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Hong Kong*:  Oct 1 2011 Share

In a Movie That Marks a Career Milestone, Action Star Plays an Entirely Different Kind of Hero - For his 100th film, Jackie Chan (成龍) can add a new title to his résumé: revolutionary hero. His latest film is “1911” (辛亥革命), a sprawling epic about China’s Xinhai Revolution, which led to the downfall of the Qing Dynasty. Mr. Chan stars as Huang Xing (黃興), a true-life military figure who worked alongside Sun Yat-sen (孫中山)—China’s first president—in establishing the Chinese republic. The film also stars Winston Chao (趙文瑄), Li Bingbing (李冰冰) and Joan Chen (陳冲). The movie reaches a pair of auspicious milestones: It comes on the centennial of the October 1911 Wuchang Uprising, which sparked the revolution. It also marks the 57-year-old Mr. Chan’s 100th movie in a career that’s spanned a half century, including his early Hong Kong action comedies like “Drunken Master” (醉拳) and the hit “Rush Hour” series in Hollywood. Mr. Chan says that he was drawn to “1911” after the producers approached him to play the role of Huang Xing. “They explained the whole story,” he says in an interview, detailing the war, the human drama and the historical aspects of the revolution. He was struck by the stories of the revolutionaries, giving their lives in order to advance their cause. “Then I said ‘wow!’” The development of modern China, says Mr. Chan, is “because of these people. They died for something. They did not die for nothing.” He pushed aside work on another movie to hop on board, and it quickly became a passion project. “I’m so proud I’m involved in this movie, because I really learned something,” he says. Nowadays many Chinese people—both in China and around the world—aren’t familiar with the events of 1911 that changed the course of the country’s history, he says. “Not even my children—even myself—there are a lot of things I don’t really know,” he says. “But now, I realize how very important” the events of 1911 were—they “changed the whole of China.” Mr. Chan says the trappings of modern materialism have pushed aside interest in history. Children today just know “what kind of telephone they are going to buy, what kind of clothes, what kind of car, what kind of food,” he says. “No. Don’t forget what [the revolutionaries] did for us. … Don’t forget history.” The film marks another personal turning point in Mr. Chan’s career. In recent years, he has been stretching his talents beyond the action-adventure comedies that made him famous to take on more dramatic roles. Gone are the days of his trademark death-defying stunts, such as his mid-air leap onto a floating hot air balloon in 1986’s “Armour of God” (龍兄虎弟). But he still maintains a busy career, releasing a few films a year and alternating regularly between Asia and Hollywood. In 2009’s “Shinjuku Incident” (新宿事件) he played an illegal Chinese immigrant in Japan who gets caught up in Tokyo’s organized-crime gangs. It was a dark film without any of the traditional Chan stunt set pieces. Last year, he appeared in the Hollywood remake of “The Karate Kid,” winning strong reviews for his role as a handyman who mentors a young American boy in kung fu. The film was a huge hit, and Mr. Chan will soon begin work on a sequel. But he hasn’t completely abandoned action comedy, having also starred last year in “The Spy Next Door” as a secret agent living in suburban U.S.

A Hong Kong court on Friday opened the door to potentially giving thousands of foreign household workers in the city a chance to apply for permanent residency, a decision likely to fuel further tensions over immigration and could mark a major change in Hong Kong's labor market and social fabric. The legal victory by Evangeline Banao Vallejos, a Filipino maid who has lived and worked in Hong Kong since 1986, could pave the way for the city's 270,000 foreign domestic helpers to qualify for residency as other foreigners are allowed to do under the territory's Basic Law. Permanent residency in Hong Kong means a person can remain in the territory indefinitely, and can't be deported. Permanent residents also have the right to vote and to stand in elections. The divisive case has stirred up strong emotions in Hong Kong, where foreign laborers are widely seen as integral to its way of life. Most middle and upper-class residents have live-in helpers, who handle household duties and help with child care. And while the government makes some guarantees for domestic helpers, such as a minimum wage of 3,740 Hong Kong dollars (about US$480) a month, there is little oversight on their working conditions. Labor and human-rights advocates said the ruling in favor of Ms. Vallejos represents an important step toward dismantling the system that treats foreign maids—most of them women from the Philippines and Indonesia—as second-class residents. An Oct. 26 hearing will discuss how the judgment will be implemented. "Today is a victory, not only for migrant workers but also for justice and fairness," said Eman Villanueva, a migrant-rights activist. "But our fight doesn't end today." Mr. Villanueva and other activists have called on the Hong Kong government to review the labor policies that "have treated us like slaves," he said. In response to the ruling, Ms. Vallejos, who didn't appear in court Friday, said to her legal team "thank God." Defense counsel Mark Daly said that she was busy working and was pleased with the ruling, adding she had "clearly won her case." The case drew fierce opposition from some Hong Kong lawmakers and workers' groups who fear maids will bring their children and other family members en masse to the city upon receiving permanent residency, putting a strain on the schools, hospitals and housing market. Regina Ip, a pro-Beijing lawmaker, said the ruling has "severe implications for Hong Kong's long-term population policy." The Hong Kong government said it will appeal the ruling. Opponents protested outside Hong Kong's High Court on Friday, carrying posters and shouting in Cantonese that supporters of residency for domestic helpers "betrayed Hong Kong people." Don Wong, part of a group called Hong Kong Social Concern Group, said: "If migrant workers win, it's bad for Hong Kong's development, for example, in education, health care and housing." Activists dismiss the claim that the right of abode would open the floodgates for migrant families. Mr. Villanueva called the concerns "baseless" and "malicious." Mr. Lee said about 120,000 domestic helpers have lived in Hong Kong for seven consecutive years or more—the minimum stay required for permanent residency. Rights groups say that figure doesn't reflect the number of potential applicants because there are other eligibility requirements, and that many wouldn't necessarily want to apply. Both sides will return to court on Oct. 26 to discuss the practical implications of the ruling, including how it will be implemented, Mr. Daly said.

 China*:  Oct 1 2011 Share

Investors dumped the stocks of some of China's biggest Internet companies, as scandals with some smaller Chinese firms has shaken Wall Street's confidence in the country's businesses. U.S.-listed shares of China's leading search engine, Baidu.com Inc., and Sina Corp., the operator of the country's Twitter-like messaging service, plunged 16% and 18%, respectively, in the last two days of trading on the Nasdaq Stock Market even though these companies haven't been accused of wrongdoing. A series of alleged accounting frauds this year at little-known Chinese companies listed in the U.S. has triggered a sharp shift in sentiment among investors, who are now worried about hidden business risks or financial problems. "If the whole sector's sentiment is negative, then investors tend to be panicking, and then they sell the most liquid names, regardless of whether there are really any problems," said Jeffries analyst Cynthia Meng. "We don't think that the flagship [Chinese] Internet names have accounting issues." For years investors, swept up in the broader China growth story, gave Chinese companies that listed their stocks on U.S. exchanges the benefit of the doubt on governance and regulatory issues. That was particularly true of the Internet sector. Investors were prepared to overlook unreliable Internet traffic data, pervasive censorship, and a reliance on an inherently risky corporate structure in their enthusiasm to profit from the explosive spread of social media, online shopping and search. The latest news to send investors running was a Thursday Reuters report quoting Robert Khuzami, the director of enforcement at the U.S. Securities and Exchange Commission, saying the Department of Justice is investigating accounting irregularities at Chinese firms. A person close to the matter confirmed the Justice Department is investigating Chinese firms, but declined to identify the companies. Along with Baidu and Sina, other major Chinese Internet companies plunged this week. Social-networking website Renren Inc. Friday fell 13% to $5.10 on the Nasdaq. Online video company Youku.com Inc., after losing 18% Thursday, gained 12 cents to $16.36 Friday. None of those companies have been accused of wrongdoing. A Youku spokesman said the company hasn't received any inquiries from U.S. regulators. A spokeswoman for Renren said the company hasn't been contacted by the SEC. Baidu, Sina and online-video company Tudou Holdings Ltd., whose U.S.-listed shares fell about 24% on Thursday and Friday, each declined to comment.

Rapidly rising wages in China have reached the point at which foreign manufacturers need to give up on the notion of the country as a low-cost production base, a senior Hyundai Motor Co. executive said Thursday. Jae-Man Noh, head of Hyundai's joint-venture operations in China, said average manufacturing-worker wages in China—about 27,000 yuan ($4,200) a year per worker in 2009—are likely to double by 2015 from current levels. Auto makers are expected to be affected as much as other industries by the trend, if not more, Mr. Noh said, adding that wage costs for many foreign auto manufacturers already have doubled in less than a decade. He said that a rival foreign auto maker that Hyundai has researched has seen worker wages in China rise to 49,000 yuan a year per worker in 2010, up from 24,500 yuan a year in 2003. "We need to let go of our perception that the Chinese market is a low-cost production base," Mr. Noh told a group of reporters at Hyundai's office in Beijing. He didn't offer specifics on Hyundai's wage costs in China. Mr. Noh leads Beijing Hyundai Motors Co., a joint venture between the South Korean auto maker and Beijing Automotive Industry Holding Co. In contrast to earlier decades, when the flow of Chinese workers from the countryside pushed factory labor costs down, China's workers now are demanding higher wages and better jobs. Manufacturing wages, in fact, have begun rising "dramatically" since last year, according to Mr. Noh, with auto makers taking the brunt of it. The Hyundai executive pointed to a series of high-profile labor strikes that hit Japanese-run auto factories and others in China last year. Normally quick to break up organized worker walkouts, the government tolerated those strikes to a large extent last year, and minimum wages in some parts of China have been rising steadily since. China still offers other draws, including strong economic growth, an increasingly affluent population and a quickly growing car culture. Plus, Hyundai's average factory labor cost in China is still one-fifth of that in South Korea, Mr. Noh said. What concerns him most is the dramatic rate of increase, he said. This trend is "inevitable" as the Chinese economy grows and society improves, Mr. Noh said. Despite rising labor costs, China's auto exports will continue to increase in part because of excess auto-production capacity in the country, he said. China's central government will also continue to focus on automotive exports, he said.

Hong Kong*:  Sept 30 2011 Share

Two major Hong Kong property agencies will stop organising flat-buying tour groups from the mainland during the "golden week" National Day holiday as credit tightening across the border starts to bite. In the past two years, the agencies have been aggressive in bringing in hundreds of busloads of wealthy mainland investors to boost sales during the period. "No group tours will be arranged this year, but our mainland branches will bring in individuals who are interested in visiting projects in Hong Kong," said Jeffrey Ng Chong-yip, director at Midland Realty. Flat-buying tourists are now far fewer than a year ago because of declining investment interest as a result of Beijing's lending curbs and the worsening global economic outlook. Furthermore, fewer new housing projects are being put up for sale in Hong Kong, contributing to lower numbers of flat-buying mainlanders visiting the city, Ng said. Indeed, the number of prospective mainland buyers has plunged by as much as 50 per cent, compared with the first half of the year, said Andy Lee Yiu-chi, head of the Shenzhen branch of Centaline Property, which has branches across the .mainland. "The increasingly tight credit conditions on the mainland have dampened buying interest [on the mainland] and in Hong Kong," Lee said. About eight to 10 customers had expressed interest in visiting Hong Kong properties during the week-long holiday, Lee said. However, the details had yet to be worked out, he said. As some mainlanders would only be interested in shopping and sight-seeing, organising small flat-buying groups would achieve better sales than bringing in busloads of prospective buyers, he said. Centaline would provide free transport for their clients, but they have to pay for accommodation if they decide to extend their stay in Hong Kong, he added. In 2009, Sino Land and Midland Immigration Consultancy organised a two-day tour group of 40 mainlanders to Sino's upmarket The Dynasty project in Tsuen Wan and The Palazzo in Sha Tin. They received complimentary accommodation at Sino Land's The Royal Pacific Hotel & Towers in Tsim Sha Tsui. Despite the end of the mainland tours, developers remain upbeat about the market outlook. Victor Tin Sio-un, general manager of sales and leasing at Sino Land, said the firm preferred to launch a road show in Shanghai during "golden week" to market its luxury residential projects. The flats are priced at HK$25 million. "We will give a briefing to mainland clients about the process of buying flats in Hong Kong," Tin said. "Nearly all the seminars, which will start on Sunday, have been fully booked. "Interest in Hong Kong properties remain keen."

Arthur Bowring says US is being vague. Hong Kong shipowners are urging "clarity and specifics" from the US treasury department as it intensifies pressure on the local industry to effectively shut out Iran's national shipping line from the city. Hong Kong Shipowners Association managing director Arthur Bowring said treasury department officials provided a list of 19 Hong Kong-registered ships they believe could be linked to Islamic Republic of Iran Shipping Lines (IRISL) but more information was needed on that and other concerns. "Being deliberately vague may help their agenda by spreading fear and getting the Hong Kong shipping industry to err on the side of caution," Bowring said. "But it doesn't help us ... it really makes life difficult for shipowners and others in the industry who have got to do business and figure out precisely where the dangers are. Some of these ships may have once been owned by IRISL but that does not mean they are still linked." The treasury's new terrorism and financial intelligence undersecretary, David Cohen, travelled to Hong Kong and Beijing this week to urge a more proactive approach to implementing UN sanctions against Iran passed in June last year. The US has also blacklisted 20 local front companies for IRISL links. Cohen's team met local shipping figures and bankers as well as government officials in both cities. The UN sanctions include the need for vigilance and reporting against IRISL ships, which a committee in 2008 declared had aided Iran's nuclear and military programmes. But Hong Kong shipping lawyers said the sanctions do not prevent the fleet calling in Hong Kong. Cohen said he wanted the ships ideally "completely shut out", even from basic operations such as refuelling, to further squeeze IRISL, which is now effectively barred from Europe. He also questioned their insurance - a key safety issue - noting their Iranian insurers could no longer lay off their risks internationally. A Marine Department statement confirmed that "certain issues" were exchanged with the treasury delegation and outlined local regulatory efforts to implement the UN sanctions. While it did not specify what action would be taken after this week's meetings, the department noted that: "If a Hong Kong-registered ship is found to be in violation of UN sanctions enforced in Hong Kong, the Director of Marine has the power to deregister the ship." It said that all ships visiting Hong Kong, regardless of flag, had to undergo the same port clearance procedures and meet the same safety requirements, including proper insurance coverage.

Construction workers will get pay rises ranging from 5 per cent to nearly 13 per cent from November, with more increases in the pipeline as demand for their services surges because of a building boom. However, the outlook for other trades is not so healthy amid a deepening euro-zone debt crisis and a fragile economy in the United States. The Construction Industry Employees General Union said a salary increase agreement, the biggest since 1997, was reached with contractors for 280,000 construction workers. "Overall, there is not a huge shortage of workers. But for certain workers like bar benders and carpenters, we really need more. This is why they will have a bigger pay rise," said Chow Luen-kiu, the chairman of the union. Bar benders are paid HK$1,100 a day, but they will receive HK$1,230 - 11.8 per cent more - from November, not August as reported previously. With an estimated shortage of 2,000 workers, their daily wage will rise to HK$1,360 in August next year and to HK$1,490 in 2013. The bar benders deal was announced in March. For carpenters working on formwork building construction, there is a shortage of 5,000. Their daily pay will rise from HK$950 to HK$1,000 in November, HK$1,300 next year, and HK$1,500 in 2013. Plumbers will see their daily wage climb 12.8 per cent to HK$880 from HK$780, while other workers such as plasterers and printers will get a 5 per cent rise. "It may be the best time for construction workers after so many years of hardship. We have to seize the opportunity," Chow said. Construction work in the private and public sectors is booming. Government infrastructure works alone rose from HK$20.5 billion in fiscal 2007-08 to HK$49.6 billion in 2010-11. Spending in 2011-12 will reach a record HK$58 billion. The union said a significant pay rise was needed to attract new blood to ease the problem of ageing staff. "Among the 280,000 workers, about half of them are aged 50 or above. We must act now," Chow said. Workers in other industries should consider switching to the trade, he said. The call may draw the attention of the 70 repair workers at Thyssen-Krupp Elevator. Earning a base salary of HK$7,000 a month, they have been on strike since Monday, as the pay at rival companies is HK$8,500. Talks with the management were continuing last night. Economist Andy Kwan Cheuk-chiu said although Hong Kong remained relatively unscathed by the global financial crisis, with the jobless rate falling to a 13-year low of 3.2 per cent, people should brace for rough times ahead. "Many workers got a 5 per cent rise this year but the global downturn may hit us from the beginning of next year. The banking industry has already started cutting manpower," Kwan said. HSBC announced earlier this month it would lay off 3,000 people - 10 per cent of its Hong Kong workforce - over three years.

Hong Kong's Henry Tang resigned Wednesday as chief secretary for administration—the city's second-highest government post—in a much anticipated move as he considers running for chief executive in March. If Mr. Tang, 59 years old, decides to seek the city's top job, he will compete against Leung Chun-ying, who announced his candidacy weeks earlier. Mr. Leung, 57, is a top member of the cabinet of current Chief Executive Donald Tsang, whose term ends next year. Both Messrs. Tang and Leung have for years been seen as leading contenders for the position as part of Beijing's succession plans for the city, which reverted to Chinese rule from the U.K. in 1997. "Recently, many people have encouraged me to run … I know deep in my heart that this will be a great challenge for me. I need time and space to seriously think about the suggestion," the U.S.-educated Mr. Tang said. He managed his family's textiles business in Hong Kong for years before entering politics in the 1990s. A change in Hong Kong's political leadership will come at a time when social tensions are simmering over surging inflation, sky-high property prices and a weakening local currency. Yet, Hong Kong's eligible voters won't have any say in the outcome of the next election, as the city's leader is selected by a 1,200-member committee consisting mainly of people backed by Chinese authorities in Beijing. The current setup more or less guarantees that the winner will have China's blessing. Members of Hong Kong's pro-democracy movement have for years sought a faster pace of democratization on the back of mounting criticism that Beijing is tightening its grip on the city. Though a part of China, Hong Kong has its own set of laws and institutions enshrined in the Basic Law, the city's mini-constitution, which calls universal suffrage the ultimate aim in the development of the former British territory's political system. Addressing calls for greater democracy, China earlier promised to organize elections for the chief executive via universal suffrage from 2017. To be sure, neither Mr. Tang nor Mr. Leung are particularly popular in Hong Kong, in large part because of their pro-Beijing ties and lack of a solid track record, academics and lawmakers contend. Mr. Tang was a member of the pro-business and pro-Beijing Liberal Party before joining the government in 2002, while Mr. Leung, a U.K.-trained surveyor by profession, has for years been a member of China's top political advisory body. Mr. Tang had an approval rating of 46.6% in the latest poll from the University of Hong Kong's public opinion program, released earlier this month. That compares with a 47.3% rating for incumbent Mr. Tsang. Similarly, Mr. Leung, as convenor of the Hong Kong Executive Council, had an approval rating of 48.1% in the university's latest poll conducted on him, released in July. "It's not a real choice, as there really isn't much difference between either candidate," said opposition lawmaker and attorney Ronny Tong, a member of the Civic Party. "I can't recall any significant achievement during Tang's nine-year civil servant career in promoting the administration's policies," Mr. Tong said. Mr. Tang was earlier financial secretary and in June 2007 became chief secretary, the post from which he just resigned. Donald Tsang Wednesday praised Mr. Tang for making "substantial contributions" in promoting Hong Kong's development. Meanwhile, Dixon Sing, associate professor of social science at the Hong Kong University of Science and Technology, criticized Mr. Leung for his loyalty to Beijing. Mr. Leung told reporters Wednesday he will continue to rally support for his campaign. He couldn't be reached for additional comment. Mr. Tang's office said he had no further comment on his resignation. A career civil servant, Donald Tsang took over from Tung Chee-hwa, who stepped down in 2005 before completing his second term amid mounting public disapproval that culminated in mass public protests.

Turmoil in global financial markets has taken a toll on one unlikely victim: the burgeoning market for Chinese-yuan bonds issued offshore. Over the past few days, investors have sold yuan-denominated debt that had been issued in Hong Kong—dubbed dim sum bonds—for the comfort of the U.S. dollar, according to traders and analysts. The selling has introduced some volatility into a nascent market that has been key to Beijing's effort to expand the use of its currency. The dim sum bond market previously had been booming, with investors betting on continued appreciation of the Chinese currency, and businesses and government entities raising capital to take advantage of the relatively low borrowing costs there. Any persistent selloff, analysts say, could complicate capital-raising efforts by China's state-owned banks, which have been among the biggest yuan-debt borrowers, at a time when they are planning fresh fund raising. "Even the dim sum market, the most resilient by far, has caved into the market contagion," said Becky Liu, a Hong Kong-based strategist at HSBC Holdings PLC who also said the selling has been broad-based. Trading volume in the young dim sum market remains thin, making it hard to get reliable valuations for such bonds. But HSBC estimates that total returns on dim sum debt for the year to date—including price and currency changes as well as coupon payments—had fallen to 1.2% in U.S. dollar terms as of late Monday from 4.5% a few weeks ago. Most of that decline came from weakening in the value of the yuan traded in Hong Kong, but analysts say selling pressure also pushed down debt prices. The selling has caused some issuers to delay planned dim sum debt issuance, including Khazanah Nasional Bhd., the Malaysian government's investment-holding arm, people familiar with the situation said last week. A Khazanah spokesman declined to comment Tuesday. Even bonds issued by China's government have been hit. The three-year dim sum bond sold in August by China's government with a 0.6% coupon is now yielding 0.85%. The bond is now selling for the equivalent of 99.3 cents on the dollar. Among the sellers have been some dollar-denominated hedge funds that bought dim sum debt with yuan converted from their dollar holdings, according to several market participants. Those funds typically would hedge their currency risk by trading derivatives that track the value of the yuan. But in the past week, selling pressure on the yuan traded in Hong Kong has made it difficult for those dollar funds to hedge their positions, leading some of them to liquidate their dim sum debt holdings. "They're forced to cut their positions as the hedging didn't work anymore," said a Hong Kong-based trader. Not surprisingly, debt issued by businesses with weaker credit ratings has especially suffered. Road King Infrastructure Ltd., a Hong Kong-listed operator of toll roads in China that sold 1.3 billion yuan ($203 million) of dim sum debt in February, paid 6% on the bond. Now, the bond is yielding between 13% and 15%, according to traders. Road King's debt is rated below investment-grade by both Standard & Poor's and Moody's Investors Service. Road King Executive Director Derek Zen Wei-peu said the selling of the company's bond was mainly due to investors trying to hold cash amid broader market panic. Since last year, a growing number of Chinese and foreign businesses, including banks, property companies and manufacturers, have loaded up on cheap capital denominated in China's currency by tapping the Hong Kong market. China's government encouraged the trend as part of its efforts to expand the use of the yuan beyond its borders. Today, dim sum bonds outstanding total about 198 billion yuan, or $31 billion. In recent months, Chinese banks, in particular, have flocked to the dim sum market. But the heightened volatility in the market could push up their borrowing costs going forward, analysts say. On Wednesday, Industrial Commercial Bank of China Ltd., the nation's largest lender by assets, said it plans to sell up to 70 billion yuan of subordinated, or junior, debt by June 30 to boost its capital base. The bank said it will sell the debt either in the mainland market or in Hong Kong, depending on market conditions. HSBC estimated in June that total new dim sum debt issuance this year would reach between 180 billion yuan and 230 billion yuan, as tight credit controls on the mainland would prod more Chinese companies to borrow offshore. While the yuan has weakened recently in Hong Kong, its value has remained strong in China's onshore market, which is controlled by the government. The yuan gained against the dollar in Tuesday trading in Shanghai, after the central bank set its daily reference rate just slightly below Monday's record level.

 China*:  Sept 30 2011 Share

Tuesday's crash on Shanghai's subway system has triggered a surge of fear and anger among mainlanders, with most pointing fingers at the government for the nation's public transport safety woes. Rail safety experts said the accident, together with the high-speed train crash in Wenzhou just over two months ago, had exposed weaknesses which, if they had been taken seriously by the authorities earlier, could have been avoided. Professor Ai Bo , deputy director of the State Key Laboratory of Rail Traffic Control and Safety, said yesterday that the Shanghai accident had exposed a series of well-known problems involving equipment, technology and management in the construction and operation of the mainland's passenger rail transport system. The accident, in which 280 passengers on the Line 10 trains were injured, should not have happened if these problems had been addressed, said Ai, also a professor at Beijing Jiaotong University. "For example, if we set up a system to enable trains to communicate directly with one another, we could have an anti-collision system similar to those on commercial airlines and avoid crashes, even with the failure of the central control system," he said. Ai said he could not reveal more details about the problems because he was not authorised to expose design, manufacturing and maintenance flaws publicly, but he believed that the Shanghai subway authorities were ultimately responsible. "The metro runs at 80km/h, maximum. That leaves less room for excuse than high-speed rail," he said. Li Jie , a commuter on Beijing's subway, said that like many of her fellow passengers she was worried about the safety of the capital's subway system after hearing the news from Shanghai. "As soon as I squeeze on to a train, I firmly grab a hand rail with both hands and stand in a rigid pose so that, regardless of whether a crash comes from ahead or the rear, I am somewhat prepared," she said. "Those standing at the centre of a compartment make me envious. They have the protection of a thick layer of human cushions." Shanghai's subway has had many problems in the past few years but they have been shrugged off because none of the previous operational glitches resulted in deaths or injury. On July 28, a malfunctioning signal device cause a train full of passengers to reverse an entire stop. The equipment supplier escaped punishment, saying a similar accident would not happen again. Professor Xie Xiaofei , a Peking University psychologist, said the public had good reason to feel angry and fearful - even if they did not take the subway often, they had parents, relatives or friends who did. "In most people's mindset, the metro is run on mature technology. Such kinds of public transportation have been running in other countries for many years without much problem," she said. On the internet, many people expressed their fury. "Should the same mistake not be corrected before it is repeated 100 times in the blood of ordinary people?" one blogger wrote. Professor Zhao Jian , a Beijing Jiaotong University economist, said that the Shanghai subway accident should not be used to argue against the development of subway systems in other mainland cities. "Public fury will decline over time," he said. "People will realise, sooner or later, that more than 74,000 people are killed on the roads in this country every year. The death toll on metros is zero."

On Sept 27, 2011, more than 1800 tourists boarded the "Legends of the Seas" luxury cruise docked at a pier of Zhoushan, a city in coastal Zhejiang province. From the city, they will start a direct four-day journey to Taiwan. The cruiser is the second ship that has set out from Zhoushan to Taiwan directly, after the Costa Cruise last year. 

China will launch the country's first space laboratory module between 9:16 and 9:31 pm on Thursday, paving the way for its own space station, a spokesperson confirmed. The unmanned Tiangong-1 will blast off from the Jiuquan Satellite Launch Center in the Gobi Desert in Northwest China. Final preparations are being made for the launch of Tiangong-1, or Heavenly Palace. A spokesperson with China's manned space program said Wednesday that fuel has been injected into Long March-2FT1 carrier rocket in preparation for launching the Tiangong-1 space module Thursday evening as planned. The Long March-2FT1 is the latest modified model of Long March-2 rocket series with more powerful thrust force, said the spokeswoman Wu Ping at a press conference in Jiuquan Satellite Launch Center in northwest China. Shenzhou VIII spaceship, also unmanned, will be launched in early November to rendezvous and dock with Tiangong-1. China is confident in the upcoming launch of its first space lab module Tiangong-1, although space launches are highly risky, said Wu. Despite August's failed satellite launch, China remains full of confidence and anticipation, Wu said. She said among the more than 1,600 space launches around the world since 1990, 93.7 percent were successful, while China has successfully conducted 94.4 percent of its nearly 130 space launches.

Over the past few weeks, observers of China’s real estate industry have been treated to songs of woe from analysts, regulators, and Standard & Poor’s rating agency. But the tune carries further when a Chinese real-estate rock star is singing the blues. Zhang Xin, the chief executive officer of Soho China Ltd., said Wednesday that in her 17 years in the residential property business she hasn’t faced such a tough market. “This by far the most challenging year in terms of what you can sell,” Ms. Zhang told the Foreign Correspondents Club Shanghai. Referring to the higher ends of the market, where Soho focuses, she said, “you’re seeing no transactions on the residential side.” The 46-year-old Ms. Zhang is half of the glamour couple that leads Soho, a Beijing-based developer known for apartments and office buildings that look equal parts IKEA and Star Trek. The former investment banker’s partnership in Soho with husband Pan Shiyi has made them among the country’s wealthiest people. Echoing complaints she and her husband have made on their Weibo accounts, Ms. Zhang pinned blame for the current slump on government policy, saying developers and buyers alike have no access to credit as Beijing takes aim at inflation and affordability. The industry is “so policy dictated,” Ms. Zhang said, “you spend more time guessing about policy than actually doing your own business.” She expressed discomfort at Beijing’s efforts to build vast quantities of social housing – “contrary to what they’ve been doing for 15 years” – scoffing that some apartments will rent as low as 70 yuan per month, or about $11. From Ms. Zhang’s PowerPoint slides, she made clear a preference for prices like the 50,000 yuan per square meter that Soho fetched for apartments sold in August, attracting a mob of buyers. Tight monetary and investment conditions won’t last in the Chinese property market, Ms. Zhang forecast. Pressed to predict when Chinese leaders will loosen their grip, she suggested a window of six months. “Very soon,” she said. Ms. Zhang kept her commentary spicy Wednesday–there is a reason 2.4 million users track the messages she blasts to Weibo from her white Blackberry. She spoke of a fast-consolidating property market that is stoking “social unrest,” governed by usurious 50% interest rates from underground banks–and, in some cases, she said, inciting suicide. Things aren’t all glum. Continued jack-hammering from the street outside the boutique hotel where Ms. Zhang spoke Wednesday attested to the fact that development hasn’t stopped in China. And Soho keeps buying and building, especially in Shanghai these days. Ms. Zhang showed a video of designs from architect Zaha Hadid with futuristic office buildings that roughly resemble the bullet trains that exit the railway station near where the development is just getting going, Shanghai’s Hongqiao Transportation Hub. Soho, Ms. Zhang said, has spent 11.4 billion yuan in 2011 making property acquisitions in Shanghai, all of it commercial. She said the government restrictions on residential development make office buildings a safer bet. The company branched into Shanghai from Beijing when, she said, Morgan Stanley unloaded some property in the east coast city in 2009. Soho is now looking at Guangzhou and Shenzhen, according to Ms. Zhang.

Hong Kong*:  Sept 29 2011 Share

Many Hong Kong employers were looking overseas to hire specialist accountants qualified to grapple with the increasing complexities of today's business world, as they could not find enough qualified people locally, a professional body warned yesterday. Some 30 per cent of the city's accounting employers are looking overseas for talent, according to a survey released yesterday by the Association of Chartered Certified Accountants and human resources agency Robert Half. The need for specialist accountants was being driven by the complexity of globalised business, and tighter regulatory control in many countries following the 2008 financial crisis, it found. Association chairman Rosanna Choi (pictured) said: "Currently, there is a mismatch in the supply of professionals in Hong Kong and the demand, particularly in the fields of compliance, risk management and internal control." The survey was conducted in Hong Kong in June, interviewing 645 people, including professionals and managers responsible for hiring. Local professionals could only benefit from the growing demand for manpower by upgrading their qualifications, one industry executive said. "The regulatory framework has been evolving since 2008 and professionals need to adapt to the ever-changing landscape. Corporates need people who can deal with multiple jurisdictions, to help them grow," the Hong Kong-based official of an investment bank, who refused to be named, said. Robert Half director Pallavi Anand said employers had complained about the difficulty of finding professionals in the finance and banking sector. She cited an earlier survey which found that more than 90 per cent of employers in Hong Kong said they had difficulties in finding skilled professionals. Despite economic uncertainty in Europe and the US, demand for those executives remained robust in Asia, she said. Denise Lim, managing partner of human resources consultant Experis, said the demand was greater for speakers of Putonghua who could meet the needs of mainland companies. The June survey found that 67 per cent of finance and accounting professionals hoped to work overseas, but only 8 per cent of employers offer regular overseas secondment. Choi said the gap between the desire to be relocated and the lack of opportunities could affect staff satisfaction and lead to high turnover.

Actress Cecilia Cheung Pak-chi was fined HK$2,500 yesterday after her luxury sports car knocked down an elderly street cleaner in Repulse Bay last year, breaking his ribs and leg. Cheung, 31, pleaded guilty to two careless driving summonses at Eastern Court through her lawyer. She was not in court. She was driving a HK$1.26 million black Range Rover when she hit Cheng Tak-yau, 68, at 2.30pm near a junction between Repulse Bay Road and South Bay Road on March 30 last year, the court heard yesterday. In a letter submitted to court, Cheung (pictured) apologised and expressed remorse. "I am deeply sorry that my careless driving manner affected others and troubled the court," she wrote. "I promise I will not drive carelessly in the future." The court heard that minutes before the accident, she had crossed continuous double white lines and driven against traffic flow to overtake a minibus, causing the driver to brake. Cheng was wearing a fluorescent working vest when he was hit. He spent 18 days in Queen Mary Hospital. Cheung passed a breath test. Defence lawyer Cheung Kam-wing said the actress was in a hurry to take her son to see a teacher at school. She hit the man as he emerged suddenly from a place where people were not supposed to cross the road. Cheung and actor Nicholas Tse Ting-fung announced the end of their five-year marriage last month. 

As economies in Europe and America slump, Western art dealers are turning their attention towards Asia. Next week, more than 20 galleries - from the United States, Britain, France and the Netherlands - will make their debut at Fine Art Asia in Hong Kong, a fair showcasing antiques and contemporary art. For the first time since the fair's founding seven years ago, the Western dealers will comprise more than 20 per cent of the 102 exhibitors this year. The galleries - which specialise in 17th to 19th century furniture, antique jewellery, silverware and paintings - hope to cultivate mainland patrons, having observed that Asian buyers, particularly rich mainlanders, have been acquiring Western antiques and valuable paintings by European old masters. Auctioneers Sotheby's and Christie's will also be showcasing Western antiques, as well as Impressionist and modern artworks at their pre-sale exhibition next week. Sotheby's will be exhibiting selective pieces from the Fabius Freres Gallery collection. It would be the first exhibition of a collection comprising a range of 17th to 19th century artworks and furniture. The items will be auctioned in Paris next month. Christie's will be displaying highlights from its upcoming sale of Impressionists, postwar and contemporary artworks in New York. "The market gears towards where the money is," said art critic Oscar Ho Hing-kay. "But seeing them coming here all at once ... you can smell the desperation of the market." "[China] is a potentially huge market," said Harry Apter, director of British antique furniture dealer Apter-Fredericks. "From history, when the wealth of a market suddenly exploded, like the Middle East and Russia, collectors will diverge into what they don't know. [The Chinese] have been collecting Chinese art, and the next step forward will be to expand their overseas collection." Andy Hei, fair director of Fine Art Asia, said it was natural to see mainlanders buy Western antiques and artworks after having bought Chinese antiques back to the mainland from international auctions. "Chinese people aspire to Western culture," Hei said. "Some wealthy Chinese families have been buying antiques, in particular furniture and silverware, in Europe and the US, but they just keep it low profile." Hei said that given the economic malaise in the West, he was not surprised to see the sudden surge in the number of Western dealers seeking Asian customers. Ho said, however, that whether the dealers would be bringing high quality artworks to the city will depend on the sophistication of the prospective buyers. "You can't rule out the possibility that some dealers might want to get rid of the unwanted stocks, but whether this would happen depends on how sophisticated and knowledgeable the buyers are," Ho said, warning that potential buyers should research the artworks thoroughly before opening their wallets.

The Real Estate Developers Association is warning the government not to overreact when deciding on a jail penalty in legislation to regulate the primary property market. Stewart Leung Chi-kin, chairman of the Reda executive committee, said yesterday that the government should clarify the circumstances that would incur a jail term. "In principle, we don't object to legislation," Leung said. "The most important thing is not to overreact. Regulation and penalty are necessary. But if it goes so far as to make us unable to do business and sell flats, it will be troublesome." He spoke a day after a government steering committee met for the last time to finalise a list of reforms for the property market. Leung is Reda's representative on the committee, which was formed in October last year. Leung said he represented a "minority view" on the panel. The reform in question is a seven-year prison sentence for a director in a development company who gives false information. Was this an overreaction? Leung did not reply directly, but said there should be distinctions in the degree of seriousness of an offence. "It is hard to define misleading [information] or misrepresentation," he said. "A mistake can also be a typo, or an advertisement so exaggerated that it becomes misleading. But if a staff member selling flats says something [wrong or misleading], is it the boss' responsibility? ... I don't believe this should involve the boss." Leung said senior management should be held liable only if the manager was "stupid enough to instruct" staff members to lie or mislead. The proposed legislation also calls for the set-up of unmodified show flats, immediate disclosure of transaction information, and the release of a price list and a sales brochure three and seven days, respectively, before the launch of a sale. The most serious penalty, seven years in prison, could apply to anyone at a developer's firm - whether a director, a senior manager or a salesperson - found to have given false or misleading information, verbally or in writing, to boost sales or prices. The reference is taken from the Securities and Futures Ordinance, which imposes up to seven years' imprisonment and a HK$1 million fine for giving false information when selling investment products. Another committee member, lawmaker Lee Wing-tat, said the panel also suggested the forfeiture of the deposit be reduced to 5 per cent from 10 per cent of the flat price, if a buyer chose to cancel the deal within three days of the purchase. The committee also decided that if a person or company sold only a single flat, say, a village house, they could be exempted from the proposed law. A spokesman for the Transport and Housing Bureau said: "Members' views have been fully expressed and debated in the various meetings. A report will cover all the issues dealt with and will give a faithful account of the main points considered." Government lawyers will draft a bill based on the report, which will be released for public consultation and then for lawmakers' scrutiny.

Hong Kong's roaring property market, which the government tried to rein in with measures such as higher stamp duties, may be headed for calmer times, according to Financial Secretary John Tsang Chun-wah. "Transactions have fallen and prices are starting to trend down slowly," he told Bloomberg on a visit to Chicago at the start of Cathay Pacific direct flights between the Windy City and Hong Kong. "There has not been a very violent reaction." As residential sales ease, the latest data show, new mortgages in August fell by more than a quarter, although new applications for home loans increased. Sales at new projects have fallen. At the weekend, sales were recorded at only two out of 10 benchmark residential projects. Developers, meanwhile, have urged the government to monitor sales before proposed new laws regulating transactions are drafted. "We hope that future legislation will not affect business," said Real Estate Developers Association executive committee chairman Stewart Leung Chi-kin. Legco's steering committee on regulation of sale of first-hand residential properties by legislation, has made several recommendations to the Transport and Housing Bureau. Some panel members have suggested criminal penalties be imposed on developers for misleading and deceitful information. The panel proposed a seven-year prison term. Also, a developer's representatives - managers as well as frontline sales people - could be held responsible for dubious practices. Lawmaker Lee Wing-tat, a steering committee member, said thethe proposals would "extend the regulation period until after the completion of flats and use the saleable area to calculate the per-square-foot price. "A three-day cooling period for buyers is also suggested, under which, if a buyer decided to cancel the deal he or she will have to forfeit the 5 percent deposit."

The government has got the go-ahead to build the giant Hong Kong-Macau-Zhuhai bridge after the Court of Appeal overturned a lower court ruling quashing the environmental protection director's approval of the project. Welcoming the decision, Secretary for Transport and Housing Eva Cheng Yu-wah said the government will soon seek funding from the Legislative Council. The aim is to start construction by the year-end so the bridge can be open for use in 2016, as scheduled. Also on the agenda is increased manpower and a revision of work methods to cut work time, though this could add a further HK$6.5 billion to the multi-billion-dollar project. The ruling means dozens of construction projects earlier put on hold will now likely go through the usual vetting process. A three-judge bench at the Court of Appeal unanimously overturned the Court of First Instance ruling - passed in April - on a judicial review alleging government failure to conduct proper environmental impact assessments of two key elements of the project. The review was filed in January last year by Tung Chung resident Chu Yee-wah, 65, a sometime Civic Party volunteer. Asked yesterday if she will lodge an appeal, Chu said: "I won't get involved in it any longer. I have no intention to stir it up. But they told me about it and I was unclear." As to who told her to file a review, she said: "Whoever told me to do it, I won't disclose it. I have been fooled. Let it be." She spoke of being worried earlier that work on the bridge's Hong Kong section would affect the environment, and thus the health of the elderly and children in particular. But she later felt upset on hearing that many job opportunities would not be created unless the bridge is built. Her counsel argued that the authorities failed to carry out a "stand-alone" assessment of likely environmental conditions without the proposed Hong Kong-Macau-Zhuhai bridge. The boundary-crossing project is to be built on reclaimed land in waters northeast of Chek Lap Kok and a nearby link road. Court of Appeal vice-president Justice Robert Tang Ching said in the written judgment that neither a government technical memorandum nor the study briefs of the projects required a stand-alone assessment in the EIA reports. He said they just require the Highways Department, as the project proposer, to conduct an assessment of the cumulative impact. Tang added: "It is often a question of professional judgment what information is required to be contained in an EIA report [to let environmental protection director Anissa Wong Sean-yee perform her duties]." The court, he said, cannot interfere unless the director's judgment is unreasonable. The Environmental Protection Department also welcomed the ruling. Green groups, meanwhile, urged that the government carry out a strategic environmental assessment on the cumulative impact of projects, including the proposed bridge and expansion of Chek Lap Kok airport.

 China*:  Sept 29 2011 Share

Shanghai is mulling setting up a yuan fund worth billions for overseas investment and lending in a bid to hasten the internationalization of the currency, Shanghai Securities News reported yesterday. Fang Xinghai, director-general of the Shanghai Financial Services Office, said the government- owned Shanghai International Group will raise the funds from both state-owned and private enterprises. Current capital controls do not allow domestic private equity funds to invest or lend to overseas projects, so the Shanghai fund needs additional approval from authorities to operate. Shanghai's move came as Chief Secretary Henry Tang Ying-yen urged the SAR to maintain its competitive edge as an offshore yuan center. "The SAR does not have exclusive rights to offshore yuan business and should anticipate growing competition from overseas markets," Tang told the Hong Kong Institute of Bankers yesterday. Hong Kong stock exchange chairman Ronald Arculli said Shanghai has technical difficulties in issuing yuan-denominated products. But the territory should not underestimate the threat posed by Singapore and London - also keen to be offshore yuan centers. Separately, China Construction Bank (0939) chairman Guo Shuqing said the yuan had fulfilled most conditions of being fully convertible. What is needed now is its broader use.

China's central bank set the yuan's official guidepost at a new high Monday even as global investors continued to push the currency lower, suggesting that Beijing will continue to let the Chinese currency strengthen despite global economic jitters. The People's Bank of China, which guides the yuan's daily trading range, didn't respond to requests for comment Monday. But observers said the move suggests Chinese officials won't let unease over the world economic outlook get in the way of efforts to gradually guide the yuan higher, as they have since Beijing essentially removed the currency's peg to the U.S. dollar in June 2010. A stronger yuan, also known as the renminbi, makes China's manufacturers less competitive abroad. But it also puts downward pressure on domestic inflation, strengthens consumption and burnishes the yuan's case for becoming a more global currency—something Chinese officials see as key to reducing Beijing's dependence on the U.S. dollar. China also faces international pressure, particularly from the U.S., to let the yuan rise and reduce what some U.S. lawmakers say is an unfair boost for China's exporters. Monday's move by the PBOC is "a signal to the market that China will keep letting the yuan appreciate despite the risk aversion in the rest of the world," said Dariusz Kowalczyk, Hong Kong-based senior economist at Credit Agricole CIB. "As China continues to focus on fighting inflation, a stronger yuan is a quick way to bring down inflationary pressures," he said. Liu Dongliang, senior analyst at China Merchants Bank Co. added: "The PBOC doesn't want to see offshore sentiment affecting the domestic market." The move follows several days of pressure on the yuan by global investors, who have driven down the value of the currency in markets outside China as they flee to investments that are traditionally seen as havens. While China strictly controls the yuan at home, investors are allowed to freely buy and sell the currency in Hong Kong and can also trade in futures tied to the currency. The PBOC on Monday fixed the yuan's reference rate against the U.S. dollar at 6.3735 before trading started, the highest since the Chinese government first removed the currency's peg to the dollar in 2005. The yuan is allowed to trade up to 0.5% on either side of the reference rate. The yuan nevertheless fell Monday on the over-the-counter market in China. The dollar was at 6.4006 yuan late Monday, up from 6.3906 yuan late Friday. The PBOC action ran counter to signals from investors that China might guide the yuan lower. A derivatives market closely followed by market participants for indications about likely moves in the yuan has even implied a slight decline in the Chinese currency versus the greenback in the next 12 months. In Hong Kong, the PBOC's move helped stabilize the yuan's value in early market action, according to traders, though investors resumed selling yuan and other Asian currencies through the day amid continued market turmoil. The dollar traded at 6.4925 yuan late Monday in Hong Kong, up from 6.49 late Friday. Having kept the exchange rate intact for a decade, Beijing allowed the yuan to strengthen 21% from July 2005 to July 2008, when it suspended the appreciation to help Chinese exporters ride through the global financial crisis. The Chinese government again loosened its grip on the yuan's value more than a year ago, putting in measures aimed at making the currency into one that can be used for cross-border trade and investment. Since then, the yuan has advanced nearly 7% against the dollar. Still, with a narrow trading band and tight controls on money flowing in and out, Beijing keeps a sharp hold on the yuan. Zhou Xiaochuan, the PBOC governor, reiterated over the weekend China's pledge to increase the flexibility of the yuan and stressed that "high inflation remains the top concern in China." His remarks helped damp speculation that China would choose to peg the yuan again to the dollar, as it did during the 2008 global financial crisis. Until last week, the Hong Kong-traded yuan had remained broadly in line with its mainland counterpart, but market disturbance left it trading at a discount to the mainland yuan. The gap between the Hong Kong-traded yuan and mainland yuan—known as the offshore market and the onshore market, respectively—narrowed on Monday but remained high by historical standards.

Hong Kong*:  Sept 28 2011 Share

Greek jeweler Folli Follie, which operates stores in Hong Kong, is planning to spin off Links of London - a jewelry and accessories business it acquired in 2006 - on the Hong Kong stock exchange. According to reports, the listing would give Links of London, a market cap of US$300 million (HK$2.34 billion). Elsewhere, listing candidate CITIC Securities has so far managed to draw just HK$2.4 million in margin financing orders - a fraction of the HK$756 million target for the retail tranche. But the mainland's largest brokerage will proceed with the listing. Separately, iron ore miner Hanking (3788) has priced its public ofering at HK$2.51 per share - the bottom end of its range of between HK$2.51and HK$2.93. The Liaoning- based company, which aims to raise US$148 million, is set to float its shares on Friday. As for debutants, the mainland's largest tea retailer Tenfu (6868) fell 3.7 percent to HK$5.78 from its listing price of HK$6 at the end of its first day of trading yesterday. At newly-listed Hongguo International (1028) net profit soared 123 percent to 131 million yuan (HK$159.6 million) - or 7.69 fen per share - for the six months ended June 30, thanks to higher sale prices and cost controls. Revenue at the women's shoemaker grew 29.8 percent to 928 million yuan. The company did not declare an interim dividend. Its shares fell 0.5 percent to HK$1.95, after rising by as much as 3.5 percent on its second trading day yesterday. But the stock remains below its listing price of HK$2.30. During its debut on Friday, it had plunged 15 percent to HK$1.96. Meanwhile, China's biggest dam builder Sinohydro Group is considering a local listing despite slashing the fundraising target for its Shanghai IPO. The firm said it will sell three billion shares instead of 3.5 billion originally planned yesterday, the first day of its roadshow. Stocks of local brokerages were battered yesterday. China Everbright (0165) plunged 7.2 percent while Haitong International (0665) slumped 8.8 percent. Hong Kong Exchanges and Clearing (0388) fell 4.1 percent to HK$118.90.

Leung Chun-ying said his resignation as Executive Council convener will take effect in a week's time, leaving him free to prepare his campaign for next year's chief executive race. Leung's remarks came almost a week after he communicated his intention to resign in person to Chief Executive Donald Tsang Yam-kuen. "It depends on my progress in handling the remaining work. I think it will not be more than a week," Leung said yesterday, but denied he is quitting before Tsang's October 12 policy speech to avoid being caught up in any controversies stemming from it. Rather, he spoke of deciding not to leave immediately at Tsang's request so he can offer advice on the policy address. "I think his request is understandable and reasonable. Although the chief executive accepted my resignation, the effective date is a few days later," Leung said. Regarding flying to Beijing for an overnight visit to see "friends" within hours of resigning last Tuesday, Leung reiterated that "it was just a coincidence" - as he visits the capital up to three times a month anyway. "My [recent] trip to Beijing was totally unrelated to my resigning as an executive councillor," he said. Leung's comments came hours after Democratic Party vice chairwoman Emily Lau Wai-hing criticized him for traveling to the capital so soon after stepping down, which she said left people thinking Beijing is pulling the strings in the race for the top job. Potential rival Chief Secretary for Administration Henry Tang Ying-yen has yet to announce his resignation, though he had been rumored to be planning to quit a day before Leung did. Tang is also expected to honor official engagements well into next week. Meanwhile, Urban Renewal Authority chairman and Leung backer Barry Cheung Chun-yuen said: "I think all those interested in running should declare their candidacies and inform the public of their beliefs, abilities and platforms as soon as possible."

The Court of Appeal on Tuesday overturned a lower court ruling that had blocked construction of the Hong Kong-Zhuhai-Macau bridge. Three judges in the Appeal Court ruled in favour of the government in its appeal against the Court of First Instance decision to quash an environmental permit it had issued for construction of the bridge. The permit, issued by the Director of Environmental Protection to the Highways Department for the project, had been annulled in April in a judicial review on the grounds that a “stand-alone analysis” – an assessment of what would happen if the bridge wasn’t built – had not been done. In a 39-page verdict released on Tuesday, the three appeal court judges said there was no need for such assessment to be conducted because an existing environmental impact assessment report was adequate. The judges also said that the court believed that in the case that air quality was affected by construction work, the Environmental Protection Department would devise measures to help deal with this. They said the court should not intervene. Alan Wong Hok-ming, solicitor for the judicial review applicant Chu Yee-wah, said he would study the ruling first before deciding whether they would take the case to the Court of Final Appeal. “We have to study the detailed judgment and talk to Chu to decide the next step forward,” he said. Wong also stressed that Chu, a Tung Chung resident, had never been “manipulated” to file the legal challenge to the bridge’s environmental impact assessment report. He also said it had been wrong to portray Chu as illiterate – as some media outlets had. The Court of First Instance decision in April held up construction work of the bridge’s Hong Kong section. It also affected other projects – including the MTR Corporation (SEHK: 0066) withdrawing impact assessment reports for its Sha Tin-Central railway link.

With China’s Zhang Ziyi, Hong Kong’s Cecilia Cheung and South Korea’s Jang Dong-gun, backers of a Chinese movie version of the French novel “Les Liaisons Dangereuses” are aiming for broad Asian appeal. The film, a co-production between China’s Zonbo Media and Singapore’s Homerun Asia, is the 13th film production of the novel, which includes a 1988 version starring John Malkovich known by the English name “Dangerous Liaisons.” With a budget of $30 million, the new Chinese version – “Weixian Guanxi” in Chinese — is set in Shanghai in the 1930s and features actors from some of Asia’s most influential markets in hopes of attracting big audiences. Zonbo’s and Homerun Asia’s ambitions may appear modest when compared to filmmakers, producers and distributors who have their hopes set on global audiences. But Asia is ambitious enough, said producer Chen Weiming on the side of a press event Monday in Beijing. “We’re just too far from the U.S.,” Mr. Chen said “Asia is the first and most important step.” In June, film production company Legendary Entertainment, responsible for blockbuster hits “Inception” and “The Dark Knight,” joined forces with Chinese independent film company Huayi Brothers Media to produce films for the world. The two companies are among others who are aiming past China’s fast-growing but still modest movie business, which posted revenue of10.2 billion yuan ($1.53 billion) in 2010, up 64% from a year earlier. So far, results are mixed. One of the bigger success was in television, where Chinese animated television series “Pleasant Goat and the Big Big Wolf” won distribution earlier this year in Australia, New Zealand, Malaysia, India, and the Philippines. Targeting Asia’s movie-goers hasn’t been a major goal for China’s filmmakers as of late, as Asia offers a much smaller financial reward and is thus less enticing than the U.S.market. Films and movies from Taiwan and Hong Kong have had better distribution across Asia, although their film industries are now on the decline. Asia-Pacific is the third-largest market for distribution of Chinese domestic films behind North America and Europe, according to media research firm EntGroup Inc. Even though Ms. Zhang won notice among American audiences after her prominent role in 2000’s “Crouching Tiger Hidden Dragon,” directed by Ang Lee, Mr. Chen reiterated that his goal is still to whet the appetite in the region. “Actually the first major goal is just to start filming,” Mr. Chen said. Production will begin at the end of September.

 China*:  Sept 28 2011 Share

China is moving to choke off funding avenues to developers across the country, tightening or eliminating credit options in a bid to slow the rampant property market and bring down prices without sending the broader economy into a crash. The latest salvo in Beijing’s battle to rein in the sector came last week, when the banking regulator ordered trust firms to detail their exposure to debt-laden Greentown. The company, based in the popular Chinese tourist city of Hangzhou, specialises in luxury property development around the country. China has already imposed home-purchase restrictions on about 40 cities as part of nearly two years of efforts to cool prices that have risen far beyond the reach of ordinary people. But regulator’s move last week stoked concerns of a funding squeeze for the sector and sparked a selloff in shares and bonds in many other Hong Kong-listed Chinese developers. Many of these developers are highly geared and had relied on trust loans as a key source of financing in the absence of other channels of funding. “The double whammy of slower sales since end-August and higher interest costs has likely sparked increasing concerns on liquidity of Chinese developers, which is likely to further deteriorate if sales slow further,” Mirae Asset Research said in a report. The average interest costs of Hong Kong-listed Chinese developers rose 64 per cent year on year in the first half, Mirae said based on the companies it tracks. Beijing wants to push developers to lower prices and sell down their inventories, so it is turning the screws on trust financing -- choking off what has been a lifeline for many of the country’s smaller developers such as Greentown. The form of financing, more expensive than ordinary loans, has been booming. Chinese trusts poured over 210 billion yuan (US$32 billion) into the sector in the first half. Total outstanding property trust loans exceeded 600 billion yuan. The China Banking Regulatory Commission scrutiny of Greentown’s lenders highlighted Beijing’s determination to bring down housing prices that it views as a threat to social stability and economic growth. It also raised the risks of investing in what used to be China’s best growth story, analysts said. Indeed, the market may well be at a turning point, with grave consequences for smaller developers around China. The restrictions on homebuying and the heavy credit clampdown on buyers and developers seem to be showing some impact in major Chinese cities. Housing inflation has shown signs of peaking, easing a touch in August, with home prices in major cities remaining flat for a second consecutive month. “The banking regulator has been tightening real-estate trust financing. It should only get tighter,” said a senior executive at a Chinese trust company. The executive declined to be identified because he is not authorised to talk to the media. Sky-high housing prices undermine Beijing’s goal of making its economic growth more sustainable, making it more reliant on domestic consumption and less on exports. A more healthy and affordable property sector would unleash real demand and so provide support to dozens of other industries from appliances to furniture. Therefore Beijing is unwilling to see a meltdown of the sector, which would destabilise its financial system, analysts say. What it hopes to see is a soft landing of the market. “I don’t believe the state will keep adding pressure to the property sector until it collapses,” Greentown CEO Shou Biannian told reporters on Thursday. Greentown is one of the more stark examples of the crunch. The company had amassed total debts of 34.6 billion yuan at end-June – almost 40 per cent of it maturing in 12 months – and 5 billion yuan of its liabilities related to trusts. Its net gearing ratio of 163 per cent, the highest among Hong Kong-listed Chinese developers, resulted from an aggressive, debt-driven expansion in the past few years’ heyday of the China property market boom. It now suffers negative cashflow, Greentown earnings figures show. At the sales office of Sincere Garden, an upscale residential project developed by Greentown, salespeople in grey uniforms politely show a few prospective buyers a sprawling model of a compound consisting of more than a dozen high-rises. Outside the fancily decorated sales office, a few trucks rumble in and out of a vast, dusty construction site in the outskirts of Hangzhou, nicknamed heaven on earth for its picturesque West Lake. “How can we possibly sell a few units in a day when you have government controls and purchase restrictions?” a saleswoman complained to one viewer. Shou said he had no plans to cut sale prices now, although the company was set to miss its this year sales target of 54 billion yuan as it had only completed half of that so far this year. At Sincere Garden, there have been far fewer buyers since the purchase restrictions kicked in earlier this year, although three quarters of the development slated for completion in 2013 had already been sold, the saleswoman said. Average selling prices had gone up to 36,000 yuan (US$5,636) per square metre, up from 29,000 yuan two years ago when it was launched. Analysts expect Greentown’s woes to spread to other developers. Its shares plunged 17 per cent on Thursday alone, hitting a 28 month low. With the credit tap tightened further and funding costs soaring, Chinese developers, especially smaller, indebted ones, are expected to cut or delay project construction and lower sale prices to stay afloat, bankers and analysts say. “The cash position of the companies should allow them to sustain for another six months. If worse comes to worse, they can cut construction and then prices,” said Jacphanie Cheung, director of Asia Credit Research at Deutsche Bank. China has banned developers from accessing the domestic stock and bond markets. Domestic banks are also increasingly cautious about lending to developers, especially small ones. Even for big developers such as China Vanke and China Overseas Land (SEHK: 0688), lending terms are getting tougher, bankers said. Some banks no longer extend credit unless borrowers provide sufficient collateral. And normally the loan they extend won’t exceed 40 per cent of the value of collateral a borrower provides. Chinese developers are virtually shut out of the overseas loan, credit and equity markets as Beijing has banned mainland companies from acting as a debt guarantor for their overseas units, and buying interest in Chinese high-yield dollar bonds has evaporated in light of a deepening European debt crisis. Chinese developers have raised nearly $9 billion in offshore bonds and US$2.39 billion in offshore loans so far this year, nearly all in the first half. Meanwhile, offshore funding costs have been surging. A typical three-year loan for a medium-size Chinese developer is now quoted as high as 600 basis points (bps) all-in, compared with 400 bps early this year. The situation is similar in the bond market. Skyfame Realty (Holdings) this month agreed to issue HK$200 million in bonds due 2013 with a 20 per cent yield to fund working capital, pay up a shortfall in registered capital of one of its project companies and repay loans. The yields are much higher compared with earlier this year.

US Secretary of State Hillary Rodham Clinton, left, shakes hands with China's Foreign Minister Yang Jiechi, at the Waldorf-Astoria hotel in New York on Monday. Foreign Minister Yang Jiechi asked Secretary of State Hillary Clinton on Monday to reconsider the US decision to upgrade F-16 A/B fighters for Taiwan. A senior State Department official said Beijing had warned in separate conversations of potential damage to US-China military ties if the US$5.85 billion F-16 A/B upgrade is not revoked. “They indicated they are going to suspend, or cancel or postpone a series of… military-to-military engagements,” the official told reporters on condition of anonymity on the sidelines of the UN General Assembly. Xinhua news agency said Yang had indicated that Washington “grossly interfered in China’s internal affairs and seriously undermined China’s security”. “China urged the US to attach great importance to China’s solemn position and take it very seriously, correct the mistake of selling weapons to Taiwan by revoking the above-mentioned wrong decision, eliminate its negative influence, stop arms sales to Taiwan and US-Taiwan military contact, and take real actions to uphold the larger interest of China-US relations,” it quoted Yang as saying. During his meeting in New York with Clinton, Yang made “very serious representations” about the upgrade, the US official said. Yang “indicated that it would harm the trust and confidence” between the two world powers, but Clinton gave no sign that the United States would reconsider, the official added. In turn, the top US diplomat spoke of Washington’s firm commitment to expanding ties with Beijing, according to Xinhua. “The US welcomes and supports the peaceful development of relations between China’s mainland and Taiwan, and will continue to be devoted to promoting peace and stability in the Taiwan Straits,” Clinton was quoted as saying. “The US is willing to properly handle the differences between the two countries and avoid disrupting cooperation between the two sides,” she said. President Barack Obama’s administration on Wednesday approved a US$5.85 billion upgrade of Taiwan’s fighter jets that stopped short of selling new F-16 C/Ds. Taiwan and US officials said the upgrade would improve the island’s defences as it faces a rising mainland, which has ramped up military spending and widened its strategic edge over the self-governing territory. Officials in Washington and Taipei said Taiwan would get a retrofit of 145 F-16 A/B fighter jets, which will be equipped with modern weapons and radar capable of detecting the PLA’s new stealth airplanes. Beijing, which claims Taiwan as part of its territory, is urging Washington to cancel the deal and said it had jeopardised recent improvements in military ties between the two world powers and affected relations with Taiwan. But analysts said the deal would probably not be as damaging as an earlier arms package that led to a break in military exchanges last year. The defeated nationalists fled to Taiwan after losing the civil war in 1949 and the island has since transformed into a vibrant democracy. Ties between Beijing and Taipei have improved markedly since President Ma Ying-jeou took office in 2008 and ramped up trade and other links. But China has refused to renounce the use of force against the self-governing island, and Ma has publicly sought new F-16 C/Ds. Washington recognises Beijing rather than Taipei, but remains a leading arms supplier to the island of 23 million inhabitants, providing a source of continued tension. Relations between the PLA and the US military have improved over the past year, and in July Mike Mullen became the first chairman of the US Joint Chiefs of Staff since 2007 to visit the mainland. Clinton and Yang also tackled North Korea, tension over claims to the South China Sea, and Pakistan as well as global economic issues, including “some of the concerns about developments in Europe,” the US official said. The two countries agreed they had a responsibility “to take the necessary steps to spur global growth.”

Two subway trains collided in Shanghai on Tuesday, injuring more than 240 people, the system operator said, just months after a deadly high-speed rail crash that shocked China. The firm blamed the accident on a signal failure – the same cause as a July train crash that killed at least 40 people and shook public confidence in China’s vast rail network. There were no immediate reports of any deaths from Tuesday’s accident, but pictures posted on Chinese websites showed bloodied passengers, some lying on the floor apparently unconscious and others with injuries to their heads. Local authorities were investigating the exact cause of the crash, in which one metro train rear-ended another, Xinhua news agency said. “Police and armed police have been dispatched to the scene to help with the evacuation,” the Shanghai Metro Company said in a statement, adding that most of the injuries were minor and nine stations on the line had been closed. Police cordoned off streets around the Laoximen, or Old West Gate station, near Shanghai’s old quarter, where around a dozen ambulances could be seen. The metro company said 500 passengers had been evacuated from the trains and the injured taken to hospital. China’s hugely popular microblogs buzzed with criticism of the authorities in the hours that followed Tuesday’s crash, with many accusing the government of failing to ensure passenger safety. “This is the consequence of rapid development. In the end we have to seriously consider if we want GDP or a happy life,” one blogger posted under the name Shaolei123. “After this I won’t dare take a subway,” posted another. The accident comes as China struggles to rebuild public trust in its vast rail system after a high-speed train crash near the eastern city of Wenzhou in July in which at least 40 died. The results of an investigation into that accident have yet to be released, but officials have blamed the crash on a failure of the Chinese-built signalling system in use on the line. A series of near misses have added to the mistrust in the system -- including one in July on the same line where Tuesday’s accident occurred, in which a train took a wrong turn during peak hours due to a signal failure. No one was hurt in the accident but passengers were alarmed by the mistake. The crash in Wenzhou, a city south of Shanghai, was the worst ever to hit China’s high-speed train network, raising questions about whether safety had been overlooked in the rush to develop China’s vast railway system. The Chinese government suspended approval of all new railway construction projects after the Wenzhou crash and cut the speed of trains running on newly-built high-speed lines. Shanghai opened its first metro line in 1995. It currently has 11 lines covering more than 420 kilometres and carries nearly five million passengers a day, according to figures from the operator.

China said on Sept 26 it has launched an inter-provincial operation to better regulate the production of light rare earth metals in its latest effort to rein in illegal rare earth exploration. The local governments of three regions where most of China's light rare earth metals exist will jointly crack down on the illegal exploration and production of light rare earths, the Ministry of Land and Resources said in a statement on its website. The operation aims to "promote the protection and rational development of the country's rare earth resources and further regulate their production," said the ministry. The three regions include the city of Baotou in northern China's Inner Mongolia Autonomous Region, Jining in eastern China's Shandong province and Liangzhou in southwestern China's Sichuan province, according to the statement. The governments will also cooperate to better plan the development of rare earths and explore the establishment of strategic reserves of rare earth resources and rare earth trade centers, it said. The move came after an inter-provincial operation launched by China last year to tighten the regulation of medium and heavy rare earth metals production in five provinces and regions in the south. Rare earth metals are vital ingredients for manufacturing an array of sophisticated products, including cell phones, wind turbines, electric car batteries and missiles. China now produces more than 90 percent of the world's rare earth metals but its rare earth reserves only account for about one-third of the world's total. The country has suspended the issuance of new licenses for rare earth prospecting and mining, imposed production caps and export quotas, and announced tougher environmental standards for rare earth production in order to control environmental damage and protect the resources. Despite government control, illegal production remains active, seeking profits from surging rare earth prices.

Hong Kong*:  Sept 27 2011 Share

Police associations are calling for a law to ban profane language against police officers after two incidents of abuse in recent demonstrations. Protests in the city have a tradition of relative civility, involving slogans without inflammatory terms. But in at least two recent protests a banner was seen that included the English-language slogan "F*** the police". Two of the four major police officers' associations said such insults against officers should be prohibited. Police Inspectors Association chairman Benjamin Tsang Chiu-fo called for a law to uphold "dignified law enforcement for the police". "Being able to enforce the law in a dignified manner is important for police," said Tsang, citing similar laws in France and Australia. "The law has protected officers against physical harm but there has always been a grey area where protection is missing," Tsang said. "The officers have always asked for this, but there was not enough support to put a law in place... citizens feel the police enjoy excessive powers." The offending slogan was first seen on September 3, when hundreds of demonstrators took to the streets accusing police of abusing their powers and urging Police Commissioner Andy Tsang Wai-hung to step down. The same banner was seen again during protests on September 18 organised by the Federation of Students against Vice-Premier Li Keqiang's visit to Hong Kong. Grievances among frontline officers had increased since the vice-premier's visit, Benjamin Tsang said. The policing during the visit triggered accusations that freedom of the press and speech had been suppressed. Gary Wong Ching, chairman of the Junior Police Officers' Association, supports a law against swearing at police and the disciplined services. But he conceded that legislating against this would be difficult. "What amounts to an insult? It is difficult to define," he said. "Even decades ago, we were sworn at when carrying out our duties." The chairman of the Legislative Council's security panel said such a law would be impractical. "The dignity of the police should be built up by the high quality of the force and its impartial practices," James To Kun-sun, of the Democratic Party, said. "Where there is no law against verbal insults in general, one for the law enforcers would create a double standard." Increasingly extreme protests made law enforcement difficult, he said, a trend for which he blamed the city's administration. "Citizens have lower respect for the police since they feel the police's actions are more politicised," said To. "Frontline officers are the biggest victims." Daisy Chan Sin-ying, secretary general of the Federation of Students, said the offending banner was not produced by her organisation. "We will not swear in any format at police, even though we are against their abuse of power," said Chan, a student at Chinese University. The chairman of the Superintendents Association, Philip Sham Wai-kin, said action must be taken to prevent such insults. "We never want to see such insulting words directed at the police," he said. "But we need further discussion to decide on the next step to take." The Overseas Inspectors' Association refused to comment. The Security Bureau could not give a reply last night, but said earlier that legislation against verbal insults was not in its purview, "as it deals more with physical protection".

The local office of Beijing's Foreign Ministry yesterday warned the United States consulate in the city to stop meddling in Hong Kong affairs. The accusation follows the recent release on the anti-secrecy website WikiLeaks of almost 1,000 unedited US State Department cables referring to Hong Kong. An office spokesman said the cables showed that the United States consulate was interfering in the city's constitutional development by holding frequent meetings with selected people and conducting "so-called opinion exchanges", according to a report by the semi-official China News Service. The spokesman accused the US of contravening the Vienna Convention on Consular Relations. "We have reasons to be concerned and upset by this and we request the US side to stop the wrongdoings," he said. WikiLeaks released 960 diplomatic cables from the US consulate in Hong Kong at the end of last month. They covered various topics, including discussions on who might be chief executive, the city's democratic development, its financial markets, how it handled waste and water supplies and how the tertiary education sectors see academic freedom on the mainland. The cables revealed that Leung Chun-ying, Executive Council convenor, had disclosed his plan to run for chief executive to political heavyweight Allen Lee Peng-fei as early as 2009. Other cables included Chief Executive Donald Tsang Yam-kuen's remarks to the former US consul, James Cunningham, in 2005 that adopting universal suffrage in 2007 or 2008 would bring instability as "the great fear in Hong Kong is not taxation without representation, but representation without taxation, in which the non-taxpaying majority would dictate to the taxpayers". The cables also revealed that the Democratic Party's James To Kun-sun had discussed alleged mainland infiltration of the party in 2007, and that the businessman and former legislator Albert Cheng King-hon had criticised Chief Secretary Henry Tang Ying-yen as "incompetent". To - who was also quoted in the cables - described the meddling claims as "paranoid". "There are at least eight foreign consulates in Hong Kong doing the same thing," said To, who is chairman of the Legislative Council security panel. "Understanding a place's political and economic situation is a basic function of a consulate." Johnny Lau Yui-siu, a veteran China watcher, said it was rare for the local office to speak up. "Why was it the ministry's Hong Kong office making the reaction but not the ministry itself?" Lau said. "The office has been keeping a low profile."

Chow Tai Fook, one of Asia’s biggest jewelry players, is aiming to go public later this year, but last week, it was raising its profile in charity circles instead of financial ones. The Hong Kong jeweler sponsored a gala that raised $2.5 million for the Diamond Empowerment Fund and China Charity Federation, which manage education initiatives in Africa and relief efforts in China, respectively. The night also honored Cheng Yu-tung, the chairman of both Chow Tai Fook and the vast New World Development real-estate company. “It’s a fair game: When you take from society, then you give back to society,” the 86-year-old Mr. Cheng said in an interview last week. Mr. Cheng, according to Forbes, is Hong Kong’s fourth-richest man. Earlier in the year, when Chow Tai Fook told Varda Shine, chief executive of the Diamond Trading Co., that it wanted to host the event for the Diamond Empowerment Fund, she quickly approved of the idea. “It was very important to do this event here, with China growing and with Hong Kong being a jewelry center,” she said, “and Chow Tai Fook is known as the biggest player in Asia.” Though little-known outside Asia, Chow Tai Fook is a powerhouse in the Chinese jewelry market, with more than 1,400 stores in China, Hong Kong, Macau, Taiwan, Malaysia and Singapore, and expects to have 2,000 stores by 2016. Its initial public offering could come as soon as December and those familiar with the deal said that the retailer could raise between $3 billion and $4 billion in the sale. Diamonds are a relatively new indulgence in China, a country which has favored gold and jade as its main adornments in the past. But the country’s rising wealth has also translated into a booming market for diamond jewelry. Diamond-laced engagement rings are increasingly common in the bigger cities, and China usurped Japan as the world’s second-largest diamond consumer in 2009 when it bought $1.5 billion worth of the gems, trailing only the U.S. in total consumption. Consumer demand for diamonds was up 25% in 2010, according to Ms. Shine, who expects the market to grow at the same rate in 2011.

 China*:  Sept 27 2011 Share

Sales of second-hand homes in Beijing slumped to a three-year low in the first 19 days of September, China National Radio reported on Sept 25. The contract sales of existing homes stood at 4,233 units from Sept 1 to 19, the report said, citing figures from the Beijing's real estate transaction management website. In Beijing's real-estate circles, September is known as the golden month as typically many houses are sold during it. The number represented a drop of 73.4 percent from the same period of last year and was less than one-fourth of the transaction volume in the same period of 2009, according to the report. "Price cuts of new property projects have affected prices of second-hand homes in the region," said Zhang Dawei, an analyst with Centraline Property, a Beijing-based real estate agency. The Chinese government has reiterated that it will work to rein in surging property prices. The government has limited purchases of housing in cities where gains have been deemed excessive and the central bank has raised interest rate three times this year to increase borrowing costs.

A Chinese scientist received a prestigious US award over the weekend for the discovery of artemisinin, a drug therapy for malaria that has saved millions of lives across the globe, especially in the developing world. Pharmacologist Tu Youyou, 81, became the first scientist on the Chinese mainland to win the Lasker Award, known as "America's Nobel" for its knack of gaining future recognition from the Nobel committee. Tu, a scientist at the China Academy of Chinese Medical Sciences in Beijing, pioneered a new approach to malaria treatment that has benefited hundreds of millions of people and promises to benefit many times more. By applying modern techniques and rigor to a heritage provided by 5,000 years of Chinese traditional practitioners, she has delivered its riches into the 21st century. "Not often in the history of clinical medicine can we celebrate a discovery that has eased the pain and distress of hundreds of millions of people and saved the lives of countless numbers of people, particularly children, in over 100 countries," Lucy Shapiro, a member of the award jury and professor at Stanford University, said while describing Tu's discovery. Shapiro said the discovery, chemical identification and validation of artemisinin, a highly effective anti-malarial drug, was largely due to the "scientific insight, vision and dogged determination" of Tu and her team. Shapiro said Tu's work has provided the world with arguably the most important pharmaceutical intervention in the past half-century. "The discovery of artemisinin is a gift to mankind from traditional Chinese medicine," Tu said as she received the award on Friday. "Continuous exploration and development of traditional medicine will, without doubt, bring more medicines to the world." She advocated global collaboration in research into Chinese and other traditional medicines to maximize their benefits. In early 1969, Tu was appointed as the head of a government project that aimed to eradicate malaria, and it was then that she began applying modern techniques to Chinese traditional medicine to find a drug therapy for malaria. After detecting 380 extracts made from 2,000 candidate formulations, Tu and her colleagues obtained a pure substance called qinghaosu, which became known as artemisinin in 1972. An artemisinin-based drug combination is now the standard regimen for malaria, and the World Health Organization lists artemisinin and related agents in its catalog of essential medicines. "Tu's achievement was one of the most important achievements in infectious diseases of all areas," Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, told Xinhua News Agency. "It is a good example of how Chinese traditional medicine sometimes leads to globally useful compounds like artemisinin." The Lasker Awards are among the most respected science prizes in the world. Since 1945, the awards have recognized the contributions of scientists, physicians and public servants who have made major advances in the understanding, diagnosis, treatment, cure and prevention of human disease. In the past two decades, 28 Lasker laureates have gone on to receive the Nobel Prize, and 80 have done so since 1945.

Hong Kong*:  Sept 26 2011 Share

Overseas doctors recruited by the Hospital Authority to ease shortages at public hospitals will have to pass the Medical Council's licensing examinations if they want to go into private practice, the Hong Kong Academy of Medicine said. Academy president Raymond Liang Hin-suen said: "Foreign doctors are not exempt from licensing examinations. "They are allowed to register under limited circumstances, and work for the Hospital Authority only. "If they leave the Hospital Authority, or they want to have a private practice, they need to pass the licensing examination." Liang said the public should not worry that such doctors would be unable to adapt to the city's medical sector, as medical practice and training are more or less the same around the world. "We had doctors from Commonwealth nations before 1997 and they were able to fit into Hong Kong's medical system," Liang said. Of 169 applications from overseas-educated Hong Kong-born doctors, at least 29, mostly from the United Kingdom and Australia, have been shortlisted and are said to be undergoing further scrutiny. Local doctors have expressed strong reservations on importing doctors from overseas.

Hong Kong is poised to see its first business trust listed on the main bourse as PCCW (0008) prepares to spin off 25 percent to 40 percent of its telecommunications assets. However, the trust will only list if its market capitalization crosses HK$28.6 billion - 20.2 percent over the current market capitalization of PCCW, which is HK$23.8 billion. The telecoms business accounted for 80 percent of PCCW's revenue last year. In a statement filed with the bourse yesterday, the firm - controlled by billionaire Richard Li Tzar-kai - said it aims to raise HK$6.8 billion to HK$10 billion from listing the business trust. It will also keep 55-70 percent of the telecoms business after a global initial public offering. Unless the float raises more than HK$7.8 billion, all proceeds will be used to repay debts, according to the statement. "Such interest expense savings will allow the [trust] to have additional cash for distribution to unitholders," it said. Any extra amount will go to CAS No1, a wholly owned PCCW subsidiary, for the settlement of pre-IPO restructuring conditions. In an extraordinary meeting to be held on October 12, shareholders will vote on whether the listing proposal can go through. But the board's final decision on whether the spin-off will go ahead is subject to market conditions and pricing. "[The spin-off will] better identify and establish the fair value of the telecoms business," PCCW said. A prospectus and an option scheme will be made public today. Currently, only real estate investment trusts are allowed to list locally. The move would allow Li to turn Now TV - the pay-TV service provider he controls - into a listed company. "Li has tried many times to list the TV operation. The spin-off can finally facilitate this," Eddy Wong Chin-wai at Fundsupermart said.

A plunge in the price of gold has triggered a buying spree in both Hong Kong and the mainland and fueled hopes the upcoming Golden Week will live up to its name. But soberer heads are counseling caution, warning that all that glitters is not gold amid the current volatility. In the event, bullish shoppers snapped gold jewelry in droves over the weekend after prices dropped 18 percent from HK$19,880 to HK$16,880 per tael on Friday from their peak two weeks ago. Gold futures for December delivery fell US$101.90 (HK$794.82), or 5.9 percent, on Friday to settle at US$1,656.80 an ounce in London, the biggest fall since March 2008. Gold has fallen 15 percent since it hit a record US$1,923.70 on September 6. At least one jewelry shop saw a 30 percent surge in sales of gold ornaments. 3D-Gold Jewellery store manager Tony Wong said customers are buying two to three taels, where in the past they would average just one. Shoppers jumped at the chance to buy after prices, reflecting international movements, sank to HK$16,880 on Friday from HK$17,830 on Thursday. Gold prices hit a high two weeks ago amid a race for safe-haven assets as stock markets plunged worldwide following US and European debt crises. Wong, for one, expects the National Day Golden Week to bring a bonanza as the mainland heads into its traditional peak season for marriages. "I expect the number of mainland customers will increase by 20 to 30 percent over last year's National Day holidays," he said. Also weighing in was a Chow Tai Fook store manageress in Tsim Sha Tsui, who says mainlanders are behind the surge. It is also happening on the other side of the border. In Guangzhou, queues formed during the weekend for gold bars. One store cleared 10 kilograms in just half a day, putting about 3.7 million yuan (HK$4.51 million) in its tills, Guangzhou Daily reported. Smaller denominations of 10 and 50 grams were even out of stock in some stores. "Gold prices will not drop further, as global inflationary pressure is mounting. One would be silly to buy stocks or houses, instead of gold, at the moment," one of the buyers told the newspaper. Sales jumped in Wenzhou - a city notorious for speculation - after the Mid-Autumn Festival as the wedding season drew closer. "Two sets of golden jewelry for weddings, incorporating necklaces, bracelets and rings, were sold within one day," said an employee at a Chow Tai Fook Jewellery's Wenzhou store. The jump in sales came as Hong Kong-based distributors, including Chow Tai Fook and Luk Fook Jewellery, cut prices at their mainland stores by as much as 31 yuan per gram, or 6.5 percent, to 446 yuan per gram. Their bullishness also came as Barclays Capital warned in a note that the correction in prices is temporary and the metal will benefit from concerns about global economy and low interest rates. "Prices are likely to drop by another US$100 per ounce in the short run," they warned. If investors are jumping in to buy gold, there is no silver lining for another precious metal. Silver investors have been selling their holdings as prices dropped by 17.7 percent to US$30.10 per ounce.

Companies would prefer to issue yuan-denominated shares in Hong Kong instead of on a new stock exchange planned to be launched in Shanghai, according to the Chamber of Hong Kong Listed Companies. The Shanghai Stock Exchange's proposed international board will allow foreign companies to list on the mainland, but no time frame for its launch has been set. "I think only those companies, such as HSBC, which want to raise awareness in the mainland market would prefer to list on the international board," said Lo Ka-shui, head of the chamber. "If Hong Kong companies list in the mainland, they will need to follow both the mainland and Hong Kong listing rules." Lo said the Shanghai bourse could be less attractive for investors due to certain mainland regulations, particularly capital controls that limit market access to overseas firms. Chinese companies are also prohibited from bringing back to the mainland yuan accumulated offshore, discouraging them from issuing yuan shares. Hong Kong Exchanges and Clearing (SEHK: 0388) (HKEx) in July announced rules allowing companies to apply for initial public offerings in both yuan and Hong Kong dollars. It also issued guidelines earlier this month allowing listed companies to issue yuan-denominated shares. To facilitate yuan shares trading, the HKEx will also introduce banking facilities aimed at providing yuan to stock brokers, allowing investors who do not hold the currency to trade in yuan shares. The yuan is not yet fully convertible, but since 2009, the mainland has allowed companies to use the currency to settle cross-border trade. A landmark relaxation in July last year allowed the currency to be transferred between the bank accounts of individuals and financial companies, encouraging the launch of yuan- denominated investment products such as insurance, funds and bonds. However, the first yuan initial public offering in Hong Kong, by Hui Xian Real Estate Investment Trust, disappointed investors when it dropped 9.35 per cent on its debut in April. Lo said the market slump made another yuan IPO less likely, with investors "not interested in buying anything". But he said many companies listed in Hong Kong were expected to issue yuan stocks to finance mainland projects in the long-term. Vice-Premier Li Keqiang, during his three-day visit to Hong Kong last month, said foreign firms would be able to invest yuan holdings directly into mainland projects. The details of this measure have yet to be released. "China will allow the currency to be freely convertible in five to 10 years," Lo said. "When that happens, it will make sense for companies in Hong Kong to issue yuan shares."

Former ATV news chief Leung Ka-wing said in a radio interview yesterday that he had been put under pressure by his unidentified source to broadcast the station's erroneous report in July that former president Jiang Zemin had died. In an interview with Commercial Radio Leung said he had been put under pressure as his source wanted the unverified report about Zemin to be broadcast that evening. He also said the station had modified its logo ahead of the broadcast without his knowledge and that he had been told he had no right to change it back when he objected. Leung has refused to identify his source for the July 6 broadcast, which embarrassed the station and led to Leung's resignation. His comments come six days after he told a Legco panel that he had mistakenly trusted the source, and claimed sole responsibility for the broadcast. He also told the panel there had been no evidence of management interference in the newsroom's operations. ATV executive director James Shing Pan-yu told the panel he was not the source of the information, and neither were ATV investor Wong Ching or senior vice-president Kwong Hoi-ying. Leung said in yesterday's interview that the source might have been only "a messenger." "Mr A (the messenger) told me a lot of things and we argued a lot... and I suspect the information was from Mr B instead. I can only suspect it because I have no evidence." He said not only could he not stop the report being broadcast, he was also told he had no say over the decision to change the colour of the station's logo. "I saw the logo changed to a dark colour at 7pm and then I asked a senior colleague to request the company to change it back," he said. "But the response was: `You do not have the authority to change it'. I was really helpless that night." However, he added that he successfully stopped the station from airing a special programme on Jiang's life later that night. Cheung Man-kwong, a lawmaker on the Legislative Council information technology and broadcasting panel, said the council should use its powers to summon Leung to return for another hearing and ask him to disclose full details of the incident. In a statement, ATV said it respected press freedom and editorial independence, and that it complied with the Broadcast Ordinance. It also rejected criticism that it had received payments for its news reports, adding that all information had been provided at the Legco panel meeting.

 China*:  Sept 26 2011 Share

In times of economic crisis, cash is king. But in times of stagflation - which occurs when the economy is not growing but prices are - gold is the emperor. The arrival at the weekend of the first gold-bullion vending machine in Beijing seems to bear this out. Soaring prices, the uncertain economic outlook and a lack of investment tools have triggered a global buying spree for the precious metal - prices hit a record high above US$1,920 an ounce earlier this month. And China is no different, especially amid record inflation and record low interest rates for bank deposits. The first of the new machines was installed in the Wangfujing area, Beijing's premier shopping district, on Saturday. Made by German gold-bullion dealer TG Gold-Super-Markt, it dispenses 10 kinds of gold coins and bars of various sizes and weights. A 2.5kg bar sells for about one million yuan (HK$1.22 million) at current market prices, which are updated on the machine every 10 minutes. Customers can use cash - 50-yuan and 100-yuan notes - or bank cards to buy gold products, with the purchase resembling a transaction at an ATM. More machines will be installed in the capital, but only in luxurious private clubs and private banks - for security reasons. The German firm launched the world's first "gold ATM" at Abu Dhabi's Emirates Palace Hotel in May last year. The machines have since spread to several countries, including Spain, Britain and the United States.

China beat Jordan 70-69 in a breath-taking final of the Asian Men's Basketball Championships on Sunday to win the title for the first time in six years. China also won the berth of the 2012 London Olympic Games while Jordan and bronze medalists South Korea will compete at the Olympic Qualifying Tournament in 2012.

Hong Kong*:  Sept 25 2011 Share

Hong Kong is the most expensive city in the world when it comes to billionaire trophy homes, according to a report by Savills, the international property consultant. "Billionaire properties in Hong Kong average £6,700 [HK$81,778] per square foot," said the report, which calculated a price index of homes for the super rich in 10 top cities around the world.  Tokyo ranked second at £5,190 per square foot and Paris third at £3,270 per square foot. Rounding out the list were London, Moscow, New York, Shanghai, Singapore, Mumbai and Sydney. Savills described these cities as prime metro areas in their respective countries that attracted billionaires. The square-foot price of Hong Kong's trophy homes is more than double London's and over 10 times the price in Sydney, the cheapest location for billionaires that Savills charted. The report said that while genuine overall demand is strong, evidenced by rental increases, the desire for "trophy assets" is stronger in Hong Kong. That's due to a huge demand for investment properties from mainlanders, coupled with restricted supply, Savills said. According to CB Richard Ellis, luxury residential prices on Hong Kong Island rose 7.3 per cent quarter on quarter to an average of HK$27,451 per square foot in the second quarter. But the rate of appreciation in luxury residential prices moderated over the second quarter, against 15.8 per cent growth in the first three months. Savills said there was some difficulty in measuring residential real estate prices across continents because of the way people live, what they expect and a difference in the size and style of their homes. To adjust for the differences, the property consultant took what it called a typical "executive unit" - a group of people that might start up or expand a global business in any country. They then compared the residential accommodation they would be likely to choose in each of the 10 cities. "It is by comparing the accommodation costs of these people that we can truly compare the cost of residential real estate across some very different global cities," the report's authors said. The people who made up Savills' "executive unit" included a middle-aged expat chief executive, a senior expat director, a locally employed director and four locally employed administrative staff. From December 2005 to December 2010, the average price of trophy homes in the 10 cities rose 65 per cent, the study found. Singapore rose the most at 144 per cent, then Mumbai at 138 per cent, Moscow at 110 per cent, and Hong Kong at 83 per cent. In the first six months, the homes of the super rich in the top 10 cities rose an average 10 per cent. This compares to average price growth of 6 per cent for ordinary properties in the same cities. Tokyo was second in price per square foot, but given the larger size of its trophy homes, Savills put it first in absolute value with a top trophy home going for £83 million.

We maybe on the brink of a major world recession, but a new survey has shown that Hong Kong businesses are not being adversely affected by it. It's the first time that Hong Kong has been included in the Randstad World of Work Report 2011-12, which includes the opinions and feedback of 380 business professionals in the city. The research is part of Randstad's annual Asia-Pacific study that canvassed 8,200 employees and employers to better understand the challenges they face in the region. Randstad is the world's second largest recruitment and Human Resources services provider and the report found that almost a third of employers see attracting talent for the next phase of growth as the single biggest challenge for the next 12 months. The vast majority of employers - 93 per cent - plan to maintain or increase their staff in 2012, with 59 per cent planning to hire more full-time staff. The finding appears to be at odds with a recent announcement by banking giant HSBC, which said it would cut 30,000 jobs or about 10 per cent of its workforce worldwide by 2013. It would also reduce its operations in Hong Kong by about 10 per cent, shedding 3,000 jobs. The news angered staff, especially those at junior levels, and unions protested at the bank's headquarters in Central against the proposed lay-offs. The Randstad survey was much more positive, although it showed that staff had other priorities apart from money. What mattered most of all to them was strong leadership, with 50 per cent of respondents describing their leaders as poor or average. Half of those surveyed believed the single biggest attribute of a successful leader was the ability to motivate and inspire others, yet 48 per cent rate their direct manager's ability in this area as poor or average. "Yes, Hong Kong people are motivated by money, but only 10 per cent of the city's employees said that money mattered most. Strong and present leadership was more important," Randstad Hong Kong director Brien Keegan said. "It's true people like dollars in the bank but it is often the intangibles an organisation offers that make a difference. We have a leadership problem in Hong Kong where we have found that a third of the employees do not trust their team leader." Employees also said recognition and a sense of achievement in the workplace were crucial factors in staying with their current employer. In other key findings of the survey, 69 per cent of Hong Kong respondents said they would prefer a pay rise over a promotion to a more senior position; and in the coming year, 58 per cent of employers will offer leadership and career development as a benefit to retain employees, and 61 per cent will offer general training and development.

A capture of Civic Party lawmaker Tanya Chan's Facebook page. Chan has vowed to continue using the social network in her election campaign. Hong Kong's complex election rules are forcing the city's political hopefuls off Facebook and other social networking sites for fear that they could fall foul of the regulations. A group of Democratic Party candidates say the Registration and Electoral Office has failed to give them clear and reasonable guidelines for using social media websites as part of their campaigns. Eric Lam Lap-chi, a party candidate in Kwai Tsing, said the office told him candidates would need to report to returning officers all the "posts and updates" related to the election campaign on their Facebook pages - including records of any visitors to their pages clicking "like" or "share" on a post. "I think that is bureaucratic and ridiculous. It's unreasonable to require candidates to report other net users' activities - which we cannot control - on our pages," said Lam. Lam said he would adjust the privacy setting on his Facebook page to only allow friends to gain access and will make no mention of his campaign in order to avoid breaching election rules. By law, candidates are required to provide copies of election advertisements - includes materials displayed or distributed by electronic means - to returning officers once they declare their candidacy. A spokesman for the Registration and Electoral Office said those materials include election-related "updates on Web pages" and "interactions on Twitter, Facebook and webpages". He did not say directly whether those "interactions" include the activities of third persons on the candidate's Facebook page, but said those with queries should "make reference to the relevant laws and guidelines". Jiff Yiu Ming, a district council candidate in Fanling for the Democratic Alliance for the Betterment of Hong Kong, said he had decided not to electioneer on Facebook because of the complicated procedures. "I would not mind making reports of what I post on Facebook, but it's nonsense to require me to report what others did on my page," he said. Yiu also said that he had been told he would need to report all the comments and actions of other internet users made in response to his posts on Facebook. Tanya Chan, a Civic Party lawmaker and a candidate for a district council seat on The Peak, said she had heard a different version of the guidelines from the government's legal adviser in a Legco meeting. The adviser had said candidates would only need to report the posts they themselves put online. Chan said she would therefore keep using Facebook for campaigning but would report to returning officers the posts she made. Still, she said she had to be careful about using pictures and also had concerns about ensuring her expenses calculations were in accordance with the office's complicated regulations. Chan called on the government to clarify the regulations covering online campaigning to reflect technological advances.

Police Commissioner Andy Tsang attends the Hong Kong Police College passing out parade at Wong Chuk Hang yesterday. More than 1,000 protesters took to the streets yesterday in a final attempt to head off a legal amendment that could scrap by-elections for Legislative Council vacancies. As a two-month public consultation on the proposal ended yesterday, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, said the government would not rule out revising its proposals for new procedures to fill Legco vacancies. The protesters, including pan-democrat supporters, marched from Causeway Bay to the government offices in Admiralty, chanting slogans and calling on Lam to step down and to withdraw the proposals; these include giving the seat of a departing lawmaker to one of his or her running mates in the previous poll or prohibiting a lawmaker who resigns from contesting the seat in the resulting by-election. The government proposed scrapping by-elections after five pan-democratic lawmakers resigned last year to trigger by-elections they hoped would be a de facto referendum on democracy. The government says the manoeuvre was an abuse of the electoral system and a waste of public money. The administration tried to rush the bill through Legco but, after the annual July 1 rally drew the biggest turnout since 2004 - 200,000 by one estimate - it bowed to public pressure to hold a consultation. Lam said he had attended 13 forums during the consultation period. They included a public forum held at the Science Museum in Tsim Sha Tsui on September 1 which was gatecrashed by masked protesters. Police Commissioner Andy Tsang Wai-hung said yesterday the force's investigation of the gatecrashing incident was continuing. A masked protester on yesterday's march said he had participated in the gatecrashing of the Science Museum, but had not been approached by police so far.

HK on track to becoming first smoke-free city - Just 11pc of adult residents use tobacco after steep falls in the habit thanks to restrictions on lighting up, tax increases and peer pressure, health experts say - The dwindling number of smokers in Hong Kong is setting the city on course to become the rich world's first "smoke-free" city. The current level of 11.1 per cent of people aged 15 or above who smoke in Hong Kong - the outcome of higher taxes, social factors and effective anti-tobacco campaigning - is believed to be the lowest in the developed world. The figure, released in August, is the result of a Census and Statistics Department survey of 13,375 households conducted from October to December last year. Experts say the downward trend will continue as new tax increases take effect, sending smoking levels into single digits as the habit becomes more socially unacceptable. The momentum could make Hong Kong the first city in the developed world to achieve "smoke-free" status - a level at which smokers make up 5 per cent or less of the adult population, a target set by countries including New Zealand and Finland. Insurers consider someone who has consumed tobacco just once in the past 12 months to be a smoker, but Hong Kong health officials define a smoker as someone who smokes at least one cigarette a day. Those who smoke only on weekends are thus not considered smokers. Dr Judith Mackay, a senior adviser to the World Lung Foundation and the World Health Organisation who has worked closely with the Hong Kong government on tobacco control since the 1980s, said there had been a profound change in attitudes. "When I started with this work, you could smoke anywhere in Hong Kong," she said. "There were massive billboards, advertising on TV, advertising on the radio and ubiquitous advertising and promotion. "There were no smoke-free areas. You could smoke in cinemas, on buses, you could smoke anywhere. This has just been an incredible public health move." Three decades ago, nearly one in four adults smoked. Today, Mackay said, the city may be nearing an "end game" with the tobacco industry. One reason for the low smoking rate is that it combined relatively low male smoking rates similar to Western countries with extremely low female rates of 3 per cent to 5 per cent - common to Asian countries. But government initiatives took much credit for the recent, sharper downturn in smoking levels, Mackay argued. "What Hong Kong has done most recently is introduce the whole smoke-free-areas initiative plus the fact we have had tax increases - it's as simple as that," she said. "Plus, we are seriously beginning to introduce assistance with quitting for smokers." Mackay said a backlash from the tobacco industry was inevitable and pointed out legal actions had been launched globally to challenge moves towards declaring smoke-free areas. Dr Raymond Ho Lei-ming, head of the Department of Health's Tobacco Control Office, agreed that going below 10 per cent of smokers in the adult population could be a significant turning point. "We are trying to set a new cultural norm," he said. "There will be more pressure on smokers to quit or at least to reduce if they can't quit immediately. More importantly, it will help stop the next generation from taking up smoking."

Apple customers use their smartphones to snap pictures of the protest banner outside its IFC store. Fans, protesters greet HK's first Apple Store - IFC Mall in festive mood as seller of iconic gadgetry opens, despite calls to protect workers' rights. Security guards scuffled briefly with protesters in the IFC Mall yesterday at the opening of Hong Kong's first Apple Store. But the incident failed to dampen a festive mood among fans of the iconic gadgetry. Angered by what they see as violations of workers' rights by the company that makes iPhones and iPads for Apple, about 20 protesters unfurled a banner at the new shop reading: "No More iSlave". The protesters, however, were outnumbered by about 500 people who had queued outside the shop, some overnight. Spirits were high ahead of the opening as youthful Apple staff in blue shirts cheered and ran along the queue, giving high fives to fans with cult-like fervour, yelling, "See you on the other side!" and repeatedly chanting "IFC!" and "Apple!" Jenny Zhang Yiyao, a master's student from Los Angeles studying at the University of Hong Kong, said she had joined the queue at 3am with a friend. "It's a historic moment," she said. "The store has an Apple vibe: simple and classy. The view is beautiful. It could even become a tourist attraction." Joe Chan Cho-yan said he had waited since 7am with two friends. "The Genius Bar is the best thing about the store," he said, referring to the team of staff offering personal technical support for those who make an online appointment. "Before this, I'd have to consult an online forum, but now I can speak to a real person." Another fan said: "I won't be buying from resellers any more because I know Apple will take better care of its products. You never know if resellers have dropped the product on the floor beforehand." At about 11am, 20 or so protesters from the non-profit advocacy group Students and Scholars Against Corporate Misbehaviour held a prearranged demonstration on the second floor of the mall, where the upper floor of the Apple Store is, unfurling their banner from a balcony. The group was protesting against the labour practices of Foxconn Technology, the Taiwanese-owned company that makes Apple products at factories on the mainland. There was a commotion as security officers tried to pull the banner back from the balcony. The tussle lasted five minutes, then the guards walked away. The banner was removed 90 minutes later. "We just wanted to protest peacefully," said one of the demonstrators, whose allegations include unsafe working conditions and low wages.

Jackie Chan's 100th film marks the 100th anniversary of the revolution that overthrew the last Chinese imperial kingdom. Set against the backdrop of a corrupt Qing Dynasty and foreign aggression, the film China 1911 depicts Dr Sun Yat-sen and commander Huang Xing leading the Xinhai Revolution that ended the system of feudal rule that had existed for thousands of years. The film premiered on Friday. Chan said he turned to historical material to understand his role as the legendary general Huang. "I hope after seeing the film that audiences will forget Jackie Chan and remember Huang Xing, and what he and his fellow revolutionaries have done for the country," he said. Chan, who is also the film's co-director, teamed up for the production with mainland filmmaker Zhang Li, who is known for his insight on grand historical subjects. The day the film wrapped up shooting, Chan added a three-minute fight scene in which he battles a group of assassins. The scene steps away from Chan's signature humor and is shot in a down-to-earth style. Chan knows Huang was not a martial artist, but believes the scene will help the film's distribution in overseas markets. Taiwan actor Winston Chao, who has played Sun Yat-sen four times in TV dramas and films, once again portrays the statesman. "A key word of Sun's doctrine is fraternity," Chao says. "He loves his people and hopes to improve their lives." The film also depicts the romance between Huang and his wife, the revolutionary Xu Zonghan, played by mainland actress Li Bingbing, star of Snow Flower and the Secret Fan. According to statistics from gewara.com, the largest online movie ticket sales platform in the Yangtze Delta, China 1911 was the second most popular movie on Friday. It fell behind May Day 3DNA, a music movie from Taiwan. More than 1,300 tickets were sold on the website that day, more than Captain America and Sanctum, two Hollywood movies. However, turnout was about 20 percent at a cinema in Chaoyang district in Beijing on Friday evening. Thirty-year-old Hao Yong used his lunch break to catch the film in Beijing on Friday. "What I was most concerned about was whether this film tells the true story of the revolution. I think it does a good job." The film will be released in North America on Oct 12, and Japan on Nov 5, after it opens the Tokyo International Film Festival on Oct 22.

 China*:  Sept 25 2011 Share

153-year-old cognac fetches 1m yuan in Shanghai - A bottle of 153-year-old cognac was auctioned for 1 million yuan (HK$1.2 million) in Shanghai yesterday, believed to be a record price for the French spirit in an unadorned bottle. Winning bidder Maggie Vong, from Hong Kong, said she was delighted to have won the bidding, which started at 388,000 yuan. Vintage cognac has brought a higher price - but only when sold in an elaborate jewelled bottle. Croizet Cognac's Cuvee Leonie was one of 16 items auctioned at an invitation-only event at Shook! restaurant, on the top floor of the Swatch Art Peace Hotel on the Bund. "I was very keen to get hold of this exclusive bottle," Vong said. "But setting a precedent also pushed me on. I am very happy to have broken a world record." The exclusive event is understood to be the first cognac-only auction to be held on the mainland. Jason Gillott, Croizet's head of international marketing, said: "There has been intense interest in this sale. People have been flying in from all over the world." The headline cognac was produced from the grape harvest of 1858 - before a blight of phyloxera wiped out most French vines in 1875, devastating the European wine industry. The rare spirit was part of a dowry given in 1892 to Leonie Croizet - great granddaughter of Leon Croizet, who founded the firm in 1805 - by her father. It has remained in the company's vaults ever since. The highest price previously paid for a cognac was US$2 million for the Henri IV Dudognon Heritage, sold in 2008. However, the bottle holding the 100-year-old brandy had been specially encrusted with diamonds and inlaid with 24-carat gold, causing some to wonder if the spirit or container was more valuable. A 1788 Vieux Cognac in its original bottle fetched €25,000 (HK$263,000) in Paris in 2009. Gillott said the company had made a conscious decision to keep the Cuvee Leonie in its original bottle. Ahead of the event, Gillott predicted that the bottle could go for more than 1 million yuan. The astronomical price earned by the headline item, and the fact Croizet chose to hold the auction in Shanghai, shows the incredible buying power of China's nouveaux rich, and the impact they are having on prices of luxury goods worldwide. But it was not all plain sailing. Before the main item was offered, almost half of the lots had failed to reach their reserve prices.

Customers in line for the official opening of the new Apple Inc store in Shanghai on Friday. The company currently has three outlets in Shanghai and two in Beijing. Apple Inc, the world's top technology company by market value, opened its biggest official Asian outlet in Shanghai on Sept 23. The move underscores Apple's attempts to broaden its distribution channels and the huge market potential in the world's largest mobile-phone market. More than 1,000 people lined up on East Nanjing Road, in one of Shanghai's central business districts, to await the 9 am grand opening of Apple's third store in the city and it's fifth in China. The opening was not attended by company executives and no new products - such as the elusive iPhone 5 - were launched. However, that failed to deter dedicated Apple fans from attending and witnessing the tech titan gain another foothold in the metropolis. Cui Lizhen, 27, flew into Shanghai on Sept 21 from the Northeastern province of Jilin. Cui, who owns a start-up company, has been an avid user of Apple products for nine years and owns the full range of its devices. "They all appear stylish and useful," he said, referring to the products as he stood at the front of a line that stretched for a hundred meters. "I wish they could open more stores in China, say in my hometown in Jilin, as the demand has, and definitely will continue to, surpass supplies." The three-storey shop, which occupies nearly 1,000 square meters, displayed a bewildering array of products. Zhang Yingda, the manager of the new store, said the company usually has superior "user experiences" built into every facet of its products, beginning with the packaging and ending with the internals that most people never see. Apple has managed to become an extraordinarily savvy supply chain force. Its iPad has revolutionized the industry and ignited a tablet frenzy among computer companies. Meanwhile, the MacBook Air and the application-integrated iPhone have seen Apple become part of a huge and still-growing sector. The company currently has three outlets in Shanghai and two in Beijing. It is set to open its first store in Hong Kong on Sept 24, bringing the total to six in a region with the company's highest-grossing outlets. While Apple is poised to expand its footprint across the country, market insiders said the decelerated opening of its stores has provided room for its rivals to flourish in the highly competitive smartphone segment. However, the company claimed only 13 percent of China's smartphone market by shipments in the second quarter, following Nokia Oyj's 36 percent and Samsung Electronics Co's 15 percent, according to estimates from the researcher Gartner Inc. Moreover, Apple is expanding at around a quarter of the pace it had previously targeted. Ron Johnson, a former head of retail, once said the company aimed to have 25 stores in China by February 2012. In July, Tim Cook, recently appointed as CEO, warned that the company is only "scratching the surface" of Chinese demand after sales in the country surged six-fold to $3.8 billion last quarter. However, Sun Peilin, an analyst with the domestic Internet research firm Analysys International, said Apple's moves suggest that the company is gradually adapting to the unique business environment in China and that increased cooperation with domestic telecommunications operators will boost sales. "Apple's distribution network in China has a limited presence, forcing customers to buy from vendors not sanctioned by the company." Sun said. Among the nearly 2 million iPhones sold in China, a large number were shifted through unauthorized channels, the so-called "gray market", Sun noted. "Now they are aware of the problems after years of operation. With two new openings in a row, these largely symbolic moves indicate that they have seriously stepped up expansion." Sun also predicted that Apple will forge closer ties with China Mobile Ltd and China Telecom Corp Ltd. "The upcoming generations of iPhones and iPads are likely to be compatible with upgraded 3G or even 4G networks that are supported by all telecommunications vendors," Sun said. "That will further remove the barriers for Apple's access to more users."

Locke promotes green transportation in C China - Gary Locke and his wife, Mona, ride bicycles with officials during an event to promote environmentally friendly transportation in Wuhan, Sept 23, 2011. 

Yachts in Qingdao, Shandong province. According to the 2010 Hurun Wealth Report, there are at least 875,000 millionaires on the Chinese mainland, and half have indicated they intend to purchase a private yacht. China's yacht market is small at present, but it will grow bigger in the coming years, industry insiders said. "The yachting market in China is emerging and exciting," Thierry Regnault, technical manager of France-based CMN shipyard, told China Daily at the Monaco Yacht Show, which runs from Wednesday to Saturday. Regnault said that his company will attend the yacht show in Hainan next year to attract Chinese buyers, although CMN has yet to sell any yachts to China. More than 500 exhibitors from 36 countries and regions across the world joined the annual show, which is the world's leading event in the super-yachting industry. According to local media, more than 100 super yachts are on show, including 40 debuts. Around 30,000 visitors are expected to attend. Yachting, a major pastime of affluent Americans and Europeans, is increasingly becoming popular among the rich in China as a show of wealth. Demand for private yachts has gained traction in China over the past two years. According to the 2010 Hurun Wealth Report, there are at least 875,000 millionaires on the Chinese mainland, and half have indicated they intend to purchase a private yacht. China makes up a small part of the global yacht market currently, but "I believe that China has the huge potential for growth, even the fastest growth in the world", British yacht designer Alex McDiarmid also said. He said that yacht magazines in China are on the rise, adding that his company has created special yacht designs for the Chinese market. "Many companies will focus on the Chinese market as China's economy develops fast," said David Namany, co-founder & director of UK-based superyachts.com, an online information and purchasing platform. China's yacht producers also want to have a slice of the pie. Roger Liang, managing director of Hong Kong-based Kingship Marine Ltd, which owns a shipyard in Zhongshan, Guangdong province, hopes to attract buyers from the Chinese mainland in the future. Liang is confident in his steel and aluminum luxury yachts, which currently are sold to overseas customers. However, not all of China's yacht builders are developed enough for mainstream sales. According to the 2010-2012 China Yachting Industry Report, the yacht manufacturing industry is still in the initial stages of development. There were less than 400 domestic boat manufacturers at the beginning of 2010, of which 75 enterprises were mainly engaged in the manufacturing of yachts and approximately 40 enterprises realized annual sales of more than 10 million yuan ($1.56 million). International yacht builders dominate the middle- and high-end yacht market in China, compared with Chinese enterprises, which focus on the middle- and low-end market. In addition, from yacht design to manufacturing technology, Chinese enterprises have long relied on resources provided by European and American enterprises, the report said.

Hong Kong*:  Sept 24 2011 Share

The latest incarnation of the West Kowloon Cultural District will get the thumbs up from Hongkongers, a consultative panel confidently predicted ahead of putting the final vision before the public next week. "We don't expect Hongkongers will say no. They chose it," said panel chairman Professor Stephen Cheung Yan-leung. The arts hub now features a more accessible Chinese Opera centre and more educational facilities, by public demand. Architect Norman Foster, designer of the hub, will be present at the launch next Thursday of the third and final public consultation at the Heritage Discovery Centre in Kowloon Park, Tsim Sha Tsui. From Friday and throughout October, the public will be able to view a 1:250 physical model of the arts hub, a digital three-dimensional model, photos and information panels. Cheung said the final design had incorporated features from the two other designs shortlisted in the second round of public consultation last year, and had been modified according to the public's comments. "Some said they didn't want to walk such a long way to see Chinese operas, so the centre is now closer to Canton Road ... There will also be more educational facilities," he said. "But these changes will not undermine the original design." That included transport facilities "and, of course, the promised 20-metre wide seaside promenade". During the consultation period, there will be guided tours to help visitors understand the plan, and the opportunity to leave comments. There will also be a series of conferences to gather more opinions. Cheung admitted that the one-month consultation was short but said the idea was to seek approval from the Town Planning Board by the end of the year. "We will continue to consult arts and cultural groups," he said. "Some features can be fine-tuned if technically feasible." And, he said, the panel would continue to listen to public opinion. Once the project has planning approval, an international competition will be launched to design some of the buildings. Cheung expected construction to start by the end of next year, and the first facilities to be open by 2015.

HKEx warns investors to heed news of downgrades "in light of the economic environment in Europe and the recent market volatility". Investment banks will be banned from issuing warrants or other derivatives if their ratings fall below a certain threshold, Hong Kong Exchanges and Clearing (SEHK: 0388) said yesterday. However, warrants already issued by such banks would be allowed to continue to trade but the issuers would need to continue to provide liquidity until the products expired, HKEx said. Ratings agencies have expressed concern about the impact of the crisis in the euro zone on some banks. HKEx requires an issuer to have one of the top three credit ratings from either Moody's Investors Service or Standard & Poor's. At present, no issuers have dropped below this HKEx threshold, although some have been on the brink. HKEx's comments yesterday were made to clarify procedures if an issuer's credit-rating downgrade meant it was banned. Brokers said the clarification would help ease investors' fears and prevent panic selling of warrants or derivative products issued by these issuers if a downgrade caused their removal as qualified issuers. Moody's last week cut the ratings of French banks Societe Generale and Credit Agricole by one notch, citing their exposure to Greek debt, although their ratings still fall within the HKEx criteria. The rating agency is also reviewing French bank BNP Paribas' rating. The Securities and Futures Commission and HKEx meanwhile warned investors to pay attention to downgrade news. "In light of the economic environment in Europe and the recent market volatility, the SFC and HKEx would like to remind investors holding uncollateralised structured products, such as derivative warrants and callable bull/bear contracts that they should pay close attention to the financial strength and creditworthiness of structured product issuers," the two regulators said. "Uncollateralised structured products are not asset-backed. In the event that a structured product issuer becomes insolvent and defaults on its listed securities, investors will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer." The collapse of Lehman Brothers in September 2008 left thousands of investors facing losses.

CLP's head office when it was built in 1940 (top) and how the site would look when it is redeveloped (bottom). The development minister has backed a revised plan by CLP Holdings (SEHK: 0002) to build flats on the site of its historic headquarters in Kowloon, a project that could earn the power firm HK$3 billion. Carrie Lam Cheng Yuet-ngor said the plan to preserve the clock tower and demolish the rest of the art deco building, which has grade one heritage status, was the result of two years of negotiations with Michael Kadoorie, CLP's chairman. "When it comes to preserving private heritage sites, it's a headache. We have to deal with it seriously and cannot deprive people of private property rights," Lam said. "We welcome the proposal because the most valuable element, the clock tower, will be preserved. The owner will use its own resources to give something back to society." The plan, which will be discussed by the Town Planning Board next month, involves demolishing the building in Argyle Street, Ho Man Tin, and building three 25-storey blocks above a five-storey car park. The clock tower will house an archive of documents related to the history of the Kadoorie family and Hong Kong and a museum of electricity. Both will be open to the public. Surveyor Pang Siu-kee estimated the redevelopment, which will produce flats totalling 300,000 square feet, could fetch HK$3 billion. The current plan was revised from one approved in 2001 for construction of a 39-storey residential tower. While the tower is now split into three shorter ones, the plot ratio has been raised to allow for the clock tower. CLP said the new approach protected its property rights while satisfying public aspirations for heritage conservation. The art deco building was opened in 1940 as the power firm, led by the Kadoories, extended electricity supply for a growing Kowloon. It marked a milestone in the development of the company and the district, according to a heritage appraisal by the antiquities office. Civic Party lawmaker Tanya Chan said she respected the Kadoories' efforts in nature and heritage conservation but it seemed that by stepping into real estate the company was doing a "side business". She hopes CLP will reconsider its plans so as to allow for preservation of as much of the building as possible. Meanwhile, the owner of Cheung Chau Theatre has submitted a plan to redevelop the grade three historic building into 11 houses while preserving the facade and ticket office.

A government consultant says moving a Sha Tin sewage treatment plant underground would free up prime residential space that could fetch net revenue of HK$8.3 billion in 17 years. This is one of the results of a cost-benefit analysis officials will use in a coming public consultation to build support for a policy to put facilities underground to lift land supply. Secretary for Development Carrie Lam Cheng Yuet-ngor told a conference attended by engineers and planners yesterday that it was worth exploring the underground area because of a lack of developable land in the city. She said it was going to be "an easy task" to show that cavern developments, though expensive and complex, would be cost-effective. "It is easy to justify because of the high land value [in the city] ... You also take into account the intangible benefits, the value of environmental improvement," the minister said. She was speaking before the consultation exercise due to begin in the next two months to gauge views on the locations and scope of cavern developments. She cited the Sha Tin sewage treatment plant, at the mouth of the Shing Mun River, saying the facility was a drag on the environment and regarded as a nuisance in the neighbourhood. The Sha Tin area was identified, along with four other places, in a preliminary study released earlier this year as suitable for hollowing out to make caverns to house unpopular utilities. Some 400 public facilities were seen as suitable for relocation. The sewage treatment plant could be moved into a cavern on the other side of the river, releasing a 28- hectare waterfront site for flats. Consultant Ove Arup & Partners told the conference the relocation, including hill excavation and the extra operating cost of running an underground instead of above-ground facility, would amount to HK$17.7 billion. But that cost could be recouped by land revenue of HK$26 billion if the site yields low- to medium-rise luxury apartments. Ling Ka-kun, deputy director of planning, said the government needed to draft a territory-wide strategy to look for underground opportunities. The Sha Tin case would take 17 years for the original site to go through statutory planning processes, construction and decontamination before it is ready for a new use. But Dr Man Chi-sum, chief executive of Green Power and a government environment adviser, doubted the public benefit of opening up costly caverns if the above-ground sites were released only for private flats. He also said there was plenty of usable rural land, now haphazardly occupied by short-term waste storage depots or recycling yards. "It is always easy to spend money to create new land owned by the government," Man said. "But why can't officials think of a way to use the rural private land that is so abused?" Engineers from Singapore and Helsinki, Finland, told the forum of their experiences using caverns for ammunition storage, a snow thawing plant, swimming pool and church.

Apple’s first Hong Kong store hasn’t even opened yet, but the buzz is building and the fanboys are ready to pounce. The two-story store, located in the city’s upscale IFC Mall, had an unveiling of sorts Thursday when Apple invited local media for a sneak peek. Tourists, businessmen and Apple fans peered through the glass doors as the metal gate lifted, but they, along with several journalists, weren’t allowed in — Apple staff conducted identity checks (on their iPads, of course) and were flanked by security guards. Store workers applauded as the selected journalists ascended the glass spiral staircase. They were greeted by Bob Bridger, Apple’s vice president of retail real estate and development, who said the Cupertino, Calif., company has hired 300 workers for the 16,000-square-foot Hong Kong store. It’s in the mall on a 10-year lease. Apple products are wildly popular in Hong Kong, just as they are world-wide, but the firm is going up against a citywide ecosystem of gray-market Apple resellers. The move highlights Apple’s ambitious expansion plans aimed at tapping growing demand for iPhones, iPads and Mac computers in Greater China. It has four stores in mainland China and is opening a fifth in Shanghai tomorrow, ahead of Saturday’s grand opening in Hong Kong. “We are really excited about the opening,” said Sharon Lam, a university student snapping photos of the store with her friends. “There will be lots of tourists from Southeast Asia and places near Hong Kong coming to visit the store.” Apple said it will give away 3,000 limited-edition T-shirts on Saturday, a move that, if other Apple store openings are any indication, means long lines of fanboys. “I won’t be surprised if people start queuing up for the T-shirts two days before the opening,” said businessman Albert Jim, who was trying to catch a glimpse of the activities inside the store before the metal gate went back down. Apple sales in the Greater China region, including mainland China, Hong Kong and Taiwan, helped boost the company’s third-quarter results, Chief Executive Tim Cook said in July. Greater China revenue surged sixfold to about $3.8 billion during the three months ended June 25. “This has been a substantial opportunity for Apple, and I firmly believe that we’re just scratching the surface right now,” he said of the region. “I see an incredible opportunity for Apple there.”

It’s a sign of global market stress that Chinese yuan traded in Hong Kong is now at a record discount compared to yuan traded on the mainland. The reason is global investors are liquidating positions in every type of speculative bet, including yuan, no matter how good the underlying fundamentals may be. Investors need U.S. dollars to pay back margin loans and make up for losses elsewhere in their portfolios. The yuan in Hong Kong, known to currency wonks as CNH, traded Friday as wide as a 2.5% discount to the onshore variety, known as CNY. It’s come back to about 1.5%. Those moves don’t sound like a lot, but it’s a record spread in the short history of China’s experiment in currency liberalization.

 China*:  Sept 24 2011 Share

Comac says it will have substantial new order for its C919 passenger jet, as it races to challenge international rivals Boeing and Airbus. Commercial Aircraft Corp of China (Comac), maker of the nation's first big passenger jet, expects to announce substantial new orders for the plane this year, bolstering efforts to challenge Boeing and Airbus. The company would announce deals for the C919 at "the most appropriate time", sales and marketing chief Chen Jin said at the Beijing Air Show on Thursday. "We will have substantial new orders," he said, declining to elaborate. ICBC Financial Leasing, owned by the nation's biggest bank by market value, and China Aircraft Leasing have said they are nearing deals for the 168-seat C919, potentially ending a near year-long order drought. Shanghai-based Comac announced as many as 100 C919 orders last year when it confirmed plans to compete with Boeing and Airbus' top models. "Chinese airlines and state-backed leasing firms need to show their support by placing orders as the planemaker is also owned by the government," Shanghai Securities analyst David Wei said. "If Comac can win more orders, especially from overseas customers, it means its product is attractive." Comac chief designer Wu Guanghui said in June the C919 might attract 50 to 100 orders this year. Ryanair Holdings, Europe's biggest discount airline, said the next day that it was exploring an order for at least 200 single-aisle jets from the planemaker. Ryanair also agreed to help develop the C919, which is due to make its first flight in 2014. Existing customers for the plane include General Electric's leasing arm, domestic lessors and the mainland's big three airlines - Air China (SEHK: 0753), China Southern Airlines and China Eastern Airlines (SEHK: 0670). ICBC Financial, a unit of Industrial and Commercial Bank of China (SEHK: 1398), said on Tuesday it might announce an order for the jet next month. China Aircraft Leasing said last month it was close to a deal for 20 planes. China first announced plans for the jet in 2008 to help develop a globally competitive aerospace industry and pare its reliance on imports. The country would need as many as 5,000 new aircraft by 2030, Boeing said this month, raising its 20-year forecast by 15 per cent. Comac has forecast that mainland airlines will receive 4,700 new planes over the next 20 years.

Allowing the yuan to appreciate cannot solve the US trade imbalance with China, the Foreign Ministry said yesterday, hitting back at planned US Senate legislation aimed at forcing Beijing to loosen currency controls. "China is unwilling to see an imbalance in trade between China and the United States, and China does not seek a trade surplus," Ministry spokesman Hong Lei (pictured) told a regular news briefing. "The Chinese government also has never aimed to benefit from global trade by so-called exchange rate manipulation," he said. "The yuan's appreciation cannot solve the Sino-US trade imbalance problem. We hope that relevant people in the United States can objectively and rationally view this issue and not politicise the renminbi's exchange rate because of US domestic economic problems." The Foreign Ministry has no say in China's currency policy, but it is typically the only government department that will regularly comment on the issue. China has repeatedly rejected criticism that it deliberately undervalues its yuan currency to give its companies a price advantage in international markets. It says it is committed to moving to a more flexible exchange rate but at its own pace. "We will continue to promote the [yuan exchange rate] mechanism's reform, and we will take a gradualist approach, which is in line with the interests of both China and the world," Hong said. The Senate bill, sure to worsen ties with Beijing that are already strained over US arms sales to Taiwan and a host of other issues, would still face many hurdles before becoming law. US business lobbies in China - fearing such a bill could spark a trade war - have called on Washington to focus more on other pressing issues, such as intellectual property protection and market access in China. The legislation combines two earlier bipartisan measures - one championed by Democratic Senator Charles Schumer and Republican Senator Lindsey Graham; the other by Brown, a Democrat, and Senator Olympia Snowe, a Republican. Schumer said he expected the bill to pass "resoundingly" when lawmakers return from a break next month. Key Republicans have indicated a go-slow approach to the China currency issue, and Schumer has acknowledged President Barack Obama does not support the bill.

Four Chinese construction firms quietly got the go-ahead last month to build and repair World Bank-funded roads in the southern Philippines - projects worth 2.7 billion pesos (HK$485 million) - before President Benigno Aquino's visit to China three weeks ago. During his visit, Aquino urged Chinese firms to bid for US$500 million worth of projects to be funded by the Japan International Co-operation Agency, Philippine Public Works Secretary Gabriel Singson told the South China Morning Post (SEHK: 0583). Aquino flies to Japan tomorrow to discuss more investments, soft loans as well as maritime security and the South China Sea dispute. The Philippines' efforts to entice Chinese companies comes after a pay-offs scandal that saw four Chinese corporations blacklisted from World Bank projects two years ago. Four other Chinese firms were initially awarded rights to the public works projects in February - the first time since that episode, said Carlos Mutuc, director of World Bank-funded projects at the Philippine Department of Public Works and Highways. The contracts went to: Hebei Road & Bridge Group Co (549.6 million pesos); Qingdao Construction Group (623.6 million pesos); China International Water & Electric Corp (977.5 million pesos); and the China Henan Shuili Yiju Co (512 million pesos). There was a difference of between 30 million and 65 million pesos in the firms' bids and the actual contracts awarded for the projects in February. Aquino assured Chinese businesspeople during a forum in Shanghai on September 2 that he would give Chinese firms "a level playing field" and that they would not have to bribe state officials to win contracts. He vowed that "each contract signed and each project completed will stand firmly on the bedrock of integrity - in other words, where every contract represents the five 'Rs' we envision: right project, right cost, right quality, right people and right on time. This is the only way to ensure that your projects will not be questioned by the public, or by succeeding administrations." Singson, who witnessed Aquino's speech, said the Chinese entrepreneurs there had been "very encouraged" by the promise. "In fact, we arranged for the Chinese contractors [who won the road projects] to meet the president to send precisely that message - that it's a new ballgame ... That we want good-quality projects," Singson said. Two years ago, Japanese contractor Tomatu Suzuka told World Bank investigators that "money would have to be paid as high up as the president, senior government officials and politicians in order to do any further business in the country. To win a contract, it would be necessary to pay the head of the bureau and politicians several million yen." Total payoffs came to between 15 and 20 per cent of the project cost, the World Bank report later said. Aquino, who was then a senator, was among those who pursued a legislative probe of graft in World Bank projects.

China yesterday urged the major developed economies to deal with their worsening sovereign debt problems after meeting the rest of the BRICS countries in Washington. The Ministry of Finance also called on the other BRICS countries - Brazil, Russia, India and South Africa - to deepen co-operation in trade, investment and finance as they braced for the challenges and risks emerging in the global economy. "We should urge major developed countries to maintain financial stability and keep the momentum of economic recovery to strike a balance between realising short-term economic growth and making fiscal system adjustments in the mid- to long term," the ministry said in a statement on its website. "Major developed countries should also properly handle the sovereign debt problem and reduce the negative spill-over impact resulting from their policies and channel more global financial resources to developing countries." The statement came a day after the G20 major economies issued a statement vowing to "take all necessary action" to preserve the stability of banking systems and financial markets "as required". The G20 statement, which coincided with the start of the World Bank-IMF annual meetings in Washington, helped to minimise losses on Asian markets. The Hang Seng Index closed at a 12-month-low, down 1.36 per cent at 17,668.8 after dropping as much as 3 per cent earlier in the day. In London, the FTSE was up 25.20 points, or 0.5 per cent, at 5,066.81. It ended the week down 5.6 per cent, wiping £81 billion (HK$975.34 billion) off its value. Frankfurt stocks were up 0.63 per cent. In the US, the Dow was down 0.09 per cent in afternoon trading, having lost more than 6 per cent this week. The Nasdaq was down 0.6 per cent, and more than 5 per cent for the week. Emerging economies were given little choice but to support the G20 direction, but there were doubts about the extent the BRICS economies would yield to political pressure to help settle sovereign debt in Europe and the US. China, the world's second-largest economy, is expected to place its domestic needs first. Societe Generale's chief Asia-Pacific economist, Yao Wei, said China was aware of the need to help ease the crisis. But providing a liquidity boost would complicate issues at home for China, including dealing with inflation and an economic slowdown. "We expect China to buy European sovereign bonds, though it is not likely to publicly commit to a certain amount," Yao said. China is not the only BRICS nation to have qualms about providing funds to stabilise the global financial system. India's central bank has already voiced its concern over the dilemma between the demand for resources at home to reduce poverty, and giving money to a multilateral institution to restore global stability. Alicia Garcia Herrero, chief economist at BBVA, was more optimistic about BRICS co-operation with the developed countries. "Everyone is a victim. The sooner that is realised, the better," she said. "It is not about the US, Europe, or the G20. It's about the world. It is in nobody's interest, including China, to let this current volatility continue."

Sounding the latest alarm about slowing economic growth in China, Mercedes-Benz on Friday said luxury-car sales gains slowed in what has been its fast-growing major market. The sales environment for Daimler AG's luxury car brand Mercedes-Benz is turning "a bit more challenging" in China, as sales growth slowed over the summer, a senior Mercedes executive said. 

Apple Inc.'s two newest retail stores in the Greater China region—a long-awaited Hong Kong outlet and a third Shanghai store, the region's biggest—are drawing much fanfare even as the company has shifted to a more measured expansion strategy. The Cupertino, Calif.-based consumer-electronics maker is opening larger stores at a slower pace in China, where demand for its iPhone 4 has outstripped supply in local Apple stores. Analysts say the company's distribution network in Greater China—which includes just six stores in the region so far, despite originally planning to open 25 stores by the end of the year—still lags behind competitors, but the company is in the midst of an aggressive expansion. Analysts say the slow pace at which Apple is opening its trademark full-service Apple Stores in China is partly to blame for the rise of copycat stores in the region. Earlier this year, the company found fake retail outlets that purported to be official Apple stores in the city of Kunming in southwestern China. Apple relies on a network of resellers as well as its mobile operator partner, China Unicom (Hong Kong) Ltd., to distribute products throughout China. But the pace of Apple's retail expansion in the region still lags behind the likes of Lenovo Group Ltd., Hewlett Packard Co. and Acer Inc. which have wide-reaching distribution networks in the country. "They've been quite slow," said Torsten Stocker, a China-based partner at consulting firm Monitor Group. "It has given rise to copycat stores as others jump to fill the gap because the demand for the products is there." An official at Apple declined to comment. In the fiscal third quarter that ended June 25, the company sold $3.8 billion worth of products in the Greater China region, which includes Hong Kong, mainland China and Taiwan, representing a more than six-fold increase from a year earlier. Chief Executive Tim Cook said Apple is merely "scratching the surface" when it comes to reaching its potential in the Chinese market. The Hong Kong flagship store—which has been the center of rumors among online Apple forums for months and opens officially Saturday—will span 16,000 square feet over two floors in IFC Mall in the city's Central district and requires a staff of 300. The mall's management had to terminate, move or not renew the leases of nine stores and knock down several walls to accommodate Apple. Renovations for the new store started in March in the shopping center that averages 200,000 visitors a day, the mall's management said. The new Shanghai store is Apple's largest in mainland China. It occupies four floors and has more than 300 staff providing service to customers. New stores alone won't expand Apple's relatively small market share in China, said Sandy Shen, research director at technology consulting firm Gartner. According to Gartner, Apple's market share is relatively small at just 13% of the smartphone market in China and only 2% of the overall mobile phone market, trailing Nokia Corp. and Samsung Electronics Co., the world's two biggest makers of handsets. "These stores are more important from the marketing perspective than sales," Mr. Shen said. "It will help Apple increase brand awareness and consumer mind share, which will then drive demand for its products." Mr. Shen added that the six stores are "a drop in the ocean in China, considering most brands have tens of thousands of stores." Resellers in Hong Kong say that the new Apple store will only boost their business because they expect the official Apple outlet to be a powerful marketing tool for the brand. "It's not a bad thing for us," said Dennis Ng, marketing manager at DG Lifestyle, which has a chain of stores in Singapore, Hong Kong and Macau dedicated to selling Apple products. "At first, it'll be competing. We'll see a bit of difference [in our sales]. But after the customers try an Apple store, they'll look to us for convenience. Hopefully, [Apple] won't have enough stock in their stores, so they'll come back to us." Experts say that the store in Hong Kong is especially important to Apple's overall China strategy given that the city is a magnet for shoppers from mainland China who flock to the former British colony to buy consumer goods at lower prices. Unlike mainland China, Hong Kong doesn't charge sales tax and import duties on goods. An iPad 2, for example, costs 16% more on Apple's Chinese online store than it does on the company's Hong Kong site. Moreover, many Apple products are launched in Hong Kong before they are put on the market in mainland China. The original iPad, for example, was available in Hong Kong for 56 days before its official launch in the rest of China. "Hong Kong is very important for Apple," said Gabriel Chan, retail analyst at Credit Suisse. "The mainland Chinese have the idea that things sold in Hong Kong are of higher quality, and trendier and fashionable. For a brand, if you have a shop here in Hong Kong, it's good advertising."

Hong Kong*:  Sept 23 2011 Share

Shanghai restaurant chain Xiao Nan Guo is pulling its HK$737 million initial public offering because of "excessive market volatility", according to an announcement yesterday. Xiao Nan Guo is the latest company to shelve a listing amid the global economic downturn and the sovereign debt crisis in Europe. It had planned to sell 335 million shares at an indicative price range of HK$1.65 to HK$2.20 each. Elsewhere, English Premier League soccer champions Manchester United is said to have put on hold a US$1billion flotation in Singapore.

CITIC Securities today opens the retail book of its HK$15.13 billion Hong Kong initial public offering. The mainland's largest brokerage has set a price range of HK$12.84-HK$15.20, or HK$7,676.61 for one board lot of 500 shares. The offering has been well received by institutional investors despite sluggish market sentiment, CITIC Securities noted. "We'll spend most of the proceeds on building an overseas trading network and strengthening the capital intermediary business in Hong Kong," said chairman Wang Dongming. Six cornerstone investors - Singapore's Temasek, Kuwait Investment Authority, Taiwan's Fubon Life Insurance, US-based mutual fund Waddell & Reed, Brazilian investment bank BTG Pactual and OCH Ziff - have locked up 47.5 percent of the issue. OCH Ziff is an asset management firm incorporated in the Cayman Islands and British Virgin Islands CITIC Securities now hopes to develop its overseas business with help of the six. In other action, men's footwear maker Active Group (1096), which seeks to raise up to HK$549 million, saw its retail tranche that closed yesterday slightly oversubscribed. It is due to start trading next Wednesday. But restaurant chain operator Xiao Nan Guo decided to shelve its listing plan due to choppy market conditions. The international and retail tranches of the Shanghai-based company are fully covered. Two listing candidates have meanwhile priced their offerings. Women's shoe maker Hongguo, which debuts on Friday, offers its shares at HK$2.3 each - the lower end of its indicative range. It will be the first listing on the local market after a two-month lull. The other one, Tenfu, China's largest tea retailer, priced its shares at HK$6 each. That is close to the upper limit of the range. And China Everbright Bank, which was to raise HK$46.7 billion from an H-share issue in August, may now delay a float to next year.

The protester, pictured above, who wore a sinister mask and manhandled a security guard after gate-crashing the election forum was not among the seven arrested yesterday - but police know his identify and are looking for him. This comes as masked protests are becoming more frequent around the world - on Monday, New York police arrested four protesters on Wall Street for wearing masks. New York's mask law, established in 1845, was originally an attempt to stop uprisings by farmers who used disguises to attack police. But such a law is unlikely to be adopted in Hong Kong, according to University of Hong Kong associate law professor Benny Tai Yiu-ting, as the issue involves human rights and freedom of expression. "Currently, I do not see that there is a need to follow the [New York] practice. It would restrict freedom of expression," Tai said.

 China*:  Sept 23 2011 Share

Chinese tourists are expected to spend more money in New Zealand and will overtake United States and British tourists in spending by mid-2012, according to official estimates released Tuesday. The Ministry of Economic Development's updated New Zealand Tourism Forecasts for 2011-2016 show Chinese tourists will spend 604 million NZ dollars (495 million U.S. dollars) in 2013, easily overtaking the expenditure of U.S. and UK tourists. Not until 2014, however, will the number of Chinese tourists exceed those of the UK and U.S. Australia will still be New Zealand's largest market by a considerable margin, with 1.9 billion NZ dollars (1.56 billion U.S. dollars) expenditure forecast for 2016. The forecast said the long-term strength of the New Zealand dollar and the poorly performing UK and U.S. economies were the main reasons for the stable numbers from those countries. In contrast, Chinese tourism is increasing globally and the New Zealand industry is seeing the benefits. The impact of the Christchurch earthquake has had significant impact on the South Korean and Japanese markets. Meanwhile, new airline connections had seen a significant increase in Malaysian arrivals. "The outlook for the next five years is strong, but the origin of tourists we are hosting is changing. The forecasts show strong growth from China and promising emerging markets like Malaysia," said Liz MacPherson, tourism deputy secretary at Ministry of Economic Development. The forecasts show that tourism spending from all countries will have increased from 5.8 billion NZ dollars (4.75 billion U.S. dollars) this year to 6.6 billion NZ dollars (5.4 billion U.S. dollars) by 2016. A total of 3 million tourists will visit NZ in 2016.

2nd China-Arab States Economic and Trade Forum opens - The five-day forum will focus on economic and trade cooperation in agriculture, science and technology, energy, finance, tourism and the publishing sector.

Beijing may again have to delay a new social security tax on foreign workers on the mainland after local governments complained that they had not been given enough time to implement it, said a person briefed by authorities on the issue. The person also confirmed that all Chinese nationals from Hong Kong, Macau and Taiwan would be exempted from the new tax, removing anxiety caused by ambiguous wording in a version of the regulation released two weeks ago. Foreign nationals working on the mainland - even if they are permanent Hong Kong residents - still need to pay the tax, which could be up to 11 per cent of their salaries to a maximum portion of 11,688 yuan (HK$14,266) a month, or 1,300 yuan, the person said. Employers must also pay - up to 37 per cent of their foreign employees' salaries and also subject to a maximum of 11,688 yuan a month (4,100 yuan), in addition to an employee's own contribution, according to the regulation published by the Ministry of Human Resources and Social Security. The rules raise questions about whether Hong Kong Chinese professionals will enjoy significant advantages over their expat colleagues as a result. Under the new regulation, it would be more expensive for a Hong Kong company to base a foreign worker on the mainland than to send a Hong Kong Chinese person. Local governments, including those in Beijing, Shanghai and Guangzhou, have apparently been caught off guard by the new tax - which was scheduled to take effect on October 15, the person said. "Since different provinces and cities have their own localised version of [tax] regulations, and since some of them are now saying they have just been informed of the new tax, I think it's unlikely that the new tax will be implemented on October 15 as originally planned," the person said. At the moment, foreigners and Hongkongers working on the mainland can voluntarily pay social security tax to local accounts if they want to receive pension incomes from the mainland after their retirement. The ministry said earlier that the new rule was designed to protect the rights of foreigners so they could benefit from the social security system. All expats from countries that do not have a bilateral exemption agreement with Beijing will be affected by the new tax. Only Germany and South Korea have agreed to such a deal with China. At least 10 other countries, including the US, Japan and Russia, are still in negotiations with Beijing on such an arrangement. If an employer is found to have failed to make social security contributions for their foreign employees, they would face a maximum penalty of three times the outstanding contributions. The same penalty will apply to employers who hire foreign workers without a proper work permit. "Nobody would like to pay an additional 50,000 yuan every year for an expat worker, so it is very good news for Hongkongers [Chinese] working there because they will have a clear cost advantage [over foreigners]," said William Cheung, a partner at Ernst & Young's human capital practice in Beijing. "The impact on Hong Kong companies may not be huge. Not many of them keep foreign workers on the mainland." Cheung nevertheless urged Hong Kong employers who have expatriate workers on the mainland to review immediately the implications of the new tax regulation.

The go signal has been given by Taipei for work to start on the first undersea telecom cable between the mainland and Taiwan - another demonstration of interdependence between the rivals. "The cable will help reduce the cost of telecommunications between Taiwan and the mainland, currently done via routes crossing third territories like Japan," said an official at Taiwan's National Communications Commission. The plan is that a 220-kilometer cable will link Tamshui in the north of the island and Fuzhou in the mainland. It should be laid by the first quarter of 2012. Chunghwa Telecom, Taiwan's leading telecom operator, will hold a 50 percent stake in the NT$200 million (HK$52 million) project, while three mainland firms share the rest. Telecom demand across the Taiwan Strait has risen sharply, mostly on a corporate need for data transmission. "Audio is expected to account for no more than 2 percent of the cable's bandwidth," said Chen Hui-yen, a manager at Chunghwa. Demand is expected to surge further as mainland operators press for third- generation mobile communication. And more emphasis on cloud computing - that means shared resources, software and information are hosted online - will also fuel the demand for cable capacity.

DHL Global Forwarding, the freight unit of Deutsche Post AG, on Sept 20 said it will set up five more branch offices and open another 20 sales offices across China by 2015 to increase its coverage to 30 percent of the nation's third-tier cities. Steve Huang, CEO of DHL Global Forwarding China, said that DHL will spread to the central and western regions of the country because many industries are moving to these areas. "Growth in central and western regions of China is in keeping with the government plan, and it is definitely the key priority," Huang said. DHL has already set up 39 branches and 26 sales offices nationwide, and it plans to have 90 branches and sales offices in China by 2015, he added. Its total investment in China has so far reached $30 million. According to Huang, DHL has recently opened five branch offices - two inland ones in Zhengzhou, Henan province, and Taiyuan, Shanxi province, and the other three in the third-tier cities of Wenzhou, Zhejiang province, Xuzhou, Jiangsu province, and Huizhou, Guangdong province - with another five in the pipeline. The opening of these offices is in line with the geographical shift in the nation's industry from the coastal areas of the Yangtze River Delta and the Pearl River Delta to the central and western regions, analysts said. "DHL has benefited from a rapid buildup of infrastructure in these regions. This has in turn facilitated the provision of DHL's scheduled, reliable and flexible door-to-door services and multimodal transport solutions," said Roger Crook, CEO of DHL Global Forwarding and DHL Freight. According to Crook, foreign investment in central and western regions is being strongly encouraged by the national and provincial governments. "In fact, their efforts have paid off. Foreign direct investment to central and western regions surged by 27.6 percent year-on-year in 2010, compared with 15.8 percent year-on-year in the eastern regions, according to the Chinese Ministry of Commerce," Crook added. Zhengzhou, in central part of China, doubled its GDP in less than five years to more than 400 billion yuan ($62.6 billion) by the end of 2010. Its government announced it would invest 200 million yuan a year to accelerate efforts of to develop the city into an international logistics center by 2015. Similarly, the GDP of Taiyuan, China's largest coal producing city, reportedly topped 177.8 billion yuan in 2010, and the city registered a compound annual growth rate of 11.58 percent between 2005 and 2009. "As one of China's pivotal railway nexuses and one of the cities in the central part of China earmarked for commercial and trade reforms, Zhengzhou has attracted investment from more than 10,000 domestic and international enterprises. Setting up an office there allows us to be in the heart of our customers' business operations," said Kelvin Leung, CEO of North Asia-Pacific, DHL Global Forwarding. The location of the new branches and offices will be set up according to the demand. "Whenever there is a market, whenever there is a customer, we will be there," Huang said. DHL's expansion of its logistics services network follows the fast-growing demand in the central and western regions for logistics services of international standards. "Looking beyond Beijing and Shanghai and tapping into China's existing infrastructure in these inland markets enables us to make our multimodal solutions that much more comprehensive. Customers can now not just opt for a combination of rail, road, sea and air transport with different transit times and costs but with different origins and destinations in mind," Huang added. In the first half of the year, China's logistics sector grew steadily, with revenue reaching 74.7 trillion yuan, up 13.7 percent year-on-year, according to figures released by China Federation of Logistics and Purchasing.

China's unmanned space rocket "Tiangong-1" stands ready for blast off on the launch pad at Jiuquan Satellite Launch Center, Sept 20, 2011. The Long March II-F carrying Tiangong-1, or "Heavenly Palace 1", will take off from Jiuquan Satellite Launch Center in Northwest China's Gansu province between Sept 27 and 30. It will serve as "a target spacecraft" for rendezvous and docking experiments with the hope its launch will pave the way for a planned space station. A Long March II-F carrier rocket loaded with "Tiangong-1", an unmanned space module, is moved to the launch pad at Jiuquan Satellite Launch Center, Sept 20, 2011. 

The U.S. accused China of imposing wrongful trade duties on U.S. chicken and poultry exports, and new U.S. Ambassador to China Gary Locke criticized China's treatment of foreign companies and repeated calls for faster yuan appreciation. U.S. Trade Representative Ron Kirk said Tuesday that the U.S. is seeking consultations through the World Trade Organization on countervailing and antidumping duties by China. China's commerce ministry said Wednesday that its anti-dumping and anti-subsidy tariffs on imports of U.S. chicken products are in line with WTO rules, adding that it would deal with the issue through the WTO's dispute-settlement process. China imposed the duties in September 2010 to retaliate against President Barack Obama's decision the previous year to invoke a rare safeguard against imports of Chinese tires. U.S. poultry exports to China have been slashed by 90% since they went into effect, with a projected cost to the U.S. poultry industry of about $1 billion by year-end, according to Mr. Kirk's office. The U.S. argues that China hasn't complied with requirements on transparency and due process, failed to properly explain its findings, incorrectly calculated the duties, and hasn't supported its findings that U.S. imports are hurting China's poultry industry. U.S. poultry-industry groups welcomed the move as did key House Republicans. Chicken processors, which face a supply glut and soaring feed costs, have been locked in a costly price war in which they have competed fiercely to hang on to market share, even as they lose money on virtually every bird they slaughter. Federal data show total chicken exports have been up 2.5% so far this year through mid-July. However, shipments to China have fallen sharply, down more than 83% last year from 2009. The beef and pork industries, in contrast, have seen global exports soar over the past year. The U.S. exports pork to China, but very little beef. Once consultations begin, if the issue can't be resolved in 60 days, the U.S. can request the WTO to set up a dispute settlement panel. Chinese Embassy officials in Washington weren't available to comment. In his first major speech to business executives since arriving in Beijing, Mr. Locke emphasized the need for China to further open its markets to U.S. companies and to better protect intellectual-property rights, particularly for U.S. software products. "Foreign businesses face substantial restrictions in participating in a variety of industries in China, ranging from health care to energy to financial services and several others," Mr. Locke said in remarks to the American Chamber of Commerce in China. "A perfect example of that is in the area of credit cards, where China's restrictions have created a domestic monopoly and have shut out the foreign credit-card companies." In February, the U.S. Trade Representative filed a complaint with the WTO alleging that China has unfairly kept U.S. credit-card companies like MasterCard Inc., Visa Inc. and American Express Co. out of its market. The former U.S. commerce secretary called on Beijing to allow faster appreciation of the yuan, both against the U.S. dollar and against other major currencies. Faster currency appreciation would help China combat inflation by cutting the cost of imports, he said, echoing an argument Washington has used before in its long campaign to change Beijing's currency policy. Since the Chinese government loosened the peg of the yuan, also known as the renminbi,from the dollar in June 2010, the currency has risen around 7% against the dollar, but it has actually fallen nearly 6% against the euro.

Hong Kong*:  Sept 22 2011 Share

Hutchison Telecommunications Hong Kong Holdings, which plans to launch its high-speed 4G mobile network later this year, has formed a strategic partnership with British communications giant Vodafone Group that aims to enhance international roaming and other services for both companies' subscribers. Hutchison, a unit of conglomerate Hutchison Whampoa (SEHK: 0013), yesterday announced that their pact will begin upon the expiration in December of Vodafone's seven-year marketing partnership with SmarTone Telecommunications Holdings (SEHK: 0315). Peter Wong King-fai, the chief executive at Hutchison Telecom, said the Vodafone partnership "will further strengthen our corporate customer base, and drive the growth of data and voice usage from the business sector". Hutchison Telecom and Vodafone plan to jointly provide customers with enhanced network coverage, harmonised roaming rates across multiple countries and greater cost efficiencies. Hutchison Telecom will be entitled to use the Vodafone brand and have access to Vodafone's mobile devices and services in Hong Kong. Both firms also plan to support multinational corporations with services including consolidated bid management for regional and global Request for Proposal programmes, single master service deals, central ordering system and online telecom expense management. "The value to Vodafone of collaborating with Hutchison Telecom Hong Kong will be significant, given the growing importance of the Asia region to our enterprise customers," said Paul-Gerhard Itjeshorst, acting chief executive of Vodafone Partner Markets. Vodafone Global Enterprise {minus} the business within Vodafone that manages the communications needs of multinational companies {minus} already has 140 customers that have headquarters in Asia-Pacific, and a further 435 customers that operate in the region. Vodafone had announced earlier that it had formed a strategic partnership with the Conexus Mobile Alliance, an influential regional trade group that counts Hutchison Telecom, Far EasTone in Taiwan, Japan's NTT DoCoMo and StarHub in Singapore among its members. 

Expectations of Hong Kong dollar moves against the US currency more than tripled over the past year as investors bet inflation and a more convertible yuan might hasten an end to the city's fixed exchange rate. One-year implied volatility, a measure of exchange rate swings used to price options, climbed to 2.1 per cent from 0.6 per cent a year ago. The jump is the biggest in Asia even though fluctuations anticipated for the HK dollar are smaller than for the yuan, whose volatility rose to 4.7 per cent from 3.8, and for the South Korean won, which climbed to 17.2 per cent from 13.3. While the Hong Kong Monetary Authority reiterated last week that it has "no plan or intention" to end the 28-year peg to the greenback, the yuan is up 30 per cent against the dollar since the start of 1999, the fourth-best performance of 25 emerging-market currencies. "We believe the HK dollar peg will eventually go because of the ongoing appreciation of the Chinese yuan against the US dollar," said Rupert Watson, the Southampton-based head of asset allocation at Skandia Investment Group. "It will come around the same time the Chinese currency moves towards full convertibility, somewhere around 2015." The spot rate for yuan in Hong Kong rose 1.2 per cent this quarter to 6.3915 against the greenback, and the Shanghai rate gained 1.2 per cent to 6.3868. Hong Kong's dollar weakened 0.15 per cent to HK$7.7950. In January, lawmakers Chim Pui-chung and Lam Tai-fai urged a review of the peg. They argue the currency link has helped fuel inflation by tying the city's monetary policy to that of the US Federal Reserve. William Ackman, founder of hedge fund Pershing Square Capital Management, has said the easiest way to allow the currency to appreciate would be to change the peg to HK$6 per US dollar, a 30 per cent gain, and then link to the yuan over three to six years.

Sany Heavy Industry has delayed its Hong Kong IPO by a few days, according to a person close to the deal, after China's biggest construction machinery maker cancelled a press conference on its offering at the Conrad Hotel yesterday. The Shanghai-listed firm is expected to raise up to US$3.3 billion, which would make it Hong Kong's second-biggest IPO this year after Glencore International's listing in Hong Kong and London in May. Sany had planned to price the offering next Monday and trading in Hong Kong was due to start on October 3. Sany and another mainland construction machinery firm, XCMG Construction Machinery, launched their global roadshows on Monday. XCMG will list on October 12. "Management would like more time to communicate with investors given the overwhelming meeting requests during the international roadshow, which is continuing. The Hong Kong IPO will be rescheduled," said a Sany spokeswoman. Replying to questions about why Sany cancelled its IPO press conference yesterday, Sany non-executive director Tang Xiuguo said: "The Hong Kong stock market slumped [on Monday], which brings disadvantages to Sany's Hong Kong IPO." The Hang Seng Index fell 2.76 per cent to a two-year low on Monday, amid concern over Europe's debt problems, but rebounded 0.51 per cent to 19,015 yesterday. "The Hong Kong listing will do much good in improving its cash flow," said Everbright Securities analyst Lu Zhou. Customers owed the company a lot of money, Lu said. Sany's net operating cash flow was a negative 3.19 billion yuan (HK$3.9 billion) in the first quarter, a marked deterioration compared with the negative 871 million yuan cash flow during the first quarter of last year. During the first half, the firm raised 14 billion yuan in new bank loans, triple the amount in the first half last year.

Hong Kong has again been named the freest economy in the world, but the city could be heading downhill from here on, a Canadian free-market think tank says. For the 33rd consecutive year the city has topped the ranking, but the minimum wage law, the competition law now under debate, and the city's increasing economic ties with the mainland may mean the best is in the past, the Fraser Institute said. The institute determined Hong Kong has the lowest level of government spending as a share of total economic output, the smallest state-backed company sector and lowest marginal tax rates. It ranked 12th when judged on its legal system and protection of property rights. But Peter Wong, executive director of the Lion Rock Institute, a local free-market think tank which helped release the study, said Hong Kong's economic freedom was likely to be far less than the report presented because judgments were based on data up to 2009. Fred McMahon, a vice-president of the Fraser Institute, said the introduction of the statutory minimum wage and a competition law might drag Hong Kong's ranking down. "Hong Kong's score is almost certain to drop in the future," he said. "The minimum wage law interferes with voluntary arrangements between hirers and employees. The competition law, as it comes in, has the potential to limit economic freedom in Hong Kong. That is very ironic, very strange, because the competition bill, the way it's structured, is more likely to limit competition, than to create it." McMahon said. "Hong Kong will remain a relatively free economy but with these two pieces of legislation, it well might be that Hong Kong will lose its No 1 position." The city scored 9.01 out of 10 for economic freedom in the annual report released yesterday by the Vancouver-based think tank - down from last year's 9.08, amid an overall drop in levels of economic freedom around the world. The global average fell to 6.64, the lowest in three decades. Singapore, as it has for the past two decades, came second with a score of 8.68, while New Zealand, Switzerland, Australia, Canada, Chile, Britain, Mauritius and the United States rounded out the top 10. China placed 92nd, but when judged on its legal system and property rights placed 122 out of 141. Zimbabwe remained the least free economy in the world. Myanmar, Venezuela, Angola and the Democratic Republic of Congo completed the bottom five. Countries were rated on the size of government, legal structure, security of property rights, impact of inflation, freedom to trade internationally, and regulation of credit, labour and business. Professor Vernon Smith, who shared the 2002 Nobel Memorial Prize in Economic Sciences with Daniel Kahneman, said the city's free-economy status depended on Beijing. "Whether the integration between China and Hong Kong will hinder Hong Kong's economic freedom depends a lot on how much China controls it," Smith said. "But Hong Kong is a success story. China is well advised to leave Hong Kong alone when it comes to developing the economy."

Hong Kong’s unemployment rate fell to a 13-year low of 3.2 per cent in the three months ending in August, government figures released on Tuesday showed. The Census and Statistics Department said the seasonally-adjusted unemployment rate decreased from 3.4 per cent in the May-July quarter to 3.2 per cent in June-August period as the number of new jobs created outpaced the labour supply growth. The latest figure was the lowest level since the three months between December 1997 and February 1998, the department said. Total employment rose for the sixth consecutive month and increased by about 10,800 to reach a new record high of 3.63 million, the department said. The number of unemployed fell by about 7,200 to 130,100. Most of the new jobs were in construction, warehousing and support activities for transportation, food and beverage service activities, and the professional and business services sectors. However, the underemployment rate, which measures the number of people who cannot find 35 hours of work per week, increased slightly from 1.7 per cent to 1.8 per cent. Secretary for Labour and Welfare Matthew Cheung Kin-chung said economic uncertainty could still affect hiring in the short-term. “While Hong Kong’s economic performance has held up rather well so far, hiring sentiment among employers has turned more cautious lately amidst the deepening euro zone sovereign debt crisis and the fragile economy in the United States,” Cheung said. He said the labour supply was expected to decrease in the next few months, with most summer time workers returning to school upon the start of new academic year in September.

China's top leadership has reached a consensus that Chief Secretary Henry Tang Ying-yen is its preferred candidate for the next chief executive, say various sources close to Beijing. This comes despite controversial remarks he made on the recent visit to Hong Kong by Vice-Premier Li Keqiang and growing doubts about Tang's competence. Tang's popularity rating fell after he said it was "completely rubbish" that the government's security arrangements for Li's visit last month had violated civil rights. A Beijing-friendly politician who maintains close contact with senior mainland officials said members of the Communist Party's Politburo had reached a consensus at the end of last month that Tang was their preferred candidate. "The decision was made on the recommendation of the Communist Party's leading group on Hong Kong and Macau affairs." Another politician with ties to the central government said the message had been circulated among senior mainland officials. "The central government prefers Tang as the next chief executive because he enjoys support from most civil servants," the politician said. "A chief executive could not govern effectively if he failed to build a good working relationship with civil servants." Tang has long been expected to face competition from Executive Council convenor Leung Chun-ying. Leung said on Sunday he was ready to discuss his resignation as convenor with Chief Executive Donald Tsang Yam-kuen as "soon as possible". Leung denied he had been put under pressure by the pro-Beijing camp not to enter the race. Tang, who joined the government in 2002, served as commerce minister and financial secretary before becoming chief secretary in 2007. James Tien Pei-chun, honorary chairman of the Liberal Party of which Tang was once a member, also felt Tang was the favoured candidate. "But my understanding is that Beijing will not ban other candidates from the government-friendly camp from contesting the chief executive race," said Tien, who vowed to canvass support for Tang in his campaign. A veteran politician said some mainland officials with whom he maintained regular contact told him recently that the central government had identified Tang as its favoured candidate. "They went on to ask me to voice support for the chief secretary publicly. I think Leung is refusing to give up his fight because he is waiting for Henry Tang to make mistakes," the politician said. A source close to Leung doubted whether Beijing had made its final choice for the next chief executive. Although he has not formally announced plans to run for the post, Tang is expected to tender his resignation this week to prepare for the March election. His press secretary yesterday declined to comment on the reports. The next chief executive will be chosen by a 1,200-strong Election Committee whose members will be chosen in limited-franchise elections in December. The committee is expected to be dominated by the business and professional elite from the Beijing-friendly camp. Executive councillor Cheng Yiu-tong, president of the Beijing-friendly Federation of Trade Unions, said last week that Beijing might prefer a single, government-friendly candidate to run.

Synthetic crystal items are displayed during the Hong Kong Jewellery and Gem Fair in Hong Kong, south China, Sept 19, 2011. A total of 3454 exhibitors from 46 countries and regions attended the five-day fair, which opened here on Monday.

 China*:  Sept 22 2011 Share

China must reduce barriers to foreign companies if it is to meet its own development goals, the US ambassador said in Beijing on Tuesday in a speech that reflected foreign investors’ growing frustration with the pace of economic reforms in the country. Gary Locke, who took up his new post in August, targeted restrictions on China’s financial services sector and on investments by foreigners, calling on Beijing to end “expansive government interference”. “These policies are ultimately counter-productive, preventing China from receiving the capital, technology, management expertise and jobs that would come with a more open investment environment,” Locke said. “The growth model China has relied on for the last 30 years – one predicated on low-cost exports to the rest of the world and investment in resource-intensive heavy manufacturing – cannot serve it well in the next 30 years,” he said. The speech, given before members of the American Chamber of Commerce in China and the US-China Business Council, was Locke’s second public address in China as ambassador. Locke, formerly US commerce secretary, had previously vowed to press for greater access for US goods and services in China. He took the place of Jon Huntsman, who stepped down as ambassador to join the US presidential race. China’s leaders have said they will roll back “indigenous innovation” policies that Locke and other US leaders had argued shut foreign companies out of industries or required technology transfers as a condition of operating in China. But foreign companies, many of which depend on China for a growing share of their profits, say they still face discriminatory practices and regulations, particularly at the local level, where Beijing’s policies aren’t always closely enforced. Locke’s remarks expanded on an earlier September speech, when he struck a co-operative tone on US-China relations before university students, but called for reduced trade and investment barriers. On Tuesday, he said advocating for better intellectual property protection would be one of his top priorities. “Despite some progress, American and other foreign companies in industries ranging from pharmaceuticals to biotechnology to advanced manufacturing to entertainment still lose billions of dollars every year from IP theft in China,” Locke said. The United States’ trade deficit with China, which hit a record US$273 billion last year and could top that this year, is a major irritant in relations between the world’s two largest economies. US leaders argue that China’s undervalued currency contributes to the problem, since it gives companies in the mainland an unfair price advantage in international markets. China’s Foreign Ministry last week urged US lawmakers on not to resort to trade protectionism after US Senate Democratic Leader Harry Reid pushed for legislation aimed at forcing China to loosen controls on its currency. Beijing has also criticised what it says are barriers to investments by its own companies in the United States. Locke urged Chinese companies to invest more in the US, where high unemployment rates continue to vex politicians. “The United States is doing everything it can to make our investment and commercial environment as open and appealing as possible,” Locke said. “Unlocking the full potential of the US-China relationship requires China to take similar steps.”

China-made cars for export at a port in Pudong district, Shanghai. Chinese auto exports to Brazil may be hit by a new tax increase from the Brazilian government. Brazil's import substitution policy in the vehicle sector will put pressure on Chinese auto exports, but it will also help accelerate their decision to establish local manufacturing in order to gain a stable foothold in the world's fifth-biggest auto market. In a move to replace imports with domestically made vehicles, Brazil's government said on Friday that taxes on imported cars and trucks and those that fail to meet localization rates of 65 percent will be raised by 30 percentage points. The move, which will remain in effect until December 2012, will increase Brazil's industrial product tax on cars by between 7 and 25 percent, depending on engine size, to as much as 55 percent. "It's clearly a blow to Chinese automakers' recently surging vehicle exports to Brazil," said Cui Dongshu, deputy secretary-general of the China Passenger Car Association. "The quickly launched measure also reflects the Brazilian government's awareness of and attention to the foray of made-in-China vehicles into the local market." Hit by the slowdown in their domestic market and keen on global expansion, Chinese automakers have been building sales volume in emerging markets, focusing especially on Brazil. According to Fenabrave, the Brazilian car dealers association, Chinese automakers now control 3.29 percent of the country's car sales, up from close to 0 percent in April 2010. In the first eight months of this year, Chinese automakers sold more than 43,000 vehicles in Brazil, where 2.6 million passenger cars were sold last year. The consultancy IHS Automotive forecasts that by 2015, passenger car sales in Brazil will have risen by 33 percent, and by 2020, passenger car sales are likely to have increased to more than 4.5 million units, offering more growth potential amid slowing growth rates in China. Since last year, a number of Chinese automakers have begun taking advantage of the favorable trade agreements between Brazil and China, which became Brazil's largest trading partner in 2009. Brazil is being targeted because it is the largest market in the region and offers high-volume sales, combined with a large established auto-making industry and parts suppliers. "Brazil's 'import substitution industrialization' is like a bid to develop its automobile industry by attracting foreign investment and technologies, not only products, by encouraging joint ventures with Chinese automakers," said Wang Zhile, director of the research center for transnational corporations under the Ministry of Commerce. "The market potential, and the Chinese companies' successful exports to Brazil, have produced a mature opportunity for domestic players to produce cars there." Cui, of the China Passenger Car Association, said "the new taxation policy will push Chinese automakers to speed up efforts to establish production facilities in Brazil so they can avoid high taxes." China's biggest auto exporter Chery Automobile Co Ltd was first, investing in a $400 million plant in Brazil in July. The facility will become operational by the end of 2013, initially with a capacity of 50,000 vehicle annually and eventually expanding to 150,000 to 170,000 units a year, depending on demand. Earlier this year, the Chongqing-based Lifan Industry (Group) Co said that it will co-invest $100 million with Brazilian auto distributor Effa Motors to set up a factory to manufacture Lifan cars in Brazil, with capacity of about 10,000 units annually. It also plans to plunge $70 million into establishing its first overseas research and development center in Brazil, making the country one of its strategic markets. However, Wang said that although he thinks it's time for Chinese automakers to invest in local production in the Brazilian market, "they should think over their strategy to make it an important step toward realizing their global expansion ambition, not only paying attention to the short-term profit there".
China Daily

China will launch a prototype module for a planned space lab next week, Xinhua said on Tuesday, a step that will bring it closer to the United States and Russia as space powers. The Tiangong 1, or "Heavenly Palace", will blast off from the Gobi Desert Jiuquan launch site in a remote part of the northwestern province of Gansu between Sept. 27 and Sept. 30, just ahead of the Oct. 1 national day holiday. The eight-tonne unmanned module, and the rocket that will carry it skyward, have been moved onto the launch pad, the report said, citing a spokesman for the country's space programme. It gave no other details. While the Tiangong initiative much smaller and more modest than the International Space Station jointly operated by Russia, the United States and other countries, it is the latest sign of China's growing space technology ability. After Tiangong 1 goes into orbit, China will use it to practice docking and other skills needed to operate a long-term space lab. China launched its second moon orbiter last year after it became only the third country to send its astronauts walking in space outside their orbiting craft in 2008. China plans an unmanned moon landing and deployment of a moon rover in 2012, and the retrieval of lunar soil and stone samples around 2017. Scientists have talked about the possibility of sending a man to the moon after 2020.

Hong Kong*:  Sept 21 2011 Share

StanChart trainee Ernest Ma with Nita Law of human resources. The bank will add 1,000 staff. Standard Chartered has no plans to trim its staff numbers despite lay-offs sweeping the banking sector, the bank's Hong Kong chief said. "There is no plan to cut jobs in Hong Kong," Benjamin Hung, executive director and chief executive of the bank's Hong Kong unit, said in London earlier this week. "In fact, the group plans to add a net 1,000 staff to its global headcount this year." The reassurance came after Britain's Independent Commission on Banking (ICB) announced a proposal last week to require British banks to separate their retail banking operations from their investment banking business. The proposal seeks to shield consumers from investment risks. HSBC has announced it will shed 30,000 jobs - or a tenth of its workforce - over three years. Barclays similarly plans to slash 3,000 jobs. But Hung said Standard Chartered, which is based in London but does the bulk of its business in fast-growing Asia, should still see healthy revenue growth. He said the bank would not cut its headcount because its policy is to maintain neutral "jaws", or the difference between the growth in income and expenses. "We don't wish to see big negative jaws for our business," Hung said. "On the one hand, we do not want to spend what we can't afford. But, equally, we have to invest to generate future growth." Worldwide, Standard Chartered employs 75,000 people in more than 1,600 branches and outlets located in over 70 countries. Its Hong Kong business posted a year-on-year revenue increase of 23 per cent compared with a 13 per cent rise in costs in the first half of this year. Globally, profit was up 11 per cent in the first half, while costs rose 8 per cent. Hung said he expects the group's global cost growth this year to catch up with the increase in revenue by year's end. For Hong Kong, it might take longer to close the gap, as it enjoyed a wider disparity than the global average. One area of expenditure increase will be marketing. Standard Chartered will spend HK$100 million to renovate all of its local branches. The sector's prospects in Hong Kong could continue to be overshadowed by volatility in Europe and the United States, Hung said, but he did not foresee a repeat of the 2008 financial crisis. "I am not saying that the banking sector is very healthy now and nothing bad can happen," Hung said. "But it is far better than it was during the fourth quarter of 2008." Hong Kong banks tend to maintain a healthier loan-to-deposit ratio than their counterparts in the West, some of whom lent more than they had in deposits and thus had to rely on wholesale funding. "Hong Kong banks are more disciplined and prudent," Hung said. Hung said the cost of doing business for banks will continue to climb in the months ahead as regulators sought to stabilise the sector. The ICB, for example, called for all British retail banks and sizeable banking groups to hold at least 17 to 20 per cent capital against their assets, with at least 10 per cent of assets in the form of equity. Basel III, a new global regulatory standard, also requires banks to hold more liquidity to back up their assets. "If you have to hold double the equity capital for the same business, this will inevitably drive down the return on equity," Hung said. "Some banks may look to reduce costs to help improve returns." Hung said the offshore yuan business, including yuan deposits, initial public offerings and debt and trade settlements, could present new opportunities for Hong Kong banks. Asia now accounts for more than 50 per cent of yuan-denominated trade settlement with China. Hiring sentiment in Hong Kong improved in June with local firms recruiting 3.2 percent or 80,600 more staff than in the same period last year, the Census and Statistics Department said yesterday. About 11.3 percent or 7,600 more people got jobs in cleaning and similar services, and 7.7 percent or 16,600 more were hired in the food and beverage services sectors - despite the imposition of a minimum wage from May 1, the department said. But the manufacturing industry hired 5 percent or 6,000 people less in June than in the same month last year. Total vacant positions in June were 56,650 - up 25 percent year on year - mainly in the food services, import and export and professional and business services sectors. But latest data showed the territory's gross domestic product growth was slowing down due to sluggish growth in almost all sectors. GDP rose 5.1 percent in the second quarter from a year ago, moderating from a 7.5 percent gain in the first quarter. Combining net output in import and export, wholesale and retail sectors rose 7 percent year-on-year in the second quarter, down from a 14 percent rise in the first quarter. "A moderation in merchandise trade and a sluggish external environment were the causes," the department said. Output growth narrowed in the accommodation and food services sectors, rising 1.3 percent year-on-year in the second quarter compared with a 1.8 percent rise in the first quarter.

Sany Heavy Industry is likely to be the second biggest initial public offering in Hong Kong this year when the machinery maker hits its target of raising up to HK$26 billion. A new sign of Sany's potential to follow in Glencore's footsteps and become a heavyweight IPO came with confirmation by Atlantis Investment chief and respected stocks investor Liu Yang that she has set aside HK$234 million to buy Sany shares. The construction machinery maker kicked off a roadshow yesterday and will open its retail book tomorrow. Rival XCMG plans to meet with institutional investors on Monday - one week later than initially scheduled for its HK$15.6 billion IPO. The Zhengzhou-based firm will open its retail book next Wednesday ahead of its new debut date of October 12. Liu is also said to be eyeing CITIC Securities - another listing candidate. Separately, iron ore maker Hanking Group started its bookbuilding yesterday and has locked in HK$468 million from three cornerstone investors - mainland giant Baosteel, Gold Mountains (HK) International Mining, a unit of Zijin Mining Group, and private equity firm SAIF Partners. Hanking's international tranche is already covered. Its shares will cost between HK$2.51 and HK$2.93, entailing a minimum spending of HK$2,959.53 for one board lot of 1,000 shares. The Liaoning-based company, seeking to raise up to HK$1.34 billion, will spend 86 percent of the proceeds on repaying debt. In other action, China's largest tea retailer, Tenfu, went down well, drawing a slight oversubscription with its retail target set at HK$142 million. But restaurant chain Xiao Nan Guo booked just HK$1.6 million in margin orders, or 2.2 percent of its retail target of HK$74 million. Men's footware firm Active Group attracted a modest HK$21 million in margin orders, representing 38.25 percent of its retail target. Lastly, shoemaker Hongguo International will start trading on Friday - the first IPO after two months.

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The University of Hong Kong medical students who created Caduceus journal in 1922 intended it to report on the latest medicines and technology. It's unlikely they ever imagined that their writing would live on into the 21st century. The journal "documented the evolution of Hong Kong's medical society" said Tim Wong Lok-yu, a final-year medical student who is one of a group who has preserved the best articles from almost 90 years of Caduceus online and in a new collection, 85 Years of Caduceus. While it was set up as the journal of HKU's Medical Society, it also provided an insight into the lives of students and their views on the big issues of their time - a series of first-hand accounts which offer a valuable insight into Hong Kong's history. After circulating in the medical community in Southeast Asia, production of Caduceus ceased during the second world war, resuming in 1969 with a new focus on offering medical students a chance to discuss the issues of the day. The later incarnation of Caduceus carried articles about social movements and politics, with topics covering the Cultural Revolution, the Bao Diao Movement in the '70s and the Tiananmen Square protests and subsequent crackdown in the '80s. There were also discussions of social issues - including Hong Kong's relations with the mainland and students' thoughts on the medical system in which many of them would later work. "[The students in the '70s] cared about social issues," said Dr Hung Chi-tim, chief executive of Queen Elizabeth Hospital in Yau Ma Tei and a regular contributor to the journal in his student days. "And as for me, I like to play around with words and I like to write. "[Contributing to Caduceus] was, to a certain extent, to hope to wake people up and make people think through words. "I remember the first article I wrote for Caduceus. It was about voting for the class union. "Caduceus provides a platform for students to express views. Many of the articles were well written and very thoughtful." And the Caduceus archive will also give the wider world a rare insight into what life was like for the students and staff at HKU's medical school through the ages. The archive contains plenty of lively anecdotes on traditions such as "Medic Night", an event in which students put on shows and compete against each other. Medic Night became a point of controversy after some students and faculty members complained of the coarse and inappropriate jokes that were told. "Sometimes we made fun of the junior students," recalled Dr York Chow Yat-ngok, now Hong Kong's secretary for food and health and a HKU student from 1967 to 1972. "The graveyard was right next to the medical school campus. So we would leave something there and asked the junior students to collect it for us at night. "Some of them were brave enough to take our instructions and we ended up becoming friends. "The campus was far from other parts of the university's main campus. My classmates and I took a lot of courses together and we became very close," Chow recalled. "I always remember the days when we were studying together. "I also remember that in my second year, three-quarters of the class failed a biochemistry class together. "I failed, of course, but did not feel too bad because there were smarter people than me who also failed the course." Chow said medical school was a time where he matured and came to understand more about life. "You have to face sickness every day as an intern. You learn and you grow up," he said. It took Wong and his fellow members of the journal's modern-day editorial team two years of trawling through the archives to create the 85 years of Caduceus website. And he had another resource closer to home to call on as well. Wong's father, Dr Wong Tak-wai, could tell his son all about Caduceus from his own days as a student at HKU's medical school. "I remember clearly as a student at medical school at HKU, Caduceus was then a monthly free journal and everyone would read it," said Wong Tak-wai. "Some say the medical community is exclusive, but I'd disagree. We are just close-knit. In the old days, only a small group of students got into medical school. We came from all over Asia - Singapore, Malaysia and so on. We graduated and work in hospitals with our seniors and alumni of the same school. We built lifelong friendships that way." Professor Rosie Young, a student from 1947 to 1953 who later taught at HKU, says the magazine reflected changes in the student body. "When I was a student back in the '40s, we were very practical. We just wanted to graduate, find a job and help people. Things changed in the late '60s and onwards. Students were more socially conscious." Recalling her own student days, Young said: "I was on a full scholarship so didn't quite come from the same background. I was also a bit younger. But being busy and our heavy study load didn't stop people from dating." For Hung, Caduceus provided an insight into life in the city's medical community. Opinions expressed in pen and ink in Caduceus can give readers at their computers today a glimpse into medical school life in the '60s, '70s, '80s and later - and a window on how young people see the world. "I think medical school opened my eyes," said Hung. "Involvement in Caduceus, the student union and studying medicine made me remember that there are more important things in life than being a successful doctor." The newly completed archive project can be found online at www.med.hku.hk/85caduceus/

Leung Chun-ying said yesterday he was ready to dscuss his resignation as convenor of the Executive Council with Chief Executive Donald Tsang Yam-kuen as "soon as possible". This came as Henry Tang Ying-yen, his likely contender, is widely expected to quit as chief secretary this week to prepare for the chief executive election. "I will discuss with the chief executive when exactly I will resign and make an announcement as soon as possible," Leung said. He made the statement after a social welfare forum organised by the Alliance for the Underprivileged yesterday. Tsang returned to Hong Kong on Friday from a business trip to Europe. Leung refused to give a resignation timetable but said the decision would not be affected by what Tang did. "I'm not basing this on what others are doing," he said. "When [I should] resign is based on the needs of my own work." He also gave a preview of his would-be political platform - a social welfare plan for Hong Kong. "I cannot say [the plan] is part of my policy platform," said Leung, referring to the election restrictions. "I will only unveil my platform after I have officially announced my bid." He said at the forum yesterday he had lined up a "major social service organisation" a year ago to prepare the plan. But he would not say which organisation he had been in discussions with. He described worsening poverty as the "deepest conflict" faced by the city. Leung denied he had been facing pressure from the pro-Beijing camp not to enter the chief executive race, to be held in March. Meanwhile, Beijing loyalist Rita Fan Hsu Lai-tai emerged as the most popular choice as the next chief executive, according to a poll of 280 headmasters and teachers. Fan, a member of the Standing Committee of the National People's Congress, scored 5.66 points on a scale of one to 10, with 10 being the highest. She voiced support for Henry Tang earlier this month. Leung came second with 5.02 points. Tang scored 4.44 points. Conducted this month by Education Convergence, an education concern group, the poll asked respondents to rate the eight people who media reports had mentioned could be possible candidates in next year's election. The other names included New People's Party chairwoman Regina Ip Lau Suk-yee (4.67 points) and Democratic Party chairman Albert Ho Chun-yan (3.98 points). Education Convergence chairman Chow Ping-yan urged the next chief executive to appoint someone with experience in education to be education minister. Meanwhile, the 60,000-member Hongkong Chinese Civil Servants Association yesterday called on the next chief executive to enhance communications with civil servants when formulating policies. The association said it would invite the likely candidates to attend its forum to express their views.

Former Asia Television news chief Leung Ka-wing attends a special Legco panel on Monday. Former Asia Television news chief Leung Ka-wing on Monday told a Legislative Council special meeting he was asked in July by a “source” to broadcast the news that former mainland president Jiang Zemin had died. Leung declined to reveal the identity of the source, however, saying he was not in a position to do so. The former news chief and other ATV executives were questioned by lawmakers looking into the matter, which angered the authorities in Beijing and caused embarrassment in Hong Kong. Leung subsequently resigned from the station, saying he accepted responsibility for failing to stop the erroneous report being broadcast. He recalled that around 6.15pm on July 6, after the first break of the evening news, a subordinate told him that “a source” said news of Jiang’s death was reliable. The “source” said it should be broadcast immediately. “The message I got was that it must be broadcast at once… But [initially] I said no, because my colleagues had not been able to verify it yet. There was no second source to verify it,” Leung explained. “Anyhow, I made a mistake in the end. That is, I trusted the source,” he added. ATV Executive Director James Shing Pan-yu, who was also at the Legco meeting, denied that the news source was the station’s major investor, Wong Ching. “Wong had nothing to do with the incident,” Shing told the meeting, before also excluding ATV’s senior vice-president Kwong Hoi-ying. Shing also denied suggestions that it was actually he who was the source of the inaccurate news. The broadcast of the report on Jiang has also raised questions about ATV’s editorial independence. The station was forced to make an embarrassing apology for the report after it was berated by the central government’s liaison office for “seriously breaching professional news ethics”. Asia Television executive director James Shing apologized to Jiang Zemin and the people of Hong Kong over the station's false report that the former president had died. He also denied that major investor Wang Zheng controls ATV, that Wang had been involved in the Jiang report, or that management interfered in editorial matters at the station. "But ATV learned a painful lesson," Shing said, bowing in the legislative chamber after delivering the apology. Former news department boss Leung Ka-wing took a swipe at ATV practices, saying an item from a sponsored feature was inserted in a news production. He also said that a woman reporter- anchor who was promoted in his department without his say-so had gone touting for paid business. On that, ATV director Stephen Luan Zhengguo denied that ATV received rewards from people or institutions featured in news programs and that the woman who raised Leung's ire "just cooperated with the sales department." Still, the Broadcasting Authority has received four complaints about the programs that Leung mentioned and is now conducting an investigation.

 China*:  Sept 21 2011 Share

Duan Linxi (left) and Hong Chen compete in the national final round of Super Girl, a popular talent show broadcast by Hunan Satellite Television, on Sept 16. Duan, who is from Yunnan province, won the national championship. Hunan Satellite Television (HST) said it will not hold popular talent shows next year after the authorities said the channel violated a broadcasting time limit for Super Girl, one of the country's most popular TV talent shows, similar to American Idol. Since some of this year's programs exceeded the maximum duration allowed by the State Administration of Radio, Film and Television (SARFT), "we received notification from the administration that we cannot make selective TV trials with mass involvement of individuals in the year 2012", Li Hao, deputy editor-in-chief and spokesman of the channel, confirmed to China Daily on Sunday. "Hunan Satellite Television will obey the State regulator's decision and will not hold similar talent shows next year. Instead, the channel will air programs that promote moral ethics and public safety and provide practical information for housework," Li said. Super Girl was based on an annual national contest held by HST since May 2009. A similar TV talent show that was seen as the forerunner of Super Girl ran for five years and swept through the nation. This year, the contest began on March 30 and lasted into July, until all the national-final players were selected to go on the air. However, the first show - aired on July 15 - lasted about 182 minutes, which is 90 minutes longer than the SARFT cap. "The administration did set a telecast time limit in 2007, but in later approval documents it did not mention the limitation, so we did not attach enough attention to the time at first," said a staff member of the TV station, who declined to be identified. "Later we received a verbal warning from the administration and we immediately adjusted the telecast time. But in later programs, there were cases where we exceeded (the time by) several minutes," he said. In 2007, SARFT took several moves to regulate talent shows, including banning TV talent shows in prime time (7:30 pm to 10:30 pm) and limiting the duration of each episode to no more than 90 minutes. The anonymous staff member also said that the ratings for the contest this year "kept being higher than other TV programs of its kind". "For me, exceeding the time limit is just an excuse to shut down the TV program, and there would have been other excuses even if the TV station did not make the shows that long," said Jin Yong, a researcher at the Communication University of China. "I believe the reason that forced the administration to 'regulate' this program is that some television hosts in the program made inappropriate comments and some did not dress properly," Jin said. "The style might have offended some older viewers, so that the authority warned the TV station with the suspension order to make their program classier." Under the 2007 regulations, SARFT stated that some talent show programs were "vulgar" and did not conform to the healthy and positive orientation that TV programs should have. In 2010, SARFT published regulations on dating shows to curb media hype of money worship. "These regulations could probably influence the shows in the short term but cannot stop them from developing, because more and more people want to escape from serious issues on TV," Jin said. In 2007, the administration issued rules intended to uphold high moral standards during the sequel of HST's popular talent contest, Super Boy. Super Boy, similar in format to Super Girl, was ordered to include only "healthy and ethically inspiring" songs. The program was also told to avoid "gossip" about the contestants and not to show scenes of screaming fans or tearful losing contestants, as those were believed to be in "bad taste".

Yuan longping, academician of Chinese Academy of Engendering and known as "father of hybrid rice", examines rice crops in this file photo taken in May of 2007. The yield of China's hybrid rice breed, which is known as super rice, has exceeded 900 kg per mu (0.067 hectare), setting a new world record in rice output, according to China's Hunan provincial academy of agriculture at a press conference on Monday. The yield of China's hybrid rice breed, which is known as super rice, has exceeded 900 kg per mu (0.067 hectare), setting a new world record in rice output. The rice breed, DH2525 (Y two superior No. 2), produced a harvest of 926.6 kg per mu during its trial plantation in Longhui County in central China's Hunan Province, according to the provincial academy of agriculture at a press conference on Monday. To ensure the accuracy of the yield, a team of experts under the Ministry of Agriculture (MOA) randomly selected three out of the 107.9 mu trial field's 18 plots and supervised the harvest on Sunday. However, the breeding can not be deemed a success until the new breed produces the targeted yield of over 900 kg per mu on at least 100 mu of farmland for two consecutive years, said the team's leader Cheng Shihua. "We have another year to go," he said. DH2525 was developed by Yuan Longping, known as the "father of hybrid rice," who started developing hybrid rice in the 1960s. His research team reached the target unit yield of 700 kg per mu and 800 kg per mu in 1999 and 2005, respectively, setting world records both times. With skills honed by his team over several decades, Chinese farmers are estimated to have harvested 300 billion kilograms more in aggregate output. Their hybrid rice, therefore, has become known as super rice. Wang Huayong, a farmer who contracted the trial field, said the field had a yielded 841.6 and 872 kg of rice per mu over the past two years, respectively, and the yield finally exceeded 900 kg per mu this year. "The seed was further upgraded, new manure was used, and we also received the guidance of Mr. Yuan himself," Wang said. Eighty-one-year-old Yuan visited the field in early September and checked the growth situation. "He issued a clear instruction on water management in the field," said Wang. Li Guoxiang, an expert on agriculture with the Chinese Academy of Social Sciences, said the higher yield target was of great significance for both heavily populated China and the world at large.

Photo taken on Sept. 19, 2011 shows the ceremony for the beginning of the construction of the city's tallest skycraper in Beijing, capital of China. Beijing will begin building the city's tallest skyscraper in its central business district. The 108-story 510-meter building, called "China Zun", is shaped like a zun, an ancient Chinese wine vessel, and will be completed within five years. BEIJING - A groundbreaking ceremony for a new skyscraper took place in Beijing's central business district (CBD) on Monday, marking the beginning of construction on what will eventually be the city's tallest skyscraper. The design of the China Zun building was inspired by an ancient Chinese wine vessel, according to the CITIC Group, the building's developer. The building will serve a variety of functions, serving as both an office building and a tourist destination, according to the group. The China Zun will dwarf the nearby China World Trade Center Tower 3, a 330-meter-tall building that is currently the tallest in the city. Aiming to top China's more environmentally-friendly skyscrapers, the group said that the building will feature the latest energy-saving technology in order to encourage the efficient consumption of energy. The building's top floor will function as a sightseeing platform and cafe, providing visitors with a panoramic view of the CBD, the group said.

Hong Kong*:  Sept 20 2011 Share

Many Hongkongers actually supported a plan to import wild beluga whales. So was the marine park's about-face on the idea a sign of a new, more enlightened approach? When Ocean Park was on the verge of bringing beluga whales from the wild to Hong Kong, it looked like the only thing standing in the way was public opinion. After all, the belugas were ready, with six already caught and held in a marine facility in Russia. The park was ready, with a tank big enough to house the whales under construction in the new Polar Adventure area. And the science was ready, with a four-year study having concluded a limited annual catch of the near-threatened species from the Okhotsk Sea was sustainable. But the Hong Kong public, as it appeared late last month, was anything but ready. Animal-welfare groups were continuing a vigorous campaign against the import of the belugas and a coalition of groups was preparing protests outside Ocean Park unless the project was scrapped. Ocean Park executives, sensitive to public sentiment, commissioned two major opinion polls. "As long as you gauge the majority feeling, that should help you make your decision," chairman Allan Zeman said on August 29 as the park announced it would not import the belugas. Given that retreat, the survey's results - revealed for the first time in response to questions from the South China Morning Post (SEHK: 0583, announcements, news) - are surprising. The Hong Kong public generally supported the idea of bringing the beluga whales to Hong Kong, the polling showed. And a majority opposed the efforts by animal-welfare groups to block the project. In one survey, conducted in July by Polytechnic University's School of Hotel and Tourism Management, 63 per cent of respondents supported bringing beluga whales to Ocean Park. In the other, by the University of Hong Kong's public opinion programme, a slight majority of people opposed importing the whales. But three-fifths supported the import so long as Ocean Park worked with other world-class aquariums on animal research to study and conserve beluga whales. "The results were overwhelmingly favourable," said Ocean Park's director of public affairs Una Lau Yuk-min about the surveys, "when conditioned on the basis that the collection is done from sustainable sources, that research is done to learn more about the animals in our care, and that we partner in research with other world-class aquariums or zoos. "Public opinion was only split if the collection was unconditional, which was never our intent." So why - if the "majority feeling" showed such widespread support for the import - did Ocean Park decide to abandon the beluga whales project? A formal statement issued at the time offered few clues: "We have decided not to pursue an acquisition from the wild, even though the removal of some beluga whales has been shown to be sustainable." Asked about the decision, Zeman said the park had listened to "different opinions" within the community and said: "We decided that it just didn't make sense at this point as a responsible park." Although widely applauded by animal-welfare groups, the decision has been sharply criticised by others who believe Ocean Park bowed to pressure from what they see as minority interest groups whose views do not reflect the sentiment of Hong Kong's population at large. A letter from one critic in Wednesday's South China Morning Post pointed out that the six beluga whales at the centre of the debate might now end up in an aquarium with inferior conditions, and called on the board to reverse its decision. What is clear is that, as the surveys were conducted, there was intense debate among Ocean Park executives over whether to go ahead with the importation of whales. Less than a fortnight before Zeman announced his decision, park chief executive Tom Mehrmann fired off a robust defence of the proposed importation to a coalition of animal welfare groups. "While we respect your point of view," he wrote in a letter, "we know through research that seeing living, breathing animals up close promotes a strong personal connection between the animals and the 700 million people who visit zoos and aquariums annually. "The dedicated educators, trainers, veterinarians, and other professional staff at parks and aquariums care deeply about the whales, dolphins, and other animals with which they interact each and every day." Merhmann's letter referred to the opinion surveys commissioned and without revealing their results, said they would "help guide the decisions made by Ocean Park". But how those results are seen is a matter of interpretation according to Sandy Macalister, executive director of the SPCA and a long-standing opponent of the beluga whales' importation. He pointed out that, viewed in a broader perspective, they actually indicate a trend away from the wild capture of marine mammals. What stood out most, Macalister said, was the HKU survey finding that fractionally more people opposed the idea of importing beluga whales than supported it. "Twenty years ago in Hong Kong, 95 per cent of people would have found it acceptable, and it's interesting that today, on a very quick survey, it's 50-50," Macalister said. "You can be sure that in 10 years' time, it would be 90 per cent against. "Hongkongers are changing in their concern and respect for animals, and there is no doubt this will be unacceptable in future." In other words, the tide of history is against the wild capture of marine mammals - and the park was considering importing juvenile belugas that can live for 60 years in the wild. "Imagine how people will feel towards that kind of thing in 40 years' time," Macalister said. "What do you do with them then? You certainly can't release them. "From the animal-welfare point of view, there is no way in the world that the wild capture of beluga whales can be considered not to be cruel, no matter how high the standards of husbandry and care and the conditions in which they are kept. "It's just a simple equation that a wild animal as intelligent as that must suffer, given the process and the end result of where it is kept for the rest of its life." Macalister described the decision not to import the beluga whales as "a fantastic turning point". "Ocean Park is to be really admired for it," he said. "For a place that is renowned for business, for someone to reassess where they are after having invested so much in it and to do the right thing is tremendous." The decision might also have widespread implications for aquariums worldwide, he argued. "What Ocean Park does matters," he said. "They are at the gateway to China and they are enormously respected and they are watched and followed by a great number of people and they are an incredible success story. "Ocean Park is a real leader - one of the best in the world at husbandry and conditions and ethics. When you get a place like that taking a position on wild capture, it is a huge thing for the marine and aquarium industry. It is hugely important for the future of higher marine mammals." While Ocean Park has given no clear commitment against taking wild-capture animals in future, it has confirmed it is no longer considering the import of bottlenose dolphins from the Solomon Islands, an issue that caused controversy last year. Macalister believes the beluga issue was the point at which an undeclared change in policy took place. "They will not want to import wild-capture animals in future," he said. "It will become unacceptable in this society to do so. It is unacceptable in places like Australia already and it will become unacceptable here, too." Dr Samuel Hung Ka-yiu, chairman of the Hong Kong Dolphin Conservation Society, which led the campaign against importing the beluga whales, is not as convinced that Ocean Park has turned a corner in its animal-acquisition policy. "They will continue to acquire wild animals if we are not watching them and keeping the pressure on them," he said, pointing out that the park had only recently imported bluefin tuna and hammerhead sharks for one of its new aquariums. "I really worry this kind of conflict will continue." Even switching to sourcing animals from other aquariums was not necessarily a satisfactory solution, he said. "It can be like animal laundering. If they get a walrus from a Japanese aquarium, what happens if the Japanese aquarium, after supplying those walruses to Ocean Park, then goes out and catches some more from the wild? "For me, it's a relief we achieved our goal and they won't bring any beluga whales to Hong Kong. At least Ocean Park is listening and that opens the door to us to collaborate in future. But if you ask me: `Have all the problems been solved?' I would have to reply: `By no means'. We have to monitor the situation. This isn't even a victory. It's just progress. "They still have the dolphin show, they still have bluefin tuna and hammerhead sharks, and they are still not willing to educate people properly. But at least Allan Zeman is listening and we have a channel to take one step at a time and make progress in the right direction. "It's not all going to change overnight. I want to make Ocean Park something I'm proud of. I think we're heading in the right direction. I am more optimistic than I was before." Will Ocean Park continue its search for beluga whales from other sources for its Polar Adventure attraction, which is due to open in 2012? Lau replied in a statement: "The park has decided to pursue other animal ambassadors and to eliminate belugas from the search process. "The park will explore diverse approaches to convey the conservation message of climate change, while placing an educational and interpretive focus on the iconic animals we will not be displaying, such as belugas and polar bears. "The Polar Adventure exhibit was always meant to be a multi-species habitat and we may simply look at expanding the other species presented to deliver the messages on conservation within the exhibit."

Chow Sing-lam, 75, takes part in the time trials at Tung Chung public swimming pool. The last time Chow Sing-lam completed the cross-harbour swim, in 1965, he was so dirty afterwards that even his wife did not recognise him. But if he swims in this year's race, he is confident he will emerge from the water a little bit cleaner. Chow is hoping he will qualify to be one of the 1,000 swimmers to compete in the historic 1.8-kilometre race from Lei Yue Mun to Quarry Bay Park on October 16. Half of the quota will be reserved for those who have met a minimum time requirement in 1,500-metre swimming races held by the organisers, the Hong Kong Amateur Swimming Association, or who have swum in open-water races. The remainder will go to the top performers in four 1,500-metre swimming time trials being held this month. The first of the time trials for various age groups took place yesterday at Tung Chung public pool. All of them had to complete the distance in 45 minutes if they had any chance of qualifying. At 75, Chow was the oldest competitor to register. If he does make the cut, he says he has no doubt it will be a much better experience than in 1965. "The pollution was very bad back then. After I finished my wife didn't know who I was because I was covered from head to toe in oil from the sea," Chow said. "But the government has done a good job in cleaning up the harbour, so it will be nowhere near as bad next month." For more than 40 years Chow swims daily in the sea near the harbourfront in Western district. Even in winter, he never misses his dip. "Swimming in sea water is good for your health," he said. "I can swim long distances, so I am confident I'll make the qualifying time." Cheung Man-kuen did the cross-harbour swim in 1975 and also finished covered in filth. The 59-year-old is hoping to take part again, but says pollution won't be the only obstacle. "When you are swimming across the harbour, the other side seems so far away. It's like you're not getting any closer, no matter how hard you swim," he said. At 12, Liao Siaoqiao was the youngest swimmer at the Tung Chung time trials yesterday. The Diocesan Girls' School pupil was upbeat about her chances. "I'm confident I can make it because I train over long distances every day," she said. "I've also swum in open-water races before." Fourteen-year-old Dominic Chan Chi-kin, a pupil at the Jockey Club College in Sha Tin, had another reason for making the starting line-up. "If I qualify for the cross-harbour swim it'll mean my mum will have to let me go swimming instead of making me study," he said. More than 1,400 swimmers will take part in the four-day time trials, and the association will list successful entrants on its website on October 3.

Elderly guests enjoy their free lunch in Shek Kip Mei. Many of them live in nearby public housing and survive on as little as HK$1,000 per month from their old-age allowances. It is still half an hour away, but a dozen elderly people are already in their seats and happily chattering away while they wait for their free lunch. Staff at the Shek Kip Mei canteen hand out cups of steaming soup. The canteen is filled with laughter and conversation. It's unlikely anyone stepping inside would guess that most of these people live alone on nearby public housing estates, surviving on little more than HK$1,000 a month. One of the regulars is Chan Piu-ying. The 84-year-old likes to take her time over lunch, staying there for more than an hour. She says getting together for the lunch every weekday is the highlight of her day. "My backbone's weak, I've got low bone density. I can't hold or carry anything and it means I can't cook," Chan said. "But here I can sit and catch up with my friends while we wait for the young people to serve us lunch. They're all my friends. I met them here, we became friends after seeing each other here day after day." Charity group St James' Settlement set up the canteen in April 2009, providing free lunches during the week for the elderly who are struggling to make ends meet and are not eligible for social security benefits. "Most of them live alone and suffer from illnesses like low bone density, cataracts and diabetes," said Connie Ng Man-yin, service manager of the St James' Settlement People's Food Bank. "They're surviving on the government's old-age allowance. They're not entitled to social security unless they get their children to sign a form saying they no longer support their parents. Most old people don't want their children to make that declaration." Danny Catering Service provides lunches to schools and is the canteen's main donor. But during school holidays, the social workers involved in the canteen project have to buy lunches from a nearby fast-food restaurant, which gives them a discount. The South China Morning Post (SEHK: 0583) is running a campaign to help the city's key food banks. The Heart of Hong Kong Relief Fund aims to raise funds for the Tung Wah Group of Hospitals Food for All - Short-Term Food Assistance Service and the People's Food Bank run by St James' Settlement. Donations will be equally distributed to the two beneficiaries. Chan said even though her children could be forgetful about giving her money, she would not consider trying to get social security. "When they forget, I give them a call to remind them I need some cash. But there are times when I just don't want to push them," she said. Chan's children paid more than HK$10,000 for her to have a cataract operation two months ago. Now, she says she is too ashamed to ask them for another HK$2,000 so that she can buy a pair of glasses - they are still at the hospital, waiting to be collected. Also struggling is Chan Siu-miu. The 69-year-old is a newcomer to the canteen. In February, she had to be taken to a hospital after fainting in the street because she had not eaten for days. She says her son has been unemployed for two years, so she collects unused papers to sell to recyclers for extra cash. Like many others in her situation, Chan Siu-miu's pride gets in the way of her seeking assistance: "If I ask for help, everyone will know my son is unemployed."

Images depicting the downfall of the Qing dynasty 100 years ago would probably have been left to rot in a dark attic had it not been for the keen eye of photographer William Cho Hung-fook. Now 70, Cho was shown a bundle of 50 black-and-white photographs from China's 1911 revolution by an American friend two decades ago. They were taken by his friend's father, who worked as a news photographer. The son had no idea where the photos were taken. But Cho recognised the setting as Wuhan , capital of Hubei province, where the revolution began. In 1911, a bomb made by revolutionaries exploded by accident in the town of Wuchang . Local police investigated, leading the revolutionaries - many of them Han people serving under the Qing imperial forces - to stage a coup on October 10. Their success prompted those in the towns of Hanyang and Hankou to declare independence from the Qing government. And in a matter of weeks, 14 provinces had seceded, sealing the fate of the Qing dynasty and leading to the birth of the republic. Wuchang, Hanyang and Hankou were merged in 1927 to form Wuhan. The photos show fierce fighting in the province. One depicts a fire in Hankou that was started by cannonballs. Others feature French and Japanese soldiers in their countries' concessions - the territories occupied by foreign powers in China. Cho rescued the photos, but he did not stop there. Now retired, he has spent 20 years collecting memorabilia related to the revolution. He said that until this year items were cheap to buy. "Nobody cared about the revolution in the past. Not until this year, when we celebrate the revolution's 100th anniversary." A round, copper plaque about the size of Cho's palm, which he bought for a few hundred Hong Kong dollars, is a good example. It bears the slogan, "Dispel the Qing, restore the Han", and has the date of the Wuchang Uprising engraved on it. "The auction catalogue described it as a copper badge. I was surprised when it turned out to be a big, heavy plaque," he said. Cho was shocked when an auctioneer in Britain later confirmed the plaque was produced shortly after the uprising - and put its value at HK$400,000. A bag of antique coins he picked up for a few hundred dollars were cast in 1912, the year the Republic of China was founded. On one side of the coins is the 18-star logo - representing 18 provinces - of a Hubei revolutionary society. On the other side, in Chinese, are the words: "In commemoration of the country's founding". Now they sell for HK$1,200 each. Cho plans to display his collection as part of the Hong Kong Collectors Society's upcoming exhibition at the Central Library. Details of the show have yet to be finalised.

People on the edges of society feature prominently in director Ann Hui’s films. But in her latest movie, the 64-year old director tackles a challenge that everyone faces: growing old. Ms. Hui’s movie-making career has spanned more than three decades and she has covered topics that include the plight of Vietnamese boat people, Alzheimer’s disease and lesbianism. In “A Simple Life,” which held its premiere at the Venice Film Festival last week, she presents a quiet contemplation on aging and based on the true story of the film’s producer, Roger Lee. The movie follows the relationship between a 40-something man and his family’s amah, who has been in their employ for 60 years. After she suffers a stroke, they reverse roles and he looks after her, eventually realizing that she’s been more than just a servant but a much-loved member of his family. Ms. Hui says she couldn’t have made “A Simple Life” 10 years ago. “At that time I wasn’t reconciled to old age to really, sincerely explore the feelings and possibilities of that particular state,” she says. The Venice audience gave Ms. Hui and her stars, Deanie Ip and Andy Lau, an enthusiastic and lengthy standing ovation. The film won rave reviews, and the Venice jury honored Ms. Ip with its best-actress award for her moving portrayal as an aging household servant, or amah. Much of the film was shot at a real residence for the elderly in Hong Kong, and several of the residents have small roles or appear as extras. “They treated us like family,” Ms. Hui says of the film’s cast and crew. “We were very respectful and they thought it was fun.” The owners of the home had no concerns about using it as a film set. “They were very sympathetic,” she explains. “I have a reputation of [filming] people — who are not so well off — with a great deal of respect, so they trusted me.”

Hong Kong and overseas professionals working in Shenzhen's Qianhai special development zone will only have to pay income tax at Hong Kong rates, a spokesman for the zone's administration said yesterday. "Overseas specialists working in the Qianhai zone will only need to pay their personal income tax at the rates levied in Hong Kong," said Wang Jinxia , director of Qianhai's operational and development department. He was speaking three months after lawmakers approved a preferential tax system. Personal income tax rates can reach 45 per cent on the mainland but the maximum rate is 15 per cent in Hong Kong - one of the lowest in the world. Corporate income tax for overseas companies will also be set at 15 per cent in Qianhai, compared with 25 per cent elsewhere on the mainland. William Ho Mook-lam, former president of the Hong Kong branch of the Association of International Accountants, said the preferential income tax rates would be attractive to Hong Kong professionals considering working in the zone, 15 square kilometres of reclaimed land north of Shekou. But he warned that there were other areas of concern. "The gulf between the Hong Kong and mainland personal income tax systems is just one of the issues we are worried about. We also have concerns about Qianhai's legal system and general business environment, among other things," Ho said. Qianhai, which Wang described as "a modern service industries co-operation zone between Shenzhen and Hong Kong", had floated a few groundbreaking ideas to tackle legal and business concerns. They included appointing two Hong Kong members to its 11-member administration committee, establishing an ombudsman and an independent Hong Kong-style anti-corruption agency, and requiring all senior officials to declare their incomes. But the Shenzhen authorities eventually scrapped these ambitious proposals in June. Tse Lin-chung, a partner at a Hong Kong-based law firm, said he hoped Qianhai would turn into a real "mini-Hong Kong" with greater legal and administrative autonomy. "The unification of personal income tax is a necessary step, but we also want Qianhai to adopt the spirit of our legal system. So far we haven't seen any breakthrough," he said. Explaining the rationale for the decision on taxation, Wang said: "It's not fair to Hong Kong residents [in Qianhai] if they are taxed at the mainland level." More tax breaks would be rolled out to woo Hong Kong investment, he added. "We also plan to cut the sales tax from the present 5 per cent to 3 per cent, equal to the rate in the Shenzhen Special Economic Zone when it was set up more than 30 years ago," he said. Another special zone, Hengqin, an island in Zhuhai neighbouring Macau, is also considering tax breaks to lure overseas investment.

 China*:  Sept 20 2011 Share

As the world's biggest car maker powers ahead in the world's biggest car market, it's hitting bumps in the road. General Motors Co. next week will hold its board of directors meeting in Shanghai, where it has its main China joint venture with Shanghai Automotive Industry Corp. It is GM's first board meeting in Asia and only its fourth ever outside the U.S. The meeting will stretch over three days and include plant tours and a town-hall gathering with employees. But even amid the pageantry, the difficulties of doing business in China are coming into focus for the car giant. One recent example: GM would like to bring its Volt electric car into China. But Chief Executive Dan Akerson said he refuses to share electric-car technology in exchange for hefty consumer rebates from the Chinese government that would juice sales of the vehicle. "There are technology risks, there are relationship risks, there are business risks. I am sure China will do what's best for China," Mr. Akerson said in an interview with The Wall Street Journal. "But you ignore China at your own peril." The lure is China's astonishing growth. In 2000, just over a million light vehicles were sold there. Last year, that number hit 16.6 million, surpassing the U.S.'s 11.6 million. J.D. Power and Associates predicts by 2018 the Chinese market will reach 33 million vehicles—more sales than the U.S. and European Union combined. Low labor and production costs have meant juicy profit margins in China. All of that has kicked Western auto makers into high gear. GM's cross-town rival, Ford Motor Co., plans to build four new plants in China by the end of 2015, launch 15 new vehicles and double its dealers in the country. Volkswagen AG, the No. 2 auto maker in China behind GM-SAIC, has made China the center of its global growth plan and is investing heavily there. Hyundai Motor Co., meantime, is in talks with Chinese partner Beijing Automobile Industry Holding Co. to create a China-only brand that will focus on electric cars. But that euphoria is increasingly tempered. Industry executives say they are fretting the race to build plants will lead to a glut of factories down the road, much like what eventually contributed to the collapse of the U.S. auto industry. And they worry about the heavy hand of the Chinese government, which requires foreign companies to partner with and split their profits with local companies as a condition of doing business in China. Ford's expansion plans would more than double its presence in China. The auto maker hasn't decide how far it will go to appease the government when it comes to sharing technology. If Ford starts selling electric cars in China, a company spokeswoman said, "we would determine how much, if any, technology we would share with our joint venture at the appropriate time." "The potential of China is incredible but there are significant restrictions coming on board and some obstacles and roadblocks to really tapping into that full potential," said Rebecca Lindland, an analyst with IHS Global Insight. "It could implode if something goes wrong and everybody has put their eggs in one Chinese basket." There are other speed bumps in China. Auto-sales growth slowed this year after the Chinese government took steps to slow momentum, including a cap on how many new vehicles consumers could buy. The Asian Development Bank this week cut China's economic growth forecast to 9.3% for the year from its previous estimate of 9.6%, though even the lower number is blazing fast compared with the sluggish economies in the U.S. and Western Europe. Analysts, in turn, have cut auto sales forecasts for China. Another issue: Chinese auto companies want a bigger share of their home market, and are expanding at a rapid pace. China-based auto companies had a 29% share of the Chinese market in 2010, the lowest rate for home-grown companies in any major auto market, according to consulting firm AlixPartners. In Japan and South Korea, local auto makers had a 95% share of the market; in the U.S. it was 43%. Then there's overbuilding. In a recent survey of global auto executives by research firm KPMG, a quarter said they expect China to have 20% more automotive capacity than needed within the next five years. Li Shufu, the chairman of Zhejiang Geely Holding Group, China's biggest privately owned car firm, said overcapacity is a concern, but his company is pressing ahead with expansion anyway. Since Geely bought Sweden's Volvo Cars from Ford last year, the Swedish car maker has green-lighted an assembly plant in the southwestern city of Chengdu and has plans to build another in Daqing, in northeastern China. Volvo's goal is to sell 200,000 cars in China by 2015, more than six times the 30,000 it sold there last year.

The headquarters of Alcoa in Pennsylvania. The company will take the majority of the equity in a joint venture with the State-owned China Power Investment Corp, to cash in on China's growing demand in the high-end fabricated aluminum market. Alcoa Inc, the world's largest aluminum producer, will take a majority equity share in a joint venture with the State-owned China Power Investment Corp, to cash in on the nation's growing demand in the high-end fabricated aluminum market, Alcoa's Asia-Pacific President Chen Jinya said on Thursday. The joint venture, as yet unnamed, intends to produce high-end fabricated aluminum products in the areas of commercial transportation, consumer electronics, packaging, areospaces and automotive, according to Chen. The companies signed a letter of intent on Wednesday to form the joint venture that will focus on producing high-end fabricated aluminum products. The two parties signed a Memorandum of Understanding in January, pledging close collaboration in the fields of mining, refining, smelting, fabrication and engineering in the global arena. Chen said Alcoa would have the majority equity in the joint venture, without disclosing details of the investment terms. China is building large aircraft, of which 80 percent is made from aluminum products, significantly driving the country's aluminum demand. Aleris International Inc, the world's third-largest aluminum supplier, earlier predicted that consumption of aluminum plate by global aircraft makers may rise 15 percent a year, propelled by China's first large passenger plane - the C919 - built by Commercial Aircraft Corporation of China. Demand for aluminum in China, the world's largest consumer of the metal, has grown by 12 percent this year, and will more than double over the next decade, Chen said. In July, Alcoa reported that second-quarter profit more than doubled, driven by continued growth in prices and sales volume. Meanwhile, aluminum prices jumped 24 percent in the second quarter, according to the London Metals Exchange. "We see global aluminum demand rising, mainly because of the pull from the emerging markets. China is a driving force of that demand," said Alcoa's Chairman and CEO Klaus Kleinfeld in an earlier interview with China Daily. "We have seen many opportunities in China's aerospace, automotive, home appliance, consumer electronics, commercial transportation and power generation industries," he said. China's 12th Five-Year Plan (2011-2015) will stimulate demand for aluminum from the railway infrastructure and see it rise by up to 55 percent, according to the aluminum consultancy Cnal.com. "If aluminum is extensively used in rail carriages as a replacement for steel, almost 20 percent of the weight would be reduced, which means more goods can be shipped without an increase in the number of locomotives or speed," said Kleinfeld. He also said Alcoa plans to further increase its use of clean energy, especially from hydropower plants. More than 30 percent of Alcoa's energy is powered by clean-energy sources. Global demand for aluminum from the auto industry will increase by 25 percent by 2015, according to Phil Martens, CEO of the Canadian aluminum producer Novelis Inc, in quotes published by Reuters on August 18. Martens predicted that electronics industry consumption of aluminum will grow by 10 percent to 15 percent and consumption by tin can producers will rise by 4 to 5 percent over the same period.

Mark, dressed a white suit, practices Taichi (or taijiquan), a Chinese martial art on the bank of Lijiang, in Yangshuo county, Guilin city in South China's Guangxi Zhuang autonomous regions, Sept 14, 2011. Mark, who is from Slovenia, and his wife completed their over-two-month Taichi education in Shibanqiao village in Yangshuo county on Sept 14. This was their second time to Yangshuo to learn Taichi. The martial art training schools in Yangshuo attract a lot of foreign tourists each year, which becomes a merging section of Guilin’s tourism.

Beijing-backed religious groups hit out at the US after it reaffirmed China's status as a country "of particular concern" on religious freedom, accusing Washington of trying to harm the nation's image. The US State Department last week released its "International Religious Freedom" report for the second half of 2010, pointing to eight countries as having especially troubling records, including China. "The Chinese government has ... protected the legal rights and interests of religious people," said a statement by the heads of China's five major religious associations, all of which are controlled by the state. "The US report ignored these basic facts and attempted to smear the image of China," the statement - reported by the official Xinhua news agency late on Friday - added. "We feel greatly disturbed as the United States has tried to interfere in China's domestic affairs by targeting religion and creating chaos among religious people in a bid to harm social harmony." The US report detailed actions such as active state repression, violence against religious groups, apostasy and blasphemy laws, anti-Semitism and restrictions on religious attire and expression. The report also named Saudi Arabia, Myanmar, North Korea, Eritrea, Iran, Sudan and Uzbekistan as "countries of particular concern" regarding religious freedom. China, which tightly controls religion, has been listed in the category for a number of years. It has been accused of curtailing the freedoms of believers, such as Tibetan Buddhists and Muslim Uygurs, and even torturing practitioners of the banned Falun Gong spiritual movement. Last month, a Buddhist monk in a Tibetan region of southwest China burned himself to death in an apparent protest against the government's religious policies, state media and rights groups said. In May, the US Commission on International Religious Freedom - tasked with making policy recommendations to the US government - said China had detained more than 500 Protestants over the past 12 months. It also accused Beijing of detaining dozens of Catholic clergy for not registering with the government, and said China had also destroyed Christian meeting points - allegations all of which were rejected by the Chinese government.

Hong Kong*:  Sept 19 2011 Share

Jerry Hsu, the new CEO for DHL Express in the Asia Pacific region, wants to promote the Chinese language within the global express giant to encourage his employees to express themselves more freely. Hsu says Asians are often shy to express their ideas in meetings and placing Chinese culture in a more prominent position will help them come out of their shell. As the only Asian representative on the six-member global management board at DHL Express, Hsu wants to put core Chinese cultural values in the limelight, much as Japanese culture was praised in the 1980s. He spent nearly 20 years in the United States after graduating from the National Chengchi University in Taiwan. His US experience had a profound impact on his management style, which has been described as frank and direct. From his deep baritone voice and his laughter, it is clear there is a big heart in his chest too. Hsu is now responsible for China (including Hong Kong and Taiwan), Japan, Korea, Southeast Asia, South Asia, Oceania and other markets and territories in the region. The new job means even more flying. He was named regional director overseeing Greater China, Korea and Mongolia in 2002 before being appointed president of DHL Express Greater China. Before joining DHL Express, Hsu held various management positions at US carmaker DaimlerChrysler.

Esprit's shares have shed 34 per cent since the Hong Kong-listed retailer reported a collapse in annual profit of 98 per cent. Shares of fashion retailer Esprit Holdings (SEHK: 0330) suffered their biggest two-day drop since listing in 1993 after brokerages downgraded the stock because of its dramatic profit slump and uncertain business outlook. The stock closed at HK$12.22 yesterday, down 19 per cent, after falling as much as 24 per cent to HK$11.52, its lowest since October 2002. It has lost 34 per cent since Hong Kong's biggest listed clothing chain reported a 98 per cent drop in annual profit on Thursday. Brokers cut their earnings forecasts for the company, saying they were sceptical about Esprit's business outlook and marketing plans. Merrill Lynch analysts Tony Tseng and Raymond Ching said "it will be a painful process and the financial results will be significantly impacted" as the management embarked on a restructuring plan to rejuvenate the brand. Esprit's net profit plunged to HK$79 million for the year to June, largely due to the sale of unprofitable operations in North America and store closures in Europe and the Asia-Pacific. Profit excluding exceptional items still fell 30 per cent to HK$2.35 million, as European markets, which contributed 79 per cent of the turnover, remained weak. Management said the brand had "lost its soul" and "its customer focus". It vowed to "take bold and decisive steps to rebuild the brand emotionally", with a heavy investment plan worth HK$18 billion. Esprit recently hired Gisele Bundchen, one of the world's highest-paid models, as its brand ambassador. "The large investment is a risky move," Credit Suisse analysts Gabriel Chan and Isis Wong said in a note. Esprit is planning to "inject value into products by offering better quality fabric, detailing and workmanship, all of which mean potentially lower gross margin", they said. The analysts also maintained that rising raw material prices, particularly cotton, would eat into the company's margin. Esprit was founded around 40 years ago by several businessmen, including Hong Kong billionaire Michael Ying Lee-yuen. Its share price surged to HK$129.79 in 2007 from less than HK$4 when it listed in Hong Kong in December 1993. Ying sold his stake through several share disposals between 2003 and February last year, earning him more than HK$23 billion. The stock has plunged nearly 80 per cent since his last sale of shares. Still, some analysts remain upbeat about Esprit. "We view Esprit's decision to invest in its brand as the right decision," Macquarie Equities Research analyst Gary Pinge said. "The real question ... [is] whether the brand is impaired to a level where it cannot be turned around."

The government is bracing for a reshuffle of its principal officials, with Chief Secretary Henry Tang Ying-yen widely expected to resign next week. Stephen Lam Sui-lung, the secretary for constitutional and mainland affairs, is tipped to succeed Tang, according to a government source. It is widely believed that Tang will tender his resignation to prepare for the chief executive election next year, although he has not formally announced plans to run for the post. A government spokesman refused to comment on the possibility of a reshuffle. Among the principal officials, Lam is second only to Secretary for Education Michael Suen Ming-yeung in terms of seniority, but Suen may be considered out of the running owing to his health problems. Suen suffered kidney failure in 2009. Lam's popularity, already flagging in recent years, hit a new low when he came under fire for his controversial handling of the a plan to scrap Legislative Council by-elections. The government source, who is familiar with the matter, says that if Lam succeeds Tang as chief secretary, his term will be "substantive" because whoever succeeds Tang has nine months before the current administration's tenure expires. Raymond Tam Chi-yuen, director of the Chief Executive's Office, is among the possible candidates to replace Lam in a reshuffle. "It would not seriously affect the work of the office even if Tam is transferred to the Constitutional and Mainland Affairs Bureau," the government source said. Tam was an undersecretary at the bureau before assuming his current post two years ago. Tang is expected to tender his resignation when Chief Executive Donald Tsang Yam-kuen returns from a business trip in Europe. Tsang is scheduled to be back at work on Monday. A source close to the matter said Tang already had a campaign team lined up, which included Anthony Wu Ting-yuk, chairman of the Hong Kong General Chamber of Commerce, retired Legco secretary general Ricky Fung Choi-cheung and Yu Kwok-chun, the chairman of Yue Hwa Chinese Products. Heidi Kwan Cheng Lai-man, who served as former chief secretary Rafael Hui Si-yan's press secretary between 2005 and 2007, will help Tang with public relations. Even without a formal announcement from Tang, Peter Lam Kin-ngok, deputy chairman of Lai Sun Garment International, yesterday expressed support for the chief secretary should he run for the government's top post.

The granddaughter of late tycoon Robert Ho Tung who now owns his Ho Tung Gardens villa is offering a compromise - albeit a small one - in her drive to redevelop the historic site on The Peak. Ho Min-kwan has offered to keep intact the Chinese landscaped garden. But she will still knock down the 83-year-old mansion to put up three- or four-storey residential blocks. In a nod to critics, she may scale back that plan to 10 blocks instead of 11. The clock is ticking on negotiations between the owner and Development Secretary Carrie Lam Cheng Yuet-ngor, who in January halted demolition by provisionally declaring the property at 75 Peak Road a monument. That bought a year's time for talks on conservation. Ho has owned the site since 2003. She has asserted her right to redevelop the 120,000 sq ft site and is not interested in a land swap, according to people familiar with the situation. She hasn't made any public appearances since the freeze. "At the most, Ho is willing to preserve the Chinese garden, but the main building has to go. She offered to take out one of the 11 new blocks proposed in the original scheme," one of the people said. The gardens, called The Falls because of a mountain stream on the grounds, contains a main building, servants' quarters, a pagoda, two pavilions, garage, swimming pool and tennis court. Robert Ho, one of the most prominent business and community leaders of his time, also used the garden to hold banquets. Surveyors estimated in January the redevelopment could be worth HK$3 billion. Ho's latest offer emerged as Heritage Hong Kong Foundation, which is closely linked to another branch of the tycoon's family, holds a public seminar today with consultants presenting architectural and historical studies about the site. The foundation, which has not taken a clear stance on the redevelopment plan, is chaired by Robert Ho Yau-chung, the tycoon's great-grandson and the owner's nephew. Ho Min-kwan recently invited lawmakers to visit the site, and Kam Nai-wai, chairman of an ad hoc Legislative Council committee for Ho Tung Gardens and one of those invited, said it was hard to reach a solution. "The lady actually wants to continue to live there while having some new flats on the site," he said. "She didn't seem to want to sell the land and leave." He said it was almost impossible to find an equivalent lot to exchange with the owner's, given the site's size and uniqueness, with panoramic views of the sea to the south and a vast piece of greenery. But Kam also said he would not buy the idea of keeping just the garden. He hoped the owner and officials would work out a solution, such as relaxing the plot ratio to allow some development while keeping the main block. Ho Tung Gardens was built in 1927 as a residence for Robert Ho Tung's second wife, Clara. Ho, a Eurasian known in the early 20th century as "the grand old man of Hong Kong", lived in the building for only a short time. Lam, the development minister, cautioned lawmakers in July that attempts to conserve the complex may fail. She also said buying the site with taxpayers' money would be controversial.

Central hot spot Dragon-i club in Wyndham Street is under fire for using a public open area in The Centrium for alfresco dining. Dragon-i, the upmarket restaurant and club in trendy Wyndham Street, Central, has removed its tables and chairs from public open space it had been occupying. It cleared the area on Thursday, just over a week after its landlord received a government notice to do so, in a move that refocused attention on commercial use of public space. But one district councillor says that is not enough and that the club should also pay for any income earned in the communal area. The tables, in an area on the first floor of The Centrium at 60 Wyndham Street that is clearly marked as being for public use, were removed on Thursday morning, but it was not clear if the action was in response to the government order. Asked yesterday why the furniture had been moved, one staff member of the nine-year-old club said it was because the floor needed repairing. Others said it was because of "management problems". A manager on the evening shift refused to say if Dragon-i had been ordered to do so by the building's owner, Sino Group, which received a letter from the district lands office on September 7 ordering it to clear the space and cease all commercial activity in it. Before their removal, the tables were laid with Dragon-i crockery and cutlery during the restaurant's opening hours and all bore a plaque saying customers would have to fetch their orders themselves. Nevertheless, the South China Morning Post (SEHK: 0583, announcements, news) observed on Wednesday that customers were being served at the tables, although staff said the tables were available to all, not just customers. A man attending a yoga class in the building said he was not aware that the outside tables were open to anyone. A worker from a nearby building said: "You wouldn't know that you can sit there. And I wouldn't even if I did - it'd be kind of awkward." Several clearly visible signs are displayed notifying that the space is available free 24 hours a day. "As you might have noticed, clear signs have been put up at various locations in the aforesaid open space, indicating that the space has been designated for the enjoyment of the public," Sino Group senior manager of corporate communications Betty Wong said. The Lands Department has not said whether it will ask Dragon-i to pay for its past commercial use of the space. Only 10 per cent of public space in buildings can be used for commercial activity and permission for it must be obtained from the lands and buildings departments. Approval must also be obtained from the Food and Environmental Hygiene Department for outdoor restaurant seating. Central and Western district councillor Kam Nai-wai said that if Dragon-i wanted alfresco dining, it had to organise a public consultation and seek the district council's opinion, as well as obtaining permission from the administration. "This is so a restaurant will not just expand without limits," he said. In 2008, Times Square and The Wharf group were involved in a legal row with the government over charging up to HK$124,000 a day for space in the Causeway Bay mall's piazza. District councillor Tanya Chan said Dragon-i should pay compensation for the money earned on public property, but it would be complicated to calculate the amount. She suggested the compensation should be based on the restaurant's revenue. According to official figures, there were 59 public spaces in private properties in the Central and Western district.

Victoria Lam (left), Tan Hanjin, Jamie Chik, Louie Castro and Lo Hoi-pang up to their usual antics during rehearsals for their reunion show next week. It is a fund-raiser for the Joyful (Mental Health) Foundation. Veteran comedian Lo Hoi-pang paced up and down a Kwun Tong studio holding an erhu and singing a comical Canto-pop oldie about the loss of freedom. Behind him comedian Victoria Lam Kin-ming reclined on a black sofa. And when the music stopped, Louie Castro and Jaime Chik Mei-chun entered the studio, screaming "daddy". Those who lived through the 1980s should immediately recognise them - the original cast from Shrimp Crazy Family, the live sitcom that ran for seven years from 1983 as one of the segments of TVB (SEHK: 0511)'s longest-running variety show, Enjoy Yourself Tonight. And now they are reunited for a good cause. The gang has been rehearsing for a theatre show that will raise money for the Joyful (Mental Health) Foundation, which Lam founded in 2004. "Many in our audience back then have now become mums and dads. This is a very nostalgic show, their collective memory," says Castro, a showbiz veteran of 30 years. Castro is Little Shrimp, who's happily married to Chik, and they have a son. But Lo, who plays Castro's dad, and Lam, who plays Chik's mum, nicknamed Great White Shark - are eternal "frenemies", and their endless fights are the source of the comical moments. Castro describes the play, in which Canto-pop golden oldies and medleys will be featured, as an incredible opportunity to gather everyone, in particular veterans Lo and Lam. "They are the soul of the play," says Castro, who has been pulling the strings behind the scenes. "They are both semi-retired and it's taken me seven years to get them to appear in the show." Lo, busy playing his erhu, cuts in in his classic comical way: "The reunion is very easy for us, but look, some are sick," he says, pointing at Lam, who has recovered from depression, "and some are new". The "new" is Singaporean Tan Hanjin, the fast-rising musician-turned-actor who has won the hearts of Hongkongers with his signature smile. Tan will be playing Castro's son in the play. "We found Hanjin because of his sunshine face. His smile lights up the room," Castro says. Tan says rehearsing a play with so many TV legends a breathtaking experience. "If the Hong Kong Film Awards is the biggest event in the East, then this is the biggest TV event," he says. He was particularly nervous about memorising the lyrics and the ad libbing, one of the best-loved features of the show when it was aired back in the 1980s. "It's like jazz." Castro hopes the four shows at Queen Elizabeth Stadium will remind the audience of their best moments. "I also want them to always remember us, that we are still alive and kicking," he says. Lo, on the other hand, has a much simpler wish: "We just want to bring joy and laughter to the audience." Shrimp Crazy Family, 8pm September 20-23, Queen Elizabeth Stadium. Tickets HK$1,280, HK$480, HK$280, HK$180. Tel: 2734 9009.

Hedge fund manager Bill Ackman created a stir this week with a call to go long on the Hong Kong dollar, a currency that has been linked in a in a very tight range near 7.8 to the U.S. dollar since 1983. Why is it time for change? He thinks Hong Kong authorities will eventually relent and let its currency strengthen under economic and social pressure. By tying the Hong Kong dollar to the U.S. dollar, Hong Kong imports U.S. monetary policy, which is super loose and set to stay there for at least another two years, as the Fed recently signaled. Meanwhile, inflation in Hong Kong hit a scary 7.9% in July and real-estate prices are above the pre-1997 Asian financial crisis bubble-of-all-bubbles peak. Mr. Ackman figures the inflation will exacerbate social tensions, and with a change in Hong Kong’s chief executive set for March 2012, the new government will be forced to let the Hong Kong dollar strengthen around 30%. A stronger currency would make all the imported goods Hong Kong relies on cheaper, ameliorating the inflation pressure. Mr. Ackman’s doubters quickly chimed in. Tom Holland, columnist at the South China Morning Post, noted that such a repegging would be painful for Hong Kong’s banks and investors. The local banking system has a surplus of deposits, some of which it converts to U.S. dollars and lends out abroad. A 30% strengthening of the Hong Kong dollar would leave a HK$60 billion (US$7.7 billion) “hole” in the banking system, he writes. And Hong Kong residents hold a substantial amount of foreign currencies in their accounts. A revaluation would cut into the value of those holdings. Then there is the nearly US$1 trillion portfolio of investments Hong Kongers hold abroad. A quick repegging would wipe out a proportional amount of that value in local currency terms. Another skeptical voice, the analysts at research house GaveKal note that repegging would just encourage more people like Mr. Ackman to pile into the Hong Kong dollar, making defending the new level even harder. Because Hong Kong is so linked to the mainland economy, investors would think the strengthening was a precursor to Hong Kong delinking to the dollar and marrying the Chinese yuan. That would cause a massive wave of capital that Hong Kong couldn’t absorb. “It is simply too risky because it could invite massive speculative flows,” GaveKal writes. There’s also the character of Hong Kong’s powerful bureaucracy: “Civil servants do not like to rock the boat in such a risky fashion.” Doubters or not, in the end, Mr. Ackman’s call is in some ways an easy one to make. There’s very little downside. As Hong Kong proved during the Asian Financial Crisis, it will defend to the death against Hong Kong dollar weakness. And unlike the yuan, which many also say is undervalued and destined to rise, the Hong Kong dollar is among the most liquid and traded currencies in the world, with none of Beijing’s restrictions or capital controls to worry about. If you have some U.S. dollars lying around earning no interest, you might as well convert them to the Hong Kong version and hope Mr. Ackman’s theory comes true. The worst-case scenario: You lose a bit on the currency-exchange fees when you give up and bring your money back into greenbacks.

 China*:  Sept 19 2011 Share

China Southern Airlines' focus on domestic flights made it Asia's largest carrier by passengers. Now, it's adding Airbus SAS A380s to help challenge Cathay Pacific (SEHK: 0293) and Singapore Airlines on routes to Europe and North America. The carrier, which flew 76.5 million passengers last year, will begin flying the first of five superjumbos next month. It will be the seventh operator worldwide and the only one in China. The double-decker planes will spearhead the state-controlled company's drive to more than double the percentage of capacity deployed on overseas routes to 35 per cent by 2015, said Yang Bo, the head of its planning department. "Flying A380s will put us in a completely different league," he said, declining to name routes for the 506-seat aircraft before an event on Tuesday. "We hope to use the planes to build a good brand image and to raise our profile overseas." The carrier has added services to Vancouver, Auckland and Amsterdam this year as it boosts international capacity 33 per cent and tries to develop Guangzhou airport into a global hub rivalling Hong Kong. Air China (SEHK: 0753, announcements, news) and China Eastern Airlines (SEHK: 0670) are also boosting overseas flights as economic growth means the number of mainland travellers flying abroad this year may rise 13 per cent to 65 million, the China National Tourism Administration says. "The Chinese carriers are in an amazing position," said Qantas CEO Alan Joyce said. "They have got the scale that will make them huge and I think they will be a big challenge for the Middle Eastern carriers as well as the Asian carriers." China Southern will fly its first A380 from October 18 to October 28 on routes between Shanghai, Beijing and Guangzhou to test operations and promote the aircraft before moving it onto international routes. The superjumbos will have eight first-class seats, 70 in business and 428 in coach. The airline plans to boost its total fleet to 645 planes by the end of 2015 from 424 planes. Its other on-order planes include Airbus A330s and A320s, as well as 10 Boeing 787s. Qantas is already competing with China Southern, as the Chinese airline is boosting Australia services as part of its intercontinental push. Similar drives in Europe and North America will follow, partly to offset competition from high- speed trains on domestic routes. The carrier will offer 42 flights a week to Australia and New Zealand from November when it begins services to Perth. It already flies to Sydney, Brisbane, Melbourne and Auckland, mainly using Boeing 777s and Airbus A330s. "China Southern's aggressive expansion will definitely hit Cathay and other Australian routes operators," said Kelvin Lau, a Hong Kong-based Daiwa Securities Group analyst. "Still, a new player may grow the overall market." China Southern has renovated business lounges and added chauffeur services to lure premium travellers. The changes helped it win the title of world's most improved carrier at this year's SkyTrax awards.

The United States Meat Export Federation presents US pork at a food exhibition in Nanjing, Jiangsu province. China imported 91,000 tons of US pork during the first seven months of this year, a five-fold increase from 14,900 tons in the same period last year. China's pork imports are likely to hit a record this year, but the surge will have limited influence on surging prices, analysts said. "China imported about 400,000 tons of pork and pork offal in the first five months of this year, up 43 percent year-on-year, and imports will probably hit a record 1 million tons this year," said Ma Chuang, deputy secretary-general of the China Animal Agriculture Association. An earlier report from the Netherlands-based Rabobank Group indicated that the potential gap between pork supply and demand would be between 2 and 2.5 million tons in 2012. The import volume of pork and pork offal will be 1.1 to 1.4 million tons this year, which will be between 25 percent and 60 percent higher than 2010's figure. China's pork prices, a key driver of inflation, rose 0.7 percent in the week ending Sept 11 from the previous week, hitting a new record, data from the Ministry of Commerce showed on Wednesday. It was the fifth consecutive weekly rise in pork prices, according to Reuters. "The imports of pork and pork offal will not have an actual influence on surging domestic prices because imports only account for a very small share of China's huge pork consumption, and it is not practical to turn to imports to curb the price," said Huang Guiheng, a manager in the research department of Bric Global Agricultural Consultant Ltd, a domestic market research firm. The price of pork will continue to be high in the foreseeable future owing to the rising cost of labor, corn and feed and the risks inherent in the industry, such as stock mortality. Huang said prices will begin to decline "around the second quarter of next year, with supplies increasing from July onwards". However, Ma said the central government will not rely on imports to regulate the price surge, although there is no limit on imports. He expects pork prices to have a "soft landing" as the market regulates itself and "steadiness and sustainability are key factors for livestock production". China's imports of pork and pork offal reached their peak in 2008 with a volume of 910,000 tons. In 2010, the country imported 900,000 tons of pork, with Denmark being the major supplier, followed by the United States, Canada and France. About 700,000 tons of the imports comprised offal including pigs' heads, knuckles and haslet (a form of meatloaf) which are not eaten in Western countries but are common in the diets of Asian countries. "In the first five months of this year, more than half of China's pork imports came from the US," Ma said. The cumulative volume of US pork imports was more than 91,000 tons during the first seven months of this year, a five-fold increase from 14,900 tons in the same period last year, according to report in the China Business News, citing the United States Department of Agriculture (USDA). China is the fifth-largest market for US pork exports. The country has been a net importer of pork and pork offal since 2007 and net imports will maintain their momentum over the long term, a factor that will further benefit producers in Western countries. "China's surging demand for pork and pork offal implies an optimal export scenario because pork offal is not eaten in Western countries and is not allowed to be processed into animal feed," said Ma, who suggested European and US pork producers should supply pork to their local markets and export offal to Asian countries Moreover, farmers overseas can profit from pork offal exports and save money on disposing of the surplus, he added. In general, it costs $40 for US farmers to dispose of a ton of chicken's feet, which are not eaten in the US but are popular in Asia, if they were not exported. Pork offal accounts for about 12 or 13 percent of US pork production. US pork exports are forecast to rise 4 percent to $5.2 billion in 2012 because of robust demand, particularly from Japan, South Korea, and China, according to the USDA. Although imports of pork and pork offal accounted for less than 2 percent of China's pork consumption in 2010 - approximately 50.7 million tons - but still had a negative effect on domestic pig breeding and production. "Imports of pork and pork offal usually come in large volumes and with higher quality but at a cheaper price, which is damaging the domestic industry," Ma said. Another problem is the quality of pork offal, as there are no health and safety standards on these products in the US and Europe.

Children perform a traditional Chinese dance during the opening ceremony of the 13th Beijing International Tourism Festival at Qianmen Commercial Street in Beijing September 17, 2011.

Xi'an, one of the oldest cities in China and home to the world-famous Terracotta Army, opened its first subway line on Friday, taking a major step toward building itself into a metropolis in the country's relatively undeveloped western region. Xi'an's Subway Line 2, the first subway line to open in northwest China, went into operation at noon Friday, five years after construction on the line began. The line runs north-south across the ancient city, passing the Ancient City Wall and Bell Tower historical sites. The subway line currently runs just over 20 km in length, but will eventually be expanded to a length of 26.3 km, according to Zhang Jianzheng, secretary-general of the provincial government. In order to allow the subway line to blend in with the ancient city, the trains and stations were designed to incorporate artistic and cultural elements from the Qin, Han and Tang dynasties. Xi'an served as China's capital during these dynasties. As the most expensive infrastructure project in the city's history, the subway line has drawn a great deal of public attention since construction first started. Nearly 50,000 passengers lined up for free rides during a four-day trial run that took place from last Thursday to Sunday, according to the city's subway construction office. The subway line runs along Xi'an's central axis, an area of the city that is known for its dense traffic congestion. Commuters have already begun to praise the new subway line. "One of my colleagues lives near Xiaozhai Station. The train allows her to get to work in just 25 minutes. Before the line was constructed, she had to spend over an hour commuting to work, sometimes even more," said Tang Mei, a primary school teacher from Xi'an. Six subway lines with a total length of over 200 km are scheduled to be built in Xi'an by 2018 as part of the city's ambitious plan to become one of China's largest urban areas. Plans have been made to integrate Xi'an with the neighboring city of Xianyang to create a single metropolitan area with more than 13 million residents. Building subway lines without bringing harm to Xi'an's numerous historical sites has been a considerable challenge for city planners. Zheng Yulin, director of the city's cultural relic bureau, said that the construction of the new metro system was designed to avoid major historical sites in order to minimize any potential damage. Subway tunnels were dug at a depth of more than 12 meters in order to avoid disturbing any potentially undiscovered relics, which are commonly found at a depth of eight meters, Zheng said. Designers have also made sure to place the tunnels at least 15 meters away from the Bell Tower, a symbol of the ancient capital that stands in the city's center, according to Chen Dongshan, head of the city's subway construction office. Finally, springs and steel plates have been installed underground to absorb and isolate vibrations that might damage nearby historical sites, said Zhao Rong, director of the provincial cultural relic bureau.

Chinese Internet-search company Baidu Inc. said Chief Executive Robin Li met recently with two senior Chinese officials, the latest in a series of high-level official visits with Web companies as the government tries to tighten control of the sector. Meanwhile, Qunar.com Information Technology Co., a travel-search company of which Baidu owns a majority stake, said it planned to list its shares in the U.S. next year. Baidu on Thursday said Chinese propaganda chief Li Changchun and Liu Qi, secretary of the Beijing Municipal Party Committee, visited a Baidu exhibition in Beijing on Sept. 5 to learn more about the company's business and to give "important instructions." Both officials are members of the Communist Party's Politburo, which is made up of the party's top 25 leaders. Baidu's CEO was at the exhibition, the company said. The company said the propaganda chief encouraged Baidu to "continue growing and become stronger, winning honor for Chinese companies." Baidu has expressed interest in international expansion and offers services in Japanese, Thai and Arabic, in addition to Chinese. A Baidu spokesman declined to provide further details on the visit. Central-government officials couldn't be reached for comment. The visits to Baidu and other companies this year underscore the government's growing anxiety over the explosive growth and spreading influence of the nation's Internet sector. Chinese Web companies are required to follow orders from authorities, including requirements to censor their content. Internet companies must walk a fine line, offering services that draw users without angering the central government. In some cases, the executives' efforts veer into unusual displays of patriotism. Robin Li and other Chinese Internet executives traveled in June to the Shanghai site of the first meeting of the Chinese Communist Party, where they sang revolutionary songs and made speeches praising China's blend of socialism and free-market elements to help celebrate the 90th anniversary of the party's founding. Last month, Mr. Liu visited online video company Youku.com Inc. and Web portal Sina Corp., which operates one of China's biggest Twitter-like microblogging services. According to state media, he told executives that Internet companies should "step up the application and management of new technology, and absolutely put an end" to "fake and misleading information," a term often to mean information not approved by Chinese authorities. Tencent Holdings Ltd.—which operates China's most popular instant-messaging service, QQ, as well as a microblogging service and a games portal—said in July that China security chief and Politburo member Zhou Yongkang visited its offices. The company said also that Politburo member Liu Yandong and Tianjin Party Secretary Zhang Gaoli appeared at Tencent's Guangdong and Tianjin offices, respectively. Ms. Liu and Mr. Zhang are potential candidates for promotion to the Politburo Standing Committee, China's top decision-making body, in next year's once-a-decade leadership change. During his visit, Mr. Zhou said "online virtual society's influence on real society is becoming bigger and bigger" and that "the government must strengthen oversight of it in accordance with the law." The visit included an inspection of an office set up by local Web police within the company, according to an article by state-run Xinhua news agency posted on Tencent's website. Tencent's site quoted Mr. Zhou as saying that Internet companies "must strengthen industry self-discipline" and play a more proactive role in "upholding harmoniousness and stability." Tencent spokeswoman Catherine Chan said the company often receives central-government officials at its offices. As for the company's cooperation with Shenzhen authorities, she said, "We have a responsibility to protect the security of virtual items on our platforms and will stay in touch with relevant departments to help resolve such user complaints." Qunar's stock-market listing would come despite investor skittishness in light of market volatility and accounting worries involving some U.S.-listed Chinese companies. Qunar's ties with Baidu, long listed in the U.S., likely would bolster the offering, however. A Qunar spokeswoman said details aren't yet available on Qunar's IPO plans. Baidu in June said it would make a $306 million investment in Qunar. It didn't specify the size of its stake but said the move made Baidu the company's majority shareholder. Baidu said Qunar would continue to operate as an independent company while cooperating with Baidu in travel-search services.

Hong Kong*:  Sept 18 2011 Share

Mainlanders who come to Hong Kong for trade fairs are much keener shoppers than those from the rest of the world, according to a study by Asia World Expo. In each business trip they made to the Lantau venue last year, they spent an average HK$10,900 on shopping, research conducted by accountancy firm KPMG on behalf of the venue found. The spending was well beyond that of Americans who shelled out an average HK$3,100, and more than double that of visitors from Europe, Africa and Middle East, who each spent an average HK$4,700. Last year, the venue received 217,000 non-local exhibition visitors, with 34 per cent from the mainland, up from 20 per cent in 2006. While retailers may rejoice at this ever-larger proportion of mainlanders, hotel operators may not be so happy. Mainland business travellers on average spent HK$3,000 per visit on accommodation last year - less than half that of Australians, Europeans or Americans, whose spending ranged from HK$7,900 to HK$8,300. "Mainland visitors are heavily biased to retail spending," KPMG's Thomas Stanley said. Meanwhile, the five-year-old venue's market share continues to climb. From nothing in 2006, its share of the convention and exhibitions industry rose to about a third last year, Expo chief executive Allen Ha said. In 2010, it hosted 89 trade exhibition and conference events, an increase of 65 per cent from 2006. The events generated expenditure of HK$13.4 billion. Performance last year was particularly good - expenditure arising from events rose a quarter over 2009 - riding on the success of an animated version of the painting, Riverside Scene at Qingming Festival, a star item from the Shanghai World Expo. About 900,000 people saw it at Asia World Expo. The exhibition's popularity prompted organisers to consider hosting public non-trade events at the venue, but not all received an overwhelming response. Some exhibitors at Better Living Expo, a public event hosted for the first time in July concurrently with the Book Fair at the Convention and Exhibition Centre in Wan Chai, complained of a small turnout. But Ha, without giving numbers, said the turnout was satisfactory for a debut and would be bigger next year. Nevertheless, trade fairs would remain the expo's focus as it eyes the Pearl River Delta market, Ha said. Completion of the Hong Kong-Zhuhai-Macau bridge, would cut the hour-long journey from Zhuhai, Shenzhen or Macau to the expo to about 20 minutes, he estimated. Construction was scheduled to start this year and finish by 2016, but it could be delayed after a court ruling overturned the project's environmental impact report. The government has appealed to the High Court. A Wine Futures trade show will make its debut at Asia World Expo from November 6 to 8. It will include tastings by heavyweight wine critics Robert Parker, Pancho Campo and Jancis Robinson.

Lawmakers at a Legco panel yesterday endorsed motions to censure the use of violence by activists at a by-election consultation seminar two weeks ago and called on police to speed up their investigation. At a special security panel meeting yesterday, Lam Tai-fai said he was disappointed with the police's failure to make any arrests so far. He said: "I must express my disappointment with the police. They haven't taken swift action - they're weak." The acting regional commander of Kowloon West, Chief Superintendent Stephen Cheng Se-lim, said the force was serious about the case and an investigation was under way. Legislator Leung Kwok-hung, who was among the activists at the September 1 protest at the Science Museum, accused his critics of hypocrisy. He said: "We should find the sources of social conflict - it's hypocritical to just condemn any kind of violence indiscriminately." But he was mocked by lawmaker Paul Tse Wai-chun: "If Mr Leung is so bold and so fond of using violence, he should choose to lead a revolution." Democratic Party chairman Albert Ho Chun-yan said: "No matter how right your action may be, if you use violence then that behaviour is wrong and deserves condemnation." Lee Kam-shing, a representative from the Hong Kong General Union of Security and Property Management Industry Employees, told the panel that security guards should not have to deal with violence and urged the police to play a bigger role in similar situations in the future. Cheng said there was no data to suggest protests in recent years were more violent. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung was forced backstage at the September 1 seminar after it was gatecrashed by dozens of activists. They claimed they were denied entry to the venue by security guards.

Hong Kong's largest developer, Sun Hung Kai Properties (SEHK: 0016) (SHKP), reported a record full-year underlying profit of HK$21.47 billion, but analysts warned that rents and property prices could decline if the global economy deteriorated. For the year to June, the developer's result was 55 per cent higher than the last year's HK$13.88 billion and above market expectations of HK$18.8 billion to HK$20 billion. Taking into account revaluation gains on investment properties, net profit rose 60 per cent to HK$48.09 billion for the year to June. But the outlook is clouded. The Asian Development Bank has lowered its forecast for economic growth in Asia (excluding Japan) this year from 7.8 per cent to 7.5 per cent and also cut its growth estimate for next year to 7.5 per cent from 7.7 per cent. "We are heading for a tough business environment," said Lee Wee Liat, regional head of property at Samsung Securities (Asia). "The market is expecting a downward adjustment in property prices, and demand for office space could be diminished as a result of the massive layoffs in the US and Europe. It will cause a correction in the rental market as well." As the Hong Kong and central governments moved to curb investment demand and contain the growth of property prices, developers would have to abandon high-pricing strategies when they launched new projects, according to an analyst who asked not to be named. "It will certainly affect their profit margin," he said. But SHKP itself remains upbeat about the market. Thomas Kwok Ping-kwong, vice-chairman and managing director of SHKP, said the group would continue to acquire land despite the global financial rout. He was asked whether the majority shareholder, the Kwok family, will repurchase its shares since the stock has dropped 21 per cent this year, compared with a 20 per cent drop in the Hang Seng Property Index. "Every stock is undervalued now," Kwok replied, without elaborating. Yesterday, the company's 81-year-old chairwoman, Kwong Siu-hing, wife of the late founder, Kwok Tak-seng, announced she would retire on December 8, and that the board had appointed Thomas Kwok and brother Raymond Kwok Ping-luen as joint chairmen. Their roles as managing directors and executive directors remain unchanged. Kwong's retirement appears to remove uncertainty over the succession plans of the property empire. The family's US$20 billion fortune placed second on Forbes Magazine's list of Hong Kong's richest. The succession issue became important after a Kwok family feud erupted in February 2008 when SHKP said Walter Kwok Ping-sheung - Kwong's eldest son - would take a temporary leave of absence. In May of that year he was demoted, after 18 years in the top job, to non-executive director. and his mother replaced him as chairman after he lost a legal fight to retain his position. To calm shareholder anxiety about a repeat of the 2008 long-running family feud, Thomas said he and Raymond, his younger brother, communicated well with each other. "We have specific responsibilities and talk whenever we come across divergent views on the company's business strategy," he said. "At the same time, major decisions need to seek approval from our board, and we have a committee made up of a group of executive directors to go through every [investment] decision in detail. The committee holds meetings every week to update progress." Said Raymond, 57: "Thomas is just one year older than me. I'm confident that we are able to co-operate with each other very well." Eric Chow, executive director of Sun Hung Kai Real Estate Agency, said the developer's property sales had reached HK$13 billion since July 1, while the sales target for the year to June 2012 was HK$28 billion. Profit from property sales increased 152 per cent to HK$16.64 billion, while rental income grew 14 per cent to HK$9.51 billion for the year to June, compared with a year earlier. A final dividend of HK$2.40 will be proposed, up 30 per cent from HK$1.85 a year earlier.

The giant king crab - one of the world's biggest crustaceans, with a limb span that can reach nearly two metres - evolved from a tiny, shell-less creature so small it can take refuge in a seashell. That is the conclusion of Hong Kong researchers after they studied the king crab, its ancestor the hermit crab and their various cousins. Despite widely different appearances, all belong to the category of crustaceans called anomura - asymmetrical creatures with a short and thin pair of last legs, and tails folded under the body. Species in this group include the porcelain crab, squat lobster, hairy stone crab and yeti crab. The discovery by Chinese University's school of life sciences researchers shows that animals that look alike may not actually have the closest genetic link. "It's like with human beings - we actually share more than 99 per cent of our genes with chimpanzees, but we look nothing like them," Dr Tsang Ling-ming, one of the researchers, said. "You would never think that the closest genetic relatives to the elephant are actually the manatee and the furry, mouse-like hyrax. Looks can be deceiving." The theory that king crabs evolved from hermit crabs was suggested in 1992 by a Yale University research group, but the results were disputable because not enough DNA specimens were used. Tsang and Professor Chu Ka-hou used 50 specimens to prove that not just king crabs but all anomura evolved from hermit crabs. King crabs were first thought to be genetically close to hermit crabs because of their asymmetrical abdomen and four pairs of legs, as opposed to the five pairs of typical crabs. The large and thorny king crab evolved in cold marine habitats, where it is hard to find shells to call home. Over time, its external flesh hardened to become the shell seen today. The king crab has existed for 13 to 20 million years, making it a relatively new creature compared with the hermit crab, which dates back to the Jurassic era that began almost 200 million years ago. The anomura specimens were collected by Tsang himself, or were contributed by overseas universities. The study took about five years and the results were published last month in the top evolutionary biology journal Systematic Biology.

Consumer Council PR officer Ambrose Ho says the use of absolute labelling such as "GM free" or "contains no GM soy" is misleading. The consumer watchdog has called for mandatory labelling of all food products with genetically modified ingredients after finding some so-called "GM-free" soy drinks actually contained a significant amount of the material. The Consumer Council tested 50 soy drinks - including ready-to-drink and powder - from supermarkets, convenience stores and other retail outlets. Half of them had at least a trace of GM materials, but none of them said so on the packaging. Thirteen claimed they were "GM-free". Four samples contained quantifiable amounts of GM elements. Chiba Soybean Milk contained 1.1 per cent of GM elements, the largest amount in all samples. Yon Ho Soybean Drink and Tai Wo Soybean Milk claimed to be "non-GMO", even though they contained 0.2 to 0.5 per cent of GM elements. Hong Kong has no specific legislation governing the sale and labelling of GM food. Voluntary labelling guidelines set in 2006 by the Centre for Food Safety suggest a "genetically modified" tag for products exceeding 5 per cent GM components. "Although there is no immediate proof of any health hazard caused by eating GM food, consumers have the right to know the truth and make their personal choices," said Ambrose Ho Pui-him, chairman of the council's publicity and community relations committee. He said the use of absolute labelling such as "GM free" or "contains no GM soy" was misleading because a zero GM level was very difficult to achieve, given the prevalence of modified soyabeans in world markets. At least a trace of GM material could be found in most food products due to an unintentional mixing of GM and non-GM crops. The consumer council wants the government to implement compulsory GM food-labelling for all prepackaged food, as well as tighten the threshold. Dr Wallace Lim, associate professor at Hong Kong University's School of Biological Science, said: "Even 100 per cent GM organisms in the food would cause no harm to health, but consumers should be informed so they can have their own preference." He said producing more GM crops was a good way to increase food production for the growing world population. A Centre for Food Safety spokesman said countries such as Canada, Japan and Taiwan also set the GM threshold level at 5 per cent. He said GM foods were subjected to rigorous safety assessments by the industry and regulatory agencies of the places of origin before they were put into the market. A survey by environmental group Greenpeace released in 2008 found none of 894 pre-packaged food items at ParknShop and Wellcome stores carried such labels. The group also estimated that about 70 per cent of pre-packaged food on sale in the city might contain genetically modified organisms. The labelling of nutrition information on all prepackaged food products became compulsory in July last year, but details on GM materials are not included.

RTHK's new director of broadcasting, Roy Tang Yun-kwong, arrived for his first day at work yesterday to be greeted by dozens of staff angered by his appointment. Dressed in black, chanting slogans and rolling out a black carpet at the entrance to Broadcasting House in Kowloon Tong, program staff union members called on the government to reverse its appointment of the veteran civil servant. Tang has no experience of broadcasting and staff fear his appointment will compromise their service's editorial independence. Union chairwoman Janet Mak Lai-ching said: "We have no faith in him." Tang took it all in his stride, saying he respected his staff's freedom of expression and was not embarrassed by the protest. He vowed to defend the broadcaster's editorial independence against any interference. "As the chief editor, I believe I have to safeguard this right," he said. The government announced Tang's appointment last week, after a nine-month recruitment exercise to find someone to replace acting director Gordon Leung Chung-tai. Tang, who has been with the government since 1987, was previously a deputy secretary for labour and welfare. He is the first administrative officer to run RTHK since it was separated from the colonial government's Information Services Department in the mid-1950s. Mak expressed fears that the broadcaster could become a government mouthpiece. "His 24 years as an administrative officer have trained him as a promoter of government policies," Mak said. "But the role of RTHK - as a public broadcaster - is to monitor the government's performance. This is where the biggest conflict lies." She said the broadcaster's staff would meet next month to discuss their next move and would not rule out taking industrial action, although she did not specify what kind.

Frank Gehry’s first residential project in Asia will likely set a record for the highest rents in Hong Kong, said the developer behind the property. The Opus Hong Kong is located at 53 Stubbs Rd. in the city’s Peak area, one of its most expensive neighborhoods. The cost of renting one of the 6,000-square-foot apartments in the 12-story, 12-unit apartment building has not been set yet, but Swire Properties has “every expectation it will break records,” Chief Executive Martin Cubbon said. At a news conference last week, Mr. Cubbon praised Mr. Gehry as “one of the most important and influential architects of our time.” Swire — which has developed several properties in Hong Kong, mainland China and elsewhere — approached Gehry Partners in 2004. The Stubbs Road designs were first unveiled in 2009. Mr. Gehry is one of the best-known names in architecture and the designer of the Guggenheim Bilbao and Disney Concert Hall in Los Angeles. His residential projects are not as high-profile, though he recently designed an apartment tower in New York’s Financial District, and his own Santa Monica home is well-documented in architecture circles. He wasn’t able to attend the briefing in Hong Kong in person, but he appeared in a video address. Hong Kong is “a city which I’ve come to love,” he said, while the building “designed itself, because of the beautiful site.” Perched on the hills overlooking its harbor, Opus Hong Kong has the curves and undulating feel of many Gehry works, a stark contrast with Hong Kong’s angular skyline. Its twisting structure means that each floor’s perspective will be slightly different — Mr. Gehry said one of his aims was to design a building in which each home was different from the others. In an interview, Mr. Cubbon said that the building will be move-in ready in the second quarter of 2012. He declined to say how much the construction cost but called it “money very well spent” considering the rents he expects it to fetch. Hong Kong is already among the world’s priciest cities, with homes at the high end running as much as 400,000 Hong Kong dollars (roughly US$50,000) a month, according to consulting firm ECA International. Prospective Opus tenants could include diplomats, business executives or entertainers, Mr. Cubbon said. While several people have expressed interest in buying an apartment, Swire plans to hold onto the residences barring an extraordinary offer, he said. Swire would be eager to work with Mr. Gehry again, he added, and that teaming up with innovative architects is something the firm hopes to do more of. “We like to be associated with leading designs,” he said. And Mr. Cubbon dismissed concerns that the turmoil in the markets could damp interest in the property. “The people who are interested, I think, are unaffected,” he said. “It is that rare and that unique.”

 China*:  Sept 18 2011 Share

Yang Lan presides over APEC Women and Economy Summit - Moderator Yang Lan, presides over the opening program of APEC Women and Economy Summit in San Francisco, U.S., Sept. 14, 2011.

A senior Shanghai official yesterday underscored the difficulties of launching the international board on the local stock exchange, dashing hopes of any imminent A-share initial public offering by a foreign firm. Fang Xinghai, the director general of Shanghai's financial services office, told a press conference that the regulators had to take into account A-share market sentiment, liquidity and trading rules before making a decision on the debut of the long-heralded board where foreign companies would be traded. "If you ask me why it's so difficult [to launch the board], all I can say is that it's always been difficult to implement any liberalisation in the finance sector," he said. "But I still believe we will eventually overcome the difficulties." Fang's remarks represented an about-face after earlier stating that the city government hoped to launch the international board this year. Beijing announced it was creating the board for top foreign companies to raise yuan funds on the Shanghai bourse in 2009 but didn't give a clear timetable. It was expected that the first foreign firm would float A shares in the second half of last year as the mainland liberalised the capital market, part of efforts to build Shanghai into a global financial centre. The benchmark Shanghai Composite Index dropped 14.3 per cent last year and regulators were spooked by concerns of a liquidity drain amid large-size initial public offerings by international corporate giants such as HSBC Holdings (SEHK: 0005). Shang Fulin, chairman of the China Securities Regulatory Commission, said in May that the international board was in the pipeline, heightening expectations of an IPO by a foreign company soon. At least two government officials familiar with the CSRC told the South China Morning Post (SEHK: 0583, announcements, news) at that time that the board was counting down to a debut. But the weak market prompted regulators to put the plan on hold, causing further gloom. The market has already lost 12 per cent this year. The on-again, off-again plans to establish the international board are a vivid example of opaque policymaking on the mainland, particularly when it comes to the stock market. Fang likened the international board's launch to the share structure reform that confused investors for six years between 1999 and 2005. Beijing first proposed all shares be made free-floating in 1999. About two-thirds of the formerly non-tradable stakes held by the state-owned parents of the listed firms would be unlocked. But it took until 2005 for regulators to order the state-owned parents to negotiate with minor shareholders - to offer them compensation in exchange for the right to unlock the non-tradable shares. The mainland will target only the world's top companies when it launches the international board, according to investment bankers. The decision to allow foreign firms to list on the domestic exchange is aimed at honing Shanghai's image as a global financial hub.

Premier Wen Jiabao and Klaus Schwab, founder and executive chairman of the World Economic Forum, arrive for the opening of the forum's Annual Meeting of the New Champions in Dalian, Liaoning province, on Wednesday. Premier Wen Jiabao said on Sept14 that China is ready to increase its investment in debt-ridden Europe, and urged the European Union (EU) to recognize China as a full market economy. "European countries are facing sovereign debt problems and we've expressed our willingness to give a helping hand many times. We will continue to expand our investment there," Wen said while addressing 1,500 business leaders and government officials at the opening of the World Economic Forum, known as the "Summer Davos". Wen said that he reiterated China's support to European Commission President Jose Manuel Barroso in a recent phone call. However, he added that "EU leaders and the leaders of (Europe's) major countries must look at Sino-EU relations from a strategic viewpoint. "Based on WTO rules, China's full market economy status will be recognized by 2016. If EU nations can demonstrate their sincerity several years earlier, it would be the way a friend treats a friend," he said. He said he hoped his scheduled summit meeting with EU leaders next month will lead to a breakthrough in recognition. Wen also expressed concern over the spread of the sovereign debt crisis in Europe. China sits on more than $3 trillion in foreign exchange reserves. He urged the United States and some European countries to tackle their problems properly. "Europe and the US must adopt responsible and effective fiscal and monetary policies in a bid to reduce debt pressures," Wen said during discussions with business leaders at the forum. Wen's comments came as global markets have been rocked by renewed fears that Greece will default on its debt obligations. Portugal and Ireland have also received rescue packages. There is growing speculation that Italy and Spain could follow suit. The Financial Times reported on Monday that Italy had asked Beijing to buy "substantial quantities" of its debt. Li Daokui, a professor of finance at Tsinghua University and an academic member of the central bank's monetary policy committee, said China should not blindly buy EU debt since it would only prolong difficulties in the euro zone. The purchase of Italian treasury bonds should be conditional, requires further study and China should be prepared for the worst-case scenario, he said. Ding Chun, chief director at the Europe Research Center of Fudan University, said buying bonds is a direct way to deal with the debt crisis. "To invest in real assets in the European market is surely a good thing for China, as it lowers the default risk while helping the EU. But there are barriers in the EU to Chinese companies," Ding said. Chen Fengying, director of the Institute of World Economic Studies under the China Institutes of Contemporary International Relations, said that the debt crisis could very likely lead to a total collapse of the euro and the European Union. "And that will end in a situation that no one wants to see - a single international financial system dominated by the US dollar," she said. She noted that that EU's biggest problem is not their huge debt and high unemployment, but lack of unity. There are now two foreseeable measures to deal with the problem, she said. The first is to let Greece go bankrupt and stabilize the euro zone, ensuring the safety of other economies, such as Italy. The second is for Germany, the largest economy in the EU, to reorganize the entire European market to tackle the crisis. "I think China should support the EU on tackling the crisis, because we'd like to see diversity in the global financial market, with the euro playing an important part," she said. The problem for the US is that it won't take any responsibility to find a way out of its debt problem, she said. The US has twice launched quantitative easing, and is likely to do it again but this only serves to shift the problem to other countries, Chen said.

A pedestrian walks past Arturo Di Modica's "Charging Bull" sculpture in Shanghai. In an update of its flagship annual economic publication, the Asian Development Bank cut its China's growth estimate for this year to 9.3 percent from the 9.6 percent projected in April. The Asian Development Bank (ADB) on Sept 14 trimmed its growth estimate of China for 2011 and 2012, mainly because of the weakness of external demand and the government's efforts to cool inflation. But economists at the ADB said a lower rating of China's sovereign credit suggested by some major international rating companies is unlikely. In an update of its flagship annual economic publication, Asian Development Outlook 2011, the ADB cut the growth estimate of this year to 9.3 percent from the 9.6 percent projected in April. For 2012, the growth forecast was lowered to 9.1 percent from 9.2 percent. "Downside risks to the growth outlook relate mainly to uncertainty over external demand, in particular from the European Union, the country's largest trading partner," said ADB chief economist Changyong Rhee. Paul Heytens, country director of the ADB in China, said the modest recovery in the US, growing fiscal and debt concerns in the EU, and Japan's post-tsunami economic slowdown would exacerbate uncertainties in the world's second-largest economy. Rhee said that as an overall budget deficit equivalent to 2.1 percent of GDP is projected for 2011 and 2012, there is scope to run a somewhat more stimulatory fiscal policy in 2012 if GDP growth prospects dim. "Weakening external demand will eventually affect China's exports, but it may take longer than we initially thought," said Zhang Zhiwei, Nomura Holdings Inc's chief economist for China. He said the strong domestic demand shown by the import rebound in August would help to support an economic soft landing in the coming months. However, inflation remains a concern, with the average rate expected to remain above the official target of 4 percent despite numerous policy actions already taken by the government, the ADB said. The bank's 2011 inflation estimate was revised up to 5.3 percent from 4.6 percent in April, largely owing to a sharp spike in food prices. Wang Tao, head of China economic research at UBS Securities Co Ltd, said the current continued strength of property sector activity in particular, and domestic demand in general, as well as the resilience in exports do not yet support immediate policy easing. Another risk pertains to a potential increase in non-performing loans (NPL) in connection with the fast increase in local government debt, Heytens said. While NPLs remain at a moderate level of about 1 percent of total bank lending, the number could increase by several percentage points in the coming years because one-third of local government debt is estimated to be at risk, he said. "However, we believe that this risk is unlikely to cause major disturbances in the economy during the forecast period, given the overall soundness of the financial sector," he added. "Given the good health of the financial sector and very comfortable fiscal position, it's very unlikely that we will see any change in ratings (of China's sovereign credit)," said Yolanda Lommen, economics unit head of the ADB China office. Dragged down by slower economic growth in China, the growth forecast for East Asia was trimmed to 8.1 percent this year from the April estimate of 8.4 percent. In 2012, a further easing of growth in China will cause overall growth of the five economies to dip further to 8 percent, the report said.

A huge red lantern is under construction in Tian'anmen Square in Beijing, Sept 14, 2011, to welcome the upcoming National Day, Oct 1. The lantern is 15 meters tall and has a diameter of 50 meters, and is scheduled to open to visitors on Sept 25. 

Zhou Xun in ‘The Equation of Love and Death.’ The Chinese actress will work with Tom Hanks and Halle Berry in ‘Cloud Atlas.’ One of China’s most accomplished actresses is uniting with Hollywood royalty. Zhou Xun (周迅) joins Academy Award-winners Halle Berry, Tom Hanks and Susan Sarandon in “Cloud Atlas,” the film adaptation of the best-selling 2004 novel by British author David Mitchell. The all-star cast includes Hugh Grant, Jim Broadbent, Hugo Weaving, Jim Sturgess, Ben Whishaw and Keith David. The film also features South Korean actress Doona Bae (배두나). The film will be co-directed by Andy and Lana Wachowski, the duo responsible for the “Matrix” trilogy, and German director Tom Tykwer (“Run Lola Run”). The producers said in a statement: “‘Cloud Atlas’ is an epic story of humankind in which the actions and consequences of our lives impact one another throughout the past, present and future as one soul is shaped from a murderer into a savior and a single act of kindness ripples out for centuries to inspire a revolution.” Filming begins Friday and will be shot on location in Scotland, Spain and Germany. “Cloud Atlas” holds the prospect of giving Ms. Zhou her largest global audience yet. Only a handful of mainland-Chinese actresses have gained widespread fame in the West — most notably Gong Li (鞏俐) and Zhang Ziyi (章子怡). Ms. Zhou has appeared in a broad range of Chinese movies — including “Perhaps Love” (如果•愛), “The Equation of Love and Death” (李米的猜想) and “Painted Skin” (畫皮) — picking up numerous best-actress awards along the way. “Cloud Atlas” marks her first major film outside of Asia.

DreamWorks Animation SKG Inc. is exploring an expansion into the Chinese film market with a Shanghai-based development and production venture, according to a person familiar with the matter. The operation would make films specifically for China, where the studio's "Kung Fu Panda 2" grossed a record-breaking 597 million yuan (about $93 million dollars) this past summer. DreamWorks is using Greenwich, Conn.-based recruitment firm RSR Partners to find a president for the new operation, which has yet to set a launch date. "As it is an important market for us and one in which the DreamWorks Animation brand and products have tremendous value, we continue to explore opportunities in China," a DreamWorks Animation spokeswoman said. "Any further speculation is premature." DreamWorks's plans for China were reported earlier by the Agence France-Presse news service. The news follows an announcement last month that Chinese Internet-video company Youku.com Inc. would distribute both "Kung Fu Panda" movies, marking the first time DreamWorks Animations films will be available online in China. The studio is only one of several in Hollywood that have sought access to the Asian nation's burgeoning audiences in recent months. Relativity Media LLC recently began a relationship with the Huaxia Film Distribution Co. and SkyLand (Beijing) Film-Television Culture Development Ltd. Legendary Pictures, the production company responsible for "Inception" and "The Dark Knight," recently teamed up with Huayi Bros. Media Corp. to create Legendary East Ltd. One common goal for these new ventures is to crack China's notoriously restrictive film market. The nation currently only allows 20 foreign films a year to be distributed in its theaters, and foreign studios collect a much smaller share of ticket sales than they do in most countries.

Hong Kong*:  Sept 17 2011 Share

New World Development (0017) chairman Cheng Yu-tung has raised his stake in Giordano International (0709), making him the largest shareholder of the clothing retailer. Cheng bought two million shares of the retailer last Thursday for HK$6.43 apiece. He now holds a 20.09 percent stake in Giordano. Separately, NWS Holdings (0659), also controlled by Cheng, plans to boost its stake in Hangzhou Ring Road during the next three months. The company aims to spend over US$1 billion (HK$7.8 billion) to raise its stakes in the expressway to as much as 90.16 percent, said executive director Brian Cheng Chi-ming. Hangzhou Ring Road links up with Shanghai and Nanjing. NWS raised its stake in the expressway three times in the past three months, taking its holdings to 58.66 percent. Executive director Brian Cheng Chi-ming expects a double-digit return from the investment. Tolls from various expressways generated 750 million yuan (HK$915 million) for the company , accounting for 31 percent of net profit. NWS closed 0.74 percent higher at HK$10.88 while Giordano fell 1.32 percent to HK$5.96.

The local economy will grow 5.5 percent this year, according to an Asian Development Bank forecast, but the growth will likely also boost inflation. Chief economist Rhee Chang Yong revised the prediction upward from 5 percent made in April, on a strong first-half performance. "For the first six months [of 2011], Hong Kong has already realized economic growth of 6.3 percent, even though exports turned weaker," Rhee noted. This came as the bank revised gross domestic product growth downward for several major Asian economies, including the mainland and India. But robust local growth will boost inflation, warned Rhee, with prices seen rising 5.2 percent this year, faster than the 4.5 percent tipped earlier. For next year, ADB projects the local economy to grow 4.7 percent, with inflation expected to be standing at 3.3 percent. In an update to this year's Asian Development Outlook released in April, the ADB revised its growth forecast for Asia to 7.5 percent - from its previous projection of 7.8 percent. Rhee also warned of volatility in the region adding to inflationary pressure. "Policy markets should be prepared for more volatile capital flows," he said. Separately, foreign assets in the Exchange Fund rose by HK$32.9 billion last month to a total of HK$2.18 trillion, Hong Kong Monetary Authority data showed yesterday. The monetary base, meanwhile, totaled HK$1.055 trillion.

A budget ferry service between Hong Kong and Macau will cease operations from today after a run of just 14 months. In a statement last night, Macao Dragon Company said the directors are seeking liquidation as restrictions imposed by the Macau government make it impossible to continue business. A passenger who recently bought 14 tickets and used two on Saturday said he is dismayed by the closure. "What can I say? It is shocking," he said, adding that he does not know what to do with the remaining tickets, which cost him HK$1,046. Sig Holiday managing director Simon Hau Su-ki believes few Hongkongers bought the company's tickets. But he said that anyone who did so through a travel agency will be able to switch to another company. Businessman Payson Cha Mou-sing, who owns the Discovery Bay ferry, is understood to have a stake in Macao Dragon, which owes the Hong Kong government HK$1.8 million in berth fees. The company said when it applied for the service in 2006, the Macau government gave it "constant reassurance" that the license would be issued shortly. "No license was forthcoming until January 2010 when, after substantial costs had already been incurred, we were finally granted a license to carry 1,152 passengers per vessel between Hong Kong and Macau," the company said. However, the Macau Maritime Administration imposed a cap on the number of passengers the ferries could carry - 750 from Hong Kong to Macau and 600 for the return trip, about 65 and 52 percent of capacity, respectively. "Although the Macau government promised to lift these caps, they have not yet done so and we are now unable to run the business on a viable basis," it said. The company had a troubled start to its operations. Its first ferry in July last year damaged a bumper at the Macau terminal, causing a suspension of service. The ferry was not damaged and no one was hurt. The company will hold a press conference with the liquidator today. The company is well known for its cheap fares. A one-way economy ticket to Macau costs just HK$88, while it can be more than HK$150 for the other companies. The company also offered many discount packages. In May, it sold 1,070 packages entitling passengers to take an economy-class trip to Macau with a gourmet set meal at any of the six restaurants at the five-star hotel Galaxy Macau.

 China*:  Sept 17 2011 Share

A major Chinese electric locomotive manufacturer, CSR Zhuzhou Electric Locomotive Co., Ltd., won a bid to export 40 bullet train locomotives to the country of Georgia. The company, based in the city of Zhuzhou in central China's Hunan Province, is expected to deliver the locomotives and accessories to Georgia in September 2012, Zhu Jianfei, the company's spokesperson, said on Tuesday. The locomotives will be used in bullet trains travelling at a speed of 120 kilometers per hour between Georgian cities in the mountainous Caucasus region, Zhu said. Due to the complicated terrain and climate of the Caucasus, the locomotives will feature technology used in the locomotives of subway and light rail trains, he said. Zhu said winning the bid is a significant step for China's high-tech railway products in tapping markets in the Caucasus region as well as markets among members of the Commonwealth of Independent States and European countries.

Nearly 37 percent more Chinese traveled on the nation's high-speed trains during the traditional Chinese Mid-Autumn Festival that concluded Monday, the nation's railways authority announced. According to figures released Wednesday by the Ministry of Railways, from Sept. 9 to Sept. 12, 1.35 million trips were made each day on high-speed trains, up 36.5 percent compared to the corresponding period last year. The daily trips made up 23.2 percent of the country's total railway traffic, up 2.9 percentage points from the corresponding period in 2010, the figures indicated. Further, the nation's railways transported 23.4 million passengers during the holiday, averaging 5.8 million daily, up 19.3 percent. Freight transport during the period totaled 36 million tonnes, up 8 percent, the figures showed.

Chinese Premiere Wen Jiabao speaks on Sept 14, 2011 at the opening plenary for the Annual Meeting of the New Champions 2011 in Dalian, Liaoning province. 

Work to build the core area of the capital's central business district (CBD), which includes 18 new low-carbon buildings, will start on Thursday, a city official has announced. "Preparation for the design and demolition, which started in March last year, has finished," Wu Guiying, Chaoyang district's executive deputy governor, said on Sept 13. "Construction on the (30-hectare zone) should be completed in 2015." Wu, who is also director of the CBD administrative committee, was speaking at a news conference ahead of the 11th annual CBD Business Festival on Sept 15. When finished, the zone will be home to the headquarters of 27 companies, including China Minsheng Bank and China Investment Corp, while it is also expected to attract investment of 100 billion yuan ($15.6 billion), with annual tax revenue of more than 50 billion yuan. A total of 18 new buildings will be built, with companies set to sign low-carbon pledges on Thursday to show their determination to saving energy, land, water and other resources. "Our goal is to save 65 percent of energy in the construction and maintenance of the buildings," Wu said. "Companies working in the zone should also be from low-carbon emission industries, such as finance and insurance, and be regional headquarters of international companies." One of the green structures will be Beijing's latest skyscraper, a 510-meter office tower owned by CITIC Group that will have 104 floors above ground and four basement levels. The final design for the core area, chosen from 203 options provided by 60 domestic and overseas agencies, will be unveiled during the festival, Wu said. Work on the underground section, which will go down five levels and connect all 18 buildings, has already started. The project includes parking lots and emergency escape routes and will cost 4 billion yuan. "People can drive underground from one building to another after the construction, which will definitely alleviate traffic above ground," Wu said. An estimated 80,000 to 100,000 people will work in the core area, with 85 percent expected to commute using public transport, he said. More than 180,000 people already work for about 15,000 companies in the CBD, making traffic congestion a pressing issue. Three new subway lines and three new bus stations will be built in the zone by 2015, Beijing Youth Daily reported. The west-to-east Line 6 will be put into use next year.

South Korea to China: Bring Some Tourists, Get a Street - Hey, if you’ve got 10,000 tourists to bring to South Korea, maybe you can get a street named in your honor. That’s the deal Baojian, the Chinese direct-sales company, got from the Korea Tourism Organization and officials on Jeju Island. Baojian is sending 10,860 of its top-selling sales reps on week-long vacations in Jeju this month. The first group of about 1,400 arrived on Tuesday and were greeted by Lee Charm, KTO’s chief, and other officials from Korean tourism companies. The KTO says it’s the biggest organized tour package ever for a South Korean destination. Baojian has previously sent its reps on tours of Taiwan and Japan as an incentive for hard work. The previous biggest case happened in July, when about 2,000 employees from another Chinese direct-seller, Infinitus, spent five days in Seoul and Jeju. The KTO and Jeju officials lobbied Baojian hard to add Jeju to their list of destinations. In July, they renamed a road in the Jeju neighborhood of Yeon-dong as “Baojian Street,” a name it will keep for five years. In return, the Baojian tourists are expected to spend about $27 million, or about $2,500 each, during their time in South Korea, which also includes a few days in Seoul.

Hong Kong*:  Sept 16 2011 Share

In a first for the SAR, 100,000 cubic meters of marine mud at the former Kai Tak airport is being used to build houses, thanks to the work of an enterprising government engineer. Some 16 percent of the mud has been used as part of the foundations of the 3.47-hectare, six- block Kai Tak Site 1A and 5.7-hectare, nine-block Site 1B public rental housing development of the Housing Authority. Some 3.3 million people will live in 13,300 units when they are completed in January 2013. If it were not for the breakthrough, the mud would have been dredged and dumped into the already bursting landfills. But the "unsuitable filling material" - the volume of which equals five Olympic-size swimming pools - was transformed into "green-treated marine mud," said Patrick Leung Pak-wai, a Housing Department structural engineer who pioneered the method. Through trial and error, Leung's team finalized the correct mix of marine mud, sand and cement three years ago, saving some HK$8.16 million in disposal costs to landfills and marine dumping sites. Instead of using normal earth- filling materials, such as sand and cement, the green-treated marine mud was backfilled and compacted in layers of about 300 millimeters thick around the core foundation of pile caps underground. Leung said the "green" mud would also be used for new public rental housing projects in Tseung Kwan O Area 65B and Tung Chung Area 56. The department said the material passed through at least 10 tests. "It has proved to be practical, inexpensive and environmentally friendly," Leung added. "This public housing rental project, hopefully, will be a role model for Henderson, Cheung Kong, New World and Sun Hung Kai," said Michelle Au Wing-tsz, senior environmental affairs officer of Friends of the Earth. She said the mud solution could drastically reduce the amount of construction waste, as 4,000 tonnes are currently dumped each day.

Hong Kong stocks reversed early losses to end slightly higher on Wednesday, with some outperformers hit by profit-taking as funds sought to lock in gains in an increasingly bearish market. The Hang Seng Index closed up 0.08 per cent at 19,045.44. The China Enterprises Index closed up 0.01 per cent at 9,968.86. The Shanghai Composite Index closed up 0.55 per cent at 2,484.83 after sinking to a 14-month trough in early trade. A-share turnover lingered at a low level comparable with much of the last fortnight. The Hang Seng Index slumped to its lowest intraday level in more than two years, below the low recorded on August 9 in early trade. It eventually finished above this level, paring losses after European stock futures opened higher in afternoon trade. Insurers and Macau casino counters, sectors that had held up this year, joined cyclical sectors such as materials in the leg-down on Wednesday, suggesting skittish investors were looking to protect gains where they could as turnover surged to its highest in more than two weeks. AIA Group, the top drag on the Hang Seng benchmark, sank 4.5 per cent to its lowest since March. The stock is still up more than 8 per cent on the year to date, compared with the Hang Seng, which is down more than 17 per cent. MGM China Holdings led losses among its Macau casino peers, shedding 3.7 per cent in twice its 30-day average volume. It is still up more than 12 per cent this year. Sands China Ltd and Galaxy Entertainment Group (SEHK: 0027) each lost almost 2 per cent.

The New People’s Party on Wednesday unveiled plans to field former senior disciplinary officers in the upcoming District Council elections in order to attract voters from the civil service. The pro-government party – created by former security minister Regina Ip Lau Suk-yee earlier this year – is preparing for its electoral debut in November’s elections by announcing a list of candidates to contest a total of 10 seats in Hong Kong Island, Kowloon East and the New Territories. The candidates include Tony Liu Kit-ming, the retired chairman of the Hong Kong Police Inspectors’ Association; and Wat Ki-on, the retired chairman of the Fire Services Department Ambulancemen’s Union. At a swearing-in ceremony, Ip said the party’s votes came chiefly from civil servants and it would like to represent voters with this background, especially those in the disciplinary forces. Ip said the party wants to improve the image of law enforcement units and increase morale following the recent controversy over police security arrangements during Vice-Premier Li Keqiang’s visit. “The police have a great duty to ensure safety of the visitors. We do not think it is appropriate to launch personal attacks on our law enforcement agencies only because of one or two incidents,” Ip said. The district council elections in November are expected to be fiercely contested because voters will elect 412 councillors – the largest number since the district administration system was established nearly three decades ago.

Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung briefs on the arrangement for the mode of the appointment of district councillors, saying the government will reduce the number of appointed district council seats in phases. The government announced on Wednesday it planned to scrap all appointed seats in the District Council – in phases. Under the plan, the number of government-appointed councillors would be reduced by one third next year, from 102 to 68, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung told reporters. The remaining appointed seats would be abolished as soon as 2016 and no later than 2020. This could be done in one or two phases, Lam said. He added the government would work out more details, such as their pace and legal arrangements of the cancellations, after the upcoming District Council elections in November. “On whether we should abolish the remaining appointed seats in one step, or in two steps, the government holds an open attitude,” Lam said. Some appointed councillors support the plan. Christina Ting Yuk-chee, chairwoman of the Eastern District Council, said scrapping the appointees would not affect the day-to-day operation of the District Council. “Both appointees and elected councillors have the same duty to serve the public. Reducing the number of appointed seats will not affect our work,” she told local radio. Dr Lau Chi-pang, vice-chairman of the Tuen Mun District Council, echoed Ting’s view. He said seats should be awarded according to politicians’ services and contributions to their community. The District Councils are consultative bodies on district administration and affairs, with part of their seats appointed by the government and the rest elected via popular elections. The government-appointed seats were abolished by the British colonial administration before the handover, but returned in 1998. Pro-democracy parties have criticised these seats for lacking a public mandate.

 China*:  Sept 16 2011 Share

The government in Beijing will pump 300 billion yuan (US$47 billion) into Tibet over the next five years, with 90.5 billion yuan to finance roads, railways, hydropower stations and other infrastructure, state media said on Wednesday. The 226 projects the money will support are “aimed at achieving rapid development in Tibet”, the official Xinhua news agency quoted deputy governor Hao Peng as saying at an internal meeting on Tuesday. Key transport schemes will include an extension of the railway from regional capital Lhasa to Shigatse, the traditional home of Tibetan Buddhism’s second highest figure the Panchen Lama, and highways to the rest of China, the report added. Other spending will target housing, health care and environmental protection, Xinhua said. “About 8 per cent of the investment will be used to foster the development of indigenous industries, including tourism, mining, agriculture and stockbreeding. The billions China has spent in Tibet over the last few years are all aimed at winning hearts and minds in the unstable Himalayan region, and to better integrate it into the rest of the country. Similar plans have been unveiled for neighbouring Xinjiang, whose Turkic-speaking and Muslim Uygur people have likewise chafed at Beijing’s rule. Tibet’s economy has grown more quickly than the rest of China, sped by the completion of a railway to Lhasa and large mining projects, though much of Tibet is still remote and very poor. But those projects have also brought more Han migrants to Tibet, leading to many Tibetans’ perceptions that they have been left out of economic growth. Since bloody demonstrations in 2008, the government has boosted training programs, subsidies and investment there in an implicit recognition of the economic roots to the violence. China has ruled Tibet with an iron fist since Communist troops marched in 1950. It says its rule has bought much needed development to a poor and feudal region. Exiles and rights groups accuse China of failing to respect Tibet’s unique religion and culture and of suppressing its people.

Pork prices, a key driver of inflation, rose 0.7 per cent in the week ending September 11 from the previous week, hitting a new record, data from the Ministry of Commerce in Beijing showed on Wednesday. That was the fifth consecutive weekly rise in pork prices and represented an acceleration from weekly increases of 0.4 per cent and 0.3 per cent in the weeks ending September 4 and August 28, respectively. Inflation eased to 6.2 per cent in August from July’s three-year high of 6.5 per cent, as price rises of food, including pork, slowed. Combating inflation remains Beijing’s top policy priority despite worries about a slowdown in the world’s second-largest economy threatened by the worsening European debt crisis and a possible recession in the United States. Spikes in pork prices have constantly driven up consumer inflation, although the meat only accounts for 3 per cent of China’s consumer price index basket. In August, pork prices rose 45.5 per cent from a year earlier, contributing 1.27 percentage points to the annual inflation of 6.2 per cent, according to official data. In July, pork prices rose 56.7 per cent, contributing 1.46 percentage points to the month’s inflation rate. A senior industry official and the China mission chief of the International Monetary Fund both warned against cyclical rises in pork prices, which could delay China’s escape from stubbornly high inflation.

Premier Wen Jiabao gives his opening speech at the World Economic Forum in Dalian in northeast China's Liaoning province on Wednesday. Premier Wen Jiabao said on Wednesday China will continue to expand its investment in the euro zone and called on Western countries facing a crippling debt crisis to “put their houses in order”. As Europe’s struggling economies look to cash-rich China as a possible rescuer, Wen also urged EU leaders to reciprocate by according the country full market economy status ahead of schedule. Beijing has long demanded that the European Union and United States accord China full market economy status, a technical designation that would remove certain restrictions to Chinese exports and investments in Europe. China has invested an increasing portion of its world-leading foreign exchange reserves in euro-denominated assets, and its leaders have repeatedly expressed confidence in the region’s economies during the debt upheaval. “China will continue to expand investment in Europe,” Wen said as he delivered the opening speech at the summer session of the World Economic Forum. However, he added that “European Union leaders and the leaders of its [Europe’s] main countries must also courageously look at China’s relationship from a strategic viewpoint.” “Based on the WTO [World Trade Organisation] rules, China’s full market economy status will be recognised by 2016. If EU nations can demonstrate their sincerity several years earlier, it would reflect our friendship,” he said. EU leaders have said in the past that the Asian giant has not yet met the necessary conditions, pointing out that most of China’s largest companies are state-owned and their leaders appointed by the government. Wen also urged action to halt the spread of the sovereign debt crisis that has sent global markets plummeting, and said governments should work harder to maintain investor confidence. China is sitting on more than US$3 trillion in foreign currency reserves and has already committed to investing in Greece, Spain and Portugal. “Governments should fulfill their responsibilities and put their own house in order,” he said. “The major developed economies should develop responsible and effective monetary policies, properly handle debt issues, ensure the safety the stable operation of investment in the market and maintain confidence of investors around the world.” Wen also pledged that China would “continue to follow the strategy of following expansion of domestic demand,” but warned that the global economic recovery would be a “long” and “difficult” process. “Sovereign debt risks are growing in some countries, causing turbulence on the international financial market,” he said. “Unemployment in major economies remains high, while emerging economies are facing upward inflationary pressure. All this shows that the world economic recovery will be a long-term, difficult and complicated process.” Wen’s speech in the port city of Dalian comes as global markets have been rocked this week by renewed fears that Greece, which was recently given the green light for a second bailout, will default on its debt obligations. Portugal and Ireland have also received rescue packages while analysts have warned that Italy and Spain could follow suit, leading to warnings that the crisis could spread to other major economies. Next week, China will discuss possible aid to the euro zone with leaders of the emerging economies of Brazil, Russia, India and South Africa, known as the BRICS, at a summit in Washington. The Chinese premier also warned that his country’s growth would slow in the long term as it reached a “new stage of development”, and pledged to increase domestic consumer demand. “China’s development is not yet balanced, coordinated and sustainable, there are many institutional constraints hindering scientific development,” he said. “As the size of the Chinese economy grows, it will become difficult to keep high-speed growth over a long period of time. “We have the right conditions and we have both the ability and confidence to maintain steady and fast growth of the economy and bring China’s economy to a new stage of development.” Wen’s speech kicked off the three-day summer session of the WEF, which was established five years ago and has this year attracted about 1,500 business leaders and government officials from 90 countries.

Hong Kong*:  Sept 15 2011 Share

Nearly a decade after it closed its last Hong Kong dealership, Swire Pacific (SEHK: 0019) is re-entering the local car market - this time as the exclusive distributor for Italy's Alfa Romeo and Fiat marques. "For Swire, we picked Alfa and Fiat because we believe these two brands have huge potential here," said George Lau, managing director of the newly established Swire Motors unit. "The Italians are very dedicated and committed ... the Hong Kong market for the principal [Fiat S.p.A.] is more important than elsewhere in Asia Pacific and we would like to focus on building up the brands in Hong Kong." Swire Motors launched its new enterprise in July with the opening of a service centre in To Kwa Wan. Last month, it opened a showroom for Alfa Romeo on Gloucester Road in Wan Chai, where many high-end car dealerships are located. In the next two months, it plans to open a Fiat showroom-cum-cafe in Causeway Bay's newly renovated Leighton Centre - just around the corner from BMW's Mini Cooper dealership - that will focus on selling the cutesy, retro-styled Fiat 500 mini-car. Lau estimates the investment by Swire will be around HK$40 million, or as much as HK$100 million if inventory is included. The initial response from local car buyers has been strong. Swire Motors sold 100 cars within the first two weeks of its Wan Chai showroom opening - about as many cars as Fiat and Alfa sold in Hong Kong on an annual basis previously. "The potential for Alfa and Fiat hasn't been well recognised in the market," Lau said. "This proves Hong Kong people have been waiting for these brands for a long time." Hong Kong's car market is small, but lucrative given its orientation towards higher-end brands. Car sales were up 8.6 per cent in the first seven months of the year to 17,580 units, according to Motor Traders Association of Hong Kong data. Lau, who trained as an aerospace engineer and later helped establish Audi in Hong Kong, is keen to play up the Italian roots of the Fiat group's line-up and to contrast that with competing brands that are better established in the local market. "Typically the first car Hongkongers buy is Japanese, because they are reliable, cheap and hassle-free," he said. "When they have more experience and are earning more money they buy a `uniform', by which I mean a German car, like a Mercedes, BMW or Audi. "But once you have a uniform, you are always looking for something sexy, which is an Italian car." The cornerstone of the Fiat brand in the local market will be the 500 model, which features fuel-sipping 1.2-litre or 1.4-litre engines and is a throwback to a tiny, two-door model popularised by the Italian carmaker in the 1960s. The modern version, first previewed in 2007, sells locally from HK$175,000. Last week, Swire Motors launched a limited-edition Fiat 500 by Gucci, which retails for HK$279,000 and features Gucci logos on the headrests and two-tone seats upholstered in the "Frau leather" you might find on the design house's handbags. With Alfa Romeo, Swire is focusing on sales of the MiTo, a sporty small car that retails from around H$260,000. There is also a good deal of local interest in the 4C, a high-end sports car that Alfa first showed as a concept car in Geneva earlier this year. It is not clear what the production model of the 4C will cost or when it will be available in Hong Kong, but Lau says orders for the car already account for around 10 per cent of sales volume. Swire is already taking HK$40,000 refundable deposits. Beyond Alfa and Fiat, is Swire targeting other marques? "We will keep our eyes open for brands that match with our values of quality and excellence," says Lau. "Most brands are already represented in Hong Kong."

Police are treating as arson a fire which badly damaged four double-decker buses early yesterday. Fire crews and police rushed to a bus terminus in Tsz Wan Shan, east Kowloon, after one of the vehicles was spotted ablaze around 4.30am. The flames quickly spread to three other buses, burning one down to its frame. All four were owned by KMB. Wong Tai Sin fire station officer Leung Wai-fung said what appeared to be a flammable substance was found at the scene in Yuk Wah Street. Detectives from Wong Tai Sin district crime squad are investigating the case. No arrests have been made. Police said the fire started about three hours after the vehicles were parked. "We believe the blaze started at the front of the bus, near its entrance," said Leung, speaking of the first bus to catch fire. Thick smoke billowing from the burning vehicles forced the evacuation of about 100 residents from the nearby Man Po and Ka Wah buildings. A 68-year-old woman security guard in the Man Po Building who inhaled smoke was treated at Queen Elizabeth Hospital in Yau Ma Tei and later released. One resident said fumes from the fire wafted into his 17-th floor flat. "When I looked down, I saw black smoke billowing from the burning vehicles," he said. Five fire engines and one ambulance were sent to the scene. Firefighters took more than an hour to douse the flames. Police cordoned off the bus terminus as government chemists searched for evidence from the burnt-out vehicles yesterday morning. KMB has used the terminus as a night parking lot for years. A company spokeswoman said no guard was assigned to the lot, although security personnel visited such lots during nightly patrols. All four damaged buses served the same route - 3D - from Tsz Wan Shan to Kwun Tong's Yue Man Square. Backup vehicles were deployed on the route and operations were unaffected, the spokeswoman said. She said KMB had not received any threats before the attack.

Democrat lawmaker James To Kun-sun said yesterday he would run in the upcoming district council elections. To had been undecided about whether to join the race, but has made up his mind to fight for a seat on Yau Tsim Mong District Council. He made the announcement at the Democratic Party's swearing-in ceremony yesterday for candidates. He is one of 126 from the party who will contest seats. To focus on his campaign, he said his wife would have an early birth by Caesarean section. He said his wife's expected delivery date fell on election day. "The expected delivery date of my wife is on November 6. Now we have decided to let my wife give birth by Caesarean section a week earlier," he said. His wife, Sue So Lai-fun, said the decision to bring their son into the world earlier was made two weeks ago, when To decided to participate in the elections. She felt comfortable with the decision. "It's better for me, the baby and my husband to give birth by Caesarean, so we don't have to worry about when exactly the baby will come out," she said. "Perhaps the baby wants to witness the election, too. It was such a coincidence to have the expected delivery date the same as the election day." Party chairman Albert Ho Chun-yan said the elections would be challenging, as the party would face attacks from both the Beijing loyalist camp and the more radical pan-democrats. Dr Yeung Sum, the party's election committee chairman, said 46 of the candidates were sitting councillors, and he hoped the party would not suffer a net loss of seats in the coming elections. The League of Social Democrats also announced its 22 candidates for the elections yesterday, among them four sitting councillors. Andrew To Kwan-hang, the party's chairman, said its aim was to attack the Beijing loyalist camp. A second batch of League candidates who will target individual Beijing loyalists and some pan-democrats will be announced in the coming weeks. The party's only lawmaker, "Long Hair" Leung Kwok-hung, will contest the elections, but he has not decided in which district to run. Yesterday, Lily Chung Lai-tuen, an election programme co-ordinator from the Independent Commission Against Corruption, said the watchdog had received 18 complaints alleging electoral bribery this year.

 China*:  Sept 15 2011 Share

The mainland's fiscal revenue surged 34.4 per cent last month from a year ago, keeping Beijing with sufficient funds to manage a slowdown in economic growth in the face of an escalating European debt crisis and a possible double-dip US recession. The income of the central and local governments swelled in August to 754.6 billion yuan (HK$918 billion), mainly from taxes, according to data released by the Ministry of Finance yesterday. The strong growth, which followed a 27 per cent year-on-year rise in July, was fuelled by economic expansion and price increases, as well as by "special petroleum proceeds", a quarterly charge to oil companies levied on high oil prices, the ministry said. Wang Tao, an economist at UBS Securities, thinks the government might ease fiscal policies by early December. This could happen, he said, "if exports have dropped, and industrial production and construction have slowed sharply". Other economists predict increased spending on social housing and other public works to offset a cooling in the economy. The finance ministry forecast that fiscal revenue growth would slow in the coming few months, "because the domestic economy is expected to slightly decelerate and fewer people will have to pay income tax from September". The Standing Committee of the National People's Congress, the country's top legislature, in June approved an increase in the minimum personal income tax threshold from 2,000 yuan to 3,500 yuan. It became effective on September 1. The growth rate of China's fiscal revenue has outpaced that of the economy as a whole as well as individual incomes for years. The nation's gross domestic product expanded 9.6 per cent year on year in the first half of 2011, while urban residents' disposable income rose 13.2 per cent and rural incomes grew 20.4 per cent, according to the National Bureau of Statistics. The mainland's fiscal revenue has now risen 30.9 per cent across the first eight months of the year, to reach 7.43 trillion yuan. For the first eight months of the year, outlays grew 29.2 per cent to hit 5.95 trillion yuan. It means there is a healthy surplus, although fiscal expenditures in August actually exceeded income, rising 25.9 per cent from a year earlier to 807.7 billion yuan, according to the finance ministry. Education expenditures rose 26.5 per cent year on year, social security and employment increased by 34.5 per cent, traffic and transportation jumped 39.7 per cent and government-subsidised housing construction surged by 68 per cent, the ministry said.

Young players hone their skills at a MLB training centre in Wuxi, Jiangsu. The league has opened a second centre, in nearby Changzhou. The United States' top professional baseball league opened its second talent development centre on the mainland in Changzhou, Jiangsu, yesterday to drill deeper into one of the biggest untapped gold mines in sport. After establishing its first centre in Wuxi, also in Jiangsu, two years ago, Major League Baseball built a second base in Changzhou, an industrial city just 40 kilometres away. The centre, at the Changzhou Beijiao Middle School, shares the same goal as the one in Wuxi - finding a global baseball superstar to attract hundreds of millions of fans and create a multibillion-yuan market. They are looking for the sport's equivalent of basketball superstar Yao Ming. About 16 per cent of the 1.3 billion people on the mainland want to play baseball, according to a study by TNS Sport Asia, a market research firm, in 2008. But they had no equipment, fields or coaches. The sport, with its high priority on team work, used to thrive on the mainland and was especially popular among the elite. But it was wiped out by reactionaries during the Cultural Revolution. The success of baseball in other parts of Asia, including Japan, South Korea and Taiwan, later rekindled interest in the sport on the mainland. The Americans are entering the mainland market after the Japanese and Taiwanese leagues but have more money, the world's best coaches and bigger ambitions. At the opening ceremony for the new centre yesterday, Paul Archey, MLB's senior vice-president in charge of international business operations, said the league was excited at the prospects for development on the mainland. "We believe the Changzhou centre will develop more excellent young players, promote the sport among people and bring the national level of game play to a higher level," he said. The Changzhou centre will recruit about 20 players a year from middle schools all over the mainland. It will offer them a normal campus life while preparing them for a professional career. Players will study and live like other students, the difference being the hours they spend after school with MLB coaches sharpening their skills. Charlie Monfort, owner of the Colorado Rockies, was impressed with the young players he saw. "They rival the players in the United States in the same age group," Monfort said.

Mainland stocks continued their downward trend yesterday after a three-day trading break as skittish investors were battered by the deepening European debt crisis. But analysts predict the market will soon bottom out amid expectations that Chinese inflation will ease thanks to Beijing's policy tightening. The benchmark Shanghai Composite Index dropped 26.45 points, or 1.06 per cent, to 2,471.3, the third session in a row in which it has closed lower. The market was closed between Saturday and Monday for the Mid-Autumn Festival. Yesterday's close was just above a 14-month low of 2,470.5 that the market reached on September 6. "The global market wobbles had a negative impact on the locally listed shares," said Shenyin Wanguo Securities analyst Qian Qimin. "But the downward pressure didn't appear as big as expected. Investors can expect a turnaround as more stocks become undervalued." In Taiwan, where the stock market was also closed on Monday for the festival, the key Weighted Index slumped 219.2 points, or 2.88 per cent, to 7,391.37 yesterday, its biggest single-day drop since August 19. Mounting worries of a default on Greece' sovereign debt dragged global markets down sharply on Monday, when the MSCI Emerging Markets Index lost 2.3 per cent. Japan's Nikkei-225 Index gained 0.95 per cent yesterday to 8,616.55 points, rebounding from its lowest close since April 2009 on Monday when it lost 2.3 per cent to 8,535.67 points. The mainland's main index has dived 12 per cent this year following a 14.3 per cent drop in 2010. Beijing's monetary policy tightening have weighed on investors, many of whom cashed out because of expectations of a further drop. However, analysts said the market would hit bottom at the 2,400-point level since stocks would by then be undervalued. In June, Guotai Junan Securities, the only major Chinese brokerage that correctly predicted a fall in the A-share market last year, forecast that the key Shanghai index would fall as low as 2,400 points in the third quarter. "It is consensus prediction among brokerages that the market would find strong support at the 2,400-point level," said Essence Securities analyst Liu Jun. "However, it doesn't necessarily mean that the market would turn into a bullish mode." Shanghai-listed stocks traded at an average of 14.85 of their 2010 earnings yesterday. According to Bloomberg, Shanghai-listed companies' were valued 11.4 times their estimated profits for this year, the lowest since January 2006. China's consumer price was up 6 per cent year on year in August, down from 6.2 per cent in July. Markets in Hong Kong and South Korea were closed for a public holiday yesterday.

Hong Kong*:  Sept 14 2011 Share

Local property transactions regained momentum over the weekend amid anticipation of developers putting more new flats on the market. According to Midland Realty, transactions among the 10 benchmark residential projects climbed to 33 during the weekend, from 28 a week back. None of the 10 recorded zero transactions, and the room for bargaining has also narrowed. "Some developers are planning to introduce more new flats soon," Midland chief analyst Buggle Lau Ka-fai said. "The market generally expects aggressive pricing on the new flats as secondary market sentiment has also picked up." The situation is more apparent in Tseung Kwan O, where several major developers are planning sales launches. Cheung Kong (0001) last week said the 961 square foot, three-bedroom units of La Splendeur at Lohas Park will likely be priced from HK$6,800 per sq ft. But owners of flats at previous phases of Lohas Park are quoting lower prices, according to Centaline Property. The owner of a three-bedroom 961 sq ft flat at Le Prime, in the second phase, is asking HK$4,683 psf - 31 percent lower than those at La Splendeur. Sun Hung Kai Properties (0016) also plans to start sales at The Wings, a new project atop the Tseung Kwan O MTR station. Pricing has yet to be revealed. Midland's Lau said homeowners in the neighborhood are only allowing 2-3 percent room for bargaining - down from a 5 percent leeway a few weeks ago. Sentiment is also rising on Hong Kong Island, with at least three residential projects set to go on the market - The Altitude and Winfield in Happy Valley and Argenta at Mid-Levels. "Transactions have increased at projects that are selling below market level, such as South Horizons," Midland agent Gary Yeung Wing-kin said. Total transactions at the three benchmark island projects - Taikoo Shing, Kornhill Plaza and South Horizons - doubled to six from three a week back. South Horizons recorded three transactions, from zero a week ago.

Political heavyweights came out yesterday in favor of having more than one pro- establishment candidate in the chief executive election in March, as speculation heated up. They waded into the fray after Chinese People's Political Consultative Conference member Chan Wing-kee - a supporter of Henry Tang Ying-yen, who is widely tipped to run in the race - insisted that only one candidate from the pro-government camp is enough. Chan was apparently responding to Executive Council convener Leung Chun-ying's indication of his intention to join the race, saying he would resign from Exco at an appropriate time, in the belief that it is a good move to have two pro-Beijing candidates. Tang, the chief secretary for administration, is expected to resign in a month to prepare for his campaign, though he too made no comment about his plans. "Those committed to serving Hong Kong and are thus considering contesting the chief executive election, should be encouraged. It is unnecessary to set many constraints," top lawmaker Jasper Tsang Yok- sing said. Asked who would be an ideal candidate, Tsang said it is not appropriate for him, being the Legislative Council president, to comment. Exco member Ronald Arculli said anyone - irrespective of affiliation - who gets nominations from at least 150 members of the Election Committee that selects the chief executive can stand in the election. Basic Law Committee member Lau Nai-keung said he has long supported a contested election, and that he believes Beijing would support those who are committed and capable. National People's Congress Standing Committee member Rita Fan Hsu Lai- tai said Tang would be an acceptable candidate if he decided to go for the top post. If he did, she will probably not run. "It should be left up to Tang to decide what he would like to do. I won't ask or lobby him to do anything," Fan said. "The acts of others shouldn't be influenced by me." Earlier, in RTHK's Letter to Hong Kong, Fan criticized government officials for being "unable to get the message across" when communicating with the public. She believes "it is a question of positioning. "I believe `the government is here to serve the people, rather than ... govern the people,"' she said. "The desire to serve comes from the heart. It cannot be just an act." The Democratic and Civic parties said pan-democrats will not be affected by the appearance of more than one candidate in the pro-Beijing camp.

Actress and singer Deanie Ip Tak-han, a long-time collaborator of Hong Kong superstar Andy Lau Tak-wah, won the best actress award - a first for a Chinese - at the world's oldest film festival. Ip, 63, who returned to the silver screen after an absence of 10 years, took home the Coppa Volpi for best actress for A Simple Life at the 68th Venice Film Festival, which closed on Saturday. Ip - who is also known as Deanie Yip - plays an aging domestic servant Ah Tao opposite her master Lau in Hong Kong director Ann Hui On-wah's film. A Simple Life is based on the true story of producer Roger Lee, and is about the lifelong relationship between the master and his servant who worked in his family for five generations. Ah Tao suffers a stroke and they reverse their roles. "My heart was pounding this time," Ip said after receiving the award, recalling her last honor was for best supporting actress at Taiwan's Golden Horse Awards in 1999. She has won at the Hong Kong Film Awards twice, both for supporting actress. "Basically, I feel exceptionally grateful because without Andy Lau, Ann Hui and all the production team members, I would not be able to achieve this." She said Ah Tao's story gave her positive insights about aging and how to face death. "I can't believe how young and beautiful and sexy this woman is!" jury chairman Darren Aronofsky gushed of Ip after the awards ceremony in the Venice Lido's Sala Grande. He said the jury was moved by the message of Hui's film. "It's an issue we deal with in every part of the world and to see a journey from health to death with such generosity was very touching," he said of A Simple Life. Russian director Alexander Sokurov's German-language Faust took the top Golden Lion prize and rising Irish star Michael Fassbender won the best actor award for Shame. The Silver Lion for best director was awarded to China's Cai Shangjun for his gritty People Mountain People Sea. Ip launched her film career in 1978. As a Cantopop singer, she released five albums in the 1980s. She retired from music in 1988 and went into semi- retirement in films, with occasional roles only. Ip returned to the Cantopop scene in 2002. Film director and producer Ng See- yuen said: "Her achievement not only gives her center stage at the top-tier film festival, it also raises the world's awareness of Hong Kong's film industry, especially for female actresses."

Asia Television's major investor Wang Zheng plans to take up a "senior position" in the troubled broadcaster. His move comes two days after a report suggested a Shenzhen developer is interested in buying ATV shares. "After the recent turmoil, I can now tell you that I will be applying for a senior position in ATV ... I hope everyone will support me," Wang said, adding he previously served as a "volunteer" at the station. Currently, he holds no position, except that of a senior adviser. Speaking at the launch of ATV's Hong Kong Loving Hearts Campaign 2011, Wang said it is normal for debates to arise during "a revolution," such as the one ATV is undergoing. "As long as long as it is not politicized, it can be solved through internal communication. Unity is strength. Let us completely awaken ATV, this sleeping lion," he said. Wang invested HK$200 million in convertible bonds in ATV last year. His relative, Wong Ben-koon, is a member of ATV's board of directors, holding a 52.4 percent stake. A report last week suggested a Shenzhen developer has expressed an interest, after the station began looking for a major investor following an erroneous report that former president Jiang Zemin had died. An ATV spokesman said he has not heard of the report. Nor did he know which role Wang is interested in. The news came as the Legislative Council information technology and broadcasting panel is due to discuss whether ATV's management has infringed on editorial freedom. Panel chairman Raymond Wong Yuk-man said he has invited representatives from the Broadcasting Authority and ATV to attend. They included Wang, executive director Sheng Pinru, acting chief executive Kwong Hoi-ying, new senior vice president of news and public affairs Lan lau-cheong and his predecessor Leung Ka-wing. The ATV spokesman said he could not confirm whether any of them would attend the meeting. Wong also vowed to find out why Roy Tang Tun-kwong, a government administrative officer with no broadcasting experience, was appointed the new head of RTHK.

The government yesterday rejected a call from pan-democrat legislators for an independent investigation into police action during Vice-Premier Li Keqiang's visit to Hong Kong last month. The lawmakers called for an investigation to be headed by a judge or to have a Legislative Council select committee investigate the row after a second special meeting of a Legco panel failed to establish whether police abused their power. The government said the police and the University of Hong Kong were undertaking internal reviews of the security arrangements on August 18, and that a police watchdog - the Independent Police Complaints Council - was handling complaints related to the visit. Secretary for Security Ambrose Lee Siu-kwong said the students who were locked up in a stairwell at HKU during Li's visit to the campus should take the row to court if they believed they were mistreated. The Legco panel yesterday touched on the detention of three students during protests at the campus. It also delved into the discussions between the university and police on arranging a protest zone. A document provided by the university showed that the police had asked to have the protest zone well away from a ceremony venue and that the university demanded police avoid confrontation with protesters. Dr Albert Chau Wai-lap, HKU's dean of student affairs, said the university's security guards had attempted to mediate when the three students were stopped by police. The three were dragged on the ground and detained for almost an hour. Chau said mediation was unsuccessful and the university found the confrontation unacceptable. Registrar Henry Wai Wing-kun said that before Li's visit, HKU had not been informed about the number of police officers who would be sent to the campus. At yesterday's hearing, Police Commissioner Andy Tsang Wai-hung did not provide a number. Security chief Lee said the students should take legal action or complain to the police if they believed they were mistreated. "If you think there were police officers involved in illegal action, I urge you to take legal action as soon as possible, so as to have a fair and justified investigation into the incident," he said. Samuel Li Shing-hong, one of the students detained, said Lee's comment was unfair. "When the government does something wrong, why should it be a victim's responsibility to take legal action rather than the government review its wrongdoing?" He said they would soon make a decision on any legal action. Meanwhile, the security secretary declined to give further details about an incident in Lam Tin where a man wearing a June 4 protest T-shirt at Laguna City said he was taken away by officers wearing black clothes who refused to reveal their identities. The man appeared at yesterday's hearing and urged the government to explain why he was taken away.

Nelly Fung is demanding action after 26 members of the Chinese International School foundation were dismissed. One of the three founders of the exclusive Chinese International School who was removed from its charitable foundation in a boardroom coup is demanding that she be reinstated, along with the other 25 people dismissed with her. Speaking out for the first time since the coup, Nelly Fung said the decision came out of the blue in a letter from the board last October. It meant only board members could serve on the foundation, which is the school's legal sponsoring body, registered under the charities ordinance. Fung said: "This was done without the common courtesy of consulting members who had devoted so much time, energy and money to the school and foundation. "Without their support, the school would not exist today. There is a Chinese saying, `When you drink water, remember its source.'" At the heart of the issue is a battle for control of the school. The dismissed foundation members claim they acted as overseers of the board of governors, while the board say its members have the final say. Fung helped establish the school in 1983. She retired from the board in 2003. Since last October's letter, she has had no formal response to her requests for a formal discussion with the board and her reinstatement. Both governors and former foundation members have spoken to their lawyers about whether the dismissals were legal. It had been the norm for former governors, to be retained as foundation members, raising funds and voting at general meetings. Fung said some were more active than others. Her two co-founders of the school, Joyce Tai and Kin Yue-fu, are on the current board of governors. Fung compared the board of governors to a company's board of directors. They oversee the senior management who do the day-to-day work but are beholden to their shareholders - which in this case, she says, would be the foundation members. Fung questioned the accountability of a board of governors without the foundation members. "Is it correct for a foundation such as this one, which is also a registered charity, to be accountable only to its own board members? There's no transparency. There's no oversight." Other members given the boot include Victor Fung Kwok-king of Li & Fung, former chairwoman of the English Schools Foundation Professor Felice Lieh Mak and ex-chief secretary David Akers-Jones. Geoffrey Mansfield, current chairman of the board, wrote to the Post last Saturday, saying that the move was legal, and many of those dismissed no longer participated in running the school. He said the numbers of retired governors who remained foundation members had grown to a size where "it was appropriate to remove any confusion as regards those responsible for the governance of the school".

Analysts said that the imminent RMB Qualified Foreign Institutional Investors (RQFII) trials will be conducive to expanding the investment channels of yuan funds raised in Hong Kong. This will also enhance Hong Kong's role as an offshore RMB center and accelerating yuan's internationalization process. The People's Bank of China (PBOC), the country's central bank, will kick-start RQFII trials soon, allowing yuan funds raised in Hong Kong to be invested in the mainland's securities market, a senior official said Thursday. The official, who spoke anonymously, said that the initial investment quota allowed to RQFII will be less than 20 billion yuan ($3.13 billion), 80 percent of which will be invested in the mainland's stock market. The option will first be open to domestic fund managers familiar with the A-share market and subsidiaries of securities companies in Hong Kong. The RQFII program, one of the measures announced by Vice Premier Li Keqiang during his visit to Hong Kong last month, seeks to allow foreign investors to use offshore yuan to buy mainland securities.

A Hong Kong regulatory review is delaying a high-profile hedge-fund launch by the former Asia investment chief for an asset-management firm owned by J.P. Morgan Chase & Co., according to people familiar with the matter. Hong Kong's Securities and Futures Commission is exploring allegations that Carl Huttenlocher, who left the bank's Highbridge Capital Management earlier this year, or others working for his fund improperly valued illiquid assets, among other actions, during the height of the financial crisis and its aftermath, the people said. An anonymous complaint filed with the Hong Kong regulator this summer led to requests for documents and other information from Mr. Huttenlocher and Highbridge late this week, the people familiar with the matter said. The regulator's requests for information, as part of inquiries the people describe as preliminary in nature, threaten to overshadow the immediate plans of one of Asia's most prominent hedge-fund managers. One issue under review is whether the valuations of Mr. Huttenlocher's fund, the timing of its asset sales and payouts to withdrawing investors unfairly benefited ongoing investors, boosting their returns and fees to the fund's managers while hurting clients that wanted out, according to people familiar with the matter. "In the three years I met with investors since 2008, I didn't hear any complaints about the Asia Fund's valuation or gating practices, and in fact, most investors applauded the plan," Mr. Huttenlocher said in a statement. "There is no factual basis to this anonymous complaint." Gating refers to steps taken to limit redemptions, often in response to a pile-up of withdrawal requests. "We do not believe there is any merit to the complaint the SFC received from a single anonymous individual," a J.P. Morgan spokeswoman said. "Clients who redeemed from the Highbridge Asia Opportunities Fund at the end of 2008 received more than 100% of their redemption request by September 2009. "We look forward to this matter being resolved quickly." An SFC spokesman in Hong Kong and a senior official in its licensing division declined to comment. Not all SFC requests for information lead to deeper inquiries or formal investigations, and it is not known whether the regulator will proceed in any way based on information it receives. J.P. Morgan bought a controlling stake in Highbridge in 2004 for more than $1 billion, when Highbridge managed about $7 billion in assets. The firm now has some $30 billion in assets and is fully owned by the bank. Mr. Huttenlocher had intended to start trading his new Hong Kong-based hedge fund, called Myriad Asset Management, on Sept. 1, say people familiar with the matter. Amid the regulatory requests, the SFC postponed approval for licenses required before Myriad can operate, the people say. Wall Street firms have eagerly awaited Myriad's arrival and the millions of dollars in trading commissions and other fees they hope to reap from the new fund. Mr. Huttenlocher has been expected to start trading with around $300 million in assets, and to expand to more than $1 billion in 2012 when he opens the fund to outside investors, say people at firms planning to do business with Myriad or otherwise connected to it. Few hedge funds in Asia have exceeded $1 billion at their launch or soon after, given the tough fund-raising environment and prolonged economic woes. Mr. Huttenlocher's planned startup has attracted significant attention from former Highbridge clients, say people familiar with him. Before he left, Mr. Huttenlocher oversaw more than $2 billion in assets, including the Hong Kong-based Highbridge Asia Opportunities Fund and a minority portion of Highbridge's main multi-strategy hedge fund based in New York. Highbridge wound down its Asia fund after Mr. Huttenlocher, who served on Highbridge's investment committee, said he was leaving in March of this year. That fund focused on trading equities and convertible bonds, the same strategy Mr. Huttenlocher plans to employ at Myriad, say people familiar with both firms. Regulators want to know about specific convertible bonds held by the Asia Opportunities fund, and how his team marked the assets at various times, including when investors were cashed out, people familiar with the SFC's inquiries say. Regulators have asked for records of the fund's communications with clients, they say, and copies of asset-pricing policies and rules governing when and how assets from one Highbridge pool could be sold to another. In 2008, the Highbridge Asia fund suffered a roughly 30% loss by the end of October—worse than most hedge funds amid the financial crisis—prompting clients to request withdrawals for about 55% of the Asia fund's assets, say people familiar with the fund. According to the people and documents reviewed by The Wall Street Journal, Mr. Huttenlocher's team segregated equities and other liquid assets from most of the convertibles, which were harder to sell and therefore classified as illiquid, and instituted a plan to pay out investors over the course of several months. Most client withdrawals were paid out by mid-2009. Investors who stayed put benefited from a 56% return in the Asia fund in 2009, a significant part of that attributed to gains in the convertibles positions that had suffered steep losses in 2008, the people say. In the third quarter of 2009, Mr. Huttenlocher surpassed his so-called high-water mark, the point at which investment gains make up for investors' losses, allowing the fund to resume charging fees on investment profits, according to people familiar with the matter and fund-related documents. Previously, Mr. Huttenlocher oversaw Asia investments in convertibles and derivatives for Long-Term Capital Management, and prior to that, he traded European convertible bonds for Chicago-based hedge fund Citadel.

Even as markets fall and volatility persists, a Chinese tea maker and a Shanghai restaurant chain started taking orders for initial public offerings, joining a mainland shoe retailer that kicked off an IPO last week. The two latest IPOs, valued at up to US$277 million, come as Hong Kong's stock market struggles amid continued worries about an escalation of Europe's debt crisis. The benchmark Hang Seng Index closed down 4.2% at 19,031, its lowest level since May 25, 2010, when it closed at 18,985. Tenfu, which sells Chinese tea and has 1,088 stores in China, plans to raise up to US$182 million in its IPO and will list its stock on the Hong Kong stock exchange on Sept. 26, according to a term sheet seen by Dow Jones Newswires. The company, which started taking orders from institutional investors Monday, planned to sell 208.62 million shares at between 4.80 Hong Kong dollars (US$0.62) and HK$6.80 each, the term sheet said. Sales to retail investors will begin on Wednesday. Private-equity firm General Atlantic LLC is buying 73 million shares, or 35% of the offered shares, as a cornerstone investor, according to the term sheet. Cornerstone investors in Hong Kong are guaranteed large allotments in an IPO in exchange for agreeing to hold the shares a certain length of time, giving investors confidence in a deal at a time of volatile markets. General Atlantic is holding the shares for 12 months. Meanwhile, Xiao Nan Guo, the Shanghai restaurant, also started taking orders from institutional investors Monday. It plans to raise up to US$95 million by selling 335 million shares at between HK$1.65 and HK$2.20, according to a term sheet. If there is strong demand, the bankers handling the deal can raise the size of the IPO by 15%, potentially raising as much as US$109 million. The stock will list in Hong Kong on Sept. 28. Xiao Nan Guo has 51 stores in China. The two deals join an offering meant to raise up to US$208 million by Chinese shoemaker Hongguo International Holdings Ltd. The company began taking orders last week and plans to list in Hong Kong on Sept. 23. Separately, Beijing-based Hai Run Media plans to raise between US$150 million and US$200 million in a Hong Kong IPO in the fourth quarter, people familiar with the situation said Monday. If the plan goes ahead, the company will be the first Chinese producer of television series to list in Hong Kong. It has hired Deutsche Bank AG and Nomura Holdings Inc. to handle the IPO, the people said. Hai Run is one of the largest privately owned producers of TV series in China. On average, it makes 600 episodes a year from 20 TV series, according to its website. In addition to producing shows for the Chinese market, it also distributes programs in Asia, Europe and the U.S., according to the website.

 China*:  Sept 14 2011 Share

China's official recognition of Libya's National Transition Council (NTC) as its ruling authorities and representative of the Libyan people is a mature decision made at the right time by the Chinese side. China and Libya can work together to push for a smooth transition and development of bilateral relations. At present, the situation in Libya has not stabilized, with the whereabouts of Muammar Gaddafi remaining unknown. However, what has already been clear is that the NTC has controlled most parts of Libya and started to assume power and administrative duties. China's decision has been based on its long-standing independent foreign policy of peace and the principle of respecting the choice of the Libyan people. China's policy on Libya is not designed to seek its own interests but is entirely in the interests of bilateral relations as well as peace, stability and development in the region as a whole. Since turmoil erupted in Libya earlier this year, China has made efforts to ease conflicts there, maintained communication and contacts with the international community and called for a peaceful solution. The friendly and cooperative relations between China and Libya should be developed on the basis of the friendship between the two peoples and the common interests of the two countries. Whatever changes may happen in the Libyan ruling authorities in the future, efforts should be made to ensure no vacuum is left in bilateral relations and that friendly cooperation and exchanges continue uninterrupted. China supports the political and economic reconstruction of Libya and is ready to play its due role in the reconstruction process based on a win-win relationship. The turmoil in Libya is only temporary, while the China-Libya friendship is everlasting. China attaches great importance to the position and role of the NTC, and has kept in close contact with it with a view to jointly promoting bilateral ties. Meanwhile, the NTC leadership said it was "delighted" at China's decision to recognize its status. In response, the NTC made a statement including three points, namely, to strictly abide by all the existing treaties and agreements between the two countries, to firmly adhere to the one-China policy, and to welcome China's participation in the country's reconstruction and jointly push forward the steady and sustained development of bilateral ties. The statement has demonstrated the NTC's clear political stance. China and Libya will enhance their mutually beneficial cooperation and work to create a broad prospect for bilateral relations. Looking ahead, Libya is facing a long, difficult process of reconstruction. It needs the help of the international community and requires a leadership role for the United Nations in the process. China, as a permanent member of the UN Security Council, is ready to join the international community in playing an active role in resolving the Libya issue and helping it return to the international stage.

The hotel markets in five major cities of Greater China have experienced the start of recovery since last year with room rates rising and occupancy growing, according to Knight Frank. It predicts the outlook will continue to improve. Hotel demand - hit by the global financial crisis in 2008 - has been picking up since last year with average daily rates rebounding 10.5 per cent year on year, said the property consultant in a report, which has surveyed the hotel sector in Beijing, Shanghai, Guangzhou, Hong Kong and Macau. Occupancy and room rates remained stable in the first six months on the back of strong demand from tourists and business travellers. In Beijing where demand mainly was driven by domestic visitors, five-star hotel occupancy fell in 2008 and hit a low in 2009, due to oversupply. However, occupancy levels showed signs of recovering and continued to remain above 60 per cent for the first half of the year. The average daily rate for a five-star hotel room bottomed in 2009, but saw a 8.4 per cent rebound last year to 814 yuan (HK$1,024). The rate remained stable in the first half of this year at 794 yuan. The confidence in the outlook has given a boost to the sector, encouraging hotel owners and operators to strengthen their foothold in the cities. "Among the five cities covered by this report, Macau was the most active market in the first half of 2011, where three large-scale, five-star hotels were completed in the period, providing over 4,000 rooms," Thomas Lam, head of Knight Frank's research department, said in the report. Five hotels, including Waldorf Astoria Shanghai on the Bund and Shanghai Pudong Kangqiao, also opened in Shanghai, adding more than 2,000 more five-star rooms. Despite the increase in supply, Knight Frank predicts a rosy picture. "We believe China's tourism market will continue to develop rapidly in the coming years and the future for its hotel market looks bright," said Lam. In Shanghai, the number of overnight visitor arrivals - especially domestic visitors - is expected to be boosted with the completion of major tourism projects such as Shanghai Disneyland in 2015 and infrastructure projects including the Huning Intercity High-Speed railway in the Yangtze River Delta region. While the hotel sector in Guangzhou will benefit from the city's position as the business and exhibitions centre of Asia, Beijing will continue to generate a steady stream of visitors, said Knight Frank. According to the World Tourism Organisation, China has surpassed Spain to become the world's third most-visited country, while it ranks fourth in terms of tourist receipts. International hotel operators also show strong confidence in China's market with aggressive expansion plans. Sheraton Hotels & Resorts has said that about two-thirds of the 25 new hotels it has planned will be situated in mainland China. Hotel markets in Hong Kong and Macau are expected to remain stable, as the cities are already well developed, it said.

Italian officials have held talks with China's sovereign wealth fund in an effort to persuade Beijing to buy Italy's government bonds or invest in its companies, news reports said on Tuesday. The chairman of China Investment Corporation (CIC) met with Italy’s finance minister last week in Rome, The Wall Street Journal and the Financial Times reported, citing unnamed sources. They gave no indication whether the two sides reached any agreements. Phone calls to CIC’s Beijing headquarters were not answered. The reports come as Italian lawmakers consider a plan to slash spending in an effort to stabilise government debt equal to nearly 120 per cent of the country’s annual economic output. CIC was created in 2007 to invest a portion of Beijing’s US$3.2 trillion in foreign reserves, the bulk of which are held in safe but low-earning assets such as US Treasury debt. The fund says it has assets of US$409.6 billion, which includes stocks in a wide array of major Western companies. CIC says it makes investments based on commercial principles. It usually buys small minority stakes in foreign companies to avoid stirring political tensions. The fund’s annual report in June said it is essentially fully invested, with only 4 per cent of its assets in cash. The talks in Rome were attended by Italian Finance Minister Giulio Tremonti, CIC chairman Lou Jiwei and officials of China’s foreign currency regulator and the Cassa Depositi e Prestiti, an Italian government investment vehicle, the Journal said. Italy’s financial crunch has prompted Rome to consider selling stakes in major state-owned companies such as power utility Enel or oil and gas supplier Eni, according to news reports.

Police have arrested 32 people suspected of producing and selling old cooking oil that has been illegally collected from restaurant gutters, according to a Ministry of Public Security statement Tuesday (in Chinese). The statement said officials seized 100 tons of the recycled oil, which can contain carcinogens and other toxins that are harmful when consumed by humans. It said they also broke up a criminal network operating in 14 provinces and shut production sites where the oil is repurposed. The suspects were caught in a swill-oil crackdown that launched in mid-July and is part of a broader effort to improve China’s food safety, which remains a major headache for the country’s leaders even three years after its largest scandal erupted. In 2008, milk contaminated with the industrial chemical melamine killed at least six children and caused illnesses in nearly 300,000 others. Cooking oil is practically sacred in China, where nearly every recipe requires a wok to be filled with it. Those people drudging it up from the drains and sewers know its worth in an economy in which rising food prices have hit restaurants and consumers hard. They sift old pieces of food from the oil and then resell it to restaurants and vendors looking to cut costs. Economic incentives are typically the drivers for food-safety violations, according to Sang Liwei, a Beijing director at the nonprofit organization Global Safety Forum. It’s likely that most of those involved have no direct intention to hurt others, but they do so in attempting to protect their pocketbooks, he said. Food additives, used to make produce bigger and meats leaner, have been the culprits of food-safety scandals in recent months. In July, a court in central China’s Henan province sentenced a man to death with a two-year reprieve for producing and dealing clenbuterol after hundreds of people were sickened from eating pork tainted with the chemical, which speeds muscle growth in pigs but can cause headaches in humans. Gutter oil has been a recurring problem for Chinese officials over the past few years. Most recently, in June, it emerged on store shelves for direct sale to consumers, according to the state-run China Daily. Recycling waste oil has become a profitable business in many markets. In the U.S., many restaurants sell it to bio-fuel users, cosmetics producers and animal-feed makers. Some have even had to fend off thieves looking to make a buck on its resale. Many in China are hoping that in the years to come, it won’t be resold to food makers.

Hong Kong*:  Sept 13 2011 Share

Former Legislative Council president Rita Fan Hsu Lai-tai has expressed her support for Chief Secretary Henry Tang Ying-yen, but she kept mum when asked whether Tang is her "favourite candidate" to be the next chief executive. Fan would give her unconditional support to her favourite candidate if he takes "substantial action" to make clear his determination to run for the city's top job, she said on a radio talk show discussing next year's election. "If Tang resigns from his position, this would be an important decision and there is no way back," said Fan, a member of the Standing Committee of the National People's Congress. She had previously signalled her consideration in running for the top job. However, Fan (pictured) declined to say whether Tang is her favoured candidate. "I am his [Tang's] supporter, but I don't belong to his [campaigning] team," she said. On Thursday, Fan said she would not run if her "favourite candidate" decided to run, and that she would give the candidate her unconditional support. On Friday, Executive Council convenor Leung Chun-ying said he would resign from his post "at an appropriate time" to prepare for his election campaign. Fan said yesterday the public should not "pour cold water" on Leung and should give him an opportunity to contest. "Leung has been preparing for a long time to make this move [signalling his intention to run]," Fan said. "I think it's a good thing for the public to have more choices." A spokesman for Tang said he thanked Fan for her support and encouragement, adding that he would continue to work hard in the future. Meanwhile, a Chinese-language newspaper said - quoting unnamed sources - he would resign next Monday at the earliest, when Chief Executive Donald Tsang Yam-kuen returns from a business trip to Europe. A spokesman for Tang said he would not comment on speculative reports.

It is not his charm that will disarm you, but a strength that no science can explain. At 78, wing chun grandmaster Chu Shong-tin is a soft-spoken man of slight build, but those who know him will speak of a physical power they have never witnessed before. "I felt power from what seemed to be an old, frail man," said Nima Khezrnejat, who moved from Australia to Hong Kong for the Chinese martial art and has opened a wing chun gym in Central. The 27-year-old described Chu's power as "something that you only hear about in movies or books". He trains at Chu's studio in Sham Shui Po, in an old residential building on Cheung Sha Wan Road. Chu, who trained under the legendary martial arts teacher Ip Man for 14 years and lived with him for five years, teaches three weeks out of every month. There is no formal structure to the class, attendance is by invitation only and there is a communal dinner break, which creates a sense of family among the students. His journey into this concept-based form of self-defence started in the most ordinary of settings in Hong Kong - a restaurant - but through an extraordinary teacher. Chu was 17 and working as a secretary at a restaurant that Ip, who also taught Bruce Lee, used for classes. "I just observed the classes," Chu said. But wing chun struck a chord, and Chu soon became a student. "When I trained under Ip Man, I was young, my body was thin and my health was not good." On Ip's advice, he took up the relaxation style of wing chun, as opposed to one based on muscular force. Chu's 37-year-old son Horace said the sport had had a profound effect on his father's life. Chu was diagnosed with late-stage cancer and told he did not have long to live. But since that prognosis, Chu has recovered, and doctors have been unable to explain what happened. "The theory of his wing chun style is impossible to explain with modern science, by physics," his son said. Once Chu Shong-tin briefly met Lee. The man who later became a movie star had asked Chu for help on building a dummy to practise wing chun. Chu described Lee, who died in 1973, as "clever and active". In Chu's 40-odd years of teaching, he has guided many students, including Sebastian Soza, 30, who says it is not easy to grasp wing chun. "You're trying to build the intention of the movement and until you feel it, that makes the difference."

A second company wants to erect a giant Ferris wheel on the Central waterfront. Dubai-based Freij Entertainment International confirmed yesterday that it was in negotiations with the Hong Kong government to raise a transportable, 60-metre-high, 42-cabin Ferris wheel, following the joint bid submitted by two British companies, The Hall Organisation and Great City Attractions Global. Both applications are under consideration by the government for a project that reportedly will be worth around HK$95 million. Freij's Ferris wheel is already in Hong Kong, where, according to a company spokesman, it has been stored after it was dismantled in Malaysia. According to reports on the website of the Malaysian newspaper The Star, the "Eye on Asia" Ferris wheel was first erected in Kuala Lumpur, and then in Kota Laksamana, on a site next to the Malacca River. It was taken down in October last year after a business dispute about tenancy. Billed as the "biggest entertainment company in the world", Freij Entertainment International runs theme parks and carnivals in Europe, Africa and the Persian Gulf. "We are the biggest Ferris wheel and carnival operators in the world," chief executive Freij Elzein said. "Currently we are the Ferris wheel suppliers for La Grande Roue de Paris and are organisers of the 2011 Expo Carnival in Shanghai. We've invested a lot of money in this and we've gone through due process concerning all the relevant government departments. "It's a taken a long time and we have been through a lot of red tape, but we've shown a lot of patience. We've done everything the proper way and are confident that our perseverance will be rewarded." But a spokesman for Hall Organisation and Great City Attractions, which had appeared to be the sole contender for the project, said the company was still confident it would get the nod. "We are aware that there are other companies interested in locating wheels in cities," he said. "However, as the market leader, we have the quality equipment, funding and extensive experience as professional operators to deliver a quality product." The spokesman said the Hall Organisation and Great City Attractions firm would work in partnership with Amstar International Holdings, a Hong Kong event management company. They would help to provide a strong local management team consisting of "a unique blend of professionals with long-term local and international experience in the leisure, event, marketing and finance industries". The Hong Kong project is part of an international expansion plan to add another 25 wheels to their fleet in the world's most prestigious cities and locations. "All of our host cities will benefit from worldwide marketing and extensive media coverage, as there is so much public and media interest in giant observation wheels," the spokesman said. A government spokesman confirmed that applications for short-term tenancy in Central had been made by the companies and were being considered.

The Tribute in Lights is illuminated between the Williamsburg Bridge (L) and One World Trade Center (R) for a test prior to events marking the 10th anniversary of the 9/11 attacks on the World Trade Center in New York, Sept 10, 2011. National and city leaders will commemorate on Sunday the ten-year anniversary of the attacks of Sept 11, 2001 with a ceremony unveiling a memorial and museum. 

Veteran Hong Kong actress and singer Deanie Ip (葉德嫻) won the best-actress award at the Venice Film Festival on Saturday night for her moving portrayal as an aging servant, or amah, in “A Simple Life” (桃姐). It was an emotional moment for the 63-year-old, who returned to the screen for the first time in 10 years to take on the role. Director Ann Hui’s (許鞍華) master-servant story, which also stars Andy Lau (劉德華), received strong reviews that singled out Ms. Ip’s performance. At the film’s red-carpet premiere last week, the three received a lengthy standing ovation from the audience. The film is about the lifelong relationship between a film producer — played by Mr. Lau — and his household’s amah, called Ah Tao, who has cared for several generations of his family. After Ah Tao suffers a stroke, they reverse roles and he looks after her, eventually realizing that she has been more than just a servant but a much-loved member of the family. The story is based on the true story of the film’s producer, Roger Lee (李恩霖). Though it is Ms. Ip’s first film in a decade, she has continued to work in television and music. It’s also the 10th movie that Ms. Ip and Mr. Lau have made together, in a professional collaboration that dates back more than 25 years. In an interview with The Wall Street Journal in Venice a few days before receiving her award, Ms. Ip addressed the reasons for her long break from films. “I think nobody wants me, because I’m very difficult,” she said. “I am a very demanding person, and people are not happy with what I demanded,” Ms. Ip added, explaining that she detests the smoke-filled environment of movie sets. She managed to institute a no-smoking ban on the set of a TV series she made a few years ago. “I just had it written in my contract,” she said. “Nobody was allowed to smoke in the dressing room, in the studio or around me. Isn’t that great?” But it was a victory that Ms. Ip wasn’t able to carry over to “A Simple Life.” “Even our director smoked like a chimney,” she said. So why did she agree to make the film? “Because of him,” she said, nodding to Mr. Lau. “I wanted to work with him again.” “So she compromised,” laughed Mr. Lau, who is one of the film’s producers. “She didn’t have any requirement about smoking.” Despite the acclaim over her performance, Ms. Ip said she doesn’t have any new film projects on the horizon. “I’m a very choosy person. I have to choose what I really like,” she said, “and there’s nothing I like at the moment.” But she does predict more films in her future, and she wants to take a stab at something new. “I would like be a director,” she said, and make “films about relationships.”

 China*:  Sept 13 2011 Share

Champion of China Pageant final of 61st Miss World unveiled - Chinese Liu Chen will represent China to compete at the world final in London, Britain.

Chinese Ethnic Games opens in SW China's Guizhou - Opening ceremony for the 9th National Traditional Games of Ethnic Minorities of China was held at the Olympic Center Stadium in SW China's Guiyang on Saturday.

The mainland's trade surplus fell sharply last month, as exports pulled back from a record high and imports jumped, a sign the world's second-largest economy is feeling the pinch from weaker global growth while domestic demand remains resilient. Mainland exports rose 24.5 per cent in August from a year earlier, accelerating from the 20.4 per cent rise in July, the customs administration said yesterday. That was stronger than expectations of 21.6 per cent in a Reuters poll of economists. However, month-on-month figures showed exports cooled a bit last month when debt worries in the US and Europe fanned fears of a renewed global downturn. Mainland exports totalled US$173.3 billion in August, down from July's record high of US$175 billion. August imports hit a record high of US$155.6 billion, up 30.2 per cent over a year earlier and soaring beyond expectations of 21.5 per cent. That produced a trade surplus of US$17.8 billion in August, down 43 per cent from in July and the first time it had narrowed in six months. "The European debt crisis and slowing US growth will be reflected in China's export data in the next few months. I expect Chinese export growth to be below 10 per cent in the fourth quarter," said Shen Jianguang, an economist with Mizuho Securities Asia in Hong Kong. "Strong import growth is driven by China's strong demand for consumer goods, luxury items, iron ore, crude oil, soya beans as well as corn," he said. The mainland's key commodity imports, including crude oil, copper and iron ore, all rose last month from July, adding to evidence that the world's second-largest economy was still going strong despite slackening growth in the West. Although the pace picked up in August, the mainland's export growth has slowed from the 37.7 per cent rate recorded in January, suggesting its economy is not immune to global headwinds. Exports to the US grew 12.5 per cent last month from a year earlier, quickening from July's 9.5 per cent, while growth of exports to Europe was steady at 22.3 per cent. Annual growth of Chinese exports to Russia and Brazil both exceeded 38 per cent last month, while sales to Indonesia, Vietnam, Thailand, Saudi Arabia and Mexico topped 35 per cent. Chinese exporters have tried to expand their market shares in developed economies and diversify into fast-growing emerging markets, though they face challenges from rising costs and a strengthening yuan. "This shows our strategy of diversifying exports is working. It is very helpful in avoiding big fluctuations in exports and maintaining steady export growth," state television quoted a customs official as saying. In dollar terms, last month's exports to the US were little changed from July's. They were down modestly to the EU. The narrower trade surplus in August would help tackle inflation, Huang Guohua, an official at the customs agency, said. The trade surplus, along with capital inflows, has been a source of excess liquidity in the economy and contributed to inflation risks that Beijing has been trying to contain.

The Three Gorges Dam, the world's largest water-control and hydropower project, started collecting water yesterday in an effort to fill it up to its maximum 175 metres by the end of October, state media reported. The dam had been discharging water in the past four months downstream to ease the worst drought in 50 years, which had dried up many parts of China's longest river, the Yangtze. Four-fifths of the 22 billion cubic metres of water in its reservoir, located in central Hubei province, were used up within one month from May to ease the aridity in central and southwesterns regions. The dam was ordered to release the water after local governments downstream complained in the wake of the drought, which started to plague the middle and lower Yangtze at the beginning of the year. Many people blame the massive dam, already controversial, for drying up sources and for triggering climate change, resulting in little rainfall. The dam was now discharging less water to the lower Yangtze, Xinhua yesterday quoted an official with the project as saying. The operation could last until the end of October or November. Xinhua said the water level had been at 152 metres, and was expected to rise by 23 metres. It would be the second time the reservoir had full water storage, the report said. The first was its first full-capacity test, in October last year. Operating at full capacity should give full play to the dam's functions of generating hydroelectric power and delivering water to the lower reaches to alleviate spring droughts. The facility mainly comprises the dam, a five-tier ship lock and 26 hydropower turbogenerators. The Three Gorges Dam project was launched in 1993 with a budget of 180 billion yuan.

Hong Kong*:  Sept 12 2011 Share

Chief Secretary for Administration Henry Tang Ying-yen is very likely to quit in a month to pave the way for his campaign in the chief executive election. Tang may make the announcement well before Chief Executive Donald Tsang Yam-kuen delivers his final policy address on October 12, a source told Sing Tao Daily, sister paper of The Standard. Tang, the source said, has received Beijing's blessings. Tang plans to resign ahead of the policy address to avoid any controversies stemming from it and which may further lower his popularity. Recent opinion polls show he may face a strong challenge from possible rival Executive Council convener Leung Chun-ying, whose popularity has been rising steadily. The source did not say when Tang, 59, would declare his candidacy for next March's election, at which the 1,200-strong Election Committee will select the next leader. The source said Tang's campaign team may include Bauhinia Foundation Research Centre chairman Anthony Wu Ting-yuk, former Legislative Council secretary general Ricky Fung Choi- cheung as well as lawmakers Lam Tai- fai and Jeffrey Lam Kin-fung. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui- lung, the source said, will probably take over as chief secretary after Tang's departure. The source said Secretary for Education Michael Suen Ming-yeung is the most experienced political appointee in the team but is probably not a good candidate for chief secretary considering his health problems. >Meanwhile, another hotly tipped election candidate, Rita Fan Hsu Lai- tai, when asked last night by reporters about election aspirants said: "At the present moment, there is only one [candidate I support]." She said if someone she finds acceptable expresses the will to vie for the top post, she will throw her support behind him or her. As such, she said, she will not contest the post. But if she finds the one who comes forward unacceptable, she will not rule out standing for election. Fan earlier said the next leader must be experienced in governance, and that Tang has been working in the government for many years, implying that he may be her ideal candidate. However, when asked last night whether she meant Tang, she declined to comment.

HK chief of HSBC quits to join BlackRock - Days after job cuts news, Mark McCombe says he will be asset manager's Asia-Pacific chairman. Mark McCombe, HSBC Holdings (SEHK: 0005)' Hong Kong chief executive, has resigned to join asset management firm BlackRock as chairman of its Asia-Pacific region. The news came after HSBC said it will slash 3,000 jobs - 10 per cent of its staff - in the city over three years. HSBC said the job cuts, some of which would come through attrition, were being made to make the Hong Kong operation more efficient. McCombe, who was the London-based chief executive of HSBC's global asset management team for three years, will take the place of Rohit Bhagat, whose two-year term as chairman is ending. McCombe will become a member of the company's global executive and global operating committee and will report to Laurence Fink, BlackRock's chairman and chief executive. "With a leader of Mark's calibre joining our team, I am confident we can accelerate the growth of our business and brand in Asia," Fink said in a statement. McCombe also resigned as a non-executive director of Hang Seng Bank (SEHK: 0011, announcements, news) yesterday. He said there was no disagreement with the board or any matter relating to his resignation that the bank's shareholders should know about, according to a statement filed with the stock exchange. McCombe joined HSBC in 1987. Early in his career, he was chief executive of HSBC Private Bank (UK), overseeing wealth management in Britain and northern Europe. He was also chief executive of HSBC Private Bank (France) and deputy chief executive of HSBC Turkey. Anita Fung, HSBC head of global banking and markets, Asia Pacific, will take McCombe's place as the bank's chief executive in Hong Kong from Monday. Fung joined HSBC in 1996 in Hong Kong as head of domestic markets, treasury and capital markets. She was named head of global markets Asia-Pacific in 2005 and was appointed a group general manager in 2008. Before she joined HSBC, Fung worked with Standard Chartered Bank in its treasury and capital markets business, holding a number of positions including director of sales and trading in its investment banking division. Shares in HSBC rose 30 HK cents in Hong Kong yesterday, or 0.46 per cent, to close at HK$64.95.

Surprise reunion gives university alumni a second chance at love - May Lam and Teddy Lam will marry today at the Ward Methodist Church in Yau Ma Tei. Teddy Lam and May Lam were reacquainted quite by accident in front of the Legislative Council Building three years ago and exchanged business cards. As students they lived in the same dormitory at the University of Hong Kong, but they hardly spoke. "In fact, we barely remembered each other's name then," says Teddy. Now, things are very different. Teddy, a broker with a local bank, and May, a human resources trainer, both 27, are to marry today at the Ward Memorial Methodist Church in Yau Ma Tei, followed by a banquet at the Hyatt Regency Hotel in Tsim Sha Tsui to celebrate with 250 friends and relatives. The unexpected reunion happened while both were working in Central. After the card swap, neither of them made any effort to call and say hello. Call it destiny - two weeks later, Teddy saw an article in a local paper in which May was featured in a career advice story. Intrigued, Teddy found May's card and gave her a call. The call of congratulations turned into a dinner date. But if May's version of the date is anything to go by, it's a wonder their relationship went any further. "It was more like a job interview," May says. "He shot questions at me about my family, my monthly salary and my work prospects. It wasn't romantic at all." In his defence, Teddy says he's always been clumsy around women he likes. "Meeting her again after so many years, I really wanted to get to know her," he said. His honesty, though, struck a chord with May, who agreed to go on a second date with him. And then another. And another. After almost two months, love blossomed. In February 2009, Teddy confessed his affection after another date. But as they walked to her bus stop, he was so nervous he couldn't make the words come out. "I knew something was up when he walked me to the bus stop, but he didn't say anything," May says. After the bus pulled away, May's cellphone rang. Teddy asked her to be his girlfriend, and they've been a couple ever since. But things haven't always gone smoothly. They had a big fight in April last year and decided to not to see each other for a month. May booked a holiday to Malaysia with her family. "I can't remember what we fought about. It was tough without her," Teddy says. He soon realised how much she meant to him and decided to surprise her with his marriage proposal. Teddy asked May's tour guide to deliver three letters to her on the flight back to Hong Kong - to May, her parents and her elder brother. It was a great surprise, and May felt tears welling up as she read Teddy's words. There was no mention of marriage in the letters. But when the flight landed, Teddy was there at the gate - holding flowers and a big banner that read: "Will you marry me?" May couldn't believe her eyes. But when she saw Teddy down on one knee, taking out the ring, the tears flowed, and she said yes. Now, Teddy looks at their life together with a mixture of realism and romance. "I don't think anyone's perfect," he says. "Everyone has their own flaws, and every couple has their own problems. But what matters is that you're willing to deal with it together."

Executive Council convenor Leung Chun-ying yesterday became the first of three widely-tipped prospective candidates to indicate his intention to run in next year's chief executive election. "I am going to resign from the Exco at an appropriate time, according to the work and progress of my election preparation," Leung said. "You know there are some legal restrictions once you declare your candidacy," he added, referring to the fact that this was not his formal declaration. On Thursday, former Legislative Council president Rita Fan Hsu Lai-tai said she would not run if her "favourite" candidate did. Chief Secretary Henry Tang Ying-yen, who is seen as Fan's favourite, is expected to resign within a month to begin his campaign for the election on March 25 next year. Leung, a 57-year-old former surveyor, has been building a strong case for his bid. "Two years of community work has boosted my confidence," Leung said. "I do not only seek support from a few sectors, but from the various social strata ... I have seen a substantial increase in my popularity ratings." While some doubt that Leung has secured Beijing's blessing for his participation - Tang is perceived as having a better chance of being backed - he said having two candidates in the race would be beneficial for Hong Kong. "The election will offer a chance for two candidates to display their governing blueprints to all Hongkongers, not just the 1,600 members of the election committee," Leung said, adding that such a campaign would be "proactive and meaningful". Chan Wing-kee, an influential Tang supporter, dismissed Leung's view, saying that one candidate would be enough. "The pro-government camp should stay united, not split," said Chan, a Hong Kong delegate to the Chinese People's Political Consultative Conference. "[Having two candidates] will bring too much of a struggle to society, which is harmful for Hong Kong." While Leung did not specify when he would resign, Ivan Choy Chi-keung, a political scientist at Chinese University, said it should be as soon as possible. "He has been in an awkward position, as he has been critical of government policies despite being part of the government," Choy said. "He needs to keep a distance from the administration's poor record." A person close to Tang said the chief secretary would resign before Chief Executive Donald Tsang Yam-kuen's policy address on October 12, to distance himself from the administration, as he "was unsure how the public would respond to the policy address". Fan, a member of the Standing Committee of the National People's Congress, refused to comment yesterday. Lawmaker Regina Ip Lau Suk-yee, chairwoman of New People's Party who has dropped strong hints that she may run "if there is no suitable choice", welcomed Leung's decision, but refused to comment on his suitability.

'Duo Mingjin' at the 68th Venice Film Festival - Director Johnnie To (2nd R) poses with cast members (from L-R) Lau Ching Wan, Stephanie Che, Myolie Wu and Denise Ho during a photocall for their film "Duo Mingjin" (Life Without Principle) at the 68th Venice Film Festival September 9, 2011.

Culture Affairs Bureau of Macao Special Administrative Region (SAR) and the Macao Heritage Ambassadors Association jointly launched the Tour of Dr. Sun Yat Sen's Macao Revolutionary Trail on Saturday to mark the 100th anniversary of Xinhai Revolution. According to the bureau, aiming to showing participants the places where were once familiar to the "Father of Revolution", the route of the tour includes Dr. Sun Yat Sen Memorial Hall, the Lou Lim Ioc Garden, Meeting Place of the Tong Meng Hui Union and the Kiang Wu Hospital, where Dr. Sun Yat Sen once worked as a volunteer doctor decades before Xinhai Revolution, also known as 1911 Revolution. Dozens of students participated in the guided tour, which took place at 3 p.m Saturday. As Dr. Sun Yat Sen, forerunner of the Chinese revolution, promoted revolutionary activities in Macao and left his indelible mark in different places, the guided tour was expected to provide a deeper understanding on the close relationship between Macao, Dr. Sun Yat Sen and his revolutionary causes, said Zhou huizhu, Chief of Macao Heritage Ambassadors Association. According to the bureau, the tour would be held at 3 p.m. every Saturday from Sept. 10th to Oct. 29th and people of all nationalities are welcome. To commemorate the centenary of the Xinhai Revolution this year, the Cultural Affairs Bureau will also hold a series of activities, including large-scale thematic exhibitions, conferences and seminars as well as two musical events. It was hoped that this wide range of popular and academic promotional programs would not only enhance local residents' understanding of Dr. Sun Yat Sen and the 1911 Revolution in China, but also arouse public interest in the history and culture of Macao by revealing the important role the territory played in the 1911 Revolution, said the bureau.

 China*:  Sept 12 2011 Share

As the Mid-Autumn Festival approaches, moon cakes sales are starting to pick-up, yet the export of Cantonese moon cakes continue to face tough challenges, such as restrictions from foreign countries on moon cake imports and food additives, Guangzhou export officials said. As of Sept .8, a total of 1,500 tons of moon cake valued at 11 million U.S. dollars had been exported to oversea countries. Although the export volume of moon cakes increased compared to last year, the growth rate has obliviously slowed. Guangdong province is renowned for its Cantonese moon cake, which is known for its high quality and unique flavor, and that is why it is one of the biggest moon cake manufacturing bases and an important export center. However, for years, moon cake export has been subject to the "green dam" set up by many countries to limit the entry of Chinese moon cakes into their markets. In recent years, mailed moon cakes have been prohibited in some countries, such as France, Germany, Thailand and Sweden. This year, this list was expanded to 33 countries. In addition, more than 30 countries have strict regulations regarding the importing of moon cakes or place rigid limitations on food additives. Some of the small and mid-sized moon cake manufacturers are facing the tough task of finding ways to export their products because they cannot meet the rigid requirements imposed by some foreign countries. Affected by the significant increase in raw material costs, wages increases and other factors, moon cake production costs have risen sharply, drastically shrinking the profit margins of export enterprises. In order to improve the moon cake imports, some experts suggested that the industry should explore new development methods of moon cake production in line with modern Western food nutrition standards. At the same time, they call for the establishment of industrial standards for the sector.

Chinese President salutes teachers ahead of Teachers' Day - President Hu Jintao sent festive greetings to teachers ahead of national Teachers' Day, which falls on Sept. 10, during his visit to Beijing No. 80 High School on Friday.

Gucci has 44 shops in 30 mainland cities, including this Shanghai store. Gucci planning to step up mainland expansion drive - Demand from consumers is strong and Chinese tastes are becoming more sophisticated, Italian brand says. Italian luxury goods maker Gucci is speeding up the pace of expansion on the mainland, planning to open more than 10 shops there next year, with more than half in second- and third-tier cities. The maker of leather handbags and high-end clothing said Chinese consumers' demand for luxury goods was very strong and their tastes were becoming more sophisticated. Aside from major cities, the company expects to expand its sales network to cities seen as tourism destinations and regional hubs. Luxury goods consumption on the mainland is expected to grow 18 per cent annually over the next four years, according to a report by the Hurun Research Institute. Total market value would hit 180 billion yuan (HK$219.5 billion) in 2015, accounting for 20 per cent of the global luxury market, it said. Francois-Henri Pinault, chairman and chief executive of PPR Group, parent company of luxury brands including Gucci, Yves Saint Laurent and Bottega Veneta, said: "No country in the world has enjoyed growth as fast as China." He said during a visit to Beijing this week that the Chinese market had exceeded the United States to become the biggest revenue contributor for the group in terms of luxury goods sales as of the end of June. Gucci, the flagship fashion brand under the group, had 44 directly-run shops in around 30 mainland cities, eight in Hong Kong and two in Macau as of June this year. Founded by Guccio Gucci in Florence in 1921, the luxury goods brand has been accelerating the pace of shop openings since entering the mainland in 1997. It will open more than 10 shops next year, compared with nine new shops this year and seven last year. However, it would slow the pace after next year because it would be able to cover most of the places it hoped to enter by that time, the company said. Its major rival, Louis Vuitton under French luxury giant LVMH Group, now runs 45 shops on the mainland, according to the brand's website. Despite the robust growth, Gucci said the China market remained challenging due to soaring labour costs and rent levels. In addition, the markets in second- and third-tier cities on the mainland were still highly fragmented and lacked high-quality shopping venues. There was also increasing pressure on domestic after-sales services as more Chinese shoppers were bringing the goods they bought overseas to be repaired locally, it added. Gucci reported revenue of €1.47 billion (HK$15.8 billion) for the six months to June, up 21.6 per cent on a comparable base year on year.

Zhang Yimou Previews ‘The Flowers of War’ - Twenty minutes of footage from “Raise the Red Lantern” director Zhang Yimou’s latest film was screened for prominent U.S. film distributors and the media at the Toronto International Film Festival Friday morning. “The Flowers of War,” a World War II drama whose working title was “Heroes of Nanking,” stars Christian Bale as an American caught in the former Chinese capital amidst the infamous “Rape of Nanking” by the Japanese Imperial Army, in 1937. The American becomes an unlikely savior for two very different groups trapped in a Catholic church: a bevy of young schoolgirls and 13 notorious courtesans. Based on the novel “13 Flowers of Nanjing” by Geling Yan, “Flowers” was adapted by Liu Heng, who previously wrote the screenplays for Mr. Zhang’s “The Story of Qui Ju” and “Ju Dou.” The movie was produced by Mr. Zhang’s long-time associate Zhang Weiping. The $100 million budget makes “Flowers” mainland China’s most expensive production to date. The movie is to be released in China in December and is currently looking for a U.S. distributor to play the film in time for awards season. 

China Blows Fred Tomaselli’s Mind - Fred Tomaselli — gregarious and warm in cargo shorts and a Hawaiian shirt — is like your dad, if your dad had an encyclopedic knowledge of music and a solo show at the Whitney. The 55-year-old American artist, who is represented by James Cohan Gallery in New York and White Cube in the United Kingdom, is best known for his paintings on wooden boards involving crushed drugs and heavy use of resin. According to the gallery, Mr. Tomaselli’s works sell at auction for $200,000 to $300,000, with a recent sale breaking the $900,000 mark. He, along with fellow Americans Philip Taaffe and Terry Winters, is participating in “Alchemy & Inquiry,” at Cohan’s Shanghai outpost, which opens on Friday. In Shanghai for the show’s opening, he spoke with The Wall Street Journal about his work, China and being in a record club with Rick Moody.

China's trade surplus narrowed in August on surging imports, a positive sign for the global economy as it indicates that Chinese demand remains strong. The surplus fell to $17.8 billion in August from $31.5 billion in July, and was well below expectations for a $23.4 billion surplus in an earlier Dow Jones poll of economists. Imports grew rapidly, rising 30.2% in August from a year earlier, data from the General Administration of Customs showed Saturday. That was up from the 22.9% rise in July and higher than economists' median forecast for a 21.0% increase. Resilient Chinese demand for imports is likely to be a welcome development for international markets, which have come to depend on China as an engine of global growth. But Goldman Sachs economist Yu Song said the outlook remains highly uncertain, and that China could still be pushed into loosening its policy settings if major economies such as the U.S. and Europe deteriorate rapidly. A lower Chinese trade surplus, if sustained, could weaken the case for rapid appreciation of the yuan, Song added. "Last month the large surplus provided ammunition to those in Beijing arguing for faster appreciation," he said. The yuan rose at an annualized rate of around 12% against the dollar in August, but most analysts doubt that this pace of appreciation will be maintained. In the eight months to August, China's trade surplus came to $92.7 billion, down 10% from a year earlier, the Customs bureau said. Imports of key industrial metals were strong, with total copper import volumes rising 11% from a year earlier and iron ore imports surging 32.5% on year. Traders said that relatively low spot iron ore prices in July had encouraged extra shipments. Exports also performed relatively well, up 24.5% from a year earlier, compared with a 20.4% rise in July and an expected increase of 21.6%.

China's inflation pulled back in August from a 37-month high, giving the government scope to hold off on further tightening of monetary policies in the face of a slowing global economy. The Consumer Price Index (CPI), the key gauge of inflation, rose 6.2 percent year-on-year, cooling from a three-year high of 6.5 percent in July, the National Bureau of Statistics (NBS) said on Friday. "The modest easing in August was led by the slower pace of the rise in food prices. And the pace of gain in non-food CPI stayed modest," JP Morgan said in a research note. Food prices, which usually contribute the most to the CPI hike, increased 13.4 percent in August, slower than the 14.8 percent in July, the NBS said. Non-food inflation increased to 3 percent, compared to 2.9 percent in July. In seasonal adjustments, the pace of gain in non-food CPI had been steady. In the non-food CPI, the housing component had been easing for the past two months, with a decline of 0.2 percent month-on-month in August and July respectively, NBS statistics show. In addition, the sequential trend in Producer Price Index (PPI) continued to ease in August, with a fall of 0.1 percent month-on-month, suggesting the easing of pipeline inflation pressure in the next few months. "As the July CPI figure had likely marked the peak in the latest inflation upturn, the headline CPI inflation rate is likely to moderately further going ahead, especially going into the fourth quarter," according to JP Morgan. Lian Ping, chief economist at the Bank of Communications, said the dip in August is largely due to favorable comparisons against a year ago, and the figure will continue to slide further in September. Such a trend means repeated interest rate hikes and other curbs meant to chill the overheated economy are taking hold, giving the government greater leeway for policies aimed at keeping economic growth on track when the global economy is slowing down. China's central bank has raised interest rates five times and lifted banks' reserve requirement ratios (RRR) nine times since October. Though these measures have cooled credit growth, one of the root causes of inflation, they have also burdened many small and medium enterprises. "The central bank is expected to take a prudently balanced monetary policy in the coming months," said Lian. According to a report from Nomura Securities, the August data revealed on Friday adds further credence to the notion that China is experiencing a soft economic landing. Industrial output rose 13.5 percent in August from a year earlier, slowing from 14 percent in July. Retail sales growth eased to 17 percent from July's 17.2 percent. Fixed-asset investment, a primary driver of the country's economic growth, rose 25 percent in the January-August period from a year earlier. That also marked moderation from 25.4 percent in the first seven months. "It also reinforces our view that monetary policy will remain in a 'wait-and-see' mode for the rest of this year," said the research note. For Zuo Xiaolei, chief economist at China Galaxy Securities Co Ltd, it is still too early to call for monetary easing, such as a system-wide RRR cut, rate cut or a bigger loan quota. Premier Wen Jiabao, quoted in a recent article in Qiushi magazine, reiterated that stabilizing prices is a top priority for the government this year. Robert Zoellick, president of the World Bank, also said on Monday that inflation was "the most important" issue for China, but he believed that "the Chinese government has already started to take measures and is moving in the right direction".

Hong Kong*:  Sept 11 2011 Share

Zhu berated 'abusive' HK media, book reveals - Newspaper articles were harsh and sarcastic, he told city's delegates at an annual session of the NPC. Former premier Zhu Rongji criticised Hong Kong's media, describing them as being filled with invective, during a session of a Hong Kong delegation to the National People's Congress in March 2001, according to his book, which was published yesterday. The four-volume work, Record of Zhu Rongji's Talks, is more than 2,000 pages thick and is published in Chinese only. It includes more than 300 articles of the retired leader's speeches, talks, letters and written instructions from 1991 to 2003, when he served as vice-premier and premier. Zhu, 82, was known to read several Hong Kong newspapers every day. He said he found that many of the articles hurled invective at him, while he found no such criticism in the mainland's censored media. "Criticism can be sharp, and this is what press freedom means. But it is better that [you] are not harsh enough - do not hurl abuse and speak sarcastically," he told the Hong Kong delegates at the national legislature's annual session. He said he laughed when he read that one Hong Kong newspaper article described him as being like a godfather of the Cosa Nostra mafia in Italy. "Do not let such inexplicable matters affect Hong Kong's stability," he told the delegates. In his first cabinet meeting as premier, Zhu, known for his fierce sense of probity and no-nonsense style, showed his disdain for political dissemblers by asking his cabinet members to serve the people wholeheartedly and truthfully, even if it meant offending some bureaucrats and others in power. "If this government is full of [these types of people] who try not to offend anybody, we will have only done a disservice to the people," he said in a State Council meeting in March 1998. In the last cabinet meeting he chaired, in early 2003, he said that, as premier, his top concern was to improve the lives of the people. "What is the premiership for, if I, as a premier, do not concern myself with people's hardships and sufferings," he said. Zhu added that whenever he came across such hardships, through internal reports or the mass media, he would immediately call up the related minister or the regional party secretary to try to solve the issues. Before his retirement in March 2003, Zhu expressed his concerns about the overheating economy, which was largely due to regional governments' rush to develop property, and about industrial developments such as car manufacturing. Both sectors have proved to be hot-button issues for his successor, Wen Jiabao. Property and car production have become two pillar industries supporting the mainland's double-digit growth and have been the main sources of revenue for local governments in the past decade. Issues arising from these two areas have also become the key causes of social, economic and environmental problems today.

The repercussions of the 9/11 terrorist attacks were felt all over the world and Hong Kong was no exception. Today, a decade on, city life has changed subtly. Immediately following 9/11, Hong Kong companies wanted security reviews of their facilities and increased surveillance around their buildings, according to Douglas Renwick, country president of Securitas in Hong Kong. Staff were trained in terrorism awareness and reporting requirements. And new buildings being built were reviewed to ensure that if hit by planes, the structures would remain standing."9/11 was a tragic incident and a real wake up call for everybody about what terrorism looked like. It was a real sea change in what governments had expected terrorists to do. And because of that I think most governments and large enterprises have revisited and rethought what security looks like," Mike Groves, country manager for Hill and Associates, a security firm, in Hong Kong. "But probably most people in Hong Kong wouldn't notice the difference." Compared with 10 years ago, liquids could only be taken on flights in small quantities, travel to high risk countries like the US and Australia require additional checks and random searches have increased, according to Sidney Chau Foo-cheong, executive director of Aviation Security Company, which overseas all of Hong Kong International Airport's security. But for all the invisible changes, 9/11 is not in the forefront of the public consciousness. Security policies were upgraded to fall in line with new regulations. "There are so many things that go on in the world every day including terrorist attacks. You read about them in the newspaper but you generally don't think you're terribly vulnerable here in Hong Kong," one Hong Kong based commercial pilot who flew regularly to North America, including New York, in the last decade, said. "That's probably to do with the political climate here. We don't have a foreign policy, we don't affect other people in other places and therefore they're not angry at us." Another experienced commercial pilot lamented the fact that the door to the flight deck now has to be closed to passengers. "Since September 11 one of my greatest joys was no longer possible. We used to accept visitors to the flight deck and sharing your intriguing job with kids and adults alike was a great delight," the pilot said. "Now we are bogged down with procedures. That professional carefree feel has faded." Muslims around the world suffered from distrust and attention, but not so much in Hong Kong. "The only thing I observed was the awareness of Islam among the local community and foreigners," Saeed Uddin, chairman of the Incorporated Trustees of Islamic Community Fund in Hong Kong, said. If anything 9/11 raised their profile, with the Hong Kong Muslim community - who Uddin says are united against Islamic fundamentalism - beginning a regular inter-faith dialogue with the Jewish, Christian and Hindu groups which continues today on a bi-monthly basis. That is, unless you had a personal link to the attacks. Teresa Wong Nga-kum, a US national now retired in Hong Kong, grew up in Manhattan, where her eldest son now lives. She was in Beijing at the time of the attacks. "I think it's the most horrible thing that has happened in the last ten years but I guess that goes back to my special attachment to the twin towers. We lived in Chinatown and from the kitchen window you could see the twin towers. Now when I go back to my parent's apartment they are gone forever."

For someone who is about to make history, Jennifer Lim is looking surprisingly calm and relaxed. The female lead of American playwright David Henry Hwang's critically acclaimed new play Chinglish, which opened in Chicago in June, will reprise her role on Broadway next month. She will be the first Hong Kong-born stage actress to get top billing on the Great White Way. "It still feels a little unreal. This is really a dream come true," said Lim, 32, who plays a strong-willed Chinese official in a comedy rendered in English and Putonghua about an American businessman encountering linguistic and cultural difficulties on a trip to the mainland. "You can't ask for a better role, a better production and, as far as debuts go and this being a Broadway debut, it's amazing." Previews begin on October 11 and the opening is set for October 27. Directed by Leigh Silverman, Chinglish received favourable reviews during a month-long run in Chicago. It was nominated for a number of Jeffs (the city's theatre awards) including best production, best director, best new work and best actress in principal role. The show has Hong Kong connections beyond Lim: the translation was done by playwright Candace Chong Mui-ngam and costumes were designed by Anita Yavich, both from the city. Other Asian actresses, such as Lucy Liu, were said to be interested in the role when the Broadway run was first discussed. But producers Jeffrey Richards and Jerry Frankel offered Lim the part again. US critics were impressed by her three-dimensional performance. Variety said "she invests her character with layers of emotions to go along with the layers of language". Because she has been doing readings of the play since Christmas 2009, "I know it inside and out," Lim said. "I know the character inside and out." She first heard about Chinglish after agreeing to attend an informal read-through of the new work in New York. Hwang was looking for an Asian actress who could speak Putonghua, and Lim, whose father is Chinese and mother Korean, fitted the bill. Lim said her background helped her understand her character, whom she describes as an "impenetrable dragon lady" dressed in a power suit with sky-high heels, hair pulled up in a bun - yet feminine". "The character I play is a little bit older than I am, but she is very familiar," she said. She feels very familiar. I think, growing up in Hong Kong and [being] raised with Asian values, whether it's Korean or Chinese, with this character, I just got her. I get what she is about," she said. After attending the Chinese International School, Lim left Hong Kong at 18 to study drama at Bristol University in England before graduating from the Yale School of Drama in 2004. "[My character] is so multi-faceted. The woman that you see at the beginning of the play and the woman you come to understand at the end of the play, the journey ... is incredible. She makes you laugh, she makes you cringe and she moves you." The Chicago Tribune has already raised the possibility of Lim getting a Tony Award nomination, a suggestion that Lim quickly tossed aside as just "crazy talk". She says she has no idea what the future holds for her - all she wants to be is a working actor. "From the start when I decided to go down this path, it's always been about the work and about the theatre. I just want to work and that's what keeps me going," she said. "My mother, for fun, went to a fortune teller in Korea right after I got into Yale and this fortune teller said to my mother: `Your daughter is a winter horse, she needs to run; she will be running her whole life, and working, because if she stops, she dies'." Lim said her mother was slightly distressed by the reading. "But when she told me about this, I said that is awesome. As an actor, I want to be working until my retirement. That's what feeds me," she said.

Rural leaders, unable to reach agreement with the government over illegal structures on New Territories houses and conservation of private land in or abutting country parks, threw down the gauntlet yesterday. Walking out of a closed-door meeting with Secretary for Development Carrie Lam Cheng Yuet-ngor, Heung Yee Kuk members said they might tour European countries where many of the owners of affected properties now live, talking to the landlords and complaining to the Chinese embassies in those countries. "The government can't be reasoned with. They don't know the history of the New Territories. They will have to bear the consequences," said Shap Pat Heung Rural Committee chairman Leung Fuk-yuen, who was at the meeting. It was arranged three months after the minister announced a long-awaited proposal to crack down on illegal additions that would affect thousands of village houses. Kuk chairman Lau Wong-fat said no consensus was reached over houses standing on so-called "old leases" that were drafted before current building codes took effect. Officials have said any village houses higher than the three-storey standard format will have to be demolished. The kuk, representing villagers in the New Territories where extra storeys are prevalent in dozens of villages with old leases, insists such structures should be exempt. "We didn't arrive at a timetable when the crackdown would start either," Lau said. The minister had earlier told lawmakers she would seek funding in the government budget next February to hire more building officers to enforce the law. Yesterday's meeting also heard kuk members' views on the government change of rules to include private land in country parks. The country park proposal was prompted by the row over excavation work on land at scenic Sai Wan on the Sai Kung coastline last year. It would involve 1,300 hectares of land in 54 enclaves in country parks, not covered by any land-use zoning plan. "Many landlords have houses on those enclaves and have emigrated to Europe. If no compensation is offered and they go home one day, they may become homeless," Lau said. He suggested a land exchange as compensation for freezing villagers' lots as country park land. Kuk vice-chairman Cheung Hok-ming said landlords living in Europe had requested a meeting in the United Kingdom and suggested airing their grievances at the Chinese embassies in Europe. The kuk might make the visit in November, Cheung said. Chinese University political scientist Ma Ngok said it was an unreasonable move to complain to the embassies. "It is not surprising the kuk would want to bypass the Hong Kong government and complain to the central government, but it's a bit far and strange if it is in Europe because the Foreign Ministry is not supposed to handle matters like this." He said the kuk's warnings appeared to be more of a scare tactic than a prelude to real radical action.

The government said on Friday it had appointed labour official Roy Tang Yun-kwong to be the new head of Radio Television Hong Kong. Tang, who had been deputy-secretary for labor and welfare since May 2010, would take up the post of Director of Broadcasting on September 15, a government spokesman said. The post was vacated by Franklin Wong Wah-kay, who announced in November he would retire, citing health reasons. The 67-year-old had coronary bypass surgery earlier last year. The government spokesman said Tang’s appointment was decided after an open recruitment exercise conducted earlier failed to identify a suitable candidate. “Nevertheless, it remains the government’s intention to groom officers from within RTHK for advancement to senior positions of the department in accordance with the established mechanism,” the spokesman said. Tang, 47, joined the civil service in July 1987. He has served in various bureaus and departments in his career, including the former finance branch, the former health and welfare branch, the former City and New Territories administration, the Hong Kong Economic and Trade Office in Tokyo, the former new airport projects co-ordination office, and the transport bureau. Tang told reporters experience in administration would help him manage the introduction of digital channels, plans for a new RTHK headquarters, and building a media asset management system. “I think the experience I have as an administrative officer – in resource management, planning, and communications skills with shareholders – will be an asset to me in handling these tasks,” he said. Tang added he would ensure editorial independence would be safeguarded in accordance with the broadcasting ordinances. He would listen to experts at RTHK before making editorial decisions, he added. However, RTHK Programme Staff Union chairwoman Janet Mak Lai-ching said the union was very disappointed with the appointment. She said the government should explain why it chose to appoint an official with no experience in public broadcasting. “As stated in the job advertisement for the position, candidates should have experience in public broadcasting. Mr Tang has spent 20 years as an administrative officer and appears to have no experience in public broadcasting. This raises questions about his ability and suitability as the head of RTHK,” she said. Mak also said the union was concerned Tang’s ties with the government could lead to interference in editorial policy. Former broadcasting director Franklin Wong said the government should also explain why its 15-month open recruitment exercise failed to find a candidate.

 China*:  Sept 11 2011 Share

China's property investment and sales in August grew at a slower annual pace than in the first seven months, official data showed on Friday, indicating Beijing's efforts to rein in the red-hot real estate sector have started to have the desired effect. Property investment grew 33.2 per cent in the first eight months from a year ago, a touch slower than the 33.6 per cent rise in the first seven months, the National Bureau of Statistics said, implying slower growth in August alone. The agency does not provide data for August alone. In value terms, annual property sales growth eased to 25.9 per cent in the first eight months from a rise of 26.1 per cent in the first seven months, the statistics agency said in a statement on its website, www.stats.gov.cn. In terms of floor space, annual property sales grew 13.6 per cent in the January-August period, unchanged from the pace in the first seven months. The data indicated a modest fall in property prices in August, echoing anecdotal evidence that home prices are starting to drop in some cities where they had risen at a fast clip in the past few years. That shows some results of China’s property tightening measures in place since late 2009, which include higher mortgage rates and down payment as well as a maiden launch of a property tax, to curb speculation and cool housing inflation. Beijing is worried that runaway home prices can fuel social unrest, and a possible bubble, if it were to burst, could destabilise the broad economy. The latest official data also showed an eighth consecutive monthly fall in China’s mortgage loans, as banks tightened beyond the regulatory requirement. Some banks in Shanghai have either stopped mortgage lending, or have delayed approvals of loan applications, because of tight credit quotas and out of concerns about record high home prices, the China Securities Journal reported on Friday. While slowing growth in property sales and bank lending to the real estate sector has crimped Chinese developers’ ability to fund their expansion, foreigners quickened their pace of investing in the vast Chinese market. Foreign investment in the real estate sector jumped 71.5 per cent in the first eight months, accelerating from a 65.8 per cent rise in the first seven months, and compared with a 75.5 per cent increase in the first half. However, foreign funds account for only 1 per cent of China’s total sources of money for the real estate sector. Annual growth in funds from banks and developers, major sources of money into the sector, slowed in August. 

Bank of Nova Scotia said on Friday it will buy a near 20 per cent stake in Bank of Guangzhou for about C$719 million (US$735 million) to expand its footprint in China, the latest in to invest in a Chinese bank before its IPO. Scotiabank expects the deal to add to earnings next year and for the deal to close by December this year, it said in a statement on Friday. “Asia is a region of strategic importance for Scotiabank and enhancing our investment in China supports our long term growth strategy,” Scotiabank’s president and chief executive, Rick Waugh, said. Bank of Guangzhou is not publicly listed, but is primarily government owned. It has been looking to list in Shanghai and last year invited bids from foreign investors for a 20 per cent stake. Many other foreign banks own the maximum permissible 20 per cent stake in second-tier Chinese lenders. For example, Citigroup owns about 20 per cent of Guangdong Development Bank, while ANZ owns 20 per cent of Bank of Tianjin and Shanghai Rural Commercial Bank. The initial wave of foreign banks investing in Chinese lenders began with global names such as Bank of America and Goldman Sachs buying stakes in top players such as ICBC and China Construction Bank (SEHK: 0939) before their IPOs. Since then, many of the foreign banks have begun unwinding their investments, typically for a hefty profit. For example, BoA made an after-tax gain of about US$3.3 billion when it sold half of its stake in China Construction Bank (CCB) in August this year. “The small-to-medium-sized Chinese banks are probably looking to learn from the business models of these foreign banks,” said Liu Qiao, a professor at Peking University’s Guanghua School of Management. “The big foreign banks such as HSBC have already bought stakes in the big Chinese banks, so we may see more happening in the second-tier lenders now.” Scotiabank’s move into China is also the latest foray by a Canadian bank into the world’s No 2 economy. Rival Bank of Montreal became the first Canadian bank to incorporate in China in November last year and has said it wants to focus on wealth management and trade financing. The 127 foreign banks operating in China saw their overall market share rise to 1.83 per cent last year from 1.7 per cent in 2009, with total aggregate assets of 1.7 trillion yuan, accounting firm PwC said in a report in June.

US Vice-President Joe Biden came to the defence of Beijing on Thursday, assuring Americans that China’s rise does not spell America’s demise. Biden, who visited China last month, made his case in an opinion piece in the New York Times, countering a theme of US decline that has gained currency amid persistent economic woes and a bitter battle for the US presidency. “Some may warn of America’s demise, but I’m not among them,” said Biden. “And let me reassure you: based on my time in China, neither are the Chinese.” Biden acknowledged that Americans are concerned about what China’s rise means for America and the world, but rejected the view that it will mean a “cold-war-style rivalry or great power confrontation”. He said the administration of President Barack Obama was “clear-eyed” about the concerns raised by China’s military capabilities and intentions, and for that reason will maintain a strong US presence in the Asia-Pacific region. “But I remain convinced that a successful China can make our country more prosperous, not less,” he wrote. He argued that as trade and investments bind the two countries, they will have a stake in each other’s success, and incentives to work together. “We often focus on Chinese exports to America, but last year American companies exported more than US$100 billion worth of good and services to China, supporting hundreds of thousands of jobs,” he said. He added that US exports to China were growing faster than to any other country. Biden said the leaders he met in the mainland understand that their economy has to change from a being driven by exports, investments and heavy industry to one driven by consumption and services. “As Americans save more and Chinese buy more, this transition will accelerate, opening opportunities for us,” he said. Biden also sought to allay fears about US indebtedness to China, saying “the truth is Americans own America’s debt. China holds just eight per cent of outstanding Treasury securities. By comparison, Americans hold nearly 70 per cent.” America, he said, is better positioned than China to compete in the 21st century because of the strengths of its political system, free market economy and rule of law. “America’s strengths are, for now, China’s weaknesses,” he said. Biden came under fire from Republican presidential candidates last month while he was in China for telling an audience of university students he “fully understands” Beijing’s one child per family policy. In a debate Republican president candidates Wednesday, Mitt Romney vowed to end trade “surrender” to countries like China.

The goverment in Beijing has launched a program trying to prevent corrupt officials from fleeing the country by closely monitoring transfers of funds and reviewing applications for overseas travel. A report released by the Ministry of Supervision on Friday says the year-long program will end in August next year and has been implemented in 10 regions, including Guangdong and Shanghai. The programme is one of numerous efforts by the central government to curb graft. Corruption is often a focal point of protests by ordinary citizens and is seen as a major threat to political stability. But it remains common among Communist Party officials. A recent central bank report said thousands of corrupt officials have stolen more than US$120 billion and fled overseas since the mid-1990s.

Xiamen Airlines to join SkyTeam - The aviation sector in the China International Fair for Investment and Trade in Xiamen in 2010. Xiamen Airlines is planning to join the Amsterdam-based global airlines alliance SkyTeam. Xiamen Airlines, a subsidiary of China Southern Airlines Co Ltd, is planning to join the Amsterdam-based global airlines alliance SkyTeam, according to a company manager. Zhao Dong, Xiamen's deputy general manager, said the move indicates the airline's determination to gain a greater international presence in the coming years. "Joining SkyTeam is part of our efforts to further advance international ambitions. Membership will help us transform from a regional airline into a global player," said Zhao. The airline's application was approved at a SkyTeam council meeting held in Singapore in June, according to company sources. "If the procedures are well advanced, we will become an official member of SkyTeam later this year," Zhao said during the China International Fair for Investment and Trade being held in Xiamen. Skyteam offers frequent-flier discounts and other services to passengers of its 14 members. The alliance owes its presence in China to the 21 percent market share of its only domestic member, Guangzhou-based China Southern Airlines' membership. Joining SkyTeam will help generate expected annual revenue of 30 billion yuan ($4 billion) in the coming five years ahead for Xiamen. The airline reported revenue of 6.6 billion yuan in the first half of this year, an increase of 23.8 percent year-on-year, company sources said. "We will launch more cooperation and share more flights with other airlines after becoming a member of SkyTeam," Zhao said. Based in Xiamen, a coastal city of East China's Fujian province, the airline operates most flights departing from Xiamen, Fuzhou, Quanzhou and Wuyishan. "We are determined to develop Fuzhou and Xiamen into leading transportation hubs in Southeast Asia," Zhao said. At present, the operation of international flights contributes only 10 percent of the company's revenue, Zhao said. Boosting its international presence in the years ahead is part of a strategy aimed at meeting the increasing demand that is a result of the regional economic development, Zhao said. "We will add more flights from Xiamen and Fuzhou airports to provide tailored services for international passengers due to the establishment of the West Coast Economic Zone," he said. The economic zone, including the coastal cities of Xiamen, Zhangzhou, Quanzhou and Fuzhou along Fujian province, is meant to help accelerate the integration of its economy, transportation system and infrastructure with Taiwan, which lies across the Straits. "Joining the SkyTeam will also mean we may suffer some losses due to global economic fluctuations. But we have measures planned to avoid such a loss," Zhao said, who declined to provide more details. In another development, Xiamen Airlines has entered into an agreement with Boeing Co to purchase six of the US company's B787 aircraft, Zhao said. The planes will be delivered in stages in the late 12th Five-Year plan period (2011-2015) and will be used to launch services to Europe and the US from Xiamen and Fuzhou, the capital city of Fujian province. Xiamen Airlines currently operates a fleet of 78 aircraft flying 119 domestic and 20 international routes. The airline provides around 3200 flights each week,- according to company sources.

Mukesh Ambani and Li Ka-shing may soon get new company in their wealth club. While the U.S. and western European economies continue to be in the doldrums, Asia, with its steady economic growth, will supply the next set of millionaires (and billionaires), says a new report. CLSA Asia-Pacific Markets, an Asian brokerage and investment group in a report on wealth, estimates Asia (excluding-Japan) has 1.2 million high-net-worth individuals, those who have investable assets of $1 million or above (excluding their first homes). Within five years this number will increase 2.4 times, from 2010 levels, taking the number of fat cats to 2.8 million, and the dollar value of their assets to $16 trillion from $5.6 trillion. Indonesia, China and Thailand will see the highest growth rates of over 20%. China will make up the largest part of the increase in wealth for the region. Over the next five years, some 900,000 Chinese will enter the wealth ranks, says CLSA. Factor in the really, really fat cats of Honk Kong, it will make up over 60% of CLSA’s estimated increase in HNWIs’ total wealth in the region. India, once again, is a distant second.

Mukesh Ambani and Li Ka-shing may soon get new company in their wealth club. While the U.S. and western European economies continue to be in the doldrums, Asia, with its steady economic growth, will supply the next set of millionaires (and billionaires), says a new report. CLSA Asia-Pacific Markets, an Asian brokerage and investment group in a report on wealth, estimates Asia (excluding-Japan) has 1.2 million high-net-worth individuals, those who have investable assets of $1 million or above (excluding their first homes). Within five years this number will increase 2.4 times, from 2010 levels, taking the number of fat cats to 2.8 million, and the dollar value of their assets to $16 trillion from $5.6 trillion. Indonesia, China and Thailand will see the highest growth rates of over 20%. China will make up the largest part of the increase in wealth for the region. Over the next five years, some 900,000 Chinese will enter the wealth ranks, says CLSA. Factor in the really, really fat cats of Honk Kong, it will make up over 60% of CLSA’s estimated increase in HNWIs’ total wealth in the region. India, once again, is a distant second.

For Switzerland, Some Franc Advice From China - Switzerland’s central bank is taking a little stick for its controversial intervention in foreign currency markets to halt the runaway rise of the franc. Some of the criticism is coming from unlikely quarters – like China. The Swiss National Bank, alarmed by massive buying of the franc as a “safe haven” from the wobbly euro and dollar, drew a line in the sand this week. The bank said it would not let the franc rise any further and would buy “unlimited quantities” of foreign currency to stop a climb in the value of the franc that had pushed Switzerland’s weaker exporters into bankruptcy and threatened other key areas of the economy like tourism. The move, widely seen as bold but risky, prompted a mixture of angry criticism and begrudging sympathy. So far in China, the criticism has been more apparent. In a post on popular Twitter-like microblogging service Sina Weibo, Li Daokui, an influential economist and adviser to the Chinese central bank, said the SNB’s move was like “drinking poison to end thirst.” Switzerland isn’t strong enough to defy global hot money flows, Li said, and it may ultimately be forced to try measures like controls on capital movements. While China’s central bank has not commented directly on the move, other voices on the sidelines of policy debates used similarly dramatic language in criticizing the SNB. Zhang Monan, an economic policy researcher with the State Information Center, a government think tank, said the move could encourage other countries to follow suit. This might trigger a round of “currency wars” as other countries try to prevent their currencies from rising and in turn hurting exports, she said. The Swiss central bank was dealing with a situation not of its own making. Global market turmoil has sent fearful investors fleeing from other currencies and piling into safer investments like the franc or gold. After the central bank’s announcement, many companies in the export-heavy economy breathed a sigh of relief. One might expect Chinese economists to be somewhat more sympathetic to the Swiss central bankers given China’s own heavy reliance on exports. Beijing has long resisted calls to let the yuan strengthen at a faster pace, fearing it would make its exports less competitive. That in turn could lead to job losses and even social unrest. While much of the world frets about China’s hefty trade surplus, Beijing uses controls on capital movements to maintain this comfortable arrangement. Perhaps the next round of commentaries on the Swiss decision will show a less critical side. Unless, of course, Mr Li and Ms Zhang don’t mind giving currency to the idea they endorse kettle and pot economics.

Hong Kong*:  Sept 10 2011 Share

There is little sympathy for bankers who lose their jobs these days—except when the losses come at HSBC Holdings PLC and are taking place in Hong Kong, the bank’s historic home. HSBC said on Wednesday it would be cutting 3,000 jobs, mostly support positions, over the next three years. Local newspapers printed tales of bank employees worried they’d lose their jobs and their homes. Other workers complained that the units targeted for cuts were more efficient than at other banks. The cuts even brought protesters to the bank’s dramatic headquarters in Central Hong Kong. Leaders of the rally, organized by the Retail, Commerce and Clothing Industries General Union, said the group is “very angry” that the bank is cutting so many staff after it posted such strong profits last year. To illustrate their point, protesters stuck dollar signs on the iconic lion statues guarding the HSBC building and put fatty pork meat in the lions’ mouths, symbolizing the bank’s fat profits. “HSBC is arguably Hong Kong’s most important financial institution,” said organizer Tam Chun-yin. “Other banks look to it as a bellwether for the market; there’s definitely a worry that other banks could follow suit. It’s setting a bad example.”

30th Hong Kong Watch&Clock Fair kicks off - The 30th Hong Kong Watch and Clock Fair, the largest of its kind in the world, opened in Hong Kong on Wednesday, attracting more than 700 exhibitors from 12 countries.

Rendering of future World Trade Center released - The renderings of the future World Trade Center issured Wednesday at a news conference in New York.

Standing next to a 4.5-metre-long oven churning out caramel-coloured mooncakes stuffed with salted egg yolks and lotus seed paste, mooncake baker Tse Ching-yuen is feeling not only the heat of the kitchen but the hot air of inflation blowing from the north. Tse, the owner of the historic Tai Tung Bakery in Yuen Long that was set up by his late father in 1943, laments that prices of mooncake ingredients, tin boxes, wages and rents are rising rapidly in the lead-up to the Mid-Autumn Festival on Monday. The 81-year-old is carefully counting his pennies while his chefs and workers are busy kneading dough, brushing mooncake crusts with whisked eggs and putting them into a gigantic oven at the bakery's central kitchen in Tuen Mun. There are now fears that this most traditional of Chinese delicacies is under threat because of rising costs and changing market conditions. "This year is particularly more difficult even though sales have been brisk," Tse told the South China Morning Post (SEHK: 0583, announcements, news) . "We are victims of cruel inflation." Prices of lotus seed imported from the mainland climbed to HK$88,000 a tonne in June from HK$60,000 in March. Prices have since fallen to HK$42,000, but remain above the price of HK$28,000 per tonne last year. Tse blames his woes on excessive liquidity on the mainland, which has driven up prices of everything from fuel to flour. Consumer price inflation on the mainland has climbed for the 25th consecutive month, and reached a 36-month high of 6.5 per cent in July. Hong Kong - which is largely reliant on imports of food and fuel, of which the mainland is a key supplier - saw consumer price inflation hit a 16-year high of 7.9 per cent in July. Beijing has been trying to stem inflation by raising interest rates and the amount of funds banks must set aside as reserves. Even so, Hong Kong is nevertheless susceptible to the effects of the supercharged mainland economy, with small businessmen like Tse particularly vulnerable. Record inflation and the strength of the yuan against the Hong Kong dollar have been a double whammy for Hong Kong importers. The yuan has gained 3.57 per cent so far this year to HK$1.219 yesterday. Economists widely expect the yuan to rise to HK$1.24, a 6 per cent rise, by the end of this year. Tse is angry and believes rich speculators in the north are behind the rising costs. "There were rumours that a female speculator in Wenzhou splurged 1.3 billion yuan [HK$1.58 billion] buying up lotus seeds in June, which sparked the price surge to HK$88,000 per tonne," Tse said. "I have never seen lotus seeds so expensive before." Prices of sugar imported from Malaysia were 80 per cent higher, peanut oil from South Africa rose 12 per cent, flour from the US increased 17 per cent, while prices of walnuts from the mainland jumped 211 per cent. Wages rose 20 per cent to about HK$70 per hour - a smaller gain than other costs - as increased automation at bigger bakery chains meant there were more part-time mooncake chefs seeking work. In short, a mooncake cost 25 per cent more on average to produce this year compared to last year, but costs only 3.4 per cent more to buy, Tse said. For example, a box of four mooncakes containing two egg yolks and lotus seed paste costs HK$308, an increase of HK$7 from last year. "The retail price can't be raised too much, or customers may vote with their feet," said Tse, who points at stiff competition from the larger bakery chains. "Producing mooncakes no longer makes you prosperous, but it means a lot in terms of continuing Chinese tradition and my family's heritage." The Mid-Autumn Festival is one of the most important events in the Chinese calendar. Like Christmas in the West, the festival is meant to be an occasion for the gathering of close friends and family. While a variety of gifts are given over the Lunar New Year, only mooncakes are exchanged during the Mid-Autumn Festival. The shape and colour of salted egg yolks in traditional mooncakes are said to resemble the moon on the night of the festival. There are now countless permutations of mooncakes with different flavours and shapes. For instance, there are non-baked snowy mooncakes made with a glutinous flour crust filled with a variety of ingredients such as chocolate, mango, cream cheese, durian and even bird's nest. There are also lobster, grilled chicken and Jinhua ham mooncakes. Trendy mooncake varieties may mean more choices for consumers, but they spell trouble for traditional mooncake makers like Tai Tung and Kee Wah Bakery. The two bakeries, which have witnessed Hong Kong's economic booms and busts over decades, have pledged to continue making mooncakes the traditional way. With soaring costs, however, that will be a challenge. Peter Tse Hing-chi, Tse Ching-yuen's son and the third-generation manager of Tai Tung, dismisses snowy mooncakes as "mooncake substitutes". "We will never produce any snowy mooncakes unless the ingredients for traditional mooncakes vanish from the earth," the former architect said. As part of an old tradition, Tai Tung still offers consumers the opportunity to buy mooncakes through monthly instalments in a so-called "mooncake club". However, most people are sufficiently well off that they do not have to save up for their annual mooncake treat. Peter Tse said mainland consumers commonly ordered as many as 50 boxes of mooncakes worth HK$10,000. In one instance, a merchant from Hangzhou ordered 150 boxes worth HK$31,500 as corporate gifts. "We have had more mainland shoppers in the past few years, and their orders are getting bigger and with more specific requests," he said. "One thing they share in common is they don't care much about prices." The small, family-owned business is constantly battling the large chains which can afford to buy big advertising signs on cross-harbour tunnel entrances, television, radio, newspapers and trains. Kee Wah - which has grown from a grocery store in Shanghai Street, Yau Ma Tei, in 1938 to a bakery chain of 48 outlets - increased its advertising budget by 30 per cent to at least HK$10 million this year, said managing director Kevin Wong Sik-cheung. The bakery, known for its Chinese bridal cakes and confectioneries, uses actor Eric Tsang Chi-wai to promote its mooncakes. "We advertise on television or in the newspapers regularly because if we pull them suddenly, the public may think we might have gone under," Wong said. "Competition is getting worse this year." Competition was so fierce that retail prices were raised by 4 per cent, way below a 20 per cent jump in costs this year, he said. Kee Wah, founded by Wong's late father Wong Yip-wing, has beefed up its marketing and the design of its products to fend off competition. "Some of the third-generation members of our family have returned from abroad to help run the business," Kevin Wong said. "I am teaching them not to stray from our family heritage, like my late father taught me." Placing importance on following tradition, Wong said that no snowy mooncakes would be served in his family's forthcoming Mid-Autumn Festival celebration. Carlson Wong, his cousin, recently joined Kee Wah in the sales and marketing department, and he has been working with family friend and painter Lo Kok-kit to revamp the packaging of mooncakes and bakery products. To increase production capacity and lower costs, Kee Wah relocated most of its production facilities from its Cheung Sha Wan headquarters to a new factory in Tai Po in the past two months. The company invested HK$200 million in the new factory, equipping the kitchens with advanced machinery that allows a higher level of automation. However, some procedures still need to be done by hand. For example, kneading the dough into a crust and turning the crust into caramel colour. Also, there are fears that rising costs are not the only factor threatening the traditional mooncake industry. Most mooncake chefs at Kee Wah and Tai Tung are in their 70s and have spent their entire careers with the bakeries. "While I don't see the inflation problem going away soon, the chefs are another problem that is looming large," Tai Tung's Tse Ching-yuen said. "We need more new blood." One of the master chefs, Chef Fu, has been with Tai Tung for more than 40 years and has vowed to work until he is unable to. While the costs of keeping a tradition from fading into history are high, they are not insurmountable.

Donald Tsang Yam-kuen and his team of political appointees will try to avoid controversy by not restoring their salaries to their 2009 levels, even though senior civil servants have been offered a 7.2 per cent pay rise from July, according to a government source. Tsang and other appointees took voluntary pay cuts in June 2009 at the height of the financial crisis to demonstrate their willingness to share the community's pain. A government source said appointees had exchanged views among themselves on whether they should restore their salaries after civil servants were granted pay rises in June, but decided against it. Civil servants in the upper salary band have been offered a 7.24 per cent pay rise, which took effect in July. "Restoration of appointees' salaries to pre-pay-cut levels would unavoidably create political troubles for the government, given the current political climate," the source said. A government spokesman confirmed that the political team had no plan to readjust their salaries. In June 2009, Tsang and 33 political appointees took a voluntary pay cut of 5.38 per cent from the next month of that year, in a show of solidarity with Hongkongers who were riding out the global financial crisis. The voluntary pay cut - which includes policy secretaries, undersecretaries and political assistants - saves taxpayers just HK$440,000 a month. Dr Ivan Choy Chi-keung, a political scientist at Chinese University, said restoring the appointees' salaries would hand ammunition to critics and opponents of the government and groups friendly to it in the forthcoming district council elections. Unlike with civil servants, there is no system for adjusting the pay of appointees. Salaries for civil servants have been increased three times since 2008, when the government expanded the political appointment system. In May 2008, the government appointed eight undersecretaries and nine political assistants. But the administration was criticised for its handling of a row surrounding the foreign passports held by some political appointees and initial refusal to disclose their salaries. The undersecretaries and political assistants subsequently disclosed their salaries under public pressure. Currently, the monthly salaries of undersecretaries and political assistants range from HK$126,930 to HK$211,560. A policy secretary earns HK$282,080 a month, compared with the newly adjusted HK$208,250 for a permanent secretary who is considered part of the civil service. A permanent secretary earned HK$194,200 a month before this year's pay rise.

Students take part in a fire dragon workshop on Tuesday. The Tai Hang parade has been declared an intangible national cultural heritage. Organisers of the Tai Hang Fire Dragon Dance are battling dwindling donations and rising costs for materials, despite the 130-year-old event being declared an intangible national cultural heritage in June. About 300 people carry a 70-metre dragon, punctured with lit incense sticks, through Tai Hang streets for three consecutive nights over the Mid-Autumn Festival period to purge the area of evil spirits. This year it will be from Sunday, starting at 7.30pm each night. In the past, the parade relied on donations from long-time Hakka villagers. But since developers began buying up flats in the area, the number of Hakka residents has fallen. The Tai Hang Residents' Welfare Association organises the parade, but when members practise a tradition of visiting homes to ask for donations, they are greeted with unfamiliar residents or empty flats. The Jockey Club is sponsoring HK$19,000 of the total HK$39,000 cost this year. The Wan Chai District Council usually provides HK$10,000 for the parade, but added HK$1,000 this year due to rising costs. The remainder of the funds came from donations. A council spokeswoman said it set aside more money than usual for the parade, because of its heritage status in Hong Kong. An association spokeswoman said the cost of materials went up by 20 per cent this year. "The price of materials was exceptionally high this year due to inflation," she said. While a lot of Hakka residents have moved away from the area, many return each year as volunteers to help with the parade, since it has to have former Hakka villagers or current Tai Hang residents. Some former Hakka villagers return from as far away as New Zealand to take part. "We must pass on this tradition from one generation to the next," said Chan Tak-fai, fire dragon commander-in-chief, who has participated since the 1950s. The 65-year-old said he hoped the next commander-in-chief would "tirelessly serve the dragon". To keep with tradition, he or she should also be of Hakka descent. This year, after the dragon makes its tour around Tai Hang on the second night, it will move to Victoria Park where it will be relit and a show will be put on for the public. This time, organisers will be able to use two hard-court soccer areas. On Tuesday, the Jockey Club and the Conservancy Association Centre for Heritage led a workshop on the fire dragon for 150 members of the public and Form Three pupils from Po Leung Kuk Centenary Li Shiu Chung Memorial College in Tuen Mun. They were shown how the dragon is created from wire and straw. The pupils are working on a project on intangible cultural heritage in Hong Kong for their English class. Marko Mak Man-ho, 14, was impressed with commander-in-chief, Chan. "It's rare to find someone so dedicated to a cause for so many years."

Harbor activist Winston Chu says he won't sue over minor reclamation projects. The development minister says the goodwill expressed by harbour protection activists over reclamation will encourage her colleagues to put forward small projects to enhance the harbourfront. Secretary for Development Carrie Lam Cheng Yuet-ngor said she was glad to hear that the Society for Protection of the Harbour would not launch any more legal challenges to the government as long as reclamation projects were small and brought major benefits to the public. "This gives us greater courage to look at [those projects] ... instead of being too fearful," Lam said. She said officials would speed up project plans that had stalled because of concerns over legal challenges. One such project is a bridge connecting Kwun Tong and the area around the old airport runway. Lam was speaking at a Harbourfront Commission meeting yesterday, where Winston Chu Ka-sun, adviser to the society, introduced what he called the "proportionality principle" for interpreting a judgment of the Court of Final Appeal in 2004. The court ruled that any future reclamation must satisfy an "overriding public need" test. "If reclamation is minor and brings benefits to the public in enjoying the harbour, our position is, why not?" said Chu, who launched several judicial reviews over government reclamation projects to build roads in the past decade. He also urged the government to set up a statutory harbour authority to conduct public consultations and decide on future reclamation. Lam said Chu's proposal offered "symbolic meaning" rather than a technical solution. "At the end of the day, whether a reclamation is minor is not a matter for you or me to decide because there can be a fourth party who could go to court. "We should not tamper with the Court of Final Appeal judgment in terms of legal compliance," she said, adding that the government would never proceed with major reclamation projects. She said works departments were required to conduct public consultations before proposing reclamation projects and to minimise their scope. Lam said she would see how Chu's principle could be incorporated into the policy. Vincent Ng Wing-shun, a commission member and architect, welcomed the society's goodwill because officials had shied away from creative waterfront enhancement projects in the last seven years.

Five Court of Final Appeal judges, including then chief justice Andrew Li Kwok-nang, considered quitting after Beijing's de facto legislative body overruled their decision on right of abode for mainland children in 1999, according to a US diplomatic cable released by the website WikiLeaks. Justice Kemal Bokhary told US officials in 2007 that he and the other four top judges "seriously considered resigning after the 1999 interpretation, when the [National People's Congress Standing Committee] effectively overruled the Court of Final Appeal's determination, but they decided not to do so because `you can only do that once."' Bokhary also said the justices "feared they would be replaced by less independent or competent jurists," according to the cable prepared by a visiting legal adviser from the US embassy in Beijing but sent by then US consul-general in Hong Kong James Cunningham. The five judges who made the January 1999 ruling were Li, Bokhary, Henry Litton, Charles Ching, and Anthony Mason. Li gave the leading judgment in "Ng Ka-ling and Others versus the Director of Immigration," which was at the center of the right-of-abode controversy. The top court ruled unanimously that the children of parents who have the right of abode in Hong Kong also have the right, irrespective of whether their parents were permanent residents at the time of their birth. The government asked the NPC Standing Committee to reinterpret the Basic Law's two sections in move that overturned the court's ruling. Bokhary also said he believed that under Secretary for Justice Wong Yan- lung the government is "not likely to submit another CFA case to the NPC Standing Committee for interpretation." When Li left office in August 2010, he said his most challenging cases involved Basic Law interpretation, particularly Ng Ka-ling's claim. The government also asked the NPC Standing Committee in 2005 to determine the length of Chief Executive Donald Tsang Yam-kuen's term after Tung Chee-hwa resigned before the end of his term. In another cable earlier in 2006, Bokhary told a US official that he believed then secretary for justice Elsie Leung Oi-sie "had been an `unsung heroine' of Hong Kong during her tenure" from 1997 to 2005. "Bokhary, who admitted he did not have concrete evidence, believed that Leung had `talked them [Beijing officials] out of gross excesses' with regard to Hong Kong policy on multiple occasions," the cable read.

 China*:  Sept 10 2011 Share

Super Model Citizen - From a Small Village in Hunan Province, China’s Liu Wen Has Become Global Fashion’s Current Favorite Face - Liu Wen is the first Chinese supermodel, the kittenish face of Estée Lauder, a runway regular in Paris, Milan and New York. She is the first East Asian woman to take part in a Victoria’s Secret Fashion show — something she has done twice. Her sleek image has been on the cover of just about every major fashion magazine, and she has modeled in ad campaigns for Calvin Klein, Dolce & Gabbana, Gap and many others. Yet the 23-year-old former tour guide from a village in Hunan province still seemed genuinely surprised at the compliments she drew from fans on a recent visit to Hong Kong. “When I was younger, nobody said I was a pretty girl,” Ms. Liu said. “Today, it happened twice. Once in the morning, and just now. I really should come to Hong Kong more often.” Ms. Liu’s rise to the top began six years ago when she took part in China’s New Silk Road World Model contest — she didn’t win the competition but garnered admirers and an appetite for the modelling industry. She moved to Beijing, and within a few months she was featured prominently on the pages of the Chinese editions of FHM, Vogue, Harper’s Bazaar and Cosmopolitan. A year later, the 5-foot-10 model was stepping out on the catwalks of all the major global fashion centers. By 2009 she had broken the mold at Victoria’s Secret, becoming the first “Angel” to take part in celebrated lingerie event in New York. Then last year, she cracked the model stratosphere. As the face of Estée Lauder, Ms. Liu joins elevated company — past “spokesmodels” for the French cosmetics giant include actresses Elizabeth Hurley and Gwyneth Paltrow. Linking up with Estée Lauder puts her firmly in fashion modeling’s elite set. She is modest about her success so far, which she says is due in part to the growth of China as a market for the world’s fashion retailers. “The Asian market is so important now, so a lot of people are looking for Asian models,” she says. “Last year, in the Louis Vuitton winter collections, you could see a lot of qipao [traditional Chinese dresses]. I remember that show had eight Chinese models.” Ms. Liu was speaking ahead of a runway show for Marc Jacobs in Hong Kong. Her hair was pulled back in a tight ponytail, and she was wearing a full-length, form-fitting Jacobs dress and four-inch platform shoes. She says she’s proud that the fashion world is taking more note of her home country these days. “Of course I like it, because it makes me feel like my country is more powerful now and because everyone is into Chinese style.” Ms. Liu is about to embark on one of the busiest periods of the year for all top models with fashion weeks in New York and Paris right around the corner. Though she now lives in New York, she says she still likes working in Asia. “People are friendly in the West too, but it’s different. We speak the same language, eat the same food. It’s like coming back to friends. It’s a bit more comfortable here.” Her backers say Ms. Liu’s success could help break ground overseas for Chinese fashion labels and models alike. “I see her taking steps with large brands, either Chinese brands who want a fashion identity in the U.S. or Europe, and with European and U.S. brands who want to up their image in China,” says Chris Gay, president of the Marilyn Agency. (Ms. Liu is on the books at Paris- and New York-based Marilyn, and Mr. Gay has been her agent since 2008.) “She has the perfect line, the perfect build and the skin that very few models have,” says Mr. Gay. “Very rarely do you have fashion credibility and commercial appeal to a much larger audience — that’s the crème de la crème in our business.”

Viadeo, a professional networking site operator aiming to compete with LinkedIn by dominating non-English speaking markets, is throwing its weight behind Chinese subsidiary Tianji despite regulatory challenges. The Paris-based company’s CEO Dan Serfaty has moved to Beijing with plans to help Tianji establish a new subscription revenue model. The Chinese website currently earns the bulk of its revenue from recruiting tools, but is free to regular users. Globally, Viadeo earns 30% of revenue from recruiting, 20% from advertising, and 50% from subscription fees paid by users. The company plans to explore various models, including small, incremental payments (like those online game and instant messaging operator Tencent charges users for virtual goods) and subscriptions. Viadeo will also soon be launching a platform for third-party applications on its website, which is expected to earn some revenue as well. Mr. Serfaty, who moved to San Francisco just last summer, said in an interview that the unintended consequence of his stint in the U.S. was to “realize how China is important for the Silicon Valley guys.” While people were mildly interested in Viadeo’s performance in European markets, he said, the company’s acquisitions in Brazil, India and especially China got the most “incredible reactions.” Viadeo, which has expanded by acquiring the top professional networking websites in markets around the world, earns the bulk of its revenue in Europe, where it says it dominates the French and Italian markets. Most of its users post information in their local languages, but its user databases in each market are linked up to enable cross-border communication, except for Tianji’s roughly seven million users in China. Tianji is gaining 350,000 new users per month. It users are isolated from the rest of the Viadeo network in part because of language, but also because the company is wrestling over how to connect Chinese users with global users while remaining in compliance with China’s censorship regulations. LinkedIn doesn’t have an office in China, which means it doesn’t have to adhere to propaganda authorities’ guidelines in managing content posted to the site. Like all foreign websites, LinkedIn can be blocked – and has been, though only briefly. Still, Mr. Serfaty said local connections remain Viadeo’s primary focus. While LinkedIn, which has roughly one million users in China, is generally aimed at a global, English-speaking audience, Viadeo is primarily a local platform, Mr. Serfaty said. LinkedIn, which does not have an office in China, had more than 120 million members worldwide as of August. Viadeo has nearly 40 million users across all of its networks. While Tianji may have a linguistic advantage over LinkedIn in China, it still faces a fair amount of home-grown competition. Other Chinese professional networking sties, including Ushi and Jingwei, launched by Facebook-like social networking site Renren and job site Zhaopin, are also gaining users. Mr. Serfaty said Viadeo expects to add more than 100 new people in the next year to its global staff of 350, and that the company has put off plans for an initial public offering for now, though it will revisit the idea again next year. “No, we’re not going public now. I think that would require more focus on profitability, which would really hinder our growth,” he said, adding that the company became profitable in 2009. He declined to disclose revenue numbers.

Taiwan has begun installing a solar power system to generate most of the electricity on its occupied Taiping islet, the largest of the Spratly Islands, located in the South China Sea, despite mounting tensions in the region. The groundbreaking ceremony took place yesterday at a park near the islet's small airport, in line with Taiwanese President Ma Ying-jeou's policy of upholding Taiwan's sovereignty over the Spratlys. A group of officials from the Defence and the Interior ministries, the Taiwanese Coast Guard Administration (CGA) and engineers from the Taiwan Power Company took part in the ceremony for the NT$22 million (HK$6 million) project that should be completed within six months, according to the CGA. Coast guard officials said the solar energy system would replace the existing diesel-powered generation system as the primary source of energy on the islet in a year or so. "The system will be able to generate 120 kilowatts of power, which will help save the government NT$536,550 worth of electricity, and will boost the government's policy of building a low-carbon Taiping islet and realising sustainable development of the South China Sea," said Hu Chung-an, a coast guard spokesman, adding that the solar power capacity in Taiping will eventually be doubled. Government and military officials boarded a 2,000-tonne Taiwanese CGA vessel on Sunday and arrived at the Taiping islet on Tuesday, Taiwanese media said. To facilitate the solar power plan, officials from relevant Taiwanese authorities - including the Defence Ministry and the National Security Council - visited the islet five times before the installation began. Taiping, occupied by Taiwan for decades, is the largest of the archipelagoes and the only islet with a fresh water supply among the Spratly chain of islands, which are claimed in part or wholly by Taiwan, the mainland, Malaysia, the Philippines, Vietnam and Brunei. The latest move is expected to spark protests from the claimants, which have disputed the territorial rights of the island chain in the sensitive South China Sea. Tensions have been on the rise since March, with the mainland, Vietnam and the Philippines staging military drills around the waters to demonstrate their claims over the territory. Beijing had proposed to co-operate with Taipei over the territorial claim, but was rejected by the Ma administration. Other than reiterating its historic claim over the territory, Taipei had remained relatively quiet to avoid intensifying the situation, but that approach was snubbed by lawmakers who said it showed the inaction of the Ma administration in upholding Taiwan's claim. The solar power installation project is being viewed as a "soft approach" by the Ma administration in upholding Taiwanese sovereignty.

China on Thursday will give its formal support for London to become an offshore trading centre for the yuan, the Financial Times said, a move that would tap into the city’s position as a major currency and commodities trading hub. London would join other centres, including Singapore and Taipei, vying for a share of the growing offshore yuan business since Chinese authorities launched a series of policy initiatives to internationalise the currency. The newspaper quoted British officials as saying Chinese backing for the move would come later in the day in a joint statement in London by visiting Vice Premier Wang Qishan and UK finance minister George Osborne. But analysts were sceptical London could usurp Hong Kong’s pole position as an offshore yuan centre (CNH) because much of Europe’s trade with China is scattered throughout the region and with Hong Kong still the gateway for companies seeking to do business with China. “China’s push to make London an offshore yuan centre is an exciting development as it is an important financial centre and also a hub for metals trading, a key focus area for China,” said Linan Liu, a senior strategist at Deutsche Bank in Hong Kong. “Still, London’s role along with Singapore and Taiwan will be largely complementary to Hong Kong as this is where the infrastructure and the liquidity exists,” she added. The gradual relaxation on the use of yuan in international transactions has led to 7 per cent of Chinese trade now settled in yuan in the March quarter, up from around 1 per cent a year ago, according to data from Hong Kong and China central banks. The pool of deposits denominated in yuan in Hong Kong has exploded in the past year, and has hit nearly 10 per cent of total deposits by end July from one per cent last January, the data showed. The paper quoted officials as saying Osborne and Wang would formally welcome the strong interest being expressed by British banks and financial institutions for London to become an offshore trading centre for the yuan. Wang’s visit comes just three months after a trip to London by Chinese premier Wen Jiabao, in which he expressed anger at the way British Prime Minister David Cameron publicly criticised human rights violations in China, the paper said.

China ranks 26th in competitiveness, up one notch from a year earlier, on the back of strong economic fundamentals, according to the Global Competitiveness Report released by the World Economic Forum on Sept 7. "China continues its relentless upward trend in the ranking with across-the-board strength in many areas," said Jennifer Blanke, lead economist and head of the Center for Global Competitiveness and Performance, World Economic Forum. The one-position rise in the ranking is attributable to good performance in most of the 12 pillars of the Global Competitiveness Index (GCI), a measure of the competitiveness of 142 economies in the report. China has improved its score and rank each year since 2005, and it leads the BRICS (Brazil, Russia, India, China and South Africa) economies by a significant margin - South Africa, second among the BRICS, placed 50th. Despite continuous inflation since October 2010, the Chinese economy still fares favorably, with $14 trillion in GDP, contributing to 19.74 percent of the world's total, the report says. Meanwhile, the world's second-largest economy has also one of the lowest rates of debt. Improved access to healthcare and education, which economists at the World Economic Forum said are the key measures of a country's competitiveness, also enhances China's performance in the ranking. According to the report, China has made remarkable advances in business sophistication and innovation, spurred by the government's staunch efforts to encourage innovation and heavy spending in research and development. However, inflation, access to financing and inefficient government bureaucracy are the top three complicating factors for those doing business in China, it said. Moreover, standards of business ethics and corporate accountability are below those found in a number of other economies, according to the report. In previous years, China's poor results in the financial market development and technological readiness pillars lowered the economy's overall competitiveness performance. But it shows marked improvement in the first of these (up nine spots) owing to an increased availability and affordability of financial services and better access to credit. Among the most competitive, Switzerland remains the No 1 for the third year, followed by Singapore, edging up one notch this year. Sweden and Finland came in third and fourth. The United States dropped for a third year in a row to fifth place amid growing macroeconomic vulnerabilities and deteriorating public confidence in politicians' ability to address critical issues.

Hong Kong*:  Sept 9 2011 Share

On a recent night in Hong Kong, dozens of the city’s fashion bloggers gathered for a launch party at the Central boutique of G.O.D., the Hong Kong lifestyle store. The event was hosted by Arnold Wong, a 19-year-old menswear designer who was marking the launch of his menswear brand. But if the setting was modern, the apparel that Mr. Wong’s label, Colonial Goods, produces is decidedly retro. His company, which was registered last December, has joined forces with Lee Kung Man, a Hong Kong knitting factory founded in 1923, to create two vintage T-shirts for his first collection. But why did Mr. Wong, who teamed up with several partners, each putting 7,000 Hong Kong dollars (roughly US$900) into the business, enter the menswear industry? “I started because I wanted to design clothes,” he says. “I’ve always been really into menswear.” The other: a desire to celebrate the city’s fashion heritage. “There’s a beautiful story to tell about Hong Kong in the 1960s and ’70s, when a lot of goods were produced here,” he says. “There are so many people who are fashion crazy here.” Colonial Goods strives to capture Hong Kong’s history. Its logo features an image of the junkyard barges that used to ply Victoria Harbour, while its press pack highlights its collaboration with Lee Kung Man, one of Asia’s oldest operating mills. One of its T-shirts comes with a Henley collar, which is often identified with Bruce Lee. According to Mr. Wong, Lee Kung Man was the maker of the Henley-collar T-shirts that the martial-arts movie star wore. The T-shirts will be sold at G.O.D. and Colonial Goods’ soon-to-be-launched online store. Despite its small outlay of products — only a few hundred T-shirts, which retail for US$45 to $55, have been produced — Colonial Goods has received significant attention. Preceding the launch, Mr. Wong teamed up with Carmen Chan, a Hong Kong photographer who frequently shoots for the South China Morning Post’s fashion section, to snap a series of photographs of Hong Kong’s best-dressed men. These included Graeme Wong, the popular style blogger, and Justin Chang, the scion of the Ascot Chang tailoring firm. The photographs went viral and were picked up by the websites of Esquire and Hypebeast. Risqué photographs of his friends wearing his T-shirts, which he posted on his Tumblr blog, also helped. “I told my friends to ‘do something sexy’,” he says. “Put a good-looking girl in something, and it gets a lot of attention.” It seems to have worked: U.S. men’s magazine Details recently picked his blog, on which he also posts photos of Hong Kong alongside those of well-dressed men, as one of the magazine’s five favorite fashion Tumblrs. He has since developed plans to expand the brand further. For its next collection, he is teaming up with some well-known Hong Kong companies to create ties, jackets and trousers. But will the attention translate into success? One potential hurdle: university. Mr. Wong, who took a gap year to finish off the project, has since enrolled at the Rhode Island School of Design. “I’ve had to make sure that I won’t have to invest too much time in the business,” he says. “[I won’t start on] the next collection until the end of next summer.”

Chilled beef from Inner Mongolia may soon be available in Hong Kong, ending an existing virtual monopoly. This comes after the director of the Hong Kong and Macao Affairs Office, Wang Guangya, said during his visit in June that Beijing would study how to provide a steady food supply in an attempt to lower prices and combat inflation. Currently, a company from Jilin province is the sole supplier of chilled beef to the SAR. But Tongliao-based Inner Mongolia Kerchin Cattle Industry looks set to enter the fray, after Food and Environmental Hygiene Department representatives visited the firm's facilities two months ago. A department spokesman said once the State General Administration of Quality Supervision, Inspection and Quarantine completes the follow-up, the department may give Kerchin Cattle the go-ahead. Pei Tao, a deputy general manager of Kerchin Cattle, said the Hong Kong officials were generally satisfied with the factory conditions, and approval may be granted in a month or two. Kwok Shi-hing, chairman of the Hong Kong Chilled Meat & Poultry Association, welcomed the possibility of more suppliers. However he is concerned it may take 15 to 20 days to ship the meat here, so it could cost consumers more. "Coupled with the rising yuan, the chilled meat from Inner Mongolia may not be as cheap as expected," he said. 

Demand by mainland investors for Hong Kong property is expected to soften further as credit-tightening and an uncertain global economic outlook dampen buying interest in luxury residential projects. Lee Wee Liat, regional head of property research at Samsung Securities, said interest from mainland buyers had waned in recent weeks due to the deteriorating global economic outlook and increasingly tight credit conditions on the mainland. "We expect softening demand from mainland buyers to hurt new launches, especially in the luxury market," he said. Lee foresees a repeat of the second half of 2008, when mainland demand for units collapsed by more than 60 per cent to HK$2.3 billion from HK$6.6 billion in the first half of the same year. In addition to individuals, some properties are bought by mainland companies for investment purposes. Developers focused on high-end project launches, including Sino Land and New World Development, were the most likely to be affected, he said. Projects that face a potential retreat of mainland buyers included Sino Land's Providence Bay in Tai Po and New World Development's Masterpiece in Tsim Sha Tsui, which was now on the market, he said. Instead of buying, he said some smaller mainland enterprises faced selling properties in Hong Kong in the face of increasing difficulties in securing bank loans at home. "The sale proceeds would be used to fund their business operations on the mainland," he said. Last Tuesday, the People's Bank of China moved to freeze 900 billion yuan (HK$1.09 trillion) of liquidity in the banking system by broadening the base for the required reserve ratio, which measures what percentage of deposits banks must set aside. The move is the latest measure Beijing has employed to soak up liquidity, hoping to curtail bank lending and slow inflation. Mainland buyers - the main drivers for the growth in prices in Hong Kong's luxury sector last year - have spent less on flats here after hitting a record of HK$22.8 billion in the second half of last year, according to a report by Centaline Property Agency on June 11. In the first half of this year, the total value of flats sold to mainlanders in the primary market dropped 6.14 per cent to HK$21.4 billion. Centaline's study came on the same day the Hong Kong Monetary Authority (HKMA) told banks that when lending to overseas buyers - and mainlanders - they must reduce the maximum loan-to-value ratio at least 10 percentage points for all types of property. The maximum loan-to-value ratio for mortgages on HK$10 million-plus properties was lowered to 50 per cent from 60 per cent previously. The loan-value ratio for properties priced from HK$7 million to HK$10 million will be cut to 60 per cent from 70 per cent now, while the maximum value of a loan must not exceed HK$5 million. Alan Chiang Sheung-lai, head of residential for greater China at DTZ, believes more than 50 per cent of mainland buyers opted for Hong Kong-dollar denominated mortgage loans when they made property investments in Hong Kong. "But now banks in Hong Kong are very strict in assessing mortgage loan applications. Mainland buyers have to buy in hard cash since most banks in Hong Kong have turned off the tap for credit for property investors." He expects mainland investors to be less keen about buying Hong Kong property if the cheap source of money disappears. Compared with the mainland's 6.8 per cent mortgage rate for first-time homebuyers and 7.5 per cent for the second-home purchases, Hong Kong's effective mortgage rate was less than 3 per cent, he said. Ivy Wong, managing director of Centaline Mortgage Broker, a unit of Centaline Property Agency, said banks had become more cautious this year, given the cost of funds and better yields on corporate lending. "They become more selective," Wong said. "Therefore, they are more cautious about lending to investors as well as mainlanders. Compared with the days before the Hong Kong government's crackdown on mortgages in June, banks carefully assess repayment abilities. She said that some banks would cut loan-to-valuation ratios for mainland borrowers by more than the 10 per cent minimum. "For those who fail to provide proof of their monthly salaries, banks will lend below the 40 per cent level suggested by the Hong Kong Monetary Authority," Wong said. Some borrowers can only get a loan-to-value ratio of 20 per cent to 30 per cent. That clamp has affected mainlanders who are not strong financially and must rely on bank loans. She said the number of mortgage deals closed by mainlanders probably dropped by about 20 per cent to 30 per cent in the past two months compared with before the HKMA's tightened credit policies. A source close to the HKMA said: "I suspect that banks would be very cautious with their credit decisions given the highly uncertain situation in other parts of the world, most notably Europe ... All along they have been telling the HKMA that they would be more cautious in their mortgage lending business given the cost of funds and better yield on corporate lending." Landscope Realty managing director Koh Keng-shing said the 10 per cent reduction in the loan-to-value ratio would make a big difference, and that some mainlanders might not be able to afford to buy because of the tightened loans. "The market has not yet reflected the unfavourable factors," he said. Koh said if the tightened credit environment continued in China, he believed more mainlanders would be forced to sell and that would cause homes prices in Hong Kong to fall more rapidly, with the downward trend lasting two to three years.

Bordeaux classics alone can no longer satisfy the palates of Hong Kong wine lovers as their tastes become more sophisticated. Three years after the abolition of a wine tax, there is stronger demand for wines cultivated outside the renowned French region, traders say. Local wine drinkers are exploring other parts of the world and have a growing interest in mid-range wines. "People want to try something new after years of Bordeaux drinking," Paulo Pong Kin-yee, managing director of Altaya Wines, said. The wholesaler, which has been selling wines to restaurants, shops and private collectors for a decade, is bringing in more boutique and family-owned estates which have an annual output of several hundred to a few thousand cases, such as champagne producer Pol Roger, Burgundy winery Ponsot and Tuscany family Siro Pacenti. Fines wines from Burgundy, Tuscany and California's Napa Valley are gaining ground, making up 15 per cent, 5 per cent, and 8 per cent respectively of Altaya's sales, he said. Niche marketing is a growing trend since the entry of more than 200 overseas wholesalers and retailers into the city since 2008, said Pong, who aims to open 12 shops in the next three years, each with a different theme, such as origins or grapes. "Establishing a brand name in Hong Kong can help us enter the mainland market," he said. Other wholesalers are set to bring in more mid-range wines costing HK$100 to HK$300 from Spain and Italy. "Wines from Spain have a full body. They appeal to Asian consumers who prefer richer wines," Defranco Leung of Everwise Wine said. French wines' market share has fallen from 70 per cent a decade ago to 30 per cent currently, he said. French exports, however, still comprise 70 per cent of total local sales value, thanks to the popularity of top Bordeaux wines in the high-end market. New World wines, especially Australia, are also rising in importance. Claudio Salgado, manager of Grand Hyatt Macau, said the proportion of such wines consumed in the hotel rose from 40 to 50 per cent recently. More importantly, people are moving from entry-level wines from New World countries to higher-priced varieties. "More people have started studying wine ... when they know more about them, they feel more confident to try things out," Salgado said. The growing interest in rarer wines is also noted by an auctioneer. In Acker Merall & Condit's September auction in the city, the seven highest-valued lots will be Domaine de la Romanee-Conti - a Burgundy gem - instead of Chateau Lafite Rothschild. The star lot among them will be a case of 1990 Romanee-Conti, with an estimated value of up to US$200,000.

The first wave of bank layoffs has hit Hong Kong, as HSBC begins to reduce its headcount around the world. HSBC sent out internal letters to employees on Wednesday, saying it planned to eliminate about 3,000 jobs in Hong Kong, about one 10th of its workforce in the city, by the end of 2013. Last month, HSBC said that it would cut at least 25,000 jobs in addition to the 5,000 job cuts it announced in late July, bringing the total number of planned layoffs to at least 30,000 worldwide. This represents about 10 per cent of its approximately 296,000-strong global workforce. The layoffs in Hong Kong would primarily involve those working in back-office functions and were part of an effort to become less complex and bureaucratic, the bank said in the internal letter to staff. “The reason Hong Kong is included is because it’s so important, and we also want to improve efficiency in its head office functions,” said Gareth Hewett, a spokesman at HSBC in Hong Kong. He added that the company would continue to hire in Hong Kong in areas where business growth was expected. The bank has indicated that some jobs will be eliminated through attrition. The bank’s Hong Kong operations had a staff turnover rate in the range of 10 to 15 per cent a year, said Hewett. Layoffs are also planned for the bank’s operations in Canada, the United States, Mexico and Brazil. HSBC plans to reduce its global cost-efficiency ratio of 57.5 per cent to a target range of 48 per cent to 52 per cent. “Cost-cutting is a trend that a lot of banks are looking into,” said Jerry Chang, managing director of Barons & Company, an international head hunting firm.

 China*:  Sept 9 2011 Share

 

Boeing Co. raised its two-decade forecast for China's spending on commercial aircraft by 25%, citing international expansion in what the company expects will become the world's second-biggest aircraft market, after the U.S. Boeing said Wednesday it expects Chinese carriers and others to spend $600 billion for 5,000 new commercial airplanes from Boeing, Airbus and other manufacturers. Boeing last year estimated that China would spend $480 billion on 4,330 planes over the next 20 years. The new forecast assumes continued economic growth in China of at least 7%. That is below the pace of the past three decades and in line with some economists' expectations, but such long-term predictions are inherently uncertain, especially in light of current global economic woes. The forecast also includes a predicted 6% increase in airplane prices, which Airbus and Boeing have raised to cover higher raw-material costs. Nevertheless, the forecast underlines the growing importance for plane makers of a complicated and increasingly competitive Chinese market. Randy Tinseth, vice president of marketing for Boeing's commercial-aircraft division, said the company expects Chinese airlines to double their combined share of the world's international air-travel market from between 6% and 10% today. As commercial air travel expands globally, the question is, " 'Who will win in that competition?' And we expect Chinese carriers to be stronger and stronger over time, and their market share will grow," Mr. Tinseth told reporters at Boeing's China headquarters in Beijing. Boeing expects China's domestic and international travel to grow at an average annual rate of 7.6% over the next 20 years, Mr. Tinseth said. "Sustained strong economic growth, growing trade activities, increasing personal wealth and income, as well as continued market liberalization will be the driving forces in shaping China's air-travel market," he said. Mr. Tinseth didn't provide a sales estimate for Boeing itself. He said the company aims at least to maintain its slightly higher than 50% share of China's market of commercial airliners in service. But he acknowledged that Boeing's share of new orders from China in recent years has been declining, in part because of competition from the Airbus unit of European Aeronautic Defence & Space Co. Chicago-based Boeing has been under increasing pressure at home, too. AMR Corp.'s American Airlines in July ordered 260 Airbus A320 jets after more than a decade of working exclusively with Boeing. American also ordered 200 Boeing 737 models. Boeing last month said it had received nearly 500 orders for a revamped version of the single-aisle 737, but doesn't plan to deliver the aircraft until 2017, two years after a competing model from Airbus. Mr. Tinseth said Chinese airlines and others are likely to buy some 3,550 such single-aisle airplanes over the next 20 years, and that demand should propel sales of Boeing's retooled model, the 737 MAX, which will carry new engines to boost fuel efficiency and lower operating costs. Boeing also could face competition from China itself. Government-owned Commercial Aircraft Corp. of China is developing a single-aisle airplane called the C919 that is being designed to compete in the latter half of this decade with the Boeing 737 and the Airbus A320. Mr. Tinseth said China is likely to increase demand for small and intermediate twin-aisle jetliners, such as Boeing's 777 and coming 787 Dreamliner jets. He estimated that approximately 1,000 such planes will be purchased to serve China's air-travel market and account for 40% of the country's commercial-aircraft market by value over the next two decades. Boeing has orders for 60 Dreamliner jets from China Southern Airlines Co. and other mainland Chinese customers and no orders for the 737 MAX, Boeing executives said. A person close to the company said the several years of delays in rolling out the Dreamliner have made Chinese customers hesitant to order. "The airlines naturally want to see the airplane actually get certified and delivered…in order to have confidence to order more," the person said.

Sanya-Taipei flight course launches - Passengers walk down the ramp of a plane in the airport in Sanya City, south China's Hainan Province, Sept. 6, 2011. A plane of flight CI525 from Taipei, southeast China's Taiwan, arrived at Sanya airport Tuesday afternoon, marking the launching of Sanya-Taipei flight course. 

The hotel markets in five major cities of Greater China have experienced the start of recovery since last year with room rates rising and occupancy growing, according to Knight Frank. It predicts the outlook will continue to improve. Hotel demand - hit by the global financial crisis in 2008 - has been picking up since last year with average daily rates rebounding 10.5 per cent year on year, said the property consultant in a report, which has surveyed the hotel sector in Beijing, Shanghai, Guangzhou, Hong Kong and Macau. Occupancy and room rates remained stable in the first six months on the back of strong demand from tourists and business travellers. In Beijing where demand mainly was driven by domestic visitors, five-star hotel occupancy fell in 2008 and hit a low in 2009, due to oversupply. However, occupancy levels showed signs of recovering and continued to remain above 60 per cent for the first half of the year. The average daily rate for a five-star hotel room bottomed in 2009, but saw a 8.4 per cent rebound last year to 814 yuan (HK$1,024). The rate remained stable in the first half of this year at 794 yuan. The confidence in the outlook has given a boost to the sector, encouraging hotel owners and operators to strengthen their foothold in the cities. "Among the five cities covered by this report, Macau was the most active market in the first half of 2011, where three large-scale, five-star hotels were completed in the period, providing over 4,000 rooms," Thomas Lam, head of Knight Frank's research department, said in the report. Five hotels, including Waldorf Astoria Shanghai on the Bund and Shanghai Pudong Kangqiao, also opened in Shanghai, adding more than 2,000 more five-star rooms. Despite the increase in supply, Knight Frank predicts a rosy picture. "We believe China's tourism market will continue to develop rapidly in the coming years and the future for its hotel market looks bright," said Lam. In Shanghai, the number of overnight visitor arrivals - especially domestic visitors - is expected to be boosted with the completion of major tourism projects such as Shanghai Disneyland in 2015 and infrastructure projects including the Huning Intercity High-Speed railway in the Yangtze River Delta region. While the hotel sector in Guangzhou will benefit from the city's position as the business and exhibitions centre of Asia, Beijing will continue to generate a steady stream of visitors, said Knight Frank. According to the World Tourism Organisation, China has surpassed Spain to become the world's third most-visited country, while it ranks fourth in terms of tourist receipts. International hotel operators also show strong confidence in China's market with aggressive expansion plans. Sheraton Hotels & Resorts has said that about two-thirds of the 25 new hotels it has planned will be situated in mainland China. Hotel markets in Hong Kong and Macau are expected to remain stable, as the cities are already well developed, it said.

China will likely need 5,000 commercial aircraft worth US$600 billion during the next 20 years, a senior Boeing executive said on Wednesday, a 25 per cent increase in value terms over the company’s previous forecast late last year. A significant portion of that demand will be small and intermediate-sized jets, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, told reporters in Beijing. Last November, Tinseth estimated China would need 4,330 new planes worth US$480 billion, effectively tripling its fleet size over the next 20 years. Boeing is betting that new Chinese wealth and government spending on infrastructure will bolster travel in the country, where the domestic passenger traffic is growing rapidly. Tinseth has said the US aircraft maker expects to maintain its market share in China. Boeing competes with Airbus for commercial plane orders, and Tinseth said that overall Boeing would deliver 485 to 495 airplanes this year, including 25-30 787s Dreamliners. Boeing is about three years behind schedule in delivering the light-weight, carbon-composite 787, which promises hefty fuel savings to airlines, due largely to snags in the complex global supply chain. When asked about the delays, Tinseth said: “We have a plan. We are meeting that plan, and we are committed to that plan. Are there risks? There are always risks. I believe we have turned a corner in terms of production and in terms of design of the airplane.” All Nippon Airways Co Ltd will be the first to take delivery of 787 on September 25 and expects to have 20 Dreamliners by March 2013. ANA President Shinichiro Ito told Reuters on Wednesday that ANA expects to receive all 55 Dreamliner jets it has ordered by March 2018. “We were in big trouble because we had to push back our business plans [due to delays with the Dreamliner], Ito said in an interview with reporters in Japan. “I’m so excited to finally be receiving it.” Competition in the sector is heating up. State-backed Commercial Aircraft Corporation of China (Comac) is developing its own commercial jet C919, which Beijing hopes can eventually compete with Boeing and Airbus. Comac said it expects the C919 to have its first test flight in 2014 with deliveries to customers starting in 2016. At the Paris airshow in June, Ryanair, which currently flies only Boeing jets, signed a deal with Comac to help it design a rival to the Boeing’s 737. Ryanair CEO Michael O’Leary said he expected mainland manufacturers to take a significant bite out the global market for short-haul planes by 2016.

Heavy machinery magnate Liang Wengen has usurped the top spot among China’s billionaires, according to a survey released on Wednesday, that called this year a record year for the country’s super-rich. Liang, 55, with his 58 per cent share in Sany Group and an US$11 billion fortune, knocked beverage-making billionaire Zong Qinghou from the top spot on the Hurun Rich List this year, a statement from the survey’s publisher said. “Despite the continuing global financial crisis, this year has been a record year for China’s rich,” the statement said, noting that 271 Chinese billionaires were now ranked on the Hurun 1,000 rich list, up from 189 last year. That number has more than doubled from 2009’s 130 billionaires. Even making the top 1,000 has become harder, with the cut-off at US$310 million, up from US$220 million last year. The average wealth of those who made the cut is US$924 million. Rupert Hoogewerf, founder and publisher of Hurun Report in its thirteenth year, said in the statement that the list did not account for all of China’s billionaires, a number he said was likely closer to 600. “China’s relentless construction boom coupled with a growing domestic retail market have been the key drivers for the growth in wealth,” the statement said. It said successful stock market listings also had been a major factor. Sany has plans to go public in Hong Kong, which could boost Liang’s fortune further. Zong, who previously took the top spot, saw his wealth decline, from US$12 billion last year to US$10.7 billion as of August 15 when the calculations were made. Search engine giant Baidu’s Li Yanhong ranked third, with US$8.8 billion to his name. China’s super rich were also well connected, the Hurun statement said, with 30 per cent of the top 50 billionaires serving in government advisory roles. Property was named as one of the main sources of wealth for 29 of the list’s top 50. China has issued a slew of measures aimed at cooling the property market over the past two years, but many economists have warned that a bursting property bubble is the biggest risk facing the world’s second-largest economy in the medium to long term. Soaring home prices and steep inflation have spurred social discontent over China’s widening wealth disparity, which surpassed warning levels in 2007 as measured by the Gini Index, and is worse than in any developed economy, the World Bank has said. China has 960,000 people worth at least US$1.5 million, the statement said. Still, with all of its rich, China has not cracked the world’s top 10, as measured by the March this year Forbes rankings, in which US citizens held four spots. The top spot in that ranking was held by Mexico’s Carlos Slim, who reportedly had wealth of US$74 billion.

A new wind turbine generator is under construction at Shanghai Donghai Bridge Offshore Wind Farm on Sept 5, 2011. As of Sept 6, 2011, the offshore wind farm, China's first, which operates 34 wind turbines each with a capacity of 3MW, had generated more than 200 million kWh of power since it started operation in June 2010. The wind farm has saved 86,000 tons of standard coal each year and reduced carbon dioxide emissions by 237,400 tons.

The Venice International Film Festival named a Chinese movie, “People Mountain People Sea” (人山人海), from director Cai Shangjun (蔡尚君), as this year’s “surprise film.” Each year at Venice, the title of one film is kept secret until just before its screening. Last year, the festival selected Chinese director Wang Bing’s (王兵) “The Ditch.” The addition brings to 23 the number of films competing for the festival’s top prize, the Golden Lion. Speculation had been rife for weeks that this year’s surprise film would again be from China. In 2006, celebrated Chinese director Jia Zhangke’s film “Still Life” (三峡好人) was selected, and it went on to win the Golden Lion. Festival director Marco Müller, a Mandarin speaker, is known for his love and knowledge of Chinese cinema. “People Mountain People Sea” is based on a true story about Lao Tie, a man searching for his brother’s murderer and seeking justice on his own when the authorities’ responses prove inadequate. Mr. Cai described the film as a revenge story. “In times of rapid change,” he said in a statement, “how do we find peace of mind and our true self?” The film’s title is an “expression that means ‘sea of people,’” Mr. Cai said. A direct translation would be “people mountain people sea,” which is a proverb used to describe “the magnificent scene of numerous people gathering together.” To him, it means “the force of a sea of people trying to survive,” he said. “When life is trampled, dignity ravaged, justice abandoned and human nature ruined, more people choose to muddle along.” He added: “I prefer Lao Tie’s stubbornness of tracking down the murderer…which comes from a kind of instinct.” “People Mountain People Sea” is Mr. Cai’s second directorial effort following 2007′s “The Red Awn” (紅色康拜因), which won the FIPRESCI prize at the Pusan International Film Festival. Before turning to filmmaking in the late 1990s, he directed for the stage.

In China, where Internet users often expect freebies, individual members of an online dating service are exchanging dozens of love notes every day at 30 cents a pop. Online dating is "quite fun," said Nick Yuan, a 34-year-old computer technician from Shaoxing, China, who signed up for Jiayuan.com International Ltd. to meet new people after his divorce. During his first few months on the site, Mr. Yuan received about 30 messages a day. " 'IT technician' seemed to be an appealing job," he said. Most of the women who contacted him asked about his salary and whether he owns a home. Mr. Yuan is among roughly a million users a month who pay to exchange messages on Jiayuan—signaling a shift for some Chinese Internet companies toward generating revenue from user fees and subscriptions rather than from typical, and highly competitive, advertising. Jiayuan (pronounced JYAH-yu-en) makes money primarily by charging users to exchange love notes through its website for two yuan each. The company is tiny, with a market value of around $400 million. But Jiayuan is growing quickly, with second-quarter revenue more than doubling from a year earlier to $12.9 million and earnings growing at a similar pace. Jiayuan's shares were up 21% Friday from when they listed on the Nasdaq Stock Market on May 11, while shares in almost every other U.S.-listed Chinese Internet company had fallen. The move toward user fees comes as the online ad market is growing in China and getting crowded with sites seeking advertisers. The market still is small compared with that of the U.S. Total revenue from online ads in China reached $4 billion last year, according to the Data Center of China Internet. In comparison, research firm eMarketer said the U.S. online ad market last year reached $26 billion. Search company Baidu Inc., an Internet heavyweight that traditionally has relied entirely on ads, is investing in online travel and hopes to start a premium digital-music service. Web portal and microblogging operator Sina Corp. is building an application store that includes paid games. Smaller companies are working on subscription and fee models as well. Online video site Youku.com Inc. is testing a service in which users would pay to watch high-definition movies and educational videos. Taomee Holdings Ltd. operates a virtual community in which children interact with each other online. The company gains revenue from subscription fees, sales of virtual items and licensing its content for products such as books. "Any technology company in China that makes money in ways other than advertising is certainly worth a closer look," said Michael Clendenin, managing director of RedTech Advisors LLC in Shanghai. "So many of the Internet companies are all going to the same advertising trough, and at some point, the advertisers are going to get fatigue" from deciding where to spend. Jiayuan doesn't have to compete for advertisers' attention "with all these companies that are much bigger," he said. Jiayuan was founded in 2003 by Rose Gong while she was pursuing a masters degree in journalism at Fudan University in Shanghai. Without a clear business plan in mind, she started off in her dormitory by building a simple Web page with her profile on it. Ms. Gong, who is Jiayuan's chief executive, eventually met her husband through the site. The company experimented with a number of different revenue models, including selling advertising and hosting in-person events like mixers and speed dating for subscribers. But Chief Financial Officer Shang Koo said advertising never was a major source of Jiayuan's revenue. Ads made up 15% of the company's revenue in 2008 and at the beginning of this year Jiayuan stopped displaying advertising entirely. Eighty percent of Jiayuan's revenue now comes from paid messaging. "We thought [advertising] was a distraction to both our business and to our users," Mr. Koo said. "It affected our user experience" and it was expensive to support the sales team. Unlike other dating websites in China and elsewhere, which typically make money from ads or by charging users for the ability to contact other members, Jiayuan charges a small fee per message—similar to how people pay for virtual items in online games or social networks. China's online-game companies, which typically let users play free but charge small fees for virtual goods, generated nearly $5 billion in revenue last year, according to research firm Analysys International. China Mobile Ltd., the nation's dominant wireless operator, last year had more than $3 billion from small fees paid for music products, such as ring tones. The messages on Jiayuan can be paid by the sender or the receiver. Jiayuan's more than a million paid users a month is up from 300,000 at the beginning of last year. It also continues to host in-person events and provides a premium service, through which users can pay a team of 100 matchmakers to help the users find prospective matches. Though Jiayuan has become the biggest online dating site in China, it remains to be seen whether the company can grow to the scale of its U.S. counterparts. IAC/Interactive Corp.'s personals business generated $116.4 million in second-quarter revenue, though that included paid subscriptions on Match.com and advertising on OkCupid. "For the most part, users are just happy to receive messages," said Mr. Koo, the finance chief. "The payment is very low, two renminbi per message. It's a bottle of water. It doesn't take much thought for the users to think about whether it's worth it or not." Mr. Yuan, the 34-year-old computer technician, is still looking and enjoying the process. "Nowadays, our life circles become narrow because we need to work very hard," he said. "So even just to make some friends, it's good."

Hong Kong*:  Sept 8 2011 Share

Commissioner of Police Andy Tsang Wai-hung yesterday received a hero's welcome at a meeting with Tuen Mun district councillors, complete with bouquet and a rousing welcome. The bouquet was presented by residents'groups, but it was offset by a Democratic Party and Hong Kong Association for Democracy and People's Livelihood delegation that handed over letters accusing the force of interfering in press freedom. Tsang told councillors he is determined to track down those responsible for Thursday's storming of a forum on by-election law changes in Tsim Sha Tsui. "Such behavior was unlawful," he said, adding officers are sifting through footage from security cameras to find out the identities of those behind Guy Fawkes masks, popularized in the V for Vendetta film. But Tsang reiterated the force had no intention of suppressing freedom of expression during Vice Premier Li Keqiang's recent visit to the SAR. Some councillors were quick to support Tsang. Chow Kam-cheung described the gate-crashing of the forum at the Science Museum as "chaotic," while Leo Chan Manwell of the Democratic Alliance for the Betterment and Progress of Hong Kong regretted the "violence" used to express views. "If the police do not maintain order, it would just encourage more violence," Chan said. Josephine Chan Shu-ying of the Democratic Party disagreed, condemning the tough policing. Legislative Council security panel chairman James To Kun-sun has rejected a bid by the DAB's Lau Kong-wah to put the fracas on the agenda for Monday's meeting. He said the meeting should focus on the security arrangements during Li's visit, but he left the door open to a discussion of the issue when it discusses "any other business."

Nicolas Uhl shows the prototype of a Leica given to Queen Elizabeth. Two rare Leica cameras with a combined price tag of almost HK$1.6 million have arrived in Hong Kong ahead of the first auction of the legendary German cameras in the city, planned for next year. They have been brought by the German retailer and collector Rahn AG Foto & Fine Art in an effort to tap into growing interest among Asian collectors in the cameras that blazed a trail for 35mm photography almost a century ago. There is no guarantee, however, that either of the cameras - in particular a prototype of the custom-made Leica presented to Queen Elizabeth II on her 60th birthday in 1986 and expected to sell for more than HK$1.3 million - will still be available when then auction goes ahead as it is already being hotly pursued by collectors. The other camera, one of only 500 examples of the current M9 model which were crafted from a single piece of titanium, has an expected price tag of HK$266,5000. "We found that 20 years ago the Japanese market was the biggest market for Leica collectors," Rahn proprietor Nicholas Uhl said. "[But] in the past five or six years everything changed. Now most worldwide collectors are in Hong Kong and China." At a Vienna auction in June, an Asian collector bought a Leica O-Series for €1.3 million (HK$14.4 million), the highest price paid for a Leica. The cameras will be in Hong Kong until November, when the company will hold an auction of 90 per cent Leica products in Frankfurt. While they would not go on public show, Rahn said it hoped that by bringing the items to Hong Kong the company would establish links with Chinese collectors and attract camera collectors and enthusiasts to next year's auction - the first it will have held here or on the mainland. A date has yet to be set, but the auction will also involve mostly Leica products. "Hong Kong is the door into China," said Uhl. "The people here are extremely enthusiastic about collecting and taking pictures ... they pay attention to detail and the history of Leica in particular." According to Uhl, there are two reasons for the growing interest among Chinese collectors. The first is increased disposable income. Secondly, more and more Chinese people are studying and living abroad, thus being able to bring back with them the knowledge of Leica and an enthusiasm for collecting when they return from overseas.

Apple said on Tuesday it will open its first Hong Kong retail store this quarter and is targeting another Shanghai store opening by the end of the year. Apple, which has four stores on mainland China, will open its Hong Kong store in the International Finance Centre this quarter, said Carolyn Wu, a Beijing-based Apple spokeswoman. Wu also said Apple will open another Shanghai Apple store by the end of the year. Apple, whose iPad and iPhone are among the most pirated gadgets in China, recently saw its retail experience ripped off by copycats in Kunming city. Apple is striving for greater growth in China via the expansion of its Apple Store network and the roll out of cheaper iPhones. The Asia-Pacific – which accounts for about one-fifth of Apple’s total revenue – and Greater China, in particular, helped Apple’s revenue surge 82 per cent to US$28.6 billion in the April-June quarter.

A government land auction held at Queen Elizabeth Stadium in Wan Chai on Tuesday. A Tseung Kwan O site, with a gross floor area of 73,662 square metres, was sold to Sun Hung Kai Properties for HK$3.12 billion. Two other plots of land, located in the New Territories, were also sold. A government land auction of a residential site fetched HK$3.12 billion, far below market expectations, with developers cautious as an uncertain global economic outlook keeps property sales sluggish. The Tseung Kwan O site, with a gross floor area of 73,662 square metres, was sold to Sun Hung Kai Properties (SEHK: 0016). It was the largest of three plots on auction on Tuesday. The price was 9.5 per cent above the opening price of HK$2.85 billion but 16 per cent below an average forecast of HK$3.715 billion from eight analysts and surveyors contacted. “It may have a short-term negative impact on the mass market but the impact will be short-lived. Taking into consideration the current weak market sentiment, the results were actually not that bad,” said Andrew To, head of research of Emperor Capital Group. The auction was held a day after a broad sell-off in global stock markets, fuelled by growing fears of a US economic recession and a worsening European debt crisis. Asian shares fell and US Treasury yields dropped to the lowest levels in at least 60 years on Tuesday on fears that Europe’s sovereign debt troubles are worsening and could trigger a second full-blown banking crisis. Hong Kong, which relies heavily on land sale for its fiscal income, has seen home prices rise more than 12 per cent this year, surpassing records in 1997 amid a low interest-rate environment, strong economic growth and buying by mainland investors. But transactions have slowed since June, when the government lowered the loan-to-value (LTV) ratio for home mortgages to cool the red-hot property market. The LTV is the percentage of a property’s value that is mortgaged. Some investors are staying on the sidelines, awaiting further possible cooling measures by Chief Executive Donald Tsang Yam-kuen during his policy address in October. The other two plots of land auctioned by the Hong Kong government on Tuesday included a 11,192-sq-metre site and a 2,400-sq-metre one – both of which are also located in the New Territories. They were sold for HK$361 million and HK$121.5 million, to local developers, respectively. Tuesday’s land auction is the fifth in the current fiscal year and comes after the government pledged to increase land supply to cool the market. Last month, a consortium of Kerry Properties (SEHK: 0683), Sino Land and Manhattan Group won a residential site in Shatin for HK$5.5 billion – 32 per cent below a consensus forecast.

Police arrive at Lok Fu Estate for the investigation of a shootout incident in which two police officers fired six shots when an emotionally disturbed man who attacked them with a chopper. Two police constables opened fire to subdue a man who was attacking a police detective with a chopper in Lok Fu on Tuesday, police said. Assistant police district commander in Wong Tai Sin, Chan Kwok-kee, said the shooting occurred around 8.50am at Wang Lok House on Lok Fu Estate. The two constables and a plain-clothed detective went to the scene to investigate a report of attempted suicide. When they entered a corridor in Wang Lok House, they saw a man brandishing a cleaver. The man appeared to be in an emotional state and rushed toward them, Chan said. One of the two officers opened fire with his pistol after verbal warnings failed to stop the man, Chan explained. That officer shot four times, but the man brandishing the chopper did not stop until he was shot two more times by the other officer, Chan said. The man was hit by bullets in the shoulder, armpit and forearm. He was rushed to hospital in a conscious state, Chan said. The plain-clothed detective suffered a cut to his arm. The housing block was closed on Tuesday for further investigation by Kowloon East police. Police said on Tuesday afternoon they had arrested a 20-year-old man in connection with the incident. Police Commissioner Andy Tsang Wai-hung defended the actions of his offic ers: “We are very prudent in the use of force. If the officers believed it was necessary to do this to protect themselves or other people from serious injury… then firearms might be used,” he said. Asked if firing six gunshots to subdue a man armed only with cleaver was really necessary, Tsang replied that police management would investigate. An initial report would be submitted to management within 48 hours, he said. Tsang said policing always carried risks and it was not possible to increase manpower every time an officer was injured. The commissioner said police would consider whether more precautions should have been taken during this incident and whether any future improvements were necessary. Last week, police constable Ko Chun-sing, 25, was seriously injured after he was stabbed by a distraught father, whose son was found dead in their Tuen Mun home.

China to Overtake Japan in Luxury Demand - Shoppers look at an Emperor Watch & Jewellery display in Hong Kong. China’s consumers are pushing the nation to the top once again. It will overtake Japan this year to be the country with the biggest appetite for luxury goods, HSBC predicts in a research report issued late last week. The broker said that it expects China’s consumers to keep spending, even if their affluent counterparts in the West stop. The reasons are, at least in part, cultural. “Displaying wealth has become a trend in China, and we think this will continue to translate into growing purchases of luxury goods for oneself, or as gifts,” HSBC said. “We think consumer habits may not necessarily always correspond to income levels due to the need to socially fit in and show off wealth.” It added a historical note: “In Chinese and Russian communist societies, individual property was not allowed and private wealth was traditionally suspicious. With the liberalization of the economy, a new class system was created where your place on the ladder may depend on how much money one earns, and owning luxury goods can help display the level of one’s wealth.” Social changes occurring around the world, such as people marrying later, women’s growing financial independence and increasing brand awareness, may also be fueling the growth in China, HSBC said.

 China*:  Sept 8 2011 Share

Singapore's finance minister said on Tuesday a global recession looked more likely than not and a Chinese official acknowledged China’s growth may slow to a 10-year low, highlighting Asia’s rising concern over its exposure to US and European risks. If Europe’s debt troubles deepen or the United States slips into another recession, Asia’s export-driven economies would be vulnerable through both trade and investment channels. Economists have already begun marking down growth forecasts while stocks have fallen across the region. Japanese, Chinese and South Korean financial regulators discussed the global threats in a conference call on Tuesday, Japan’s financial services minister told a news conference. “Asia will not be immune to a global slowdown,” said Tharman Shanmugaratnam, Singapore’s finance minister. “We are already at stall speed in the US and Europe, which means we are now more likely than not to see a recession.” Singapore, one of the world’s biggest trade hubs, is heavily exposed to global trade cycles and its economy contracted in the second quarter, compared with the prior three months. Some economists predict another contraction in the July-to-September period, which would fit the commonly used recession benchmark of back-to-back negative quarters. Tharman’s prognosis was gloomier than those of most US and European officials, who still see the global economy escaping another recession. World Bank President Robert Zoellick, speaking in Singapore at the same conference as Tharman, said another recession was unlikely although the risks were high. But a surprisingly weak US August employment report and mounting worries about European sovereign debt sustainability have heightened concerns of a downturn. US stock markets were expected to sell off when they reopened on Tuesday after a three-day holiday weekend. European shares fell sharply on Monday. With growth constrained in most advanced economies, investors are looking to emerging markets to pick up the slack. But growth is already slowing in countries such as China, and with inflation stubbornly high, policymakers are not inclined to provide much of an artificial boost. Huang Guobo, the chief economist at China’s currency regulator, said growth may ease to below 9 per cent next year, but fighting inflation remained the top policy priority. “The weakening global demand for Chinese exports will be a challenge,” Huang said. “Next year, if the situation continues, China’s growth rate may fall below 9 per cent.” Many private economists have already cut their next year growth forecasts for China, so a sub-9 per cent reading next year would not come as a big surprise. However, it would mark a significant slowdown. China, the world’s second biggest economy, managed to sustain growth of more than 9 per cent even during the depths of the global financial crisis in 2008 and 2009. China expects growth to average 7 per cent over the next five years, so slipping below 9 per cent next year would not be a policy disaster. In fact, it might help to contain inflation, which hit a three-year high of 6.5 per cent in July. Data due on Friday is expected to show it moderated a bit in August, although it is almost certain to remain far above China’s annual target of 4 per cent. Asia’s advanced economies were also wary of global repercussions. Australia’s central bank held interest rates unchanged on Tuesday, as expected, but said the outlook for the global economy was less clear than it was earlier in the year. Central banks in Japan, South Korea, Indonesia, Malaysia and the Philippines hold policy-setting meetings later this week, and the dimming global picture will probably persuade all of them to hold interest rates steady.

China's outbound direct investment (ODI) surged 21.7 percent year-on-year to $68.81 billion in 2010, growing for the ninth straight year and recording an average annual growth rate of 49.9 percent, according to a government report issued Tuesday. Non-financial ODI climbed 25.9 percent to $60.18 billion last year, while the country's overseas investment in financial sectors rose to $8.63 billion, according to a report jointly released by the Ministry of Commerce (MOC), the National Bureau of Statistics and the State Administration of Foreign Exchange. By the end of 2010, Chinese enterprises established 16,000 overseas companies in 178 countries, covering all economic sectors and focusing on six industries, including business service, banking, retail and wholesale, mining, manufacturing, and transport, the report said. China's 2010 ODI accounted for 5.2 percent of global capital flows and exceeded the ODI of both Japan and the United Kingdom for the first time to become the fifth largest in the world, said Shen Danyang, spokesperson for the MOC, citing a report released by the United Nations Conference on Trade and Development.

A construction worker looks at a golden bull weighing one ton with a worth of 300 million yuan ($46.9 million) in the hall of a skyscraper under construction in Huaxi village, the richest village of China, located in East China's Jiangsu province, Sept 5, 2011. The 328-meter-high 74-storey skyscraper cost more than 1.5 billion yuan and is scheduled to go into operation in October, 2011 to mark the 50th anniversary of the founding of the village. It ranks as the 15th tallest skyscraper in the world and the eighth tallest in China.

Chinese president Hu Jintao meets delegates attending the first APEC Meeting of Ministers Responsible for Forestry in Beijing September 6,2011. China aims to increase its total area of forest by 40 million hectares in the next decade, as compared with that in 2005, President Hu Jintao said Tuesday. Hu said China will continue to accelerate the pace of forestry development. It is working to increase the country's total forest inventory by 1.3 billion cubic meters from 2005 to 2020. Hu made the remarks at the first APEC Meeting of Ministers Responsible for Forestry held Tuesday morning in Beijing. Representatives from the 21 members of the Asia-Pacific Economic Cooperation (APEC) forum and other international organizations attended the meeting. "China is ready to make new contributions to green growth and sustainable growth," Hu said in a speech at the opening ceremony. In 2007, the APEC leaders set a goal of securing a net growth of 20 million hectares in the region's forest area by 2020. They reaffirmed the aim to advance rehabilitation and sustainable management of forests at the 2010 summit in Japan. "Forestry cooperation in APEC enjoys huge potential and great prospect," Hu said, noting that the Asia-Pacific region has the richest and unique forest ecosystem in the world and accounts for more than half of the world's forest area. Hu said China will continue to provide the developing members of APEC with assistance within its capacity through the Asia-Pacific Network for Sustainable Forest Management and Rehabilitation (APFNET). Hu put forward a three-point proposal on advancing forestry development and cooperation in the Asia-Pacific region. Firstly, Hu said APEC members should strengthen forestry cooperation by integrating forestry development into the general plan of economic and social development. He called for APEC members to increase funding and technological input to upgrade the volume and quality of forest resources. Secondly, Hu said APEC members should properly handle the relations between development, protection, industry and ecology while tapping various functions of forests. He emphasized the need to protect bio-diversity, increase carbon absorption by forest and safeguarding eco-security in the region and the world. Thirdly, Hu said APEC members should deepen regional forestry cooperation. He called for APEC members to continue high-level dialogues on forestry, step up policy coordination and technological cooperation and eliminate green trade barriers. China raised the proposal of holding the APEC meeting of ministers responsible for forestry at the 18th informal APEC leaders meeting in Yokohama, Japan last year. The proposal was embraced with enthusiasm by other APEC members. The theme of the first APEC forestry ministerial meeting is "enhanced regional cooperation for green growth and sustainable forestry development."

Argentine Foreign Minister Hector Timerman Saturday urged to boost the south American country 's trade ties with China, saying a free trade agreement (FTA) between Beijing and the Common Market of the South (Mercosur) could be "extraordinary". Timerman is scheduled to visit Shanghai and Beijing on Sept.5-9, leading a delegation of entrepreneurs from sectors including food, wine, cosmetics, pharmaceuticals, oil, iron and steel to tap business potentials in China. "There is the possibility that Chinese companies make their purchases directly. We will meet with three Chinese companies because we know their projects," said the minister. Regarding a free trade agreement between the Mercosur and China, Timerman said: "At this very moment there is no dialogue about the issue, but I think we are going to arrive to that point as we deepen the bilateral ties." Argentina and China forged diplomatic ties in 1972. China is Argentina's second largest trading partner after Brazil, with trade volume hitting 13.5 billion U.S. dollars last year. Touching on the crisis that faces the world, the former Argentine Ambassador to the United States said "there is a real chance of cooperation between Latin America and China to set up an anti-crisis fund in the region." The foreign reserves of regional central banks are the world's fourth or fifth while China's reserves are the world's first. Timerman said countries in the region need to think very seriously what to do with them and not to be affected. "Reserves have to be safe. I am convinced that if China sends part of their reserves to countries of Unasur (Union of South American Nations), or Mercosur, it would be a smart move because both sides are growing economies," he added. Timerman said Argentina works hard at G20 Summit "with a group called 'developing countries' led by China (because) we felt very comfortable there." "Argentina supports and encourages a greater presence of China in the global economic decisions" because "we believe it is a very powerful country that must be present, and because we feel it is a developing country defending positions that are common to us all," noted the minister. Although the problems that lead to crises such as high debt and high trade deficits do not directly affect Argentina, Timerman said, "We live in an interdependent world. What we have to do is talk to China and with the G20 in various international forums and take actions jointly to face the crisis." Argentina "rejects" the French proposal to curb volatility in food and fuel prices by regulating commodities and financial markets. "The problem with primary products will be just solved by cutting governmental subsidies and opening markets," Timerman noted." According to the Argentine Foreign Minister, limiting product prices, maintaining subsidies and closing the markets as Europe and the United States do does not help to resolve the international crisis.

Hong Kong*:  Sept 7 2011 Share

Anyone who disrupts public order will be dealt with according to the law, Chief Executive Donald Tsang Yam-kuen told a policy-address consultation forum yesterday, amid stepped-up security. This came after a similar meeting last Thursday ended in a violent clash between protesters and government supporters. "Security officers were hurt at another disrupted forum last week," said Tsang at yesterday's forum in Leighton Hill Community Hall in Causeway Bay. "We will handle those who disrupt social order according to the law." He was referring to last week's consultation forum on the government's plan to scrap Legislative Council by-elections, which descended into chaos as a hundred protesters gatecrashed the venue and became involved in scuffles with security guards and forum participants. Increased security was much in evidence at yesterday's event, which was also attended by Financial Secretary John Tsang Chun-wah. About 100 uniformed and plainclothes police officers, security guards and officials from the Home Affairs Department were deployed at the venue, where a group of about 20 protesters from the League of Social Democrats staged a demonstration. League lawmaker "Long Hair" Leung Kwok-hung attempted to throw a bag of rubbish and a bag of dog biscuits at Donald Tsang, but was caught by a plainclothes officer. Meanwhile, the Hong Kong General Union of Security and Property Management Industry Employees asked why police officers did not help security guards in maintaining order at the Science Museum forum. Lawmaker James To Kun-sun said he also found it strange that the police did not take action when it was clear that there was a "breach of the peace". A police spokesman said security arrangements were discussed with organisers of individual events. He said the police would take appropriate action against any breaches of the law or public order during public events.

Planned wind farm to use green technology - CLP Power says its Clear Water Bay windmills will be built without harmful dredging of the seabed. An eco-friendly technology which allows building offshore windmills without dredging the seabed will be used for the first time in Hong Kong by CLP Power (SEHK: 0002), which plans to spend HK$70 million to put up a data mast off Clear Water Bay to collect necessary information for its future sea-based wind farm. The data mast - powered by solar panels - will be installed by the middle of next year, and collect data on wind speed, wave temperature, relative humidity and air pressure. The power producer says this information is crucial to the proposed 200MW wind farm with up to 67 turbines, to be erected about 9 kilometres off Clear Water Bay no later than 2016. CLP said they would use a new method known as suction caisson technology to build the data mast. The technology is unique to oil drilling and has never been used in offshore wind farms. It allows engineers to build the mast and avoid any dredging or drilling of the seabed, reducing damage to the environment. The technology, though more expensive than conventional dredging, will sink the foundation of the mast down to 30 metres below the soft mud seabed by using water pressure. It takes about two days to complete the process if weather conditions allow. If the data-mast construction is successful, the same technology will be used to build the windmills. But critics of the project yesterday said no matter what construction method was used, the offshore wind farm would have only a "negligible" positive impact, at the expense of spoiling a region tipped to be listed soon as a global geopark. "It is going to spoil the wilderness of the area and may affect a future reassessment of the region, even after it is selected as a world geopark," said Young Ng Chun-yeong, who is from a concern group against the project. An international panel of experts has visited Hong Kong to study the proposed world park. It has an estimated size of 50 square kilometres, including the sea area close to the planned wind farm. A decision by the global geopark network on the listing will be announced shortly. Lo Pak-cheong, corporate development director of CLP, said no commercial decision had been made on the wind farm, as more data was needed to determine the layout of the farm and the size of the turbines. "If the results are not satisfactory, we might end up slashing the scale, making some adjustments to our plan or even looking for other possibilities," said Lo, adding that government approval was still needed. Lo said the data could help decide if the turbines would be 125 metres or 150 metres tall. Opponents of the project are concerned about the visual impact of the turbines. Lo said the total cost of building the wind farms would be between HK$5 billion and HK$7 billion, depending on the number of turbines and their size. While the power firm is entitled to enjoy an 11 per cent return on the investment, which is higher than the 9.9 per cent of other power generation assets, electricity users would pay two per cent more on their power tariff. CLP Power started to study the feasibility of an offshore wind farm in 2006, and an environmental impact assessment has been completed and was endorsed by the government in 2009. But the firm has yet to submit a detailed business plan for the Environment Bureau to approve. The wind farm is expected to satisfy the power demands of 80,000 households, and reduce carbon emissions by up to 300,000 tons a year. But the projects' opponents said that reduction was meagre compared to the total investment. A spokeswoman for CLP said last night that they had regular communications with stakeholders, and had heard no adverse comments about the mast installation. Apart from CLP Power, Hongkong Electric (SEHK: 0006) - a subsidiary of Power Assets Holding - is proposing to build a 100MW offshore wind farm southwest of Lamma Island.

Hong Kong Exchanges and Clearing (0388) is ready to allow listed companies to issue shares in the mainland currency. The basic mechanism will follow the previously announced Dual Tranche, Dual Counter format, under which fewer conditions will be imposed on the firms. "Listed firms can raise yuan funds through placement, rights issue/open offer, public offer, or a combination of the above," HKEx renminbi products head Bryan Chan Ping-keung said. He added that current listing rules are basically currency neutral. Existing disclosure requirements, listing rules and company ordinance will continue to apply. Firms will also have to disclose more information on their dual trading counters and related arrangements. "There is no specific requirement for the follow-on fund raising, but the HKEx expects a meaningful offer size and an adequate spread of shareholders for the yuan counter to support secondary market liquidity," Chan said. Companies can choose whether the two share tranches would be inter- transferable. But Chan said the exchange is more keen on having transferable shares to enable efficient arbitrage. "The transferability allows arbitrage trade at lower costs," said Chan. Arbitrage is the practice of profiting from price differences between two or more markets. The new tranche of shares denominated in yuan will be given another stock code - the same as the system under the "Dual Tranche, Dual Counter" mechanism. As for dividend payouts, shareholders can choose to receive them in either the yuan or the Hong Kong dollar. The trade support facility that will allow investors to pay for yuan shares in the Hong Kong dollar is due to be launched next month. As of August 31, ninety brokerages and banks had agreed to join the facility. The HKEx is in the final stages of drafting related agreements with financial institutions. Chan added that simulation tests involving the listing of yuan-denominated stocks on the local bourse will be carried out soon.

Pointing to violent protesters at a by-election forum, members of a security guard union want to be armed with batons and other gear for facing trouble. The 3,000-strong Hong Kong General Union of Security and Property Management Industry Employees pressed the case yesterday, saying guards face immense stress because of an increasing number of violent protests. About 100 radicals, some masked, last Thursday gate-crashed the forum at the Science Museum in Tsim Sha Tsui and rained dog food on Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung. But there were no arrests. The union claimed one guard was "violently treated" by a radical who took hold of his neck before forcing his way into the museum. Union vice chairwoman Huen Wai-han said guards should be equipped with protective wear like knee pads as well as batons to face protesters. Some security guards at the gathering said their families have asked them to quit their jobs as they do not want them to get hurt. And Chief Executive Donald Tsang Yam-kuen weighed into the fray last night by saying authorities will handle actions that disrupt social order. Offering a view on troublemakers while at a policy address consultation at a community hall in Causeway Bay, Tsang said Hong Kong is civilized and protesters should not interrupt a forum. On the same issue, however, a motion of condemnation demanded by the Democratic Alliance for the Betterment and Progress of Hong Kong is unlikely to feature in a legislative security panel meeting on Monday. Panel chairman and lawmaker James To Kun- sun said that while security for activities organized by the government is in the scope of the panel, the motion was not on the agenda already set. But he would be seeking legal advice before a final decision, To added, and even if the motion is not tabled on Monday it could be raised later. DAB chairman Tam Yiu-chung said he regretted that the motion would not be be tabled. If the motion did not move along next week, he said, "people may think that legislators are protecting each other." One of the items that lawmakers will be discussing on Monday are the security arrangements for Vice Premier Li Keqiang's visit last month. Secretary for Security Ambrose Lee Siu-kwong and Commissioner of Police Andy Tsang Wai-hung will be attending the session. To said he also invited representatives of the University of Hong Kong, where there was a fracas and major fallout from the Li visit.

Two senior news executives at Asia Television have quit over not being able to stop the station from airing an incorrect report on the death of former president Jiang Zemin. The resignation of senior vice president of news and public affairs Leung Ka-wing was accepted by the broadcaster with immediate effect. His deputy, vice president Tammy Tam Wai-yee, tendered her resignation soon after ATV announced Leung's departure around 5pm. In a phone interview with ATV news, Leung said: "Why do I have to take full responsibility? It is because I failed to stop that news report from being aired despite my all-out efforts." He did not say who had insisted on running the report on July 6, only that he had tendered his resignation two days after the report was aired. ATV major investor Wang Zheng earlier denied suggestions he was the source of the announcement. Leung said he tendered his resignation to executive board member James Shing Pan-yu and senior vice president Kwong Hoi-ying and left it for the station to decide when he should leave so as not to shock colleagues. He said for the past two months no one persuaded him to stay and that it was only last Thursday that ATV discussed with him his departure arrangements. The news department led by Leung reportedly clashed with management over objective reporting last month. The department was said to disagree with a plan to put an extract of a weekly sponsored financial program, Corporate Excellence, into another show, Wealth Blog, produced by the news section. This is the second time Leung has quit ATV. He tendered his resignation as vice president of news along with three other top executives four days after Ricky Wong Wai-kay was appointed as the station's new chief executive in 2008. Their departure sparked speculation of a major change in the station's editorial operations and policies. Leung later agreed to stay after Wong's departure. In a brief statement, the broadcaster said Leung resigned with immediate effect "for personal reasons" and praised him for "being committed to his work and making huge contributions" to ATV. A spokesman for the station said vice president Lau Lan-cheong will replace Leung but declined to confirm if Tam tendered her resignation and whether it has been accepted.Tam could not be reached for comment last night. A day after ATV aired the report on July 6, Xinhua News Agency said speculation over the death of Jiang, 84, was "pure rumor" while the central government liaison office was cited by Beijing-backed Hong Kong China News Agency as expressing outrage over the report. The office also criticized the channel for seriously breaching professional news ethics. Wang said he only knew about the report on Jiang's death after the ATV newscast. The broadcaster then issued an apology and retracted the report. The Broadcasting Authority yesterday said its investigation into 41 complaints against the report is still ongoing. The Legislative Council's panel on information technology and broadcasting will follow up the issue next month. Leung Tin-wai, head of Shue Yan University's journalism department, said Leung's resignation shows it is hard for news departments to maintain editorial independence as they are controlled by bosses.

Coupons from the scheme run by the Tung Wah Group of Hospitals work like money: families use them to buy products from the vendors, whom the charity later reimburses. Kind vendors join fight against family hunger - Food sellers talk about the 'bigger picture' of taking part in charity's food assistance scheme. Meat merchant Man Chiu-ming believes helping the underprivileged can take many forms. He has chosen to take part in a voucher scheme that sells fresh food to beneficiaries of a service run by the Tung Wah Group of Hospitals. Man has been selling meat in Tai Kok Tsui for more than 30 years. A significant portion of his business comes from long-time customers who have moved to other districts but return because they trust him and the meat he sells. "I'm not a rich man; I have no money to donate to charity. But I help through my work so I joined the scheme," he said. Man knows that many food assistance recipients are embarrassed to show their meat coupons. Therefore, he assures them they are also bringing him business, like the rest of the customers. "I can tell some of them are uncomfortable. They hesitate when they are taking the coupon out of their wallet, and when they pass the coupon to us, they are uncertain whether they should do so. They don't need to feel bad. They are helping me by shopping at my store," Man said. He also knows some are too embarrassed to get the meat themselves and they ask their friends to do it. The charity group provides its "Food For All" assistance to lowincome families in West Kowloon. It distributes basic packs to families who can cook at home; and more simple ones to street sleepers and those who cannot cook at home. A basic pack, which the recipients take home once a week, contains rice, eggs, noodles, an energy drink and canned food. It also has vegetable and meat coupons. The size of a pack depends on the family. Those with babies and young children receive milk formula in their packs. Each coupon is worth HK$10. A family of four will receive four meat coupons and four vegetable coupons. Beneficiaries of the Tung Wah food bank service can take the coupons to the charity's partner vendors to receive the vegetables and meat they want. A recent report on global wealth found that, in Hong Kong, one in six families with children often suffers from hunger. In light of the situation these families face, the South China Morning Post (SEHK: 0583, announcements, news) has launched a campaign to raise funds for Food for All and the People's Food Bank run by St James' Settlement. The donations received will be equally distributed to the two beneficiaries. Also driven by the belief that helping others can come in many forms, Sam Lau, a vendor selling vegetables at Tai Kok Tsui Municipal Services Building, joined Tung Wah's programme. "I lost all my savings more than 10 years ago doing business in Dongguan ," Lau said. "I know there are good times and bad times. When we are doing fine, we help those less fortunate. "If I don't join this scheme, those customers may not come to me, but by joining the scheme, I have more business." The charity visits the vendors occasionally to collect the coupons and pay the money. "The vendors are very kind indeed. It takes them extra time to do business with us and they don't receive cash immediately," said Lau Kim-wun, Tung Wah's acting district co-ordinator. Identifying the right vendors is not easy. "They must be honest and reliable, and treat the beneficiaries well," Lau said. The scheme has 13 vendors. BENEFICIARIES: St James' Settlement's People's Food Bank; Established in 2003, the service provides food to people in need on a short-term basis, serving rice, noodles, canned food, frozen meat, vegetables, hot meals and baby milk formula to around 1,500 people a day. Tung Wah Group of Hospitals' Food for All assistance service, Food for All has been providing short-term help to the needy since 2009. Some 165,000 people get rice, noodles, biscuits and powdered milk, as well as coupons for fresh meat, vegetables, fruits and cooked meals. Customised menus are also available. How you can help these programmes - Make a donation by: Direct transfer to HSBC account 502-676588-001 for SCMP Charities Ltd. Cheque payable to "SCMP Charities Ltd" and mail to: SCMP Charities Ltd, Morning Post Centre, 22 Dai Fat Street, Tai Po Industrial Estate, New Territories. Donations of HK$100 or more are tax-deductible. For a tax receipt, please send us the original bank receipt with your name, address and phone number to the address above. Please call 2680 8159 with any inquiries.

A senior executive at Asia Television’s news department in Tai Po has resigned, the broadcaster said on Monday – about two months after the station was criticised by mainland officials for a report saying former president Jiang Zemin had died. In a statement issued on Monday afternoon, ATV said senior vice-president in news and public affairs Leung Ka-wing resigned for “personal reasons”. It did not explain further, saying only that his resignation was accepted “with immediate effect”. In an interview broadcast by ATV on Monday afternoon, Leung said he had resigned to shoulder responsibility for “the failure to stop broadcasting the report on Jiang’s death”. “I have complete responsibility over the coverage. The next day after the report was broadcast I thought I had to resign. It was because I had failed to stop the report being broadcast,” he said. Leung said two days later, he submitted his resignation to management. Leung joined ATV in 2007 as vice-president of news, and was promoted to senior vice-president of news and public affairs the following year, the station said in a statement, which was only available in Chinese. “During this period he was highly conscientious and made many contributions,” the statement said. “Asia Television owns a debt of gratitude to Mr Leung for his services. We wish him a happy life and good health,” it added. The TV station was forced into an embarrassing apology after it was severely criticised by the central government’s liaison office for “seriously breaching professional news ethics” over a report it broadcast on its July 6 evening news saying Jiang had died in Beijing. The official Xinhua agency also dismissed it as “pure rumour”. ATV later withdrew the report.

A Hong Kong regulatory review is delaying a high-profile hedge-fund launch by the former Asia investment chief for an asset-management firm owned by J.P. Morgan Chase & Co., according to people familiar with the matter. Hong Kong's Securities and Futures Commission is exploring allegations that Carl Huttenlocher, who left the bank's Highbridge Capital Management earlier this year, or others working for his fund improperly valued illiquid assets, among other actions, during the height of the financial crisis and its aftermath, the people said. An anonymous complaint filed with the Hong Kong regulator this summer led to requests for documents and other information from Mr. Huttenlocher and Highbridge late this week, the people familiar with the matter said. The regulator's requests for information, as part of inquiries the people describe as preliminary in nature, threaten to overshadow the immediate plans of one of Asia's most prominent hedge-fund managers. One issue under review is whether the valuations of Mr. Huttenlocher's fund, the timing of its asset sales and payouts to withdrawing investors unfairly benefited ongoing investors, boosting their returns and fees to the fund's managers while hurting clients that wanted out, according to people familiar with the matter. "In the three years I met with investors since 2008, I didn't hear any complaints about the Asia Fund's valuation or gating practices, and in fact, most investors applauded the plan," Mr. Huttenlocher said in a statement. "There is no factual basis to this anonymous complaint." Gating refers to steps taken to limit redemptions, often in response to a pile-up of withdrawal requests. "We do not believe there is any merit to the complaint the SFC received from a single anonymous individual," a J.P. Morgan spokeswoman said. "Clients who redeemed from the Highbridge Asia Opportunities Fund at the end of 2008 received more than 100% of their redemption request by September 2009. "We look forward to this matter being resolved quickly." An SFC spokesman in Hong Kong and a senior official in its licensing division declined to comment. Not all SFC requests for information lead to deeper inquiries or formal investigations, and it is not known whether the regulator will proceed in any way based on information it receives. J.P. Morgan bought a controlling stake in Highbridge in 2004 for more than $1 billion, when Highbridge managed about $7 billion in assets. The firm now has some $30 billion in assets and is fully owned by the bank. Mr. Huttenlocher had intended to start trading his new Hong Kong-based hedge fund, called Myriad Asset Management, on Sept. 1, say people familiar with the matter. Amid the regulatory requests, the SFC postponed approval for licenses required before Myriad can operate, the people say. Wall Street firms have eagerly awaited Myriad's arrival and the millions of dollars in trading commissions and other fees they hope to reap from the new fund. Mr. Huttenlocher has been expected to start trading with around $300 million in assets, and to expand to more than $1 billion in 2012 when he opens the fund to outside investors, say people at firms planning to do business with Myriad or otherwise connected to it. Few hedge funds in Asia have exceeded $1 billion at their launch or soon after, given the tough fund-raising environment and prolonged economic woes. Mr. Huttenlocher's planned startup has attracted significant attention from former Highbridge clients, say people familiar with him. Before he left, Mr. Huttenlocher oversaw more than $2 billion in assets, including the Hong Kong-based Highbridge Asia Opportunities Fund and a minority portion of Highbridge's main multi-strategy hedge fund based in New York. Highbridge wound down its Asia fund after Mr. Huttenlocher, who served on Highbridge's investment committee, said he was leaving in March of this year. That fund focused on trading equities and convertible bonds, the same strategy Mr. Huttenlocher plans to employ at Myriad, say people familiar with both firms. Regulators want to know about specific convertible bonds held by the Asia Opportunities fund, and how his team marked the assets at various times, including when investors were cashed out, people familiar with the SFC's inquiries say. Regulators have asked for records of the fund's communications with clients, they say, and copies of asset-pricing policies and rules governing when and how assets from one Highbridge pool could be sold to another. In 2008, the Highbridge Asia fund suffered a roughly 30% loss by the end of October—worse than most hedge funds amid the financial crisis—prompting clients to request withdrawals for about 55% of the Asia fund's assets, say people familiar with the fund. According to the people and documents reviewed by The Wall Street Journal, Mr. Huttenlocher's team segregated equities and other liquid assets from most of the convertibles, which were harder to sell and therefore classified as illiquid, and instituted a plan to pay out investors over the course of several months. Most client withdrawals were paid out by mid-2009. Investors who stayed put benefited from a 56% return in the Asia fund in 2009, a significant part of that attributed to gains in the convertibles positions that had suffered steep losses in 2008, the people say. In the third quarter of 2009, Mr. Huttenlocher surpassed his so-called high-water mark, the point at which investment gains make up for investors' losses, allowing the fund to resume charging fees on investment profits, according to people familiar with the matter and fund-related documents. Previously, Mr. Huttenlocher oversaw Asia investments in convertibles and derivatives for Long-Term Capital Management, and prior to that, he traded European convertible bonds for Chicago-based hedge fund Citadel.

 China*:  Sept 7 2011 Share

A worker sits in front of a dragon shaped lantern decoration which set up for the upcoming Mid-Autumn Festival at Longtan park in Beijing September 5, 2011. Chinese worldwide will celebrate the festival on the 15th day of the eighth month of the Lunar calendar. The festival falls on September 12 this year.

An artist's impression of Zhongguo Zun in the CBD. The building, which will house offices of CITIC Group, will be the tallest in Beijing when it is finished, standing 510 meters. Developers working on a new skyscraper, which once built will be the capital's tallest building, say they will break ground on the project on Sept 19. CITIC Group, which won the rights to the land in the Central Business District with a bid of 3.6 billion yuan ($563 million) last December, plans to build a 510-meter-high office tower with 104 floors above ground and four basement levels. "The final design hasn't been decided yet, as the group is waiting for the municipal government's approval, but the building will be higher than 500 meters," an insider at CITIC Real Estate who refused to be named said on Monday. The new skyscraper is called Zhongguo Zun, which means China Goblet, as the inspiration for the design came from an ancient ritual vessel. Construction will be completed in five to seven years, the insider said. The land where the building will stand is in the north of the CBD, which houses many international companies. The capital's tallest building now is Tower 3 of China World Trade Center, which is 330 meters tall and is also in the CBD. "It is going to become a new landmark for the city," said an official in charge of the CBD who also spoke on condition of anonymity. The skyscraper is expected to serve as an office building for CITIC Group. "The company will occupy the whole building, and even then the space will not be enough," added the CBD official. "Also, the company can't rent any of that office space for 10 years, as stipulated in the contract it signed with the municipal government." Wu Chengtao, editor of Skyscraper Magazine, said: "The building, to some degree, demonstrates the city's image and economic strength, and will attract more investment. Besides, the competition among cities, both at home and abroad, has become more and more fierce, triggering many cities to pursue more super high-rise buildings." He said at least three skyscrapers above 600 meters were under construction in Shanghai, Wuhan and Shenzhen. The number of buildings higher than 500 meters is much larger, "and I can't remember them all", he added. "Considering its economic strength and influence as the Chinese capital, Beijing could build one higher than 700 meters," said Wu. "However, the tallest building will be about 510 meters, which shows the city is pursuing stable development." The design of the new skyscraper adopts many elements from traditional culture, such as the Kongming (Floating Paper) Lamp. "The building will remind people of the ancient Chinese city, representing Beijing's image perfectly," said Wu. However, the high-rise will bring about some problems, experts say. "Having a large amount of people concentrated in a limited place will put huge pressure on transport and the environment," said Yan Jinming, a professor of land management at Remin University of China. "Plus, the requirements for foundations, equipment to prevent disasters and fires are more strict, thus the cost is much higher." Wu agreed and said that since the CITIC Group is involved in broad business, lots of related enterprises will move closer for convenience, causing a hike in rental prices. "However, as more jobs will be created, on a whole, the advantages brought by the new skyscraper will outweigh the disadvantages," he added.

China's services sector grew in August at its weakest pace on record, a private survey showed on Monday, as new orders ebbed and tightening measures to rein in an exuberant property sector started to pinch. The slowdown in the services sector to below levels seen during the global financial crisis reinforces signs that the world’s second-biggest economy is losing steam, even as global demand sputters. While the services sector accounts for less than 45 per cent of China’s gross domestic product, similar PMI reports last week showed growth in its manufacturing sector has also cooled conseridably, and even contracted according to one survey. Though a sharp economic slowdown is not expected at this point, the combination of cooling growth at home and a prolonged slump abroad will not be welcomed by policymakers in Beijing who are still struggling to tamp down high inflation with tighter policy without further curbing growth. The world economy faces risks from both slowing growth and persistent inflationary pressure, which is spilling over from emerging to advanced economies, Ma Delun, a vice-governor at China’s central bank, said in comments reported on Friday. The comments about world economic prospects echoed earlier ones from Chinese Premier Wen Jiabao, underscoring that Beijing is not counting on major foreign markets to recover quickly. The HSBC’s Services Purchasing Managers’ Index (PMI), which provides a snapshot of conditions in industries from restaurants to computing, slid to 50.6 in August from July’s 53.5, said Markit, a British research firm that compiles the index. The August reading was the lowest since the survey begun in November 2005 and was a touch lower than the previous trough of 51.2 during the global crisis. The 50-point level demarcates expansion from contraction. The figures are seasonally adjusted. “Overall, services sectors are set to slow as both credit and property tightening measures are filtering through,” said Qu Hongbin, China economist at HSBC. India PMI data released on Monday also showed that country’s services sector also grew more sluggishly in August. The HSBC Markit Business Activity Index dropped to 53.8 from 58.2 in July, slowed by a faltering global economy and India’s tight monetary conditions. India’s services sector, which includes outsourcing power-houses like Tata Consultancy Services and Infosys, has traditionally shrugged off weak global economic conditions due to its ability to take on more work at a time when companies worldwide seek to lower costs. In China, the August slowdown was mainly driven by a slip in new business flows, as businesses found it more difficult to win new contacts. The new business sub-index fell from July’s 52.6 to 51.2, the second-lowest reading in the survey’s history, Qu said in a note to clients. Despite the fall, China’s PMI reading still implied an annual expansion of 8-9 per cent for the service sectors, Qu said. The property market is unlikely to collapse, not least because of Chinese households’ low leverage ratio and credit tightening is approaching to an end, Qu added. “This, plus the still resilient consumer spending, suggests China’s services sector is likely to see moderation, not meltdown, in the coming months,” he said. In one worrisome sign, the survey showed input prices remained elevated in August, with respondents citing higher wage costs, which often lead to further broad price rises. In a bid to tame stubborn high inflation, the central bank has raised interest rates five times since October and lifted the deposit reserve requirement ratio nine times. The government has also unveiled a flurry of steps to cool property price rises, including home purchase restrictions, the launch of a property tax and increased mortgage rates. China will release August inflation figures on Friday, giving investors a picture of how successful those measures have been. A separate PMI for China’s services sector, published by the China Federation of Logistics and Purchase, dipped to 57.6 per cent in August from 59.6 per cent in July as railway investment fell following a deadly high-speed train crash. The reading follows a pair of manufacturing PMIs last week that showed China’s factory activity steadied in August owing to solid domestic demand, but tight monetary policy at home and torpid demand abroad dimmed chances for a sustained recovery. An official government survey showed factory activity growth picked up a but, despite a sharp drop in new export orders, while a survey conducted for HSBC shrank showed the sector shrank slightly for a second straight month, albeit not as much as initially feared. While retail sales clocked up 17.2 per cent growth in July from a year earlier, domestic demand may not be resilient enough yet to rebalance the export-oriented economy on its own. Home-grown carmakers are reeling after Beijing stripped away incentives for some cars at the end of last year, thought Western brands are faring much better.

President Hu Jintao might be greeted by unshaven villagers wearing old clothes when he travels to the countryside to share a meal with locals. If so, then everything went according to plan. A recently released Wikileaks cable provides a rare and detailed glimpse into the degree of stage managing involved when Mr. Hu makes domestic visits, usually with state-run new agencies in tow. The cable describes a great deal of secrecy over Mr. Hu’s identity, keeping local officials in the dark until the president himself arrives, as well as measures that include keeping the temperature of home cooking oil low so he won’t be scalded while helping locals prepare a meal. Mr. Hu’s domestic trips are regularly the top story on China’s national evening news. His meetings with farmers, factory workers and schoolchildren, among others, harken to the party’s populist roots and are a chance for the propaganda apparatus to soften Mr. Hu’s often rigid outward persona. The cable is based on an interview between embassy staff and a former ranking local party official, whose poverty-stricken district in the northwestern province of Gansu Mr. Hu visited during the Chinese New Year holiday in 2007. Ten days before Mr. Hu’s visit, an advance team from Beijing arrived to tell the local leader that a ranking party member would be visiting, though its members never revealed that Mr. Hu was the expected visitor. Then, three days before Mr. Hu would arrive, the advance team chose a farmhouse in one of the district’s villages where Mr. Hu would share a traditional New Year’s meal. Officials finally chose the home of 70-year-old Li Cai, a longtime party member. “The house appealed to the General Office advance team not only because it looked rustic…but Li himself sported a long beard that made him the epitome of a weathered Gansu farmer,” the cable read. With the location chosen, officials ordered that nothing be changed. Party officials fear local cadres would try to spruce up a house too much, and the local officials ordered Mr. Li not to shave his long beard. The cable goes on to describe the meal itself: Word came from the General Office that “the visitor” wanted to make meat dumplings with the family…even though it was not the local custom. Another part of the meal, a genuine local tradition of frying twisted dough sticks in a wok of boiling oil, presented the serious risk of hot oil splashing on Hu Jintao. The solution…was to heat the oil to 70 percent of the normal temperature and give Hu an extra long set of chopsticks. When it came time to eat, Hu’s own undercooked portion was set aside in favor of properly fried dough sticks that had been prepared earlier. Stage managing the trips of top political leaders isn’t unique to the Chinese. There was no shortage of photo-ops during Vice President Joe Biden’s recent trip to the country, for example. In one case, shortly after Mr. Biden finished a private tea in the city of Dujiangyan in the southwestern province of Sichuan with his Chinese counterpart, Vice President Xi Jinping, the two men chatted casually (at least as casually as the vice presidents of China and the U.S. are capable) on the city’s idyllic South Bridge. More than 100 journalists, State Department and Foreign Ministry officials looked on, not to mention a small army of U.S. Secret Service. So, what to do when a scripted moment goes astray? The cable describes a moment from Mr. Hu’s 2007 visit to Gansu, when the young granddaughter of wispy-bearded Mr. Li refused the local potato variety Mr. Hu offered her. The child complained she was tired of eating them. “The family eventually cajoled the girl into accepting,” the cable read. A shot of Mr. Hu and the young girl together sharing the local specialty was later broadcast on the national evening news.

Hong Kong*:  Sept 6 2011 Share

The House of Dancing Water is a HK$2 billion show created by internationally celebrated producer Franco Dragone - of Cirque du Soleil fame. The project, which was five years in the making, takes place in a highly specialized revolutionary purpose-built theater that holds a record-breaking 14 million liters of water - equal to that in five Olympic-size swimming pools. The success of the show at the City of Dreams, Macau, lies in the final effect - the teamwork that aims to stun all five senses of the audience as visual effects match perfectly with the dance and the flawless, innovative acrobatic sequences. The meticulous architecture and stage design feature shifting planes of different sizes and water levels, as well as screens bearing lifelike scenery. The spectacular extravaganza that meets the eye captures the imagination as well, through a cross-disciplinary display of art, theater, dance, music and fashion - each complementing the other flawlessly. However, one must reflect upon the weak storyline, as the narrative is not always coherent or purposeful - in particular the freestyle motorcycle show - albeit impressive. Nonetheless, the architecture complements the art in a subtle way, tying the show together and giving it the power to attract and engage audiences of all cultural or indeed non-cultural backgrounds. Hong Kong Art Vanguard Association members - architect Nicholas Ho and art historian Stephanie Poon - don't always see eye to eye.

Vice-Premier Li Keqiang last month promised to make it easier for Hong Kong insurers to set up operations on the mainland. Beijing's ambition to turn Hong Kong into a yuan hub is spurring Hong Kong insurance companies to issue more yuan-denominated life policies - but they want greater access to the mainland market as well. Vice-Premier Li Keqiang last month announced a range of measures to boost the city's yuan business, and promised to make it easier for Hong Kong insurers to set up operations on the mainland, but did not give details. Currently, only insurance companies with at least US$5 billion in total assets are allowed to set up joint venture insurance companies on the mainland. That largely rules out most Hong Kong insurers, who say they should also be able to conduct business across the border. "If Hong Kong insurance companies with a lower capital requirement were allowed to set up promotional or agency offices in Guangdong or other parts of China, it would be very helpful to our business expansion," Chan Kin-por, a legislator for the insurance sector told The South China Morning Post (SEHK: 0583). The Financial Services and Treasury Bureau (FSTB) plans to accompany the Hong Kong Federation of Insurers to Beijing later this year to lobby for more opening up of the mainland market. Hong Kong insurers say they need to be able to invest in mainland equities and bonds so they can offer clients a better return on policies. AXA Hong Kong chief executive Stuart Harrison said any sign of opening up to the Hong Kong insurance sector was welcome. In 1999, AXA established the joint venture AXA Minmetals Assurance in China, and launched yuan-denominated insurance products in Hong Kong last year. Now that there are more yuandenominated products, "we will continue to look at ways to redefine our product mix to ensure that they are in line with market needs," Harrison said. "We do not rule out the possibility of additional yuan products if there is demand." The yuan is not yet fully convertible but since mid-2009 Beijing has been moving to gradually internationalise it. It allows selected companies to settle cross-border trades in yuan, and last July permitted yuan transfers between bank accounts, paving the way for a flood of yuandenominated investment products, including insurance policies. Yuan policies are popular in Hong Kong, with 10 insurers launching yuan-denominated policies worth 4.4 billion yuan so far this year. Alex Chu Wing-yiu, chairman of the Hong Kong Federation of Insurers, said investors liked yuan policies, as they thought the yuan would continue to gain against the US dollar. He added, however, that Hong Kong insurance companies now mainly issue short-term yuan insurance products such as five-year or 10-year life policies, as it was difficult to find longer-term yuan-denominated investment products. The product range is also limited, with a slew of dim sum bonds - yuan-denominated bonds issued in Hong Kong - but no yuan shares except for a yuan real estate investment trust launched in April. Insurers in Hong Kong complain that they cannot find appropriate yuan investment products in Hong Kong and are not allowed to buy mainland stocks or bonds. However, Vice-Premier Li hinted last month that the Beijing would relax foreign direct investment rules so foreign firms could invest yuan directly into mainland projects instead of having to use US dollars. The government has also set a new quota of 25 billion yuan for non-financial companies to issue dim sum bonds in Hong Kong this year. "These measures will encourage more companies to issue yuan bonds and yuan shares in Hong Kong. This will widen the investment choices for the local insurers so they can offer investors a higher return on yuan policies," Chu said. Choy Chung-foo, chief executive of BOC (SEHK: 3988) Group Life, said he would like Hong Kong insurers to be able to invest in the mainland bond market. If that were allowed, "we could achieve a higher return for Hong Kong policyholders", Choy said. "We can also provide more stable funding. This is a win-win situation.'' At present, US and Hong Kong dollar life policies can offer a return of about 4 per cent because of the wider range of US and Hong Kong-dollar denominated bonds and shares. In contrast, yuan policies only offer an annual return of 1 to 2 per cent. Manulife (International) executive vice-president and chief executive Michael Huddart predicts that yuan-denominated products will account for 25 to 30 per cent of Manulife Hong Kong's premiums and deposits in five years' time. "Manulife is an active participant in the yuan-denominated investment market," Huddart said. "Vice-Premier Li Keqiang has reaffirmed Hong Kong's position as the centre for offshore yuan investments. Although the details have not been announced yet, we anticipate more and more yuan investments to be launched in the market in the future." Looking ahead, Huddart said the key issue would be for the mainland to open up more to give foreign insurers access to long-term yuan securities and mainland bond markets.

A bane of urban life in Hong Kong has been waiting for buses not knowing when they will arrive. Now a new smartphone application has come to the rescue. The app by Hong Kong-based Nuthon IT Solution not only helps you to find the nearest bus stops, it also tells you how long you have to wait - relying on real-time input from bus passengers. "I know how annoying it is to wait 20 minutes for a 20-minute bus ride," said Leo To Chun-hong, director of Nuthon IT Solution, who is developing the free app with his team to be launched next month in Apple and Android app stores. He said bus passengers had the incentive to provide the information because their input was required if they, in turn, wanted to use the service while waiting for buses. Nuthon launched another app two years ago to provide road users with information on the nearest public toilets. It has had at least 20,000 downloads so far. Another app it has invented shows shoppers where the nearest ATM machines and convenience stores are. This has attracted 50,000 downloads. Hong Kong Internet Society chairman Charles Mok said apps development in Hong Kong was growing fast this year. "More than 10 years ago, companies still considered whether they needed a website. Now it's needless to ask. The same is now happening with apps," he said. Mok said Hong Kong app developers mostly partnered with firms and made apps for marketing purposes.

Galaxy Entertainment Group Ltd. said Wednesday its first-half net profit fell 20% from a year earlier, dragged down by one-time charges linked to the opening of its new casino in Macau, despite soaring gambling revenue growth in the Chinese territory. The Hong Kong-listed casino operator, controlled by the family of billionaire Lui Che Woo, said its net profit for the six months ended June 30 was 378.3 million Hong Kong dollars (US$48.5 million), down from HK$475.0 million. Revenue rose 59% to HK$13.67 billion from HK$8.57 billion. On May 15, the company opened Galaxy Macau, a US$2 billion casino complex in Macau's Cotai area with 450 gaming tables. It will ultimately have 2,200 hotel rooms and more than 50 food-and-beverage outlets. The company said it had a one-time expense of around HK$800 million related to the casino resort's launch. The new flagship competes with Las Vegas Sands Corp.'s Venetian Macao resort down the road and the City of Dreams resort, owned by Hong Kong-Australian joint venture Melco Crown Entertainment Ltd. Rivals Wynn Resorts Ltd., MGM China Holdings Ltd. and SJM Holdings Ltd. also plan to build casino resorts in the area. Like it did last year, Galaxy didn't recommend a first-half dividend.

At least four measures announced by Vice-Premier Li Keqiang during his visit to Hong Kong last month should help banks accelerate their business, bankers said. The key measures include: allowing yuan-denominated foreign direct investment (FDI) from Hong Kong; permitting non-financial institutions from the mainland to raise yuandenominated bonds in the city; expanding the yuan cross-border trade settlement scheme; and accelerating Hong Kong banks' "cross-city" sub-branch openings in Guangdong. While all the measures complement each other in helping the city take off as an offshore yuan centre, several banks particularly made note of the opening up of yuan-FDI policies. They said this policy of repatriating the mainland currency would have immediate effects on banks as it helps utilise yuan that has accumulated in the city. Hong Kong had 553.6 billion in yuan deposits by the end of June, up 517 per cent compared with the same time last year. But banks have not been able to spin profits from yuan-related business, mainly due to a lack of investment channels. Bank of China Hong Kong, the sole yuan clearing bank in the city, for example, has suffered in lending profitability. Its net interest margin fell 37 basis points year on year to 1.21 per cent in the first half. If the yuan effect was discounted, net interest margin would have dropped by only 16 basis points to 1.48 per cent. Thomas Poon, HSBC's head of business planning and strategy, Hong Kong, said the new policy would not only create possibilities of driving up yuan-loan demands, but also benefit the bond market. With a strong demand for dim sum bonds - yuan-denominated bonds issued in Hong Kong - companies that wish to raise money to fund their FDI activities would probably choose to use the debt market due to its flexibility in issuance size and the attractive borrowing cost, he said. Hong Kong has been the main source of FDI for the mainland, accounting for about 50 per cent. Even though most of the FDI in the mainland is denominated in US dollars, there have been trial cases of yuan-denominated FDIs since last year. The second measure, permitting non-financial institutions from the mainland to raise yuan bonds in Hong Kong, would have immediate business impact as it will expand the scope and size of potential issuers, said Standard Chartered Bank. In the past, only mainland financial institutions, such as banks, were allowed to raise dim sum bonds in the city. "There will be more opportunities for banks to arrange and underwrite the issuance of dim sum bonds, so the banks will be getting the fee income," said Poon, who added that banks could also help issuers distribute bonds. As a result, some of the banks' other businesses - such as asset management and global market functions - would also benefit, he said. The third measure, expanding the yuan-trade settlement agreement across all 30 provinces, autonomous regions and municipalities, up from 20 will expand the yuan accumulation in the city, enhancing the city's status as an offshore yuan centre. Bankers said while this policy has its benefits, the business volume growth it brings might not be as great as when Beijing extended yuan cross-border trade settlement to 20 provincial-level regions in June of last year, up from five cities. The People's Bank of China and the State Council allowed Shanghai, Shenzhen, Guangzhou, Zhuhai and Dongguan to settle trades in yuan with Hong Kong and Macau and Asean countries in July 2009. But the trade settlement scheme really took off last year in June, when Beijing expanded the scheme to 20 mainland provinces and all foreign countries as counterparties. After the expansion, the amount of yuan accumulated in Hong Kong shot up by 517 per cent. The fourth measure - accelerating Hong Kong banks' cross-city sub-branch openings in Guangdong province - will help speed up the ability of banks to establish themselves in the provinces while lowering costs, bankers said. One main difference between a branch and a sub-branch is that the capital requirement for opening a sub-branch can be just one-tenth that of a branch. The capital requirement for a branch is at least 100 million to 300 million yuan, while a sub-branch's requirement is just about 10 million yuan. Also the size of the operation and the costs are smaller for sub-branches. In the past, Hong Kong banks were not allowed to open up sub-branches in cities before they had established a branch. In October 2009, Guangdong began permitting so-called "cross-city" sub-branches. After that Hong Kong banks were permitted to set up sub-branches across all cities if it had one branch in the province, instead of in each city. Many banks are planning to capitalise on the opportunity and speed up their establishment of cross-city sub-branches in major cities in Guangdong province.

The Hong Kong Triathlon Association has had to cancel its showpiece ITU event next month after the Transport Department refused to close a road. It is the second setback for the association this year after it lost the Disneyland venue used for the previous three years after failing to secure sponsorship to meet the costs of road closures on Lantau Island. It is also another blow to the city's wider ambitions to stage major sporting events. The association learned just 10 days ago that the department would not agree to their request to close Bride's Pool Road, Tai Mei Tuk, for the two-day event, giving them just the Sunday morning to host it. "This is very disappointing as we applied for the road closure way back in April, but we learned just 10 days ago that our request for a road closure on two consecutive days has been turned down," said Angela Wong of the association. The popularity of triathlons meant it had to be staged over two days for the past six years, with elite athletes racing on Saturday and age group entrants on Sunday. It regularly attracts international athletes. "We've looked at all sorts of ways to accommodate both races in just one day, but we just can't accommodate the large number of competitors involved," Wong said. "We need two days to effectively stage all of the disciplines that make up the event, and staging a triathlon is much more complicated than organising a run." A department spokesman said a two-day road closure would cause disturbance to the residents and create traffic problems. The age group competition will now go ahead as planned on Sunday and will be known as the Hong Kong Triathlon Championships. Andrew Wright, who ensured that triathlon would remain as one of the Hong Kong Sports Institute's government-funded focus sports with his seventh place finish in the Asian Games in Guangzhou last year, was upset the Hong Kong ITU Triathlon Asian Cup would not now take place. "I find this very sad indeed, said Wright. "Although the event itself will take place as the Hong Kong Championships, it will be the first non-ITU race in Hong Kong for many years. Surely we should be progressing, not going backwards? In July Fina, swimming's world governing body, decided against giving Hong Kong the 2015 or 2017 world championships. Hong Kong's government had failed to provide a written guarantee that it would underwrite the event. Last year, saw the cancellation of the Louis Vuitton Trophy Hong Kong Regatta in the city's waters. It was due to have been held in January, but was scuppered when America, New Zealand and other top teams chose to compete in America's Cup-related races.

A drug rehabilitation centre for youths in Sai Kung is being forced out to make way for a new waterfront hotel. The 193,000 sq ft area, also home to the Sai Kung Water Sports Training Centre and Happy Farm, an organic farm run by the Richmond Fellowship charity, was put up for sale by tender last week by the government. The sale was triggered by a HK$580 million offer from an unknown bidder wanting to build a hotel. The government will consider other bids between September 23 and October 21. The three current occupants have to leave within the month. The arrangement is legally sound but until the rehabilitation group Sai Kung New Being Oasis took up the land, no one had wanted it for half a decade. The group's head said he was surprised by the speed with which its members were being asked to move. While the plot sat unused, the Home Affairs Bureau offered a short-term tenancy - allowing a low rent but requiring a short eviction notice - to organisations which it felt would be an asset to the community. The rehabilitation centre has occupied 40,000 sq ft since it moved onto the site in May last year. Run by the Christian New Being Fellowship, it trains former teenage drug addicts in business skills. The first task was to knock the wasteland into shape by levelling the ground, laying power cables and drainage, and converting containers into offices and shops. The transformation cost more than HK$1 million over six months. "New Being never expected the land to be auctioned so early," said Sunny To Fung-sun, its director general. He was an opiumaddicted policeman more than 20 years ago. "Almost all the equipment is in place and each feature of the Oasis, no matter big or small, has been built by the continuous efforts of our staff and kids." The short notice also surprised Alan Tam King-wah, the director general of the Sai Kung District Community Centre under the district's rural committee. He approached all three businesses that set up last year after the Home Affairs Bureau asked him to find worthwhile organisations for the land. He said if he had known what a short period it was going to be he would not have invested. "I expected at least two years. I don't think we can find a substitute for a location as good as this, but I'm trying to help or to work with the parties to carry on their projects." Tam had believed that given a height restriction of five storeys on any development and how little demand there was for the land, the chance of eviction was slim. The centre attracts many visitors as former addicts train dogs, sell exotic plants and serve homemade herbal teas. It makes enough to cover its operating expenses. Now developed, the plot has attracted three bids for redevelopment in the past two months. For five years previously, there were no bids. "People here are joyful," said Billy To Chi-lai, a visiting retail manager. "It's quite rare to find a place like this, helping people get back on the right track." The youth-run social enterprise is one of four rehabilitation centres operated by New Being in Hong Kong. It is a halfway house for those who have done their initial rehabilitation but need the community's help or career skills to reintegrate with society. Leung Yiu-tat, a 21-year-old former ketamine addict, now spends his time tending to plants, managing stock and serving customers. But if the centre goes, he does not know what he will do. "What a waste," he said. "Not only the money that was put in, but all the people's involvement. We learn things here that we can't learn elsewhere."

 China*:  Sept 6 2011 Share

Ding Yanna has been involved in Sino-Russia trade for more than 19 years. Since arriving in Russia as a student in 1992, she has sold fur coats, been a construction contractor and is now opening a restaurant in St Petersburg. Russian customers choose clothes at a market in Manzhouli, Inner Mongolia autonomous region. China and Russia have pledged to increase bilateral trade to a value of $200 billion a year by 2020, up from $55.4 billion in 2010. Unlike many of her Chinese peers, Ding spends most of her time with Russian friends and only conducts business in accordance with local laws and regulations. Although it has brought a lot of extra costs, such as the payment of taxes and the cost of hiring lawyers and accountants, this approach has allowed her business to survive and thrive. "If you want to do business here over a long period, doing it legally is of the utmost importance," said Ding, who also has a business in Moscow. She said she is planning to establish a school to provide basic business knowledge to Chinese entrepreneurs working in Russia. Illegal Chinese business activity in Russia is one of the most sensitive issues facing the future of Sino-Russian trade. In 2009, around 150 Chinese businessmen and a large amount of their goods were detained by Russia's Federal Migration Service in raids at the Cherkizovsky Market, in the east of Moscow. The raids and subsequent detentions quickly escalated into a diplomatic spat, with Chinese officials demanding that the Russian government should protect the interests of Chinese businesspeople in the country. China also sent a delegation to Moscow to conduct negotiations on the issue. Three years later, many of the merchants who stayed in Russia have relocated to a different market in a southeastern corner of the city. Officially it's called the Moscow Trade Center, but is better known to locals as Lyublino. Although many of the Chinese dealers are still complaining about the Cherkizovsky raids, during which contraband goods worth about $2 billion were seized, most of them are getting used to the new place. "I like the new market, it is much cleaner and better regulated compared with Cherkizovsky," said Li Xue, who came to Russia in 2000 and owns a shoe store at Lyublino. She said business has improved since she moved from Cherkizovsky three years ago. According to official figures, about half of Russia's trade is now conducted with other European countries. Its trade with China, meanwhile, accounts for about 10 percent of its total trade. Earlier this year, China and Russia pledged to increase bilateral trade to a value of $200 billion a year by 2020, up from $55.4 billion in 2010. However, a lot of the trade volume is conducted through energy sales. Cai Guiru, chairperson of the Chinese Chamber of Commerce in Russia, said in an article earlier this year that the biggest obstacle for Sino-Russia trade is "Gray Customs Clearance", in which some government-connected "clearance" companies have been pushing imported goods into the Russian market at a tax rate much lower than the official level. The Russian authorities have long criticized the low level of business education of Chinese traders and workers in their country, noting that Chinese commodities traded to Russia often go through the gray market rather than the proper channels. "China and Russia need real international trade instead of covert transactions such as street vendors, illegal private banks, and urban marketplaces," said Cai. He added that Russia needs licit Chinese commodities and welcomes entrepreneurs who will run their businesses legally. Cai said that if long-standing illegal business practices are allowed to continue, Sino-Russian trade will remain at a low level. According to official figures, there are between 200,000 and 400,000 Chinese living in Russia. A 2008 study by Aleksander Larin, a researcher at the Institute of the Far East in Moscow, shows that the average Chinese migrant in Russia hails from northern China. Deng Weining, secretary general of the association of South China dealers at Lyublino, said many Chinese dealers have started to conduct legal business since they moved to the new market. "Russia needs Chinese goods, but it also wants quality Chinese goods," said Deng. He noted that Chinese dealers need to be united to raise the average price of Chinese goods to counter rising costs. According to Deng, a Chinese T-shirt will often sell for 200 roubles ($7) in an urban marketplace. The same item will fetch more than 400 roubles in a mall or even 4,000 roubles if it's passed off as an exclusive brand in a specialized shop. That affords Chinese dealers a chance to make a much bigger profit if they manage to ascend the value chain, he added. Ling Ji, minister counselor for economic and commercial affairs at the Chinese embassy to Russia, said the Sino-Russian trade volume totaled around $30 billion in the first five months of this year. "It shows that the Sino-Russian trade relationship has very great ability to restore itself," said Ling. Meanwhile the Chinese and Russian governments have set a target of raising the volume of trade between the two countries to $100 billion by 2015. "The US and Canada are not very populous compared with China, but their trade volume exceeds $600 billion. China and Russia share a 4,300-kilometer-long border, so it's really a pity that their trade volume is only $55.45 billion," said Cai.

A consortium of five state-owned Chinese companies are buying a 15% stake in the world's largest niobium producer for $1.95 billion in cash, a move that highlights the race among steelmakers to secure resources amid tightening supply. Brazil's Companhia Brasileira de Metalurgia e Mineraçào, or CBMM as it is known, produces more than 80% of the world's supply of niobium, which is used to strengthen steel and is widely employed in making cars and natural-gas pipelines. The Chinese consortium is led by Citic Group and comprises Taiyuan Iron & Steel Group Co., Baosteel Group Corp., Anshan Iron & Steel Group Corp. and Shougang Corp., CBBM said in a statement. China, whose steelmaking capacity has risen to over 700 million metric tons a year, is the world's biggest importer of niobium and is seeking to secure global supplies. Last year, China's state-owned East China Mineral Exploration Development Bureau acquired control of Australia's Globe Metals & Mining Ltd., which has niobium reserves in Africa. CBMM, established in 1955, is controlled by the Moreira Salles family which after this transaction will still hold 70% of the company. CBMM mines the niobium deposit located near the city of Araxá, Minas Gerais, Brazil. The Moreira Salles family is one of the owners of Brazil's Itau Unibanco Holding SA bank. CBMM signed a similar deal with a Japanese and South Korean company earlier this year on nearly identical terms. The consortium consisted of Japanese steelmakers JFE Holdings Inc. and Nippon Steel Corp.; Japanese trading company Sojitz Corp.; government-funded Japan Oil, Gas & Metals National Corp., or Jogmec; South Korea's National Pension Service; and Posco. "Global demand for niobium rose about 10% a year between 2002 and 2009 due to the growing need for specialty steels," the Brazilian company said. "In future niobium demand should continue to grow faster than steel production because of greater use of niobium in steelmaking technologies." The unwieldy and rare combination of five Chinese state-owned enterprises in one consortium is a sign Chinese companies are grouping together to more effectively compete with other resource-hungry nations and that the regulators who approved the deal are supporting their battle. A Baosteel official said in June that the country's stainless-steel demand will likely grow up to 7% annually over the next five to 10 years. The Chinese consortium took about two years to seal the deal, said a person familiar with the matter, as the state-owned companies sought internal approvals and from the Chinese regulator. UBS AG advised the Chinese and Deutsche Bank advised CBMM.

China's railway system has transported some 1.27 billion passengers during the first eight months of this year, up 11.8 percent from a year earlier, the Ministry of Railways said Sunday. The figure has accounted for 67.4 percent of the ministry's full-year target, said the ministry in a statement on its website. The Ministry of Railways has planned to send 1.9 billion passengers in 2011, up 13.1 percent year-on-year. The country's high-speed trains had been operating with improved order and efficiency, said the ministry, which has been required to run high-speed trains at slower speeds, as well as to reorganize bullet train schedules nationwide, for safety reasons. The State Council, or Cabinet, ordered increased safety checks after a fatal train collision that killed 40 people in July raised concerns over the safety of the country's high-speed railways. The ministry cut the number of high-speed trains running between Beijing and Shanghai to 66 pairs from 88 pairs per day, effective as of Aug. 16. Meanwhile, the railways transported more than 2.6 billion metric tons of goods from January to August, up 7.8 percent year-on-year, the ministry said.

Philippines President Benigno Aquino III (C) plants a tree with Chinese government officials at a clan hall in Hongjian village, Zhangzhou city of East China's Fujian province, on Saturday. The village is home to his mother's ancestors. The president's mother is Maria Corazon Sumulong Cojuanco, the late former Philippines president Cory Aquino.

Hong Kong*:  Sept 5 2011 Share

Some of the city's best established wine merchants, hotels and auction companies are adamant that recent reports of counterfeiting of classic vintages on the mainland is not happening in Hong Kong and these fake labels will not emerge here. Hong Kong and the mainland are becoming the world's largest consumers of Bordeaux wines, but reports say counterfeiters have begun collecting empty bottles and then refilling them to scam rich Chinese on the mainland. Chateau Lafite Rothschild 1982, which can cost up to HK$25,000 for an intact bottle at auction, has proved popular. But on the mainland, some vintage wines on sale have labels incorrectly spelt as "Laffite" or "Lafitte". Greg De'eb of Crown Wine Cellars admitted that there frequently were fakes in the mainland and these scams did take place, but this was not the case in Hong Kong. "Of any current fakes that are in circulation around the world, including Hong Kong, I'd say that 99 out of 100 originate from the `old world' - the likes of France, Belgium and the UK," De'eb said. "They have the knowledge to do this. They're not from China, whose fakes can be spotted easily. But even then counterfeiting hardly occurs in this city where we have a 40-year wine-buying and wine-collecting tradition." De'eb believed that Hong Kong owned probably 15 to 20 per cent of all the rare and fine wines that exist in the world, and had very well educated collectors and drinkers. "Even if faking of fine wines is going on in Hong Kong, which I doubt, it's infinitely smaller than in the UK or France today," he said. What was more of a problem for Hong Kong's wine merchants and auction companies was how the wine was stored. Poor storage was normally behind the disappointment when a classic vintage turned out not to live up to expectations. In the past year, the Hong Kong Customs specialist anti-counterfeit unit dealt with 10 counterfeit fine wine cases. Eight out of the 10 were proved not to be counterfeit issues, while the remaining two have not yet been proven one way or the other. Giuliano Ungaro, director of food and beverage at the Kowloon Shangri-La hotel said counterfeit wines could be found in any part of the world and he would be lying if he said Hong Kong did not have the same problem, but it was minimal. "Since all wine duties were eliminated in Hong Kong in 2008, the city has become a leading and premier wine market, which attracts a lot of top-tier wine cellars, retailers and Chateaus from around the world to do business here," Ungaro said. "For that reason, I doubt the problem is huge in Hong Kong." Robert Sleigh, who is head of wine for Sotheby's Asia, also believed the city had nothing to worry about. "I've heard the same stories about real bottles being refilled with something else and resold in China, but I haven't come across them here," Sleigh said. "I've seen relatively little counterfeit wine here in Hong Kong or at least no more than in the rest of the wine-drinking world." Sleigh said Hong Kong had a sophisticated market, while the mainland's was still developing.

Chin Han and Steven Soderbergh during the filming of Contagion. The movie depicts the spread of a deadly virus in Hong Kong. The portrayal of Hong Kong as a disease-stricken city in a star-studded Hollywood blockbuster movie which opens in the city this week may get the cash rolling in at the box office, but how it will promote "Asia's World City" is debatable. Contagion, directed by Steven Soderbergh, stars Matt Damon, Gwyneth Paltrow, Jude Law, Kate Winslet and Marion Cotillard, as well as Hong Kong actors Chui Tien-yau and Josie Ho Chiu-yee, daughter of casino mogul Stanley Ho Hung-sun. The story follows the rapid progress of a lethal airborne virus that kills within days. It begins with Paltrow's business executive getting the virus in a Macau casino along with others sharing a gambling table. She then takes it back to the US. Two days later she's dead and soon others exhibit the same symptoms and die suddenly. Before long the virus has swept the world and thousands die. As the disease originated in Macau and Hong Kong, where it is now rife, a World Health Organisation worker (Cotillard) is sent to investigate but gets stonewalled by unhelpful Hong Kong health officials and ends up being abducted by a local man desperate to find an antidote for the virus that has spread to his family. Spreading Across The Territory is the film title's direct translation from English to Chinese, one that underplays the controversial subject matter. For apart from reviving painful memories of the 2003 Sars outbreak - the severe acute respiratory syndrome virus killed 299 people in the city, emptied hotels and shops, saw millions don surgical masks and others flee abroad in panic - it hardly depicts Hong Kong as an attractive destination for travellers. A number of Discovery Channel documentaries also bear an uncanny similarity to the premise of the film. The Film Services Office (FSO) of CreateHK is the designated government office that facilitates location filming in Hong Kong. They worked closely with Soderbergh on the project, researching information about the public health system in Hong Kong and liaising with various government departments and public bodies on locations for the filming. "According to the filming plan, Contagion is not a documentary on Sars but a fictional story about the spread of a virus across the globe, Hong Kong being one of the international cities affected by the virus," an FSO spokesman said. "The US crew conducted months of preparation work in ensuring that the filming of infection control scenes were professionally treated and they had the support and help of various public and private health professionals in Hong Kong and the US. "Being a free city, we do not consider it necessary to vet the content of the film before providing film facilitation services as long as the filming is conducted properly and legally here in Hong Kong." A spokesman for the Department of Health said the movie team consulted the Centre for Health Protection on technical information last year during production of the film. "However, we are not involved in the actual shooting of the film, nor do we know anything about its story," the spokesman said.

An American company that broke the mould by exporting chopsticks to the mainland is lining up Hong Kong as its next market. Jae Lee, a former scrap-metal exporter from Americus in Georgia, began turning out chopsticks for China last year. His company, Georgia Chopsticks, produces two million sets of disposable chopsticks a day with "Made in the USA" emblazoned on each box sold to the mainland. "Initially, I had hoped to ship out fresh logs direct to China, but the freight charges were too high," Lee said. "So I decided to try shipping out smaller quantities, and that's when I thought about making chopsticks. They were semi-finished products that could then be shipped to China where they'd be polished." Lee's workers first shave and cut huge logs into rough chopsticks, which are shipped via Savannah to Dalian, in Liaoning province, where the finishing touches are added. From Dalian they are sold all over the mainland. "Demand for chopsticks is huge and we are working 24/7 to keep up orders. We hope to export 10 million pairs a day by the end of the year." Lee, 43, was born in Seoul and lived there until he finished high school in 1986 when his family moved to Georgia. He said Hong Kong importers wanted his company to provide the finished product, but they did not have the skilled workers. "Once we develop the right kind of skilled workers in the US, where we can produce the finished product, we will definitely be selling chopsticks to Hong Kong." Lee said Georgia had a plentiful supply of raw materials, such as poplar and sweet gum trees, which were ideal for making chopsticks.

The Hong Kong Jockey Club says it may be forced to set up an offshore satellite wagering operation to circumvent double taxation issues if it is to take part in overseas betting pools. Chief executive Winfried Engelbrecht-Bresges dropped the bombshell as the club prepares for the new season, which starts next Sunday. "I think we have to forget about commingling beginning during the current season - but we are also getting to the point where it's now or never," he said. "I really hope the government will compromise on the taxation obstacles so we will be commingling by the start of the 2012-13 season." Commingling is a procedure by which bets placed on one country's racing with an operator in another country are funnelled into the "home" pool where the race is staged. "We don't have any plan to go offshore at this stage, but it is something we would have to consider if we do not get action soon. "We have huge illegal exchanges operating just outside our door, and with other countries banding together in a commingling hub to take legal bets between different nations, the external forces on all sides are building up and we are going to be shut out. We don't live in a vacuum - ultimately, these operations can endanger our business right here." Legal betting on Hong Kong racing exists in a number of foreign countries, but bets go into small local pools and the Jockey Club receives a 3 per cent fee. The club says these pools add up to HK$3 billion to HK$4 billion a year, and believes that would double if wagers went into Hong Kong's more stable "home" pools. If bets from Canada, for instance, are commingled into the Hong Kong pool, the Jockey Club and the foreign operator taking the bets share earnings from the bet and each deals with its government obligations from its own share. The sticking point is the Jockey Club cut is less than it would receive from a bet sourced here, but the government is not prepared to take less than its usual cut. That renders the process commercially unviable for the foreign operator and the Jockey Club. Important racing countries such as Australia, South Africa and France have formed relationships around the world, setting the prices and framework for the process. Earlier this year, Australia's Tabcorp and Phumelela, of South Africa, agreed to set up a global hub, overcoming technological barriers to exchanging bets between different jurisdictions, but also based in a tax haven to enable aggressive pricing. And this development has the Jockey Club worried. "If we are not part of commingling, then we are rivals and there is a danger the hub will be big enough to start diverting bets from our pools by offering attractive deals to some of our very price-sensitive major customers," Engelbrecht-Bresges said. "That's when commingling will cease to be an offshore issue, seemingly unconnected to our HK$80 billion Hong Kong wagering business. Then we could find part of that turnover heading offshore to the hub. Our position as a world leader is not in danger now, but it may be in a few years and that would endanger our contributions to the community through taxation and charity." The last resort, said Engelbrecht-Bresges, would be to set up a Jockey Club base for commingling, outside Hong Kong's jurisdiction and separate it from local operations. "Amazingly, the end beneficiary of commingling would be the government, which is providing the obstacles," Engelbrecht-Bresges said. "In our increased simulcasting of overseas races, for example, the government, and therefore the community, has benefited by more than HK$150 million, the Jockey Club by around HK$10 million after we have paid all the expenses involved." The Jockey Club estimates commingling would be worth an extra HK$180 million-plus a year to the government.

The government will be told by December whether a third runway is needed for Hong Kong International Airport's future development, the Airport Authority said yesterday at the end of a three-month public consultation. However, it is likely the recommendation will be made without knowledge of what the HK$136.2 billion project's real economic and social costs might be. Stanley Hui Hon-chung, the authority's chief executive, said the authority had received 29,000 opinions on the controversial project from stakeholders, political parties and green groups by Thursday afternoon. The opinions - together with media commentaries and individual presentations - will be collated and analysed by the University of Hong Kong. The outcome will be studied by the authority's board of directors, which will submit a recommendation to the government. However, Hui did not commit to conducting an analysis of the project's social and environmental costs. This is in contrast to Britain, where the government found the social costs of a third runway at Heathrow Airport would slash the project's estimated benefits by up to 70 per cent. "Hong Kong's legal system requires us to conduct an environmental impact assessment, and this we will certainly comply with," Hui said. "As for other opinions, we will listen and consider." The city's environmental law requires each infrastructure project to meet a certain benchmark on air quality, but it does not require a price tag to be placed on the project's implications for public health and the environment. The authority said a third runway would bring HK$912 billion of economic benefits to Hong Kong in the 50 years to 2061. But Fiona Waters, principal economist of PricewaterhouseCoopers, told a symposium organised by the Aerospace Forum Asia yesterday that in order to calculate a project's economic benefits, one must also know its economic costs. "The cost-and-benefit approach is a common economic technique and in the UK there is a green book outlining the methodology." In 2009, the Department of Transport in Britain said that while a third runway at Heathrow could bring £19.2 billion (HK$242 billion) in economic benefits, it will also cost society £13.6 billion in construction, carbon emissions, noise and damages to air quality - leaving only £5.5 billion worth of benefits for a project that cost £7.8 billion. The UK government eventually gave up building a third runway for Heathrow. The calculation on noise impact, for example, takes into account the number of households within a range of 50 decibels and impact on house prices. However, Hui questioned whether Britain's approach could be directly applied to Hong Kong, which has a different economic environment. William Yu Yuen-ping, head of WWF Hong Kong - a conservation body which collected 7,500 petitions calling for the release of the runway's social costs - said the methodology of calculating the social return on investment was not complicated and had been applied to more than 500 projects. John Slosar, chief executive of Cathay Pacific (SEHK: 0293), told yesterday's forum that Hong Kong could not afford to remain static. Every other airport in the region was racing ahead to catch a share of the expected future air traffic boom in Asia.

TVB (SEHK: 0511) general manager Stephen Chan Chi-wan's celebrity status helped the District Court to clear him of charges yesterday that he had defrauded his employer. The charges arose after Chan agreed to host his talk show Be My Guest, which was included in the 2010 New Year Eve programme held at Olympian City. Chan had confirmed his appearance only after TVB had agreed to host the show. His moonlighting, for which he received HK$112,000 through a company run by co-accused and former assistant Edthancy Tseng Pei-kun, had not affected TVB's affairs or its business. The city's biggest station had also tacitly agreed that Chan could earn extra money from outside work, the court found. "I agree with [defence lawyers' submissions] that when the first defendant [Chan] was performing, his identity was a `celebrity' or an artist, but not as a TVB general manager. This is because front-stage performance is not within the scope of a general manger's duty," said Acting Chief District Judge Poon Siu-tung. The judge previously questioned whether taking outside work without TVB's awareness constituted civil liability rather than a criminal offence. Chan and Tseng were also acquitted of cheating five artists out of appearance fees by concealing a HK$300,000 sponsorship paid to Tseng's company. TVB's controller of production resources Virginia Lok Yee-ling testified that she had allowed the artists - Charmaine Sheh Sze-man, Tavia Yeung Yi, Sharon Chan Man-chi, Skye Chan Sin-yeung and Shirley Yeung Sze-ki - to attend an autograph-signing session for Chan's book launch for free so that they could show their support for the "boss". She said would not have approved of this if she had been aware of the sponsorship. Lok's testimony failed to convince the judge that TVB approved of support-the-boss activities based on the nature of the events or whether commercial sponsorships were involved. He also ruled that there was insufficient evidence to show that Chan was aware of the sponsorship deal or that he had dishonestly concealed the contract signed by an employee of Tseng's company. After the trial lasting 19 days Tseng and TVB marketing chief Wilson Chan Wing-shuen, the third accused, were also cleared of charges that they had falsely created a contract to cheat TVB out of HK$550,000.

 China*:  Sept 5 2011 Share

China unveils 2011 list of top 500 companies - A list of this year's top 500 Chinese enterprises was unveiled in the city of Chengdu in southwest China's Sichuan Province on Saturday.

The number of Shanghai residential transactions fell to a six-year low last month after the central government enforced restrictions on the number of home purchases in an effort to curb demand. Property website Soufun reported that the total dropped to 4,964 units, amounting to 576,000 square metres last month, the lowest since 2005. That represented a decrease of 25 per cent from July as average transaction prices edged down 1.1 per cent to 21,816 yuan per square metre. "Slow sales in Shanghai are apparent as the central government will strictly enforce austerity measures in first-tier cities," said Alan Chiang Sheung-lai, head of residential for Greater China at DTZ. "Beijing will also be affected." Beijing's August home sales dropped 22.9 per cent to 13,664 from July, the lowest since 2009, Soufun said, quoting figures from the capital's property transaction website. In Shanghai, the sale of flats at 30,000 yuan per square metre to 50,000 yuan per square metre fell 43 per cent, to 53,000 square metres last month as non-Shanghai residents and foreigners were prohibited from buying homes in the city unless they had worked there for a year, Soufun said. In addition to a ban on residents purchasing more than two flats, there were growing difficulties in securing pre-sale permits, which contributed to fewer new projects, Chiang said. In a bid to restrain prices, the city government was unlikely to approve projects offering flats at reduced prices, he said. "Such price-control policies have greatly reduced the supply of new projects." In Shanghai, the government has also accelerated the construction of homes intended for average incomes, which posed a threat to sales by private developers, Chiang said. "Demand for small-sized units in the private property market will fall as an increasing number of residents choose to buy affordable housing at 6,000 yuan to 8,000 yuan per square metre instead of 28,000 yuan to 30,000 yuan per square metre in the private sector," he said. He believed developers would react by cutting prices by about 10 per cent. Lee Wee-liat, regional head of property at Samsung Securities, said the bigger immediate concern was a possible hard landing due to policy missteps. "This will continue to haunt China's property stocks," he said. Shares of Evergrande Real Estate Group (SEHK: 3333) fell 3.51 per cent to close at HK$4.67; Agile Property (SEHK: 3383) lost 2.46 per cent to HK$10.30, and Soho China (SEHK: 0410) dropped 2.45 per cent to HK$6.76. "The mainland government is still fixated on inflation, and now increasingly more people think that this could decelerate the economy too much given the slowdown in the US and the euro zone," Lee said. "Policies for the property sector and home purchase restrictions are supposed to be a temporary stopgap measures. The government has not been effective in pushing out supplies as the amount of land sold in the year to date is down by as much as 40 per cent from last year."

UBS Economist Jonathan Anderson, a sharp analyst of the Chinese economy, believes he’s uncovered a “pretty convincing turning point” in China’s development model. For decades, Beijing has relied on super-low wages to win a bigger slice of global exports and help turn a poor country into the world’s second largest economy. But for the past 24 months, Mr. Anderson says in a new report, China’s share of low-end light manufacturing imports into the U.S. and European Union “has peaked” at around 50% of those markets. In the U.S. market, Vietnam, Bangladesh, Indonesia and Mexico are picking up market share at China’s expense. In the EU, it’s those Asian nations along with Poland, the Czech Republic and Hungary. It’s difficult to come up with a definitive count of “low-end” manufacturing. Mr. Anderson uses trade data labeled “miscellaneous manufacturing items” as a surrogate. That category includes toys, clothing, footwear, furniture and sporting goods, among other items. In the U.S. market, Mr. Anderson says Vietnam, Bangladesh and Indonesia are getting a bigger slice of the clothing and footwear the U.S. imports, while Mexico is picking up market share in furniture. For China, the market-share loss is, in some ways, the predictable outcome of government policy to sharply raise minimum wages and employer recognition that they must pay higher wages to keep assembly lines full. Chinese officials also know they need to shift their export efforts to more innovative, higher profit goods and services. That means the cheapest labor jobs are headed out of China. But China also has hundreds of millions of impoverished rural farm workers for whom low-wage factory jobs could be a step upward. If those factory jobs move in large numbers overseas, China’s ability to sustain its double-digit annual growth may be endangered. The pressure on Chinese government officials to engineer a shift so the economy relies more on domestic demand and less on exports is bound to intensify.

Hong Kong*:  Sept 4 2011 Share

Until his arrest on bribery and fraud charges last year, high-profile TVB (SEHK: 0511) manager Stephen Chan Chi-wan could do no wrong. Widely regarded as exceptionally intelligent and tactful, the 51-year-old former government official had no reason to look forward to anything other than more successes in broadcast media. As he had said in an interview in 2009: "So far, there haven't been any obstacles in my life." That changed abruptly in March last year, when officers from the Independent Commission Against Corruption knocked on the door of his home in Mong Kok, where they arrested him and his former assistant Edthancy Tseng Pei-kun on charges of defrauding the TV channel and some its best-known artists. TVB marketing chief Wilson Chan Wing-suen, producer Wilson Chin Kwok-wai, and TVB performer Leung Chi-cheong (stage name Ning Jin) were also arrested, but of these three only Chan was charged. Chan, Tseng and Chan were accused of conspiring to defraud TVB and its artists through scams such as the "secret commission" of HK$112,000 paid by a shopping mall to host a 2010 New Year show and a HK$300,000 sponsorship received by Tseng's company for getting five actresses to attend his book signing. All three were acquitted yesterday, after a trial that generated huge media attention. No wonder - the charges involved the city's largest licensed free-to-air TV station, which once held sway over much of Hong Kong's popular culture and among the Chinese-speaking population in the rest of the world, and boasted some of the best-known names on Hong Kong's TV scene. Never has Hong Kong's showbiz industry produced a household name like Chan's. Behind the camera, he is a top executive of the city's largest terrestrial TV station, wielding influence over TVB's business dealings and the fate of many starlets and singers yearning for a big break. In public, he's the TV station's poster boy, always impeccably dressed and flashing a confident smile. In turn, the TV station has given him a platform for further fame: he developed his own talk show, Be My Guest, interviewing political and showbiz big names. The show made him such a celebrity that he was chosen to be a torchbearer for the Beijing Olympics relay in Hong Kong. "He is one of a kind in Hong Kong's television history," said Cheuk Pak-tong, head of Baptist University's film academy. "There's no doubt that Stephen Chan is an extremely smart man who smoothly crosses between running a TV station as a manager and going in front of the camera as a celebrity." But Chan's versatile nature and high-profile appearances - not just in the entertainment pages, but also the main news sections - made him a controversial figure, said Peter Lam Yuk-wah, vice-president of the Hong Kong Televisioners Association. It also made him enemies. It all began in 1992, when Chan, then an assistant commissioner with Television and the Entertainment Licensing Authority, decided to leave the government, where his duties included a four-year posting in London lobbying for the right to abode on behalf of Hong Kong residents, and to cross over to broadcasting. He had already shown an interest in the industry. During his later years with the government, the HKU graduate in English and theatre worked as a part-time programme host for Radio Television Hong Kong under the stage name Wai Ka-ching. He landed himself a second career when his talents caught the eye of Commercial Radio's leader Winnie Yu, who brought him to her radio station. Two years later, he was poached by TVB, joining the broadcast giant of over 4,200 employees as a programme controller and later taking up duties of the TV station's external affairs. He won a key vote of confidence from Mona Fong Yat-wah, wife of TVB's 103-year-old founder Run Run Shaw and TVB's deputy chairwoman. In 2002, he was made assistant general manager. Two years later, he was promoted to general manager, broadcasts - the position he still holds. He reportedly had his own personal assistant and a chauffeur just like any other A-list star. TV artists worshipped him, hoping they'd get more opportunities and exposure if they befriended the top executive; singers wooed him for more exposure on the small screen. And in showbiz, exposure and cash-generating opportunities like celebrity endorsements are directly proportionate. Chan was never shy about his burning desire to perform, nor content to pull the strings behind the scenes. He became the star-maker for himself. He started by doing voice-overs for the travelogue On The Road series, a breeze for the former disc jockey. He took a bigger step in 2006 by creating Be My Guest, in which he interviewed political and entertainment big shots at fancy restaurants while tasting their signature dishes. Chan's guest list included Chief Executive Donald Tsang Yam-kuen, former Chief Secretary Anson Chan Fang On-sang, and other senior government officials who were rarely interviewed by the media. Chan also charmed Gillian Chung into appearing on the show, the Twins singer's first public interview after the Edison Chen sex-photo scandal. Success followed upon success. Chan was voted as Yahoo's personality of 2008, sharing the title with City Telecom's Ricky Wong and Ocean Park chairman Allan Zeman. In 2009 he was appointed as a member of the Hong Kong Tourism Board. "He is no doubt a brilliant talent," says Lam. "As a host of Be My Guest at TVB, he created a new model of talk show that manages to get stuff out of celebrities and public figures that they normally do not share in other media interviews." But, Lam noted, unlike other ex-TVB creative masterminds like Lau Tin-chi and Stephen Shiu Yuek-yuen, Chan appeared to be more of a managerial type instead of introducing innovative programmes to the channel - with the exception Be My Guest. Some of Chan's most notable appearances as a top TVB executive were related to the TV station's scandals and public criticism of the station's increasing self-censorship. In May 2009, Chan defended the layoff of 110 staffers. When he turned up at public hearings for the mid-term review of TVB's licence in June and July 2009, the station came under fire for allegedly going soft on news of the June 4 anniversary and giving too much time to pro-government legislators. But Chan calmly fended off the charges by comparing the lengths of different items in the newscast. When protestors took control of an autograph session for Chan at the 2009 Book Fair - one of them throwing a book at Chan on the stage - Chan smiled and said everyone had the right to express an opinion. But a more dangerous adversary was Lee Po-on, who was promoted in September 2009 as TVB's group general manager, equal in rank to Chan but in charge of TVB's finances. From then on, Chan was reportedly kept some distance from many TVB business dealings, including TVB's disputes with the "big four" - Sony, Universal, Warner and EMI - over music rights. The fight led the station to quit using music from the four labels, and blocked many singers, including big names like Eason Chan Yik-shun and Hacken Lee, from appearing on TVB. Those problems were nothing compared with his arrest by the ICAC but amid all the accusations and criticisms, Chan always managed to look confident. "Another thing at which Chan is brilliant is crisis management," says Lam. "He always maintains a very calm manner. Look at that press conference he held a week after he was arrested." Chan called that press conference at a time when everyone thought his career was over. During a four-minute briefing held at a Regal Hotel function room packed by some 200 reporters, Chan said, "What's true cannot be false, and what's false can never be true." He also joked about wearing a surgical mask when he was photographed leaving the ICAC's offices: "I wanted to tidy up my appearance but unfortunately I injured my face with a shaver. I didn't want people to think that I was injured because of the ICAC, so I covered up my face." Suspended by TVB, Chan laid low for three months. He then returned to work, but stayed off the air and away from glamorous appearances. One thing the trial made clear: Chan's close friendship with TVB actor Wong Hei. After Chan was released on bail last year, Wong bought Chan pomelo leaves, believed to dispel bad luck if used in baths. During the trial, Wong often accompanied Chan to court - holding the umbrella for Chan in the rain and looking after Chan's personal belongings. But in an interview with Sing Tao Daily last year, Chan confessed he has never had a Valentine and has never been in love. His parents passed away, in 1990 and 2005. After his acquittal, Chan thanked Wong before a few others, including Mona Fong, when he spoke to reporters outside the court. "People will always have this confusion of whether he is a TV manager or a star," Cheuk said. "He definitely has put a much more colourful dress on TVB, creating an extraordinary image for TVB's management, but whether this is an achievement or his mistake is debatable."

Talk turned from constitutional change to condemnation yesterday as government allies blasted rowdy demonstrators whose gatecrashing stunt on Thursday disrupted a forum on a controversial plan to scrap by-elections and left four injured. Criticism was led by government-friendly lawmaker Lau Kong-wah, who submitted a motion to the Legislative Council secretariat to condemn the "violent" act. Lau, vice chairman of the Democratic Alliance for the Betterment and Progress of Honk Kong (DAB), wanted the motion discussed at a special meeting of the security panel on September 12. The same panel will discuss security arrangements for Vice-Premier Li Keqiang 's visit to Hong Kong last month, which some members of the media say were heavy handed. The forum on the government's plan to do away with Legco by-elections was suspended for 20 minutes after 100 protesters - led by League of Social Democrats lawmaker "Long Hair" Leung Kwok-hung - stormed the venue at the Science Museum in Tsim Sha Tsui. Security panel chairman James To Kun-sun, a Democratic Party legislator, said the demonstrators were not justified in gatecrashing, even if they were not allowed to take vacant seats, as some had complained. "They should have protested against being denied entry," To said. "However, it was unreasonable for them to cause the disruption." Similarly, Chief Executive Donald Tsang Yam-kuen believed such "barbaric behaviour" was unacceptable and risked undermining freedom of expression, a spokesman said. Leung said the group had no intention of causing trouble during the forum or obstructing other participants from expressing their views. A spokesman for the Home Affairs Department said those who had reserved seats through a telephone hotline were admitted first. The government is seeking the public's views on whether what it says is a loophole that enables abuse of by-elections needs to be closed, or if the status quo of holding by-elections to fill Legco vacancies arising from resignations should stand. Four cultural services assistants - three women and one man - were injured during the disruption as protesters rushed into the lecture hall of the Science Museum on Thursday. One of the injured women, only identified by her surname, Young, said she was pinned against the glass door when protesters broke open the other side of the door and rushed into the lobby outside the lecture hall. "My head and body were sandwiched between the glass door and the crowd," she said. "I felt severe pain in my neck."

Several investment banks have approached Italian carmaker Fiat in recent weeks with a proposal to list its legendary sports car unit Ferrari on the Hong Kong stock exchange, four people with direct knowledge of the matter said. An initial public offering could value Ferrari as high as US$6.3 billion, according to some analysts. The deal would help Fiat raise funds to pay down its debt of about €5 billion (HK$55.6 billion) and could also boost the valuation of the parent company's shares. "Fiat hasn't made up its mind yet about the IPO, but it's certainly talking with banks about it," said one source, who declined to be named because the discussions are private. Some meetings had been held and several others had been lined up in coming weeks to seek support for the potential offering, the sources said. A Fiat spokesman declined to comment when asked if meetings had been held with banks about a possible Ferrari offering. He referred to comments by Fiat chief executive Sergio Marchionne, who repeated several times in the past few months and as recently as last week that a Ferrari offering "is not on the table" for the time being. Last year, Fiat - which owns US-based Chrysler - said it was considering an initial offering for Ferrari as a strategic option, and speculation has grown ever since. Still, Ferrari chairman Luca Cordero de Montezemolo and Marchionne have recently sought to play down a potential deal. "It's more real than you'd think," said another banker who had met with Fiat. Hong Kong, the world's top destination for initial public offerings for the last two years, has become the venue of choice for global brands - such as cosmetics company L'Occitane International and luggage maker Samsonite International - that seek top valuations and deep-pocketed investors. Fashion house Prada raised nearly US$2.5 billion in June, becoming the first Italian company to go public in Hong Kong. A Ferrari offering would also be a coup for the city, which recently lost out to rival Singapore on the initial offering for English Premier League champions Manchester United, worth up to US$1 billion. The sports car maker's history dates back to 1929, when Enzo Ferrari founded the Scuderia Ferrari racing team. Its first car, the 125 S, was produced in 1947, and the company's mystique has grown ever since, with its "rosso corsa" (race red) cars becoming a status symbol around the world for celebrities, royalty and the wealthy. As with Prada, LVMH and other luxury goods companies, Ferrari has seen a booming market for its sports cars in China, the world's second-largest economy. The company said in January it expects China to become its second-largest market after the United States in a few years.

TVB general manager Stephen Chan Chi-wan is mobbed my the media as he walks out of the District Court in Wan Chai after being acquitted of corruption and fraud charges on Friday. TVB (SEHK: 0511) top executive Stephen Chan Chi-wan and two others walked free from the District Court on Friday after they were acquitted on corruption charges. The court cleared Chan, 51, his former assistant Edthancy Tseng Pei-kun, 28, and former head of business development for TVB’s marketing and sales division, Wilson Chan Wing-shuen, 63, of five bribery and fraud charges involving Hong Kong’s biggest TV station. Three of the charges alleged Stephen Chan had received HK$112,000 in bribes through a production company run by Tseng in return for hosting a talk show during a 2010 New Year countdown event organised by TVB. Prosecutors alleged earlier that Stephen Chan had received the reward without TVB’s prior permission. In Friday’s verdict, Judge Poon Siu-tung said that there had been a mutual misunderstanding between TVB and Tseng’s company over Stephen Chan’s appearance at the talk show Be My Guest. It would have been naïve of the TV station, the judge said, to think Chan had taken the job for nothing, local media reported. Poon also accepted Chan’s argument that he participated in the talk show using his identity as a celebrity, but not as a TVB manager, and the charges were, therefore, inappropriate. Stephen Chan’s lawyers earlier argued that the charges laid against him were solely applicable to public servants and Chan could be regarded as a public servant only when working in his capacity as general manager of TVB, which is considered a public authority under the law. A fourth charge alleged Tseng and Wilson Chan had conspired to misappropriate HK$550,000 from TVB by making false representations in a contract in 2009. Poon said the court found insufficient evidence to substantiate claims of false representation. Tseng’s company had provided services to meet the contract, the judge said. The fifth charge alleged that Stephen Chan and Tseng conspired to defraud TVB and five actresses, depriving them of commissions, by asking the women to attend a publicity event free of charge for Stephen Chan’s book, at which a chain of jewellery stores was also promoted. Prosecutors earlier accused Stephen Chan of concealing a HK$300,000 contract he had made with the chain of shopping mall jewellery stores, called Ma Belle Diamond. But Poon said TVB had no clear rules requiring its actors or actresses be paid when attending events. Therefore, he said, Stephen Chan had no basis upon which to cheat TVB. Stephen Chan, Tseng and Wilson Chan were arrested by the Independent Commission Against Corruption on March 11. TVB had suspended Stephen Chan’s duties following his arrest, but he resumed his position after eight months. A spokesman for the ICAC said on Friday the anti-corruption agency would study the verdict and seek advice from the Department of Justice before deciding whether to appeal. TVB said in a statement on Friday it respected the court’s decision and the case would not affect the station’s daily operations.

Lawmaker and former security chief Regina Ip Lau Suk-yee has thrown her support behind the third-runway proposal so that the SAR can retain its status as an international aviation hub. Ip said the project will also create jobs and maintain the territory's competitiveness in the world. "If the airport's capacity is not increased, Hong Kong may lose its position as an international aviation hub. We will lag behind if it is not constructed," Ip said. She described the third runway as being "vital" for Hong Kong's development, and said Guangzhou Baiyun Airport will complete its third and fourth runways before the end of 2013 and 2020, respectively. Ip is worried the public may not reach a consensus on the proposal and the consultation may need to be extended. Using London's Heathrow Terminal 5 as an example, she said the consultation lasted for four years and did more harm than good to London as it lost out on the economic benefits brought about by the new terminal. One of the main reasons that a number of green groups are opposed to the third runway is that the 650 hectares of reclaimed area are near the habitat of the Chinese white dolphins. Although Ip said she is not a marine expert, she believes the Airport Authority can provide effective mitigation measures to minimize the runway's impact on the dolphins as well as residents living in the vicinity. For instance, she pointed out that the third runway will create noise pollution for residents and urged the authority to install soundproof windows in their flats. She also said residents may need to close their windows because of the noise and run their air conditioners more often, so the authority should provide electricity subsidies for them. Her party stressed that economic development and environmental protection are not mutually exclusive as the aviation industry has been introducing new technology to reduce carbon emissions and noise pollution. It added the government should also hire independent experts to conduct in-depth studies on how the third runway would affect air and noise quality in the area. Meanwhile, WWF Hong Kong handed a petition with over 7,500 signatures to the Airport Authority, and called on the body to analyze the true environmental costs of the airport expansion options. "As the many thousands of signatures illustrate, Hong Kong people are deeply concerned that a huge infrastructure project is being sold to them without the full costs of the project being revealed," said its conservation director, Andy Cornish. The three-month consultation will end today.

This is the ugly face of anarchy in Hong Kong. The men in the masks emerged last night when 100 rowdy radicals gate- crashed a by-election forum in Tsim Sha Tsui and rained dog food on Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung. Police took away one man for questioning after a woman complained of being molested by a protester. The action was condemned by both Acting Chief Executive Henry Tang Ying-yen and Lam. "We are angered by this kind of behavior," Tang said, insisting that such actions did not facilitate rational discussion and undermined people's rights to express their views. Lam said the protesters ignored the rule of law, broke a door and injured several security guards. The protesters, led by the League of Social Democrats and People Power, stormed into the Science Museum where about 300 people were attending the second of a series of by-election consultations. Two security guards attempted to block them but failed. The first protester into the hall held one guard by the neck for a few seconds before releasing him and running into the museum. He wore a Guy Fawkes mask popularized in the V for Vendetta movie which, it was explained, symbolizes the destruction of a totalitarian government. The angry protesters, including LSD legislator "Long Hair" Leung Kwok- hung, demanded that Lam withdraw the four proposals by the government aimed at preventing legislators from resigning in mid-term, which is what five lawmakers did last year to trigger a "referendum"on electoral reforms. They accused Lam of organizing what they called a "fake consultation." The protesters ran up to the stage and threw papers missiles at Lam, who immediately retreated to the back of the venue, leaving his watch on the table. At a previous protest, Lam's guards were able to protect him from paper missiles with black umbrellas. But, on this occasion, they failed to prevent the dog biscuits from landing on him. A quarrel also broke out between the protesters and people at the forum. A man in a blue shirt attempted to climb onto the second row of the seats to confront two old men who accused him of disrupting proceedings. While arguing, the protester apparently lost his balance and fell on them. A woman belonging to the Democratic Alliance for the Betterment and Progress of Hong Kong complained to the police that during the chaos she was molested by a member of People Power. A man was later taken to the Tsim Sha Tsui police station. The forum was delayed for about 30 minutes. It resumed after the protesters left. "Both within and outside the venue today there were certain parties and certain members of the public who disrupted public order," Lam said later. "Hong Kong is a civilized place governed by the rule of law. We can discuss different issues in a rational way." He stressed he will consider the views he received during the consultation and, if necessary, make suitable amendments to the government's proposal to plug the by-election loophole.

If you think gasoline is expensive, just be thankful you don’t have to buy Chanel quilted bags in Asia. According to a new Asian Lifestyle Index from the Swiss private bank Julius Baer, the cost of living the luxury life in Asia soared 11.7% in dollar terms over the past year. That’s more than twice the inflation rate for Asia as a whole. Even in local currency terms, the inflation rate was 7.2%. The Lifestyle Index is based on a basket of 20 luxury goods and services that are commonly purchased by millionaires in Hong Kong, Shanghai, Singapore and Mumbai. The items include everything from Oyster Rolex watches and Armani suits to boarding school and face lifts. The main reason for the inflation: more demand from more rich people. Julius Baer said the number of people in Asia with $1 million or more in investible assets will more than double by 2015, to 2.82 million. Their total wealth will nearly triple to $15.8 trillion, they said. China alone will account for nearly half of the number of high net-worth individuals, with 1.4 million rich people by 2015, the report said.

 China*:  Sept 4 2011 Share

The world's highest "Ferris wheel" starts its trial operation in a drizzly Guangzhou, capital of South China's Guangdong province, Sept 1, 2011. The world's highest "Ferris wheel" starts its trial operation in a drizzly Guangzhou, capital of South China's Guangdong province, Sept 1, 2011. The giant ride, built on the roof of the city's new 450-meter TV tower, consists of 16 cars, each with a six-person capacity. Each rotation along the tilted roof of the tower takes 20 minutes to complete. The ride has been dubbed a "Ferris wheel" because from ground level it looks like one. To ensure safety, a weather alert system was installed in the tower to monitor weather conditions, and it will send an alarm 20-50 minutes ahead of any disastrous weather, leaving enough time for visitors to evacuate. Children shorter than 1.4 meters and people older than 70 are not allowed on the ride alone. The ticket price for the ride is 130 yuan ($20.36).

ConocoPhillips China has been ordered to stop drilling in Bohai Bay, following an investigation that found it has not fully cleaned up or brought under control the offshore spills that have raised an outcry among fishermen and environmentalists. In a statement released on Friday, the State Oceanic Administration (SOA) demanded "strong and effective measures" to prevent further oil leaks and to clean up any spills, calling for a full environmental impact assessment before production resumes. It ordered the company to stop production at its Penglai 19-3 oilfield, which was the source of the leak in Bohai Bay. ConocoPhillips said earlier this week that it had met a Tuesday deadline for a full cleanup, sealed the fault causing the leaks and placed a containment device to prevent further seepage. However, further investigation by the SOA found the company's attempt to plug the leaks was unsuccessful. ConocoPhillips China is developing a compliance plan with its co-venturer in the field, China National Offshore Oil Corp, and will be submitting it to the SOA shortly, according to a news release by the oil company. Activities that are related to depressurizing the field will continue in a safe and environmentally responsible way, it said. On Friday morning, a group of more than 30 lawyers representing the fishermen applied to the SOA for the details of the investigation, and will start a lawsuit after getting the report. "We urgently want to know how much oil has been leaked, how much harm the pollution has caused and how fast the oil will diffuse," Zhao Jingwei, director of the legal group, told China Daily. "The direction the oil is flowing and the government responses are also our concerns," he said. However, the lawyer refused to give an exact time for the lawsuit or say how much compensation they will ask for from ConocoPhillips China. Yang Jizhen, chairman of the Laoting fisheries association in Hebei province, said the Ministry of Agriculture collected a sample of dead scallops in the area on Aug 3 and promised to give a response within one month, but the result is still unknown. "More than 60 percent of fishermen have suffered serious losses. All fishermen are paying attention to the development of this accident," he said, adding they are looking forward to receiving a fair result and getting compensation after the lawsuit. Lin Fanzhong, an official with the inspection team, said they conducted a thorough examination of the site with satellites, aircraft, sea vessels and even underwater robots on Thursday. A preliminary investigation by the administration's inspection team found the leak was caused by incorrect injections that destroyed the stability of the seabed. The company should shoulder responsibility for the accident, the administration said. In the meantime, ConocoPhillips China should report on the progress of the cleanup work and be supervised by the public, said the administration, which will soon ask the company for ecological compensation.

A real estate tycoon from the mainland has defended his plan to buy a large tract of wilderness in Iceland to build a resort in a proposal that has stirred unease in Europe about the environment and Beijing’s role. Huang Nubo, chairman of Zhong Kun Group, said on Friday he wants to build a wilderness tourism destination that protects the environment and Icelandic culture. He said the project is a private investment, rejecting suggestions by some critics in Iceland that the project might be an effort by the China’s government to establish a foothold there. The Iceland government has said it welcomes the investment but is still reviewing environmental and other aspects of the project before deciding whether to approve it.

Beijing plans to impose congestion fees on cars using certain roads and to encourage residents to buy alternative-energy cars in its latest drive to ease chronic traffic jams and cut pollution, China’s media reported on Friday. Officials hope the fees will lead more residents to use public transport, according to the plans announced on Thursday, the state-run Xinhua news agency said. The reports did not give details of tolls that would be imposed or how those fees would be collected. Beijing’s plan will provide unspecified incentives to buy so-called new-energy cars, including electric vehicles. It pledged to improve equipment at electric-vehicle charging stations and build more of them, Xinhua said. China’s capital has already taken several measures to reduce traffic pressure since the 2008 Beijing Olympic Games, when it began to order some vehicles off the streets on certain days depending on the licence plate numbers. That policy has not had much effect on the traffic gridlock, which has continued. Beijing in January began capping new car registrations at 20,000 per month, available through a lottery. But that has only slowed the pace of increase in congestion, while angering tens of thousands of hopeful car owners left unable to buy a vehicle. The local authorities also increased parking fees, built parallel roads, widened certain intersections and expanded the subway system, all to try to relieve traffic congestion. China overtook the Unites States in 2009 as the world’s largest car market. The rapid growth of ownership has caused traffic nightmares in several major Chinese cities, with Beijing expected to have 7 million vehicles on the road by next year.

China, the world's largest steelmaker and iron ore consumer, is further diversifying its overseas ore supplies by significantly increasing imports from non-traditional countries, an industry official said on Thursday. Iron ore imports from countries other than Australia, Brazil, India and South Africa reached 64. 63 million tons in the first half of this year, accounting for 19.3 percent of imports and up nearly 4 percent from last year, Xu Xu, chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, said at a conference held by the consulting firm Umetals in Jinan, Shandong province. The larger proportion of ore imported from other countries signals that the traditional position of Australian and Brazilian miners is being challenged, Xu said, as China diversifies its overseas iron ore supplies. The country is exploring emerging regions such as Peru, Chile and Canada, he added, and should actively develop strategic relationships with iron ore exporters including Russia, Vietnam and Kazakhstan. He also said that the proportion of Indian ore imports tumbled by 14.9 percent in the first half of this year - the largest proportion fall in 13 years - due to higher taxes and China's surging domestic demand. "We've seen more other countries offering iron ore supplies to us. For instance, Honduras is listed in our clients this year, after we diversified ore imports into other countries including Mexico, Venezuela, the Philippines and Iran," said Shen Tong, an iron ore trader from Zhejiang Materials Group Co Ltd, which used to import the steelmaking ingredient from Australia, Brazil and India. Iron ore import prices for August delivery surged to the highest level since May 6, according to data from The Steel Index (TSI) released on Wednesday. The iron ore price for 62 percent ore fines ended the month at $179.9 a ton in Tianjin port. Chinese steelmakers have seen their profits squeezed and are under heavy pressure because of costly ore prices as the world's three biggest miners - Vale SA, BHP Billiton Ltd, and Rio Tinto Group - control two-thirds of the world's iron ore exports and have a say in global ore prices. The average price of iron ore imports surged 37.8 percent to $162.7 a ton in January to July, compared with the same period last year, resulting in 137 billion yuan added cost for the Chinese steel industry, Luo Bingsheng, the deputy Party secretary of the China Iron and Steel Association, said at the conference. The profit margin of 77 large and medium Chinese steelmakers reached 3.08 percent in the first seven months of this year, down 0.1 percent from a year earlier, Luo said, adding the industry is in a high-cost, low-profit situation compared with the average industrial profit margin of 5 percent. China's domestic iron ore production rose 22 percent to 691.9 million tons in the first seven months compared with a year earlier, Luo said. Luo also said global miners have overstated China's demand for imported ore because the country's domestic ore production has greatly increased. Luiz Meriz, Vale's China president, said the company's iron ore exports to China will remain near last year's levels of 130 million tons. He said China's steel output will rebound in the fourth quarter after slowing in the third and peaking in the second.

A fisherman shows a 6-kilogram spotted silver carp he netted from Taihu Lake, East China's Jiangsu province, Sept 1, 2011. More than 3,000 fishing boats sailed to Taihu Lake after it reopened to fishing on Sept 1, following a seven-month closure. Taihu Lake is the second-largest freshwater lake in China, with a surface area of about 2,338 square kilometers. 

A construction site of the Lhasa-Xigaze Railway in Southwest China's Tibet autonomous region, Sep 1, 2011. The 253-kilometer Lhasa-Xigaze Railway, which will start operating in 2014, is expected to improve transportation in the southwestern part of Tibet. The railway is an extended part of the Qinghai-Tibet railway, the world's highest and longest plateau railway connecting Xining, capital of Northwest China's Qinghai province and Lhasa in Tibet.

A consortium of five state-owned Chinese companies are buying a 15% stake in the world's largest niobium producer for US$1.95 billion in cash, people familiar with the deal said, a move that highlights the race among steelmakers race to secure resources amid tightening supply. Brazil's Companhia Brasileira de Metalurgia e Mineração, or CBMM as it is known, produces more than 80% of the world's supply of niobium, which is used to strengthen steel and widely employed in making cars and natural-gas pipelines.

Hong Kong*:  Sept 3 2011 Share

The Ministry of Finance guarantees the allocation of at least a board lot of 10,000 dim sum bonds to each retail investor applicant. The remaining dim sum bonds will be allocated to investors in proportion to the amount they applied for. The retail tranche of the dim sum bonds has a two-year tenor and an annual coupon rate of 1.6 per cent. Bank of China (Hong Kong) and HSBC are joint co-ordinators of the offerings. Ahead of the retail tranche, the finance ministry offered 15 billion yuan of dim sum bonds to institutional investors, such as insurance firms, pension funds and mutual funds managers. The institutional tranches were sold through tender on August 17. The finance ministry has raised 20 billion yuan in dim sum bond offerings - its third offering and the largest in the city. The ministry said the successful issuance of dim sum bonds in Hong Kong reflected Beijing's support in enhancing the city as an international financial centre. It also demonstrated investors' confidence in China. Beijing has pledged to issue more government bonds in Hong Kong. During his visit to the city last month, Vice-Premier Li Keqiang said the mainland's non-financial corporations would be allowed to issue up to 25 billion yuan in yuan-denominated bonds in Hong Kong this year. Beijing has set a 50 billion yuan quota to be shared equally between non-financial and financial companies this year. Christopher Cheung Wah-fung, Christfund Securities' chairman, said the dim sum bonds attracted investors who wanted to bet on valuation gains in the currency. The yuan has gained more than 20 per cent against the US dollar since 2004. "The yield of the China sovereign bonds is not very high, but bondholders earn the valuation gain," Cheung said. "Investors do not have much choice nowadays. The bank deposit interest rate is close to zero, stock markets worldwide are so volatile, and prices of gold and other commodities are so high. "Sovereign bonds are among the few low-risk products that can offer reasonable returns."

The Hospital Authority will launch a five-year plan next year to contain drug-resistant superbugs, including an electronic system to monitor the use of antibiotics. The system will give advice on whether the doctor's prescription of "big gun" antibiotics is appropriate based on the patient's condition and history. If the use is found to be inappropriate, it will suggest alternative choices, the authority's chief infection control officer, Dr Dominic Tsang Ngai-chong, said yesterday. If doctors insist on the prescription despite the system's advice against the use, they will have to seek approval from specialist doctors, as in the current system. The new system, scheduled to be introduced in the second year of the five-year plan, will be built with reference to one in a Singapore hospital which was effective in reducing drug abuse. Big gun antibiotics are more potent drugs that should be used as a last resort. Bacteria exposed to drugs may mutate and develop resistance, and early resistance to such strong drugs makes them hard to defeat. "The advantage of an electronic system is that it can give immediate advice anytime, and reduces the need for human resources which we lack," Tsang (pictured) said. Prescriptions are now monitored by specialists who also have other duties and may not be able to give timely feedback. Other parts of the plan include a screening program to control outbreaks. A large number of the same sub-class of a superbug would mean an outbreak. A colour coding system to differentiate between equipment to be used for superbug contaminated and non-contaminated patients will be extended. Hand hygiene will be further enhanced, possibly through an electronic monitoring system for hand washing and the use of alcohol hand rubs, Tsang said. The announcement of the five-year plan comes after two of the seven major superbugs recorded a slight increase in the first half of this year compared to last year. Tsang said the sample percentage of carbapenem-resistant Enterobacteriaceae (CRE) compared to the non-resistant form of the bacteria in public hospitals had increased from 0.19 to 0.64. At the same time multi-drugresistant Acinetobacter (MDRA) increased from 2.1 to 3.1, with both imported and local cases. There was a slight reduction in methicillin-resistant Staphylococcus aureus (MRSA), the bug that was found last month to breed especially vigorously in homes for the elderly.

The summer villa, once surrounded by fruit trees, was built in 1934 and opened to the public in the 1950s. Now it is overgrown, strewn with rubbish and falling apart. Young people play in the "ghost house". Choi Hing-chung, a Tung Tau Wai villager, recounts the old days in Yu Yuen, built by his uncle Tsoi Po-tin, the businessman and philanthropist. The elegant Yu Yuen villa was commissioned by construction-business-leader Tsoi Po-tin in 1934 as a summer villa for his family living on Hong Kong Island. Built in European style and surrounded by fruit trees, it became a local attraction and was opened to the public in the 1950s. Tsoi was a leader of the charity Po Leung Kuk and was behind many well known projects in Hong Kong and Guangzhou, including the Oi Kwan building - the first high-rise in Guangzhou, according to the Antiquities and Monuments Office. Yu Yuen was among his favourites. It is now only a shadow of its former glory, used as a rubbish dump and by children playing ghoulish games, particularly during the Chinese ghost festival. A recent visit by the South China Morning Post (SEHK: 0583) found the entrance almost entirely blocked by empty plastic petrol cans. Its beautiful woodland no longer exists, and in its place is a sandy site used to store construction materials. Banyan trees now grow on the side of the building. Dead branches are tied in bundles, filling the drawing room. On the second floor, paper offerings are scattered. A table with burnt candles stuck on its four corners stands near the centre of the room. There's burn marks on the walls, and paper peeling from them. Bits of broken wooden window and door frames lie about. A fountain is the only remainder of the garden in front of the house, which has become a car park. "People say this is a ghost house," said Choi Hing-chung, nephew of Tsoi. "Of course it is not. "It used to be a beautiful place." 

Wen Jian Bao presses Aquino on Hong Kong hostage crisis follow-up - Premier tells Aquino to 'properly' handle aftermath of bus siege and respect requests from victims' families - Premier Wen Jiabao told visiting Philippine President Benigno Aquino face to face for the first time yesterday to properly handle the aftermath of last year's Manila hostage crisis in which eight Hong Kong residents were killed. The exchange came as survivors and families of victims submitted a petition with about 9,000 signatures to the Foreign Ministry office in Hong Kong to press for an apology from Aquino and compensation from the Philippine government. Wen told Aquino in Beijing that he hoped the Philippine government would "pay much attention" to the demands of the Hong Kong government and residents and handle the incident "properly". It was one of several subjects the two leaders discussed, according to Xinhua. Aquino once again expressed regret over the tragedy and said his government had been handling the issue seriously and was willing to keep up communications with the Chinese government. Tse Chi-hang, younger brother of slain tour guide Masa Tse Ting-chunn, said he welcomed Wen's remarks, but said the premier could have pushed Aquino harder. "It is too early to say it was a victory," Tse said. "It is just a remark from Wen, but no concrete actions had been promised from Aquino. Aquino's response was in line with what he had said previously." Tse hoped the central government could continue to press for action through diplomatic channels so that they did not need to pursue legal claims. However, the survivors and families of the victims are continuing to prepare for legal action after meeting a group of human rights lawyers in Manila last month. The group launched an online petition last week with an open letter to President Hu Jintao , urging him and other officials to raise the tragedy with the Philippine president, who began a five-day visit to the mainland on Tuesday.

Hong Kong director John Woo (吳宇森) returned to the Venice International Film Festival this week, a year after he was awarded the festival’s Golden Lion for Lifetime Achievement. This year, the legendary filmmaker is promoting a new Taiwanese epic that’s screening in competition: “Warriors of the Rainbow: Seediq Bale” (賽德克‧巴萊), from director Wei Te-sheng (魏德聖) about the island’s aboriginal tribes that staged a rebellion against Japan’s colonial rule in 1930. Mr. Woo, who serves as one of the producers, said he has long loved epic films and names a few of his favorites: David Lean’s “Lawrence of Arabia,” Stanley Kubrick’s “Spartacus” and Akira Kurosawa’s “Seven Samurai.” Scene Asia caught up briefly with Mr. Woo at Venice. What drew you to “Warriors of the Rainbow”? I love the subject. The whole movie is about honor, loyalty, dignity and courage. And I didn’t know this part of Taiwan’s history, so I had to learn. After working many years in Hollywood, why did you return to Asia to make “Red Cliff” (赤壁) in 2008? One of the biggest reasons I went to China to shoot the film was I realized that since I had been working in Hollywood for so many years, it was about time that I bring back the experience of what I learned. What are you working on now? My next project is a love story. The temporary title is “1949.” In that year many Chinese people went to Taiwan [to escape the Chinese Civil War]. There are three stories of people separated into two cities: Shanghai and Taipei. What would you be doing if you weren’t making films? I first wanted to be a preacher, but the missionary said I was too artistic.

Gambling revenue in Macau rose 57% in August from a year earlier to a fresh record, government statistics showed Thursday, as high rollers from mainland China continued to fuel growth despite China's ongoing tightening measures. "August growth was spectacular and demonstrates the limited impact from global macro concerns (and) tighter money supply in China," said CLSA analyst Aaron Fischer. Macau, the only place in China where casino gambling is legal, has seen gambling revenue soar since the end of 2009, as players placed more bets and casino operators opened new large-scale, Las Vegas-style casino resorts to attract patronage. Gambling revenue in the Chinese territory rose to 24.77 billion patacas ($3.09 billion) last month, up from 15.77 billion patacas a year earlier, according to data from Macau's Gaming Inspection and Coordination Bureau. The solid growth comes despite sharp declines in global financial markets sparked by Standard & Poor's downgrade of U.S. sovereign debt in early August. Hong Kong's benchmark Hang Seng Index tumbled 8.5% for the month, its worst August performance since 2001. "The factors driving (the high-rollers segment) don't seem to have been impacted yet by recent developments," said RBS analyst Philip Tulk. He said the "pretty amazing period of growth" in Macau won't likely change in the near term, and affirmed his forecast that the Chinese territory's gambling revenue will grow 45% in 2011. Macau overtook the Las Vegas Strip as the world's biggest gambling market in 2006 and is poised to rake in five times the Strip's gambling revenue this year. In the January-August period, Macau's gambling revenue rose 47% from a year earlier, adding to a 58% surge in 2010. RBS's Mr. Turk said he expects growth in casino gambling revenue to slow next year and in 2013, due in part to a high comparison base. He forecasts gambling revenue to rise 18% in 2012, with growth slowing to 16% in 2013. U.S. casino companies Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International have been benefiting from the strong growth at their Macau units, offsetting the slow recovery in Las Vegas. Nonetheless, the market's largest operator remains local magnate Stanley Ho's SJM Holdings Ltd., which accounts for about one third of Macau's gambling revenue.

Shimao Property Holdings (SEHK: 0813) will cut its construction area by more than two million square metres in cities facing home-purchase restrictions and increase sales volume to offset a sluggish market. The company made the announcement after reporting that underlying interim profit rose 39 per cent. Excluding revaluation gains on investment properties, core earnings were 2.27 billion yuan (HK$2.77 billion), up from 1.63 billion yuan a year earlier. Turnover increased 21 per cent to 12.17 billion yuan, and the company declared an interim dividend of 22 HK cents, up 46.66 per cent from a year earlier. Jason Hui Sai-tan, Shimao Property vice-president, said properties under development would be reduced to 7.7 million square metres by the end of the year, down from an original target of 10 million square metres. "We will adopt a standardised approach to ensure developments are built faster and sold faster," he said. This included a more efficient development process, he said. The company planned to slash the time between securing a site and putting a project on the market for pre-sale to five months from nine months to a year at present, he said. Hui said he was confident the firm would meet its 36 billion yuan annual sales target this year despite central government moves to extend restrictions on the home purchases to second and third-tier cities. The firm managed to achieve 20.9 billion yuan in contract sales as of August 31 even though half of the 34 cities where it had projects were subject to home purchase restrictions, he said. The central government in January announced eight measures to curb the property boom and, for the first time, required local governments to set targets for average home prices. Based on guidelines set by Beijing, at least 35 big cities moved to restrict registered residents from buying more than two flats. Last month, the government decided to expand the restrictions to smaller cities where property prices were still rising rapidly. Taizhou, a so-called third-tier city in the wealthy eastern province of Zhejiang, recently announced home purchase restrictions, becoming the first of the smaller cities to announce such measures. Hui said the firm would release as many as 30 projects for pre-sale next month, which is the traditional peak season for transactions, as it sought to boost sales. Shares of Shimao Property closed 4.59 per cent higher at HK$8.19.

The government on Thursday expanded a committee for vetting post-service employment of former civil servants – following a public outcry over the appointment of an ex-housing chief as a director of a major developer. A spokesman said the government had appointed four new members to the Advisory Committee on Post-Service Employment of Civil Servants for a term of two years with immediate effect. The four new members are Hong Kong Red Cross Deputy-Chairman Vincent Lo Wing-sang, former Police Chief Lee Ming-kwai, HSBC Holdings (SEHK: 0005) Executive Director Vincent Cheng Hoi-chuen and City University Vice-President Professor Paul Lam Kwan-sing. The committee advises the government on matters relating to the post-service employment of civil servants. The spokesman said the government had accepted the recommendations of a Legislative Council inquiry set up last year to investigate the post-service employment of former Housing Director Leung Chin-man. The recommendations included expanding the composition of the advisory committee and enhancing its independence. Leung triggered criticism over a possible conflict of interest when he became executive director and vice-chairman of New World China Land (SEHK: 0917), the mainland subsidiary of New World Development, in August 2008. As housing chief in 2004, Leung played a key role in the government’s sale of Hung Hom Peninsula, a never-occupied, subsidised housing estate, for barely half the asking price to a consortium that included a sister company of New World Development. He worked for the developer for only two weeks, and stepped down hours after Chief Executive Donald Tsang Yam-kuen ordered a review of the Civil Service Bureau’s decision to approve his new job. A Legco select committee investigation concluded last December that it was inappropriate for Leung to have taken the job, and criticised him for deliberately hiding facts in his application to the government for permission to join the firm.

Lawmakers' move to the Tamar development in Admiralty may be delayed if work on access routes - which was to have been finished yesterday - is not completed within two weeks. After a three-hour meeting to discuss progress on construction work, the Legislative Council Commission yesterday tentatively decided to proceed with its plan to hold the first meeting of the legislative session there on October 12. At the meeting, Chief Executive Donald Tsang Yam-kuen will deliver his final policy address. Legco president Tsang Yok-sing said the decision was not final. Tsang said the government has to ensure easy access for lawmakers and the public to the new Legco complex before a permanent move is possible. Workers are still racing to meet deadlines to complete access routes to the complex. Lawmakers will make a final decision when the Legco secretariat issues notice of the first meeting of the coming legislative session. The former Legco building will be placed on standby. "The building has passed a systems test and the hardware is largely ready," Tsang said. "However, the government has to fulfill its promises on public accessibility." The key problem for lawmakers is a delay in completing work on two footbridge from the Admiralty Centre to the adjacent government headquarters. Access to the Legco complex is poor, as is pedestrian access from the Academy of Performing Arts. Access to the government buildings from the west by car is also inconvenient. There are also questions about the number of bus routes serving the Tamar development. Lawmakers also criticised the size of the protest zones at the development. Unionist lawmaker Lee Cheuk-yan said there was a serious regression in the size of protest zones and the convenience of routes for rallies. "A protest zone outside the Chief Executive's Office measures only 24 square metres, which is like a subdivided flat," Lee said. "What's worse, it will only be opened every Tuesday when the Executive Council holds its regular meetings." In comparison there was a 1,600 square metre protest zone at the old Legco building in Central. Lee said the five routes for protest marches proposed by police would give demonstrators less access, but accepted the site has inherent constraints.

Two companies aim to raise a total of up to $5 billion through initial public offerings in the fourth quarter, as the city's market for new listings shows more signs of revival despite steep stock-market losses. Jewelry retailer Chow Tai Fook Jewellery Co., which is controlled by billionaire Cheng Yu-tung, on Wednesday submitted the so-called A1 form with the stock exchange, the first formal step in an IPO that could raise $3 billion to $4 billion, a person familiar with the situation said. The company plans to list in December. Beijing-based Guodian Technology and Environment Group Co. Ltd. plans to raise around US$1 billion through a Hong Kong IPO in the fourth quarter, people familiar with the situation said Wednesday. The two follow XCMG Construction Machinery Co., which is looking to raise $1.5 billion to $2 billion in Hong Kong in October, and Citic Securities Co., China's largest brokerage by market value, which is targeting an Oct. 6 listing for a deal that could be worth at least $1.5 billion. Hong Kong has been one of the world's busiest markets for share listings in the past few years, playing on its connection to mainland China. Despite finishing the month on a three-day winning streak, Hong Kong's stock market posted its worst August performance in 10 years, tracking a rout in global equity markets amid global events like the U.S. credit rating downgrade. The Hang Seng Index rose 1.6% on Wednesday but lost 8.5% in August, its worst monthly showing since October 2008. Year-to-date, the benchmark index has lost 11%. The decision by jeweler Chow Tai Fook to file a listing application comes amid continued increases in retail sales in the city. The value of Hong Kong's retail sales rose 29.1% in July from a year earlier to 35.2 billion Hong Kong dollars (US$4.52 billion), boosted by an increase in tourism and strong consumer sentiment, the Census and Statistics Department said this week. The growth rate was higher than June's 28.8% rise. Chow Tai Fook has more than 1,400 sales outlets in Hong Kong, China and Taiwan, the person familiar with the IPO plans said. The company couldn't be reached for comment. Shares of Hong Kong-listed jewelry-store operators Luk Fook Holdings International Ltd. and Chow Sang Sang Holdings International Ltd. have risen more than 40% so far this year, outperforming the Hang Seng Index. Guodian Technology and Environment is a unit of China Guodian Corp., one of China's five major state-owned power-generation companies. China Guodian listed its wind power unit China Longyuan Power Group Corp. in Hong Kong two years ago. Guodian Technology includes businesses that remove sulfur from coal and make air-cooling and wind-power equipment. Separately, Hongguo International Holdings Ltd., a Chinese shoemaker and retailer, is seeking to raise up to $300 million and has a tentative listing date of Sept. 23. Goldman Sachs Group Inc., HSBC Holdings PLC and J. P. Morgan Chase & Co. have been appointed to handle the Chow Tai Fook IPO, people familiar with the situation said earlier. China International Capital Corp. is handling the Guodian Technology IPO, the people said Wednesday. 

 China*:  Sept 3 2011 Share

The asset management arm of Edmond De Rothschild Group, owned by the Rothschild family, said it had bought more than 5 percent of China CYTS Tours Holding Co Ltd, worth $54 million at present, and plans to increase its stake over the next 12 months. Edmond De Rothschild Asset Management Hong Kong Ltd owns 21 million shares of CYTS Tours, or 5.06 percent of the Shanghai-listed company, as of Tuesday, and plans to buy more shares to gain investment returns, the company said in a statement to the Shanghai Stock Exchange. In line with Chinese regulations, upon acquiring more than 5 percent of a listed company, an investor is required to fully disclose its holdings. The statement comes a week after CYTS Tours said it had failed to receive regulatory approval to spin off its profitable Wu Zhen tourism unit for a Hong Kong listing - a plan that had raised investor concern over the future profitability of the company. Rothschild and other foreign investors have been investing in China's capital markets under the Qualified Foreign Institutional Investor (QFII) policy, seeking exposure to the world's fastest-growing major economy. Rothschild said it had been gradually buying shares of CYTS Tours since February. Rothschild Group's banking unit obtained $100 million in QFII quotas in 2006. Rothschild has also bought more than 5 percent of chemical producer Liuzhou Chemical Industry Co Ltd. Hong Kong-listed mainland companies in which Rothschild owns more than 5 percent include China Tycoon Beverage Holdings Ltd, the investment holding company CNNC International Ltd, NetDragon Websoft Inc and Tianjin Capital Environmental Protection Group Co Ltd. Established in 1953 by Baron Edmond de Rothschild, Rothschild Group specializes in private banking and asset management. Established in 1980, CYTS Tours went public on the Shanghai Stock Exchange in 1997. Shares of CYTS Tours rose 0.75 percent to 16.18 yuan ($2.54) on Wednesday. Headquartered in Beijing, the company is a major Chinese tour operator that basks in a booming tourism market. According to a report released by the China Tourism Academy in April, mainland tourists made more than 57 million overseas trips and spent $48 billion last year. It is estimated that mainland tourists will make 65 million outbound trips and spend $55 billion overseas this year. Meanwhile, China has also become a hot tourist destination. According to the 12th Five-Year Plan (2011-2015), the country hopes to attract 3.3 billion tourists by 2015, up from 2 billion last year. The Boston Consulting Group said in a report in March that China is expected to overtake Japan and become the world's second-largest travel market by 2013. China currently accounts for 6 percent of global tourism revenue. That proportion will increase to 8 percent in 2013 and 14 percent in 2020, the report said. Travel revenue in China is projected to grow by 14 percent annually to reach 5.5 trillion yuan in 2020. Tourism generated revenue of 1.55 trillion yuan last year, according to figures from the National Tourism Administration.

China will speed up the opening up of its western inland region, continue to fund cross-border infrastructure projects, and roll out favorable policies to make Xinjiang a key economic hub at the heartland of Eurasia. Vice-Premier Li Keqiang told officials and business leaders attending the first China-Eurasia Expo in Urumqi, Xinjiang Uygur autonomous region, on Thursday that opening up to countries in Eurasian heartland was an important part of the country's overall opening-up. Xinjiang, which covers one-sixth of China's landmass, borders key regional players such as Russia, Kazakhstan, and Pakistan. The region also holds abundant oil and gas reserves. But regional economic activities were slowed partly due to poor infrastructure along the border, which runs across rough territories such as the Pamirs plateau. The region has also been engaged in a long battle against violence that's been detrimental to economic development. Zhu Hailun, Urumqi's top official, told reporters Wednesday that it took almost a year for the city's economy to recover from the deadly 2009 riots. Security was tight Thursday in and around the expo venue - the 1.3 -billion-yuan ($201.5 million)- Xinjiang International Convention Center located in suburban Urumqi. Authorities ramped up security after police foiled attempts to sabotage the event, Zhu said. China opened up to the world from its eastern coast in the late 1970s when late leader Deng Xiaoping unleashed the landmark market economic reform. Decades of a booming export-oriented economy has brought tremendous prosperity to the eastern regions. "Looking to the future, we will accelerate the opening up of the inland and border regions while advancing the opening up of the eastern region," Li said. The vice premier said Xinjiang is a key region in the government's strategy to develop the country's western regions and the central government has drawn up and is implementing a series of favorable policies covering tax, investment in infrastructure and environmental protection, exploitation of resources and welfare projects to boost Xinjiang's development. He said the government is working to speed up the opening-up of Xinjiang by setting up special economic zones in two border cities, restructuring local industries, expanding the number of border trade ports, and implementing financial measures to encourage the use of Chinese currency, the yuan, in cross-border trade and investment. Li also urged neighboring countries to fast track cross-border infrastructure projects - roads, railways, flight routes, pipelines, and telecommunication networks to explore the full potential of transport across the heartland of Eurasia. Beijing will continue to provide low-interest loans to other countries for infrastructure projects, he added. Xinjiang now has only one cross-border railway, the 460-km line that connects Urumqi to Kazakhstan' s rail through the Alataw pass. A second China-Kazakhstan rail line is being constructed to link Xinjiang's trading port Horgos to the inland rail network. Pakistani officials have also proposed constructing a cross-border railway to link its northern border with Kashgar, an old Silk Road town and a major city today in southern Xinjiang. Pakistan's ambassador to China Masood Khan said that a feasibility study of the railway had been conducted, but there is still no time-table for construction. "By using this option, you can shorten China's trading routes from the Gulf to Shanghai by about 5,000 miles. It is very short," Khan said, adding that talks about a cross border pipeline that can carry oil and gas to China through inland Eurasia have also begun. "New opportunities have emerged for China and countries in the heart of Eurasia. The pace of regional economic integration is growing significantly," Li said. China's trade with central, south, and west Asian countries reached $270 billion last year. "There is great potential to boost regional trade. Governments should further expand their domestic markets and oppose protectionism to facilitate trade," he said. 

Kai-Fu Lee, former China chief for Google Inc., raised $180 million from a group of prominent investors for his company aimed at helping Chinese tech-industry startups, a sign of continued interest in the sector despite a range of recent challenges that have pushed down share prices for Chinese Internet firms listed in the U.S. Investors in the new fund run by Mr. Lee’s Beijing-based Innovation Works include Sequoia Capital, Silicon Valley investor Ron Conway–who was among the early backers of Google, Facebook Inc. and Twitter Inc.–and Yuri Milner, whose firm Digital Sky Technologies invested in Facebook, Groupon Inc. and Zynga. The fund will use the money for new Chinese Internet projects, Innovation Works announcement said in a statement Thursday. Innovation Works, which Mr. Lee founded in 2009 after four years running Google in China, backs early-stage start-ups in China’s fast-growing Internet sector. It has helped nine companies obtain funding from third-party venture capital funds, including a smartphone operating system developer and a mobile application distribution platform. Mr. Lee said in an interview Thursday that the nine companies raised an average of $8 million each and have an average valuation of $40 million. “The Chinese Internet will undoubtedly grow in usage, mobility, monetization, e-commerce—all faster than the U.S. market, so this is clearly one of the best investment opportunities,” he said. But the sector has been confronted recently by growing concerns about a possible bubble in Chinese tech stocks, worries about the regulatory environment in China, and broader concerns over corporate governance practices at smaller Chinese companies. A string of new Chinese Internet listings in the past year have performed badly. Shares in social-networking site operator Renren Inc. are now trading on the New York Stock Exchange around half their initial public offering price in May, and NYSE-listed stock in online-video company Youku.com Inc., which more than doubled on their first day of trading in December, are now back below their IPO price. Shares in Nasdaq-listed Tudou Holdings Ltd., a Youku competitor that listed last month, closed on Wednesday 10% below their offering price. These companies, as well as China’s top Internet companies including Baidu Inc., Tencent Holdings Ltd. and Sina Corp., have multi-billion dollar valuations comparable to some U.S. Internet companies, despite competing for significantly less market revenue. Total revenue from online ads in China reached $4.3 billion last year, according to research firm Analysys International. The U.S. online ad market last year reached $26 billion, according to research firm eMarketer. Market enthusiasm for Chinese Web companies has also been damped by increased government supervision of information online. It also follows the controversial handling of an ownership restructure by Chinese e-commerce company Alibaba Group Holding Ltd., of which Yahoo Inc. owns a roughly 40% stake, in which Alibaba transferred a key business to its chief executive without approval from its board of directors. Mr. Lee, who is also a former Microsoft executive, said the Chinese Internet sector still has much to offer. “The overall trend is still exciting,” he said. “Some public companies are bubbles, but the same is true anywhere.” It’s “all the more reason” to invest at an earlier stage “before the valuation gets too expensive,” he said.

Hong Kong*:  Sept 2 2011 Share

Yuan-denominated shares and other investment products will help it become a truly international currency, Hong Kong's exchange chief says. Establishing a popular yuan-denominated share market in Hong Kong is the next big step for the yuan to become a global currency, says the head of the city's exchange. Hong Kong Exchanges and Clearing (SEHK: 0388) chief executive Charles Li Xiaojia said the liquidity pool created by the increasing amount of trade settled in yuan is a good start. "But for the yuan to become a real international currency like the US dollar, euro, yen or the Australian dollar, it still has a long way to go," Li told a seminar yesterday. "The internationalisation of the yuan is like running a marathon - it's a long-term game." He said mainland capital controls and the fact interest and foreign exchange rates are not determined by the market means the yuan cannot be freely traded by global investors like other currencies. "The yuan will only become an international currency when investors and other people like using it. As such, it is important for Hong Kong to develop yuan-denominated shares and other yuan investment products," Li said. These shares or derivatives would offer higher returns than yuan deposits or bonds, while companies would be able to raise funds in yuan share offerings in the city to finance mainland projects, he said. While in Hong Kong earlier this month, Vice-Premier Li Keqiang announced eight measures to expand yuan business in the city. One of them was relaxing foreign direct investment rules so that - from next month - foreign firms can invest yuan holdings directly into mainland projects instead of using US dollars. Secretary for Financial Services and the Treasury Chan Ka-keung said this would ease currency risks for companies with mainland projects, and that it made sense for them to use the yuan instead of the dollar. Hui Xian Real Estate Investment Trust was the city's first yuandenominated initial public offering - it lost 9.35 per cent on debut in April. Li said more measures to support yuan offerings would be introduced from October. These would include a dual option whereby new stocks could list in both the yuan and the Hong Kong dollar, and firms that have already issued shares in Hong Kong dollars could add yuan ones.

With 97 million active users worldwide, eBay has become a significant force in global shopping. Many firms rely on the website's sales. Driven by strong demand from overseas buyers, the mainland and Hong Kong have been ranked as eBay's biggest exporters in Asia. Annual overseas sales in 2010 by large eBay sellers on the mainland increased 34 per cent year on year on average, while those in Hong Kong grew 14 per cent, according to the firm's inaugural eBay Asian Exporters' Index report. The findings were based on internal data from eBay, the world's largest shopping and auctions website, and the results of a Nielsen survey of eBay sellers with annual sales exceeding US$100,000. Jeff Liao Guangyu, the chief executive of eBay Greater China and vice-president for Asia-Pacific cross-border trade, said the mainland and Hong Kong would continue to drive Asia-Pacific trade and e-commerce growth as consumer demand continues to rise. "We expect eBay sellers from Asia to ship in excess of 200 million parcels worldwide next year," Liao said. That compares with the projected shipments of more than 140 million parcels in 2011. The top five product categories sold by mainland eBay sellers are: clothing and accessories; jewellery, gems and watches; mobile phones and accessories; computers; and consumer electronics. Privately held online clothing retailer Vancl (Beijing) Technology estimated that 50 per cent of its annual global sales come from eBay. Gavin Yin, the channel business development manager at Vancl, credited eBay for "promoting Vancl's brand in many major markets", with the majority of buyers located in the United States, western Europe and Russia. The company's target is to reach annual global sales of US$1.5 billion, compared with US$300 million in domestic sales last year. Hong Kong eBay sellers' top five product categories are: photographic equipment; computers and accessories; mobile phones and accessories; jewellery, gems and watches; and clothing and accessories. Liao pointed out that Asia's largest individual exporter - as opposed to a company - on eBay is from Hong Kong and has recorded US$21.7 million in sales so far this year. An eBay spokeswoman declined to identify this eBay seller, who is a specialist vendor of computer accessories.

The Solar Albatross, one of the four Hong Kong Jockey Club ferries. The solar sails on the bulk carrier would be 25 times the size. Solar Sailor, an Australian company specialising in renewable energy technologies, is negotiating to install its solar and wind power systems on a massive dry cargo ship that could be used to haul iron ore from Australia to China. The equipment is likely to be similar - but on a more massive scale - to the zero-emission systems the company has installed on four dual-fuel passenger ferries operated by the Hong Kong Jockey Club. Solar Sailor Holdings chief executive Robert Dane said talks were under way with an Australian mining giant which planned to buy a fleet of ultra-large Capesize bulk ore carriers. He declined to name the company, pointing out the issue was "very sensitive", but Solar Sailor is already working on initial development work to install its equipment on new ships as well as retrofitting existing vessels. He estimated it would cost A$7 million (HK$58 million) to install solar-panel-equipped sails on the bulk carrier but that the owner would save that amount on fuel in just two years. Electric power from the solar cells would augment power from the diesel engines, while the sail would harness the wind to provide additional thrust that would allow the ship owner to reduce engine power. Each sail, which could be lowered to fold along the side of the ship to allow cargo to be loaded and unloaded, would cover 800 square metres. This is 25 times the area of each of the sails used on the Solar Albatross, one of four passenger ferries Solar Sailor has built for the Jockey Club to ferry passengers from Sai Kung to the Kau Sai Chau golf course. Solar Albatross is the only one of the four vessels that has solar-equipped sails, which can be angled to the sun and wind direction. The three other ferries have solar cells mounted on the roof. Solar Sailor held a patent, which it had already been forced to defend, covering "any vessel with a wing or sail that has got solar panels or cells on it that can be angled to the sun or the wind and can fold down", Dane said. He said initial estimates showed that the four ferries, which can carry up to 100 people each, had cut the Jockey Club's fuels costs by half. Dane said the ferries would be monitored over the next year to assess the actual fuel savings. Electric power from the solar cells is used for the five minutes when the ferries are arriving and departing Sai Kung and Kau Sai Chau, while the diesel engine is started for the 15-minute cruise. Dane said the ferries can operate at six knots using electric power and 16 knots using diesel. The diesel engine consumed about 10 litres of oil an hour. "With solar power we can reduce that by a couple of litres. For us that's the critical thing - the fuel savings," he said. Dane said the arrival of the Jockey Club vessels had sparked interest elsewhere, although approaches to Star Ferry had met with more resistance. He said retrofitting the Star Ferry ships with solar-powered, all-electric engines "would be a piece of cake".

A Kowloon hills quarry will become home to 30,000 people, with rock caverns being used for leisure and retail use after it closes in 2016, under Planning Department proposals. The Anderson Road Quarry, between Kwun Tong and Tseung Kwan O, will provide a 40-hectare platform for development, the same size as the West Kowloon Cultural District. Planners also suggested 80 per cent of the future flats be allocated to the private sector, an idea that caused debate at the Sai Kung District Council briefing yesterday. Chief town planner Fiona Lung Siu-yuk, told the council the department's vision was "to reshape the Anderson Road Quarry site into a green and liveable community that meets territorial, district and local needs." She said the public housing component could be either conventional rental homes or fall under the government's new My Home Purchase Plan rent-to-buy program. However, councillors disputed the ratio of homes between the private and public sectors. Councillor Ng Shuet-shan said public housing should make up the majority of the development. "This is such a prime site. It should not fall into private developers' hands and become another batch of luxury flats," he said. Christine Fong Kwok-shan said the site should be used for the Home Ownership Scheme, which the government would probably revive, to build subsidised flats for sale. Other councillors said private homes should take the lead because areas surrounding the quarry, Kwun Tong and Lam Tin, were already dominated by public housing. Work on a public housing project that will house 48,300 people has already started on the quarry's edge. Lung said the proportion could be revised, depending on feedback from a three-month public consultation which started yesterday. Apart from residential development, a rock cavern, with an opening at least 300 metres wide, would be developed for use for wine cellars, restaurants and possibly a spa, the department said. Two options have been recommended for the rest of the land. One gives more space to retail and entertainment use, and features a 15-hectare park, while the other provides for government and community facilities, with less commercial use. Choy Chak-hung, a Kwun Tong district councillor, said there were concerns the development would increase traffic on main roads in Kwun Tong and Tseung Kwan O. The department suggested adding an escalator and lifts to connect the quarry to Kwun Tong town centre and expanding sections of the roads.

Macau casino operator Galaxy Entertainment Group (SEHK: 0027) posted an 84 per cent jump in underlying profit for the first half of this year on surging demand from cash-rich mainland gamblers, sending its shares up more than 5 per cent. Gaming revenue in the former Portuguese colony has surprised analysts and investors, hitting record levels since the start of the year. Macau is on track to outperform neon-lit rival Las Vegas this year by as much as fivefold in terms of revenue. Galaxy, one of six licensed operators in Macau, said adjusted first-half earnings before interest, taxation, depreciation and amortization (EBITDA) jumped to HK$1.8 billion (US$230.9 million) from HK$990 million in the year-ago period. Analysts had expected an EBITDA number around HK$1.5 billion. That overshadowed an unexpected 20.4 per cent drop in first-half net profit to HK$378.3 million. Galaxy, around 20 per cent owned by private equity group Permira , said adjusted for the one-off HK$800 million expenses related to the opening of its new $2 billion property in the world’s largest gaming destination , net profit was HK$1.3 billion. “I am comfortable saying that the one-offs are legitimate. The stock is going to react favourably to this. The market is going to like this,” said Philip Tulk, Royal Bank of Scotland’s gaming analyst in Hong Kong. Galaxy shares jumped as much as 5.8 per cent to HK$20.2 after the results announcement, before easing to around HK$19.32 in mid-afternoon trade. They are up about 120 per cent on the year despite a 20 per cent plunge in the gaming sector in mid-August on global market volatility. Shares have since recovered sharply on strong half-year earnings momentum in the sector and expectations of strong growth in the coming year. Analysts forecast Macau’s gaming revenue for August, due to be announced on Thursday, at about US$3 billion, citing unabated demand from cash-rich mainland visitors who continue to flock to the only place in China where casino gambling is legal. Macau’s July gaming revenue rose 48.4 per cent year on year to 24.2 billion patacas (US$3.01 billion), the second highest gathis year. Galaxy Entertainment CEO Francis Lui told reporters at a briefing that he expected the firm’s gaming revenue to grow more than 30 per cent year on year this year. Owned by Hong Kong property and construction tycoon Lui Che Woo, Galaxy had increased its market share to 19 per cent in July from 9 per cent in April, said Karen Tang, Deutsche Bank’s gaming analyst in Hong Kong. Valued at around US$9 billion, Tang wrote in a note that the company now ranked behind SJM Holdings, the gaming conglomerate owned by Macau icon Stanley Ho, in market share, jumping ahead of US billionaire Sheldon Adelson’s Sands China Ltd and Steve Wynn’s Wynn Macau, since opening its new casino in May. Galaxy’s US$2 billion gold embossed property marks the latest addition to Macau’s developing Cotai strip, already home to Melco Crown Entertainment Ltd’s City of Dreams and Adelson’s Venetian. “In my estimates I had assumed pre-operating expenses of HK$100-125 million. They had to rush pretty hard to get the casino open but it has obviously had a major impact on their bottom line,” Tulk of RBS said. Concern that global economic woes will affect Macau are warranted, say analysts, but most agree that the gaming industry is unlikely to be severely impacted given China’s relatively robust economy and the sustained ability of wealthy Chinese gamblers, who account for most of Macau’s visitors, to obtain credit. In a report released on Tuesday, Moody’s said Macau junkets, middle men who loan credit to high-rolling VIP gamers to help them bypass currency restrictions, were not heavily reliant on the domestic banking system. “Although there are concerns that tighter credit restrictions by the central government will slow the country’s economic growth and eventually affect gaming spending, we expect the impact to be modest,” the ratings firm wrote.

The Legislative Council was likely to move into the new government complex at Tamar on schedule because most of the facilities there were ready, Miriam Lau Kin-yee, deputy-chairwoman of the Legco Commission, said on Wednesday. Lau said facilities including the building’s electronic systems and the voting system were working well and most fitting-out work had been completed. She was speaking after a closed-door meeting of legislators to discuss a date for moving into the new complex. About three weeks ago, lawmakers had to postpone a deadline they had set for the transfer to Tamar because the electronic systems were not ready. Legco president Tsang Yok-sing said some legislators expressed concern that work on transport facilities and public access – including a pedestrian bridge linking the Admiralty MTR station to the complex – might not be completed in time. Tsang said on Wednesday the government had promised to complete the works in September. He also said the Legco’s goal was to move in before the new session begins in October. A back-up plan would be to hold meetings in the present Legco building in Central – if works remained unfinished by October, Tsang said.

Secretary for Food and Health York Chow Yat-ngok said on Wednesday vegetable supplies to Hong Kong remained safe despite fears of contamination in the mainland following a spill at a chemical plant in Yunnan. Chow told a press conference that two to three mainland farms were at risk of contamination after a tributary to the Pearl River was found to have high concentrations of a toxic heavy metal. The health secretary was commenting after field tests released by Greenpeace China on Tuesday showed the tributary has been seriously contaminated following the dumping of chromium waste. The results of the tests on samples collected near the Yunnan Luliang Chemical Industry factory in Qujing confirmed high concentrations of chromium waste in the Nanpan River. Chromium waste has the potential to cause cancer, according to health experts. “The present estimation is that about two to three vegetable farms in the area are probably contaminated,” Chow said. “The mainland authorities have yet to establish whether that was caused by toxic material in the water. We hope they can find out soon,” he said. Chow said the Food and Environmental Hygiene Department had taken vegetables samples from Hong Kong markets for tests. He stressed that vegetable supplies to the territory had met Hong Kong’s safety standards. He said that in the past 18 months, Hong Kong had tested 900 vegetable samples for chromium and found six samples contained the metal. The six samples passed Hong Kong safety standards. Only one exceeded mainland standards, Chow added.

George Clooney is the latest boldface name coming to CLSA’s annual investors’ form, following similar turns by Sarah Palin, Bill Clinton and Alan Greenspan. The Hollywood star will have lunch with CLSA clients on Sept. 21 in Hong Kong and discuss “his career, life outside Hollywood, activism and his Africa human rights and peace promotion work” — not the typical banker-networking fare — according to a statement by the brokerage. CLSA’s conference has drawn an eclectic mix of guests, including Ms. Palin in 2009, not long after she resigned as governor of Alaska, and Mr. Clinton, his former vice president Al Gore and Mr. Greenspan in 2006. Archbishop Desmond Tutu and financier Michael Milken have also attended, and Sir Elton John and Macy Gray have entertained guests in past years. Another Hollywood star, Michael Douglas, canceled his appearance last year after he was diagnosed with a throat tumor. If Gordon Gekko’s message was to have been “greed is good,” would humanitarian Mr. Clooney’s be just the opposite? 

 China*:  Sept 2 2011 Share

Mainland punters have emerged as a formidable force in the international gold market and are one of the main reasons for the ongoing volatility in gold prices, say Hong Kong industry sources. The spot price of gold has lurched between US$1,640 per ounce and US$1,900 in the past month. From 7.30pm Hong Kong time yesterday the price went from US$1,785 to US$1,840 in a matter of hours in New York trade. A source in the market saw 7,000 contracts being placed via electronic trading at the start of this period. Heavy volume of bullish bets placed on the gold price by mainland punters also pushed it higher, the source said. Emperor Financial Services assistant vice president Sam Lee Chun-wai estimates the global trading volume of gold amounts to US$1 billion daily. Mainland punters by themselves cannot move the market, he said. But Lee noted that an appreciation of the yuan amid continued economic boom in China has boosted the firepower of mainland players. "Buying commodities with US dollars has proved to be an attractive investment for many mainlanders in the last few years," he said. According to a report in Yangcheng Evening News last Wednesday, just one city in Guangdong province - Guangzhou - has 2,000 underground investment companies dealing in gold and foreign currencies. Investors can leverage up to 100 times their principal with such black- market brokers, the daily said. The black market for gold in China sees up to 100 billion yuan (HK$122 billion) worth of trade every year, the report said. Legal exchanges around the world have acted swiftly to curb volatility in the price of the precious metal. The US-based CME Group raised trading margins of gold by the most in more than two and a half years last week, leading to a 4 percent drop in the spot price. CME increased margin requirements on its gold futures contract by 27 percent, the second hike in a month, following similar moves by the Shanghai Gold Exchange and Hong Kong Mercantile Exchange earlier this month. Mainland punters are taking advantage of the situation, sources say, by going both short and long on the metal. End-of-month settlement for futures contract has also helped raise volatility, said traders, who also noted that the US$1 billion daily trading volume of the gold market is relatively thin compared with the oil market, which sees a much higher volume. "Contrary to what many people think, it is not unthinkable that on certain days, mainland punters may emerge as a dominant factor on the international gold market," a source said. Mainlanders have certainly emerged as the largest players in the Hong Kong gold market in recent years, traders confirm. Local analysts estimate they now account for up to 70 percent of the daily trading volume on the Hong Kong open market. The SAR also allows out-of-market gold trading and this is very attractive to mainlanders, traders said. Last night, spot gold was up 2 percent, reaching as high as US$1,822.50 an ounce in New York afternoon trade.

In an ambitious move to make basic welfare more accessible, the central government will issue social security cards for everyone on the mainland. The cards, which can double as bank cards, are issued by the Ministry of Human Resources and Social Security with the co-operation of the central bank, the People's Bank of China. The programme, currently in pilot form, will dwarf that for identity cards. ID cards, issued by the public security authorities, are for residents aged 16 and above, but the social security cards are to be for all. Although a person's social security card will have the same number as their ID card, the functions of the two are not to be merged soon, said Hu Xiaoyi, vice-minister of human resources and social security. In the future, Hu said, the social security card would take on more functions, such as for claiming retirement, unemployment, work-injury and maternity benefits. In a pilot programme, now being extended, about 145 million new social security cards have been issued in 170 cities, according to official data from the end of July. The mainland has more than 360 cities. According to the nation's 12th five-year plan, which covers the period from 2011 to 2015, up to 800 million cards will be issued, covering 60 per cent of the mainland population. The rest will be issued after that. It was premature to expect the security cards to take on personal investment functions any time soon, said Wang Yanzhong, a scholar with the Chinese Academy of Social Sciences known for his research on social security. Still, according to both social security and central bank officials at an official press conference in Beijing yesterday, the social security card will provide access to the holder's personal welfare accounts and will be able to process much larger amounts of information than the present ID cards. ID cards carry limited information about the cardholder and don't allow for changes to information. At present, according to Hu, the main function of the new social security card is to allow the holder to pay medical bills wherever they are on the mainland. "It is the priority," he said; "a focal demand from society". When dealing with inter-city medical care, beneficiaries are usually required to pay with their own money and seek reimbursement afterwards. "But to claim reimbursement can be an annoying experience, as the social security administrators in one city tend to turn down the bills from another city for who knows how many reasons," said Zhou Xiaxia, an employee of Ericsson (China) who recently went back to the city where her mother retired, to get reimbursement for her medical bills. "There don't seem to be clear rules. It ends up like a one-on-one negotiation." Beneficiaries of retirement policies can face similar difficulties. One prerequisite for cities to be admitted to the pilot programme for the social security card is that they must have reliable connectivity with the nationwide network, so that they can process cards issued anywhere on the mainland, Hu said. A network has been built between the central data centre of the Ministry of Human Resources and Social Security and all provinces, municipalities and autonomous regions, he said. The pilot programme is progressing rapidly. Officials said they expected that by the end of this year cardholders would reach 190 million. There is also a plan to upgrade the card's security features, said Li Dongrong, assistant governor of the central bank. In five years, he said, all cards would be upgraded from the present magnetic-strip cards to more sophisticated chip-only cards, to make them more secure. Li said the country's UnionPay network, which allows for the nationwide use of bank debit cards, had generated sufficient experience to handle the social security card's withdrawal and payment features.

Sina Corp, owner of China's third-most popular website, paid $66.4 million for a stake in Tudou Holdings Ltd to boost its investments in online video services. Sina acquired 1.075 million American depositary receipts (ADR) at Shanghai-based Tudou's initial public offering (IPO) in the United States this month for $31.2 million, it said in a filing to the US Securities and Exchange Commission on Monday. Sina spent $35.2 million for an additional 1.49 million Tudou's ADRs, after the listing, taking the total holding to 9.05 percent. Sina is adding video, social-networking and e-commerce services to attract users in the world's biggest Internet market. The investment in Tudou, China's second-biggest video website, follows Sina's acquisition of a minority stake in the online apparel retailer Mecox Lane Ltd this year. Tudou is open to "strategic business cooperation in multiple areas" with Sina, it said in a statement on Tuesday. Sina's investment is "financial" in nature, Tudou said. Sina, based in Shanghai, said in May that it plans to spend $100 million to develop its micro-blogging service to attract social-networking users. Tudou has declined about 11 percent in trading on the Nasdaq stock market since its $174 million IPO. Tudou ADRs rose 2.5 percent to $25.73 on Monday, compared with their IPO price of $29. The company said it plans to use proceeds from its listing to acquire video content and upgrade technology, as competition with bigger rival Youku.com Inc intensifies. Gary Wang, founder and chief executive officer of Tudou, had his stake in the video company cut to 8.6 percent from 12.7 percent following the IPO, according to Tudou's prospectus. Tudou's site offers movies, TV series and content it produces, as well as user-generated videos. Tudou accounted for 14 percent of online video advertising revenue in China at the end of June, compared with 17 percent at the end of 2010, while Youku gained 2 percentage points to 23 percent and Sohu.com Inc's video site jumped to 13 percent from 7.9 percent, according to data from Analysys International, an Internet information company. An unidentified source told China Daily that Web portal Sohu.com and Internet conglomerate Tencent Holdings Ltd had approached Tudou with the intention of buying a stake but failed to reach a deal.

McDonald's Corp, the world's biggest fast-food chain, is tweaking its strategy in China to take account of changing industry conditions. The new efforts include loosening its ownership structure to expand the number of stores and renovating current stores to provide a better customer experience. Last week, McDonald's expanded its trial franchise program to include Kunming North Star Enterprise Co. The move allows the local catering company to take over the 11 existing stores in Yunnan and open new ones throughout the province. "We are walking our way through this franchise program, we will continue looking for franchise partners in China," Kenneth Chan, chief executive officer of McDonald's (China) Co Ltd, said on Tuesday. McDonald's relies heavily on franchises in developed markets including the United States, but in China almost all its stores are self-operated. The trial program was launched in China six years ago. But before last week it had only three franchisees running six restaurants. Expanding the program is expected to help it accelerate a plan to expand its China network to more than 2,000 outlets by 2013. Adding more stores will help the US-based company to put more resources into China, where competition in the fast-food market has intensified two decades after the golden arches first made an appearance. At present, the top spot is held by rival Kentucky Fried Chicken, owned by Yum! Brands Inc, which has about 3,200 locations. McDonald's has about 1,300. More players are coming in, giving consumers more choices and threatening to cut into McDonald's market share. The Chinese fast-food chain Kungfu Catering Management Co Ltd has more than 300 Zhen Kungfu restaurants, while Taiwan's Ting Hsin Group operates more than 1,000 Dicos fried-chicken stores. Other chains, including California Pizza Kitchen Inc and German upscale seafood chain Nordsee GmbH, also plan to enter the market. To foster customer loyalty, McDonald's is renovating existing stores and remodeling its traditional yellow-and-red decor into a more relaxed and stylish bistro design. By creating a better dining environment, McDonald's hopes costumers will visit more often, and not just for the food. The latest renovated store reopened on Tuesday in the upscale CITIC Square in downtown Shanghai. The new store features free WiFi, cozier seats, selected music and outdoor seating. By 2014, about 70 percent of McDonald's stores in China will have a similar look. The renovation, said Chan, will help McDonald's stay "one step ahead of the game" and be "different from other brands" in China.

China and the Philippines will work to double their trade volume to hit $60 billion in five years, Vice-Premier Wang Qishan said on Wednesday. "China and the Philippines should tap their cooperation potential, expand trade volume, optimize the composition of imports and exports and make efforts to bring bilateral trade to $60 billion by 2016," Wang said in his address to a China-Philippines economic and trade forum on Wednesday. The forum coincided with Philippine President Benigno Aquino's first state visit to China since he took office last year. China-Philippines trade amounted to $27.7 billion in 2010, making China the third largest trade partner of the Philippines. With the progress of the China-ASEAN free trade zone, which was established in 2010, as well as policy initiatives carried out in both countries, China and the Philippines are embracing new opportunities for cooperation, Wang said. "I invite the Chinese community to take part in this opportunity to invest in an emerging economic force in Southeast Asia," Aquino told an audience of about 600 government leaders and business executives from the two countries. Wang echoed Aquino's call, saying China will encourage strong businesses to invest in the Philippines and play a part in infrastructure construction. Aquino said his administration is devoted to instilling a culture of transparency and integrity in government, pledging a level playing field for Chinese businesses. He encouraged Chinese companies to seize opportunities to make strategic investments in the Philippines in areas such as tourism, agriculture and infrastructure. "The ties between the Philippines and China go back centuries and I am hoping that our continued partnership will become stronger than ever," Aquino added. Wang said the Chinese government will work with the Philippine government to create a favorable environment for the business community. Teresita Sy-Coson, chairperson of Banco de Oro Unibank Inc. (BDO), the biggest commercial bank of the Philippines, told the forum that the BDO is glad to assist Chinese companies with their financial requirements in the Philippines. She introduced her country's huge business potential, citing the infrastructure, IT, agriculture, mining and energy sectors. Aquino led the delegation of over 200 Philippine businessmen that joined him in Beijing. "It has been the largest-ever trade delegation to travel with the president to foreign countries, which reveals not only the strong desire of the Philippine side for stronger trade cooperation with China, but also the broad prospects and huge potential of bilateral trade bonds," said Francis Chua, president of the Philippine Chamber of Commerce and Industry, the country's main business group. The two countries are expected to sign a series of cooperation agreements, including a five-year plan for trade cooperation, following official talks between Chinese President Hu Jintao and Aquino on Wednesday afternoon. Aquino arrived in Beijing on Tuesday night for a five-day visit. Besides Beijing, he will also visit Shanghai and Southeast China's Fujian province.

Hong Kong*:  Sept 1 2011 Share

A Chinese shoemaker on Tuesday started gauging investor interest in its planned Hong Kong initial public offering, making it the first company to gear up for a listing in the city since concerns about global economic growth set off widespread market turmoil last month. Two other companies, also from China, are expected to follow suit next week with offerings that are expected to be much larger. Hongguo International Holdings Ltd., a Chinese shoemaker and retailer, plans to start formal investor presentations on Sept. 9 and has a tentative listing date of Sept. 23, according to a term sheet seen Tuesday by Dow Jones Newswires. It aims to raise up to $300 million, people familiar with the situation said earlier. On Tuesday, it started premarketing, in which the company and its bankers assess investors' interest in an IPO and come up with a price range. The Nanjing-based company, which makes shoes for Nine West and Guess, among others, plans to sell 500 million shares in the offering, amounting to a 25% stake, according to the term sheet. It plans to spend 40% on expanding its retail network, and another 25% on footwear-business acquisitions. Separately, Shenzhen-listed XCMG Construction Machinery Co. plans to start gauging investor interest in its Hong Kong IPO next week, having received approval from the Hong Kong stock exchange last week, people familiar with the situation said Tuesday. The machinery maker is looking to raise $1.5 billion to $2 billion. XCMG Construction, which develops and makes road and paving machines sold in Japan, South Korea, Southeast Asia, U.S. and Europe., has plans to list in Hong Kong in October, said the people familiar with the situation. Meanwhile, Citic Securities Co., China's largest brokerage by market value, said the domestic securities regulator had approved its planned secondary listing in Hong Kong. A person familiar with the situation said it will seek listing approval from the Hong Kong stock exchange Thursday and aims to list Oct. 6. Informal investor meetings could begin Monday, and talk has been of a deal worth at least $1.5 billion. The offerings will test investor sentiment at a time when the local stock market is deep in the red. Although the Hong Kong market rose for the second consecutive session on Tuesday, the Hang Seng index is down 10% in August and 12% so far this year.

Police Commissioner Andy Tsang Wai- hung has blown the whistle on the University of Hong Kong in defending officers' actions at the campus during Vice Premier Li Keqiang's visit. At a special meeting of the Legislative Council's security panel yesterday, he also denied the tough policing was an attempt to win favor with Beijing. But Tsang did say later when quizzed on other trouble during the Li visit that the force had been in talks with mainland counterparts, though he refused to reveal what they talked about. On the university visit, Tsang said HKU authorities had decided to adopt a wider security zone when they met police officers on August 17, a day before Li attended its centenary celebrations. However, he rejected claims that officers detained three student protesters during Li's visit. Officers were acting on the university's request that uninvited guests be kept out of the security zone, he said. Responding later to Tsang's claims at the panel session, the line from the university was that it never asked police to create a " security zone" on the campus. The discussions on August 17 were focused on traffic arrangements, it said. Police representatives proposed an extension of a traffic-control zone to Swire Bridge and asked for assistance from the university. The three students were allegedly locked up on the back stairs of the university's K K Leung Building after they tried to reach Loke Yew Hall, where Li was taking part in celebrations. According to Tsang yesterday: "At that time, the police officers were just assisting the institution to block [students] from entering the institution's security zone from the back stairs. They absolutely did not lock them up. " Subsequently, the police handed them over to the institution's security guards." But Tsang amended his account later, explaining he had meant to say the police handed the case - not the students - to the institution. Also, Tsang stressed, officers " did not explicitly say or imply that [students] could not leave." He added: " The security guards of HKU repeatedly asked them to leave through the smoke stop door of the back stairs instead, but the students ignored the request, scolded the police officers at the scene with foul language and phoned a woman [reporter] to come and were interviewed. " The three entered and left the back stairs many times, so the accusation of an illegal lock-up is not based on facts." But one of the three students, Samuel Li Shing-hong, last night denied they had " scolded police officers with foul language." And officers had never said they could leave, he added. Also raised at the panel meeting was Li's visit to Laguna City, where a resident named Wong - wearing a T-shirt with a slogan demanding Beijing change its official verdict on the 1989 Tiananmen crackdown - was hustled away by police officers. Questioned repeatedly by lawmakers on whether the force was told by the mainland to ensure that Li would not face any embarrassment, Tsang said the content of their discussions remains confidential and he refused to disclose details. He only admitted there had been communication between Hong Kong and mainland police over security arrangements. Tsang also said the police operation had a legal basis, citing section 10 of the Police Force Ordinance, which stipulates officers are duty bound to preserve the public peace and prevent injury to life and property. Security for Security Ambrose Lee Siu-kwong said the arrangements for Li were consistent with the practice for visits of government leaders or foreign dignitaries. But Confederation of Trade Unions lawmaker Lee Cheuk-yan accused the force led by Tsang of behaving like mainland police and asked if Ambrose Lee would sack the commissioner because of what happened. In related developments, two groups published statements in newspapers yesterday, one in support of the police action and the other against.

HSBC Global Asset Management plans to launch yuan-denominated bond funds in Europe later this year. Europe's largest lender will sell Luxembourg-domiciled yuan bond funds throughout the continent as it bets that Europeans, like Hongkongers and investors elsewhere in Asia, will find the products attractive. HSBC Global Asset Management's newly appointed Asia-Pacific chief executive Joanna Munro said the bank also planned to offer yuan denominated funds in the US and Taiwan. This followed the launch of its US$500 million yuan-denominated fund in Hong Kong and Japan early this year. HSBC is among six funds houses which have issued yuan-denominated bond funds in Hong Kong since the People's Bank of China relaxed rules in July last year. But it is the first to expand the product beyond the city's borders aggressively. "We see a growing demand for yuan bonds globally and with our strong investment capabilities in the Chinese market and Asian fixed income, we will be a leader in this area,'' Munro said. Investors bet on yuan fund products partly due to expectations of valuation gains in the currency, which has risen over 20 per cent against the US dollar since 2004. Munro, a veteran British fund manager with 25 years' experience, relocated to Hong Kong from London in May. As part of her new role, she said she would continue to launch new funds in the region, after successfully setting up 12 new funds in first half of this year, including the popular yuan bond funds. Munro also wants to capture growing business opportunities on the mainland, now the world's second largest economy. HSBC has a mainland joint venture fund company HSBC Jintrust, with whom "we have been managing close to US$10 billion of Chinese assets and will continue to strengthen our resources to capture the growing and evolving opportunities in this market." On the institutional business side which invests for large companies, insurance companies and pension funds, Munro wants to focus on emerging markets. "We do not want to be all things to all clients, so our focus is clearly on emerging markets, as the world rebalances away from developed markets," she said. Munro said the recent stock market turmoil triggered by the Europe sovereign debt crisis and the worry over the US economy outlook has meant investors have shifted from stocks to more conservative investment choices such as bond funds. However, she did not see massive redemption demand as many fund investors were seeking long-term investment. The challenges ahead, she said, were not the volatile stock markets. "The major challenge is to recruit the right talents in Asia as the employment market here is so competitive," she said.

Norman Foster's architectural firm, defending its design for the West Kowloon Cultural District yesterday, insisted that the plan's green features were not responsible for HK$4 billion in cost overruns. Spencer de Grey, a senior executive of the Foster team, which is in charge of the final design of the 42-hectare arts hub, said he did not know why the hub authority said last week that underground facilities and other green features would add an extra HK$4 billion to the costs. "A green approach, including an underground car park, has always been an integral part of our proposal," de Grey said. "We have a good track record of taking costs very seriously." He denied that underground roads, car parks and the waste and water recycling systems were responsible for raising the construction costs of the HK$21.6 billion project by HK$4 billion, as the authority's chief executive Michael Lynch told lawmakers on Friday. "You must ask the authority [how the sum was calculated]," he said. He maintained that putting traffic, parking and servicing below ground was a flexible way to use space. Lynch had said the financial situation of the arts hub project was vulnerable because of high inflation, surging construction costs and low investment returns from the government's HK$21.6 billion endowment in 2008. The authority had said, in a paper submitted to the legislature, that the economic environment in recent years was very different from the long-term assumptions used in the analysis by its financial consultant in 2006. For example, the construction costs in 2010 were 49 per cent higher than estimated. Sin Chung-kai, board member of the West Kowloon Cultural District Authority, said neither Foster's nor the other two competing designs fitted with the HK$21.6 billion budget. "They went over the sum to different degrees," he said. "To be fair, we didn't make it a requirement that they must fit the figure. Each of them had their own budget." Sin said the higher costs of building underground facilities, a key element of Foster's design, were not taken into account in the 2006 assessment, since the design came afterwards. "What we now should do is to sort out ways to increase income," he said. With lawmakers saying they would not easily approve more money for the authority, the executives proposed new ways to raise funds. They will review the possibility of building the more expensive mega-venues at a later stage, explore sponsorships and naming rights, and reduce the number of car parks which are underground. Foster's team is consolidating the final design with elements from the other two architect teams, taking reference from public feedback. The ultimate design will be released for the last round of public consultation, which starts at the end of September and lasts for a month. It will then go to the Town Planning Board.

Secretary for Security Ambrose Lee and Police Commissioner Andy Tsang attend a special meeting of the Legislative Council. The government has refused to promise better press arrangements next time state leaders visit Hong Kong amid calls from journalists and lawmakers not to replace media coverage with official press material. Vice-Premier Li Keqiang attended at least 22 events when he visited the city two weeks ago but the media were invited to only 10, raising fears that press freedom had been eroded. Information on other events - including Li's visit to local families, a home for the elderly and meetings with officials and business leaders - was released only through the government's Information Services Department or Xinhua. Democratic Party lawmaker Emily Lau Wai-hing called for the government not to rely on issuing official press material as the only means of releasing information. But Secretary for Security Ambrose Lee Siu-kwong, the highest-ranking official attending a special Legislative Council meeting yesterday, refused to make such a promise, saying he was not in a position to do so. "Space in some venues was too limited so we could only arrange official media to record [the event]," he said. Chief Secretary Henry Tang Ying-yen, who earlier dismissed as "complete rubbish" claims that press freedom had been suppressed, did not attend the meeting. Lau said it was common for the media to arrange for one or two journalists to cover an event, if it was held in a confined space, and share the information with other press afterwards. Lee said he would discuss her suggestion with the Information Services Department. About 300 journalists staged a protest last week over the media arrangements for Li's visit. The chairwoman of the Journalists Association, Mak Yin-ting, said the police had failed to strike a balance between public security and press freedom. "The press areas were very far away [from the venues] and some were separated by roads or pillars. Maybe the police commissioner thinks that reporters' cameras can make turns like AIM-9 Sidewinder missiles [to capture Li]," she said. Serenade Woo, an Asia-Pacific representative of the International Federation of Journalists, said the way police treated journalists was becoming similar to tactics used by public security on the mainland. Tang will meet the News Executives' Association tomorrow and Police Commissioner Andy Tsang Wai-hung will meet the Journalists Association on Thursday to discuss the press arrangements for future state leader visits.

Citic Securities, China's biggest publicly traded brokerage, has obtained approval from the China Securities Regulatory Commission (CSRC) for its potential US$2 billion initial public offering in Hong Kong, the firm said late on Monday. The CSRC approved Citic Securities’ plan to issue up to 1.14 billion shares in Hong Kong, the brokerage said in a statement to the Shanghai Stock Exchange. Citic Securities said the IPO plan still needed approval from the Hong Kong stock Exchange. Separately, IFR, a Thomson Reuters publication, reported on Tuesday that Citic Securities would seek approval from the Hong Kong Stock Exchange on September 1 and planned to kick off pre-marketing of the deal once approval was granted. Citic Securities International, CCB (SEHK: 0939) International and ICBC International are joint sponsors on the deal, as well as joint bookrunners with ABC International, BOC (SEHK: 3988) International and BoCom (SEHK: 3328) International, according to IFR. Bank of America Merrill Lynch, CLSA, HSBC and Morgan Stanley are international co-ordinators for the offering.

Hong Kong-listed shares of China Construction Bank (SEHK: 0939) rose more than 4 per cent on Tuesday after Bank of America said it will sell about half of its 10 per cent stake in the Chinese lender, providing relief to investors by removing uncertainty surrounding the stake. News that Temasek Holdings was among institutions that bought the shares offloaded by BoA also lifted CCB’s appeal as the Singapore state investor had only about a month ago sold $3.6 billion worth of CCB and Bank of China shares. Two sources familiar with the situation had told Reuters on Monday that Temasek is among the buyers of the BoA stake in the the world’s No.2 lender by market value, a move that surprised some. “They’re behaving almost like a hedge fund, which is surprising because they’ve always talked about being a long-term investor,” said James Antos, a banking analyst at Mizuho Securities in Hong Kong. Temasek-linked investment firm Seatown, run by the state fund’s head of strategy Jimmy Phoon, was also a buyer, another person familiar with the situation said. The person did not know the size of Seatown’s purchase. Before adding the newly bought shares, Temasek already owned 7.03 per cent of CCB. This makes it the largest CCB shareholder after the Chinese government, which owns 59 per cent of the banks through its Huijin investment arm. Temasek pocketed about HK$9.39 billion when it sold part of its CCB stake for HK$6.26 per share on July 5. This is 43 per cent higher than the HK$4.38 it paid per share when it subscribed to BoA’s share of the Chinese bank’s rights offer, according to Antos’ calculations. Separately, Temasek also raised its stake in China’s No 4 lender Bank of China to 7.07 per cent from 6.96 per cent, according to a disclosure to the Hong Kong stock exchange on Monday. It bought each share for HK$2.972, according to the disclosure, which would translate into a total deal size of about HK$288 million. That is a 7 per cent discount to BOC (SEHK: 3988)’s current trading price of about HK$3.20. A Temasek spokesman declined to comment. Temasek had said in July it was bullish on China and is looking for opportunities in emerging markets and the United States. Temasek has plenty of cash, having added $7 billion to its cash pile in its last financial year, 70 per cent more than a year ago. Standard & Poor’s estimates that the fund, owned by Singapore’s Ministry of Finance, had cash and bank balances of almost S$40 billion ($33 billion) at the end of March last year. By 2.27pm, CCB was up 1.62 per cent at HK$5.64, its highest in about three weeks but paring earlier gains of over 4 per cent. The benchmark Hang Seng China Enterprises Index of top locally listed mainland companies was up 1.9 per cent. Trading volume spiked to a more than two-year high with about 4.7 billion shares changing hands. Of that, 4.4 billion shares changed hands at HK$4.94 in pre-opening trade, said Patrick Yiu, a director at CASH Asset Management. “This suggests that about a third of the shares sold by Bank of America went to hedge funds and other institutional investors,” Yiu said. “It’s a big discount on the CCB shares, and whoever was offered such a big discount should be happy to take it up.” Shares of CCB are down 17 per cent so far this year, worse than the 12 per cent decline on the benchmark Hang Seng Index. CCB will sign a five-year strategic cooperation agreement with BoA within days, it said in a statement posted on its website, adding that it understood the reasons for BoA’s stake sale and reiterated that it believes the US lender will remain a long-term investor. The two sides signed an agreement in 2005 to cooperate on areas such as credit card sales, risk management and retail banking, and the new cooperation will build on that, the statement added. A sale price of HK$4.94 per share would represent a discount of about 11 per cent to CCB’s Monday’s close of HK$5.55, based on Reuters’ calculations. This comes on top of an about 10 per cent discount that CCB was trading at compared with its two closest rivals, Industrial and Commercial Bank of China (SEHK: 1398) Ltd and Agricultural Bank of China. BoA is selling 13.1 billion CCB shares for US$8.3 billion, it said on Monday, in its latest effort to shed assets and boost capital. “This removes an uncertainty that’s been hanging over CCB shares for a long time,” said BNP Paribas analyst Dorris Chen in Shanghai. “When you look at CCB’s valuations, it’s clearly a very strong buy, but asset quality concerns are going to drag on for a while more,” Chen added. There have been widespread worries that asset quality at Chinese banks such as CCB and ICBC may sour if the country’s economy slows, as many of them had boosted lending in a big way during the global financial crisis to boost growth.

The new-look Central harbourfront will boast a 60-metre-high observation wheel if a company that runs such wheels in several cities around the world has its way. It would complement promenades, cafes and a maritime museum planned for the area. The company and a partner will submit the proposal for a "Hong Kong Eye" to the Harbourfront Commission today. The Hall Organisation and Great City Attractions Global in Britain want to site the wheel on reclaimed land near piers No 9 and 10 for one to three years. Great City Attractions Global runs similar wheels in several cities including Singapore, where its 165-metre Singapore Flyer is the world's tallest. "The wheel will definitely become a focal point of the harbour, offering postcard photo opportunities. It will attract people to the harbourfront and can promote vibrancy both day and night," the potential operators say in a paper to be presented to the commission. Peter Wong Yiu-sun, an engineer and commission member, agreed. "We need something other than just cafes on the waterfront. A wheel can add vibrancy to the area," Wong said, adding that he did not see typhoons posing a safety problem to the metal-framed structure, which does not require ground works or foundations. But another member, Paul Zimmerman, had reservations about a wheel occupying a huge site in the centre of the waterfront. "It is immediately iconic, but it seems to me having a wheel in Hong Kong, after London and Singapore, is a bit `me-too'," he said. "It's a positive thing that people are starting to throw out ideas for the harbourfront, but I would hope for something more creative and outstanding." The would-be operators are eyeing about 3,000 square metres at the future Site 7, one of four on the Central harbourfront the government has planned for development under a public-private partnership. The site is currently zoned as open space. The wheel, carrying 336 passengers at a time, would be lit with LED lighting and be open from 9am to midnight daily, the paper says. It would entertain 2,000 visitors on weekdays and 4,000 at weekends, the operators estimate.

Hong Kong customs said on Tuesday they had seized HK$13 million worth of African ivory tusks inside a container shipped to the territory. A spokesman said customs officers on Monday found 794 pieces of African ivory tusk, weighing a total of 1,898 kilograms, in a container shipped from Malaysia. The consignment was declared to customs as non-ferrous products for factory use but officers ordered an inspection, based on intelligence received earlier, and found the tusks concealed among stones. A 66-year-old man was arrested in connection with the haul, the spokesman said. “Follow-up investigations are still going on,” he added. International trade in elephant ivory was banned in 1989 under a trade convention to protect African and Indian elephants under threat of extinction. Before the ban, Hong Kong was a major importer, and a trading and manufacturing centre for ivory carvings, crafts and products. In Hong Kong, ivory imports are banned under the Protection of Endangered Species of Animals and Plants Ordinance. People found guilty of trading in endangered species for commercial purposes could face a maximum fine of HK$5 million and two-year’s imprisonment.

Gome Electrical Appliances Holding Ltd, China's second-largest electronics retailer by sales, is seeking to increase annual sales by 15 percent in the coming years, President Wang Junzhou told reporters in Hong Kong on Monday. The company aims to expand its store network to 2,400 by 2014, up from 938 at the end of June, Wang said. Smaller cities will be the focus in terms of new stores, Chairman Zhang Dazhong said. "The group will endeavor to further optimize its store network in first-tier markets, while actively expanding into second-tier markets," Zhang said. "The group will penetrate into third-tier and fourth-tier markets, which are economically developed, when opportunities arise," he said. Gome posted a 30 percent gain in first-half profit after opening stores to meet demand boosted by rising wages. Net income climbed to 1.25 billion yuan ($196 million), the Beijing-based retailer said in a statement to the Hong Kong Stock Exchange on Monday. Sales advanced 20 percent to 29.8 billion yuan. Zhang became the company's chairman after the unexpected resignation in March of former chairman Chen Xiao, marking the end of a long battle between Chen and the company's founder, Huang Guangyu, who is serving a 14-year jail sentence for bribery and other illegal business practices. The company, which operates under two major brands, Gome Appliances and China Paradise, closed 19 underperforming stores in the first half but opened 131 new stores, bringing the total number of stores to 938 at the end of June from 826 a year earlier. The company is adding outlets to narrow the gap with larger rival Suning Appliance Co Ltd in an electronics and appliances market that is forecast to surge 70 percent to 2.14 trillion yuan by 2015 compared with 2010, according to London-based researcher Euromonitor International. Suning opened 140 new outlets on the Chinese mainland and five stores in Hong Kong from January to June. At the end of June, it operated 1,488 stores - 1,451 on the mainland, 28 in Hong Kong and nine in Japan. Gome is developing regional logistics centers to support the expansion of its store network and the development of its e-commerce business, it said in its statement. Shares of Hong Kong-listed Gome rose 3.66 percent to HK$3.4 (44 US cents) on Monday. The company's stock has risen 21 percent this year, compared with a 14 percent loss for the benchmark Hang Seng Index. Per capita urban disposable income rose 13.2 percent in the first half and rural cash incomes climbed 20.4 percent, China's statistics bureau said in July. Gome's same-store sales, which strip out the effect of outlets open less than a year, rose 7.4 percent in the first half, according to the statement. Gross margin widened to 18.3 percent at the end of June, compared with 17 percent a year earlier, it said. Suning reported a 25.4 percent increase in its net profit to 2.47 billion yuan in the first half of the year. Suning's sales grew 22.7 percent to 44.2 billion yuan, cementing its leadership in the Chinese market.

 China*:  Sept 1 2011 Share

Former British PM Tony Blair launches his memoir in Beijing - Former British Prime Minister Tony Blair attends the book launch ceremony of the Chinese edition of his memoir A Journey in Beijing, Aug. 30, 2011.

Stepped-up security at Beijing and Shanghai airports has caught travelers by surprise, with long queues for checks, delayed departures and some passengers missing their flights. The measures came into force on Sunday - apparently after finds of dangerous items - with travelers told to be early to allow time for checks. But some complain the security processes are too slow, taking up to 30 minutes. The checks include passengers having to remove their shoes and to keep their bags open. "Standing in a long queue is not that dreadful," passenger Liu Wei remarked on his blog. "What is dreadful is that there was no explanation." And Xinjiang-bound passengers at Beijing Capital International Airport were separated for two security checks. Among them, a traveler named Zhao said: "People can understand that stricter security measures protect our safety." But he hopes airport personnel will improve efficiency for the checks. Although aviation authorities did not give reasons for the measures, speculation is that it follows the recent discovery of knives and other banned items at an airport in Xinjiang, where the first China-Eurasia Expo opens next month. Some media reported that security staff at Xinjiang's Urumqi airport found a knife in a water bottle on August 3. Bosses at Hong Kong travel agent Modern China welcome stricter checks as they are for passenger safety. Another agent, Wing On Travel, is now arranging for groups to arrive at the airports earlier than before. A spokeswoman said groups had until now been asked to assemble at airports three hours before departures, but that is being increased by 15 minutes. But the agency has not received complaints about the increased security. A Dragonair spokesman said the airline was notified of the measures yesterday. But its operations at Beijing and Shanghai airports remain normal. "We'll continue to work closely with the relevant authorities," he added.

Philippine President Benigno Aquino will discuss a controversial Chinese-funded railway project when he flies into Beijing today at the start of a five-day state visit. Philippine Secretary for Transportation and Communications Manuel Roxas confirmed at the weekend that the suspended North Luzon Railways (Northrail) project "will be one of the matters to be discussed". "We are seeking amendments to the existing agreement so that problems can be addressed," Roxas said, without elaborating. The Northrail was to have been the showcase of a "golden age" in Philippine-Chinese relations when it was made the centrepiece of President Hu Jintao's state visit to Manila in 2005. During the visit, the Export-Import Bank of China extended a US$400 million loan facility to Manila covering phase one of the project. This would have involved upgrading 32 kilometres of an old 80km railway line running from Metro Manila to Clark international airport in Pampanga province. A contract was agreed with China National Machinery Industry Corp - formerly China National Machinery and Equipment Corp - to build the project. However, it was soon derailed by charges of overpricing and illegality because no public bidding was held. Other delays were caused by squatters on land where the railway tracks would pass. Northrail soon became a political hot potato for then Philippine president Gloria Macapagal-Arroyo, becoming a basis for an impeachment complaint against her that was thrown out by her lawmaker allies. However, a separate lawsuit filed by residents who would be displaced by the project is still pending. Work on the railway began in 2008, but in May this year, Northrail halted building for a thorough review by then transport and communications secretary Jose de Jesus. After he resigned due to poor health, De Jesus criticised Northrail, saying the design was wrong - "the ground (for the piles) is a lot softer than anticipated" - and it would cost too much. He estimated that up to US$2 billion more would be needed to complete the project in addition to the US$621 million already spent. The Chinese embassy in Manila declined to say how much has been spent so far. China's ambassador to Manila, Liu Jianchao, said last week that Beijing was open to a review of the project. "We are ready to have further discussions with the Philippine government on what we are going to do about the project. We hope it will materialise and we hope that the project will benefit the Philippine people in whatever way," Liu said. "The Northrail project I believe, and the Philippine government believes, is one the Philippine government needs. China takes a very positive and open approach to this project." Beijing will have to convince Aquino that it is a worthy project. Before running for president, he said the Northrail was one project he would review if he won because it delivered "less bang for the buck". He explained why: "You take a project like Northrail and contrast it to Southrail by the Koreans. The Koreans will build a 34-kilometre narrow-gauge railway system for US$50 million. The first phase of Northrail is US$503 million for 32 kilometres."

Spring Airlines Co Ltd, China's only budget carrier, is set to establish a subsidiary in Japan as part of its efforts to explore international markets. Preparatory work is currently under way. "Spring Airlines is planning to open a company in Japan," said Wang Zhenghua, Spring Airlines' chairman and founder, during a lecture at Shanghai Jiaotong University on Saturday, according to reports on the major Chinese-language website 163.com. Zhang Wuan, a spokesman for Spring Airlines, said on Monday that the idea of opening a subsidiary in Japan was first raised at the beginning of this year. "Currently, we have embarked on the preparation work," Zhang said. The subsidiary is likely to become the first for a Chinese carrier in Japan, according to Zhang. Even the nation's three biggest State-owned carriers - China Southern Airlines Co Ltd, China Eastern Airlines Co Ltd and Air China Ltd - only operate sales departments there. Since starting its first international flight to Japan's Ibaraki prefecture in July 2010, Spring Airlines has been actively exploring overseas markets, and more than 20 percent of its external flights are bound for Japan. "The Japanese aviation market is extremely important and large, especially for carriers based in the Yangtze River Delta region," said Zhang. He added that Japan's more-than-100 airports need to begin flights to China. Spring Airlines has been approached by more than 10 Japanese prefectural governors about starting regular flights. Meanwhile, an agreement was reached a month ago for Spring Airlines to begin flights to Sagaken. Wang said that Japan has an isolationist and protectionist market - as a case in point, he said that in order to open its subsidiary, Spring Airlines had to establish a joint venture in Japan, with a stake of no more than 33 percent. "A stake of 33 percent stake is too low for Spring Airlines, and we are worried that this will limit our influence during decision-making," Wang said. The carrier's flight to Ibaraki has so far maintained an average occupancy rate of 95 percent, indicating strong demand for low-cost air travel in the Japanese market. Spring Airlines is not the only carrier looking to explore the low-cost Japanese air market. Japan Airlines Co Ltd has established a joint venture - Jetstar Japan Co Ltd - with Australia's Qantas Airways Ltd and the trading house Mitsubishi Corp to tap into the nation's budget travel market, according to the Wall Street Journal.

It was a hand-to-hand battle between the two fastest men ever in history on the 110m hurdles track - literally. Cuban hurdler Dayron Robles was stripped of gold and glory on Monday in a twist every bit as dramatic as Usain Bolt's disqualification from the blue riband 100 metres sprint the night before.

Hong Kong*:  Aug 31 2011  Share

Hong Kong's Census and Statistics Department announced Monday that the value of total retail sales of the city in July was provisionally estimated at 35.2 billion HK dollars (4.52 billion U.S. dollars), up 29.1 percent year on year. According to the department, after netting out the effect of price changes over the same period, the volume of total retail sales grew 22.4 percent. The revised estimate of the value of total retail sales in June rose 28.8 percent at 31.3 billion HK dollars, and the volume of total retail sales increased 22.2 percent. For the first seven months of the year, total retail sales increased 25.1 percent in value and 19.6 percent in volume, over the same period last year. Analyzed by broad type of retail outlet and comparing July this year with the same month last year, the volume of sales of miscellaneous consumer durable goods increased the most, by 84.6 percent, followed by sales of electrical goods and photographic equipment, up 73.3 percent. The department added that based on the seasonally adjusted series, the volume of total retail sales increased by 5.3 percent in the three months ending July when compared with the preceding three-month period. (1 U.S. dollar equals 7.796 HK dollars)

One group of Hong Kong service providers is bullish about its mainland prospects under Cepa, the free-trade deal Hong Kong negotiated with the central government. Testing and certification bodies have been able to put their safety tags on selected products for sale on the mainland since May last year and the list has just grown sixfold. Vice-Premier Li Keqiang has said that local testers would be able to certify all kinds of Hong Kong-processed consumer products that require the CCC - China Compulsory Certification - mark, a safety label for many products sold since May 2002. The seventh Closer Economic Partnership Arrangement, signed in May last year first allowed Hong Kong's testing companies to conduct CCC assessment on four types of mainland consumer products. These were toys, switches and protective and connection devices for electrical installations, information technology equipment and lighting apparatus. The scope has been expanded to all 23 types of products under the CCC system, including medical devices, fire fighting equipment and vehicle safety parts. "The expansion means that the central government recognises the ability of our industry," said Ching Pak-chung, chairman of the Hong Kong Council for Testing and Certification. SGC, an international testing and certification company with headquarters in Switzerland and a branch in Hong Kong, was the first to become qualified in July, and is so far the only one. "Living standards on the mainland have improved drastically ... Safety of their homemade products is more emphasised," SGC's consumer testing services director Raymond Wong said. "With the CCC qualification, we're very optimistic about opening up the market in China." On the mainland, only 11 testing organisations, which Ching said were mostly authorised by the central government, can carry out testing on products under the CCC system. "In the past, China was mainly an export-oriented country. But now it is producing more and more products for its own use," said Raymond Li Wai-keung, vice-president of Bureau Veritas, another local testing company. "We believe the 11 mainland companies are no longer enough to do all the testing jobs."

Siu mei is popular among Hongkongers but poses serious health risks unless one removes the fat and skin, a dietitian reminds us. Hongkongers love their roast pork and other kinds of siu mei, or Chinese-style barbecued meat. But, a dietitian warns, more than one piece a week can be hazardous to your health if you leave the juicy fat and crispy skin on when you eat it. The average Hongkonger eats siu mei 1.79 times a week, or once every four days, a survey of 1,706 people in the past two months by health website healthyD.com found. The survey, the first of its kind, shows char siu - barbecued pork marinated in honey - is the most popular. Roast pork or pork belly ranks second, and roast goose third. Dietitians warn of the high risk of heart disease and stroke in eating too much fatty meat. Roast pork belly is the most dangerous kind of siu mei, with roasted spare ribs next, registered dietitian Sally Poon Shi-po said. "You can't get rid of the fat no matter how hard you try. One shouldn't take them more than once a week," she said referring to both kinds. Chicken has less saturated fat and is the healthiest kind, she said. Poon said one should not eat siu mei too often - at most twice a week. Each time, a woman can take up to 80 grams, about four to six pieces. Men can take up to 120 grams, six to eight pieces. But that is provided one removes the fat and skin, she said. "Fatty meat and skin are unhealthy food," she said. "Eating more than one piece a week is too much. If you do eat it, you may need to exercise for at least half an hour to make up for it." Some people like their siu mei charred, and some like theirs with condiments like soya sauce, plum sauce or mashed ginger. But Poon said eating the charred parts can cause cancer, and salty, oily sauces can cause high blood pressure. Of those surveyed, 78 per cent said they knew eating siu mei was unhealthy, but only 1 per cent said they had stopped eating it for health reasons; 45 per cent admitted they ignored the risks to their health. Eating fatty siu mei increases the risk of coronary heart disease and stroke, because animal fats contain a large amount of saturated fats, which stimulate the liver to make the bad cholesterol that blocks blood vessels. A separate survey by heart disease patients' groups showed that 53 per cent of 994 people interviewed at a mobile check-up station had at least one of three risk factors for heart disease - high blood pressure, abnormal fat levels in blood and diabetes - of which they were unaware. "This result raises concern. It shows that many high-risk people are not alert enough," said Dr Chan Ngai-yin, an associate consultant in cardiology at Princess Margaret Hospital, who oversaw this survey. Other high-risk factors include being overweight, lack of exercise, smoking and an unbalanced diet lacking in fruits and vegetables. Thirty per cent of heart disease patients with heart muscle death die within a month of their heart blood vessels being blocked, half of them before reaching a hospital, Chan said, citing research from abroad.

Cathay Pacific Airways Ltd. Chief Executive John Slosar said Monday that the Hong Kong-based carrier plans to launch premium economy cabins on long-haul flights from the second quarter of next year, tapping a new source of revenue from travellers who would like more space but don't want to fork out substantial business-class fares. The blue-chip airline will join a handful of other major regional carriers to offer the premium economy cabin—an intermediate step between coach and business class—at a time when many companies have cut executives' travel budgets amid global economic uncertainties. To stay competitive, many airlines have in recent years invested heavily in their long-haul business-class cabins, with amenities such as flat-lying beds becoming standard in the trade. Meanwhile, coach-class products have remained largely unchanged in terms of personal space, resulting in a significant price gap. A round-trip flight between Hong Kong and New York on Cathay Pacific's business class in September costs as much as six times the fare of a coach ticket, according to the airline's website. "The seat will be more like a regional business-class seat," Mr. Slosar said in a statement. "But it's not just the seat, we'll have an improved service as well," he said, noting that meals on the service will also be improved. Pricing and other specifics on the new cabins haven't yet been released. In the aftermath of the 2008 global financial crisis, Cathay Pacific conducted a strategic review of its product offerings to consider whether it needed to adjust its heavy focus on the premium travel market, and whether it should introduce a premium economy cabin for long-haul services. Mr. Slosar said in June the airline plans to offer new economy-class seats on its aircraft as early as the third quarter. Cathay Pacific's long-haul economy-class cabins last underwent a retrofit in 2006 with the installation of seats that move forward when passengers recline to give them more space. However, some travelers said the hard-back seats were uncomfortable. Other airlines that offer premium economy cabins on their long-haul flights include All Nippon Airways Co., Qantas Airways Ltd., Japan Airlines Corp., British Airways PLC and Virgin Atlantic Airways. United Continental Holdings, Inc.'s United Airlines markets several rows of coach on most of its aircraft as an 'Economy Plus' product, which offers a few extra inches of legroom for customers paying a surcharge or who have an elite status on its frequent flyer program.

The Court of First Instance on Monday rejected a Mei Foo resident’s bid to block a controversial project to build a 20-storey building on a site neighbouring her home. Ho Mei-ling, who lives in a flat at Mei Foo Sun Chuen Stage 8, last month applied for a judicial review of the Building Authority’s decision to approve the project. Ho argued the authority had been wrong in approving the project. Ho had stressed that the land being used for the 20-storey block was actually part of Mei Foo Sun Chuen. She told the court that the authority needed the consent of residents before going ahead with the project. Her application followed protests by residents against the project and its developer, Billion Star. In Monday’s ruling, Justice Johnson Lam Man-hon said he accepted that the authority had not made any error. Lam said the site was independent of Mei Foo Sun Chuen and calculations of the project’s plot ratio and site coverage were in accordance with the law. Lam also said Ho had been late in filing the judicial review application. Ho made the application nine months after the plans were approved, beyond a three-month limit. Outside court, a Mei Foo residents’ group supporting Ho said they were planning to appeal the ruling.

 China*:  Aug 31 2011  Share

The stewardesses prepare to board on a Wuxi-Taipei direct flight of Shenzhen Airlines at the airport in Wuxi City, east China's Jiangsu Province, Aug. 29, 2011. A regular direct cross-strait flight between Wuxi and Taipei of southeast China's Taiwan was launched Monday. A new regular direct air service was launched between Wuxi on the Chinese mainland and Taipei on Monday. The mainland's Shenzhen Airlines and China Eastern Airlines and Taiwan's China Airlines and TransAsia Airways will jointly operate the air route and share the same flight numbers, according to a spokesman with the Sunan Shuofang International Airport in Wuxi. Shenzhen Airlines and TransAsia Airways are jointly running a round-trip flight (ZH9021/2 and GE9021/2) every day except Saturday, the spokesman said, while China Eastern Airlines and China Airlines are jointly operating a round-trip flight (MU2931/2 and CI8014/3) every day, plus an additional round-trip flight (MU2961/2 and CI8016/5) on Mondays, he added. The airport mainly serves its residents and visitors to Wuxi and Suzhou cities, which have 18,000 Taiwan-funded businesses and 300,000 Taiwan business people, and the cities both enjoy close trade links with Taiwan, he said. "The new air route will further promote cultural, economic and political exchanges between Wuxi, Suzhou and Taiwan," he said.

Dayron Robles of Cuba (R) clears a hurdle next to Liu Xiang of China during the men's 110 metres hurdles final at the IAAF World Athletics Championships in Daegu, August 29, 2011. Dayron Robles was disqualified from the 110 metres hurdles final at the world championships in Daegu and stripped of his gold medal on Monday after bumping China's Liu Xiang in a physical track tussle. America's Jason Richardson was lifted from silver to gold with the Cuban's disqualification and Liu moved up to second. Britain's Andrew Turner was given bronze.

China's mutual funds made a combined loss of 125.4 billion yuan (US$19.6 billion) in the first half of this year, battered mainly by weakness in the country’s stock market, official financial newspapers reported on Monday. The reports gave no comparison, but state media have reported the funds lost 439.75 billion yuan in the fist half of last year. All of the country’s 61 fund management companies, which manage 763 mutual funds, posted losses in the first six months of this year, the official Shanghai Securities News said. Stocks-oriented funds reported the biggest loss, of 78.9 billion yuan, while the funds that invested just a part of their funds in stocks lost 47.9 billion yuan, it said. “Mutual funds were mainly hit by the weak stock market,” the newspaper said. Money market funds made a slight profit to become the only silver lining of the domestic industry during the period, the newspaper said. China’s benchmark Shanghai Composite Index fell 1.6 per cent in the first half of this year, due mainly to a slew of economic cooling steps, including increases in interest rates and bank reserve requirement ratios. In the first half of last year, the index plunged 27 per cent, battered by a government campaign to ease property price rises.

Chinese cabbage ready for shipping to South Korea at a logistics center in Shenyang, Liaoning province. China has become the fifth-largest global exporter of agro-goods. When he worked from dawn to dusk fishing in the sea off Weihai in Shandong province, more than three decades ago, Tang Jude never thought of turning his trade into a business that could reach people outside the East China coastal city, let alone outside the country. The 20-year-old fisherman of those faraway days is now the executive vice-president of Homey Group Co Ltd, a top 10 Chinese seafood exporter, with a sales network covering a number of developed nations including Japan, South Korea, the United States and the European Union (EU) trading bloc. In 1978, Tang and 200 fellow fishermen established the Qiujia Fishing Company, the predecessor of Homey Group. "It was a small business. We fished everyday and sold to local people, but business was very good," Tang said. It was around 1990 that Tang's company began to sell overseas, but the volume was quite small, as it was very difficult to promote sales abroad at that time. The turning point came in the mid-1990s when a delegation from Japan flew to Weihai and visited the company. The team stayed for a couple of days, researching and sounding out local people, and eventually an agreement to establish a joint venture was signed with TableMark Co, Japan's biggest Japanese food processing company by sales. Now Homey Group's annual exports are $70 million and 80 percent of its goods go to Japan. The company listed on the Shanghai Stock Exchange in early 2004, with total assets of 3.5 billion yuan ($550 million). "Quality is the lifeblood for the food business," Tang said. Homey Group is the epitome of thousands of agricultural goods manufacturers and exporters in China, and their evolution and prosperity have helped the country grow into the fifth-largest global exporter of agro-goods. The exports are projected to be on the rise and the prospects to be promising, but quality and branding will be key to maintaining robust growth, said government officials and company executives. China's entry into the World Trade Organization (WTO) in 2001 stimulated the nation's exports of agricultural goods. According to the General Administration of Customs, exports of Chinese agricultural goods surged to $48.88 billion in 2010 from $18.03 billion in 2002, registering an annual growth rate of 13.4 percent. That growth was mainly buoyed by sales of labor-intensive goods, with the three categories of organic aquatic foods and seafood, garden produce, and livestock and poultry products contributing approximately 70 percent of the nation's agro-exports annually over a period of years. China has the largest population in the world, but it is limited in terms of arable land, so the nation mainly plants wheat, rice and corn for domestic self-sufficiency, importing large amounts of soybeans, cotton, edible oil and sugar. Last year, the country became the largest destination for US agricultural goods, with imports totaling $17.5 billion. That figure accounted for 15 percent of US agro-goods exports in 2010. As the world's major agriculture nation with a huge rural population, China is set to see a surge in food-based exports, according to officials. "We have reason to believe that China's agro-exports will experience rapid growth and the future will be very positive," said Wang Shouwen, director of the department of foreign trade at the Ministry of Commerce. China's agro-export growth is gaining momentum. Between January and April, exports rose by 34.4 percent from a year earlier to $18.68 billion, compared with annual growth of 13.4 percent during the past nine years. Shandong province in East China is the country's biggest region for agricultural exports, contributing one-fourth of the nation's total in 2010.

Visitors look at a huge moon cake exhibited in a food fair in Chengdu, Sichuan province, on Sunday. When Wang Youhua heard that his company was giving him a pack of moon cakes to celebrate the coming Mid-autumn Day festival, you might think he was full of cheer. Instead he is bristling over the fact that the cakes, valued at 300 yuan ($47), will land him a bill of at least 60 yuan from the tax authorities. Wang, who works for an IT website in Beijing and has a monthly salary of 10,000 yuan, said that until he had read a news report he was unaware that the cakes were taxable. "Since when are moon cakes taxed?" he said. "I'd rather not receive such benefits if I have to pay tax." Under long-standing tax regulations, in-kind benefits that employees receive are taxed according to their market value. Under the regulations, workers are liable to pay tax for such benefits if their monthly income surpasses the tax-free threshold. A month ago the State Council announced income tax law changes that will come into force on Sept 1, raising the monthly tax exemption from 2,000 yuan to 3,500 yuan, and changing other tax brackets. owever, rules on in-kind benefits are unchanged. In Wang's case, if the moon cakes are taxed under the old rules he will have to pay 60 yuan; if they are taxed under the new rules he will have to pay 75 yuan. "Moon cake tax" became a buzz phrase on the Internet after the Beijing newspaper the Mirror Evening News reported on the ramifications of the tax changes on Friday. In a poll by weibo.com, which had attracted more than 5,000 respondents by Sunday afternoon, 96 percent of those answering said they oppose moon cakes being taxed. Most workers are unaware of such a tax, believing the moon cakes to be a benefit, with no strings attached, a report of China National Radio said. An opinion piece on Sunday in the Qilu Evening News, in Jinan, East China's Shandong province, said authorities had never explained the tax implications of giving moon cakes, so they were responsible for public ignorance on the matter. The cakes are subject to consumption tax when they are bought, so should not be taxed again when given to workers as a benefit, said an article on people.com.cn, the website of People's Daily. Wei Yan, of the Tai'an office of the State Administration of Taxation in Shandong province, told China Daily that the local tax bureau had taxed in-kind benefits since the regulation was enacted in 1994. "All in-kind benefits, such as gasoline cards and moon cakes, are taxed as part of the individual income according to the regulation. "Most large companies report the in-kind benefit to the tax bureau, but many small and middle-sized companies don't. It's difficult for the tax bureau to police." Wang Yi, of the Beijing Folklore Association, said the rules on taxing moon cakes were highly regrettable because the Mid-autumn Day festival was meant to be "heart warming for the union of the family". Wang Youhua, the IT worker, said that the high valuation put on moon cakes also made him reluctant to receive the benefit. "The value of a '300 yuan' moon cake is really less than 50 yuan, but I have to pay at least 60 yuan tax on it. It's a financial burden rather than a benefit."

A high-speed bullet train arrives at the railway station in Nanjing, Jiangsu province on Aug 27, 2011. According to the new schedule issued by the Ministry of Railways, high-speed trains will run at a slower speed from Aug 28. More high-speed trains, including those on trunk lines, will be running at slower speeds from Sunday, greatly altering the country's train schedules. According to the new schedule issued by the Ministry of Railways, high-speed lines with a designed speed of 350 km/h will be allowed to run at 300 km/h from Sunday. Lines operating at 250 km/h will now run at 200 km/h, and passenger trains that used to run at 200 km/h on older lines will operate at 160 km/h. The new plan will affect the timetable of 498 pairs of trains that belong to 18 railway sub-bureaus across the country. This is the second time this month that the Railways Ministry has made national adjustments to slow train speeds to improve safety. Two weeks ago, bullet trains on the Beijing-Tianjin intercity railway, the eastern section of a loop railway on Hainan island, and the Guangzhou-Zhuhai intercity railway had their speeds reduced in the first part of this program. Those adjustments came after the State Council's decision earlier this month to put a brake on the country's railway networks. On July 23, a bullet train rear-ended another in East China's Zhejiang province, killing 40 passengers and injuring nearly 200 others. The tragedy fueled public concerns over China's high-speed rail safety. The new schedule will increase passengers' travel times on many fast lines. For example, after train speeds on the 190-km Shijiazhuang-Taiyuan line are reduced to 200 km/h from the original 250 km/h, journeys from Beijing to Taiyuan via Shijiazhuang will take an extra 27 minutes. "The passenger flow might be affected a bit in the short term after the adjustment, but there is no chance of a sharp decrease," Tian Qiang, a publicity officer at Taiyuan railway administration, said on Sunday. Guo Weidong, a 46-year-old Taiyuan resident who takes a train to Beijing every weekend to take care of his daughter, said the new schedule would not affect his decision to commute between the two cities. "Half an hour is a good price to pay for safety," he said. "Besides, a slower car is more comfortable." To compensate for the slower speeds, ticket prices will be reduced by about 5 percent for all types of seats, railway authorities said. The adjustment also involves adding or cutting trains on certain lines to help meet market demand. Four pairs of bullet trains that leave at night and arrive in the morning at places between Beijing and Shanghai will resume operations on Sept 1. Those trains had been popular with passengers but were halted after the new Beijing-Shanghai high-speed railway opened. However, some high-speed trains will be eliminated in the new schedules. The bullet trains linking Beijing to Chengdu and Beijing to Chongqing will be halted. Slower passenger cars that ill have larger capacity and cheaper tickets will replace those fast trains, which started operating seven months ago. China has increased the speeds of its trains six times since 1997 and has been expanding its high-speed rail network at a fast pace in recent years. This adjustment is the first time railway authorities have gone against the long-standing policy of acceleration. Sheng Guangzu, the railways minister, said earlier that the decision was designed to "accumulate safety management experience". According to the Ministry of Railways, local railway administrations will have a 10-day transition period to adjust to the new schedules. Construction of new rail lines will be halted from Aug 26 to Sept 4 to guarantee transport safety during the grace period.

The People's Bank of China will require banks to hold more types of deposits in reserve, effectively tightening credit conditions further, according to a memo from the central bank seen by Dow Jones Newswires. The central bank will require banks to include so-called "margin deposits," or collateral deposited by customers for letters of credit and other guarantees, in calculating the proportion of deposits that they must put aside for the required reserve ratio, according to the memo circulated within a major domestic bank. With the official bank reserve requirement ratio now at 21.5%, the move could take 800 billion yuan ($125 billion) to 900 billion yuan out of the system by the time it is fully implemented in February, economists said. Separately, the state-run Xinhua news agency reported Monday that stabilizing prices remains the government's top macroeconomic priority, in a possible sign that Beijing will keep policy tight despite market volatility around the world.

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

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