China.Hawaii Chamber of Commerce ®
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Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
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China President Hu Jintao USA State Visit January 19 - 21 2011

Wine-Biz - Hong Kong Brand Hong Kong Video

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China 

Year of the Dragon - January 23 2012 Dance w/ Firework 

President Obama's Lunar New Year Message - Year of the Dragon

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

Meetings and Exhibitions Hong Kong - Converging Possibilities - English the Official Language

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

TED: Martin Jacques Understanding The Rise of China 马丁·雅克:了解中国的崛起 

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

Thumbnail 奧巴馬和羅姆尼標籤中國人是騙子 - 你同意嗎 Obama & Romney labeled Chinese as Cheats & Crooks-do you agree? 

Ferries Accident on October 1 2012 - Day of condolence for Hong Kong vessel tragedy 全港哀悼撞船事故罹難者

Thumbnail HK Mourn Oct 1 12 Victims-Day of condolence for HK vessel tragedy on Oct 4th 全港哀悼撞船事故罹難者CCTV-香港三分钟

Thumbnail China is doing the right things dealing with the challenges according the World Bank President Jim Yong Kim at this WSJ Interview 

Hong Kong*:  Dec 1 2012 

Foie gras - modern interpretations (By Vicki Williams) Foie gras is now found in many cuisines in different guises (By Vicki Williams) Shang Palace's braised South African six-head abalone and pan-fried foie gras in abalone sauce. Whisk's Scottish oyster with foie gras and grapefruit granita. Chez Patrick's foie gras trio with orange and bitter chocolate sauce. Stewed spotted grouper with foie gras and black garlic. Foie gras, the fattened liver of a goose or duck, has had its ups and downs recently. Although France legally protects it as part of the country's cultural and gastronomic heritage, California banned its sale starting from July 1 because it is the product of a traditional feeding method of animals called gavage. Bans of varying degrees also exist in other places, including Australia. Detractors of gavage consider it cruel. However, fans disagree, and there are scientific studies to support their view. What's more, not all producers practise gavage on their fowl. In any case, consumer demand for foie gras is growing, and countries such as China, Vietnam, Hungary, Russia and Canada have joined France in producing it. In Hong Kong, demand is high. It is a popular diners' choice, as can be seen by its increasing use in modern dishes by local chefs. Take Frenchman and executive chef of Chez Patrick, Patrick Goubier. On his menu are four foie gras dishes, all using duck liver, which he prefers. This includes the modern foie gras trio with orange and bitter chocolate sauce. A slab of foie gras terrine is served with two profiteroles, one filled with foie gras ice cream, the other containing duck liver which has been marinated in the sweet wine Monbazillac and baked in an oven for a few minutes. This is finished with a drizzle of sauce that includes balsamic vinegar reduction, orange zest and dark, bitter chocolate. "The idea was to create a surprise for the diner. First you taste the robust chocolate, which is quickly replaced by the acidity of the orange and then the delicate foie gras," says Goubier. The dish is delicious and moreish, the chocolate serving as a fine complement to the liver. No stranger to creating something from a traditional inspiration, Alvin Leung, chef owner of Bo Innovation, uses savoury ice cream in a foie gras dish. Muy choi flavoured ice cream and preserved Chinese mustard greens sit atop a bed of ginger biscuit crumbs. The preserved vegetable is traditionally used in Hakka cuisine and is often paired with braised pork belly. Here, the fatty protein element is duck foie gras. The liver is seared in a pan until it is browned, with a firm outside and soft centre. The dish is garnished with a dehydrated, crispy leaf of preserved mustard greens. Leung is not the only chef substituting foie gras for pork belly. A friendship inspired Jason Atherton, the chef behind tapas bar 22 Ships, to create a popular dish - chargrilled Iberico pork and foie gras burger with avocado and pickled cucumber. "I invented this for Asian film director Eric Khoo, who is a family friend. When I was working on my tapas restaurant in Singapore, he asked me to include a good pork burger, so it was born out of that. I wanted to create the ultimate burger." The mini burgers are a combination of minced pork neck and duck liver served on a brioche bun that adds a hint of sweetness. The cucumber is used to balance the richness. Also on offer is foie gras and sweetbread empanada with capers and burned onion jam. Finished with a piece of pan-fried foie gras, it is indulgence on a fork. Ming Court's executive chef, Tsang Chiu-king, is well-known for his innovative creations and use of luxury Western ingredients. The current foie gras offering is an evolution of the traditional taro puff. This puff has a fluffy, extra crunchy outside that gives way to a succulent blend of pork, taro, and goose liver. It's a delight to eat, with a rich mouthfeel as the flavours of pork and taro lead to a lingering foie gras finish. At the two-Michelin-star Shang Palace, there are six goose liver dishes on the menu. Executive Chinese chef Mok Kit-keung believes the richness of the liver enhances certain dishes, particularly seafood. That includes the signature dish, stewed spotted grouper with foie gras and black garlic, and braised South African six-head abalone and pan-fried foie gras in abalone sauce. In the grouper dish, it certainly adds depth, and with the abalone dish, it provides textural and taste contrasts. On offer at three-Michelin star Lung King Heen are wok-fried prawns with duck liver and almonds, which are deep fried. According to executive chef Chan Yan-tak, the dish was the result of experimenting with ingredients that would complement and bring out the flavour of prawns, which he believes can be rather tasteless on their own. The liver is slow-cooked before being pan-fried and then added to the wok with the other components, resulting in a balanced dish with complexity and three distinct tastes and textures that combine seamlessly. He says each mouthful is a new experience. Foie gras is making an appearance in a sushi roll at Roka. The Japanese spin of foie gras nu ume she is to give the duck liver the appearance of a thick-cut futomaki style sushi roll. It is poached in Japanese plum wine and wrapped in seaweed. It comes with a squid ink nori (seaweed) bread. Head chef Manabu Oikawa says the dish is an homage to classic French poached foie gras, but the presentation and flavour are firmly Japanese. The result is an intense and successful combination with notes of fruit and spice playing off the liver, with the taste of the sea from the bread adding playfulness to the dish. More surprises are in store at Whisk. Part of a degustation menu that highlights dishes from around the world, "Scotland" is the first course. It is a combination of Scottish oyster, foie gras and grapefruit granita. Chef Bjoern Alexander Panek describes the thinking behind it: "It is a dish designed to surprise the palate. The oyster gives saltiness, the duck foie gras is buttery, while the grapefruit granita gives texture and freshness. The palate experiences cold first, then fattiness and finally saltiness." 

From Frankel to Class Five – welcome to Hong Kong Tom Queally (By Michael Cox) Tom Queally on Frankel. “Frankel’s jockey” Tom Queally starts his Hong Kong riding career on Sunday, and in what must be some sort of cruel initiation ritual by the club, he has been drafted to ride a horse which has never been placed in eight starts and wouldn’t be able to keep up with Frankel if the champion was walking backwards around the parade ring. We’ve described getting off Frankel and on to a Class Five slug as climbing out of a Ferrari and into Fred Flintstone’s stone-wheeled foot mobile, but that might be overstating Diamond Agate’s ability. Tom, welcome to Hong Kong, and welcome Class Five, on the all-weather track no less – try and stay out of the kick-back. There’s that point at the school athletics carnival when a teacher announces: “All of the kids who haven’t won a ribbon today please come forward” – and the less athletically inclined students step up for a what is hoped will be a morale boosting, “everyone gets a prize” contest. Well, the Hong Kong Jockey Club have their own versions of these egg-and-spoon races – they’re called Class Five handicaps, where the roughest and most dishonest collection of nags this side of Macau do battle in a race to decide the best of the worst. Hong Kong racing is structured in such a way that every one of the 1,400 or so horses eligible to race at any given time are given a fair chance to win a race through handicapping. Every horse has a rating indicating their ability expressed as a number – re-assessed after each run. Ambitious Dragon is currently rated the best on 134. Horses are then bracketed into divisions, or classes – Class One (with Group One, Two and Three above that), right down to our hapless friends in Class Five. At the bottom end of the scale, rated from zero to 40 points, you have this motley crew of thoroughbred failures. Whether they are unco-ordinated, unsound or just plain hopeless horses, they are the bane of a punter’s existence. At the moment three horses share the dubious distinction of being stuck with the label “worst horse in Hong Kong” – with a rating of 13: Barcelona Too, Crimson and Beautiful Scenery. Too slow to keep up in sprints, but too weak to race over any further – this is the lot of many riding the slippery slope down the ratings. But the worst type of Class Five animal isn’t necessarily the slow one - who at least tries his best - but it’s the pretender who is less reliable as a copy watch from Chun King Mansions when put under any sort of pressure. Watch this effort from Class Five scoundrel and punters’ nemesis Saddlers Lodge last season – where he bursts to the front like he belongs in a Group One, but “lays down” and leaves Douglas Whyte stranded at sea and paddling like crazy. It’s all very well to label a jockey “Group One-standard” – but is there a greater test of a rider’s skill and tenacity than getting a Class Five slowcoach over the line in a close finish? Umberto Rispoli earned plaudits from Tony Millard at Happy Valley last night when he did everything bar get off and carry Medic Champion – a horse that is so fat he needs a medic with an oxygen mask after every gallop. One of the best jockeys to watch in a Class Five is the energetic and ultra-competitive Brett Prebble. He sometimes gets marked hard on aesthetics by posh purists from the northern hemisphere, but at least his effort levels are obvious when he throws himself into his work. And saving every inch of ground takes on critical importance when you’re on a horse whose fuel meter is always stuck on empty. For those part-time punters who like to take a shortcut with the form and simply illiminate the horses who “can’t win” – Class Five is a nightmare. Putting a big red line through those who apparently haven’t got recent positive performances will leave you with very little ink left, and worst still, no selection. Some liken “cellar grade” to a maximum security prison containing only the shiftiest customers – you don’t turn your back on them, because you can’t trust any of them with your hard-earned. Saddlers Lodge races on Sunday – where he faces another Class Five “lifer” Gorgeous Ruler. It’s hard to separate these two for lack of willingness to compete. The tale of the tape of this epic head-to-head match-up of mediocrity is revealing. Saddlers Lodge had already racked up two seconds in maidens in England before he came to Sean Woods – admittedly one of them was behind a subsequent multiple Group One winner in Society Rock – but, in hindsight, the failures were telling. Getting beaten has quickly become Saddlers Lodge’s specialty – he has finished runner-up six times in 27 starts – but still never won. Likewise, winless Gorgeous Ruler has finished second six times in 32 trips to the track. We can see it now, Gorgeous Ruler and Saddlers Lodge emerge from the pack at the 300m, locked in a neck-and-neck struggle … to see who can best find a way to lose. All eyes will be on Queally though, and what happens when he asked Diamond Agate for effort in the straight. He might like good on Frankel when he pushes the “go button” – but will his Fred Flintsone feet move fast enough to carry this one over the line?

Kowloon Watch Company celebrates 60th anniversary (By Vivian Chen) Angie Wong, Wong Kam-shing, Samson Sun and Yu Chui-yee. To celebrate its 60th anniversary, the Kowloon Watch Company hosted a get-together in The Ritz-Carlton hotel's Diamond Ballroom on Monday night. The company opened its first shop in 1952 in Sham Shui Po, and now has 13 stores in town. It also sells its own brands, Cover and Jaz-ma, on the mainland. Looking back, managing director Wong Kam-shing said the company had evolved over the past few decades. "Before, it was more about having a strong product and introducing it to customers. But these days, we are more focused on catering to our clients' needs," he said. Wong said he hoped to further develop the company's market research team to keep up to date on the ever-changing tastes of luxury-watch enthusiasts. To highlight the "Hong Kong spirit" that has been passed down from the company's founders, local singing group C AllStar were booked to provide entertainment at the gala. The company's staff also took turns on stage to show off their Gangnam Style moves.

Ranking falls, but Hong Kong still in world's top 10 places to be born & United States was ranked 1st now at the 16th place (By Ernest Kao) Hong Kong ranked seventh the last time the EIU's report was published in 1988. The city now ranks 10th. Despite out-of-reach property prices and dangerous air pollution, Hong Kong is the world’s 10th best place for a baby to be born - at least according to a study by the Economist Intelligence Unit. The EIU, a sister company to The Economist magazine, looked at “11 statistically significant indicators” including geography, demography, social and cultural characteristics, policies and the economy as well as taking into account a wide range of different life-satisfaction surveys. The study was conducted in 80 countries, of which Hong Kong and China received separate rankings. Hong Kong ranked seventh the last time the EIU’s report was published in 1988. Singapore, No 6 on the list, has since edged Hong Kong out as the best place in Asia for a child to be born. For 2013, China languishes at a dismal 49th place, which means that other than stellar economic growth things have not improved that much over the last twenty years. The United States, which took the top spot in 1988, dropped out of the top 10 to a meagre 16th place, putting the country only slightly higher than the United Arab Emirates, South Korea and Israel. The EIU attributed America’s big drop to 2013’s babies having to “inherit the large debts of the boomer generation”. Large European economies such as Germany, France and Britain did not perform well either, mainly because of uncertain circumstances of the euro-zone financial crisis. Germany fell from No 3 in 1988, just before unification with its eastern counterpart, to 16th place for 2013. Australia and a handful of Scandinavian countries dominate in the top 10, with Switzerland taking the top spot as the best place for a baby to be born. According to The Economist, the next where-to-be-born index is scheduled for publication in 2030, when the children born in 2013 reach adulthood. The world's top 10 countries to be born in

Rank Country Score (of 10)
1 Switzerland 8.22
2 Australia 8.12
3 Norway 8.09
4 Sweden 8.02
5 Denmark 8.01
6 Singapore 8.00
7 New Zealand 7.95
8 Netherlands 7.94
9 Canada 7.81
10 Hong Kong 7.80

KMB seeks 8.5pc fare hike as losses mount (By Lai Ying-kit) A Kowloon Motor Bus station in Hung Hom. Kowloon Motor Bus, the city’s largest franchise bus operator, on Thursday applied for an 8.5 per cent fare rise for next year. The proposed increase would be higher than this year’s inflation, which was between 1.6 per cent and 6.1 per cent. It will require approval from the government. KMB posted a loss of HK$15.2 million in the first half of this year. It said it hoped the fare increase could help it break even by the end of next year. The company has been struggling with a 40 per cent increase in fuel prices and a 9 per cent rise in wages over the past two years. It also said a substantial number of passengers – about 500,000 daily – had shifted to using the MTR and railways which have been expanded in recent years. Despite efforts to rearrange duplicated bus routes with low patronage, progress has been very slow, the bus company said on Thursday. At present, over 70 per cent of KMB’s 400 bus routes consistently suffer from low patronage. The last time KMB raised its fares – by 3.6 per cent – was in May last year, but that was not enough to cover the overheads, the company said.

 China*:  Dec 1 2012

KFC China says chemical chicken feed produces 'normal' growth (By Amy Li) China's KFC released a statement on Thursday maintaining the methods used to feed chicken by its supplier, Shanxi province-based Suhai Group, are 'scientific'. A branch of KFC restaurant in Beijing. China’s KFC released a statement on Thursday, maintaining the methods used to feed chicken by its supplier, Shanxi province-based Suhai Group, are “scientific”. The response came days after reports surfaced online accusing the supplier of using toxic “instant chicken” chemical feed. Those chemicals could speed up chicken’s growth cycle to 45 days, reported China Daily on Wednesday. In the statement posted on KFC’s official account on Sina Weibo, China’s Twitter-like service, KFC denied any foul play in Suhai’s feeding practice. It also asks the public to recognise the “significant changes” in poultry breeding brought by “increasing market demand and advanced technology”. The statement said: “45-day growth cycle for white-feather chickens is normal. It’s a result of selecting top quality chicken breed and scientific methods.” KFC said earlier on its weibo that Suhai supplied only 1 per cent of its chicken.

Trade barrier motivates US Huawei, ZTE allegations (Xinhua) As the United States warns that two leading Chinese technology firms pose potential threats to its national security, an expert from a Chinese think tank has called this assertion "a barrier to trade." "Technically or economically, it's impossible for Huawei and ZTE to place back doors deliberately," Fang Binxing, a member of the Chinese Academy of Engineering and president of Beijing University of Posts and Telecommunications, was quoted as saying by Guangming Daily on Wednesday. "Back doors" refer to programs secretly inserted by developers, enabling attackers to install malicious software that could paralyze networks and allow hackers to gain entry into highly classified systems. An 18-month White House-ordered review on Huawei, the world's second-largest maker of networking gear, indicated no evidence of Huawei espionage was found, but that it was still risky based on the presence of "back doors." Fang said Huawei shares similar technology with Cisco in routers. As the world's leading maker of computer networking equipment, Cisco is able to find any back door without difficulty, if it exists. "But now US companies and government agencies fail to provide any evidence," Fang said. "How can they still claim Huawei and ZTE insert back doors in their products?" In recent years, Huawei has pursued a foothold in the US market as a private enterprise. Spying for China at the expense of its reputation "does not make sense," according to Fang. Huawei and ZTE have already become Cisco's major competitors. But both of them hit an invisible wall when they attempted to expand their business in the United States. Fang said US allegations against Huawei are groundless. "It just intends to set up trade barriers to Chinese companies," he said. He also called on the Chinese government to tighten its own information security measures and establish a dedicated agency for this task. According to a report released in early July by China's primary computer security monitoring network, nearly 50,000 overseas-based internet protocol addresses were involved in attacks against 8.9 million Chinese computers last year. As China is facing increasing cyber attacks and threats from overseas, "we need a specific agency to take charge of network security issues," Fang said.

Patrols in Hainan get more clout (By Huang Yiming in Haikou and Wang Qian in Beijing) Police in Hainan will be authorized to board and search ships that illegally enter the province's waters in 2013, the latest Chinese effort to protect the South China Sea. Under a set of regulation revisions the Hainan People's Congress approved on Tuesday, provincial border police are authorized to board or seize foreign ships that illegally enter the province's waters and order them to change course or stop sailing. The full texts of the regulations, which take effect on Jan 1, will soon be released to the public, said Huang Shunxiang, director of the congress's press office. Activities such as entering the island province's waters without permission, damaging coastal defense facilities, and engaging in publicity that threatens national security are illegal. If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communications systems, under the revised regulations. Calling the revisions "significant", Zhuang Guotu, director of the Southeast Asian Center at Xiamen University, said: "It is urgent for China to improve its legal system regarding offshore law enforcement because disputes with other countries are on the rise in the South China Sea. "Police have clear processes laid out in the new regulations for appraising illegal activities and punishing illegal entry," Zhuang said. The revisions also emphasized border police should strengthen the patrolling of the waters of Sansha and coordinate with the routine patrols conducted by the country. Sansha, the newest prefecture-level city, which was established in July, administers the islands and waters of the South China Sea. The city is under the jurisdiction of Hainan. Bi Zhiqiang, director of the legislative affairs commission of the Hainan People's Congress, said the revised regulations will strengthen offshore patrols of the waters off Hainan, protecting national maritime interests. An insider from China Marine Surveillance told China Daily that new ships will join the South China Sea patrol fleet soon. On Nov 12, a 3,000-metric-ton inspection ship started patrolling the Yellow Sea, and on Nov 15, another one joined the patrol fleet in the East China Sea. All these moves show that the country is preparing itself for dealing with complicated marine disputes, said Qi Jianguo, former Chinese ambassador to Vietnam.

Hong Kong*:  Nov 30 2012 

What Hong Kong can expect from Li Yuanchao, likely next Beijing link-man (By Cary Huang in Beijing) Li Yuanchao is tipped to be the next vice-president of Hong Kong and Macau affairs, after a career that began in teaching - Three decades ago, Li Yuanchao seemed destined for a life in the classroom, not the intrigue-filled halls of Zhongnanhai. Li, from Jiangsu, was among the first students to enter the prestigeous Fudan University after the social upheavals of the Cultural Revolution. The university, under the leadership of the famous "first geometer of the Orient", Su Buqing, was developing into the cradle of the mainland's burgeoning mathematics community. Like most students in his classes, Li seemed wholly devoted to his studies and showed little interest in politics. He had taught secondary school mathematics before entering university, and many expected him to have a long career in teaching after his studies were complete. One former classmate, Wu Zongmin, who is now a mathematics professor at Fudan, told the Southern Metropolis Weekly: "His only prospect in life was to learn mathematics and continue his career as a secondary school teacher after graduation." Those who know Li say his humble, flexible and easy-going manner was already well established during that modest period of his life. Analysts believe such characteristics will serve him well if Li, as widely expected, is tipped to become vice-president in charge of Hong Kong and Macau affairs. Friends, classmates and colleagues describe him as a reform-minded leader open to new ideas and initiatives, provided they meet a careful cost-benefit analysis. That could possibly include controversial political reform proposals on the mainland and in Hong Kong. A former subordinate of Li's said: "He is flexible in policy and thus he would adopt a more tolerant approach in regard to Hong Kong affairs as it is under the one-country, two-system formula. However, he is not radical. While he is bold in accepting new things, he is also cautious in trying experiments." Li was born in 1950 in Liangshui, Jiangsu province. He father, Li Gancheng , was a vice-mayor of Shanghai in the 1960s, making him a member of the Communist Party elite. But that status, which today makes Li a "princeling", did little to protect him in Mao Zedong's purges during the Cultural Revolution. Like many of the children of revolutionaries, he was "sent down" to the country to work as a labourer. He was among the first wave of students to enrol in universities when entrance exams resumed in the first two years after Mao's death in 1976, the so-called 77th and 78th classes. Those students now make up much of the country's ruling elite, and hold several seats in the party's powerful Politburo. Chen Zhimin, a professor at Fudan's School of International Relations and Public Affairs, said: "The 77th and 78th students have played major roles in sowing new thinking, reforming the old system and guarding the new in the past three decades." At university, Li established a reputation for being both accommodating and assertive. His classmate Wu recalled how Li accepted a less desirable bed near a door so that a classmate could have a better one near a window. Another time, Li, acting as student representative, asked Su to push back the dormitory's scheduled lights-out time to 11pm from 10.30pm so students could continue reading without having to go into the lobby. Although he joined the party in 1978, Li did not seem to pay much mind to politics. Many expected him to pursue a career in academia, like large numbers of his classmates, who are now scattered across the prestigeous universities of the world, from Chinese University of Hong Kong to Harvard. "Like most students of sciences, who are usually indifferent to politics, Li showed no particular interest in controversial political issues at that time," the former colleague said. His shift towards politics came after graduation, when Li became an assistant professor at Fudan's School of Management and agreed to serve as the school's secretary for the Communist Youth League. In 1983, an early patron of Li's, Shanghai party chief Chen Pixian, recommended the young professor to then general secretary Hu Yaobang to serve as Youth League secretary for the entire university. It was a major break. The Youth League was becoming a key power base for future president Hu Jintao and Li rose quickly through the ranks of what is now known as the tuanpai or the "Youth League faction" of the party. By the end of his first year as a full-time league leader, Li had become secretary of the Shanghai league. He later moved up to the same post in Beijing, where colleagues remember him as intelligent and personable, with a ready smile. "He is poised, but without an official air," a former colleague said under the condition of anonymity. "He is cautious, but not indecisive; he is flexible, but not unprincipled; and he is pragmatic, but not without ideals." Li was later appointed to the top party posts in Nanjing and Jiangsu before being promoted to the Politburo and placed in charge of the Central Committee's Organisation Department in 2007. In that powerful role, he oversaw the personnel assignments for the entire 80-million-member party. In the meantime, he attended Peking University and the Central Party School, earning bachelor's, master's and doctoral degrees. In 2002, he completed a five-week training programme at Harvard University's Kennedy School of Government. With such a background, Li is often seen as an exemplar of the new generation of party leaders: well educated, with a good administrative track record and exposure to the outside world. Steve Tsang, who heads the University of Nottingham's China Policy Institute, said: "While all the third and fourth-generation leaders received an education in Soviet-style planned economics, the new leaders are generally younger, better educated and, to some degree, less ideological, as many received an education increasingly influenced by Western ideas in economics, law and politics." Because of his background and ties to Hu Jintao, many expected that Li would ascend to the Politburo's supreme Standing Committee after the 18th party congress earlier this month. That did not come to pass, if only because the Standing Committee was reduced to seven members. Analysts say he remains a figure to watch and, at 62, is young enough to be promoted after the next party congress in 2017. Beijing names Zhang as its top man for HK - Politburo Standing Committee member Zhang Dejiang has taken over from Vice President Xi Jinping as the highest mainland official in charge of Hong Kong affairs - ending speculation that the job will go to former propaganda chief Liu Yunshan. Zhang, formerly Guangdong party secretary, was elevated to the all- powerful seven-man committee at the 18th Communist Party congress earlier this month. News of his new role comes as top local officials take turns to visit Beijing, where a once-in-a-decade leadership transition is under way. Chief secretary Carrie Lam Cheng Yuet-ngor started the ball rolling in September, followed more recently by Financial Secretary John Tsang Chun- wah and Police Commissioner Andy Tsang Wai-hung. The justice and development chiefs, Rimsky Yuen Kwok-keung and Paul Chan Mo-po, are currently in Beijing, while Secretary for Security Lai Tung- kwok is expected to return to the SAR today. None of their itineraries mentions any meeting with Zhang. Earlier, there was speculation that Liu, who was also elevated to the Standing Committee, would be in charge of Hong Kong affairs. But a source told The Standard that Zhang, who is familiar with local affairs, will replace Xi - expected to succeed Hu Jintao as president in March. Zhang, 66, studied at the Kim Il Sung University in Pyongyang, North Korea, where he earned a degree in economics in 1980. He was party chief for Jilin province from 1995 to 1998 before taking over the reins of economic powerhouse Zhejiang. His next move as party chief was to Guangdong in 2002. As Guangdong chief, Zhang pushed for the formation of a pan-Pearl River Delta economic bloc to boost growth. Also known as "9+2" - the bloc covers the provinces of Fujian, Jiangxi, Hunan, Guangdong, Hainan, Sichuan, Guizhou and Yunnan, the Guangxi Zhuang autonomous region and the two SARs of Hong Kong and Macau. Zhang was appointed vice premier in 2008 and in March he was appointed Chongqing party chief in place of former "princeling" highflier Bo Xilai who was removed over charges of corruption and abuse of power.


Kai Tak paddle sports centre clears hurdle, gets green light (By Alvin Sallay) World-class facility for dragon boats, rowing and canoeing next to old airport now set to become a reality after thumbs-up from key government bodies - The Kai Tak development project. A world-class water centre for paddle sports in the heart of Hong Kong has moved closer to reality after two key government bodies recently gave the project their stamp of approval. The Home Affairs Bureau and the Harbourfront Commission's task force on Kai Tak have backed the Water Sports Council's proposal to create a regatta centre adjoining the runway at the old airport site in Kowloon East. The council comprises the national associations for rowing, dragon boating and canoeing. Mike Tanner, chairman of the Hong Kong Rowing Association, said: "This is excellent news. By showing their support for a water sports centre, we are one step closer to realising our dream for a world-class facility which can host major international events in all the different paddle sports." Dr Raymond Ma Siu-ming, chairman of the Hong Kong Dragon Boat Association, added: "Every year the government spends millions of dollars on creating a flat-water course for the international dragon boat races in the harbour. So why not save money by giving us a permanent place? This is absolutely good news for our sport." On Tuesday, the Water Sports Council (WSC) gave a second presentation to the task force, spelling out in detail its plans for a multi-use water sports centre to cater to the strong public demand. The facility will include an international-standard regatta course for rowing, canoeing and dragon-boat racing as well as a kayak whitewater course. Ian Brownlee, one of the main forces behind the plan and a consultant to the water sports associations, said: "Last August we presented our case, and while generally supportive, they had a few reservations. But this time they were fully behind us and gave us the nod to go ahead." The WSC received a further boost last week, when the Home Affairs Bureau (HAB) gave its blessing to the project. Annie Kong, on behalf of the secretary for Home Affairs, wrote: "The HAB welcomed the provision of new facilities that will help to promote sport at both the elite and community levels. "We see clear merit in developing water sports facilities at Kai Tak, given the convenient location and the presence of other sports facilities under planning in the area, including the multi-purpose sports complex. We therefore support in principle the allocation of the site concerned for the development of the proposed water sports centre." Brownlee said the next step would be to make a formal application for the 1.8-hectare site. "There will be a lot of engineering work going on over the next five years or so in that area, so I'm not sure when the site will become available. But we will try to get temporary use of it so we can hold events," Brownlee said. Tanner said the major hurdle had been overcome. "The support from these two key bodies was essential and crucial to our hopes. Now we have to start looking at how the project will be funded, designed and planned. "I think the site will only become fully available to us by 2018 or 2019, but in the interim we are looking at holding events. "We will have to look to the government for funding. But there have also been suggestions that the project go ahead on a public-private partnership, and we'll look at this as well."

Hong Kong ranks third in global study of cognitive skills (By Linda Yeung) International survey shows city's youngsters are doing well, but experts warn about rote learning - The University of Hong Kong. Hong Kong ranked third in an international survey of students' cognitive skills and educational attainment, behind South Korea and Finland. Japan and Singapore trailed behind the city, despite being among the top five in the Global Index of Cognitive Skills and Educational Attainment study by the Economist Intelligence Unit released yesterday. The survey compared the performances of grade 8 and grade 4 pupils in 40 countries in mathematics, reading and science, based on their results in the OECD's Program for International Student Assessment, and the international Trends in International Mathematics and Science Study and Progress in International Reading Literacy Study assessments. The measurement of educational attainment is based on the countries' latest literacy rate and graduation rates at the upper secondary and tertiary level. Despite Hong Kong pupils' superior academic performance, local experts warned rote learning remained an issue here. The report attributes the success of Finland and South Korea to some common qualities: high-quality teachers, value accountability and a moral mission that underlies education efforts. The index is in The Learning Curve, a research report published by educational company Pearson, which has information on education inputs and outputs in more than 50 countries. While factors like government spending on education, school entrance age, teacher salaries and degree of school choice are believed to affect educational quality, the report points out that simply pouring resources into a system is not enough: far more important are the processes which use these resources. Cultural change towards education and ambition are equally, if not more, important than income in promoting better educational outcomes. But there is no doubt about the importance of good teachers. "The impact of good teachers extends beyond positive educational outcomes and can be linked to positive societal factors, such as lower levels of teenage pregnancy," the report says. "The best performing countries attract top talent, train teachers throughout their careers and allow them freedom." The report also highlights the difficulty parents - even in the developed world - have in making the right choice of schools for their children. Extensive studies of voucher programs and charter schools in the United States indicate that, while both can be beneficial, neither offers a magic formula, it says.

Wedding guests need to give more generously than ever (By Amy Nip) - With the average cost of a banquet above HK$600 (US$80) a head, giving less than that won’t do. If you want to be a welcome guest at your friend's wedding, be prepared to stuff more than HK$600 in your gift envelope. It seems the woman who got Hong Kong talking when she used Facebook to tell would-be guests not to come to her banquet unless they paid more than HK$500 has a point. Getting married is expensive, and the lion's share of the cost is the wedding banquet, a traditional must-have in Chinese society. Although friends invited to the dinner can pay whatever amount they want, an ESDlife survey covering 1,768 respondents found that a sum less than HK$612 would be unlikely to cover the food and beverage costs. The website, which offers information about wedding-related services to couples, conducts an annual survey on the cost of getting married. The most recent survey found that couples paid an average of HK$282,317 on their weddings, 6 per cent more than last year. They spent an average of HK$147,173 on banquets, which usually involved about 240 guests at 20 tables. "Giving HK$500 is not quite enough [to cover banquet costs]," ESDlife research manager Jeremy Mou Chi-wah said. The woman, whose post went viral, said: "I don't want to create economic difficulties for you, but I'm not operating a charity." She was upset that people paid the same amount (HK$500) for dinners at restaurants and hotels. For those worried about how much to pay, the survey may offer clues. Respondents paid a median of HK$1,000, HK$800, HK$700 and HK$500 for banquets held at a high-end hotel, standard hotel, high-end restaurant and standard restaurant respectively. The survey found that couples spent an average of HK$43,323 on rings and jewellery this year, 39 per cent more than last year. Banquet spending rose just 1 per cent. "Instead of one-off events like banquets, couples are willing to spend more on jewellery, which can help them fend off inflation," Mou said.

Carrie Lam denies interfering in CE illegal structure probe (By Lai Ying-kit) Carrie Lam speaks at a Legco meeting in Tamar on Wednesday. Chief Secretary Carrie Lam Cheng Yuet-ngor said on Wednesday she did not interfere in the investigation of the illegal structures problems involving her boss Chief Executive Leung Chun-ying. Questions were raised about the roles of Lam and the Buildings Department after the department revealed that it had noticed a suspicious brick wall sealing up an unauthorised extension in one of Leung’s houses on The Peak in late June. The position of the wall also did not match the original approved plans. But the department had not released the information until early this week. Media reports have also suggested that the department’s senior management had stopped a frontline officer following up on a “suspicious” wall. When the department first investigated Leung’s house in June, Lam was then development minister and boss of the department. Leung then was chief executive-in-waiting, preparing to take office in July. Lam, responding to a barrel of questions on the issue after a Legislative Council meeting, said the Buildings Departments carried out enforcement independently and impartially under the law. Lam added that not even a principal official had any power to interfere. “There is no room for anyone from outside the Buildings Department, not even a principal official, to interfere in enforcement actions on any case,” she said. Lam said she and the development bureau did no more than receive reports from the department on its probe in Leung’s case, as in other cases involving senior government officials or celebrities. “The role of my bureau was no more than being notified about the actions taken by the Buildings Department, some news releases and replies to media enquiries [about the case],” she said. “I did not take part or interfere in any enforcement action,” she said.

Hong Kong's MTR buys first China-made locomotives (By Hao Nan) Hong Kong's Mass Transit Railway Corp has signed a 160-million-yuan order with China CNR Co for 23 locomotives with proprietary technologies developed by its subsidiary in Dalian. Following fierce competition, the first independently developed diesel locomotives made on the Chinese mainland have been selected by Hong Kong's Mass Transit Railway Corp for use in its world-class transit system. China CNR Co announced last week that it has secured an order worth more than 160 million yuan ($25.7 million) from the MTR for 23 diesel locomotives made with its proprietary technologies. The designer and builder of the locomotives is a wholly owned CNR subsidiary headquartered in Dalian, Liaoning province. According to an announcement from the State-owned railway equipment manufacturer, its CKD0A locomotives ordered by the MTR meet the strictest global emission standards and reduce operational noise to less than 70 decibels, lower than the 78-decibel standard on the Chinese mainland. The MTR is considered one of the most successful railway operators in the world with a comprehensive and highly sophisticated network. It is also famous for caution in selecting suppliers, said the CNR statement. The announcement also noted that the MTR procurement announcement attracted many well-known locomotive manufacturers, and bidding for the contract was fierce. A CNR spokesman said the order shows its CKD0A locomotive has won the recognition it deserves and is also useful as a stepping stone to competing in top international railway markets. The manufacturer says the CKD0A meets advanced international standards in fabrication, design, quality control and performance tests. It can run at 80 kilometers an hour powered by two electric motors and a diesel engine. The design also provides more interior room by eliminating the need for a gearbox, which also improves the locomotive's reliability. The driver's cab has two sets of controllers equipped with computer and cruise control systems. The CKD0A locomotive is expected to be used in MTR's rolling stock in addition to subway vehicle rescue. The contract calls for the first locomotive to be delivered to MTR by March 2014, followed by a 5,000-kilometer test run. The MTR has also ordered high-speed trains valued at 1.36 billion yuan from China South Locomotive and Rolling Stock Co Ltd, National Business Daily reported. The report said CSR's CRH380A model will be customized to meet MTR requirements and serve on the Guangzhou-Shenzhen-Hong Kong express rail link expected to enter service in 2015.

Hong Kong catering industry records profits (By Li Tao from Hong Kong) Major players in Hong Kong's catering industry have managed to grow their profits despite wrestling with rising operating costs. Both Fairwood Holdings Ltd and Cafe de Coral Holdings Ltd have posted a healthy profit gain in the first half. Fairwood posted a net profit of HK$64 million ($8.26 million) for the six months ended Sept 30, 2012, up 10.3 percent from the restated HK$58.1 million a year ago, the fast food chain operator told the Hong Kong Stock Exchange on Tuesday. Total revenue edged up by 6.9 percent to HK$972.8 million, with gross profit margin improving to 14.5 percent from the previous 13.7 percent. The result compares with those of the city's biggest fast food restaurant operator, Cafe de Coral, which said on Monday that profit rose 16 percent to HK$221 million over the same six-month period, while total revenue also gained 8 percent to HK$3.14 billion. Both catering services groups cited soaring raw material costs, rising rents and higher wages as challenges to the business operations in Hong Kong as well as on the mainland. At the same time, both groups expressed their support to the government's plan to lift the minimum hourly salary from HK$28 to HK$30 in the city. Raymond Chan, chief executive officer of Fairwood, said the proposed HK$2 hourly salary increase is unlikely to bring much impact to the group, as only about 15 to 20 percent employees were affected when the minimum hourly wage was increased from HK$23 to HK$28 previously. However, Fairwood will slow down the pace of new stores opening in both Hong Kong and mainland in the second half, as it had already opened seven new outlets in the city and mainland during this period, respectively, Chan said during a media briefing on Tuesday, The fast food chain will also not select prime places to open new shops as the landlords in Hong Kong are raising rental prices aggressively these days, Chan added. During the first six months, Fairwood renewed leases for 19 existing shops in Hong Kong. Average rents for these stores rose about 7 to 8 percent over the previous contracts, according to Chan, who added that 10 more outlets in the second half of its financial year will also need to renew their contracts. Cafe de Coral's Chief Financial Officer Mike Lim said Monday that the company would maintain its announced plan to open 20 outlets in Hong Kong and 30 on the mainland for the whole year, after 14 outlets in Hong Kong and 15 on the mainland were opened in the six months through September. Linus Yip, a strategist from First Shanghai Securities, said catering services are one of the most promising sectors within the consumer goods market as they are daily necessities. "Challenges for these fast food chains are how to control the costs, which are easily affected by rising material costs as well as government policies," Yip told China Daily in a telephone interview.

 China*:  Nov 30 2012

In memory of a respected highflier (By By Wu Yong and Liu Ce in Shenyang and Zhao Lei in Beijing) China is mourning the death of Luo Yang, who made major contributions to the development of the country's first carrier-based fighter jet. Xi Jinping, general secretary of the Communist Party of China Central Committee, has extended his "condolence with a deep feeling of grief" at the unexpected death of Luo, chairman and general manager of the Shenyang Aircraft Corp and on-site director-in-chief of China's carrier-borne fighter jet program. Xi called Luo's death "a big loss to the Party as well as the nation", and he extended words of comfort to Luo's family. Xi said Luo devoted himself to the country's aviation industry and made an extraordinary contribution to its development. Luo headed the development and production of the J-15 fighter jet. He died of a heart attack shortly after leaving China's aircraft carrier, the Liaoning, on Sunday. He was 51. "Luo Yang, I know you were too exhausted these days," his wife, Wang Xili, said as she watched his body being sent to a funeral home. "I don't want to lose you. You were so tired and now you can sleep!" Her words moved everyone present to tears. Chu Xiaowen, Party chief of the Shenyang Aircraft Design Institute, where Luo worked for 20 years after graduation, recalled: "After Luo finished his work at the Zhuhai Airshow, he flew to Beijing for a business meeting. Then he took a helicopter to the Liaoning aircraft carrier without having any rest. "On the Liaoning, I noticed he was seriously fatigued, and I tried to persuade him to take at least a short break, but Luo refused and told me he had to catch up with the agenda." Xie Genhua, Party chief of the Shenyang Aircraft Corp and a longtime colleague of Luo's, wrote in a memorial letter: "Now, return home, Luo. Your wife and sister have come to Dalian to receive you. Leaders and your brothers-in-arms from the People's Liberation Army navy have come to the hospital to bid you farewell, and leaders and your friends at the Dalian Shipbuilding Industry carried your coffin to the hearse and they were shouting ‘Now you are going home, our brother!'" Researchers, technicians and workers at the Shenyang Aircraft Corp have been flooding the mourning hall at the company to express their respects and grief. "I don't know the words to express how deeply sad I am," the general manager of a subsidiary of the company who gave his name as Li said on Wednesday as he left the mourning hall. "Without Luo's contribution, our company would not be what it is today." Tian Feng, of the Shenyang Aircraft Corp labor union, said: "Luo was always very nice to us ordinary workers. Our incomes saw substantial increases because of his efforts. "In our hearts, he has not died. I think the best way to commemorate him is to work harder for our country's aviation industry." A 32-year-old employee at the company said: "I don't believe he has left us. The name Luo Yang will live as long as the Liaoning aircraft carrier, and we will never forget him." The man was too grief-stricken to give his name. Receptionists at the mourning hall said every day more than 1,000 people, from primary school students to an 88-year-old man, have come to say goodbye to Luo. Bombardier, a Canadian aircraft manufacturer and partner of Luo's company, sent a representative to Shenyang to express its sorrow. In Beihang University, China's top aeronautics and astronautics institute and where Luo studied high-altitude equipment from 1978 to 1982, professors who taught him said he was a model for all students. "Luo once told me that being busy at work made him feel happy because ‘our nation had so many missions to accomplish'," said Wang Jun, a member of the Chinese Academy of Engineering who tutored Luo. Li Min, the instructor of Luo's class, said Luo's accomplishments far exceeded all expectations and his selfless spirit inspired admiration and respect. Luo had never boasted of his achievements, according to Li Zhaojian, who shared a dormitory with Luo during their time at the university. "I didn't know anything about his success and achievements until I saw them on the Internet and the TV. He used to keep a low profile." Huang Yuchen, a postgraduate from the School of Aeronautical Science and Engineering at Beihang University, said: "His story has been encouraging us. We selected the profession of aeronautics and we are determined to serve our motherland with our knowledge. We will follow Luo's path." In commemoration and respect, the Liaoning sounded its siren on Tuesday morning as the crew lined up along the bows saluting Luo.

China not a currency manipulator, US says (By Bloomberg) The yuan has gained 9.3 per cent in nominal terms and 12.6 per cent in real terms against the dollar since June 2010, the US Treasury said. China isn’t a currency manipulator under US law, though the yuan “remains significantly undervalued” and needs to rise further, the US Treasury Department said. China “has substantially reduced the level of official intervention in exchange markets since the third quarter of last year”, the Treasury said in a statement accompanying its semi- annual currency report to Congress on Tuesday. The yuan has gained 9.3 per cent in nominal terms and 12.6 per cent in real terms against the dollar since June 2010, the Treasury said. “It appears that the strategy of the last two administrations to use diplomacy rather than confrontation in dealing with the yuan’s value is having some positive results,” William Reinsch, president of the National Foreign Trade Council, a Washington-based business group, said in an e-mail after the report. “There is clearly room for further appreciation, however.” In declining to brand China a manipulator, the Treasury cited the reduced intervention and “steps to liberalise controls on capital movements, as part of a broader plan to move to a more flexible exchange-rate regime”. The US hasn’t designated another nation since 1994, when it named China. Critics of China’s exchange-rate policies, including former Republican presidential candidate Mitt Romney, say the nation deliberately suppresses the value of its currency, making its goods cheaper in overseas markets and costing jobs in the US “This report all but admits China’s currency is being manipulated, but stops short of saying so explicitly,” US Senator Charles Schumer, a New York Democrat, said in a statement. “The formal designation matters because there can be no penalties without it. It’s time for the Obama administration to rip off the Band-Aid, and force China to play by the same rules as all other countries.” Chinese Central Bank Governor Zhou Xiaochuan said on November 17 that full convertibility of the yuan will be the next step in an overhaul of the exchange-rate system. Signs that Asia’s largest economy is starting to recover after a seven-quarter slowdown is also supporting the currency. In addressing other trading partners, the Treasury said in the report that “it remains important that Japan take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy, by easing regulations that unduly deter competition”. The Treasury said it will “continue to press” South Korea to limit its foreign-exchange interventions to “the exceptional circumstances of disorderly market conditions and to commit to greater exchange-market transparency, including through the publication of intervention data”. Though the South Korean government doesn’t publish data on currency intervention, “market participants indicate that Korean authorities intervened on both sides of the market during the course of the year”. The South Korean won has strengthened 5.7 per cent against the dollar since the end of June, the best performance among the 11 most-traded Asian currencies. On the euro area, the Treasury said the region’s success in the next phase of fighting its debt crisis “will hinge on rapid implementation of institutions that strengthen the euro, and continued progress on economic reforms that support growth”. The US ran a US$295.4 billion trade deficit with China last year, about an 8 per cent increase above the 2010 level. Allowing the yuan to appreciate would make Chinese goods more expensive for American consumers than they are now, reducing US imports of the merchandise. The yuan climbed to a 19-year high on Tuesday after European officials reached an agreement on Greece and on signs that China’s slowdown is nearing an end. The yuan climbed 0.05 per cent to 6.2223 per dollar in Shanghai, a 1 per cent premium to the daily fixing, the maximum it’s allowed to fluctuate, according to the China Foreign Exchange Trade System. The US Treasury said it would pay “particular attention” to the pace of the yuan appreciation and “press for policy changes that yield greater exchange-rate flexibility, improve transparency, level the playing field for American workers and businesses, and support a strong, sustainable, and balanced global economy”. Because of the yuan’s appreciation, the US decision not to name China a manipulator isn’t a surprise, Ted Truman, a former Federal Reserve official and assistant Treasury secretary, said in an e-mail. “But we are still living with economic, financial and political after-effects of a decade of a very undervalued yuan,” said Truman, who is now senior fellow at the Peterson Institute for International Economics in Washington. China revalued the yuan, officially known as the renminbi, and ended its peg to the US dollar in 2005, allowing the currency to become convertible for trade purposes, giving banks more freedom to set interest rates and allowing some foreign institutional investors access to the country’s stock and bond markets. “China’s overall trade deficit has come down while the renminbi has appreciated and is trading in both directions on a given day,” said Phillip Swagel, who was an assistant Treasury secretary under President George W Bush and is now a professor at the University of Maryland in College Park. “With these changes, it is more difficult to label China a currency manipulator, especially when the Obama administration declined to name them previously.” John Frisbie, president of the US-China Business Council, said the Treasury “again made the right call. China’s exchange rate has strengthened over 30 per cent against the dollar in the past several years”. “The exchange rate has little to do with the US trade balance or employment,” Frisbie said. “We need to move on to more important issues with China, such as removing market access barriers and improving intellectual-property protection.”

China decries attempts to 'read too much into' passport map (By Reuters in Beijing) A pointer indicates where disputed islands and territorial waters are situated in the map of China that includes the South China Sea, printed on page 8 of the new China passport. A page in a Chinese passport that shows dashes which include the South China Sea as part of the Chinese territory. China said on Wednesday that people should not read too much into the placement of a new map in its passports that depicts claims to disputed maritime territory, after the United States said it would raise concerns with Beijing over the issue. The Philippines and Vietnam have condemned the new microchip-equipped passports, saying the map they incorporate violates their national sovereignty by marking disputed waters as Chinese territory. India, which also claims two Himalayan regions shown as Chinese territory on the map, is responding by issuing visas stamped with its own version of the borders. “The aim of China’s new electronic passports is to strengthen its technological abilities and make it convenient for Chinese citizens to enter or leave the country,” Foreign Ministry spokesman Hong Lei told a daily news briefing. “The issue of the maps in China’s new passports should not be read too much into. China is willing to remain in touch with relevant countries and promote the healthy development of the exchange of people between China and the outside world.” State Department spokeswoman Victoria Nuland said the United States had concerns about China’s map causing “tension and anxiety” between countries in the South China Sea. The United States, which has urged China and its Southeast Asian neighbours to agree on a code of conduct as a first step toward reducing tensions over the South China Sea, will continue to accept the new Chinese passports because they meet the standards of a legal travel document.

Yao Ming receives honorary PhD degree at HKU (China Daily) China's basketball legend Yao Ming, left, attends the 187th Congregation of the University of Hong Kong (HKU) where he is conferred Honorary Degree as an outstanding individual in Hong Kong, Nov 27, 2012.

Scandal-hit liquor maker halts packaging lines (Xinhua) A Chinese liquor maker suspended its packaging lines on Tuesday after being hit by a plasticizer scandal. Initial investigations indicated that liquor produced by Jiugui Liquor Co Ltd might be contaminated with plasticizer during the packaging process -- from plastic tubes and corks, according to Xia Xinguo, general manager of the firm. Xia said only the packaging lines are suspended while the production lines are still in operation. The scandal broke a week ago when a business news website ( reported that one kind of Jiugui liquor contained 1.08 mg per kg of dibutyl phthalate, a type of plasticizer. The report prompted an investigation by the food quality watchdog of the Tujia-Miao autonomous prefecture of Xiangxi, in Hunan province, where Jiugui is based. The results found the DBP in Jiugui liquor was higher than the 0.3 mg per kg standard, a provisional regulatory limit set by the Ministry of Health in June 2011. The food quality watchdog urged the liquor maker to determine the source of the plasticizer and make sure other products were not tainted. Plasticizers are used to thicken liquids but alcohol products do not need them, according to health experts. The chemicals can cause male reproductive problems as well as damage to the digestive and immune systems. The scandal sent Jiugui's shares tumbling and some of its products taken off the shelves. Shares closed at 34.69 yuan ($5.52) per share by midday Tuesday. It marked a third consecutive trading day its shares have dropped by the daily limit on the Shenzhen Stock Exchange. Most liquor companies have seen their shares contract over 10 percent since the scandal erupted, including Wuliangye Yibin Co and Hebei Hengshui Laobaigan Liquor Co. The least-affected company, Kweichow Moutai Co, has slumped 3.3 percent. The China Alcoholic Beverage Association said last week that large-scale tests on China's liquor showed that almost all alcohol products contained plasticizers, with an average level of 0.537 mg per kg.High-end liquor products contain more plasticizers than low-end ones. Some industry observers defended the liquor makers because there is no law or formal regulations on the levels of plasticizers liquor products are allowed to contain. Dai Qi, an official of Hunan Provincial Administration of Quality, Inspection and Quarantine, said the MOH has not put the provisional regulatory limit into the production standards for liquor products, so legally it is impossible to say whether Jiugui contain "excessive" amounts of the plasticizer.

China launches new communication satellite (Xinhua) A Long March-3B carrier rocket is launched in Xichang, Southwest China's Sichuan province, Nov 27, 2012. China successfully sent a French-made communication satellite "APSTAR-7B" into orbit with a Long March-3B carrier rocket launched from the Xichang Satellite Launch Center on Tuesday. China successfully sent a communication satellite into space on Tuesday evening. Conditions of Chinasat 12 are normal after it was launched from the Xichang Satellite Launch Center in Southwest China's Sichuan province at 6:13 pm. It has reached a preset orbit, according to a monitoring center based in Xi'an. The satellite, the 13th commercial orbiter operated by the China Satellite Communications Co Ltd, will provide telecommunications services for its customers in Asia, Africa and Europe. Manufactured by France's Thales Alenia Space, Chinasat 12 was launched by the Long March-3B carrier rocket. It was the 173rd launch mission for the Long March series of carrier rockets.

Hong Kong*:  Nov 29 2012 

Bruce Rockowitz named in probe of property buyers' use of offshore firms (By The Guardian in London) Investigation names Li & Fung chief Bruce Rockowitz among owners of British property who used a BVI firm to exploit tax loophole - Coco Lee and Bruce Rockowitz. Hong Kong billionaire Bruce Rockowitz has been named by the Guardian as part of a major investigation into the use of offshore companies to obscure the real identities behind secretive British property deals. Rockowitz - president and chief executive of garment wholesalers Li & Fung, husband of pop star Coco Lee and one of Hong Kong's most successful expatriate businessmen - bought a luxury London flat and transferred it to an associate using an opaque offshore technique. He was among the previously secret owners identified by the Guardian yesterday in a sample of almost 60 British homes and offices. They typify the 100,000 such purchasers who have set up offshore companies, largely registered in the British Virgin Islands (BVI), since 1999. The owners of BVI entities use them to hide their dealings in British property and to take advantage of tax loopholes. The new disclosures about property ownership follow a pledge by Vince Cable, the British business secretary, that his department would look at evidence of sham directors putting their names to thousands of anonymous offshore companies. "We are not complacent or naive. We recognise there are individuals who will seek to abuse or evade," he said on Monday. "We will investigate fully any specific allegations and ensure appropriate action is taken." Cable was responding to a worldwide investigation into offshore abuses by the Guardian, the BBC's Panorama programme and the US-based International Consortium of Investigative Journalists. The practice of using offshore companies to buy property or to exploit tax loopholes is not illegal. Capital gains tax, inheritance tax or stamp duty on property purchases can often be avoided by offshore owners. The tax breaks open to offshore buyers have attracted a flood of foreign property money into Britain, particularly into central London, forcing up house prices by almost 50 per cent since 2009. But until now, the full scale of this influx has been hidden by the anonymity conferred on the owners of BVI companies. Britain's land registry controversially allows offshore property owners to keep their identities secret, despite its status as a public record. Owners identified yesterday include Rockowitz, the former tennis professional who carved out a business career alongside fellow Canadian Allan Zeman. Colby International, the sourcing firm they founded in 1981, was sold in 2000 to Li & Fung, where Rockowitz works. Rockowitz bought a luxury flat in Knightsbridge, then transferred it to an associate. The flat was held in the name of a BVI entity, Billion Choice Investments Ltd. The BVI company was in turn placed in the ownership of an offshore trust, the London Trust, set up in the far-flung Cook Islands, in the Pacific, with Rockowitz himself named as the trust's beneficiary. The beneficiary was then switched, the flat sold for £790,000 (HK$9.8 million), and the cash placed in an associate's bank account. Rockowitz did not respond to invitations by the Guardian to comment and declined to comment when contacted by the South China Morning Post. Since 1999, 94,670 offshore entities have been set up in the BVI purely to hold British property. Purchasers pay £ 800 to £ 1,000 in fees to offshoring agencies for the privilege of not having their names made public.

More than 40 injured in Wan Chai bus collision (By Danny Mok) Rescuers attempt to free a stranded passenger with about 44 others in a three-bus pile up at peak rush hour in Wan Chai. About 45 passengers were injured on Tuesday when three buses were involved in a pile-up shortly before 7pm on Johnston Road in Wan Chai during peak rush hour. Police on Tuesday said a New World First Bus’ double-decker plying route 105 hit the back of another KMB bus on route 101 loading passengers at a bus stop at the junction of Johnston Road and Fleming Road outside the Tai Yau Building shortly before 7pm. The impact sent the second bus crashing into another KMB double-decker on the same route at the stop. Firemen had to deploy a mobile platform and force open the back window on the upper level of one of the buses before they could reach one seriously injured passenger. Most of the other passengers suffered minor injuries but two of them on First World buses were trapped for about 20 minutes before they were freed. One bus driver was unconscious when he was pulled from the cabin of his bus. All the injured passengers were sent to Queen Mary, Ruttonjee and Pamela Youde Nethersole Eastern hospitals. Investigators have launched a probe into the cause of the crash, the second major bus accident to happen within a week.

Tiffany & Co. tree lighting at Statue Square (By Vivian Chen) Jacky Cheung, a guest of honour at Tiffany's ceremony. The 18-metre-tall Tiffany & Co. tree set up in Central last year is lighting up Statue Square again this Christmas. The tree, adorned with ornaments, strings of pearls and the jeweller's signature blue boxes, was unveiled on Friday. Canto-pop king Jacky Cheung Hok-yau was a guest of honour at the event. Although in his 50s, the playful singer hopped on a wooden horse on a 24-seat carousel set up near the tree to pose for photos. Socialites including Deborah Hung, Daisy Ho Chiu-fung and Anina Ho photographed the tree while revelling in the festive spirit. The festive fun-land is open to the public until January 1. Guests can have their photos taken with Santa Claus or shop at a candy store. A pop-up book disguised as a large Tiffany & Co. box will spring open for two days only, on December 22 and 23, on the theme of the fabled carousel in New York's Central Park. Proceeds from the activities will be donated to Helping Hand, which supports more than 800 needy elderly in seven residential homes. "Christmas is a season full of love and joy, and I wish everyone a wonderful Christmas," Cheung said. "Funds raised from this event will not just help the elderly who are in need, but also show them our care and warmth during this holiday season."

Hong Kong regulator says IPO rules give power to probe (By Reuters) Ashley Alder, chief executive of the Securities and Futures Commission. Proposed new regulations for sponsors of IPOs in Hong Kong will give bankers greater authority to scrutinise their clients before they list, the head of the city’s securities watchdog said on Tuesday, referring to a controversial plan that could make banks liable for listing documents. Ashley Alder, chief executive of the Securities and Futures Commission (SFC), said responses to a consultation on initial public offering sponsor regulation would be released next month and include proposals to give sponsors more powers. “Fundamentally we will be saying a fair amount about how to establish greater authority for sponsors,” he said. Investment banks are opposed to rules that explicitly make sponsors of IPOs civilly and criminally liable for prospectuses, arguing competitive pressures and resistant clients can make it impossible for them to detect fraud. IPO sponsors, usually banks or corporate finance houses, prepare a company’s listing documents and perform due diligence to ensure they comply with Hong Kong’s listing rules. The consultation came after a number of companies that listed in Hong Kong ran into trouble shortly after going public. In April the SFC revoked the licence and announced a record fine for the sponsor of the 2009 listing of Chinese textile maker Hontex International Holdings. Alder said some of the industry had pushed back strongly against liability, fearful it would lead to bankers running the risk of going to prison. “Those who simply say ‘oh my god I’m going to go to jail’, you’ll only go to jail if you’ve done something seriously wrong,” he said in the interview on the sidelines of the third annual Thomson Reuters Pan-Asian Regulatory Summit. “This is not a question of doing a due diligence job a little bit shoddily and you’ll be marched off to jail. “The whole idea is to try to lower risk rather than increase it, so you lower risk for the sponsors because they can do their jobs properly, you lower risks for the markets because they have better gatekeepers and then you lower risks for investors.” In a speech to summit delegates earlier, Alder had urged Asian regulators to maintain high standards and come together to stop US and European regulators imposing their rules on the region’s financial markets. He told an audience of 550 people from the compliance industry that there was a danger a “one-size fits all” set of financial rules would be foisted on Asian banks and brokers by Western regulators unless the region’s watchdogs spoke up. “If Asia does not get properly involved in the global regulatory agenda, we will find that the US and European rules will be extended to us whether we like it or not,” said Alder. “The result could be an isolation of Asian markets from international finance,” he added. Banks in Asia have become increasingly concerned by the overseas reach of new US financial regulations. One big area of contention is the new rules on derivatives trading under the Dodd-Frank Act. US regulators want to ensure that the rules apply to cross-border trades between, say, a Wall Street and an Asian bank. Asian regulators are concerned that would mean banks in their countries would have to follow US and domestic regulation, which may in some cases clash and drain liquidity from their markets. In a rare unified move, regulators from Australia, Hong Kong and Singapore wrote a joint letter to the US Commodities and Futures Trading Commission (CFTC) in August asking them to review the overseas reach of these new rules. “The fact that this letter came from multiple regulators had a real impact and it undoubtedly changed the debate,” said Alder during his speech. Alder, who took up his post a year ago, said that it was vital that cross-border rules be internationally agreed, and that Asia had no interest in having laxer rules than the West. “There is no advantage of lowering our standards to attract business. This kind of regulatory arbitrage always ends badly,” he said. On a subsequent panel discussion, Krirk Vanikkul, deputy governor at the Bank of Thailand, said Western regulators needed to understand that Asian markets were different. “What Asia is trying to do is not overturn the system or reform. What we are asking for is some greater flexibility so we can design our own measures to suit our systems,” he said. Greg Medcraft, chairman of the Australian Securities and Investments Commission, said regulators had to make it easier for financial firms to operate across borders. “This is critical. Markets are global and we’ve got to find a way for making it easier for institutions to operate across markets and avoid duplication,” he said. Alder added that if Asian regulators did not push Western regulators to agree on a workable set of international rules, big banks could be forced out of the region’s markets. “The threat is that if we or Asian firms don’t play ball, international firms will find it hard to operate here, seriously harming liquidity in these markets. It could be a case of my way or the highway.”

Soap bubble artist gives performance in Hong Kong - Soap bubble artist Su Chung-tai is the Guinness World Record holder of "the most soap bubble domes created inside one another" (15 layers).

 China*:  Nov 29 2012

China launches Sri Lanka’s first satellite as India watches ties grow (By Reuters in Colombo) Chinese Defence Minister Liang Guanglie (right) meets with Sri Lankan Secretary of Defence and Urban Development Ministry Gotabaya Rajapaksa in Beijing on November 11. Sri Lanka launched its first communications satellite on Tuesday in partnership with a Chinese state-owned space technology firm, the Sri Lanka partner said, adding to unease in neighbouring India about Beijing’s growing ties with the island nation. The Sri Lankan government has emphasised the launch was a private effort, carried out by SupremeSAT (Pvt) Ltd and the China Great Wall Industry Corporation. But Sri Lanka President Mahinda Rajapaksa’s youngest son, Rohitha, has been credited in domestic media as the creator of the satellite. Vijith Peiris, chief executive of SupremeSAT, told reporters in Colombo that the launch from the Xichang Satellite Launch Centre in western China was successful. The joint launch marked the latest in a series of economic and military ties between the two countries, a relationship that is being closely watched by India. “It reinforces the impression that Sri Lanka is getting slowly but surely closer to China,” said Brahma Chellaney, an analyst at the Centre for Policy Research in New Delhi. “From a larger geopolitical perspective, it sends a message to India that a country in its own backyard is cosying up with China.” Economic and strategic rivals China and India fought a brief, high-altitude border war in 1962 and still have contested regions, though the defence relationship has improved. Rhetoric flared anew recently after China issued a new passport with a map that shows two disputed border areas as Chinese territory. India responded by stamping its own map on visas it issues to holders of the Chinese passports. China has been the largest lender to Sri Lanka, a US$59 billion economy, since the end of a three-decade civil war ended in May 2009. China had provided military equipment to the Sri Lankan government to defeat ethnic Tamil rebels. Since then, Sri Lanka has sought stronger defence ties with China, a fact that has irked India and the United States. Chinese Defence Minister Liang Guanglie visited Sri Lanka in September, offering grants to modernise Sri Lanka’s military training. Liang said the ties were aimed at maintaining regional stability and were not targeted at any third party. During a visit to China early this month, Sri Lanka Defence Secretary Gotabaya Rajapaksa, younger brother of the president, met Liang and agreed to consolidate bilateral cooperation. China has also become involved in construction of a strategic sea and air port in Sri Lanka’s southern district of Hambantota, also Rajapaksa’s constituency. It is also involved in a coal-fired power plant, expressways, railways and irrigation works. India has not officially protested the increasing Chinese influence in Sri Lanka and has even said the latest corporation on space technology was not a concern. “It’s a commercial communication satellite. It’s going to be in a Chinese (orbit) slot and not in a Sri Lankan slot. At that far, you can’t do anything and it’s not a concern for us,” said an Indian diplomat based in Sri Lanka, speaking on condition of anonymity. China, like other nations with the technical capability, has launched numerous satellites on a commercial basis for other countries.

Death of respected aircraft designer leaves military, and nation, in shock (By Liu Ce in Shenyang and Zhao Lei in Beijing) In the eyes of his teachers and classmates at college, he studied hard and was always happy to lend a helping hand; his colleagues respected him because he had devoted all his life to his work; and for Chinese military fans, he was the man who enabled the country's first carrier-based fighter jet to fly high. However, the respected Luo Yang, a senior aircraft designer, can no longer hear these words of praise. Luo, general manager of the Shenyang Aircraft Corp, which develops and manufactures the J-15 fighter jet, died of a heart attack on Sunday morning in Dalian, Liaoning province, soon after the carrier-based aircraft successfully completed landing and take-off tests on the country's first aircraft carrier, the Liaoning. He was 51. China Central Television broadcast footage of Luo's final hours on its prime time news program on Monday, showing he was smiling when leaving the Liaoning. CCTV quoted company sources as saying Luo had felt unwell on the carrier but carried on with his work. "After Luo left the Liaoning, Xie Genhua, our corporation's Party chief, went to receive him and found he did not look well. Luo then returned to the hotel and in his suite, had a sudden heart seizure," Wang Enfu, chairman of the labor union at Shenyang Aircraft Corp, told China Daily on Monday. "A driver and a local guide rushed him to the hospital, but he could not hold on, even though the car was only a few hundred meters away from the hospital." "The tragedy happened all of a sudden, we could never have anticipated it," said Liu Yongtao, deputy general manager of the company. "Last night, after his body was sent back to Shenyang, we arranged for the hearse to tour the factories in our company and the Shenyang Aircraft Design Institute where he worked for nearly two decades. "Thousands of our researchers, technicians and workers crowded alongside the roads to salute Luo and bid farewell to him." Luo made his final call to his wife on Saturday, telling her he was pleased that all test missions had been completed, according to Liu. He said the company is now preparing for a mourning ceremony to be held on Thursday in Shenyang, capital of Liaoning province. An LED screen on the top of the main office building in the company's compound displays a dedication to Luo. "Your name will be enshrined for your dedication to China's aviation industry, and your virtue and contribution will last forever in the eulogy from the blue sky," the screen reads. The main page of Shenyang Aircraft Corp's website has been changed to black and white. The company also opened a mourning hall on Monday afternoon in the SAC Hotel. Luo studied high-altitude equipment at Beihang University and graduated with a bachelor's degree in 1982. After graduation, he joined the Shenyang Aircraft Design Institute and was gradually promoted to deputy director of the institute. In 2002, Luo was appointed vice-chairman of the Shenyang Aircraft Corp and later became general manager and chairman. Both the design institute and corporation belong to Aviation Industry Corp of China, the country's top aircraft manufacturer. "He was very diligent and hard-working when he studied here," Wang Xueren, a retired teacher at Beihang University who tutored Luo's class. Wang said although Luo usually kept a low-profile, he was an enthusiastic participant in class activities and often came up with good ideas. Chen Shuhuo, a former classmate of Luo, remembers him fondly. "Luo was an easy-going boy and the organizer of sports events in our class. All the classmates knew he was always ready to help and had a strong sense of responsibility," Chen said. "He was a good student and a dedicated man," Wang Xueren said. "Most of his classmates have left the aviation industry, but he persisted." "He turned down two opportunities to be promoted because he didn't want to leave the research-and-development field," Chen added. "We feel extremely proud of you," reads a condolence letter sent by Wang Xueren and two other teachers. "Every one who has contributed to, and toiled for, the nation's aircraft carrier development deserves our respect. And now more and more young people with dreams and determination are joining this glorious team. I hope this will make you feel gratified," Yang Yu, a well-known news commentator, wrote on his micro blog. His words were echoed by netizens, who posted images of candles on their micro blogs to demonstrate their condolences and respect. "He was too tired. Now he can finally have a rest," Wang Enfu said.

Chinese chefs get a taste of Australian beef and lamb (By Mike Peters and Fan Zhen) Australian meat has distinct flavors and richer texture. There were lion dancers, diplomats and a parade of 14 prominent Beijing chefs, toqued and jacketed for the formal occasion. But the eyes of the 200-plus guests at the gala dinner for the Red Majesty Chef program rarely strayed from their plates. From crispy-fried beef parcels to Chinese lamb kofta with a pepper-honey glaze, a stream of 12 dishes the chefs created kept the crowd hungry for more. The goal of the year-long program of Meat & Livestock Australia is to promote a culinary exchange and bring beef and lamb from Down Under into Chinese cuisine - while taking high-end Chinese cuisine to the outside world. "There will be more training and recipe development," says the meat association's Tang Xuehong. "It is a continuous program and will become a platform for Chinese chefs to exchange ideas, explore and experience Australian beef and lamb. "MLA will also expand the program into other cities, so RMC chefs will lead the trend of using Australian red meat in Chinese cuisine." Tang says that in 2011, Australia exported 7,754 tons of beef to China and 21,234 tons of lamb. "As Chinese consumers are very conscious about their health and food safety," she adds, "we expect the numbers to increase as consumers' disposable income increases." Xu Long, head chef of Western cuisine at Beijing's Great Hall of the People.

China's airport construction takes off (By By Zheng Yangpeng) The terminal 2 building at Hongqiao International Airport in Shanghai. The National Development and Reform Commission approved 24 projects to build new airports and expand existing airports this year. The overall investment was estimated at about 100 billion yuan (US$15.9 billion). Local governments drive expansion in the sector with lofty goals, raising fears of overcapacity - As the global aviation industry is being hit by a downturn due to flagging tourist demand, China is seeing an airport construction boom driven by local governments. Last month, Hunan province said it planned to build 21 general aviation airports in the next 18 years. Earlier, neighboring Hubei province also said it would build seven commercial airports and two general aviation airports in the next 18 years. General aviation airports are designed to handle four to 10-seat aircraft, as well as planes used for agricultural, industrial and rescue purposes. The lofty goals - though still in the public consultation phase - stirred media debate, and raised questions about the need to have so many airports in the two provinces. In July, the State Council issued a document to encourage the development of China's civil aviation industry. In the same month, the Civil Aviation Administration of China, or CAAC, said that the country plans to build 82 new airports and expand 101 existing ones across the country from 2011 to 2015. This year alone, the National Development and Reform Commission, the country's top economic planning agency, approved 24 projects to build new airports and expand existing airports, with an estimated investment of around 100 billion yuan ($15.9 billion). Li Jiaxiang, head of the CAAC, said that China's civil aviation development required some degree of "advanced thinking". "China now has only 182 commercial airports. The number is no more than 300 if general aviation airports are also counted. I would say that the airport sector in China is underdeveloped, rather than overdeveloped," Li said. However, Li admitted that most of China's airports are now running at a loss. Of the 180 airports China had in 2011, 130 were in the red, with a combined deficit of about 2 billion yuan. In a recent report, the Beijing Evening News said that almost all of the country's feeder airports are posting losses. 

Hong Kong*:  Nov 28 2012 

Greens home in on Fan Ling golf club (By Kelly Ip) The 170-hectare Fan Ling golf course could be redeveloped into a massive housing complex for 100,000 people, according to an environmental group. Green Sense made the proposal to help the government - which wants to develop three areas in northeastern New Territories - "in saving time and money." But the proposal immediately drew fire from some members of the Hong Kong Golf Club, which operates the course. Herman Hu Shao-ming, chairman of Ryoden International and son of its founder, Hu Fa-kuang, said it would be ridiculous for Hong Kong not to have a world-class course, given its global position. "I don't mind if I can't play golf, but Hong Kong must have its own course as an international city to attract investors to visit," said Hu. He said Singapore has more than 20 courses, some of them bigger than the Fan Ling one. Green Sense said a group of young architects is ready to draw up a blueprint for the redevelopment of the course at south Kwu Tung. It could even include a replica of the old Lai Yuen park of Mei Foo as an alternative to Ocean Park and Disneyland. Green Sense president Roy Tam Hoi-pong said since the land is owned by the government and leased by the golf club, "the government can take it back after giving the club a year's notice." He added: "We chose this specific course for a redevelopment plan as it's the only course whose land belongs to the government. It's also close to the three development areas at northeastern New Territories proposed by the government." He expects residential buildings can be completed in 2017 if Green Sense's proposal is adopted - five years earlier than the government's target date for finishing the building of homes in the area. "Following our proposal, the government can save time and money taking back land from residents of north Kwu Tung, north Fan Ling, Ping Che and Ta Kwu Ling," Tam said. The Fan Ling course is frequented by tycoons, including Cheung Kong Holdings chairman Li Ka- shing, and former officials, including Frederick Ma Si-hang, who used to be the secretary for commerce and economic development, and Ambrose Lee Siu- kwong, ex-secretary for security. The club, established in 1889, has a 20-year waiting period for applicants. The secondhand market price for membership is around HK$14 million.

Hong Kong parking space prices zoom to record (By Ray Chan) Some owners make HK$300,000 (US$38,000) profit in quick resales of spaces, which escaped stamp duty - Cheung Kong sold a spot for HK$1.3 million (US$180,000) - the price of two vans. The soaring price of a parking space in Hong Kong is raising fresh concerns that money flowing into the city could further inflate the red-hot property market. Despite a subdued economy and a new 15 per cent stamp duty on non-resident and corporate buyers, prices paid for parking spots in Tai Wai have reached over HK$1.3 million - topping the heights reached by the market before the 1997 property bubble. Some owners of parking slots are reselling newly acquired spaces for profits of up to HK$300,000. Li Ka-shing's flagship developer, Cheung Kong, sold 514 car parks, priced from HK$980,000 to HK$1.3 million, in its real estate project in Tai Wai over the weekend. The firm made HK$600 million from the sales, and, separately, 200 car parks were made available for lease. Roy Choi, a sales manager at Centaline Property Agency's Tai Wai office, said a handful of the car park owners resold their parking spots at quick profits of between HK$200,000 and HK$300,000, depending on their location. Traditionally, parking places that are near elevators and exits sell at a premium. Eric Wong, chairman and chief executive of Richburg Motors, a luxury car dealership, said the high prices of parking spaces underscored a policy failure that resulted from the government not extending the additional stamp duty charged on residential property to car parking bays. "The overall affordability of car parking spaces has been lifted significantly by speculators from the mainland, and the record price level in Tai Wai is very misleading," said Wong. At a price of HK$1.3 million, he said, a car park cost the same as two luxury multi-purpose Toyota Alphard vans. Wong said the expensive car parks in suburban areas should serve as a "a warning sign of more illegal parking and [the] intensifying congestion problems ahead". Since surpassing their previous peak reached in 1997, home prices have once again risen to levels that are beyond the reach of many people. Patrick Chow, head of research at Ricacorp Properties, said property prices jumped 21 per cent in the first 10 months of the year. "Property prices now look dangerously overvalued," said Gareth Leather, an economist at Capital Economics, a London-based macroeconomic research house. In a note dated November 16, Leather said "significant price falls in Hong Kong's property market of around 30 per cent are needed and likely before the market returns to balance".

MPF regulator moves to slash pension scheme fees (By Lai Ying-kit) Wu Hung-yuk and John Poon, of the Mandatory Provident Fund Schemes Authority outline cost-cutting measures for MPF providers. Operators of MPF pension schemes could be asked to slash administrative fees for all their funds, under reforms proposed by the pension regulator on Monday. The Mandatory Provident Fund Authority’s suggestions for long-term structural reforms, released along with a consultancy report, noted that among 40 fund schemes, only 16 offer relatively low administration fees. The reform proposals call for lower administrative costs for all funds. To help reduce the fees, the authority also recommends that trustees use more electronic and online platforms for transactions, and employees – working Hongkongers who make MPF contributions – should consolidate their different accounts with one operator. It suggested setting a ceiling for administration costs charged for fund schemes, and introducing a not-for-profit organisation to manage funds. The authority released its reform proposals after a consultancy study found there was room to reduce trustees’ administration fees. The study was commissioned by the authority and conducted by Ernst and Young. It found that employees, on average, were paying trustees 1.74 per cent of about HK$400 billion in assets under management. Of that amount, 0.75 per cent – or three-sevenths – goes to pay administration fees. That is much higher than the level in many other countries such as the United States, where it is 0.1 per cent on average. The authority said the proposed measures could reduce the ratio to 0.4 per cent. The authority’s chairwoman, Anna Wu Hung-yuk, said at a press conference the proposals were aimed at across-the-board reforms to increase the provident fund’s efficiency.

 China*:  Nov 28 2012

Price comparison: How much groceries cost in Hong Kong, Beijing and London - investigates the price variations across the three cities - Shoppers in Beijing are paying more for some of their groceries than in other major cities. After revealed earlier this month that Starbucks charges its Beijing customers 22 yuan (HK$27.5) for a cup of regular coffee that only sells for 11 yuan in San Francisco, we decided to find out whether such price hikes were commonplace in China. To kick off our price comparison series, we began by checking the prices of 10 grocery items in mid-range supermarkets in Beijing, Hong Kong and London. Using the most up to date exchange rates, we converted each price to HK$. We found that when it comes to grocery shopping, a majority of items in our China basket cost more than those in our Hong Kong and London baskets. Head & Shoulders shampoo was more expensive to buy in Beijing than in London. Baby milk formula was by far the most expensive in Beijing. Thai rice was pricier in London - despite being sold at a discount at Sainsbury's supermarket. 


Chinese insurer Ping An hits out at Wen Jiabao report (By Agence France-Presse in Beijing) China's government granted Ping An a waiver from a requirement that large financial companies be broken up in 1999. Chinese insurance company Ping An threatened legal action on Monday after a media report linked a key government decision about the company to shareholdings held by relatives of current Premier Wen Jiabao. The New York Times said on Sunday that the chairman of Ping An Insurance wrote personally in 1999 to Wen, who was vice-premier at the time, and met his wife as the government mulled a decision to split up the company. Following the lobbying, it said, the government granted Ping An a waiver from a requirement that large financial companies be broken up. An investment vehicle later controlled by relatives of Wen bought shares in Ping An at a significant discount following the government decision, long before most other investors could buy into the stock, the report said. The company went on to become a hugely influential insurer and shareholdings held by Wen’s family grew hugely in value, peaking at US$2.2 billion in 2007, the paper reported. The company is now China’s second largest life insurer. Last month The New York Times reported that financial records showed Wen’s relatives had controlled assets worth at least US$2.7 billion, a report that China branded a smear. Ping An said in a statement on Monday that “recent media coverage related to the company” contained “serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic”. Ping An “will take appropriate legal action commensurate with the damage and adverse impact the media reports have caused to the company”, the statement said, without elaborating. A source close to Ping An said the statement was a response to The New York Times report but that the company “doesn’t want to directly point to which media” in an official statement. The source confirmed that Ping An’s chairman Ma Mingzhe wrote to Wen in 1999, when the government was considering breaking up the company, but said that the Times article had quoted the letter out of context. Asked by AFP about the meeting between Ma and Wen’s wife Zhang Beili, Ping An said it had no comment about the reported meeting. The company added that “Ping An does not know the background of the entities behind our shareholders”. Wen is expected to step down as premier in March, when he will be replaced by current Vice-Premier Li Keqiang.

Hong Kong*:  Nov 27 2012 

Beijing may scrutinise Hong Kong laws, says Rita Fan (Joshua But) Hong Kong residents should not be surprised if the Standing Committee of the National People's Congress exercises its power to scrutinise local laws, veteran Beijing loyalist Rita Fan Hsu Lai-tai said yesterday. Fan's view echoed that of Zhang Xiaoming, deputy director of the State Council's Hong Kong and Macau Affairs Office, made in an article last week on the implementation of "one country, two systems". That opinion was "hugely misleading", Civic Party leader Alan Leong Kah-kit said, as the power of the NPC Standing Committee to review Hong Kong legislation was limited under the Basic Law. Fan, who also sits on the committee, said the national legislature had been "relatively lax" in wielding its power and might take a "more rigid" approach. "The article might be reminding us that there exists an arrangement [for the committee to scrutinise local laws], so that we won't be surprised when the power is exercised," she told TVB show On the Record. Under Article 17 of the Basic Law, laws enacted by the Legislative Council must be reported to the NPC Standing Committee. The committee may return a law related to foreign affairs, national defence or mainland-Hong Kong relations if it is judged inconsistent with Hong Kong's mini-constitution. Of the more than 500 new laws enacted since the handover, none had been returned by the committee. Leong said he was "taken aback" by Fan's remarks. "It gives Hong Kong people the impression that the Standing Committee holds wider powers than it has, to monitor local legislation," he said. "This is simply not the case. "We should stick with the Basic Law, which is the ultimate safeguard of 'one country, two systems'."

Women's badminton pair Zhao and Tian win doubles at Hong Kong Open, prove Olympic success no fluke (By Chan Kin-wa) Women's pair Zhao Yunlei and Tian Qing prove a point over Olympic rivals in final of Hong Kong Open as China make it a clean sweep - Tian Qing (left) and Zhao Yunlei (right) of China celebrate after beating Wang Xiaoli and Yu Yang in the women's doubles. Olympic Games champions Zhao Yunlei and Tian Qing of China proved their success in London this summer was no fluke when they beat compatriots Yu Yang and Wang Xiaoli in the women's doubles final at the Yonex-Sunrise Hong Kong Open yesterday. On a day when the Coliseum in Hung Hom was packed with more than 5,000 fans, the Chinese shuttlers made a clean sweep of all five titles, starting with Zhao and Tian, who won 22-20, 14-21, 21-17. The victory was an important one because many felt their Olympic gold medal wasn't fully deserved. Reigning world champions Yu and Wang were the top seeds in London but were thrown out of the Games - along with three other pairs - for deliberately losing games at the group stage to engineer a better draw in the knockout rounds. Yesterday's final was the first time Zhao and Tian had met Wang and Yu in a competitive match since the Olympics. "We didn't feel we had to prove ourselves here," insisted Zhao, who, two hours later, combined with Zhang Nan to take the mixed doubles title, beating Xu Chen and Ma Jin 21-17, 21-17 in the final. "The Olympics are over and we'd rather not dwell on what happened in London. We've moved on from that and are looking to the future. Of course, we're very happy to have won here by beating the world champions. "We are ranked No 1 in the world and we are the Olympic champions, so everyone's gunning for us, not just the old guard but also newer players who are keen to make their mark. We are very aware of this challenge, so there is no way we would ever be complacent." Yu admitted she and Wang did not deserve to win as they made far too many unforced errors in the final. "We haven't trained much since the Olympics, so physically we're not at our best," Yu, the 2008 Beijing Olympic Games champion when she partnered with Du Jing, said. "If your fitness level drops, you are bound to make silly mistakes." In the men's singles final, world No 1 Lee Chong Wei of Malaysia had to settle for the runners-up prize after losing to Chen Long, 21-19, 21-17. Chen, widely considered the heir apparent to Olympic and world champion Lin Dan, was well beaten by Lee in the semi-finals at the London Games but the 23-year-old was in commanding form yesterday, winning his second Super Series title in as many weeks. "I didn't put too much pressure on myself ahead of the final, because I knew I was up to the challenge of taking on the world No 1," Chen, who won the China Open in Shanghai a week earlier, said. "But there is still a long way to go if I want to be the best player in the world. Indeed, players such as Lin Dan, Lee and Taufit Hidayat are all good models for me to learn from." Lee offered no excuses for his defeat but said a hectic schedule this year had sapped his energy. "The Hong Kong Open is my third Super Series event since the Olympics. I also played in Japan and Denmark," the 30-year-old said. "On top of that, I also spent a lot of time preparing for my wedding so, yes, I guess I am mentally drained," added Lee, who married former professional player Wong Mew Choo earlier this month. "I'm pleased I reached the final here but now I need to get some rest. I'll probably skip the Macau Open [this week] and maybe also the Super Series finals [in Shenzhen next month]. But I will consult my coach first." The women's singles final was a repeat of the London Games final, with Li Xuerui thrashing compatriot Wang Yihan, the world No 1. Li, who needed three games to clinch the Olympic gold medal, had an easier task in Hong Kong. After taking the first game 21-12, Li was leading 11-3 in the second when Wang retired injured. "I'm disappointed," Wang said. "But I didn't want to aggravate the knee injury I sustained at the Denmark Open." Fu Haifeng and Cai Yun rounded off a successful day for the Chinese with their 21-16, 21-17 win over Malaysia's Koo Kien Keat and Tan Boon Heong in the men's doubles final.

Sabatini marks 20 years of Italian cuisine in Tsim Sha Tsui (By Vivian Chen) Francesco Sabatini (left), Walter Kwok and Silvestro Sabatini. Sabatini Ristorante Italiano in Tsim Sha Tsui celebrated its 20th anniversary with the appearance of two of the founders, brothers Silvestro and Francesco Sabatini, making it more special. In his speech, restaurant owner Walter Kwok reminisced about the memorable dinner he and his wife had at Sabatini in Rome more than 20 years ago. "Sabatini is my favourite Italian restaurant. I was attracted by it when I travelled to Rome all those years ago and I was determined then to bring Sabatini to Hong Kong," he said at the event on November 17. Meanwhile, Silvestro Sabatini thanked Kwok for two decades of partnership. Other notable figures who attended the event were former chief secretary Anson Chan Fang On-sang and Kevin Chan, the vice-president and general manager of The Royal Garden. They were also on hand to cut the ribbon and the giant birthday cake. Guests savoured a special menu that included both authentic Roman cuisine, such as ravioli and pan-fried veal, and seasonal white truffle dishes created by the Sabatini brothers and the restaurant's sous chef, Andrea Oreste Delzanno.

Harbour watchdog backs yacht club's proposal for racing facilities (By Olga Wong) Harbourfront Commission supports plan for facilities to host international races and provide a permanent home for the Maritime Museum - Harbour watchdog backs yacht club's proposal for racing facilities. A harbour watchdog has backed a proposal to make room on the harbourfront for an international yacht race village and a permanent site for the Maritime Museum in Causeway Bay. The Harbourfront Commission hopes the government will factor in such facilities in its work on the Central-Wan Chai Bypass and Island Eastern Corridor Link before it is too late. The proposal, put forward by the Royal Hong Kong Yacht Club this month, is expected to attract international yacht races like Volvo Ocean Race and America's Cup World Series at the former public cargo handling area next to the club. It involves a hectare of land and a water area of about two hectares. The water area, with additional breakwaters, would feature international boat shows and provide a floating stage for cultural performances, while the land would be used for small-scale shopping and dining facilities, a permanent site for the Maritime Museum and a possible stop for water taxis. The museum has moved from Stanley and will reopen at Pier 8 in Central in January. Although the proposal was well-received by the commission, it presents two challenges: it involves a reclamation for a permanent breakwater of about 470 square metres, and the ideas were only proposed after tunnel construction works in the area were tendered. Adding the breakwater involves the harbour protection ordinance, which requires that the Legislative Council agrees a reclamation is necessary and in the public interest. Regarding tunnel work, the club said contractors needed to be instructed now to provide flexibility for future facilities - such as including a deeper seabed, public access and basic utilities like water, power and sewage systems, or risk incurring extra costs and delays later. "The proposal has merits and was well received by our members," commission chairman Nicholas Brooke said. "We hope the government will plan ahead and allow flexibility for future facilities." Brooke said the Planning Department would look at the feasibility of the proposal in its study introducing water recreation and open-air dining facilities to enhance the new waterfront in Wan Chai and Causeway Bay. Roger Eastham, the club's marine services manager, said: "Our concern is the development will be made without consideration of these facilities." Eastham said international organisations were genuinely interested in holding yacht races in the city but were discouraged by the lack of basic waterfront facilities, such as space for a viewing arena, a stage and electricity. The club would take this opportunity to dispel the perception that sailing is only for the rich. "We just want to improve the waterfront from cultural, leisure and sport perspectives. It's not something we want to own or operate," Eastham said.

TVB executive says no room for new players (By Amy Nip and Vivienne Chow) In the first of a two-part series, TVB executive Mark Lee Po-on discusses the threat and 'unfeasibility' of new stations in the free-to-air TV industry - TVB's Mark Lee Po-on insists ad revenue cannot support more players. Photo: May Tse. If the battle over new free-to-air television licences is as much about public opinion as it is about the government's long-delayed decision, then TVB executive director Mark Lee Po-on is coming out swinging. While a recent poll by the University of Hong Kong found that 85 per cent of the city's viewers want more choices, the two existing terrestrial stations, Television Broadcasts (TVB) and Asia Television (ATV), have been the most vocal critics, arguing that there is simply not enough advertising revenue to support more players. "We are not against having more [fishermen] join us to catch fish, but you have to create more fish in the sea first," Lee said. TVB is fighting the new licence applications by City Telecom (CTI) and subsidiaries of iCable and PCCW on three levels: on government procedure, public opinion and in the political sphere. Lee has questioned the government's right to award new licences before TVB and ATV's latest licences (which were secured with the promise of vast investment) will expire in 2015. He is prepared to go to court to press the claim, and has written to all lawmakers, Executive Council members and board members of the Office of the Communications Authority for support. "If others are escalating this [dispute] to this level, we have to follow," Lee said, perhaps referring to City Telecom chairman Ricky Wong Wai-kay's high-profile "please" for an answer on the licence applications, which the government has been considering for more than 1,000 days. TVB planned to offer better benefits to its staff. From next year, they would work five days a week like many office workers in Hong Kong, and would get pay rises according to the inflation rate. But if anything goes wrong, the company would have to take the opposite direction. "The bottom line is, if there's no money, we will have to cut costs. And there's no way we can improve the quality of our productions." Would this be Plan B if more competitors emerge? "It would be inevitable," he says. "The government must be clear about its logic and rationale [about granting more free TV licences]. It owes society an explanation on how many licences Hong Kong can accommodate. The government has never been clear," Lee said. Commerce Secretary Greg So Kam-leung, he says, has been reluctant to even discuss the issue. "Greg told me: 'Mark, let's not talk about free-TV licences today.' What else can we talk about?" Lee wants the government to clarify three things: how many licences it will issue in the long run, how it arrived at that number and when it will issue them. According to Lee, the government's consultants never contacted TVB or ATV when they assessed the television market, raising concerns about the accuracy of their studies. Maintaining a tight grip on advertising and content, while introducing competition would kill the industry, the executive argued. "There is no government around the world, which would bring in a few more stations, knowing they would fail in the end. Such behaviour is not responsible," he says. But it seems the viability of stations is not the main concern of the city's viewers. While millions of eyes are glued to TVB's shows, audiences are quick to complain about programme quality and illogical plots. Actor Raymond Lam Fung appears invincible to bullets or explosives in his role as a police narcotics officer in the action drama Highs and Lows. A bottle of oolong tea appears on Qing dynasty emperor Daoguang's desk in Curse of the Royal Harem. The same faces appear repeatedly in various shows: actor Law Lok-lam "dies" five times in different dramas aired on a single day. Dramas tend to be restricted to a handful of genres featuring either an upper-class family's dispute, or the wives of an ancient emperor fighting for his love - the kind of tear-jerkers housewives enjoy after washing the dishes. It is in stark contrast to shows, such as Seven Women, that TVB produced in the 1970s, challenging viewers' minds and tastes. And worst of all, some online users have nicknamed the station "CCTVB", accusing the broadcaster's news arm of taking its lead from the mainland's official broadcaster. However, Lee rejects the criticism. He says TVB respects editorial independence and gives enough freedom to its creative team, allowing it to produce dramas like last year's hit When Heaven Burns, which won the hearts of young viewers (who usually reject free-to-air channels) with its subject matter - cannibalism - and political undertones. But amid that creative freedom, ratings remain king, Lee says. "Why would [TVB] have to produce programmes that have low ratings? They can't generate revenue. No commercial operator would create products that have no market. We won't go against the market." So, while ATV's major investor, Wong Ching, chooses to dance Gangnam Style outside the government headquarters during a protest against the licences, Lee, nicknamed "the maths man", centres his argument on the figures. While licence applicants cite TVB's billion-dollar profits to support their argument that the market is big enough for more, Lee thinks otherwise. "It would be harsh for me to put it this way, but TVB is earning more at the expense of ATV," he says. In 1996, TVB earned HK$2 billion from advertisements, while ATV earned HK$855 million. By last year, Lee's station was earning HK$2.8 billion, while ATV only had HK$100 million, he said. Local television advertising revenue remains at about HK$3 billion, Lee says, much lower than advertising monitor's estimate of HK$18.2 billion last year. And with ATV and TVB spending HK$2.5 billion between them, the money would soon run out if CTI lived up to its pledge to spend HK$1 million per hour on its proposed drama series. There is a big difference between the two stations' revenue and admanGO's figures because they offer hefty discounts to major advertisers and frequenters, Lee, a member of the Hong Kong Institute of Certified Public Accountants, says. He worked for accounting firm KPMG from 1977 to 1987 prior to his television career that spans both TVB and ATV. "If there is indeed HK$18 billion worth of advertising, I won't really care how many stations there are," he says. Advertising revenue has fluctuated in recent years, slumping after the severe acute respiratory syndrome (Sars) scare in 2003 and dipping again in 2009 after the economic crisis. When the economy goes down, advertising is the first thing many firms cut. The amount that companies devote to television advertising has not increased as more channels have been added. "Before 2007, there were four analogue channels in the city. The number went up to more than 10 after the introduction of digital channels, including our three [channels] and ATV's four," Lee said. "But having more channels doesn't mean more advertising revenue." With more stations to choose from, he says: "Total advertising revenue could increase a little, but that definitely won't be a large increase." And there are other challenges for the industry. Hongkongers work ever longer hours and are likely to become more selective about which channels - if there are more available - they should devote their time to. "People need to work and to sleep. It's a global trend that they are watching less TV," Lee said. There is also increasing competition in the ad market - internet ad revenues grew 27 per cent last year while magazine advertising was up, according to admanGo. "You can see all the outdoor ads in MTR stations. Video ads appear in buses' TV sets and even in lifts," Lee said. He draws on his own experience at the helm of ATV between 1992 and 1996 to explain the likely consequences of too many stations competing for too little revenue. "You cut the costly local productions and buy overseas dramas," he says. Dramas produced elsewhere are available at a fraction of the cost of locally produced series. "I cut the hours of drama production from 600 to 260 [at ATV]," he recalls. The struggling station, which ran two dramas of its own every day during the 1990s, has since purchased more dramas from the mainland and the rest of Asia for dubbing. ATV still produces variety shows, but local dramas have been completely wiped out. Lee says the situation is aggravated by the government's reluctance to allow the stations to expand beyond Hong Kong's small market. While their signals spill over into the heavily populated Pearl River Delta, ATV and TVB are not allowed to air their own ads. Instead, they have to hand over the rights to the mainland authorities for a paltry annual fee of less than HK$100 million. TVB has made overtures during discussions on the mainland-Hong Kong Closer Economic Partnership Arrangement, but there has been no sign of a breakthrough. The uncertainty over the new licences has also stymied TVB's plans for overseas expansion, which might be risky. To step up its presence in the West, over the last six months it was planning an international version of the English-language Pearl channel to be broadcast on satellite stations. News would be its focus, mixed with travel shows and programmes about Chinese culture. But Lee had to turn his attention to finding ways to fend off rivals, and he has harsh words for Ricky Wong. "I don't like the aggressive way he does things." He says Wong's CTI plotted to poach half of TVB's 80-strong drama team in one weekend last year. "[CTI] wants to paralyse our operations. In the end, 25 of our staff quit. … If it is working for the well-being of the whole industry, it should train its own people instead of doing something this hostile. "He keeps bashing our station's quality, but at the same time recruits our people and highlights what TVB dramas they worked on in the past." But Lee strikes a more optimistic note when he talks of reforming the station's operations - regardless of the competition. "People are craving openness, and we are heading in that direction," the TVB executive says. For the first time ever this year, for instance, TVB invited members of the public to choose the winner of the Miss Hong Kong beauty pageant. But the experiment backfired, with the system crashing as millions of people tried to cast their votes. The winner was eventually chosen, as in previous years, by a panel of judges. This has not deterred Lee. Viewers will be able to vote for their favourite actor, actress and drama in TVB's annual awards show at the end of this year. It is also going to scrap its three-decade-old Jade Solid Gold Best Ten Music Awards Presentation in favour of a more authoritative show jointly organised by TVB and three radio stations. The show - which other stations say has yet to be finalised - will also feature public voting. "TVB does not have hegemony. We want to give the power back to the people," he says. Lee emphasises that his station is an institution. "Victoria Harbour, Ocean Park and TVB come to people's minds when they talk about Hong Kong. The wrong policy could crush the 45 years of achievements that TVB has attained."

TVB shelves HK$50m plan for international channel (By Amy Nip and Vivienne Chow) Fears of rising competition for advertising due to rival applications for free-television licences lead to ambitious scheme being put on hold - Mark Lee Po-on, Executive Director and Group General Manager of TVB. TVB has shelved a plan to launch an international English channel in the face of uncertainties in the free-television market, group general manager Mark Lee Po-on has revealed. Over the past six months, the television station has held internal discussions on launching a satellite channel to target English-speaking Chinese around the world, Lee told the South China Morning Post. The project was to have been an "international version of the Pearl channel" broadcasting to the United States, Canada, Australia, Europe, Singapore and Malaysia, he said. TVB estimated it would cost HK$50 million to set up and expected the operation to break even after three years. "Now we will have to reconsider the plan," he said. "We cannot guarantee that the business environment [for domestic free television] will remain stable." According to the initial plan, the new channel was to focus primarily on news broadcasts. It would also serve as a platform to promote aspects of Chinese culture such as kung fu and tai chi, and to introduce Hong Kong through travel programmes. Lee said an English channel, rather than a Cantonese one, could appeal more to the offspring of Chinese emigrants living in the target destinations, who tended to communicate primarily in English. TVB had aimed to hire 50 people to run the channel, he said. But Lee said the potential emergence of more free-television rivals had changed matters. City Telecom, PCCW and i-Cable applied for new licences three years ago. Last year the-then Broadcasting Authority recommended all three be granted licences, but the Executive Council has yet to give its approval. If the government approves the three applications, TVB argues, the resulting intense competition for TV advertising revenue will eventually drive some operators out of business. The station decided to take a cautious approach by shelving the new channel, which it expected to boost long-term growth but would not create quick profits. Meanwhile, it has prepared for the possibility of taking its plea over the new licences to the courts. "TVB is very efficient. We are quite prepared," Lee said. In an earlier letter to lawmakers, executive councillors and the Communications Authority, TVB challenged the legitimacy of issuing new free-television licences before those of TVB and ATV end in 2015. The letter demanded that the authorities reveal how many new licences they intend to give out and the mechanism behind their application assessment. City Telecom chairman Ricky Wong Wai-kay has said a judicial review would be an option if he failed to get a licence. To that, Lee said: "It is OK for anyone to fight for their rights with legal action in a civil society."

Mainland firms going overseas via HK (By Oswald Chen from Hong Kong) As about 60 percent of mainland companies' investments are conducted through Hong Kong, the city is serving as the platform for mainland-listed enterprises to embark on their overseas business expansion plans, Under Secretary for Financial Services and the Treasury Julia Leung said. Addressing the Chinese Listed-Companies Overseas Summit held in Hong Kong on Thursday, Leung said, "As mainland firms' influences in the city are increasing, these companies can leverage on the Hong Kong platform to strengthen their international connections and establish their brand names in the international market," Leung said. The Chinese Listed-Companies Overseas Summit was attended by senior Hong Kong officials incharge of financial affairs and numerous chief executive officers from a wide spectrum of Hong Kong-listed mainland companies. "Approximately 60 percent of the mainland company investments are conducted through Hong Kong. Currently there are 50 mainland State-owned enterprises holding majority stakes of over 100 locally registered subsidiary companies," Leung said. "As at the end of 2011, 62 mainland financial institutions were operating their businesses in Hong Kong with a combined total asset under management of over HK$265 billion ($34.19 billion), registering a 200 percent surge in the last few years," Leung added. Besides facilitating overseas business expansion, the Hong Kong platform also enables mainland firms to tap overseas capital through securing listings outside the country's capital market. Charles Li, the Exchanges and Clearing Limited Chief Executive, said that the mainland companies are playing an important role in the Hong Kong share market. "Mainland listed companies now account for approximately 60 percent of the total Hong Kong share market capitalization, and these companies' daily trading turnover account for 60 percent to 70 percent of the total market turnover," Li said. The provision of an overseas fund-raising platform for mainland companies has enabled some mainland banks or insurers to become the world's largest capitalized banks or insurance companies after listing, Li said. Besides the overseas fund-raising platform, re-exports and the foreign direct investment are also the two important channels through which Hong Kong is contributing to the country's economic reforms. Li said the long term trend of FDI will more likely take a reverse course: more listed companies on the mainland or in Hong Kong (with mainland background) will pursue overseas acquisitions of corporate shares, technology or other assets, rather than overseas capital investing in mainland companies. Under Secretary for Financial Services and the Treasury Julia Leung, however, cautioned that there is still a lot of room for improvement for mainland firms to make more overseas acquisitions. "China is the world's second largest economy in the world. However, the value contributed by mainland companies' overseas acquisitions only account for 5 percent of the country's gross domestic product. This ratio is much smaller than the US' 30 percent, UK's 70 percent and Malaysia's 37 percent," Leung said. The yuan internationalization process is also facilitating more mainland corporations to engage in the international market in the future. "When the country gradually opens the currency market, it will stimulate domestic capital to buy overseas assets that will unleash the country's influences in the global economy," Li said.

Former Shek Kip Mei students recall poor but happy years (By Jennifer Ngo) More than 600 former pupils and staff of Shek Kip Mei primary gather to renew bonds formed decades ago in area of abject poverty - Former principal Wong Ming-chu holds up the old school badge as she revisits the now-empty Shek Kip Mei building. For poor children growing up in Shek Kip Mei until the late 1970s, school was more than a place of learning - it was a safe house. Shek Kip Mei Government Primary School may have closed 32 years ago, but that did not stop more than 600 former pupils gathering at a local restaurant yesterday to honour their former principal and teachers, who practically brought them up and steered them out of poverty. "We were all very poor, we had basically nothing, but those were happy times," said Lai Wai-lun, who grew up in the nearby seven-storey tenements erected after a fire destroyed a squatter area of mostly post-war immigrants, leaving 53,000 people homeless. The school served children from one of Hong Kong's toughest neighbourhoods built to house the poorest of the poor, where gang fights, drugs and triad activity were rife. "When I was assigned to Shek Kip Mei primary school, the first place I visited was the local police station to ask for more protection," recalled Wong Ming-chu, principal of the afternoon-session school from 1963 to 1977. "The people in the area were, let's say, a bit complicated." Lai said there were always fights in the area, often among groups sometimes armed with knives and choppers. "There was a heroin dealer in our block who used to store his 'goods' in his family's kitchen cupboard - which was outside the flat, in the corridor. Of course, we never touched the dealer's stuff, or bothered him. In turn, his presence actually kept other bad people away," said Lai, with a laugh. Due to their sheer numbers, pupils attended school in two shifts. There were 24 classes for the morning session, and the same number in the afternoon. Each class had 45 pupils, but sometimes Wong would sneak in an extra pupil if poor parents came to beg for schooling for a child. There were 34 teachers employed for the afternoon school, she said. Not surprisingly, Wong, now 83, described a typical school day as hectic. "Most parents worked all day and so the children played on the streets by themselves," she said. "If they got hurt, they didn't run home - they came to school. We weren't just their teachers, we were their babysitters as well." Wong recalled rushing a child to the local emergency unit after a bad fall, and chasing away drug-dealers who would try to get children to be couriers. Teachers volunteered as after-school tutors, watched children for free if there was no one to take care of them, and even took them home for dinner. "This is probably why, even today, our students still keep in touch with the teachers, and treat us with such respect," said Wong. "The bonds forged in those days were very strong and deep. "The students were incredibly close, too. They weren't brought up as princes and princesses - most of them worked very hard and never gave up." Lai recalled how children in the tenements entertained themselves. "Unlike children now, we were never cooped up at home," he said, recalling simple games of tag in the hallways, and girls playing with dolls made of bags filled with rice. In 1975, the government started redeveloping the Shek Kip Mei area, and Lai's family moved to Pak Tin. Other families were dispersed to other areas, but those who kept in touch looked back on those days fondly, said Lai. After finishing primary school in 1971, Lai attended high school at La Salle College, then university to become a social worker. Yesterday's reunion was the fourth and biggest to date, with many students flying in from around the world. While society regards these old settlement areas as symbols of poverty, for former residents it was still home. "I treasure those days - and the people who helped me and those who grew up together," said Lai.

 China*:  Nov 27 2012

China successfully launches remote sensing satellite (Xinhua) The Jiuquan Satellite Launch Center confirmed that China successfully launched the Yaogan XVI remote-sensing satellite into space at 12:06 am Sunday. China launched the Yaogan XVI remote-sensing satellite into space from the Jiuquan Satellite Launch Center on Sunday. The satellite, launched from the center in Northwest China's Gansu province, was boosted by a Long March-4C carrier rocket and sent into a predetermined orbit. The Yaogan XVI remote-sensing satellite was developed by an affiliate research institute of the China Aerospace Science and Technology Corporation. It has been designed for a variety of uses, including technological experimentation, land resource surveying, agricultural yield estimation and disaster prevention and reduction. The launch marked the 172th of the Long March series carrier rockets.

2012 Beijing International Marathon held - Contestants ran during the 2012 Beijing International Marathon in Beijing, China, on Nov. 25, 2012.

Car firms show up in droves (By Li Fangfang in Guangzhou) Japanese brands seek to claw back lost China sales at Guangzhou auto exhibition. Guangzhou's automobile market has had a tough time of late. The combination of a city limit on the number of new cars allowed on its roads, and rising anti-Japanese sentiment, has meant falling sales in recent months. But despite the downturn, organizers of the Guangzhou Auto Show 2012, said they expect the event to be the biggest in its 10-year history, with carmakers from around the world, including Japan, arriving in larger numbers. Open for 10 days from Thursday, 950 vehicle models will be displayed, 50 more than the event in 2011. A record 34 global debuts of vehicles will be made, with 23 of these from Asia. Almost all of Japan's major car manufacturers have production bases in Guangzhou, giving its brands an important role in the South China market. But business has been hit hard by falling orders and production cutbacks, due to tension resulting from Japan's illegal "purchase" of China's Diaoyu Islands. The latest vehicle production forecasts for China from automotive strategy, planning and analysis company IHS Automobile, show just how severe the impact of the Diaoyu Islands dispute has been on Japanese vehicle production in China. Namrita Chow, a senior analyst with IHS in Shanghai, said that despite dealers offering strong discounts, overall sales of Japanese brands in China slumped 40 percent in October year-on-year. "In 2013, we see Japanese automakers further cutting production with lost output likely to hit 350,000 units in 2013 and 300,000 units in 2014," Chow said, adding however, that the recent "sales dive does not mean that they have completely stopped selling models". She said that Nissan and Toyota, in particular, which have the biggest stands at this year's event are using the occasion to show they are still major players locally, taking more floor space than ever before. Toyota said it will exhibit more models than usual on a 4,500 square meter stand, 10 percent larger than last year, including its new flagship Lexus sedan. Japanese rivals Honda and Mitsubishi will also be there in force, with the former choosing to focus on its luxury Acura brand, and the latter bringing its latest models. Given the recent issues, Chow said their involvement at this year's show is all about "strengthening brand awareness of their products in the hope that they regain some of their market share". According to IHS, South Korea's Hyundai will be using the Guangzhou event to strengthen its presence in southern China, with displays of all its most recent vehicles. IHS estimates that Hyundai is likely to see sales of 967,000 vehicles in 2013 in China, rising from 786,688 in 2011 - significantly boosted at the expense of lost Japanese sales. French brand Peugeot Citroen, added IHS, is using the show to launch its new, locally produced sport utility vehicle, the Peugeot 3008, through local joint venture Dongfeng Peugeot Citroen Automobile. The SUV focus is timely. This week a new forecast from McKinsey & Co suggested that in the next decade, car sales in China are expected to rise by 8 percent annually for the next decade, likely to be driven by SUV sales, especially in second- and third-tier cities. "Peugeot Citroen aims to win market share from Japanese brands in the SUV segment with the release of this new model," said Chow. "Peugeot-branded models in China will see sales increase to more than 240,000 units in 2013, up from around 174,210 in 2011." German luxury brand Mercedes-Benz, meanwhile, is unveiling a line up of 36 models, including the zero-emission F 125 Research Vehicle, the all-new G63 AMG high-performance SUV, and an all-new SL roadster. Bjorn Hauber, executive vice-president of Mercedes-Benz (China) Ltd, called its product offering in Guangzhou "even stronger" this year, aimed at "further consolidating our core competitiveness in the market".

China conducts flight landing on aircraft carrier (China Daily) A carrier-borne J-15 fighter jet prepares to take off from China's first aircraft carrier, the Liaoning. After its delivery to the People's Liberation Army (PLA) Navy on September 25, the aircraft carrier has undergone a series of sailing and technological tests, including the flight of the carrier-borne J-15, naval sources said. Designed by and made in China, the J-15 is able to carry multi-type anti-ship, air-to-air and air-to-ground missiles, as well as precision-guided bombs. China has successfully conducted flight landing on its first aircraft carrier, the Liaoning, naval sources said. A new J-15 fighter jet was used as part of the landing exercise. After its delivery to the People's Liberation Army (PLA) Navy on September 25, the aircraft carrier has undergone a series of sailing and technological tests, including the flight of the carrier-borne J-15. Capabilities of the carrier platform and the J-15 have been tested, meeting all requirements and achieving good compatibility, the PLA Navy said. Since the carrier entered service, the crew have completed more than 100 training and test programs. The successful flight landing also marked the debut of the J-15 as China's first generation multi-purpose carrier-borne fighter jet, the PLA Navy said. Designed by and made in China, the J-15 is able to carry multi-type anti-ship, air-to-air and air-to-ground missiles, as well as precision-guided bombs. The J-15 has comprehensive capabilities comparable to those of the Russian Su-33 jet and the US F-18, military experts estimated.

Hong Kong*:  Nov 26 2012 

Business chambers voice concerns over working hours (By Phila Siu and Colleen Lee) Chambers say it will harm the growth of the city as democrats call for 40- to 44-hour work week - Secretary for Labour and Welfare Matthew Cheung Kin-chung. Seven of the city's biggest business chambers have sent a rare joint letter to the government, warning that legislating standard working hours would hurt the commercial environment. The chambers wrote to Secretary for Labour and Welfare Matthew Cheung Kin-chung yesterday, a few days before the government is expected to table a study report to the Labour Advisory Board for discussion. The carefully drafted letter does not say directly that the chambers oppose such a law, but warns it would be detrimental to the city's steady and robust economic growth. "The far-reaching implications of regulating standard working hours have the potential to rock the fundamentals which have underlined Hong Kong's success," it says. Pan-democrats have called for a 40- to 44-hour working week and want people who put in longer hours to be paid 1-1/2 times their usual wage rate. In a poll of retail workers in the summer, most respondents said they worked more than 54 hours a week. Businesses claim a minimum wage law that sets hourly pay at no less than HK$28 has pushed up operation costs since it went into force in May last year. The letter was issued by the Hong Kong General Chamber of Commerce, Federation of Hong Kong Industries, Chinese Manufacturers' Association of Hong Kong, Chinese General Chamber of Commerce, Real Estate Developers Association of Hong Kong, Hong Kong Retail Management Association and Employers' Federation of Hong Kong. Hong Kong is one of the most service-oriented economies in the world and that means other countries' experiences with this law may not work here, it says. "Realistically, it is simply too difficult to set 'standard' working hours for different industries in a free economy." It also warns that bosses may have to hire temporary or part-time workers to avoid handling excessive overtime claims. When asked if the letter was meant to exert pressure on the government, Jonathan Choi Koon-shum, standing committee member of the Chinese General Chamber, said the chambers simply wanted to express their concerns to the administration.

Bidding frenzy for Kowloon Bay commercial site (By Yvonne Liu) A commercial site put up for tender by the Lands Department in Kowloon Bay attracted 20 bids by yesterday's deadline compared with just six for a residential site in Tseung Kwan O, in a further sign of developers' response to government attempts to cool the housing market. Swire Properties and Hopewell Holdings, which generally don't join any bidding for land, were among the developers who lined up for the Kowloon Bay site. Others included Cheung Kong (Holdings), Sun Hung Kai Properties, Kerry Properties, Sino Land, Manhattan Realty, Wheelock, Lai Sun Development, Henderson Land, Regal Hotels International and Wing Tai Properties. Commercial plots generally attract only six to eight bids, but in a role reversal, the Tseung Kwan O residential site received just six. Only seven joined the tender for another residential site in the district earlier this month. Sino Land joined Wheelock Properties in tendering for the Tseung Kwan O site. Cheung Kong, Sun Hung Kai Properties, K Wah International, New World Development and Lai Sun Development also submitted bids. "The new cooling measures have already affected the residential market. Developers flocked to the Kowloon Bay site as the commercial market has been left untouched by the government," said Vincent Cheung Kiu-cho, national director, greater China, at Cushman & Wakefield. Thomas Lam, head of research at Knight Frank, said the outlook for the office market in Kowloon Bay is bright in view of the government's Energizing Kowloon East scheme. The scheme aims to develop the area into a new core business district. "With the demand for office space strong, the vacancy rate of offices in Kowloon Bay has dropped to 5 per cent from 15 per cent three years ago. Average rent has risen 15 per cent this year. We expect it to rise another 10 to 15 per cent next year," he said. Surveyors estimate the Kowloon Bay site, next to Exchange Tower, is worth between HK$1.4 billion and HK$2.5 billion, or between HK$4,200 and HK$7,500 per square foot. It could yield a gross floor area of 333,124 sq ft. The residential site, located to the south of the Tseung Kwan O MTR station, could provide a gross floor area of 573,366 sq ft and is worth between HK$2.46 billion and HK$2.75 billion, or HK$4,308 to HK$4,800 per sq ft.

Stars shine at 49th Golden Horse Awards ceremony - Stars pose on red carpet during the 49th Golden Horse Awards ceremony held in Ilan, southeast China's Taiwan, Nov. 24, 2012.

 China*:  Nov 26 2012

PayPal service helps China's online vendors boost sales to new markets (By Bien Perez) Chinese online vendors are doing brisk trade in new emerging markets through the PayPal payment service. Online merchants in China are spearheading increased shipments to new emerging markets, as more vendors use PayPal's global e-commerce payments service. A survey by PayPal, a subsidiary of internet shopping and auctions giant eBay, found that large online retailers from the mainland, Hong Kong and Taiwan on its platform generated more robust sales growth in South America and eastern Europe than in developed markets. In the 12 months to June, these PayPal users recorded 96 per cent growth in Argentina, 72 per cent in Israel, 71 per cent Ukraine and 69 per cent Russia. By comparison, they achieved 57 per cent growth in Japan, 42 per cent Britain, 40 per cent Germany, 25 per cent the United States, 24 per cent Canada and 23 per cent France. There are 3,709 large Chinese PayPal merchants which sell on their own or other websites, but not on which recorded 35 per cent annual sales growth during the period. Meanwhile, the number of large internet retailers in the country using to sell overseas and have PayPal as their primary payment method reached 3,835 in the same period. These firms posted annual sales growth of 68 per cent. Combined, there were 7,544 large vendors on the eBay platform and PayPal users outside of in the country with annual sales of US$100,000 or more. "One of the most successful business strategies for any Chinese exporter is to open an online store on eBay and accept PayPal as their preferred payment method," said Rohan Mahadevan, the vice-president for Asia at PayPal. Californian-based PayPal's service, which supports 25 currencies, has more than 117 million active accounts and is available in 190 markets. The company posted revenue of US$1.3 billion in the third quarter, representing 40 per cent of eBay's US$3.4 billion income during the period.

Smart move by EU on Export Strategy: Airbus wins 60-plane China order after EU retreat on CO2 Charges (By Bloomberg in Beijing) Airbus SAS won an order for 60 A320 planes from state-backed China Eastern Airlines Corp., less than two weeks after the European Union backed down in a dispute with the government in Beijing over jetliner-emission levies. China Eastern received a “substantive” discount to the list price of $5.4 billion (HK$ 41.85 billion) for the single-aisle planes, it said in a statement from Shanghai yesterday, adding that Toulouse, France-based Airbus also agreed to take 18 regional jets off its hands. EU plans to impose carbon dioxide-emission fees on flights in and out of the bloc were suspended on Nov. 12 after countries including China, India and Russia threatened retaliatory steps. Airbus parent European Aeronautic, Defence & Space Co. had said the levies might cause China to refuse to take its planes. “I suspect there’s a message there,” said Sandy Morris, an analyst at Jefferies International in London with a “buy” rating on EADS. “China has been light on A320 orders for a while now and it looks like Airbus held some production slots back until this was resolved. It’s called looking after your customer.” The A320s, due to arrive from 2014 to 2017, will be used mainly on domestic routes, according to China Eastern, which last year switched an order for 24 Boeing Co. 787s wide-body planes to 45 smaller 737s because of waning long-haul demand.

China publishes 1st official map of Sansha city - China has published the first official map of the newly-established city of Sansha, located in the South China Sea.

Envoy sees Chinese role in Middle East (By Li Xiaokun) China can play a "special role" in the Middle East, a Palestinian envoy said on Friday, a day after a cease-fire took effect following eight days of bloody fighting between Israel and militants in the Hamas-run Gaza Strip. Beijing has decided to give Palestine $1 million in urgent humanitarian aid, Bassam al-Salhi, an envoy of Palestinian President Mahmoud Abbas, said after talks with Foreign Minister Yang Jiechi. Foreign Minister Yang Jiechi greets Bassam al-Salhi, Palestinian President Mahmoud Abbas' envoy, before they hold a meeting in Beijing on Friday. Al-Salhi referred to China as a "broker" and a "mediator" in efforts to maintain calm in the region as well as seeking the status of Palestine as a non-member observer of the UN. The envoy arrived in Beijing on Thursday for a three-day trip, after the fiercest fighting in years between Israel and Hamas militants killed 161 Palestinians and five Israelis. A cease-fire brokered by Egypt came into effect on Thursday in Gaza. Al-Salhi, also general secretary of the Palestinian People's Party, said Beijing could succeed in finding a solution to end hostilities between Israel and the Palestinians. "We are very interested in the Chinese role in all the Middle East because all the Middle East needs more efforts from the international community. "They want to be involved and we are interested in them being more involved. "A special role (for) China is coming," he said. According to a statement from the Foreign Ministry, Yang told al-Salhi that Beijing is happy to see the cease-fire agreement and hopes "relevant parties fulfill the cease-fire promise earnestly to avoid more conflicts". "The Gaza conflict has once more exposed the importance and urgency of solving the Palestinian issue," Yang said. The minister also said "China understands, respects and supports Palestine's decision" to seek a state observer status at the UN. Palestine wants China to help press for an upgrade in the Palestinians' UN status from permanent observer to non-member observer, which could boost their chances of joining additional UN bodies such as the International Criminal Court. Israel and the US oppose the move, saying Palestinians should negotiate their statehood via peace talks and not conduct unilateral moves. "China will join hands with the international community and continue playing an active and constructive role in seeking a comprehensive and fair settlement of the Palestinian issue," Yang said. AP said in a report on Friday that Al-Salhi's visit is "the latest sign of Beijing's growing influence in the Middle East". It cited a proposal Beijing made late last month to tackle the Syrian crisis "region by region and stage by stage". But Dong Manyuan, vice-president of the China Institute of International Studies, said as a permanent member of the UN Security Council, China has tried its best to push for the Palestinian issue, yet how much it contributes has to be based on China's national conditions. "The $1 million is a kind regard for the Palestine people. It will alert the global community of the humanitarian crisis there. China is sending a clear signal on that," Dong said. Yin Gang, an expert on Middle East studies with the Chinese Academy of Social Sciences, said so far there is no sign of major change in Beijing's policies on the Palestinian issue. As for the future of the region, Yin said the cease-fire could be "quite effective". "Hamas would like to obey it. Actually it does not want to continue the fighting, and the conflict this time was not raised by Hamas either," he said. Dong also said Hamas would need time to recover its military power that was hard hit by Israel. "And as long as Hamas does not launch Qassam rockets at Israel, the possibility of Israel launching large attacks against Hamas could be basically ruled out," he said. But that does not mean Israel would not attack key Hamas leaders, Dong added.

Hong Kong*:  Nov 25 2012 

Chief Justice defends city's courts in Oxford talk - Chief Justice Geoffrey Ma Tao-li said Elsie Leung had every right to voice her opinion (By Ada Lee) Geoffrey Ma Tao-li says speculation is natural following criticism by former justice secretary - Chief Justice Geoffrey Ma Tao-li. In a rare public remark on a topical issue, the city's top judge has said it is natural for Hongkongers to speculate about former justice secretary Elsie Leung Oi-sie's recent criticism of the judiciary. Chief Justice Geoffrey Ma Tao-li said Leung had every right to voice her opinion, and Hong Kong's higher courts were subject to criticism like any other body. But her background and close ties to Beijing could lead people to believe she was voicing the views of certain interests in Beijing, he said. The judge made the comment in England, while speaking to a small group at Oxford University's Harris Manchester College. His comments were relayed to the South China Morning Post by a person who heard Ma speak. Some law students at the talk asked Ma to comment on recent remarks by Leung. She said last month that Hong Kong's legal profession, including judges, did not understand the relationship between the mainland and the city. She then refused to explain her comment at a Legislative Council meeting, saying it could be turned into "McCarthy hearings". Ma was also asked to comment on remarks by Mr Justice Kemal Bokhary of the Court of Final Appeal, whose recent retirement prompted speculation that he had been pushed out because of his liberal rulings. Bokhary said last month that a "storm of unprecedented ferocity" was gathering over the rule of law in Hong Kong. He was reacting to public calls for Beijing to reinterpret a long-standing decision of the courts, "and the atmosphere created by the mere fact that this call is being made". Ma, an honorary fellow at the Oxford college, disagreed with Bokhary's assessment, and described Bokhary's comments as "colourful", according to the person who attended the meeting. "He [Ma] is of the opinion that this is not quite the case, and the current situation does not bother him to that extent," the person said. "He believes that the courts of Hong Kong are doing what they should be doing, namely, deciding cases according to their legal merits, and the adjudication process should not be affected by the opinions of others." Ma encouraged attendees to assess the city's legal system from time to time. "He invited everyone to make an objective assessment of the current situation in Hong Kong, and not just take his word for it," the person said. Ma is on a personal visit to Britain, the judiciary confirmed. "The chief justice has said that Ms Elsie Leung was entitled, just like anyone else, to comment on court decisions, but that in view of her former position … some people may read something more into her remarks," a spokeswoman said.

China shuttlers beat Korean pair and advance to Hong Kong Open semis (By Chan Kin-wa) Disqualified from the Olympics, pair moves a step closer to defending Hong Kong Open title - China's Wang Xiaooli and Yu Yang on their way to their quarterfinal victory over South Koreans Eom Hye-won and Jang Ye-na at the Hong Kong Open. Former Olympic champion Yu Yang and her partner Wang Xiaoli put unhappy memories of London behind them as the two mainlanders stormed into the doubles semi-finals at the Yonex-Sunrise Hong Kong Open. The pair, who lifted the 2011 world title, were 21-10, 21-19 victors over South Korea's Eom Hye-won and Jang Ye-na at the Coliseum in Hung Hom yesterday, although they were stretched in the second game. "We still need some time to get back to our best," said Yu, the 2008 Beijing Games doubles champion when partnered with Du Jing. "We did not have any systematic training after the London Olympics and after going through five matches at last week's China Open, we were running out of stamina a bit in the second game. "We do have to work hard on our fitness level but since there is only one match a day, we should have enough time to prepare for the semi-finals." The second seeds and defending champions will meet Shizuka Matsuo and Mami Naito of Japan in the next round, and if it goes according to form they should take on Olympic champions Tian Qing and Zhao Yunlei in the final. The pair were favourite for London gold after lifting the world title a year ago at the Wembley Arena, the Olympics venue. But they were disqualified after being found guilty of failing to try their best in a group match in order to get a favourable draw in the knockout round. "We forgot the London Olympics after it was over. We don't think about it anymore," said Yu, 26. "We are still young and there are many chances for us in future." Wang, 23, said she is enjoying the game as much as ever and is eager to win her third consecutive doubles title in Hong Kong. She partnered Ma Jin to clinch the title in 2010 before joining forces with Yu last year. In the men's singles, second seed Chen Long of China went through to the semis following a 21-16, 21-12 victory over Sho Sasaki of Japan. Widely touted as 'the next Lin Dan', he will meet Tommy Sugiarto of Indonesia for a place in the final. The latter won 21-17, 19-21, 21-17 against Marc Zwiebler of Germany. Top seed Lee Chong Wei of Malaysia survived a shaky second game to beat Nguyen Tien Minh of Vietnam 21-18, 21-19. "There were some problems in the second game as I haven't trained much since the Olympics. But I was able to hang in there till the end," said Lee, watched by wife Wong Mew Choo for the first time after they married two weeks ago. "Overall I am not too disappointed." London Games women's singles champion Li Xuerui of China reached the semis after her opponent, Tine Baun of Denmark, withdrew from the match due to a right heel problem.

Heavyweights turn out for opening NPC bout (By Beatrice Siu and Eddie Luk) Pro-Beijing heavyweights turned out in force at the Exhibition Centre in Wan Chai for a meeting of local National People's Congress deputies vying for support in the upcoming NPC election. Sixty to 70 candidates are expected to compete for the 36 seats. The voters yesterday elected a 19-member presidium which included former chief executives Tung Chee-hwa and Donald Tsang Yam-kuen, incumbent Chief Executive Leung Chun-ying as well as Cheung Kong chairman Li Ka-shing, Wharf Holdings chairman Peter Woo Kwong-ching and lawyer Ambrose Lau Hon-chuen. Nominations will be accepted from tomorrow until December 4 and the election will be held on December 19. More than 1,600 people, who are mainly members of the Election Committee which returned Leung as chief executive, local deputies to the NPC and Chinese People's Political Consultative Conference members, will elect 36 NPC local deputies. NPC Standing Committee member Rita Fan Hsu Lai-tai admitted her criticism of Leung may affect her chances of being elected. One of the expected candidates, New Territories Association of Societies chairman Brave Chan Yung, said competition will be keen as several of the old brigade will not seek re-election. Around 10 of the current 36 local delegates have indicated they might not stand, including former Baptist University president Ng Ching-fai. "More candidates from the political field and the professional sectors will take the opportunity to contest the election," Chan said. Federation of Trade Unions' lawmaker Wong Kwok-kin, a current NPC deputy, said: "The election will be more competitive this year as the number of candidates taking part will increase." Wong said Fan's criticism of Leung will have minimal impact in the election. "Fan is one of the experienced politicians familiar with Hong Kong and mainland political affairs. I believe she has a very high chance of being re-elected." Those seeking re-election include Basic Law Committee member Maria Tam Wai-chu and former Independent Commission Against Corruption chief Fanny Law Fan Chiu-fun. Tam said that, even though she is getting older, she hopes to be re-elected to give the NPC some continuity.

'Prosperity will continue under CY', says NPC vice-chairman (By Colleen Lee and Tony Cheung) A top Beijing official says that while Hong Kong is mired in conflicts and livelihood issues, Leung Chun-ying's administration will be able to maintain prosperity and stability. Li Jianguo, vice-chairman of the National People's Congress Standing Committee, made the comment yesterday while briefing the electors on next month's vote to pick Hong Kong's 36 deputies to the NPC, the national legislature. Li also recognised Leung's efforts to provide the city with good governance. "Facing the unresolved conflicts and rather significant livelihood issues in Hong Kong society these days, the new SAR government led by Leung Chun-ying is making efforts [to deal with them]," Li said. "With the SAR government's implementation of a set of new policies and gaining of more governance experience, Hong Kong will be able to maintain prosperity and stability with the support and united efforts of different sectors." Commenting on Li's remarks as he left the meeting, local NPC delegate Wong Kwok-kin said: "The conflicts may include the income gap, youngsters' job opportunities and social injustice … Social injustice refers to the fact that some people don't have reasonable pay despite hard work." But it was hard to say whether Li's remarks were a gesture of support for Leung, Wong said. Since Leung took office in July, he has faced calls for several officials to step down, including Secretary for Development Paul Chan Mo-po and Education Secretary Eddie Ng Hak-kim. Various initiatives put forward by his administration have encountered opposition among lawmakers. Executive councillor and NPC deputy Cheng Yiu-tong said the solution to social conflicts was compromise between different sides in controversies. "A diversified society [like Hong Kong] still has to … come up with solutions, and political parties and politicians have to compromise on all sorts of conflicts," he said. Another executive councillor and NPC delegate, Fanny Law Fan Chiu-fun, said she did not think Li's comments were a show of support for Leung, but did not elaborate. She said a key problem for the city was the lack of trust in the government, and she urged the administration to boost its ties with various sectors in the city.

Cathay warns over outlook as cargo revenue tumbles (By Bloomberg) A Cathay Pacific employee walks past self check-in booths at Chek Lap Kok airport. Pacific Airways Chief Executive Officer John Slosar told staff the carrier was facing a “very challenging year” and must reduce expenses as cabin crew seek above-inflation pay rises. “We must tackle our cost base where we can,” Slosar said in an article in the Hong Kong-based carrier’s monthly in-house magazine. This is “a very challenging year,” he said. He didn’t specifically mention labour costs or wages. Slosar highlighted a rise in fuel prices that has made actual fuel costs 6 per cent higher than expected, along with a decline in fares and a cargo slump caused by the economic slowdown. The airline, which had a first-half loss, has this year quickened the retirement of older planes, grounded freighters and offered cabin crew unpaid leave to cut costs. “Cathay’s business will not be pretty this year,” said Kelvin Lau, a Hong Kong-based Daiwa Securities Group analyst. “It’s watering down expectations from both employees and investors by issuing this update.” The airline dropped 0.6 per cent to close at HK$13.88 in Hong Kong trading, reversing gains of as much as 1 per cent in the morning session. The carrier distributed the article as a trading update via the exchange during the lunchtime break. Cathay Pacific Airways Flight Attendants Union earlier this month requested a 5 per cent wage increase for next year. Hong Kong’s consumer prices were 3.8 per cent higher than a year earlier in October. The union is in pay talks with Cathay, General Secretary Tsang Kwok-Fung said by phone. He didn’t comment on Slosar’s article. The group represents over 5,800 cabin crewmembers, according to its website. Actual fuel costs have been about 6 per cent higher than expected, Slosar said. That would have caused the carrier to exceed its high fuel budget by HK$2.5 billion (US$323 million) if it had done nothing, he said. The airline offsets at least some of the higher costs through hedging and surcharges. The airline is also facing higher charges in areas including airports, catering and groundhandling, Slosar said. Chief Operating Officer Ivan Chu is overseeing a cost-cutting drive, he said. Average fares have fallen by 4 per cent from last year because of competition and slower demand, Slosar said. Top corporate customers in the finance industry have cut flying by more than 15 per cent over the past two years. “Many airlines are facing similar challenges and the competition for passengers is even more intense than usual,” Slosar said. Cargo sales are down about 13 per cent from last year, and freight will probably generate “well below” the almost 30 per cent of total revenue it can account for in good years, Slosar said. Singapore Airlines earlier this month said it will park one of its 13 Boeing 747 freighters for more than a year to cut capacity after losses at its cargo unit. The carrier had a smaller-than-expected profit in the quarter ended September. Cathay Pacific is following Singapore Air in retiring its 747-400 passenger fleet. The Hong Kong carrier is replacing its jumbo jets with 777-300ERs, which are more than 20 per cent more fuel efficient than the older 747s. The full benefit will not be realised until 2014 because of delivery schedules, Slosar said. The airline lost HK$935 million in the six months through June, its first half-year loss since 2008. The carrier will post a full-year profit of HK$1.4 billion, based on the average of nine analyst estimates compiled by Bloomberg.

C.Y. Leung admits liability for illegal structures (By Lai Ying-kit) After many months of controversy, Chief Executive Leung Chun-ying on Friday issued a 30-page document explaining the illegal structures at his houses on The Peak, admitting mistakes but insisting his integrity was intact. “I admit that I was not careful enough in handling the incident. But I have all along been honest and open, and co-operative with the government and the media, and taken rectifying action as quickly as possible,” his statement said. Leung released a 14-page statement, plus a 16-page appendix of supporting documents. His statement acknowledged building two unauthorised structures at his two luxury houses in Peel Rise after he and his family moved in. The first structure was a wooden trellis located at House No 4, and the other was a glass enclosure with metal support at House No 5. There are five houses at the 4 Peel Rise address. Those two unauthorised structures were among six exposed by the media in June, and the trellis and glass enclosure were soon removed. At that time, Leung explained that the glass enclosure was a replacement for an old trellis that had been installed. “Now a land surveyor’s report has confirmed that I remembered it incorrectly at that time,” Leung said in the statement. “I mixed House 4 up with House 5 at that time.” He insisted he had not purposefully tried to mislead Hongkongers. He released the statement after the Court of Final Appeal rejected a legal challenge by election rival Albert Ho Chun-yun, which claimed Leung had not been legally elected chief executive in March because of his false statements about the illegal structures. The chief executive admitted in Friday’s statement that he had been negligent in failing to notice the illegal structures at an early stage. He had no intention of concealing anything, he said. ”Looking back, I did not make myself clear on some occasions, leading to misunderstanding by the public,” he said. On other unauthorised structures – a basement, a metal gate, a parking place covering and a small storage structure – Leung said they were installed by the house’s previous owner. He said he had already dismantled the parking place cover and the single-storey structure. Works to fill the basement and dismantle the metal gate were now awaiting approval from buildings departments. The statement, which is in Chinese only, is available the website of the Chief Executive’s Office.

Fury in Hong Kong at Beijing official's claim of 'foreign interference' (By Joshua But) Beijing official's allegation that 'external powers' help to co-ordinate campaigns for opposition parties in city called 'hollower than hollow' A top mainland official in charge of Hong Kong affairs has lashed out at interference by "external powers" in Hong Kong elections, alleging for the first time that the unspecified powers were helping co-ordinate campaigns for opposition parties. Zhang Xiaoming, a deputy director of the State Council's Hong Kong and Macau Affairs Office, said "necessary measures" were needed to combat such interference and called for Hong Kong to pass the national security law required by Article 23 of the Basic Law. His words, in an article published yesterday in the pro-Beijing newspaper Wen Wei Po, sparked alarm among pan-democrats, who said it could indicate a harder line by Beijing towards dissent in the city. Zhang wrote that the "external powers" "even get deeply involved in local elections and help co-ordinating campaigns for opposition parties. We have to take necessary measures to prevent external interference." Civic Party leader Alan Leong Kah-kit, describing the allegation as "hollower than hollow", said: "It is the most irresponsible way to make an allegation, because there is no evidence. We only have evidence of how the [central government] liaison office meddles with the elections." Political commentator Johnny Lau Yui-siu said "external interference" had long referred to Britain and the US. But the definition had expanded in recent years to include Taiwan and Chinese dissidents in exile. The 6,000-word article, "Enrich the implementation of One Country Two Systems" was a chapter in a study guide to the report of the 18th party congress in Beijing last week. In it, Zhang said Hong Kong should complete the Article 23 legislation "in due course". He added that any referendum campaigns and the Hong Kong City-State Autonomy Movement were in breach of the "one country" part of "one country, two systems". He also insisted that the Standing Committee of the National People's Congress had legitimate power to interpret the Basic Law, a view echoed by the former Secretary for Justice Elsie Leung Oi-sie. The committee should also take up its role to monitor Hong Kong's legislation, Zhang said. Leong said the article shed light on the central government's changing policy in Hong Kong. "What Zhang said is not only unconstitutional but also immoral," he said. "If it had been said before 1997, I would bet Hong Kong's transition would not have been as smooth as it was." Another pan-democrat, Lee Cheuk-yan, said he feared the central government had been ill-advised on Hong Kong affairs. "A hardline approach can now be expected," Lee said. The Democratic Party's acting chairwoman, Emily Lau Wai-hing, said Zhang was twisting the facts. "Hong Kong people are furious at Beijing's interference in the city's internal affairs," she said. Beijing-loyalist lawmaker Wong Kwok-kin said some recent developments in Hong Kong, such as protesters raising the colonial Hong Kong flag, might have struck a nerve in Beijing on the issue of sovereignty. "Zhang's message could be a warning to some Hong Kong people," he said. "Overseas influences have long existed in the city. But the article shows Beijing is not going to tolerate any more." Separately, former chief secretary Anson Chan Fang On-sang said Hong Kong was enduring the worst atmosphere since the handover. She said Chief Executive Leung Chun-ying had failed to maintain meritocracy in his appointments of senior officials and top advisers. "I could only shake my head at what [Central Policy Unit head] Shiu Sin-por said," she said. "He seems to think he is a loyal servant of the Chief Executive and to forget he is employed as a civil servant." The recruitment of Sophia Kao Ching-chi by the unit to co-ordinate appointments to government advisory and statutory bodies was also a bad move, she said. "I wonder whether the government wants to hear merely one voice, which is to support the administration," she said.

Hong Kong money lender eyes Tianjin (By Sophie He from Hong Kong) First Credit Limited, a licensed money lender in Hong Kong, is set to roll out its business in Tianjin, as it sees a promising future on the mainland, which is a vast market, its chairman Checkley Sin Kwok-lam told China Daily. The company is applying for a license to establish a micro-credit firm in Tianjin and it will probably be the first of its kind in Tianjin to be wholly-owned by an overseas company, said Sin. First Credit was established in 2006 and listed on the Hong Kong Exchange GEM Board in December 2011; its major business is to provide loans to individuals as well as to small companies in Hong Kong. Sin said Hong Kong's micro-credit market is relatively well developed and mature, so there is limited room for significant growth, and meanwhile, the mainland market is rapidly growing. "According to our research, the micro-credit market on the mainland is very much like the market in Hong Kong 30 years ago," he said, adding that First Credit is eager to enter this rapidly growing market with its experience from Hong Kong. According to data released by the People's Bank of China, at the end of September, there were a total of 5,629 micro-credit companies with outstanding loans of 533 billion yuan ($85.53 billion), including 141.4 billion yuan new loans during the period. Sin said that the company chose Tianjin to roll out its business because the Binhai New Area is one of the testing grounds in China for pilot financial policies, and the local government is open-minded and welcomes his company. Besides, Tianjin has a population of around 13 million and its residents' incomes are growing rapidly, and so the potential of the micro-credit business there is limitless, he added. The requirement for establishing such a money lending company in Tianjin is that the company should have at least four major shareholders, including the largest shareholder's stake not exceeding 30 percent of the venture, he said. "But the Tianjin government is willing to make an exception for us, considering that we are a listed company in Hong Kong, and technically our firm in Tianjin will have hundreds of shareholders." Sin believes it will get the approval it needs from the Tianjin government before the end of this year. "Actually we have already rented a place (in the Tianjin Binhai New Area) and have aleady hired several staff," he said, adding that, "hopefully our (micro-credit) firm will be opened in the first half of next year." Sin is ambitious about the company's business on the mainland, and despite the central government's relaxation of its monetary policy, he expects his business to thrive as small and medium sized enterprises are still finding it very hard to get loans from banks, let alone unsecured loans. First Credit's long-term goal is to open a micro-credit firm in Beijing, Shanghai, Guangzhou, Shenzhen and Chongqing. Although currently, 100 percent of its revenue is from Hong Kong, along with the growth of its business outside Hong Kong, the revenue from the mainland will become its major income source eventually, said Sin. The company does not have specific target companies or industries as its potential customers in Tianjin, as "the market is always changing" and the company will closely monitoring the market and choose its customers carefully. A Tianjin resident who has a proven working record of more than two years, a small firm or store with a track record of one or two years, probably will be good enough to qualify for a loan from First Credit, said Sin. In Hong Kong, First Credit would provide a loan of HK$500,000 ($64,510) to HK$2 million to each corporate customer or HK$10,000 to HK$1 million to each individual customer, with an annualized interest rate of over 20 percent. The company also has a unique business in Hong Kong, which is lending money to foreign domestic helpers; the amount is usually around HK$10,000 to HK$20,000 for each person, with the annualized interest rate of over 40 percent. Sin said that some foreign domestic helpers needed the money to pay for their agencies, which charged them a lot for helping them to come and work in Hong Kong, while others may need some extra cash during the Christmas shopping season before they head home to visit their family. He explained that the interest rate for foreign domestic helpers is so high because the company has to take the risk that some of helpers may return to their country and never come back to repay their loans. For the nine months ended September 30, 2012, First Credit had a net interest margin of 23.87 percent, which is relatively stable from the 23.63 percent it recorded a year ago.

 China*:  Nov 25 2012

China passports now have map of disputed islands (By Reuters) China is issuing passports containing a map marking its territorial claims in a maritime dispute with neighbouring Southeast Asian nations, triggering an angry protest yesterday from the Philippines. It means other claimant countries will have to stamp the microchip-equipped passports of thousands of Chinese tourists and businessmen containing the Chinese claims that they are disputing. Stand-offs between Chinese vessels and the Philippine and Vietnamese navies in the South China Sea have become more common as China increases patrols in waters believed to hold vast reserves of oil and natural gas. "The Philippines strongly protests the inclusion of the nine-dash lines in the e-passport as such [an] image covers an area that is clearly part of the Philippines' territory and maritime domain," Philippine Foreign Secretary Albert del Rosario said on Thursday, referring to the lines on the passport map. "The Philippines does not accept the validity of the nine dash lines that amount to an excessive declaration of maritime space in violation of international law." Chinese carrying the new passport would be violating Philippine national sovereignty, said Philippine foreign affairs spokesman Raul Hernandez. Vietnam had also protested to the Chinese over the passport, Hernandez said. Malaysia and Brunei are also claimants in the dispute which overshadowed an Asian leaders' summit in Cambodia this week. China is also embroiled in a territorial dispute with Japan. China's foreign ministry said in a faxed response to questions that the new passports met international standards. "The passports' maps with their outlines of China are not targeting a specific country. China is willing to actively communicate with the relevant countries and promote the healthy development of Sino-foreign personnel exchanges," it said. In Tokyo, a foreign ministry official said: "We have confirmed that disputed islands in [the] South China Sea appear in a map printed on new Chinese passports. "On the other hand, Senkaku doesn't. Therefore we are not in a position to complain."

Palestinian envoy seeks role for China in Gaza conflict (Agence France-Presse in Beijing) General Secretary of the Palestinian People’s Party, Bassam al-Salhi, greets China's Foreign Minister Yang Jiechi in Beijing. China could play a “special role” in the Middle East, a Palestinian envoy said on Friday, following eight days of deadly conflict between Israel and militants in the Hamas-run Gaza Strip. Bassam al-Salhi, a representative of Palestinian President Mahmoud Abbas, was speaking after talks in Beijing on efforts to upgrade his people’s status at the United Nations and maintain calm in the region. A ceasefire brokered by Egypt came into effect on Thursday in Gaza, which Abbas does not control. Salhi, also general secretary of the Palestinian People’s Party, referred to China as a “broker” and a “mediator” after talks with Foreign Minister Yang Jiechi. He said Beijing could succeed where the United States failed in finding a solution to end hostilities between Israel and the Palestinians. “We are very interested in the Chinese role in all the Middle East because all the Middle East needs more efforts from the international community,” he said. “They want to be involved [in the Middle East] and we are interested in them being more involved. “A special role [for] China is coming.” Sali said China had expressed its support in Palestine’s bid to upgrade their status at the United Nations, and was giving them US$1 million in aid. China is a permanent member of the UN Security Council and has backed the Palestinian push for full state membership of the organisation. Beijing supports “stopping any kind of aggression from the Israelis against the Palestinian people,” Salhi told reporters. Chinese officials did not immediately comment. The talks followed Gaza’s first day of calm after the fiercest fighting in years between Israel and Hamas militants. A ceasefire started on Wednesday ended eight days of airstrikes and artillery attacks by Israel and rocket attacks by Palestinian militants that killed 161 Palestinians and five Israelis. China has increasingly played a more active diplomatic role in the Middle East. It recently announced its own four-point plan for a political solution to the Syrian conflict, although observers said it was vague and did not significantly add to past peace plans that have failed. It has also called on the international community to help resolve the Israeli-Palestinian conflict, but not played an active role itself. The country generally opposes what it calls intervention in the internal affairs of other nations.

Capsule hotel in China's Chongqing - These rooms are equipped with power supply, clock, wall lamp, TV set, air conditioner and even WIFI, attracting many young people to lodge.

L'Oreal's alluring number: 1 billion (By Yao Jing) L'Oreal China says it is dedicated to research and innovation to serve the needs of Chinese and Asian consumers. The cosmetics maker is out to attract millions of customers, and guess which country it thinks can help it do that? Like any big company, the cosmetics maker L'Oreal is not shy about its ambitions, but just how big the French company's ambitions are becomes clear when you consider the numbers it talks about. In its annual report last year it said it had set itself a target "to conquer one billion new customers in the next decade". That would mean doubling the number of customers the company now has, it said. Those ambitions may come across as far-fetched to some, but L'Oreal is crystal clear with at least one thing: as it tries to make that dream become a reality, China will play a significant role. "Right now, China is the third-largest market for L'Oreal worldwide," says Alexis Perakis-Valat, chief executive officer of L'Oreal China. "We are sure that China will be No 1 one day. There is no doubt about it." L'Oreal's sales in the Asia-Pacific region rose 12.5 percent in the first half of this year compared with the corresponding period last year, to reach 2.13 billion euros ($2.7 billion), while its European sales rose by a meager 1.9 percent. As for L'Oreal China, its sales totaled 10.7 billion yuan ($1.7 billion; 1.3 billion euros) last year, 18 percent higher than in the previous year, helping the company to extend its double-digit growth to 11 consecutive years. The company's solid confidence in the Chinese market is being propelled predominantly by two things: the seemingly inexorable upmarket shift of its consumers and the potential for geographic expansion. "The country still has a lot of cities that do not have luxury beauty brands and have room for mass products," Perakis-Valat says. The cosmetics market in China was once strongly concentrated in the very big cities like Beijing and Shanghai, but now the lower-tier ones are opening up, he says. "The lower-tier cities are giving us a big opportunity at the moment. We have our mass-market brands, including Maybelline and Garnier, in more than 300 cities. And for luxury brands, we have opened in more than 70 cities for Lancome." L'Oreal came to China in 1997, starting from four brands to 20 today, including Garnier, Kerastase, Lancome, L'Oreal Paris, Matrix, Maybelline, Vichy and Yue-Sai. In the fist half of this year, the company's mass-beauty division had turnover of 5.45 billion euros, a rise of 4.7 year-on-year, while turnover in the luxury division, though just under half that amount, rose at more than double the rate. In China, the situation is almost the same. "Luxury is expanding geographically in China while mass is already everywhere," Perakis-Valat says. For L'Oreal that means grabbing a greater share of the mass market and beating others to take luxury cosmetics to new cities, he says. Another component of staying ahead is research and innovation, something in which L'Oreal takes particular pride. It boasts that it has research centers worldwide, and that last year alone it spent 720 million euros on research and registered more than 600 patents. But that innovation and experimentation is not limited to chemicals and test tubes. Electronic skin-care devices are now emerging as an important market category, and L'Oreal plans to introduce Clarisonic, a market leader in such devices, to China at the end of this month. L'Oreal completed its acquisition of Pacific Bioscience Laboratories Inc at the end of last year, Perakis-Valat says, and "we hope to grab the opportunity in instrumental cosmetics in China also". While such devices may have universal appeal, L'Oreal, after 104 years in business, is wise enough to know that with certain products you have to carefully choose your markets. "Beauty is not a one-size-fit-all business," Perakis-Valat says. "We have to respect diversity and should not come up with one brand that serves all the needs." More than 70 percent of what it sells in China is specifically formulated for this marketplace, the company says. Maybelline BB cream is a case in point. "Chinese women want their skin to look much more natural, with much less covering and more hydrating," he says. "This was developed for China and in China, and now other countries have adopted it." In 2004, L'Oreal bought the highly successful local brand Yue-Sai, founded 20 years earlier by the Chinese-American TV celebrity Yue-Sai Kan, and it has been reaping the rewards ever since. In September a new Yue-Sai product, Cordyceps Rejuvenate, containing a highly prized fungal ingredient said to help combat the first signs of aging, went on the market. L'Oreal has also discerned a wider public acceptance of the benefits of Chinese traditional medicine, and is exploiting that. "We work with labs to see what ingredients from Chinese medicine are really effective on the skin," Perakis-Valat says. "Yue-Sai has experience of over 20 years of dedicated and in-depth study of Chinese skin fundamentals, and we are very satisfied with the performance of the brand." The company also attributes its achievements in China to the talent of its Chinese staff. Of its 3,000 employees in the country, less than 1 percent are foreigners, the company says. "The future of our success relies on products and people. Besides providing quality and diverse products, we are very focused on recruiting and developing great Chinese people, training them, sending them abroad, etc," Perakis-Valat says. L'Oreal's presence in China includes two manufacturing plants, a management development center for talent development, an Asian-Pacific Operation Division and a research and innovation center dedicated to understanding and serving the needs of Chinese and Asian consumers. Last year, the company announced it was investing 200 million yuan to turn its plant in Yichang, Hubei province, into the group's largest make-up production center in Asia. At the same time, it created a consumer care center in Shanghai, the first of its kind in the industry, to upgrade consumer service. In a way, those developments reflect the sea change in China since L'Oreal first arrived in the country 14 years ago. At that time, seeing a woman with makeup was a rarity. L'Oreal built its business in the country by convincing women of the need to do more than just hydrate their skin, and these days even men are getting into the act. But as L'Oreal toils away to attract those one billion consumers worldwide, Perakis-Valat insists the work must go on. "We have to cope with the pace and understand the changes, and then, being very fast in coming up with solutions to fill these needs."

China rejects Japan's 'control' of Diaoyu waters (Xinhua) A spokeswoman for China's Foreign Ministry on Thursday reiterated that the country has never accepted Japan's so-called existence on, or control of, the sea area adjacent to the Diaoyu Islands. "China has always stressed that Japan's so-called existence on, or control of, the sea area adjacent to the Diaoyu Islands is illegal and invalid, which China never accepts," Foreign Ministry spokeswoman Hua Chunying told a daily press briefing on Thursday. Hua made the remarks when asked to comment on Japanese Foreign Minister Koichiro Gemba's latest article carried by a US newspaper that said China did not accept post-war international order. "The Japanese foreign chief's comments are extremely wrong and irresponsible," Hua said, adding that Diaoyu Island and its affiliated islands have been China's inherent territory since ancient times, which is supported by historical facts and jurisprudential evidence. Hua said the Cairo Declaration and the Potsdam Proclamation were the legal basis for the Allied Powers and Japan to conclude World War II and construct post-war international order in Asia and the Pacific. These two treaties also laid the legal basis for China and Japan to settle post-war territorial entitlements, Hua said. "It is groundless for Japan to claim sovereignty over the Diaoyu Islands in accordance with the so-called Treaty of San Francisco," Hua said. As China is not a signatory to the Treaty of San Francisco, this treaty is neither legally binding to China nor a legal basis for China and Japan to settle post-war territorial entitlements, Hua said. "Japan's continuous provocative acts on the Diaoyu Islands, in nature, reflect Japan's attempt to deny the effects of the Cairo Declaration and the Potsdam Proclamation and challenge post-war international order," Hua said. The current tensions between China and Japan originate from the fact that Japan has not completely reflected on or criticized its past of militaristic aggression, Hua said. She urged Japan to give up illusions, face up to reality, deeply reflect on the past, show sincerity and make substantial efforts to properly resolve the current problem.

Hong Kong*:  Nov 24 2012 

Fury in Hong Kong at Beijing official's claim of 'foreign interference' (By Joshua But) Beijing official's allegation that 'external powers' help to co-ordinate campaigns for opposition parties in city called 'hollower than hollow' A top mainland official in charge of Hong Kong affairs has lashed out at interference by "external powers" in Hong Kong elections, alleging for the first time that the unspecified powers were helping co-ordinate campaigns for opposition parties. Zhang Xiaoming, a deputy director of the State Council's Hong Kong and Macau Affairs Office, said "necessary measures" were needed to combat such interference and called for Hong Kong to pass the national security law required by Article 23 of the Basic Law. His words, in an article published yesterday in the pro-Beijing newspaper Wen Wei Po, sparked alarm among pan-democrats, who said it could indicate a harder line by Beijing towards dissent in the city. Zhang wrote that the "external powers" "even get deeply involved in local elections and help co-ordinating campaigns for opposition parties. We have to take necessary measures to prevent external interference." Civic Party leader Alan Leong Kah-kit, describing the allegation as "hollower than hollow", said: "It is the most irresponsible way to make an allegation, because there is no evidence. We only have evidence of how the [central government] liaison office meddles with the elections." Political commentator Johnny Lau Yui-siu said "external interference" had long referred to Britain and the US. But the definition had expanded in recent years to include Taiwan and Chinese dissidents in exile. The 6,000-word article, "Enrich the implementation of One Country Two Systems" was a chapter in a study guide to the report of the 18th party congress in Beijing last week. In it, Zhang said Hong Kong should complete the Article 23 legislation "in due course". He added that any referendum campaigns and the Hong Kong City-State Autonomy Movement were in breach of the "one country" part of "one country, two systems". He also insisted that the Standing Committee of the National People's Congress had legitimate power to interpret the Basic Law, a view echoed by the former Secretary for Justice Elsie Leung Oi-sie. The committee should also take up its role to monitor Hong Kong's legislation, Zhang said. Leong said the article shed light on the central government's changing policy in Hong Kong. "What Zhang said is not only unconstitutional but also immoral," she said. "If it had been said before 1997, I would bet Hong Kong's transition would not have been as smooth as it was." Lawmaker Wong Kwok-kin said some recent developments in Hong Kong, such as protesters raising the colonial Hong Kong flag, might have struck a nerve in Beijing on the issue of sovereignty. "Zhang's message could be a warning to some Hong Kong people," he said. "Overseas influences have long existed in the city. But the article shows Beijing is not going to tolerate any more."

Chan verdict `unlikely to change' (By Kelly Ip) Acting Chief District Judge Poon Siu-tung is unlikely to change his acquittal of former TVB general manager Stephen Chan Chi-wan, legal experts believe. "It is unlikely for the judge to hand down another verdict as it would mean rejecting what he said earlier," a source said. Lawmaker and barrister Ronny Tong Ka-wah said unless Poon made other legal errors in the resumed case, the Department of Justice would be unable to file an appeal again. But if Poon rescinded his earlier verdict, Chan would face immediate imprisonment. The source from the legal sector said it is not abnormal for the Court of Appeal to return the case to the trial judge. "Resuming the case does not mean the trial handed down a wrong verdict," he said. "The higher court judge would like the the trial judge to clarify reasons of the verdict." Amina Bokhary, whose uncle Kemal Bokhary was a judge of the Court of Final Appeal, was given a non-custodial sentence, a fine of HK$8,000 and had her driver's license suspended by a magistrate for slapping a policeman in the face. The Justice Department appealed and the case was returned to the magistrate. However, the magistrate did not amend the sentence. Magistrate Anthony Yuen Wai-ming, whose judgment stated that his verdict was based on consideration of both sides' arguments, including a psychological report stating the defendant suffered from bipolar disorder and was to undergo treatment. He believed a jail sentence would make things worse. But acting principal magistrate Amanda Woodcock at Eastern Magistrates' Court later sent Bokhary to jail for six weeks after she breached a probation order.

Actress Charmaine Sheh takes centre stage at opening of new wine shop (By Vivian Chen) Wine brings out the poet in TVB actress Charmaine Sheh Sze-man. The beauty flaunted her toned figure in a red evening gown at the opening of Madison Wine Shop in Wan Chai on Tuesday. "Every time I try a good wine, it makes me fantasise that I'm playing my favorite character," she said. "Wines mature and reveal a different side to their character over the years. And so with the different characters I get to play in film and television series, I find a different side of myself." She was joined at the event by a cast of socialites and celebrities, including actor Michael Wong Man-tak and his wife Janet Ma Sze-wai, and models Jocelyn Luko and Shirley Cheung Yuk-shan. Unlike Sheh, Ma isn't much of a drinker. She said she once got drunk and fainted on a flight to New York, and has since been more careful with alcohol.

Aspiring deputies kick off race for national legislature (By Colleen Lee) Fanny Law attends the election meeting of local deputies to the National People's Congress at the convention centre in Wan Chai on Thursday. Dozens of aspirants for next month’s election of local deputies to the national legislature made every effort to canvass support on Thursday, as the election race kicked off. On Thursday morning, National People’s Congress Standing Committee vice chairman Li Jianguo briefed the 1,274 local electors present on the details of the December 19 election which is to pick 36 deputies representing Hong Kong in the national legislature for the next five years. The voters also elected a 19-member presidium of the election committee, including Chief Executive Leung Chun-ying, his predeccessors Tung Chee-hwa and Donald Tsang Yam-kuen, Cheung Kong Holdings chairman Li Ka-shing, and solicitor Lau Hon-chuen. Lau, who was later chosen as the press spokesman for the presidium, announced that nominations would run from Saturday to December 4, and the polling day would fall on December 19. Around 10 of the existing 36 local delegates are seen unlikely to seek re-election. Those canvassing for support in the Hong Kong Convention and Exhibition Centre on the sidelines of today’s briefing include former security minister Lee Siu-kwong, Nameson Group chairman Wong Ting-chung and Hong Kong Chinese Importers’ and Exporters’ Association vice president Cheung Ming-man. Zhang Tiefu, director-general of the social affairs department at the central government’s liaison office, as well as Li Yinquan, vice president of the China Merchants Group, were also among those seeking nominations. One requires to be a Hong Kong resident with Chinese nationality, and receive at least 10 nominations to stand for the race.

Hong Kong tycoon Li Ka-shing addresses school celebration in Beijing - Li Ka-shing receives a souvenir at the celebration held to mark 10th founding anniversary of the CKGSB in Beijing.

 China*:  Nov 24 2012

Thailand must start exporting as rice begins to pile up (By Reuters in Bangkok) China pledges to buy some of 14 million tonnes of rice Thailand has stockpiled, but traders say there is little real substance to the agreement - Thai Prime Minister Yingluck Shinawatra welcomes Premier Wen Jiabao to Bangkok. China pledged yesterday to buy rice from Thailand's growing mountain of unsold stocks, during a visit by Premier Wen Jiabao, officials said. The memorandum of understanding, which did not specify the size or value of the exports, was part of an agreement between Wen and his Thai counterpart Yingluck Shinawatra to expand economic ties between the two countries. But traders said the pact looks more political than like a real opportunity to cut into the huge stockpiles of subsidised grain that are pricing the Southeast Asian producer out of the international rice market it has long dominated. Wen called for further co-ordination with Bangkok in regional affairs yesterday as he held talks with Yingluck on bilateral ties, Xinhua reported. He also told Thailand's Privy Council President Prem Tinsulanonda in a separate meeting that the two countries "have always treated each other as equals and with mutual respect, and helped each other at difficult times". Yingluck said she hoped the two countries would focus on manufacturing, agricultural products and infrastructure construction to promote bilateral trade and improve interconnection in the region, Xinhua said. During Wen's visit, Thailand also invited Chinese investors to participate in projects, including the Dawei deep-sea port being jointly developed with Myanmar, as well as in areas such as rubber processing, flood prevention and high-speed rail. Under the memorandum of understanding, China can import Thai rice if it wants to. But it did not agree to any actual sales. The agreement comes just after a regional summit in Cambodia which Wen attended, and appears to be a clear attempt by China to curry favour with Thailand. "The Thai government wants people to believe something is happening and they also desperately want exports to take place," said a manager at a Singapore-based international commodities trader. "We are very sceptical." Bangkok is struggling to offload a record 14 million tonnes of rice and is scouring the country for storage space after Yingluck extended the rice subsidy scheme - aimed at the small farmers who helped vote her into office last year - into the new season beginning last month. The scheme has made Thai rice nearly a third more expensive than grain from rivals Vietnam and India and threatens to take away Thailand's status as the world's biggest rice exporter. A Thai official said the cabinet had approved a framework to sell up to 5 million tonnes of rice within 3 years if China wanted to buy. Thailand is paying farmers 15,000 baht (HK$3,400) a tonne for paddy, far above the estimated market price of around 9,000 baht. Thai exporters have said the agreement with China could have more to do with their government's attempts to counter a planned parliamentary censure debate over the rice issue by showing it is managing the problem well. "It's just a political move," said a Bangkok-based trader. "The government wants to show it can handle the stocks even though it can't sell any rice via government deals."

China data pushes European shares to 2-week highs (By Reuters in London) An employee walks past columns of steel as she works at a steel production factory in Wuhan. European shares hit a two-week high on Thursday as Chinese economic data gave a further sign of recovery in the world’s second-biggest economy, encouraging investors to put more money into stocks. The China HSBC Flash Manufacturing Purchasing Managers Index, which largely reflects the private manufacturing sector, hit a 13-month high of 50.4 in November. It followed figures on Wednesday showing US manufacturing picked up at its quickest pace in five months in November. “There are questions over whether the Chinese economy is really that bad or if the US will take a long time to recover, but we are getting signs that the situation is not as bad as assumed,” Peter Braendle, head of European equities at Zurich-based Swisscanto Asset Management, said. “I am betting on a positive economic environment. I suspect that many investors are still ‘underweight’ European equities and they have to catch up a little bit,” said Braendle, whose fund company manages nearly US$60 billion. Braendle said he raised his exposure to KBC last week and was keeping an eye on financials like Barclays and BNP Paribas, adding: “For me, it’s a question of valuation, which is far too low and has potential to catch up.” Barclays was on a price-to-book ratio of 0.5, while BNP traded at 0.7, against 1.5 for the broader STOXX 600 index, according to Thomson Reuters data. Braendle said Barclays and BNP traded on a ratio of about 1.0 some years ago. Sectors more sensitive to economic growth were among the top gainers, with miners rising 1.1 per cent, technology gaining 0.8 per cent and the travel and leisure sector climbing 0.7 per cent. At 8.48pm, the FTSEurofirst 300 index was up 0.4 per cent at 1,101.68 points after rising to 1,103.20, the highest since November 8. It has so far gained more than 3 per cent this week, the best weekly performance since early February. A positive outlook was also reflected in a note from Bank of America-Merrill Lynch, which said investors should position for a ‘great rotation’ out of bonds and into equities next year, fuelled by high liquidity and hopes for future global growth. They recommended to buy US, UK and continental European equities this year, although warned a rally into the end of the year would depend on good purchasing manager indexes (PMI) data and a positive outcome to budget talks in the United States. The bank recommends hedging long positions with shorts on the European insurance sector, which has rallied 35 per cent since June, and options to sell the S&P 500. The euro zone’s blue chip Euro STOXX 50 index rose 0.5 per cent to 2,531.24 points, with charts showing that the index had potential to advance further in the coming days. Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said the index was still in a sideways environment and was likely to face resistance at around 2,555 – a falling trendline that started from its September highs. “We could see somewhat higher prices in the next few days, but looking at a longer-term weekly chart, it faces horizontal resistance at 2,610. As long as this level is not broken, we should expect a continuation of the sideways price action between 2,400 and 2,600.” Analysts said investors were likely to stay cautious in the coming weeks following worries related to the US fiscal negotiations, but they should look for a balanced approach by buying some cyclicals. Robert Parkes, equity strategist at HSBC Securities, said there were risks in having a purely defensive portfolio at this point in time, but noted that some investors were still trying to avoid risk, which was reflected in equity valuations. According to Thomson Reuters Datastream, the broad STOXX 600 trades at 11 times its 12-month forward earnings, still well below a 10-year average of 12.3, against a price-to-earnings ratio of 12.1 for Wall Street’s S&P 500 . Some positive corporate news also helped in improving sentiment. SABMiller, the world’s second-biggest brewer, rose 6.7 per cent after posting a 12 per cent rise in first-half profit. Turnover was thin as US markets were shut for Thanksgiving. Trading volume on the FTSEurofirst 300 was just 25 per cent of its 90-day daily average by midday.

Ministry urges US, EU to stop 'politicizing' Chinese trade (By Ding Qingfen) Trade protectionism targeting China will continue to be "severe" unless developed markets — especially the United States and the European Union — stop politicizing trade investigations into made-in-China goods, a senior commerce official has warned. "The situation remains challenging and complicated," said Zhou Xiaoyan, head of the Bureau of Fair Trade for Imports & Exports at the Ministry of Commerce. "More and more high-end Chinese exports, such as telecom goods, are getting embroiled in trade investigations, and this will continue," she said.

Japan appoints new ambassador to China (Xinhua) The Japanese government officially approved the appointment of Masato Kitera as its new ambassador to China at a cabinet meeting Thursday morning. Kitera, 60, graduated from Tokyo University, began to work for Japanese Foreign Ministry from 1976, had served as assistant chief cabinet secretary since 2011 before he was appointed as ambassador to China. The appointment will be effective from next Monday. Shinichi Nishimiya was nominated as new ambassador to China in September to replace Uichiro Niwa, but died of an acute heart failure before leaving for China. Kitera will take the post of Nishimiya.

Hong Kong*:  Nov 23 2012 

Citing fear for 'McCarthy hearing', ex-justice chief Elsie Leung snubs lawmakers (By Tony Cheung) Elsie Leung raises spectre of 1950s McCarthyite witch-hunts as she turns down meeting request - Former justice secretary Elsie Leung Oi-sie has invoked the spectre of McCarthyism in refusing to attend a Legislative Council meeting to explain her contentious remarks about the legal profession. Leung said that if she heeded lawmakers' demand for her to turn up, it might turn Legco panel meetings into "McCarthy hearings". The reference is to the notorious witch-hunts conducted in the 1950s by Republican US senator Joseph McCarthy to track down communist sympathisers. Leung, who is also vice-chairwoman of the Basic Law Committee, added fuel to the debate sparked by her accusation last month that the legal profession, including judges, did not understand the relationship between the mainland and Hong Kong by saying that if the city's legal system had not developed it might still be subject to Qing Dynasty laws. Her remarks came in a letter and an 11-page written submission to the legal affairs panel, which had invited her to a meeting next Tuesday. She suggested that lawmakers seeking a discussion should contact her directly and arrange an appointment, rather than "intruding upon the valuable time for the panel meeting or utilising public resources". "I doubt whether the panel meeting is an appropriate venue," Leung wrote. "Inviting me to attend the panel meeting simply because some legislative councillors take issue with what I have said may create a dangerous precedent for turning meetings into McCarthy hearings." Dennis Kwok Wing-hang, a legal sector representative and vice-chairman of the legal affairs panel, said he regretted that Leung refused to attend the panel's meeting and had "inappropriately compared" the meeting with McCarthy's hearings. In her latest submission, Leung said critics' suggestions that she was advocating change in the legal system were totally false. "If the legal system of Hong Kong had not been developing, the Chinese community must still be governed by customary law derived from Qing law," Leung said. Her critics were making the claims "purely for the purpose of scaremongering the public, disparaging me and causing disharmony in society", she said. Kwok said Leung's remarks touched on promises made about the legal system in the Sino-British Joint Declaration and the Basic Law. "If she thinks that not changing the legal system means we would still be using the Qing law, I think she has mixed up some concepts," said Kwok, a Civic Party member. The panel chairwoman, Priscilla Leung Mei-fun, a pro-establishment lawmaker, said it was "very unideal" that Leung would be absent from next week's meeting. However, Leung said, she understood that the Secretary for Justice, Rimsky Yuen Kwok-keung, and representatives from the Bar Association would attend and debate the matter with lawmakers. In a paper submitted to the panel, the Department of Justice reiterated that the government attached great importance to all matters concerning judicial independence and the rule of law, and was committed to upholding these two important principles.

Celebrity chef identifies taxi victims (By Beatrice Siu) World famous chef Heston Blumenthal was still grieving in Hong Kong last night after identifying the bodies of two senior members of his culinary team. They died along with the driver of their taxi when crushed between two double-decker buses in Shau Kei Wan just before noon on Monday. Blumenthal, who is in town for a private function, was not talking about immediate plans yesterday. But executives of the Mandarin Oriental confirmed that the dead visitors - British citizen Ivan Aranto Herrera Jorge and Swede Carl Magnus Lindgren - were guests of the hotel. They were both talented young chefs in the Blumenthal lineup. More insights into the crash, which also left 56 people injured, emerged yesterday. It started when the driver of a New World First Bus double-decker coming down the hill from Chai Wan lost consciousness. Out of control, it side- swiped a seven-seater vehicle and then slammed into the taxi, crushing it against a KMB bus waiting at traffic lights. It took emergency workers nearly three hours to extract the bodies of the three men from the wreckage. And there was word from NWFB of on-board video footage that showed the 57-year-old driver, Lau Chit, unconscious as the bus careened towards tragedy at 11.38am. "The bus hit road barriers after going past the fire station," said William Chung Chak-ma, head of operations for NWFB and associated operator Citybus. "The driver was unconscious for more than 10 seconds with the bus out of control. Nobody attempted to take control." Lau had returned to work on Monday after a two-day break, Chung said, and he had passed a medical check in July. "We are now seeking medical advice on whether drivers aged 50 and above need to have electrocardiogram tests like those of 60 and above," Chung added. Along with details of the smash came calls for a commission of inquiry into instances of driver blackout. Police as well as bus operators have investigated other cases, but findings and ideas to prevent similar incidents have not been forthcoming. Adding to concerns was the revelation that New World First Bus recently told drivers with diabetes to submit detailed medical reports on the severity of their conditions. Chung Chung-fai, chairman of the NWFB staff union said: "We don't oppose independent inquiries, but they will not prevent drivers from suffering blackouts if there are hidden diseases." Chung confirmed that the operator issued a circular last month requiring diabetic drivers who were injecting insulin to tell more. "The company admitted that more drivers have been suffering from diabetes in recent years," he said. "So medical advice is needed on whether certain people remain fit to drive." As the debate about driver fitness continued, so did the grieving for Wong Kim-chung, the driver of the taxi carrying the visiting chefs. Among mourners was a cousin, Wong Ka-po, who said NWFB had contacted the family but there had not yet been talks on compensation.

Builder wagers $6b on Cotai push (By Victor Cheung) Paul Y Engineering (0577) is switching from construction to the gaming business by spending HK$6 billion to develop a casino on the Cotai Strip in Macau. The locally based firm will conduct a massive equity financing drive that will lead to its parent, PYI Corp (0498), shedding control. In an exchange filing yesterday, Paul Y said it will acquire a 65,000-square- foot Cotai Strip plot for HK$2 billion. On this it plans to build and operate a five-star hotel with ancillary retail and entertainment facilities, such as gaming. The development will include two floors of gaming rooms with about 66 tables, as well as restaurants and shops. One of Macau's gaming concessionaires or sub-concessionaires will operate the gaming activities. The total cost of the project will be about HK$6 billion. Paul Y said it will raise the funds by selling shares and convertible bonds worth HK$3.2 billion to HK$6.4 billion, with the balance funded by bank loans. Businessman and investment banker Stephen Hung will accept a share option scheme in Paul Y and become a co- chairman. Paul Y will also divest from its construction business by paying out 49 percent of the operations to its shareholders, who may also opt for cash payouts at 30 HK cents per share. After the transactions are complete, PYI will hold 21 percent of Paul Y, down from 62 percent. Paul Y will then pay a special dividend of 26 HK cents per share. Hung is currently vice chairman of the holding firm of Macau's Rio Hotel & Casino. He was formerly a vice chairman of eSun Holdings (0571), which also had business in Macau. Credit Suisse analyst Gabriel Chan said the scale of the planned hotel, with an estimated 200 rooms, is "tiny" compared with other gaming complexes in the area, but Paul Y will likely try to grab business from the niche high-roller market. He said the project will also need Macau government approval and collaboration from existing gaming operators.

Housing chief rejects calls to buy back Link Reit (By Lai Ying-kit) Secretary for Transport and Housing Anthony Cheung Bing-leung. The government has no intension of buying back The Link Reit because that would not help lower the rents of shopping centres and car parks, a top official said on Wednesday. Secretary for Transport and Housing Anthony Cheung Bing-leung dismissed calls to buy back a controlling stake in the Link, a real estate investment trust that manages about 180 shopping centres and car parks formerly run by the government. The Link has been managing the city’s largest retail portfolio since the Housing Authority privatised its shopping centres and car parks in 2005. It faces frequent criticism for forcing out small-scale retail tenants by increasing their rents. Even with its controlling power, the government could not cut rents significantly because the trust’s conditions require it to maximise profits for investors, Cheung said. The housing secretary was responding to a motion raised by League of Social Democrats’ lawmaker “Long Hair” Leung Kwok-hung at a Legislative Council meeting on Wednesday afternoon. Leung called for the government to buy back at least 25 per cent of the Link’s shares to curb exorbitant rents and prices. The Labour Party’s Lee Cheuk-yan supported Leung’s motion, saying the Link had replaced small vendors with large chains, limiting the shopping choices of public housing tenants. However, New People’s Party Michael Tien Puk-sun disagreed, saying the government should uphold free-market economy principles. It would face legal challenges by shareholders if it cut rents considerably, he warned. In June, chief-executive-elect Leung Chun-ying said buying back shares in the reit could be an option to lower the rents of local businesses.

Strong interest for PICC's US$3.6b Hong Kong IPO (By Ray Chan, George Chen and Reuters) Wu Yan, Chairman of PICC. PICC, the mainland’s No 1 non-life insurer, says more than a dozen institutional investors have shown a strong interest in its US$3.6 billion initial public offering – Hong Kong’s largest listing for two years. By Wednesday morning, at least 16 institutional investors from the mainland and abroad, including China Life, China’s No1 life insurer and Japan’s Tokio Marine, had agreed to buy a combined US$1.35 billion slice of PICC’s planned IPO – which so far represents about 37 per cent of the entire offer. The institutional sales part of the PICC IPO is continuing. Bankers expect more institutional investors, also known as “cornerstone investors” to subscribe. PICC, which is based in Beijing, is tightly controlled by the Chinese government. American International Group on Wednesday afternoon pledged US$500 million to Chinese state insurer PICC Group’s up to US$3.6 billion Hong Kong IPO, sources told Reuters. AIG was added to a list of 16 investors that initially signed up, taking the total cornerstone commitments to US$1.85 billion towards People’s Insurance Company (Group) of China’s Hong Kong offer, set to the biggest IPO in the city for two years. American International Group, once one of the world’s largest insurance companies and bailed out by the US government during the 2008 global financial crisis, plans to invest millions in the IPO, according to industry sources. A final agreement is expected to be reached after the Thanksgiving holiday in the United States on Friday (HK time). This year, many companies have managed to float their shares in Hong Kong primarily because of “cornerstone investors”, who subscribed to between 40 and 50 per cent of new offerings. In better times, such investors would have been expected to take up just 20 per cent of an offering. The more “cornerstone investors” become involved, the likely it is that the IPO will be launched. China International Capital Corporation, the Beijing-based investment bank led by Levin Zhu, the son of ex-Chinese Premier Zhu Rongji, Goldman Sachs, HSBC and Swiss bank Credit Suisse are sponsors of the PICC deal, while 14 other banks are underwriting it.

Acquittal of former TVB manager Stephen Chan overturned on appeal (By Austin Chiu) Former TVB general manager Stephen Chan Chi-wan (centre) on Wednesday after the Court of Appeal quashed his acquittal on bribery charges. The Court of Appeal on Wednesday has quashed the acquittals of former TVB general manager Stephen Chan Chi-wan and his former assistant on bribery charges. The court ruled on Wednesday that a District Court judge erred in the application of a law in acquitting Chan and Edthancy Tseng Pei-kun last year. The case now returns to the District Court, which will reconsider its original verdict. Chan and Tseng were each released on HK$100,000 bail. They must inform the Independent Commission Against Corruption 24 hours before travelling out of Hong Kong. They will appear in District Court on December 18. Wednesday’s decision stems from an appeal, by the Independent Commission Against Corruption, against Chan and Tseng’s acquittal earlier this month. In September last year Chan went on trial for being paid HK$112,000 by Olympian City in 2010, behind his employer’s back, to host one performance of the live talk show Be My Guest. The show was staged at the shopping mall and produced and broadcast by TVB. In the past, Chan had made more than 150 episodes of the show free of charge for the station, but this time he was paid – through a company run by Tseng. Acting Chief District Judge Poon Siu-tung acquitted Chan, ruling that he appeared on the show as a celebrity or an artist, not as an agent of TVB. In the appeal argument, Eric Kwok Tung-ming SC, for the graft buster, said Poon erred in law. If Chan’s act of hosting the talk show for a reward was “in relation to [TVB’s] business”, then he should be convicted in accordance with the law, Kwok said. The case now goes back to the trial judge.

China tennis champion Li Na confirms Hong Kong match (SCMP) Li Na returns a shot to Victoria Azarenka during their match on the fourth day of the WTA championship in Istanbul on October 26. Li Na, China’s first grand slam champion, will take on former world number one Caroline Wozniacki in the BNP Paribas Showdown at Hong Kong’s AsiaWorld-Arena next March 4. The new event, which coincides with World Tennis Day, will also feature great rivals, eight-time grand slam champion Ivan Lendl and seven-time grand slam winner John McEnroe. Li and Wozniacki will play a best-of-three-sets match, while golden-oldies Lendl and McEnroe will provide the hits-of-yesterday in a pro-set encounter. Li has a 3-2 head-to-head edge in their series, though Wozniacki won their only meeting this year, which came in Tokyo in October. Last year, Wozniacki was a straight-sets winner over Li in the ill-fated Hong Kong Tennis Classic at Victoria Park. “It’s great to have the chance to play in Hong Kong again,” said Wozniacki. “It’s also exciting to be part of the first World Tennis Day. I hope it’s successful in getting more kids playing around the world.” Lendl won 94 titles in his career, including an ATP tournament in Hong Kong in 1980. He then won consecutive Marlboro Championship titles from 1990-92. “I have always enjoyed playing in Hong Kong. It is a place with a lot of good memories, including one of my first ever wins on the pro tour.” McEnroe has also played in Hong Kong, most recently at the Hong Kong Tennis Classic last year. World Tennis Day is held in conjunction with the International Tennis Federation.

 China*:  Nov 23 2012

Chinese Premier Wen Jiabao (L) shakes hands with Thai Prime Minister Yingluck Shinawatra in Bangkok, Thailand, Nov. 21, 2012. Chinese premier meets with Thai PM - Chinese Premier Wen Jiabao held talks Wednesday with Thai Prime Minister Yingluck Shinawatra on bilateral friendly ties. Chinese Premier Wen Jiabao held talks Wednesday with Thai Prime Minister Yingluck Shinawatra on bilateral friendly ties. As friendly neighbors from ancient times, China and Thailand had maintained close contact and nurtured a firm friendship, giving body to the notion that "China and Thailand are one family," Wen said. Against the backdrop of complicated and profound changes in international and regional situations, China stood ready to work with Thailand to support and help each other to seek common development, he said. Wen also highlighted the need for the two sides to maintain high-level exchanges and further promote coordination in regional affairs so as to facilitate regional peace, stability and prosperity. China and Thailand enjoyed a number of favorable conditions and broad prospects for future cooperation, the Chinese premier said. China was willing to make concerted efforts with Thailand to actively implement the five-year project for economic and trade cooperation signed by the two sides and advance cooperation in infrastructure construction in areas such as transportation and water conservancy, agriculture and mutual investments, Wen said. China attached great importance to exchanges with Thailand in the areas of culture and education, and was ready to help improve Chinese language teaching in Thailand and promote cooperation in tourism and youth exchanges between the two nations, he said. Yingluck extended congratulations to the successful 18th national congress of the Communist Party of China, voicing belief China would continue to move forward steadily and play a more active role in the world. Relations between Thailand and China had made substantial progress in all areas, she said, adding that Thailand unswervingly pursued friendly policies with China and would like to enhance contact between the two countries at all levels. She voiced her hope that the two countries would focus on manufacturing, agricultural products and infrastructure construction to promote bilateral trade and investment and to improve interconnection in the region. Enhancing local cooperation and people-to-people and cultural exchange was of great importance and enjoyed broad prospects, she said. After the talks, the two leaders attended the signing ceremony of bilateral cooperation documents. Also on Wednesday, Wen and Yingluck attended the inauguration ceremony of the Chinese Culture Center in Bangkok. They spoke highly of the traditional friendship between the two countries and pledged to further enhance people-to-people and cultural exchanges to deepen the understanding and friendship between the two peoples.

Shipbuilder in carrier call - China should build its own aircraft carriers, the country's largest shipbuilder said. The call for China to match its growing global influence with new military hardware comes after Beijing in September commissioned its first carrier, the Liaoning, which was purchased from Ukraine and refurbished. The launch of the carrier is being viewed as a symbolic milestone for the growing military power of China at a time of regional anxiety over Beijing's rise. But it has also sparked speculation on when China will construct its own carriers. Adding to the debate was Hu Wenming, chairman of China State Shipbuilding Corp, who said his company is ready to build the "seagoing airbases," China Daily reported. "We must enhance our independent weapons and equipment research and production capacity to match the country's clout, and independently build our own aircraft carriers," he said on the sidelines of last week's Communist Party congress.

Chinese trade (By Ding Qingfen) Trade protectionism targeting China will continue to be "severe" unless developed markets — especially the United States and the European Union — stop politicizing trade investigations into made-in-China goods, a senior commerce official has warned. "The situation remains challenging and complicated," said Zhou Xiaoyan, head of the Bureau of Fair Trade for Imports & Exports at the Ministry of Commerce. "More and more high-end Chinese exports, such as telecom goods, are getting embroiled in trade investigations, and this will continue," she said. Trade conflicts between China and developed economies have escalated this year, with investigations now taking place on various types of goods, but most notably solar panels. China has been a major target of anti-dumping investigations for the past 17 years, and a target of anti-subsidy cases for the past six years. According to the ministry, a total of 758 trade cases worth $68.4 billion were filed against Chinese exporters from 2003 to the end of September. Zhou added: "The US and the EU have started to resort more frequently to filing trade investigations to fend off competition for their own industries and businesses, and they will continue to politicize any trade frictions with China." During the recent US presidential election campaign, trade with China took center stage, with Republican candidate Mitt Romney accusing President Barack Obama of adopting too soft a trade stance toward China, vowing to label the nation a "currency manipulator" if he won the election. In October, the US announced it was to impose sharply higher tariffs on solar cells imported from China for the next five years, in response to a case filed last year by SolarWorld Industries America. China criticized the move, saying it will hurt trade relations and provoke further trade friction. "The end of the US presidential election does not mean the US will loosen its restrictions on the Chinese exports, but unfortunately, our forecast is not positive," said Han Yong, a division cheif of the ministry's Bureau of Fair Trade for Imports & Exports. "We will probably see trade conflicts between China and the US grow in the coming months", while US economic growth falters, he said. Lawmakers recently urged the US Congress to conduct an investigation into Chinese telecom equipment makers Huawei Technologies Co and ZTE Corp. Commerce Minister Chen Deming accused Washington in response, of a "Cold War" mentality for claiming that Beijing was involved in cyber espionage. Zhou added that in Europe too, officials are stepping up their challenge of China's trade practices as countries struggle with an ongoing debt crisis. Early this month, the EU announced it was launching an anti-subsidy investigation into Chinese exports. The announcement dealt a serious blow to Chinese solar panel exporters, given that 60 percent of China's exports of panels and components went to the EU last year. In his report to the 18th National Congress of the Communist Party of China, Hu Jintao, general secretary of the 17th CPC Central Committee, said that China should appropriately address such trade frictions through consultation, seek further liberalization of international trade and investment, and fight trade protectionism. Chong Quan, the Ministry of Commerce spokesman on trade negotiations, said this week that China, and Chinese exports in particular, will have to continue to face the challenge of rising trade protectionism. And this, combined with other factors such as shrinking overseas demand and fierce global competition, will hurt the growth of China's foreign trade. Economists have warned that the global economy could continue on a rocky road into 2013. Latest figures showed the US economy grew at a tepid 2 percent in the third quarter, and the last quarter is expected to be even weaker.

Foreign exchange supply and demand in China is "generally balanced" and expectations remain "basically stable" despite hot money inflow concerns, the industry regulator said Wednesday. The foreign exchange watchdog made the comments after the spot price of the yuan against the U.S. dollar rose by the 1-percent daily limit for ten consecutive days from late October into November. This reignited concerns over hot money inflows into the world's second-largest economy. Hot money, or speculative capital flows, can potentially lead to market instability. "There is no strong evidence of hot money inflows in China despite a recent rally in the yuan, which has been driven by improved market sentiment," the State Administration of Foreign Exchange (SAFE) said in a statement. The prospect for the country's economy and currency is one of optimism due to both domestic and external factors, leading to a stronger yuan, the statement said. The spot price of the yuan against the U.S. dollar rose to 6.2262 on Nov. 13, marking a record high since China's foreign exchange reforms seven years ago. Chinese clients exchanged 125 billion U.S. dollars in foreign currency for yuan through the country's banks in October. They bought 117.2 billion U.S. dollars in foreign currency from financial institutions last month, according to the SAFE data. This resulted in a foreign exchange surplus of 7.8 billion U.S. dollars in October. This follows a surplus of 6.5 billion U.S. dollars in September, indicating that Chinese business and individuals are becoming more willing to hold onto the yuan, with expectations for a stronger currency. The third round of quantitative easing by the United States has not yet caused obvious hot money inflows into China because of a series of factors. These include continuous declines of the yuan's forward exchange rates, the narrowing interest rate gap between China and other countries as well as the fragile economic recovery in the country, according to the statement. The SAFE pledged to strengthen the monitoring and management of abnormal cross-border capital inflows and outflows and accelerate the development of the country's foreign exchange market, the statement added.

Trade links deepen between China and Brazil (By Zhou Siyu) Brazilian officials are visiting China to expand business between the two countries, especially in the food and drink sector. According to Alessandro Golombiewski Teixeira, Brazilian deputy minister of Development, Industry, and Trade, the two countries have common interests in improving agricultural trade, which will help satisfy China's growing demand for agricultural products and create more jobs in Brazil. The South American country is the world's third-largest food exporter and China is the world's largest food consumer. He made the remarks on Tuesday in Beijing while leading a delegation to promote Brazilian agricultural products, including beef, coffee, honey and wine. He also revealed that more than 400 meetings between companies from both countries have been set up during this visit. China has been one of the top buyers of Brazilian farm products in recent years. More than one-third of China's soybean imports came from Brazil last year, making it the second-largest soybean supplier to the market after the United States. Chinese demand for other Brazilian agricultural products is also rising. Brazilian government data show that in first 10 months of this year, China imported 1.8 million metric tons of Brazilian sugar, for instance, making it the country's top sugar buyer, accounting for 12 percent of Brazil's total sugar exports. "Chinese consumers still know very little about Brazil's other food products," Teixeira said. "But there are many Brazilian products which provide quality at low prices," he added. Industry analysts say China's growing demand for food imports is mainly driven by its ongoing urbanization and increasing population, and that closer ties with Brazil could help diversify its import suppliers. "Trade with Brazil could prevent China from becoming over-reliant on a single country, such as the US," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd. In the meantime, growing trade with Brazil will encourage bilateral investment and accelerate the development of China's agricultural industry in the long run, added Zhang Monan, an economist with the Economic Forecast Department of the State Information Center. Zhang also said that agricultural trade could help further strengthen commercial ties between the two emerging markets, especially in light of continued economic uncertainty around the world. "Given China's status as the world's second-largest economy, it needs better trade and economic cooperation with emerging markets to maintain the high growth of its export sector," Zhang said. China outstripped the US to become the largest exporter to Brazil this year. During the first 10 months, China's exports to Brazil grew by 6.2 percent from a year earlier to $28.7 billion. Meanwhile, its annual imports from Brazil have declined 5.2 percent to $35.2 billion, according to official Brazilian data. Trade experts and analysts expect Brazil's surplus with China to hit $7.5 billion this year.

China remains an 'engine' in global economy (By Qin Jize in Phnom Penh, Cambodia and Cheng Guangjin in Beijing) Wen urges ASEAN members to tackle international financial crisis China will continue to be an important engine for the regional and world economies, said Premier Wen Jiabao on Tuesday, referring to the Chinese economy as "stable" and maintaining "relatively fast growth". Wen made the remarks at the 7th East Asia Summit gathering leaders of the 10 members of the Association of Southeast Asian Nations and world economic powers Australia, India, Japan, New Zealand, South Korea, Russia and the United States. The Chinese economy is becoming more stable and is expected to maintain relatively fast growth and develop to a higher level, said Wen. Members of the East Asia Summit should make great efforts to do their own business well, and be all the more mindful of potential perils and responsibilities, he added. Wen also suggested that members make more powerful policies and measures to deal with the international financial crisis, stabilize finances, revive their economies, increase employment and improve the people's livelihood, which are the most direct and efficient ways to contribute to regional development. The summit is taking place at a time when the world is still facing economic uncertainties and other challenges, such as soaring oil prices, food security, natural disasters and cross-border crimes, said Cambodian Prime Minister Hun Sen in his opening address. "These obstacles cannot be tackled at the regional level, but need closer cooperation as well as comprehensive approaches at both the regional and global level," Hun Sen said. In this context, he said, constant cooperation and deeper integration among countries participating in the summit would be the best way to address these problems. It was the second time that the US and Russia joined the summit since both were admitted to the regional forum in 2011. The forum is committed to East Asia integration and provides a valuable opportunity for leaders to discuss key strategic, political and economic issues of common concern. South China Sea Wen also explained China's stance on the South China Sea issue in a closed-door meeting of the 7th East Asia Summit on Tuesday. "Huangyan Island is China's inherent territory, and there is no question over its sovereignty. It is proper and necessary for China to safeguard its sovereignty. China's position on the South China Sea issue is clear and consistent. We attach great importance to peace and stability in the South China Sea and regional freedom of navigation and security, which has been fully protected, and we hope that the position of the South China Sea as an international waterway will be guaranteed." "China adheres to the policy of good-neighborliness and friendship, and is committed to regional stability in the South China Sea. We have effectively responded to regional emergencies which were not provoked by us. China and ASEAN signed the Declaration on the Conduct of Parties in the South China Sea a decade ago, and we reached an agreement on the principles. We do not want the South China Sea issue to be internationalized. With the restoration and development of the world economy, we hope that the South China Sea will be more fully utilized." At the end of the forum on Tuesday, negotiation for a new regional economic partnership was officially launched. The Negotiation on the Regional Comprehensive Economic Partnership consists of 10 ASEAN nations and six key Asia-Pacific powers — China, Australia, India, Japan, South Korea and New Zealand. Through the economic partnership, "ASEAN's five existing free trade agreements with six countries (China, Japan, South Korea, India, Australia and New Zealand) in the region would be brought under one umbrella agreement," said ASEAN Secretary-General Surin Pitsuwan. The partnership reflects the consensus of countries in this region and points out a clear direction for regional economic integration, which is of great significance, said Wen. "China will fully support ASEAN in this process," he said. The negotiation is expected to be completed by the end of 2015.

Hong Kong*:  Nov 22 2012 

Deadly bus crash puts focus on health of drivers (By Simpson Cheung and Jolie Ho) Regular check-ups urged after man at wheel of double-decker collapses, causing deadly crash - Firefighters and paramedics struggle to free the occupants of the taxi crushed between two buses in yesterday’s fatal crash near Shau Kei Wan. Legislation should be passed requiring all public-transport drivers to have a comprehensive health check annually, a legislator urged yesterday, after two double-deckers crushed a taxi and caused three deaths and 56 injuries yesterday. Passengers on the New World First Bus vehicle said they saw the 57-year-old driver, Lau Chit - who passed a physical in July - collapse just before the crash in Chai Wan Road, Shau Kei Wan. First Bus drivers aged over 50 have regular body checks, but a union said those were only general check-ups. Civic Party lawmaker Dr Kwok Ka-ki, a surgeon, said the government should invite medical professionals to draft guidelines on what items should be covered in a compulsory check-up. He said it should include an exercise electrocardiogram, which would help find hidden heart problems. "They are driving vehicles all around the town. They have a very high risk. Public vehicles can kill. I hope this will not happen again," he said. Chan Shu-ming, director of the New World Bus branch of the Motor Transport Workers General Union, said current health checks covered general aspects such as the eyes, ears, lungs, blood pressure and urine. But a general electrocardiogram was not available until the age of 60. Secretary for Transport and Housing Professor Anthony Cheung Bing-leung said 50 was a reasonable age for bus drivers to undergo an annual health check. Independent Eastern district councillor Daniel To Boon-man said the part of Chai Wan Road where the accident occurred was very steep and the scene of frequent accidents. He said he had suggested six months ago that the intersection be widened, as buses had little turning space. The department has agreed to do so in a few years, when nearby residential blocks of Ming Wah Dai Ha undergo reconstruction. But To urged that the widening be carried out six months ago. Cheung said the crash zone was not a traffic black spot, but the transport department would inspect the area to see if anything could be improved. He added that he expected the bus operators to submit reports on the incident as soon as possible. Lawmaker Chan Kam-lam said the Legislative Council transport panel, which he chairs, would call a special meeting to discuss the crash. In August, five passengers were injured after a Longwin bus hit a shopping centre in Tsuen Wan after the driver collapsed.

Philanthropist extends family love to mainland poor (By Vivian Chen) Helen Fong (left) receiving her award from Carrie Lam. It is family that matters most to philanthropist Helen Fong Lau Show-may, and she extends that love and passion to underprivileged families on the mainland. The chairwoman and a founding member of the Hong Kong China Foundation received an honorary award for her charity work earlier this month at the 40+ Distinguished Fellows' fifth anniversary charity ball at the Grand Hyatt hotel, officiated by Chief Secretary Carrie Lam Cheng Yuet-ngor. "My family is very important to me, and so is helping poor children on the mainland to at least have a chance to receive proper education," Fong said. Fong has spent almost two decades contributing to a variety of charitable groups including the Po Leung Kuk, China Charity Federation and Eastern district's Hong Kong Girl Guides Association. Asked how she balanced her career and family life, the mother of three said: "A successful woman needs to be confident and have a very clear goal on every project she works on. It has made my life much easier because I keep thinking positively even when I face problems or difficulties."

City Telecom pushes ahead with multimedia centre without free-to-air licence (By Amy Nip) City Telecom chairman Ricky Wong Wai-kay. City Telecom’s chairman Ricky Wong Wai-kay says he will push ahead with building a multimedia centre in Tseung Kwan O even though he has yet to get the related free-to-air TV licence. The tendering period for construction bids on the 400,000 sq ft centre, estimated to cost HK$600 million, will end this month, Wong said on Metro Radio programme on Tuesday morning. Building is scheduled to start in January. “We will continue to go forward,” he said, adding that a poll released by the University of Hong Kong yesterday found 85 per cent of Hongkongers want a new free-to-air TV station. The lack of competition in the TV sector has dragged down both the quality of programming and veterans’ salaries, he said. At the well-established TVB broadcaster, profit has risen from HK$500 million to HK$1.5 billion in about 15 years while directors’ salaries have remained at little more than HK$20,000, he said. City Telecom applied for a free-to-air television licence in December 2009, and Wong has recently launched high-profile criticisms of the government for the long delay in processing the application.

 China*:  Nov 22 2012

China firm aims to build sugar industry in Australia outback (By Reuters in Canberra) Brahman cattle bound for Indonesia held at Cedar Park, a pre-export feed lot some 100 km south of Darwin, Australia, on 14 July 2011. A Chinese firm has won the right to develop a farm project in Western Australia, targeting a $728 million investment to build a sugar industry in the state, and marking the latest foreign deal aimed at securing agricultural resources in Australia. Shanghai Zhongfu Group plans to invest up to A$700 million (US$728 million) in the next six years in the 52-sq-mile (13,400-hectare) area of the Ord East Kimberley region, the Western Australia state government said on Tuesday. Zhongfu forecast the project could produce about 4 million tonnes annually of sugar cane, exporting 500,000 tonnes of raw sugar, or about 15 per cent of Australia’s estimated 2012/13 exports. The move comes after a number of high-profile deals involving Chinese investors, including the purchase of the country’s biggest cotton farm, as well as foreign takeovers in its deregulated wheat industry. However, foreign investment in agriculture has sparked a political backlash that some analysts fear could threaten the opportunity for Australia to tap the booming demand to accommodate Asia’s middle-class. “This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for the East Kimberley and northern Australia,” Western Australia premier Colin Barnett said in a statement. Zhongfu, trading in Australia as Kimberley Agricultural Investment (KAI), is also proposing to build an A$425 million sugar mill in the area and could build a biofuel plant as well as upgrading port facilities in the area. Despite local scepticism at the prospects for Australia’s farming sector, an increase in offshore interest comes at a time when returns have seldom been better and adds to other evidence suggesting the foreign investment may not be mistimed after all. Helped by generous rains and strong global prices, Australian farmers may have enjoyed the best year in decades in 2011/12. Australia is the driest inhabited continent, but it has plenty of water in the tropical and sub-tropical northern regions such as Kimberley, which are mostly underdeveloped. The Kimberley project would open new tracts of farmland to irrigation from the waters of the Ord River and Lake Argyle, which hold enough water to fill 21 Sydney Harbours. Zhongfu’s president Pui Ngai Wu said investment in a sugar mill and other infrastructure would depend on further negotiations with local governments and environmental approvals. “Scale is important and will directly relate to the level of investment which KAI will make in infrastructure such as port upgrades,” Wu said in a statement. The firm’s plans could also include building an ethanol plant, which could produce biofuel from sugar, the state government said. The Kimberley project is the first investment in Australia by the Shanghai-based property company, which is still negotiating rent and will look to start clearing land from 2013. Australia is the world’s third-biggest raw sugar exporter, with exports forecast to rise by nearly 12 per cent from last year to 3.4 million tonnes. Global sugar consumption is expected to grow by 32 million tonnes by 2020, an increase of 2.2 per cent a year, driven by rising population and incomes, according to consultant Jonathan Kingsman. China is the world’s second-largest sugar consumer after India, accounting for about 8 per cent of global output. Whether for food or ethanol, Zhongfu should be able to profit from the sugar project, said Stephen Ryan, general manager of the Australian Cane Farmers Association. “If you’ve got cheap rent, plenty of water, plenty of sunshine...there is every reason that it should succeed,” he said. Most of Australia’s sugar industry is clustered on the east of the country and previous attempts in the west have faltered including the closure of a sugar mill operated by South Korea’s largest food maker CJ Cheiljedang. Peter Robertson, campaign manger for environmental group, the Wilderness Society, said there were also risks hanging over this project. “We think it will be unprofitable, and probably will only last for a couple of years, and then the investors, whoever they are, will pull out and say it is not viable,” he said.

Shanghai mayor promoted to Party leader (By Agence France-Presse in Beijing) Former Shanghai Mayor Han Zheng - China on Tuesday named a new leader for Shanghai, a day after naming a replacement leader for Chongqing following the departure of disgraced former official Bo Xilai. Business-friendly Shanghai Mayor Han Zheng, 58, was promoted to the city’s top post as Communist Party chief after serving as mayor since 2003, Xinhua news agency said. Up-and-coming politician Sun Zhengcai, 49, a former minister of agriculture was named top Communist Party official in Chongqing, Xinhua said in an earlier report. Han is credited with guiding Shanghai through the successful World Expo in 2010 and he survived a 2006 corruption scandal which sent former Shanghai party chief Chen Liangyu to jail for 18 years. A native of Zhejiang province which neighbours Shanghai, Han was educated in Shanghai and served his entire political career in the city. Several candidates were rumoured to be in line for the Shanghai party chief job, but local government officials were keen to have one of their own take the post instead of an outsider, a Shanghai-based political journalist said. Sun’s promotion is largely based on his expertise in agriculture – a key sector in a country that needs to feed 1.3 billion people. He graduated from Beijing Agriculture University in 1987 and later spent a year as a visiting scholar at Britain’s Rothamsted Experimental Station, an agricultural research centre based at a manor house in Hertfordshire. Later he served as minister of agriculture for three years. Following Bo’s dismissal from Chongqing in April, the sprawling city of 30 million people has been run by Vice Premier Zhang Dejiang, who was last week promoted to the elite seven-member Politburo Standing Committee. Zhang is slated to become China’s next parliamentary head in March next year. Bo is at the centre of the biggest political scandal in China in years, which saw his wife Gu Kailai given a suspended death sentence in August for murdering British businessman Neil Heywood. He was formally expelled from the ruling Communist Party late last month and is in custody awaiting trial for corruption and abuse of power. Bo had been tipped for promotion to the top ranks of the party at the once-in-a-decade leadership transition that saw President Hu Jintao hand the top party post to Vice President Xi Jinping last week. During the reshuffle, Sun was one of the youngest politicians promoted to the 25-member party Politburo, placing him at the forefront of leaders slated to rule China following the next power transition in 2022, analysts said.

United States overtakes EU as China's top export market (By Agence France-Presse in Beijing) Containers are unloaded at Qingdao port, Shandong province. China said on Tuesday that the United States has overtaken the European Union as its biggest export market, as the continent’s debt crisis has sent demand slumping. “The biggest is the US and the EU is second,” Commerce Ministry spokesman Shen Danyang told reporters at a regular briefing, without saying when the reversal occurred. “The EU used to be the biggest,” he added. Chinese customs figures for the first 10 months of this year showed that China’s exports to the United States totalled US$289.3 billion, while shipments to the EU came to US$276.8 billion. Weak demand from both Europe and the US has been a big factor as China’s economic growth has slowed over the past seven quarters to the end of September. Economic growth in the United States remains weak but is expanding, while the eurozone’s debilitating debt crisis has dragged it back into recession. Shen noted that China will probably miss its full year target of 10 per cent foreign trade growth this year due to sluggish overseas demand, particularly in Europe and Japan. “The international economic situation this year has been severe and complicated. There have been many uncertainties, with slack foreign demand being the most severe one,” he said. “It will be indeed very difficult to achieve this year’s 10-per cent target for trade growth,” he said, yet added it was premature to conclude what the full year increase would turn out to be. Chinese customs data showed foreign trade rose by just 6.3 per cent in the first 10 months of the year from the same period last year. Shen also said the Association of Southeast Asian Nations had moved past Japan as China’s third-biggest export market. Japan, which is in the midst of a diplomatic row with China that has hit trade between the two nations, slipped to fourth place. Shen offered no explanation for China’s changing trade patterns with Asean and Japan. China shipped US$125.3 billion in goods to Japan in the first 10 months of the year, compared with US$163.9 billion dollars to the 10 Asean countries, according to customs figures.

Obama urges restraint amid Asian territorial disputes (By Reuters in Phnom Penh) US President Barack Obama, Cambodia's Prime Minister Hun Sen and China's Premier Wen Jiabao at the East Asia Summit in Phnom Penh. US President Barack Obama urged Asian leaders on Tuesday to rein in tensions in the South China Sea and other disputed territory but stopped short of firmly backing allies Japan, the Philippines and Vietnam in their disputes with China. The comments illustrate the challenge facing newly re-elected Obama in managing Sino-US ties that have become more fraught across a range of issues, including trade, commercial espionage and the territorial disputes between Beijing and Washington’s Asian allies. “President Obama’s message is there needs to be a reduction of the tensions,” Deputy National Security Adviser Ben Rhodes said after the East Asia Summit in the Cambodian capital Phnom Penh. “There is no reason to risk any potential escalation, particularly when you have two of the world’s largest economies - China and Japan - associated with some of those disputes.” The comments appeared carefully calibrated not to offend either side. It follows a three-day trip by Obama to three strategically important Southeast Asian countries: old US ally Thailand, new friend Myanmar and China ally Cambodia, in a visit that underlines Washington’s expanding military and economic interests in Asia under last year’s so-called “pivot” from conflicts in the Middle East and Afghanistan. Obama’s attention was divided as he tried to stay on top of the unfolding crisis in Gaza. He dispatched Secretary of State Hillary Clinton from the summit to the Middle East for a round of troubleshooting talks in Israel, the West Bank and Egypt. A decades-old territorial squabble over the South China Sea is entering a new and more contentious chapter, as claimant nations search deeper into disputed waters for energy supplies while building up their navies and military alliances with other nations, particularly with the United States. Beijing claims almost the entire sea as its territory based on historical records, setting it directly against US allies Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to parts. The Philippines lodged a formal protest on Tuesday against summit host Cambodia, accusing the Chinese ally of trying to stifle discussions on the South China Sea when leaders of the Association of Southeast Asian Nations (Asean) met on Monday. On Tuesday, China defended its stand to not discuss the South China Sea issue at multilateral forums. Beijing prefers to deal with other claimants on a bilateral basis. “We do not want to bring the disputes to an occasion like this,” Chinese Premier Wen Jiabao told the summit, according to Chinese Deputy Foreign Minister Fu Ying. “We do not want to give over emphasis to the territorial disputes and differences, and we don’t think it’s a good idea to spread a sense of tension in this region,” Wen added. Several leaders at the summit raised the South China Sea issue, including a dispute over Scarborough Shoal, where Philippine and Chinese ships faced off in April. That prompted a firm response from China, Fu told reporters. “Huangyan Island (Scarborough Shoal) is China’s territory,” Fu quoted Wen as telling the summit. “China’s act of defending its sovereignty is necessary and legitimate.” Earlier, in his first meeting with a Chinese leader since his re-election, Obama said Washington and its chief economic rival must work together to “establish clear rules of the road” for trade and investment. But he stopped short of accusing China of violating those rules, a hot topic in his re-election campaign. “I’m committed to working with China and I’m committed to working with Asia,” Obama told Wen in a bilateral meeting. Wen highlighted “the differences and disagreements between us” but said these could be resolved through trade and investment. Japanese Prime Minister Yoshihiko Noda said mounting Asian security problems raise the importance of the US-Japan alliance, a veiled reference to tensions over Chinese sovereignty claims and maritime disputes. “With the increasing severity of the security environment in East Asia, the importance of the Japan-US alliance is increasing,” Noda told Obama. Sino-Japanese relations are also under strain after the Japanese government bought disputed islands known as Senkaku in Japan and Diaoyu in China from a private Japanese owner in September, triggering violent protests and calls for boycotts of Japanese products across China. China says both disputes involve sea-lanes vital for its economy and prefers to address conflicts in one-on-one talks. Cambodian Prime Minister Hun Sen said on Sunday Southeast Asian leaders agreed not to internationalise the row over the South China Sea and to confine talks to between Asean and China – a claim disputed by Philippine President Benigno Aquino. A stern-faced Philippine Foreign Minister Albert del Rosario said his delegation had been shocked when a Cambodian official told a news conference that Asean leaders had reached a consensus at their summit on Sunday. “Consensus means everybody. I was there, the president (Aquino) was there and we’re saying we’re not with it because there’s no consensus,” del Rosario told reporters. “How can they say there’s consensus when we’re saying there’s no consensus?” It was the second time in five months Cambodia was accused of bowing to Chinese pressure and thwarting regional debate on the issue. A July Asean foreign ministers meeting, also in Phnom Penh, broke down in acrimony and failed to agree on a communique for the first time, just weeks after a standoff between a Philippine warship and Chinese vessels in the South China Sea.

Hong Kong*:  Nov 21 2012 

Leung Chun-ying has strong support base, says Lam Woon-kwong (By Colleen Lee) Hong Kong's chief executive enjoys a "solid foundation of support" despite "not so high" popularity, according to Executive Council convenor Lam Woon-kwong. In the latest popularity poll earlier this month, Leung Chun-ying's rating rose to 53 points out of 100, after the government rolled out a buyer's stamp duty on non-locals to cool the property market. The increase of 3.9 points from two weeks ago nearly puts him back at the 53.8 points he recorded in mid-July soon after taking office. Lam also gave credit to the embattled chief executive for his efforts to deliver on his election pledges and address issues that have been avoided by previous governments - such as plans to draw a poverty line and study standard working hours. "Setting a poverty line was … taboo in the previous government, but he decided to do it … It shows his determination," he said. "He is serious in honouring his election pledges … His popularity is not so high, but - as you may notice - he has a rather solid foundation [of support]," Lam added. "The public hold expectations of him and hope that he can have room to do something." But Lam conceded the new government had faced "more challenges than it expected". "It is impossible to honour all his election pledges in five years … But people would expect him to at least address the tasks that are considered crucial," he said. Lam added: "But if the opposition camp wrongly thinks they can drag him down by labelling him 'red CY Leung', this would be a wrong judgment."

Lam Woon-kwong: I'm no parrot for policy (By Gary Cheung and Colleen Lee) Executive Council convenor says his criticism of the government's stance on tackling gay bias and retirement protection is healthy for politics - Lam Woon-kwong says his honest political opinions do not breach the principle of collective responsibility. Executive Council convenor Lam Woon-kwong has defended his apparent departure from the government stance on how to tackle gay bias and universal retirement protection, saying there is no need for another "human recorder" to repeat the administration's position. Lam, formerly secretary for the civil service and director of the Chief Executive's Office, said his views on both issues did not breach the principle of collective responsibility to which executive councillors should abide. "Non-official members of the Exco are not part of the governing team. We should offer honest advice to the administration," he told the South China Morning Post in an interview. "There is no need for us to come out to defend all government policies as it is already being done by policy secretaries," he said. "If we were to be human recorders, it wouldn't matter to have one more or one less of this kind of person." Former chief secretary Stephen Lam Sui-lung earned the nickname "human recorder" for repeating government policy. Lam Woon-kwong, who will step down as Equal Opportunities Commission chairman in January, criticised the government's refusal to hold a public consultation on outlawing discrimination based on sexual orientation. "It is very backward, not just compared to the whole world. It is more backward than Asian places like Taiwan and mainland China," said Lam. "Even if I were not with the commission, I would also criticise anything unjust." In a Legislative Council debate on the issue on November 7, constitutional minister Raymond Tam Chi-yuen said the government would take the pulse of public opinion to decide how to tackle discrimination. Lawmaker Cyd Ho Sau-lan's motion demanding a public consultation was vetoed. Lam, who promoted an old-age pension scheme in the 1990s as an official in the colonial government, said he still supported the idea of a universal retirement scheme, although the details needed to be hammered out. His advocacy apparently goes far beyond the government line, which says society has yet to reach a consensus on the issue. The recently revived Commission on Poverty will have a task force to study social security and retirement protection. The old-age pension scheme proposed in the time of last colonial governor Chris Patten required employers and employees to each contribute 1.5 per cent of an individual's salary to a pool. Pensioners would receive HK$2,300 a month. But the colonial administration later shelved the scheme in the face of opposition from business and Beijing. "I have always believed we must ensure the elderly people in Hong Kong have a decent post-retirement life and a sound retirement protection scheme," he said, adding that Leung Chun-ying's administration recognised the inadequacies of the existing Mandatory Provident Fund.

Exchange Fund rounds to HK$41.2b gain in third quarter (By Eric Ng) Market turnaround and gains in currencies and bonds lead third-quarter reversal from HK$41.7 billion loss in the same period last year. The Exchange Fund turned around earlier losses to return HK$41.2 billion in the third quarter, thanks to a rebound in the stock market and gains from currencies and bonds. The third-quarter profit compared to a loss of HK$5.6 billion in the second quarter and a loss of HK$41.7 billion in last year's third quarter, said the Hong Kong Monetary Authority (HKMA). Investment income in this year's first nine months was HK$80.1 billion, compared with HK$5 billion in the same period last year. The fund, which is mandated to support the Hong Kong dollar's fixed exchange rate to the US dollar, made HK$9.3 billion from Hong Kong stocks, HK$14.4 billion from other stocks, HK$6.6 billion from currencies and HK$10.8 billion from bonds. Globally, stocks performed better in the third quarter as investor sentiment improved after the European Central Bank said in September that it was prepared to make "unlimited purchases" in euro members' bond markets. The move triggered a rally in shares globally. The Hang Seng Index gained 7.2 per cent in the third quarter, compared with a 5.4 per cent decline in the second. HKMA chief executive Norman Chan Tak-lam told a Legislative Council Financial Affairs Panel meeting yesterday that the investment return of the exchange fund this year was good but advised caution. "Due to unstable global conditions, especially the fiscal cliff after the presidential election in the United States, as well as the conflict in the Middle East, stock-market volatility will increase," he said. "It is difficult to predict the full-year performance of the Exchange Fund." He believes the Democrats and the Republicans in the United States will come to an agreement to avoid the so-called fiscal cliff - a looming expiry of major tax reductions and implementation of government spending cuts due in early January that threatens to throw the US back into recession. Chan said the HKMA is doing a "stress test" on the banking industry for assessing the potential impact of a worst-case scenario if the US fails to reach agreement. Besides risks emanating from the US, the European Union has entered its second recession in three years, mostly as a result of the austerity measures in the region's heavily indebted nations. "The euro-zone debt crisis, combined with persistently high unemployment and depressed demand in the US as well as faltering growth in emerging markets have all contributed to a perfect storm for the world economy," Financial Secretary John Tsang Chun-wah told a forum yesterday. Meanwhile, Chan warned potential investors in local residential properties to be cautious because of uncertainties on how long the ultra-low interest rates in the US and Hong Kong will persist, despite the US Federal Reserve's indication that they will stay low until mid-2015. "While the mortgage repayment-to-income burden is lower than in 1997, the local property market's risk is no smaller," he said. "In 1997, interest rates were on a downtrend whereas nowadays, with mortgage rates averaging 2.3 per cent, there is a lot of room for them to go up." He also said the HKMA will ask banks to tighten lending to investors in industrial and commercial properties if there are signs of excessive speculation following the government's clampdown on residential property speculation.

Long wait ahead for Hong Kong's new TV licences (By Ng Kang-chung) Minister says there's no timeframe for a decision, as Exco still looking into matter. Secretary for Commerce and Economic Development Gregory So Kam-leung. The minister in charge of broadcasting policy has hinted there could still be a long wait for a decision on new free-to-air television licences. Secretary for Commerce and Economic Development Gregory So Kam-leung said yesterday there was no timeframe for a decision, saying the Executive Council was still considering the issue. But he reiterated that there was no political considerations behind the delay, saying everything had to be done according to established procedures. "I have clarified many times that political concerns are an irrelevant factor," said So. "We have been following our laws and guidance notes and procedures to process [the licence applications]. "The Executive Council will make a decision. Our bureau will offer support to the Exco... It is not appropriate for us to set a timeframe for Exco. I believe the council will process the applications in a prudent and prompt manner." His comments yesterday appeared to shift slightly from his previous stance, that the government would follow proper procedures in processing the applications and a decision would be made as soon as possible. There were reports that Exco had agreed in principle to issue new licences but was uncertain whether it should grant them to all three applicants, hence the delay. One of the applicants, City Telecom, appeared to be losing patience, with its chairman Ricky Wong Wai-kay saying he might consider lodging a judicial review if the government postponed its decision for too long. City Telecom has reportedly invested more than HK$300 million and hired 700 workers and 200 performers for its proposed station. It also sold its telecommunication assets for HK$5 billion earlier this year to focus on building a TV empire. A City Telecom spokeswoman yesterday expressed disappointment with So's statements, saying: "It is irresponsible. Whether they are going to grant us a licence or not, they should tell us as soon as possible." The company cancelled a press conference planned for today, sparking speculations that the unusual move was due to some development in the licence saga. The spokeswoman said the press event was cancelled because it would have been too close to the announcement of its financial results. Other licence applicants include Fantastic Television, a subsidiary of i-Cable Communications, and HK Television Entertainment, set up under PCCW Interactive Media Holdings. But neither of them was as vocal as City Telecom in the fight for licence. The saga is showing signs of brewing into another political bomb, after a mounting chorus of protest against both the delay and the issuing of licences.

Three killed, 56 injured in Shau Kei Wan bus crash (By Lai Ying-kit) Firefighters and paramedics try release passengers trapped in a taxi after a pile-up in Shau Kei Wan on Monday. Three people died and 56 people were injured when a taxi and two double-decker buses collided in Shau Kei Wan on Monday. The crash happened at the junction of A Kung Ngam Road and Chai Wan Road at 11.38am, police said, as the New World First Bus approached Chai Wan Road driving downhill. The bus first had minor collisions with two private cars, and then moved into the opposite lane to hit a taxi and a KMB travelling along the lane. The three who died were all in the taxi - the driver and his two passengers, both of whom have been indentified as foreign nationals. One of the passengers was confirmed to be Swedish. The three were trapped inside the taxi for more than an hour before firemen were able to cut them free from the wreckage. Fifty-six people on the buses, one from First Bus and another from KMB, were injured, including the two drivers. Most of the injured received treatment on the roadside at the scene, but others were sent to three nearby hospitals for treatment. One person is in critical condition, five are in serious condition, and 15, stable. Thirty-five people were treated and discharged from hospital. Local media quoted a First Bus passenger as saying the bus driver collapsed at the wheel and then the double-decker crashed into the taxi and ran off the road. The KMB bus, which was behind them, then crashed into the First bus. “We heard a loud shout of ‘Aaah’ and then other passengers said the driver was not all right. Then, I saw the driver’s head had dropped down on his left side,” the female passenger said. Fire Service station commander in North Point Derek Armstrong Chan said firemen took a long time to pull three people out of the taxi. “The taxi was sandwiched by the buses after the collision, but the buses’ braking system were locked so they could not be towed away,” Chan said. “We had to lift the two buses upward and backward a bit to make space. And we had to pry open the taxi using saws to pull the three people out,” he said. Secretary for Transport and Housing Anthony Cheung Bing-leung said on Monday afternoon the government had asked the bus companies to submit a report on the fatal accident. He said the scene was not an accident black spot, but the Transport Department would study how to improve road safety at the location. The New World First bus was a Route No 8 running between Heng Fa Cheun and Wai Chai Ferry Pier while the KMB was a Route No 118 running between Sham Shui Po and Siu Sai Wan. Police said they would look into any mechanical failure, human negligence and breaches of traffic regulations to determine the cause of the accident. TV footage showed how the First bus ended up on a pavement beside the damaged taxi. The Transport Department closed the Chai Wan-bound lanes of Chai Wan Road after the accident. 

Hong Kong unemployment rises to 3.4pc (By Lai Ying-kit) A job seeker fills in an application form at the Hong Kong International Airport Job Expo. Hong Kong’s unemployment rate rose slightly to 3.4 per cent in the three months from August to October as the economic slowdown continued, the government said on Monday. The latest seasonally adjusted jobless rate was up from 3.3 per cent in the July-September period, the Census and Statistics Department said. However, the under-unemployment rate – which measures the number of people who cannot find at least 35 hours of work a week – fell from 1.6 per cent to 1.5 per cent. Most of the job losses during the recent three-month period were in the accommodation services, transport and construction sectors. Secretary for Labour and Welfare Matthew Cheung Kin-chung said employers had become more cautious about hiring in recent months amid continued slow economic growth. The euro zone’s debt crisis and the so-called fiscal cliff that looms in the United States had added uncertainties to the economic prospects, he said. “As such, there might be further upward pressure on the unemployment rate in the period ahead,” he said. Cheung said he expects an upturn in hiring during the year-end festive season, when business usually picks up.

 China*:  Nov 21 2012

China downgrades powerful domestic security chief position (Reuters in Beijing) Public Security Minister Meng Jianzhu will replace Zhou Yongkang as head of as head of China's Political and Legal Affairs Committee. China confirmed on Monday that it had downgraded the position of domestic security chief as part of a move to a new and smaller top elite, an expected move that reflects fears the position had become too powerful. The official Xinhua news agency said in a brief announcement that Zhou Yongkang’s position as head of the Political and Legal Affairs Committee, a sprawling body that oversees law-and-order policy, had been taken over by Public Security Minister Meng Jianzhu. The 69-year-old Zhou had to retire along with most members of the Politburo Standing Committee, the inner council at the apex of power, at this month’s 18th Party Congress, due to his age. He turns 70 in December. Meng, however, is only a member of the new Politburo, the 25-member body which reports to the down-sized Standing Committee, putting him on a tighter leash and returning to a pattern the party kept to for much of the 1980s. Reducing the party’s Standing Committee from nine to seven members came as part of a once-in-a-decade leadership change announced last week, which saw Vice President Xi Jinping raised to head of the ruling Communist Party. This follows reports in August that Zhou’s position was likely to be downgraded and Zhou replaced by Meng. Zhou had been on the Standing Committee since 2007 while also heading the central Political and Legal Affairs Committee. That double status allowed Zhou to dominate a domestic security budget of US$110 billion a year, exceeding the defence budget. Zhou was implicated in rumours that he hesitated in moving against the politician Bo Xilai, a former candidate for top office who fell in a divisive scandal after his wife was accused of murdering a British businessman. Security forces also suffered a humiliating failure earlier in the year when they allowed blind rights advocate Chen Guangcheng to escape from 19 months of house arrest and flee to the US embassy in Beijing. Since the 1990s, China’s efforts to stifle crime, unrest and dissent have allowed the domestic security apparatus – including police, armed militia and state security officers – to accumulate power. In another announcement, Xinhua said that Zhao Leji had replaced Li Yuanchao as head of the party’s organisation department that oversees the appointment of senior party, government, military and state-owned enterprise officials. Zhao had been party boss of the northern province of Shaanxi and is close to president-in-waiting Xi. There was no announcement on where Li, a reformer who has courted foreign investment and studied in the United States, may go. He missed out on a spot on the Standing Committee despite being tipped to enter it. Standing Committee positions will officially be released in March at the annual meeting of parliament, though there is no doubt Xi will become president and Li Keqiang will take over as premier from Wen Jiabao. Over the next few days and weeks state media should announce the positions of the other members of the Politburo.

China opposes sea row ‘internationalisation’ (Agence France-Presse in Phnom Penh) China's Premier Wen Jiabao (centre) walks between Cambodia's Prime Minister Hun Sen (left) and Japan's Prime Minister Yoshihiko Noda at the Asean summit in Phnom Penh on Sunday. Chinese Prime Minister Wen Jiabao told Southeast Asian leaders on Monday that negotiations to end territorial disputes in the South China Sea should only be held between claimant countries. Wen stressed Beijing’s position during a summit with the 10-member Association of Southeast Asian Nations (Asean) in the Cambodian capital of Phnom Penh, Chinese foreign ministry spokesman Qin Gang told reporters. Qin said Wen quoted from a 2002 deal reached between Asean and China in which they agreed to limit negotiations to “directly concerned” countries. Wen said that among the principles under the 10-year-old declaration is to “oppose the internationalisation of the issue”. “So Premier Wen quoted the principles... enshrined in the declaration,” according to Qin. Asean members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the sea, which is also believed to be rich in fossil fuels. But China insists it has sovereign rights to virtually all of the sea. Tensions have risen steadily over the past two years, with the Philippines and Vietnam accusing China of increasingly aggressive diplomatic tactics to stake its claims. The Philippines has consistently sought wider help, such as from close ally the United States, in dealing with its more powerful Asian neighbour on the South China Sea issue. The controversy of “internationalisation” flared again in Phnom Penh this week with the Philippines insisting it should not have to confine its negotiations to just with China. US President Barack Obama, who arrived in Phnom Penh on Monday night for an 18-nation East Asia Summit, was also expected to raise his concerns over the South China Sea, which would anger the Chinese but embolden the Philippines.

Wen urges closer cooperation in East Asia - Chinese Premier Wen Jiabao (2nd L) attends a summit between the Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea (10+3) in Phnom Penh, Cambodia, Nov. 19, 2012. Chinese Premier Wen Jiabao (6th L) and other leaders hold hands for a photo during a summit between the Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea (10+3) in Phnom Penh, Cambodia, Nov. 19, 2012. The summit coincided with the 15th anniversary of ASEAN Plus Three (APT) cooperation. The summit coincided with the 15th anniversary of ASEAN Plus Three (APT) cooperation. Chinese Premier Wen Jiabao on Monday urged members of the Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea (10+3) to further promote cooperation in the region. At a 10+3 summit, Wen asked countries in the region to focus on development problems and work for an early creation of East Asian community. Wen arrived in Phnom Penh on Sunday afternoon to attend a series of meetings of East Asian leaders and pay an official visit to Cambodia. The 13 nations have successfully handled the 1997 Asian financial crisis and properly dealt with the current international financial crisis, forged a rather complete cooperation platform, and made important achievements in maintaining financial and food security in the region, Wen said. The Chinese premier called on the countries to strengthen capacity for crisis management, speed up the revision of the Chiang Mai Initiative Multilateralization, a regional currency swap arrangement, promote the 10+3 macroeconomic research office to a regional institution, and groom Asia's bond market. Wen urged the parties to work hard to boost regional integration, saying China supports talks for comprehensive economic partnerships in the region, the expansion of mutual investment and industrial convergence. The Chinese premier also urged efforts to promote transnational infrastructure. He called on the leaders to strengthen policy coordination, expand financing channels, and build convenient and efficient infrastructure networks. Wen urged the development of regional institutions in law enforcement, disaster management, the fight against transnational crimes and disease prevention. He also asked for more cultural exchanges and contacts between youths and between media organizations. He said all ASEAN nations, as well as China, Japan and South Korea should continue to step up strategic communication, deepen mutually beneficial cooperation, and stay committed to maintaining lasting peace and common prosperity in East Asia. Other leaders attending the summit agreed that the international financial crisis, which has triggered global economic downturn, has brought huge uncertainty and instability to the region. They believed that the 10+3 countries should work together even closer so as to promote regional trade liberalization and economic integration, maintain financial, energy and food security, strengthen infrastructure construction, and expand cultural exchanges. The members should also join hands in maintaining robust economic growth in the region and prompt balanced and sustainable development, the leaders said.

Preparing for a 4G network across China (By Shen Jingting) Engineers test new mobile grid ahead of launch of revolutionary technology. A bus installed with professional testing equipment is driven slowly along the main roads in Qingdao's Huangdao development zone. Engineers watch a screen in the center area of the vehicle, checking ever-changing numbers that reflect the status of a TD-LTE 4G trial network. The average download rate is around 35 megabits per second, with the maximum rate sometimes reaching 95 mbps. When engineers open a popular TV drama on the Chinese video website, there is almost no download waiting time and the picture quality is good. China Mobile demonstrates its Four Generation Time Division Long Term Evolution technology at a telecommunication fair in Nanjing, the capital city of Jiangsu province. It is a common scenario for Ericsson China's engineers on the newly constructed TD-LTE trial network. TD-LTE stands for Time Division Long Term Evolution technology, one of the international 4G mobile telecommunication standards. It is a homegrown technology largely promoted by China Mobile Ltd, the nation's biggest telecom carrier. Li Jiangli, senior customer solution manager at Ericsson China, said the TD-LTE trial network Ericsson built in Qingdao has been very successful and demonstrated a much superior performance than the current 2G and 3G mobile networks. "Compared with 2G and 3G networks, the TD-LTE network will enable people to do more things with mobile phones. For example, you can watch movies, have video conferences and complete tasks that use large data traffic," Li said. Telecom equipment vendors including Ericsson are closely cooperating with China Mobile to deploy and test TD-LTE trial networks. Only through various tests under different circumstances can equipment suppliers gather experience and prepare well for their future commercial use, she added. In Qingdao, Ericsson tested the possibility of updating GSM 2G base stations directly to the 4G TD-LTE base stations. "The solution does not only provide quality 4G functions but also greatly reduces the construction cost for telecom operators," said Chang Gang, chief marketing officer of Ericsson China. China Mobile owns most of the nation's GSM base stations and operates one of the world's most efficient GSM networks. The number of China Mobile's GSM stations is more than double the carrier's TD-SCDMA 3G base stations. By making better use of its GSM 2G resources, China Mobile can deploy a 4G network in a much shorter time because it takes only one hour to update a 2G station, Chang said. China Mobile has been officially running the second phase of its scale-trial of TD-LTE technology in 13 Chinese cities since June. In addition to Ericsson, other leading telecom equipment vendors such as Huawei, ZTE and Alcatel Lucent have all participated and come up with new solutions and applications for the TD-LTE network. In Hangzhou, people can experience TD-LTE network's high-speed data transfer in buses. In Shenzhen, when the 26th Summer World University Games opened last year, media reporters were already able to shoot videos and send them back to editing platforms immediately via a TD-LTE trial network. "The world's 4G network development is gaining momentum. There is a clear trend in that all telecom equipment vendors are actively joining China's 4G development," said Huang Meng, a telecom analyst at Beijing-based research firm Analysys International. The increasing 4G activity is largely driven by positive signals released by Chinese government and telecom operators recently, analysts said. Miao Wei, minister for industry and information technology, revealed the Chinese government would soon grant 4G licenses to telecom carriers. The government will issue 4G licenses over the coming year, Miao was quoted as saying in a China National Radio report. The ministry officially defined the TD-LTE spectrum - 2,500-2,690 MHz - in China in October, paving the way for future TD-LTE network commercial use. Xi Guohua, chairman of China Mobile, said in June that China Mobile plans to have a total of more than 200,000 TD-LTE base stations through new builds and upgrades by 2013. Rumors have circulated in Chinese media that China Telecom, the nation's smallest mobile carrier, will probably adopt TD-LTE technology when it starts to deploy its 4G network. If true, it would be a great boost for the TD-LTE industry both at home and abroad.

Chinese shoemaker wins EU anti-dumping case (Xinhua) China's leading shoemaker, Aokang Group Co Ltd, has won a lawsuit against European Union (EU) anti-dumping measures on Chinese leather shoes, according to the company. On Sunday, Aokang received the judgement of the European Court of Justice by which the Court set aside a General Court of the EU ruling in April 2010 which dismissed Aokang's action against the EU. The Court also ordered the Council of the European Union to pay the costs incurred by Aokang Group from the lawsuits. The EU imposed two-year 16.5-percent anti-dumping duties on imports of Chinese leather shoes in October 2006 and later decided to extend the policy until March 31 in 2011. Five Chinese shoe companies including Aokang lodged a lawsuit against the EU measures to the General Court of the EU after the duties were imposed. After the Chinese companies lost in the first instance in April 2010, Aokang decided to appeal to the European Court of Justice against the verdict. The EU removed the anti-dumping duties on April 1, 2011, while Aokang continued with the lawsuit despite the removal. Experts said Aokang's "legal victory" could bring the company more than 5 million yuan ($801,600) in compensation for the legal costs, and importers and exporters in trade relations with Aokang will get back the anti-dumping duties levied by the EU during the past six years. Experts also believe that the winning of the case will create a legal basis for the Chinese shoemakers when facing international trade disputes in the future.

'Served by China' targets 'Made in China' (Xinhua) As China catches heat for amassing a huge foreign trade surplus by allegedly "manipulating its currency," the country is dealing with widened losses in its service trade with foreign countries. China's foreign trade deficit for services increased 75.5 percent in the first three quarters of 2012 to reach $70.2 billion, according to data from the State Administration of Foreign Exchange. At this rate, the deficit is expected to top $100 billion for the full year. The service trade mainly includes tourism, transportation, finance and intellectual property products. "Made in China" can be seen in every corner of the globe and has largely become a symbol of the country as the so-called "world's workshop," but "Served by China" has lagged behind as the country's service exports remain weak. "The imbalanced situation won't change in the near future," Wang Jun, a senior expert with China Center for International Economic Exchanges, told Caijing Magazine. China's service trade of tourism, transportation, insurance, patents and franchises reported major losses in the first three quarters. Outbound trips made by Chinese tourists, which are considered tourism imports, will hit 82 million this year, up 16.7 percent year on year, according to a report by the China Tourism Academy. However, inbound trips are expected to fall 2.2 percent to 132 million this year, partly due to a faltering global economy, the report said. The academy forecast that China will likely see a tourism trade deficit of more than $40 billion in 2012. Liu Feng, an expert with the Development Research Center of the State Council, said that apart from the substantial amount of Chinese going abroad, the huge consumption appetite of Chinese tourists abroad has added to China's tourism deficit. Services closely linked to the manufacturing sector also had a hard time this year due to the contracted world economy. China's transportation service exports saw a deficit of up to $34.8 billion in the first three quarters, and the insurance sector lost $12.9 billion in foreign trade. Despite the sluggish global economy, China's foreign trade volume of goods remains one of the world's largest, creating great opportunities for the country's productivity service providers. Chinese enterprises with weak global competitiveness, however, did not seize this opportunity and let orders go to their foreign counterparts, Long Guoqiang, another expert with the center, told Caijing Magazine. Along with traditional services like tourism, transportation and insurance, foreign trade in "emerging services," including patents, franchises, movies and other video products, widened the deficit for China. China spent $12.9 billion in obtaining patents and franchises in the first three quarters, and it spent $2.5 billion importing ads, movies, audio and video products. China is likely to import more emerging services in the coming years, according to Liu Yuhui, chief economist with Huatai Securities. By contrast, the US sold $52.8 billion worth of services in August, marking a record high. Liu Xuede, vice president of China International Freight Forwarders Association, suggested that Chinese enterprises should invest directly in overseas ports, airports and logistics facilities. International transportation relies on these infrastructures, Liu told Caijing Magazine. The Ministry of Commerce is mulling a guideline to help leading logistics enterprises track opportunities overseas. Chinese enterprises invested $42.2 billion in non-financial sectors in foreign countries during the January-July period this year, with 56.8 percent of the capital put into the commercial service sector. Besides traditional services, China is trying to improve emerging services, which industry insiders believe are key to reversing the country's deficit-laden service trade. China's trade volume of emerging services, including advisory services, communication services and IT services increased rapidly in 2011, up 24, 26 and 30 percent, respectively, year on year. Service outsourcing has been developing most rapidly in 2012. Chinese enterprises took service outsourcing orders of $30.8 billion in the first three quarters, said Li Rongcan, assistant to Commerce Minister Chen Deming. Service outsourcing has become the major advantage and engine for China's service exports in the first three quarters, said Mei Xinyu, a foreign trade expert at the Ministry of Commerce.

China's environment satellite blast off - A Long March-2C rocket carrying the environment-monitoring satellite Huanjing-1C blasts off from the Taiyuan Satellite Launch Center in Taiyuan, capital of North China's Shanxi province, on Nov 19, 2012. The satellite will be used to monitor environmental situations and help to reduce the effects of natural disasters. 

Hong Kong*:  Nov 20 2012 

Tsang warns of further economic downturn (By Karen Chiu) The Hong Kong economy now is "a mixture of grief and joy," said Financial Secretary John Tsang Chun-wah, adding that the fiscal budget must prepare the territory for a further downturn. In his latest blog posting, made yesterday, he reiterated the importance of prudence in public finance. "We should spend what should be spent and avoid squandering, in order to make sure we have the sufficient reserves to take appropriate actions at appropriate times," he said. The SAR continues to be affected by the lackluster global economy, he said. Hong Kong has dodged a technical recession after reporting a 1.3 percent growth in the three months to September, after contracting 0.1 percent in the second quarter. Tsang said it was delightful to see domestic demand still remain stable under such adverse global conditions. The tourism sector and private consumption expenditure both expanded in the third quarter. Investment expenditures have also been drastically boosted by active construction works and private machinery purchases, and the labor market remains tight, Tsang said. But the financial secretary is pessimistic on the local foreign trade environment, at least for the short term.

Talent in need of long-term design - Many years ago, a group of experienced architects and scholars voiced their concerns to the government that the so-called creative industry of Hong Kong was heading downhill at an exponential rate. The reason behind the claim was the severe lack of opportunities available for local architects, especially young and emerging talent. Hong Kong is famous for its architecture scene and has always been an open playground for the world, welcoming international architects and designers to erect landmarks. There are benefits to being an open ground for architects from around the world. However, to promote the so-called creative industry, one must understand that the prerequisite is a strong group of local architects and designers. The government has in recent years increased the number of architectural competitions and development projects in a bid to help promote the creative industry. International firms wishing to participate in an architectural competition here must partner with a local firm to submit their entry. Although this may help improve the situation for a while, it is perhaps the general attitude of "The West is better" that has really killed the opportunities for local talent. And for emerging talent, the problem is perhaps even more severe. There aren't enough competitions that have fewer entry requirements and are open to small local firms only. Such endeavors are important and the government must take the initiative to offer opportunities to the next generation to train and prove themselves. The lack of such openings, and the fierce competition, means the local industry faces dramatic challenges. Countries like Japan, Singapore and South Korea, where the government has taken a strong stand, ensure that sufficient opportunities are offered to local architects and designers alike, especially the emerging ones. It is through such efforts that the government can help build a creative industry, not by simply allocating a budget or building design institutions and academies. A program to create long-term, forward- looking strategies for local talent once they graduate and try to start something new is not a sprint but a marathon and the only way to ensure the solution is self-sustaining and far-sighted. Architectural critic Nicholas Ho and art historian Stephanie Poon don't always see eye to eye.

Developer Cheung Kong to meet potential investors in hotel listing (By Peggy Sito and George Chen) Horizon Hospitality's Harbourfront Horizon. Cheung Kong (Holdings) will start its first round of meetings with prospective investors on Monday for the proposed listing of its extended-stay hotel business that aims to raise about US$800 million. The listing application was approved on Thursday and the offering may be launched next month, according to sources. The amount to be raised could range from US$500 million to US$800 million, depending on the prevailing market environment. Extended-stay hotels typically offer suites that are larger than hotel rooms and facilities such as kitchens. Cheung Kong, the city's second largest developer in terms of market share, had earlier said it proposed to separately list the extended-stay hotels business by way of a listing of stapled securities on the main board of the Hong Kong exchange. A stapled security is a financial product comprising two or more securities, such as a share in a corporation and a unit in a unit trust, which are contractually bound together and cannot be traded separately. On October 11, the trustee-manager of Horizon Hospitality Investments and Horizon Hospitality (Holdings), which will own the extended-stay hotels arm, submitted a listing application to the exchange. Horizon Hospitality (Holdings) will own four hotels - two in Kowloon and two in the New Territories - which together will have 4,833 suites with a total gross rental area of 3.32 million square feet. Given the going rate of about HK$7,000-HK$8,000 per square foot, the estimated value of the hotels would be HK$26.6 billion, according to a research report by KGI Asia last month. Each stapled security would comprise a unit of Horizon Hospitality Investments, a preference share in Horizon Hospitality (Holdings) and an interest in ordinary shares of Horizon Hospitality (Holdings) held by the trustee manager. Horizon Hospitality Investments is a fixed single investment trust that will only invest in securities and other interests in a single entity - Horizon Hospitality (Holdings). Bank of America Merrill Lynch, DBS and Standard Chartered are handling the offering, which will be the second listed stapled security besides HKT Trust and HKT.

Spaniard Jimenez wins third Hong Kong Open (By Noel Prentice) Miguel Angel Jimenez plays an approach shot during his march to victory in the Hong Kong Open on Sunday. Miguel Angel Jimenez’s love affair with “Asia’s World City” continued on Sunday when the popular Spaniard won his third Hong Kong Open. The 48-year-old Jimenez called on all his experience down the stretch to beat Swede Fredrik Andersson Hed by one shot in the US$2 million (HK$15.5 million) event. Jimenez finished with a five-under 65 for a 15-under 265 total. “I like everything about this place,” the cigar-chomping Jimenez said as he added to his victories in 2004 and 2007. It was his 22nd victory as a professional and earned him US$333,000. Jimenez stepped into the role of crowd favourite when Rory McIlroy sensationally missed the cut on Friday and he did not disappoint the 14,786 fans who descended on the Hong Kong Golf Club at Fanling, despite the absence of the world number one. Jimenez also "guaranteed" he would be back next year when the troubled tournament will be moved from its prime slot as the penultimate event on the Race To Dubai and replaced by a US$7 million event in Turkey. The European Tour announced on Sunday it would be held in early December next year and be one of its first events. With UBS ending its association with the prestigious event, the European Tour, which underwrites the tournament, said it was actively searching for a new sponsor with the other stakeholders – the Asian Tour and Hong Kong Golf Association. Jimenez became the oldest winner in European Tour history today – at 48 years and 318 days and scored his first victory since the 2010 Omega European Masters. Andersson Hed just failed to force a play-off when his putt lipped out on the 18th hole, finishing with a six-under 64. Australian Marcus Fraser also shot a 64 to race up the leaderboard and grab third place. Italian teenager Matteo Manassero, who beat Louis Oosthuizen in a play-off to win the Barclays Singapore Open last week, came up short to finish in a tie for fourth at 11-under with Peter Lawrie (Ireland) and Stephen Gallacher (Scotland). Michael Campbell, bidding to win his first tournament in seven years, started with a birdie to take the outright lead but the Kiwi fell away to finish with a 72 and at eight-under. China’s veteran Zhang Lianwei, who started the day in second place only one shot off the overnight leaders Jimenez and Campbell, made a bad start at the first hole and his day just got worse, finishing with a 73 and nine shots off the winner. His quest for a China Slam, having already won the Macau Open (twice) and China Open, now looks to be out of his reach. 

 China*:  Nov 20 2012

Wen upbeat on growth as global `engine' fires up (By Grace Cao) The mainland economy has stabilized and is expected to attain a high level of growth for a long period, said Premier Wen Jiabao. A state researcher, meanwhile, forecast an 8 percent growth rate next year. "We will continue to be the engine of economic growth in the world and in the region," Wen told China News Service on his flight to Phnom Penh yesterday to attend the 15th summit between China and the 10-country Association of Southeast Asian Nations. "It is the only right choice and our mutual wish to make a concerted effort to overcome the current difficulties as the recovery of the world economy is slowing down and East Asia is facing increasing pressure," Wen said. He called for solidarity and cooperation among ASEAN members and advocated new development themes. Senior state researcher Lu Zhongyuan expressed optimism over the mainland's growth. "China's gross domestic product growth is highly likely to exceed 8 percent next year as the external environment improves," said Lu, vice president and senior research fellow of the State Council's development research center. Speaking at a Beijing forum yesterday, Lu estimated GDP to be between 7.5 and 8 percent this year driven by domestic growth. In the first three quarters, GDP rose 7.7 percent year-on-year, compared with 9.3 percent in the same period last year. The mainland has targeted 7.5 percent growth in 2012. Lu expects the 12th Five-Year Plan period, which runs from 2011 to 2015, to be around 8 to 9 percent, and around 7 percent from 2016 to 2020. People's Bank of China governor Zhou Xiaochuan said on Saturday that inflation remains a long-term risk as the economy makes a transition from a planned economy to a market-based one. Deeper financial reforms are needed to complete the move, he explained. Zhou also said Wenzhou's economy is likely to go down for a while and is yet to bottom out. The southeastern Zhejiang city earlier reported rising bad loans and entrepreneurs going bankrupt.

Ring of luxury fakes bagged (By Eddie Luk) The mainland and the United States have smashed a global syndicate selling fake luxury leather goods to North America and the Middle East. A total of 73 mainlanders, mostly from Guangdong, were arrested and 5 billion yuan (HK$6.21 billion) worth of counterfeit Louis Vuitton, Gucci, Burberry and Hermes products were seized. More than 30 warehouses, many in Guangzhou, were raided. Investigators also said the ring had bought more than 200,000 square meters of land in Anhui to concentrate its production there. Xinhua News Agency reported that in an investigation that began in January, mainland police found that the syndicate had produced a large number of counterfeit leather goods in the mainland and smuggled them to the United States and Middle East nations. It was also learned that the ring rented various commercial venues and residential flats in Guangzhou in 2010 to showcase the goods. The syndicate set up more than 10 manufacturing centers. Foreign buyers can order online and, once payment is made, the group will ship the products. Mainland police raided several warehouses in May just as the syndicate was planning to send a large consignment to the United States. In a separate case, US authorities charged more than 20 people in March with smuggling US$325 million (HK$2.54 billion) in counterfeit consumer goods from China - including fake Nike sneakers and Coach handbags - through a New Jersey port. The bust, involving mostly ethnic Chinese, was one of the largest in US history and it also involved the smuggling of cigarettes.

Economist story on 'bumbler' Ma causes storm in Taiwan (By Agence France-Presse in Taipei) An article in British magazine The Economist branding Taiwan President Ma Ying-jeou "a bumbler" has set off a media storm on the island, causing even the opposition to give a rare show of support for him. The report, published in the weekly's November 17 edition, detailed Taiwan's economic woes, ranging from stagnant salaries to a pension system threatened by bankruptcy, stating the island seemed to agree Ma was "an ineffectual bumbler". "How can a 'bumbler' get a doctorate from Harvard?" said Wang Chien-shien, president of the Control Yuan, a branch of Taiwan's government in charge of monitoring the others, according to the Taipei-based daily China Times Sunday. Ma, who received his doctorate in juridical sciences at Harvard in the early 1980s, was the target of a "biased" report, Finance Minister Chang Sheng-ford was quoted as saying by the Central News Agency. Diplomatically isolated Taiwan is highly conscious of its image abroad, with the local press often reporting at length if the island is mentioned in international media, even if it is as part of the weather forecast. The Economist's characterisation of Ma was a top news item in major Taiwanese papers on Sunday and a hot topic on the talk show circuit over the weekend. Even the main opposition Democratic Progressive Party (DPP) came out in a rare show of support. "At this time, the entire nation, including the DPP, should work together to help the government," DPP chairman Su Tseng-chang was quoted as saying by The China Post newspaper. Su linked this remark to his party's wish for a national conference aimed at addressing the island's economic problems.

Islands row off the agenda at East Asia summit (By Greg Torode, Chief Asia Correspondent, in Phnom Penh) Summit leaders meeting in Cambodia agree to put territorial disputes on the back burner in a potential diplomatic victory for Beijing - US President Barack Obama and Thai Prime Minister Yingluck Shinawatra at a press conference in Bangkok yesterday. Asean leaders yesterday moved to limit their discussions of tensions over territorial disputes in the South China Sea - a move which could keep the issue off the agenda just as US President Barack Obama arrives in Phnom Penh to intensify Washington's push back to Asia. Papering over differences after rancorous meetings in July, the 10 leaders of the Association of Southeast Asian Nations pledged to confine the dispute to direct talks between the bloc and China, rather than in bilateral talks between Beijing and rival claimants like Hanoi and Manila. "On the Asean side, we are ready, willing and very much committed but it takes two to tango," Asean Secretary General Surin Pitsuwan told reporters after the Southeast Asian leaders held their own talks in Phnom Penh, ahead of tomorrow's East Asia summit. The agreement could keep the South China Sea off the summit's agenda, when Asean leaders meet eight of their counterparts from the wider region, including Chinese Premier Wen Jiabao and Obama, who arrived in neighbouring Thailand yesterday. Fresh from his re-election victory earlier this month, Obama is due to arrive in Phnom Penh from Bangkok later today and is expected to raise maritime security as well as economic issues. The Asean leaders are due to meet Wen today but will now curb discussions of the dispute in other meetings. "The leaders decided that they would not internationalise the South China Sea issue from now on," said Kao Kim Hourn, a deputy foreign minister, adding that the Asean-China framework would be the sole venue for the dispute. Analysts saw the agreement as a potential win for Beijing after backroom lobbying, limiting space for the US and its allies in the region to push the issue. It also raises questions over the annual Asean regional forum on security. The closed-door event has seen both Asean and other states - including the US, Japan and South Korea - directly criticise China over its assertiveness in the South China Sea. In a brief news conference in Bangkok with Prime Minister Yingluck Shinawatra, Obama spoke of deepening ties of trade, security and democracy in the region. Obama also defended his decision to go to Myanmar tomorrow, after visiting Phnom Penh for only a matter of hours. "This is not an endorsement of the Burmese government," Obama said. "This is an acknowledgement that there is a process under way inside that country." Asean is pushing Beijing to start formal negotiations on a binding code of conduct to better manage tensions. Pitsuwan said the grouping wanted talks on a code as soon as possible, saying it was "an issue of concern and worry to the international community". In Beijing, Foreign Ministry spokesman Qin Gang said consultations with Asean over the code would continue, but that the South China Sea should not be allowed to become an "obstacle" to the summit's success. "This is not the key issue and should not be a stumbling block in China-Asean relations," he said - comments which Chinese envoys have been repeating widely behind the scenes. Greater economic co-operation to limit the regional fallout of the international financial crisis "should be the key to the success of the East Asia Summit", he said. Wen said en route to Phnom Penh that the Chinese economy was stabilising and that it would be an engine of growth to the world. He is expected to hold bilateral talks with Obama tomorrow - his last before leaving office next year.

Top-level talks on sea spats sought - Southeast Asian nations urged China quickly to begin top-level talks over tense sea territorial disputes, as they tried to present a united front in tackling their neighbor. Leaders of the Association of Southeast Asian Nations made their bid to end the impasse over Beijing's claims to nearly all of the South China Sea as Premier Wen Jiabao flew to Cambodia for an annual summit. "On the ASEAN side, [we are] ready, willing and very much committed but it takes two to tango," ASEAN secretary-general Surin Pitsuwan said after the Southeast Asian leaders held their own talks in Phnom Penh. The 10 ASEAN members want to begin "more formal and official" talks on a legally binding code of conduct aimed at easing tensions "as soon as possible." Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the sea, home of some of the world's most important shipping lanes and believed to be rich in fossil fuels. Tensions have risen amid concerns from some ASEAN countries that China is becoming more aggressive. The code of conduct was first proposed a decade ago but negotiations floundered amid China's preference for handling disputes with individual countries. The sea row caused major divisions within ASEAN this year. Cambodia, a close ally of Beijing that has held the ASEAN chair this year, resisted efforts by the Philippines and Vietnam to take a more aggressive position. However, ahead of and during their annual summit in Phnom Penh yesterday, leaders sought to present a unified stance. But China's foreign ministry spokesman, Qin Gang, offered no signs of a change in position when asked if Beijing is prepared to begin top-level talks on the issue.

Incoming premier to forge new strategic economic path (By Victoria Ruan) Incoming premier to pursue four key areas of economic transformation that will be used to help improve nation's economy over coming decade - Premier-designated Li Keqiang is making a new strategic push for China - the "four new modernisations", highlighting the key areas the nation plans to focus on to transform its economy over the next decade. Li stressed the goal of "four new modernisations" at a panel meeting during the Communist Party Congress last week, referring to Beijing's new push for industrialisation, information technology application, urbanisation, and agricultural modernisation over the next decade. While it may sound abstract, the phrase "four modernisations" is no stranger to China watchers. Similar goals raised by former leaders have shaped every key stage of the country's economic transition in the past. In the 1960s, Premier Zhou Enlai was the first to call on the nation to realise modernisations in the fields of agriculture, industry, national defence, science and technology. In the late 1970s, after the Cultural Revolution, Deng Xiaoping used the phrase again, attaching it with new details of increasing per capita gross domestic product to US$1,000 by the end of the 20th century. The economy has since surged to become the world's second-largest. Per capita GDP has exceeded US$5,000, far outpacing Deng's goal. The phrase "four new modernisations" was again used in 2005 referring to industrialisation, marketisation, internationalisation, and urbanisation. But Li has reinvented the phrase to address the new challenges the mainland faces. The nation, for example, has come to a stage in its economic development where it can no longer rely on labour-intensive manufacturing as its population gets older. The loss of demographic dividends has hurt China's competitiveness compared with other emerging countries such as India, Vietnam and Mexico where such workforces are younger and labour costs are lower. The ageing population, as well as problems such as excessive industrial expansion and an increasingly polluted environment, means a transformation in growth model is inevitable, according to a report by financial services group JP Morgan. "The new leadership is likely to put strategic focus on urbanisation, innovations and industry upgrading, reducing income inequality and regional imbalances, aiming at inclusive and sustainable growth in the next decade," it said. Calling the modernisations goals "very inspiring but never easy to achieve", Li Yizhong, former minister of industry and information technology, said China was midway through "an acceleration period of industrialisation" after a century's development. The core of industrialisation would be innovation, which needs more government support, Li, now a senior lawmaker, said at a summit held by Caixin Media yesterday. He said Beijing should increase its annual fiscal discount used for technological upgrading to 30 billion yuan (HK$37.2 billion), starting next year from 22.8 billion yuan this year. The fiscal support would help drive investment worth more than 700 billion yuan a year, he added. Barry Naughton, a professor at the University of California, San Diego, said urbanisation "is a crucial driving force of China's economic development and has become even more important at this stage of growth".

Myanmar to deepen relations with China (By Qin Zhongwei) 'Special' links with Beijing will remain strong amid reforms. Myanmar cherishes the "special" links it has had with China since ancient times and will further strengthen and deepen its "time-honored and time-tested" friendship during the country's current reforms, the top political adviser to the Myanmar president told China Daily in an exclusive interview during a recent visit to China. The remarks were given by Ko Ko Hlaing, chief political adviser to the Myanmar president, who led a 25-member delegation on a two-week visit to China after being invited by the China NGO Network for International Exchange, an non- overnmental organization dedicated to promoting exchanges and communication. "We were in isolation for many years and now are opening up, but it will not hamper the relationship between Myanmar and China. The bilateral relation is a special one," Hlaing said. Myanmar was one of the first countries to establish diplomatic ties with New China in 1950. But the two countries' close relationship dates to centuries ago, Hlaing said. He said the ancestors of people now living in both countries had referred to each other at one time as "paukphaw", a Myanmar word meaning brothers and sisters. The countries' relationship has remained strong in recent decades, especially during Myanmar's isolation, a time that it received much assistance from China. China is now the country's largest investor and trade partner, he said. "China has gained a lot of experiences in social and economic reforms since the reform and opening-up that we can learn from in our development of many different endeavors, such as agriculture, industry, technology, the provision of social services and urban planning," he said. Since Myanmar announced its ambition last year to transform itself through a series of political and economic reforms, foreign leaders and diplomats have been paying frequent visits to the country. US President Barack Obama's upcoming trip will make him the first US top leader to ever visit Myanmar. "We need to keep cordial relations with all nations," Hlaing said. "But the truth is, China is our most important neighbor. We will never forget that." Myanmar will still hold up the "Five Principles of Peaceful Co-existence" that China, Myanmar and India that proclaimed in the 1950s to govern their conduct in foreign affairs, and the country will strive to be a good neighbor, he said. The Myanmar delegation visited several places in China, including Beijing, Nanjing and Hefei and met officials, scholars, NGO staff members and business people. In the adviser's words, that gave them a good opportunity to observe China with their own eyes. Most of the delegates have not come to China. And he said both sides realize the importance of striving for better mutual understanding and communication level in the future. "There are lots of people now doing business with Myanmar, and they need more information about us," he said. People in Myanmar pay a lot of attention to how foreign businesses show themselves to be socially responsible and their integration into the local community, ccording to U Aye Kyaw, a human resource development specialist who also attended the delegation and offers advice to Chinese companies that are interested in investing in Myanmar.

Sea issue not 'barrier' to ties (By Qin Jize in Phnom Penh and Zhao Shengnan in Beijing) Cambodia’s Prime Minister Hun Sen accompanies Premier Wen Jiabao as he inspects a guard of honor upon his arrival in Phnom Penh on Sunday for a series of meetings. Wen arrives in Phnom Penh for meetings with regional leaders China and Cambodia agreed on Sunday that the South China Sea issue should not be a stumbling block for relations between China and the Association of Southeast Asian Nations. The agreement was reached during talks between visiting Prime Minister Wen Jiabao and his Cambodian counterpart Hun Sen. According to Foreign Ministry spokesman Qin Gang, broad agreement was also reached on the issue during talks, also on Sunday, between Wen and Indonesian President Susilo Bambang Yudhoyono and Malaysian Prime Minister Najib Razak. Qin said ASEAN countries reached consensus that the South China Sea issue should not be internationalized or be a barrier between China and ASEAN, adding consultations with ASEAN nations were ongoing. Wen is currently visiting Cambodia ahead of a series of meetings with East Asian leaders. These meetings, the 15th summit between China and ASEAN, as well as the 15th summit between ASEAN, China, Japan and the Republic of Korea, will start on Monday and Wen will also attend the seventh East Asia Summit, which will be also attended by the US President Barack Obama. Cambodia holds the ASEAN chair this year. Wen and Hun Sen also witnessed the signing of a number of economic deals, aimed at boosting Cambodia's infrastructure. Analysts said China's aid is not only beneficial to the economic development of Cambodia, but also conducive to narrowing the development gap within ASEAN. The two leaders pledged to expand cooperation in all fields and to double trade to $5 billion by 2017. Before to the talks, Wen paid tribute to former Cambodian King Norodom Sihanouk at the capital's Royal Palace. Sihanouk passed away at the age of 90 in Beijing last month. Wen also held talks with Cambodian King Norodom Sihamoni and Queen Mother Norodom Monineath. Fu Xuezhang, a former Chinese ambassador to Cambodia, said the death of Sihanouk will not change the direction of relations as both countries share similar policies at home and abroad — developing their domestic economies and maintaining diplomatic independence. "Cambodia, which has suffered from conflict for decades, always prioritizes development and stability, while cooperation with China has been helping it to achieve these goals,'' he said. China is now Cambodia's largest foreign investor. In 2011, trade was around $2.5 billion, a 73.5 percent surge on the previous year. However, the number is dwarfed by the value of trade of other Southeast Asian countries with China. Gong Yingchun, an associate professor with the Beijing-based China Foreign Affairs University said Asia is experiencing downward pressure, and for those Southeast Asian countries cooperation with China is inevitable and is even on the top of their agendas.

China to change duties on US steel imports, after WTO ruling (By Agence France-Presse in Geneva) Beijing must bring policy and legislation on special steel in line with international laws - US rolled-steel used by Chinese carmakers. China says it will change its restrictive policy on certain steel imports from the United States after the World Trade Organisation declared it was in breach of international trade rules. After a meeting of the world trade arbiter's dispute settlement body in Geneva, China said that although it "may not agree" with all the WTO's findings, it would respect and "work hard to implement" them. The Chinese statement follows a meeting last month of the WTO's appellate body, which upheld a US complaint that Chinese duties on its high-value specialist magnetic rolled-steel were illegal. The WTO had ruled on June 15 that China breached trade rules by not providing sufficient evidence for imposing the duties, but that decision was appealed by Beijing five days later. The dispute dates back to September 2010 when Washington accused China of breaching trade rules by not providing sufficient evidence that anti-dumping duties were needed on US imports of electrical steel used in the power sector. China must now indicate to the body's other member nations how it intends to bring its legislation in line with WTO rules. The two governments have stepped up WTO complaints and rhetoric over access to each other's markets this year, as the global economic crisis crimps trade. In September, the Geneva-based trade arbiter agreed to set up a panel of judges to investigate China's allegation that American anti-subsidy duties are affecting US$7.3 billion of Chinese products, such as solar panels, wind towers and steel wire, and violating global commerce rules. Meanwhile, China's top trade and investment officials are railing against what they call a rising tide of global protectionism that blocks its major companies from expanding overseas and further integrating into the global economy.

Hong Kong*:  Nov 19 2012 

Directors of overseas trade offices to face Legco's commerce panel (By Lana Lam) Directors of city's 16 trade offices, which will spend HK$485 million this year, face lawmakers - The work of Hong Kong's 16 trade offices overseas and on the mainland, which cost more than HK$485 million a year, will come under scrutiny this Tuesday for the first time since the new administration took power. The director of each office will be in Hong Kong this week to face the Legislative Council's 16-member panel on commerce and industry and talk about their staff's achievements over the past 12 months. Typically, the meeting is held every June, but the meeting was pushed back to November because of September's Legco election. Each trade office has submitted annual reports which detail their work but there are no concrete dollar figures that measure how much business each office brings to Hong Kong. Instead, their work is measured by the number of meetings they attend, events they organise or attend and press releases they write. There are 11 overseas economic and trade offices managed by the Commerce and Economic Development Bureau: Brussels (17 staff); Geneva (15); Berlin (4); London (18); New York (14); San Francisco (15); Washington (18); Singapore (11); Sydney (11); Tokyo (13); and Toronto (10). On the mainland, the offices in Beijing (16 staff), Shanghai (6), Chengdu (8) and Guangdong (15) are managed by the Constitutional and Mainland Affairs Bureau. A new office in Taiwan (15 staff) opened last December and is also managed by this bureau. It has been confirmed that a fifth office is slated to open soon in the centre of the mainland. The commerce bureau said the non-mainland trade offices would continue to remain relevant despite the mainland opening its trading doors and potentially reducing Hong Kong's role as a gateway. The bureau said the offices promoted Hong Kong as a reliable trading partner and regional hub giving access to other Asian economies. A spokeswoman for the mainland trade offices said that with the "increasingly close co-operation and relations" between the mainland and Hong Kong, the offices would still be needed. At last year's annual meeting, the industrial sector lawmaker Lam Tai-fai raised concerns about the budget of the mainland trade offices. Panel chairman Vincent Fang Kang of the Liberal Party refused to answers questions about the annual reports, saying the report and meeting were routine matters.

Operation Santa Claus 2012: still giving after 25 years (By Lo Wei) Operation Santa Claus hits its quarter-century this year, with more than HK$100 million raised for dozens of charities since it began back in 1988 - Singers Elisa Chan Kit-ling and Alex To Tak-wai help launch the second Operation Santa Claus in 1989, the year the South China Morning Post came on board. It started with popular DJs pulling crazy stunts to attract donations. Then it turned into a multimedia fund-raiser well before the internet age. Today, 25 years on, the spirit of giving is still growing from strength to strength at Operation Santa Claus (OSC). The charity drive, jointly organised by the South China Morning Post and Radio Television Hong Kong (RTHK), identifies the changing needs in the community, explains them to the public and channels help to where it is needed at Christmas. Year after year donations are collected, from schools, clubs, companies and generous individuals, in a series of fund-raising events that boost the season's festive atmosphere. With cash from OSC, small charitable organisations have expanded and thrived, helping more and more people in need. "Christmas is a time for giving, a slot in the calendar where people are feeling generous," says Alastair Monteith-Hodge, who organised the campaign in its first year, 1988. He was an RTHK radio presenter and producer at the time, and is now chief executive of the Children's Cancer Foundation. Operation Santa Claus' roots date back to the 1960s, Monteith-Hodge says. The tradition started with RTHK Radio 3 presenters performing public stunts to raise funds for charity. They dived into Victoria Harbour in the winter cold, read poetry on roofs and climbed flagpoles among other capers. RTHK's current deputy director of broadcasting, Tai Keen-man, recounts the stories with relish. "Our popular DJs and presenters gathered at Queen's Pier. When donations reached a certain amount, they would jump into the sea," he says. Santa Claus was played by the inspector of prisons, David Hampton. A fluent Cantonese speaker, he played the same part for the Children's Cancer Foundation in the 1990s, growing his beard from September to December just for his Santa role. The early campaigns stopped in the 1970s, when the launch of the Community Chest gave Hongkongers an official body to receive charitable donations. "Perhaps people were asking, 'Why did we have all these crazy gweilos doing these things when we have the Community Chest?'" Monteith-Hodge says with a chuckle. The late 1980s brought worries about the future of Hong Kong, after the Sino-British Joint Declaration was signed. "The mood in society was quite down," Tai says. "Maybe people thought it was time to conduct a charity project to cheer up society." Tony Baynes, the head of RTHK Radio 3 at the time, asked Monteith-Hodge to "resurrect" Operation Santa Claus in 1988. "Our aim was to raise awareness for small charities and their missions, and raise funds for them. The radio was a good way [to do it]," Monteith-Hodge says. They identified Watchdog, a learning centre for children with special educational needs, as their target charity that year, and set out to raise HK$100,000. In the end they went slightly over the top, reaching HK$101,000. Fundraising events included the pantomime, a British Christmas tradition, which gave men a chance to do outrageous things, including dressing up as women. On one Christmas radio show, audiences donated money to sponsor the playing of a hit song from the year. "We had entertainment to make expats feel like it was Christmas back home," Monteith-Hodge recalled. Another event was the Battle of the Taipans, in which real taipans - bosses of big companies - were challenged in a general knowledge quiz. "It was fun, but the fundraising was serious," Monteith-Hodge says. In 1989, the campaign's target was increased to HK$150,000, with the chosen charity the Children's Cancer Fund (now called the Children's Cancer Foundation), which had been established that year. One day, Philip Crawley, the South China Morning Post's editor-in-chief at the time, gave Monteith-Hodge a call and says: "Let me know if there's anything I could do to help," to which the radio man replied: "Can you give us half a page on page three in the paper every day for a month?" Crawley almost immediately agreed to the request. "And that was it," Monteith-Hodge says. "I put down the phone and there was panic. 'What are we going to do with half a page on page three every day for a month?'" Every December since that year, the Post has been publishing beneficiaries' stories and giving coverage to fund-raising events. "Boy, it just took off," Monteith-Hodge says. "Now it was not just on radio. It was a multimedia campaign, a very powerful combination." An avalanche of cheques came in every day, and the fund-raising target of HK$150,000 was passed in the first week, he recalls. Meanwhile, the Operation Santa Claus "Christmas tree" progress chart began appearing on page three of the Post, keeping track of the donations rolling in. Shortly before Christmas that year, RTHK outdid itself by holding a live, outdoors OSC broadcast near the Tsim Sha Tsui Star Ferry pier. There were toys, Christmas puddings and a lucky draw for a gold coin. And of course, there was Santa Claus. "We broke the million dollar barrier that day. It was just amazing," Monteith-Hodge recalls. By 1990 the formula was in place, and the campaign grew bigger and bigger. Over the first 15 years, only one or two beneficiaries were picked each year. Then in 2003 the number of charities receiving support from OSC jumped to 12, chosen from the hundreds of suggestions put forward by readers and listeners. Current Post editor-in-chief Wang Xiangwei says: "It allowed a variety of different charity groups to benefit. OSC has grown over the years to reflect the different needs in society. It's amazing to see how people still give generously during times of economic uncertainty." Another milestone achieved that year was the amount raised - HK$6.5 million, almost double the previous year's figure. But 2003 was also a sad year for Hong Kong, as the Sars outbreak killed 299 people in the city. Bryan Curtis, head of English programming at RTHK, says: "Towards the end of 2003, people felt we were turning the corner. There was a lot of relief in the community. People gave from their hearts." Operation Santa Claus was turned into a registered charity that year, with the formation of SCMP Charities Ltd. Major donors were included on the selection committee, which chooses each year's aid recipients. The next year, 2004, donations shot up even further, to HK$7.2 million for the campaign and another HK$9.6 million for victims of the South Asian tsunami. Curtis noted a new trend of donors organising their own fund-raising events for the OSC campaign, in some cases with a high degree of creativity. One chief executive jumped off Macau Tower and asked his employees to donate, a bit like a revival of the "crazy stunts" of the old days, he says. As the campaign developed over the years, donors have become more engaged, Curtis says: "Donors are more concerned, now, about seeing their money at work." With the coverage given to beneficiaries' stories, "people feel they can see it, touch it and taste it", he says. Cliff Buddle, the Post's special projects editor, says meeting beneficiaries and seeing their project updates was one of the most rewarding times for him. "You really see how OSC changed people's lives." The campaign has continued to broaden in a way that organisers might not have foreseen 25 years ago, Tai says: "Donor-beneficiary relationships have extended to outside the campaign, giving continuous support to the charitable organisations."

Paul Poon's Macau win is bittersweet after friend's tragic death (By James Porteous in Macau) Hong Kong driver fights back the tears to win on Macau circuit where pal died on Friday in crash - A minute's silence is observed in Macau for the deaths of Hong Kong's Phillip Yau Wing-choi and Luis Carreira of Portugal. Macau Grand Prix Touring Car Cup winner Paul Poon Tak-chun yesterday told how he put aside tears and fears to take the chequered flag after his friend and fellow driver Phillip Yau Wing-choi lost his life on Friday. Yau died during qualifying for the race won by Poon when his Chevrolet crashed into a barrier. The other members of the field, mostly amateurs and semi-pros from Macau and Hong Kong, returned to race yesterday, after organisers decided not to cancel the events despite two deaths in two days at the track. However, they held a minute's silence before the Touring Car Cup as a mark of respect. Poon, who won the race, admitted it was difficult to focus on his driving as he passed the Mandarin bend where his friend died. "The first couple of laps, when we got to the bend where the accident happened, it was a little bit scary and we slowed down a bit," said the 41-year-old China Dragon Racing driver. "I knew Phillip well. For 15 years, we raced against each other many times, more than I can count. But just one impact and he's gone, it's unbelievable. I've never experienced anything like this in my 15 years of racing and I hope it's the last time." Poon said the mood around the paddock was one of utter incredulity as news came through of Yau's death, with drivers breaking down in tears. "We were doing the qualifying and I was out on a lap and I went past his car at the accident before the red flag came out," he said. "After the qualifying, some guy told me he's gone. I just didn't believe it. The mood among the drivers was just shock. Some guys were crying, total shock." On Thursday, motorbike rider Luis Carreira died after a crash. However, bike racing is so dangerous deaths in the sport are almost taken for granted. Touring car racing, which involves heavily modified street cars, is by comparison a lot safer. "It's very rare to have deaths in this sport," added Poon, who has been racing in Macau since 2001. "You get broken bones, broken arms and things like that. During past years, I've seen so many big accidents here - wheels flying everywhere - but the driver always walks out fine. "Last night we had a Chinese traditional ceremony. I'm so sorry for his wife and family. "I think the Hong Kong drivers will arrange something to commemorate his memory." On Friday, organisers defended their decision not to cancel any of the weekend's remaining races. The prevailing feeling was motorsport is inherently dangerous, as all competitors know, and two deaths in successive days was a freak, tragic coincidence. Joao Manuel Costa Antunes, co-ordinator of the Macau Grand Prix Committee, denied there were concerns over the track's safety or stewarding. Officials said Yau's car had passed all the requisite safety checks. "In all motorsports there is always a challenge so when the teams and drivers start practising this sport they know the challenges in front of them," said Antunes when asked by the Sunday Morning Post what efforts the committee would make to ensure the event was safer in future. "Our circuit has existed for 60 years and, of course, we have always followed all the guidelines in terms of security." Standard investigations will be held into the two deaths.

Central Policy Unit chief defends government ads to push proposals (By Joshua But and Lauren Ho) Government's spending on ads to promote policies it wants Legco to pass draws fire; advisers to monitor public mood on social networks - Shiu Sin- por, head of the Central Policy Unit think tanks. The government must engage in a public relations battle to drum up support for its policies, and pay more attention to views expressed online about its policies, the head of the Central Policy Unit think tanks says. Shiu Sin-por defended the government's recent public announcements and said critics of its PR tactics were "ludicrous". He said the administration was responsible for selling its policies and telling the public how they could benefit from them. Printed advertisements and television announcements in the public interest (APIs) - funded by taxpayers' money - have been used recently to promote plans for an old-age living allowance and three new towns in the northeast New Territories. The ads caused controversy, as neither proposal has yet been endorsed by the Legislative Council. The Development Bureau and the Labour and Welfare Bureau refused to disclose how much the advertisements cost. "We are in the society of electoral politics," Shiu told TVB's On the Record programme yesterday. "Every day politicians and interest groups try to promote their stances to the public. "If the government were to maintain neutrality and do nothing, it would be no different to sitting still and getting hit. It is absolutely reasonable and necessary for the government to drum up public support." Shiu, a close ally of Chief Executive Leung Chun-ying, denied the unit had misjudged public opinion about government plans for national education in schools. But he said it would start monitoring and analysing online public opinion - in blogs, Facebook and discussion forums. Asked whether the unit had become "a political tool", Shiu said: "We must be a tool to serve the government. We are not a chit-chat unit or a playgroup." Dr Elizabeth Quat, vice chairman of the Legco's information technology and broadcasting panel, said: "It is indisputable that the government should use public resources to promote its policy initiatives and ideas, but its message must be clear. "The advertisements on the old age living allowance conveyed a confusing message to elderly citizens who may think they have been granted a HK$2,200 monthly allowance despite the proposal not yet being passed by Legco." Acting Democratic Party chairman Emily Lau Wai-hing agreed the government should explain its policies in areas of public interest, but said recently APIs had been used as a "political tool" to pressure legislators. The Information Services Department said the Development Bureau had used announcements on the new town development plan to emphasise the need for building public flats. The Office of the Communications Authority had received 31 complaints about the two ad campaigns up to November 12.

Hong Kong-born adoptee wins fight for Chinese nationality (By Simpson Cheung) Maggie Cheung was born and raised in Hong Kong but until she applied for a passport she had no idea she wasn't actually Chinese - Maggie Cheung, 24, has recently been granted Chinese citizenship after being born and raised in Hong Kong. Maggie Cheung was born in Hong Kong, her parents are Hongkongers, she speaks perfect Cantonese, holds a Hong Kong identity card and a Chinese home return permit, but it took media pressure for the government to grant her Chinese nationality. After filing her application a year ago, the Immigration Department finally approved her application to become a Chinese national on Friday, following questions raised by the Sunday Morning Post over the case. Cheung was born to a Pakistani woman in Hong Kong 24 years ago, but her mother abandoned her. She was fostered by a Chinese family when she was three months old and was legally adopted by the same family when she was three. The young woman studied at a local school and then progressed to Chinese University where she studied for a bachelor's degree in physical education and sports science. Two years ago she had a chance to take part in an exchange programme in Britain, so she went to apply for a passport. She was shocked to be told she was not a naturalised Chinese and was only given a document of identity for visa purposes, in which the section concerning her nationality was left blank, indicating she was stateless. "I really struggled psychologically when I found out that while I recognise myself as a Hongkonger, the law does not," she recalled. She regards herself as a Hong Kong citizen and her identity card carries three stars - indicating her permanent residency. After being given the document of identity she tried to apply for naturalisation but was told her chances were slim as she did not have a stable income. Cheung, who now teaches liberal studies in a secondary school in Tseung Kwan O, formally filed an application last year after she became a teacher. On Friday that application was approved. "I am really disappointed," she said. "So the government actually works that way - it approves an application when [the] media file inquiries. It is not credible at all and the system is very problematic." She has yet to receive a written notice of the approval. According to the Convention Relating to the Status of Stateless Persons, to which Hong Kong is a signatory, contracting states "shall as far as possible facilitate the assimilation and naturalisation of stateless persons". Law Yuk-kai, director of independent rights organisation Human Rights Monitor, said the government had an international obligation to solve Cheung's nationality issue when she was legally recognised as an adopted child - following the nationality of her adoptive parents according to international practice. "She has a home return permit, meaning even the Chinese government recognised her as a Chinese national, or else how can she return 'home' [to the mainland]?" he said. Foreigners or stateless persons holding Hong Kong permanent residency can only apply for the home return permit when they have been naturalised, according to the website of the China Travel Service, which issued the permits. Barrister and former lawmaker Margaret Ng Ngoi-yee, now a member of the non-government organisation Hong Kong Unison, agreed, saying Chinese law states that adopted children should be treated the same as one's own children and should be given Chinese nationality if their parents are Chinese. Cheung is the fourth person with an ethnic minority background reported by the Post as having had trouble with their naturalisation applications. However, Ocean Park chairman Allan Zeman, district councillor Paul Zimmerman and former director general of InvestHK Michael Rowse were all successfully naturalised. "It would not cost the director of immigration anything to write an open statement once again to reassure everybody that 'we do apply the rule consistently and actually there is no racial bias'," said Equal Opportunities Commission chairperson Lam Woon-kwong. He added that matters concerning immigration were exempted under the racial discrimination ordinance. Fermi Wong Wai-fun, executive director of Hong Kong Unison, which helps ethnic minorities, said she would write to Secretary for Security Lai Tung-kwok this week with about 10 similar cases and if he failed to give a positive response, she would launch a judicial review against the naturalisation system. An Immigration Department spokesman refused to comment on individual cases.

Mainland trade missions to stand up for Hong Kong (By Lana Lam in Shanghai) The city's soon-to-be-five trade missions north of the border will help ease cross-border tensions, and aid Hongkongers in trouble - Chief Executive Leung Chun-ying calls Hong Kong's growing network of trade missions on the mainland "internal diplomacy". Hong Kong's growing network of trade missions on the mainland will be at the forefront of government efforts to ease cross-border tensions. They will play a key part in what Chief Executive Leung Chun-ying calls "internal diplomacy". Part of that is explaining and standing up for Hong Kong's cultural and economic identity, said Joyce Tam Wai-yee, head of the Shanghai trade office. "If Hong Kong continues to be a separate economy as guaranteed under the Basic Law, we need to have our presence to say we are economically quite separate from China," she said. The other part, as Leung has said more than once, is to show that more economic co-operation will be mutually beneficial. "If Hong Kong's economy grows faster, we will have more resources to resolve some deep-rooted problems in the city, such as poverty, housing and environment," he said in June. Leung wants to strengthen the city's economic and trade offices on the mainland, of which there are currently four, with a fifth due to open. A senior government official said this was not only important for "internal diplomacy", but would make Hong Kong better prepared for new and possibly unexpected political, economic and social developments under the nation's new leadership. The government, this official said, needed to better understand the new leaders' thinking, and the city needed people who could better explain to those leaders and to local officials the true feelings of Hongkongers and the city's values as a way to enhance mutual understanding. There is growing disquiet in Hong Kong about the city's identity and its relationship with the mainland. This has been stoked by controversy over issues including national education lessons, cross-border parallel traders and mainland investors snapping up property in the city. In what has been a critical few weeks in Hong Kong's relationship with the mainland, a small number of protesters have at times waved colonial-era flags and chanted slogans demanding the city's independence, drawing rebukes from the mainland. So heated did the atmosphere become that Hu Jintao made what was seen as an unusual reference to Hongkongers' pride in their national identity in his opening speech to the 18th Communist Party congress, which wrapped up last week. As well as representing Hong Kong interests, the city's four trade offices, in Shanghai, Beijing, Chengdu and Guangdong, have taken on a quasi-consular role, Tam, of the Shanghai office, said. "It is [Hongkongers'] expectation that they can access the Hong Kong connection, so there is always a role for us there," she said. The Guangdong office alone handled more than 300 requests for assistance from Hongkongers in distress in the 15 months to September. The Beijing and Shanghai offices also provided assistance to many Hong Kong residents over trade disputes and legal matters. "As long as we have economic and trade relations with a place, we will have Hong Kong enterprises and people there," Tam said, and the offices had to take care of them. The debate over identity in Hong Kong flared up again last week with the release of a Chinese University survey which showed 65.2 per cent of 816 respondents saw themselves either purely as Hongkongers or as primarily a Hong Kong person, with their Chinese identity as a secondary element. This was the highest percentage since the survey started in 1996. After criticism by the party mouthpiece Global Times, Anthony Fung Ying-him, director of Chinese University's Centre for Communication and Public Opinion, defended the survey as an important measure of the city's sentiments on identity at a critical time. "It's a description of what people are saying," Fung said. "We just want to present the facts."

Resale stamp duty fails to halt flat sales as profits keep rising (By Amy Nip) Government stamp duty fails to stop early sales as property prices keep rising - A special stamp duty intended to discourage the resale of flats within two years of purchase lost its effect after just 16 months, official statistics show. The government brought in the levy to curb speculation and cool the property market in November 2010. The duty requires people to pay 5 to 15 per cent of a flat's price if the property is resold within two years. The longer they hold the flat, the lower the duty. Since its introduction the number of speculative confirmor transactions - resales before a property is assigned - dropped dramatically. But resales one to two years after assignment, which initially dipped, have crept up again. They accounted for 6.3 per cent of transactions in the third quarter - only slightly below the level before stamp duty was introduced. The government also released the latest figures for quarterly economic growth alongside the property statistics. GDP grew by 1.3 per cent year on year in the third quarter, up slightly from the 1.2 per cent growth in the second quarter. On a quarter-to-quarter basis, real GDP grew 0.6 per cent, after a decline of 0.1 per cent in the preceding quarter, due to improved external trade, thanks to stronger growth in Asia. Inland Revenue Department figures show the number of confirmor transactions was at most 20 per month in the 16 months after the duty's introduction. But it jumped to more than 100 per month in March. Since August, that pace sped up to reach about 285 in October. "As property prices go up, deterrence of the 5 per cent duty diminishes," government economist Helen Chan said yesterday. This trend explains the adjustments in the duty last month, she said. People buying flats on or after October 27 must pay a duty of 10 to 20 per cent for a resale, five percentage points more than before. The government also extended the tax's effect from two years to three. Patrick Chow, head of research at Ricacorp Properties, said property prices jumped 21 per cent in the first 10 months of this year. In February and March, the month-on-month increase was three to four per cent. "Due to soaring prices, sellers didn't mind paying the special stamp duty for buyers. They could still make a profit," he said. The surge in resales in recent months had also been affected by the structure of the duty. Many owners held onto their flats for more than a year after its introduction, and were now subject to the lower rate of 5 per cent, Chow explained. However, he believes the new 10 per cent duty will remain effective. "People would rather hold on to their properties for a little longer than pay the government a huge sum." The government has revised its economic forecast for GDP growth this year from "one to two per cent" to 1.2 per cent. The forecast for headline inflation is also revised from 3.7 per cent to 3.9 per cent due to a rebound in global food prices in July and August following the drought in United States and the new rounds of quantitative easing in various economies. The US "fiscal cliff" posed great uncertainty for the global economy, Chan said. If the country fell into recession, it would dampen the already-sluggish European markets and inevitably affect Hong Kong.

 China*:  Nov 19 2012

China does not want South China Sea dispute overshadowing summit (By Reuters in Beijing) Chinese Vice Foreign Minister Fu Ying. A regional summit opening in Cambodia this weekend should not be overshadowed by a dispute over the South China Sea as the situation is under control and countries involved can resolve differences themselves, a top Chinese diplomat said on Saturday. China’s assertion of sovereignty over the stretch of water off its south coast and to the east of mainland Southeast Asia has set it directly against Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to parts, making it Asia’s biggest potential military trouble spot. But Chinese Vice Foreign Minister Fu Ying said the dispute was well in hand, ahead of a meeting of regional leaders in Cambodia attended by Southeast Asian heads of states as well as China’s Premier Wen Jiabao and US President Barack Obama. “As soon as this region is bought up everyone thinks it’s very dangerous, very turbulent, because of the South China Sea issue. In fact, over the past few years, China and the countries surrounding the South China Sea have successfully controlled the dispute and not let it intensify,” Fu told reporters. Asia’s experience since the end of the cold war of avoiding large-scale conflict showed that the South China Sea issue was also manageable, she said. “This region can control and deal with crises through talks and negotiations, leading to peace and stability in the region. Only with these conditions can there be economic development.” China has resisted proposals for multilateral talks on the sea, preferring to try to negotiate disputes with each of the far less powerful individual claimants. It has also criticised Washington’s attempts to get involved. The stakes have risen in the area as the US military shifts its attention and resources back to Asia, emboldening its long-time ally the Philippines and former foe Vietnam to take a tougher stance against Beijing. Fu said over the past few years there had been a “phenomenon” of the South China Sea issue being “hyped up” whenever there was a regional or international meeting involving China and its neighbours in the 10-nation Association of Southeast Asian Nations (Asean). “Shattering the peaceful atmosphere in this way gives people the wrong impression.” Unprecedented arguments over the sea prevented an Asean summit in July from issuing a joint communique, the first time that had happened in the bloc’s 45-year history. “The dispute’s resolution still has to come from talks with the countries directly involved. China and Asean are confident they can maintain peace and stability in the South China Sea, and we have already proved that we can do this,” Fu said. “We also hope that countries from outside the region, in other words countries which are not China or Asean members, can have faith in us. If you want to help, then do it in a positive way, and not interfere or provoke.”

Asean seeks to heal South China Sea territorial rift (By Agence France-Presse in Phnom Penh) Cambodian securities personnel stand guard at Phnom Penh International Airport ahead of the 21st of Association of Southeast Asian Nations Summit on Saturday. Southeast Asian foreign ministers sought on Saturday to heal a rift over territorial rows involving China, aiming to build unity ahead of a leaders’ summit in which rights and trade will also dominate. The hot-button South China Sea issue was one of the top items for the ministers as they held a day of talks in the Cambodian capital, following months of acrimony over how to tackle China’s claims to nearly all the waters. “We wish that we would be able to solve this problem together,” Surin Pitsuwan, secretary general of the 10-member Association of Southeast Asian Nations, told reporters at the start of the meeting. “We hope that if there is anything we can do to help to build this new culture of norms... of new habits of working together we would like to help.” The foreign ministers’ meeting is to pave the way for the annual Asean leaders’ summit in Phnom Penh on Sunday, which the bloc is hoping will push forward policies on human rights and free trade. US President Barack Obama, Chinese Premier Wen Jiabao and leaders from six other nations are scheduled to then join their Asean counterparts for the two-day East Asia Summit starting on Monday. Some of the countries involved in the talks have seen diplomatic relations plummet this year because of a raft of maritime territorial rows, and analysts said those disputes would likely overshadow proceedings in Phnom Penh. Asean members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the South China Sea, home of some of the world’s most important shipping lanes and believed to be rich in fossil fuels. China insists it has sovereign rights to virtually all of the sea, and the Philippines and Vietnam have expressed concerns that their giant Asian neighbour has become increasingly aggressive this year in staking its claim. An Asean foreign ministers’ meeting in Phnom Penh ended in July without issuing a joint communique for the first time in the bloc’s 45-year history because of divisions over how to handle the South China Sea issue. The Philippines and Vietnam had wanted the communique to make specific reference to their disputes with China. But Cambodia, the hosts of the talks and a close China ally, blocked the moves. Surin said on Saturday that such a public spat would not be seen this weekend. “I don’t think it’s going to be confrontational, I don’t think it’s going to be overly contentious,” he said. But adding to the tensions, analysts said Obama was expected to raise the issue while in Phnom Penh. Obama is likely to reiterate that the United States has a fundamental interest in freedom of navigation in the sea, while urging Asean and China to agree on a code of conduct for the area, according to analysts. China has long bristled at what it perceives as US interference in the South China Sea, and was upset at last year’s East Asia Summit in Indonesia when Obama succeeded in having the issue discussed there. Chinese vice foreign minister Fu Ying warned on Saturday that China did not want a repeat and that the South China Sea should not be on the agenda at the East Asia Summit. “Discussion of the South China Sea issue should return to the framework of China and Asean. Discussing the issue in other forums will interfere with the direction of cooperation,” Fu said. Meanwhile, Asean leaders are aiming to endorse on Sunday a declaration they say will promote human rights within their 10 countries but which has drawn widespread criticism. More than 60 rights groups, including Human Rights Watch and Amnesty International, issued a statement on Thursday urging Asean to revise a draft of the declaration. Asean members are also aiming to kickstart negotiations in Phnom Penh over a giant free trade zone with China, Japan, South Korea, India, Australia and New Zealand. The 16 nations account for roughly half the global population and around a third of the world’s annual gross domestic product.

Department stores wheel out big guns in retail battle (By HE WEI in Shanghai) Traditional department stores are flexing their muscles to regain their place on the retail battlefield, as the breakneck growth of e-commerce takes its toll. The risks faced by bricks-and-mortar retailers have recently been amplified by a string of somber sales figures, especially after online vendors, fueled by the Singles' Day bonanza on Nov 11, delivered an enviable performance over the past weekend. A department store in Zhengzhou, capital of Henan province, offers a 52 percent discount on Nov 11, Singles' Day, to compete with e-commerce giants such as Alibaba Group Holding Ltd that used the occasion to promote their sales with deep price cuts. That day, e-commerce giant Alibaba Group Holding Ltd alone generated 19.1 billion yuan ($3.06 billion) in sales, triple the combined revenue of around 5,000 retail outlets in Shanghai during the eight-day National Day holidays in early October. During the holidays, from Sept 30 to Oct 7, the nation's 100 major retailers saw their sales increase by 8.49 percent year-on-year, according to China National Commercial Information Center. This was a rare occurrence of growth since the introduction of the Golden Week more than a decade ago. But problems are likely to loom larger for traditional retailers as online merchants sprint ahead. Driven by an urgent desire to boost their sales, stores are jostling to offer the deepest discounts to drum up consumer interest. Feeling the pinch due to the e-commerce boom, Hong Kong-headquartered New World Department Store China Ltd has stepped up promoting its annual discount gala in Shanghai more than a month earlier than previous years. Likewise, the three outlets of Pacific Department Store Co Ltd in Shanghai plan to knock up to 50 percent off women's sweaters and offer special discounts on jewelry and cosmetics. According to the company, the 17-day long promotion aims to expand its consumer base and retain customers by encouraging shoppers to register for a membership card that entitles them to discount coupons. The move is, put bluntly, to tackle the growing challenges posed by the exploding development of e-commerce, said Yan Chengda, deputy general manager of the company. "Clothes are generally the least immune items to pressure from the thriving online business, so we are offering deep discounts," Yan added. Meanwhile, Pacific has added categories like accessories, which require more customer engagement, because Yan said department stores have an edge over their virtual rivals in the interaction they provide between customers and shop assistants. In general, however, e-commerce has dealt the heaviest blow to apparel retailers, notably sportswear companies, said Han Weiwen, a Shanghai-based partner with consultancy Bain & Co. "The apparel industry's stellar growth rate in China has come to an end. It is not going to enjoy double-digit growth again," he told China Daily. Anta Sports Products Ltd opened 229 new stores in 2011, only one-third of those opened in 2010. Peak Sport Products Co Ltd has lowered its growth target to single-digits and shut 500 stores nationwide in 2012, said Zeng Xiang, a manager at Bain. In a somewhat similar move, the usually markdown-averse Shanghai Bailian Group dusted off its clearance signs, selling apparel and footwear at discounts of up to 30 percent. The retail conglomerate saw its gross profit decline by 1.96 percent, according to the 2011 annual report of its A-share listed company Shanghai Friendship Group Inc Co. Cash flow generated from its operating activities, a combination of rents and revenue deduction, slid 31.4 percent year-on-year, indicating a drastic drop in sales and perhaps customer flow. Amid the difficulties, introducing world-renowned brands such as Boss, Cartier and Longchamp has "played a critical role in the readjustment of the company's strategic layout", the report said, adding it will stick to its path of attracting top-notch brands. Chen Tao, a partner at consulting firm Roland Berger Strategy Consultants in Beijing, said boutiques and shopping centers are more vulnerable to Internet sales if the inventories they have in stock are standardized products that are easy to get. "If you look at the online apparel landscape, it's interesting to note that people start by selling shirts and sportswear, both of which are standardized clothes, and from there they proliferate to other categories," Chen said. Likewise, digital products and home appliances are the categories of goods that are least immune to pressure from Internet sales. Apart from their inventory, stores should learn to identify their target customers and readjust their strategies accordingly. Chen said that online shoppers have weaker product preference than consumers purchasing goods through traditional channels, and place less emphasis on the brand, because the Internet provides consumers with many replaceable and complementary categories. Nevertheless, developers are still poised to cash in on the retail property market, statistics have suggested. According to commercial real estate consultancy Cushman & Wakefield Inc, rents at department stores across the Asia-Pacific region grew 2.8 percent in 2012, largely fueled by growth in China. Hong Kong, Beijing and Shanghai were among the five cities with the highest rents in Asia. "The value of department stores lies in the unique shopping experience and services, which could be strengthened to offset the impact of online shopping," said Xu Feifei, brand strategy director at Labbrand Enterprise Management Consulting in Shanghai. Retailers should step up their personalized game, offering more objects with new fonts and creative typography to attract a new generation of shoppers, said Chen. "For instance, they could sell tailor-made products with a special color or pattern that is only available in brick-and-mortar stores," he said. In the long run, online and offline shops are complimentary, said Jeff Baum, senior vice-president at Manhattan Associates Asia-Pacific, a company that facilitates supply chains.

China faces challenges in maintaining growth (Xinhua) A construction worker installs scaffolding on the top of a building at sunset in Shanghai November 13, 2012. In an exclusive interview with Xinhua, CNN Beijing Bureau Chief Jaime FlorCruz said the new Chinese leadership faces the challenge of maintaining high economic growth in wake of the global economic downturn, as well as better projecting itself to the world. As a journalist who has extensively covered China for over three decades, FlorCruz said the new Chinese leaders inherit a situation in which China has enjoyed rapid economic growth in the past twenty years and emerged as the world's second biggest economy. "But China faces the challenge of keeping this high economic growth and creating millions of jobs, because it needs to be done at a time when there is an economic downturn in China and overseas," he said. In the third quarter, China's GDP grew 7.4 percent compared to the previous year. It was the seventh consecutive quarter of slowing growth, against the backdrop of China's aim to tame inflation and its real estate bubble. To cope with the slowing economic growth, FlorCruz believes the mid-to-long-term solution lies in the development of the service sector. "There needs to be more encouragement for the growth in the private sector, and especially in the service sector, because China can no longer rely on the manufacturing. "China needs to shift its economic model from being the factory of the world to the innovator of the world. So it needs more development in the service sector, and that could be the next growth area for China," he said. A report by the Ministry of Agriculture said in the first three quarters of this year, the urban-rural income ratio has narrowed to 2.72 to 1, down from 2.77 to 1 in the same period last year, and the gap has been on the decline for three consecutive years. But the overall wealth gap in China has given rise to social conflicts in recent years, and FlorCruz sees it as a major obstacle for China's economic reform. "It's probably unavoidable to have gaps, but China cannot tolerate this growing gap," he said, adding that taxation and greater investment in the western part of the country could help alleviate problems stemming from income disparities. FlorCruz first came to China in 1971 and has stayed thereafter, thus witnessing the country's gradual opening up and its efforts to be understood by the world. But even today he says China needs to project and explain itself better to be understood overseas. "Without such understanding, China is either depicted as very very dark or very very rosy. The truth is somewhere in the middle. I think China needs to be looked at as a whole. "China has its redeeming virtues and values, but China also has its set of problems. China has made a lot of successes, but China also faces a lot of challenges," he said. He added that a strong and stable China is beneficial for the world. "What the world doesn't want to see is an unstable China, nor a China that's in chaos. Because we've seen what it's like before, and it's not pretty. I think the world hopes that China will be a positive force as a strong power," he said.

Hong Kong*:  Nov 18 2012 

Hong Kong economy grows 1.3% in third quarter (By AFP in Hong Kong) Hong Kong’s economy returned to modest growth in the third quarter. Hong Kong’s economy returned to modest growth in the third quarter, helped by improving exports and rising domestic consumption, officials said on Friday. Gross domestic product grew 1.3 per cent in the three months to September compared to the same period last year, and by 0.6 per cent from the second quarter when output shrank 0.1 per cent from the preceding period. The result means the southern Chinese city avoided a technical recession, typically defined by GDP contractions in two consecutive quarters. Exported goods grew by 4.7 per cent over the preceding quarter and “sanguine job and income conditions” helped boost private spending, which rose 2.8 per cent. “Hong Kong’s trading environment is still subject to a high degree of uncertainty,” the government said in a statement, referring to concerns about the looming “fiscal cliff” of tax rises and spending cuts in the United States. “Nevertheless, activity in the mainland economy has shown signs of re-acceleration in the more recent months, which should lend support to intra-regional trade going forward,” it said.

China dulls Sa Sa's shine (By Karen Chiu) Sa Sa International Holdings' (0178) interim profit beat market expectations and rose 26 percent from a year earlier to HK$282.1 million but its mainland operations continued to pile up losses. Sa Sa shares rose 8 percent to HK$5.94 yesterday, marking the highest level for the year. Revenue jumped 21 percent in the six months to September to HK$3.38 billion thanks to strong performance of its core Hong Kong and Macau businesses. The firm raked up a total net profit of HK$283 million, up 27 percent, thanks to the rising number of mainland tourists. Rents at its Hong Kong and Macau outlets rose by 37 percent in the first half, with 15 stores having to renew their leases, chairman Simon Kwok Siu-ming said. But rental costs still managed to take up 11.4 percent of sales and the ratio is expected to further ease to 11 percent during the second half. Looking forward, he remains optimistic about the group's sales during the Christmas period which followed better sales in the third quarter in all of its three major operating areas. "Same store sales have grown by 18 percent in Hong Kong and Macau, while a 10.4 percent growth was recorded in the mainland in the third quarter," he said. The cosmetics brand opened seven stores in Macau in this financial year and five in the mainland. But hurt by the slowdown in the mainland's economy and rising expenditure due to management restructuring, Sa Sa's losses of its mainland business touched HK$19.82 million in this period, The group said it is stepping up investments to improve its management structure in the mainland and hiring more employees. Kwok expects to narrow the loss in the future, believing it is still worthwhile to invest in the mainland. By March next year, Sa Sa will be operating a total of 264 stores, including 100 in Hong Kong and Macau, and 62 in the mainland.

Beijing to play `bigger role' (By Kelly Ip) Hong Kong can expect five years of non- intervention by Beijing in economic and livelihood issues. But political scientists believe the central government will play an active role in Hong Kong's political development. "Beijing will participate actively in the political development of Hong Kong with regard to universal suffrage to be adopted in the Legislative Council and chief executive elections," City University political scientist James Sung Lap- kung said. "The central government can still make a call on how the next Legco will be selected - for instance by changing the number of super seats." Sung said putting both Zheng Qinghong and Xi Jinping in charge of the Secretariat of the Central Committee is unprecedented. He also believes Zhang Gaoli, who as party secretary of Shenzhen is responsible for cooperation with Hong Kong, will also become a member of the central government's working group on Hong Kong and Macau. "Together with another top official - Zhang Dejiang, the former Guangdong party secretary who is also familiar with Hong Kong affairs - I expect the new leadership to become more involved in Hong Kong affairs." Sung said though Liu Yunshan had a reputation of suppressing public opinion, he does not think freedom of speech in Hong Kong is in danger. "Everyone acts differently in another position," Sung said. "I believe Liu will act in accordance with Hong Kong's political environment." Veteran political commentator Johnny Lau Yui-siu said Hong Kong and Beijing have different concepts about universal suffrage. "The universal suffrage we have been longing for may not be like what we expect," Lau said. He does not think the controversial Article 23 anti-subversion law will be brought up in the near future even if Liu is put in charge of Hong Kong and Macau affairs. "In the next five to 10 years, I doubt the central government will ask the SAR to activate Article 23 as Chief Executive Leung Chun-ying's popularity remains low," he said. "Beijing will not push him further by mentioning a policy that was opposed by thousands of Hong Kong people."

Causeway Bay shop rents lead world (By Yvonne Liu) Central and Tsim Sha Tsui score fourth and fifth in property consultant's rankings as international brands demand more space - Retail rents in Causeway Bay rose to more than HK$20,000 in the year to June. Strong demand from international retailers and tight supply mean retail rents in Causeway Bay, Central and Tsim Sha Tsui are among the five most expensive shopping addresses in the world. Research by property consultant Cushman & Wakefield showed average rent in Causeway Bay surged 34.9 per cent to US$2,630 - equal to HK$20,384 - per square foot a year for the 12 months to June. It overtook New York's Fifth Avenue as the most expensive retail destination in the world. It is the first time in 11 years that Fifth Avenue with an average rent of US$2,500 per square foot a year has not led the rankings. Hong Kong's Central and Tsim Sha Tsui ranked the fourth and fifth-most expensive retail locations with an average rent of US$1,856 and US$1,547 per square foot a year respectively. New York's Times Square ranked third with an average rent of US$2,100 per square foot a year. John Strachan, head of global retail services at the firm, said the retail rents of prime shops in Hong Kong jumped 21.8 per cent during the period. He believes strong growth in retail rents could be attributed to extremely active demand from new international retailers, expansion plans from existing brands and the very limited availability of retail shops. "Indeed, notwithstanding slowing economic activity, retailers continued to see the market as the ideal launching platform into the mainland," Strachan said. Luxury and mass-market fashion brands continue to vie for the best high-street locations, although retail sales growth slowed in the summer. That put upward pressure on rents, forcing mass-market retailers into secondary street stores or shopping centres. It meant mostly luxury watches and jewellery brands were able to afford the high rents demanded in premier locations. However, the property consultant expects the impressive rental growth in Hong Kong will cool somewhat. Michele Woo, senior director of retail transaction services at Cushman, said: "There has been a slowing in leasing activity in the past month as retailers adopt a wait-and-see approach towards year-end and the new mainland leadership confirmation after the 18th national congress." She said Hong Kong would remain the ideal launching platform into the mainland for international retailers although "we are unlikely to see these very high levels of rental growth sustained". Woo expects retail activity in Asia-Pacific will remain healthy as international retailers struggle to generate profitable trading in their own markets and need to look for expansion opportunities in the region.

Husband-and-wife team win interior design 'Oscar' (By Vivian Chen) Hong Kong duo make history as the first Asians to win global interior design 'Oscar',writesVivian Chen - Ajax Law and Virginia Lung of One Plus Partnership (below) designed the interiors of the Wuhan Pixel Box Cinema (left), the Chongqing Flower and City Sales Office (above) and the Wuhan Moulding Show House. Virginia Lung Wai-ki and Ajax Law Ling-kit, the husband-and-wife team behind Hong Kong-based interior design firm One Plus Partnership, will be celebrating their history making win tonight at the Andrew Martin International Interior Designer of The Year Award in Shanghai. This year, One Plus Partnership beat out 90-odd global rivals to earn the title, making it the first interior designer from Asia to win the award. Founded in 1996, the "Oscars" of the interior design industry has a winners' list that includes Kelly Hoppen, Kit Kemp and Martyn Lawrence-Bullard. "It still feels so unreal," Lung says in their office in North Point. "When I was on the phone with Martin [Waller, co-founder of Andrew Martin], I thought there must be some mistake. Not even in our dreams had we thought about winning." Adds Law: "It was a big surprise because we know the other firms shortlisted are all movers and shakers in the industry; some have been there much longer than us." But the two certainly dare to dream big with their designs, and have done so since they opened for business in 2004. The three projects they submitted to the competition this year - Wuhan Moulding Show House, Wuhan Pixel Box Cinema and Parc Four Seasons Shanghai - are all ambitious projects. "When our contractors first looked at the blueprints and models for the Pixel Box Cinema, they felt it would be impossible to construct," says Law. One Plus likes to develop designs from novel themes. The cinema was inspired by the movement of the pixels that make digital film images, while the Wuhan Moulding Show House is a playful take on traditional moulding techniques on ceilings and walls. Parc Four Seasons Shanghai highlights the owner's passion for cooking by borrowing the concept of "executive chef". The Pixel Box Cinema spans more than 8,000 square metres. Clusters of steel tubes were used to materialise the pixel concept. More than 6,000 pieces of stainless steel were used to construct an oval sphere which allows passers-by to see their own reflection, echoing the theme "world of images". We had developers telling us to our faces - without looking at our designs - that they'd never use designers nobody had heard of. "Before, people always thought that it was only the film that mattered when you went to the cinema, but we managed to prove that the design also helps to draw customers," says Law. The duo recently completed the 1,300 square metre Chongqing Flower and City Sales Office project in Sichuan province. Working with the theme of flowers, the team decorated the interior using 7,000 plastic balls in nine shades adorning the walls in a kaleidoscopic pattern. Coloured marble flooring was assembled piece by piece to show floral prints across the grand hall. "The design is so complicated that we couldn't express it properly on blueprints, so we had a proper model in three dimensions made and shipped to Chongqing so the contractors could recreate it pixel-by-pixel," says Lung. They treat each and every project as if it's their last. "Working with a small team, we are able to be very hands-on with every project," says Lung. "Whenever we get a chance to meet a client who appreciates the way we do things, we give it all we have. If you don't try your hardest, you might not get a second chance." They had a shaky start when they launched their own business after quitting their previous jobs. "We worked almost 24 hours a day," Lung recalls. "We'd camp out in the office, take a two-hour nap, and resume work. Design is not really all that glamorous; it's time-consuming and it takes a lot of effort." "It was really frustrating," says Law. "We had developers telling us to our faces - without looking at our designs - that they'd never use designers nobody had heard of, and saying we couldn't be trusted because we wouldn't be able to afford the luxury apartments they'd be building." They were so angry after one client meeting that they hopped straight on to a plane for a getaway in Taipei. Today, more than 80 per cent of their designs are realised on the mainland, with the rest in Hong Kong and Macau. The team have won almost 60 overseas and 70 Asian industry awards, and credit their success to their originality. "We are troublesome designers," says Lung, laughing. "We always want to break boundaries. We've been lucky to have clients who will listen, but really it's down to us putting in a lot of extra work to make the models convincing." "Being original is about hard work, too," says Law. "We hate copycats. Every time we finish a project, we ask our industry friends if they've seen anything similar. We have scrapped whole designs and started over again if we found there wasn't a significant level of newness in the design."

Hong Kong avoids recession as GDP edges up (By Lai Ying-kit) Government economist Helen Chan. Hong Kong avoided a technical recession when the economy grew a seasonally adjusted 0.6 per cent in the third quarter, reversing its second-quarter decline, according to government figures released on Friday. The third quarter’s growth followed a 0.1 per cent decline in the preceding quarter. A technical recession means two consecutive quarters of decline. The growth rate from July to September was 1.3 per cent greater than in the same period last year, and 1.2 per cent more than the second quarter last year. The government has revised its full-year growth forecast to 1.2 per cent, on the pessimistic side of its earlier estimate in the 1-2 per cent range. Government economist Helen Chan said Hong Kong’s trading environment remained subject to a high degree of uncertainty due to weak sentiment in Europe and the United States. “Exports to the EU market recorded a double-digit, year-on-year decline in the third quarter, while those to the US and many major Asian markets were also weak,” Chan said. Total exports of goods grew moderately, by 4.0 per cent in real terms in the third quarter, over a year earlier. On consumer prices, Chan said inflation was likely to remain higher than earlier estimates because of a rebound in global food prices, the new round of quantitative easing in advanced economies and the renewed pick-up in local housing rents. The government’s forecast for headline inflation is 3.9 per cent for the year, with underlying inflation at 4.5 per cent, higher than its August estimates of 3.7 per cent and 4.3 per cent, respectively, she said.

Hong Kong racer Phillip Yau Wing-choi becomes second to die at Macau GP in two days (By James Porteous in Macau) Choi crashed his Chevrolet Cruze into a barrier while competing in the CTM Macau Touring Car Cup - Medics at Macau battle to save Hong Kong racer Phillip Yau Wing-choi. Organisers of the Macau Grand Prix defended their safety record after tragedy struck for the second day in a row with the death of Hong Kong racer Phillip Yau Wing-choi on Friday. Choi crashed his Chevrolet Cruze into a barrier while competing in the CTM Macau Touring Car Cup. Medical teams had to cut him free from the wreckage and he died in hospital. It is the second death in two days at the circuit, after Portuguese motorbike rider Luis Carreira succumbed to injuries sustained in an accident on Thursday. "I don't think there is any question about the track, it has existed as it is for 60 years," said Joao Manuel Costa Antunes, co-ordinator of the Macau Grand Prix committee, who added that none of the weekend's remaining events would be cancelled. Yau was an experienced Macau competitor and had won two races at the event. It took six minutes to cut him from the wreckage, but organisers insisted this was within the bounds of international road racing. They said that extricating him was made more difficult because his car was a left-hand drive. They also denied there was any problem with the safety equipment in his car and that it had passed all the standard checks. "The Macau Grand Prix Committee regrets to announce that Yau Wing Choi, Phillip, competitor No.31, from Hong Kong, competing in the CTM Macau Touring Car Cup, has succumbed to injuries sustained in a racing accident during the qualifying session this afternoon," read a statement from organisers. "The incident occured at Mandarin Bend at 13.11. The qualifying session was immediately red flagged. "After the incident, two fully equipped rescue cars were at the scene, followed by the extrication car. The position of the racing car required cutting in order to facilitate extrication. At 13.19, the competitor was removed from the car, and at 13.20 Mr Yau was transported by ambulance to hospital where he was admitted at 13.24. "Continuous CPR was performed however he succumbed to his injuries at 13.51. "The Macau Grand Prix Committee has contacted the family and the members of the team. The Committee expresses its sincere condolences."

 China*:  Nov 18 2012

Markets keen to know names of men who will be in charge of economy (By Daniel Ren) Five names in the frame to be the economy's leaders over five difficult years have all served their time at the top financial institutions - Markets are watching a handful of experienced bankers whose ascent though the party ranks this week makes them likely candidates for top jobs managing the world's second-largest economy for the next five years. At least four cadres with stints at the helm of one of the Big Four state-owned banks - Shang Fulin , Guo Shuqing , Xiang Junbo and Xiao Gang - are widely seen as favourites for top economic posts after promotion to the Communist Party's Central Committee. The four, along with the chairman of the China Investment Corporation, Lou Jiwei, are seen as leading contenders for top positions at the People's Bank of China and the Finance Ministry. The governor of the Central Bank, Zhou Xiaochuan, is expected to retire after a decade. Finance Minister Xie Xuren is also on his way out. Just as China watchers have been attempting to analyse the impact of changes to the country's top political body, the business world is eager to find out who will be responsible for reforms of the country's financial system, the internationalisation of the yuan and managing the country's vast overseas assets. Shang, Guo and Xiang, now head the country's banking, securities and insurance regulators, respectively. Each previously led one of the country's big state-owned banks before their government appointments late last year in what analysts believed was preparation for more significant roles after the reshuffle. The three regulators will be joined on the Central Committee by Xiao, the current Bank of China chairman. Analysts believe that Shang, Guo and Xiao are all contenders to fill Zhou's shoes at the PBOC. The next central bank governor will be expected to take new steps in liberalising the interest rate mechanism, letting market forces decide deposit and lending rates. He may also be asked to oversee making the yuan fully convertible in the next five years. Should Guo or Shang take the helm of the central bank, Xiao is expected to fill their posts at the banking or securities authorities. All four candidates are considered advocates of more market freedom and less control over banks' business operations. The chief securities regulator will be under pressure to bail out the troubled stock market, among the world's worst-performing over the past three years. The top banking watchdog faces a worsening bad-loan problem and will have to help the banks better manage their assets in an uncertain economy. The insurance regulator will be expected to accelerate liberalisations, widening insurers' access to properties, stocks and derivatives. Meanwhile, Lou, a former deputy finance minister who now oversees China's sovereign wealth fund, is tipped to replace Xie at the Finance Ministry after his election to the Central Committee. Lou is among those senior government officials who understand the Western financial systems and support the further opening of the mainland's financial markets.

New leadership of Communist Party of China - Members of Standing Committee of Political Bureau of CPC Central Committee - Xi Jinping - Li Keqiang - Zhang Dejiang - Yu Zhengsheng - Liu Yunshan - Wang Qishan - Zhang Gaoli 

On campus, US-Chinese interaction is surging (By Yu Wei in New York) An influx of young Chinese, along with steadily rising enrollments from Saudi Arabia, has enlarged the international student body at US colleges and universities, according to a report issued this week. One-quarter of the 764,321 international students who enrolled at US schools for the 2011-12 academic year were from China, a 23 percent jump from the previous year, according to the annual Open Doors report. It's published jointly by the New York-based Institute of International Education and the US State Department's Bureau of Educational and Cultural Affairs. Columbia University students enjoy face-painting and other activities during the China Day cultural fair on the school's New York campus in October. Business management and engineering remain the two most popular disciplines for Chinese students in the US. Overall, the number of foreign students on US campuses rose 5.7 percent last year, in line with a long-running upward trend. A big contributor was Saudi Arabia, which saw a 50 percent increase in the number of its citizens studying in the US (34,139). But China held its spot, for the third year in a row, as the top source of international students on US campuses, at just over 194,000. The top five was rounded out by India, South Korea, Saudi Arabia and Canada, according to the Open Doors survey, which compiles data collected by US institutions themselves. For Americans who studied abroad in 2010-11, China was the No 5 destination, the fifth consecutive year the country has held that ranking in the Open Doors survey. Chinese campuses hosted nearly 14,000 students from the US in 2010-11, the most recent academic year for which such data is available. That's a tiny number compared with Chinese students in the US, but it reflects increased popularity of study-abroad programs on both sides of the Pacific. "International students always enrich classrooms and communities through their cultures, traditions and diversity of backgrounds. It's critical to continue to open our campuses to them," said Ann Stock, assistant secretary of state for educational and cultural affairs, who presented the report on Tuesday in Washington. "International education creates strong, lasting relationships between the US and emerging leaders worldwide," she said. "Students return home with new perspectives and a global skill set that will allow them to build more prosperous, stable societies." The Open Doors survey also found that, for the first time in 12 years, the number of international undergraduates outnumbered their postgraduate counterparts. "This is primarily due to the large increase of Chinese undergraduates," said Rajika Bhandari, deputy vice-president of research and evaluation for the Institute of International Education. This could usher in changes in the nature of foreign students' experience and influence in the US. "Undergraduates not only stay longer, they have more impact on campus culture, both inside the classroom and out," said Allan Goodman, the institute's president. At Michigan State University, growth in the number of foreign undergraduates, especially from China, has been dramatic. Like many other large American research universities, Michigan State has long had sizable enrollment of postgraduate students from abroad, after they earned their bachelor's degrees back home. Michigan State ranked ninth in the US for the size of its international-student body in 2011-12, at about 3,600. But that total included 2,845 undergraduates, skyrocketing from just 43 seven years ago. "The university has seen a particular influx of undergraduates from China in recent years," said Peter Briggs, director of the school's Office for International Students and Scholars. "Having the opportunity for us to know those Chinese students and for them to know us is extraordinarily important," he said. According to Open Doors, the University of South California led US schools in international enrollment for the 11th straight year, followed by the University of Illinois at Urbana-Champaign, New York University, Purdue University in Indiana and Columbia University in New York. In 2011-12, California schools hosted more than 100,000 students, the survey found. Other top states for international enrollment are New York, Texas, Massachusetts and Illinois. The yearly growth has made education one of the United States' leading exports. According to the Commerce Department, international students contributed nearly $23 billion to the US economy last year. At Ohio State University, which enrolled 3,438 students from China this fall, in-state undergraduates are charged $10,037 for annual tuition, while nonresidents pay $26,445; for postgraduate students, in-state and nonresident tuition charges are $12,200 and $31,653, respectively, according to the school' s admissions office. Mu Ge, a Beijing native who earned a master's degree at Michigan State and is now working toward another at New York University, said he has spent a huge amount of money to study in the US. "Not only does the university benefit financially from Chinese students, but locals do, too. For example, when I was in Michigan, most Chinese students I knew had their own cars and rented an apartment off campus; the restaurants were always full of Chinese students," Mu said. "I guess my contribution to the US economy was in spending on football games," he said with a laugh. Mu has fallen in love with the sport and was in the stands at most Spartans home games. The Open Doors report also offers a snapshot of US students abroad. Some 274,000 Americans were enrolled at non-US colleges and universities in 2010-11, up 1.3 percent from the previous academic year. Although China again placed fifth in countries hosting US students, it was the first outside of Europe — a traditional education destination for Americans. Preceding China were Britain, Italy, Spain and France; the rest of the top 10 consisted of Australia, Germany, Costa Rica, Ireland and Argentina. President Barack Obama's 100,000 Strong Initiative is meant to boost the number of US students who spend a semester or more in China. About 26,000 Americans went to China to study in 2010-11, of whom nearly 9,000 were engaged in noncredit-bearing activities. "Based on these numbers, the initiative is likely to meet its cumulative target of 100,000 by about 2014," said Bhandari of the Institute of International Education. "The world is tilting toward China, and the more our young people know about the language, culture and history, the better they will be able to collaborate, cooperate and compete," said Tom Watkins, a former education superintendent for the state of Michigan. There is no more important geopolitical relationship in the world than that of China and the US in the 21st century, Watkins said. "All major global issues will intersect at the corner of Beijing and Washington, DC. The more we understand each other the better off the world will be."

Xi a 'caring' listener, says Iowa friends (By By Zhang Yuwei in New York) Muscatine host to promote exchanges - As the 18th Party Congress drew to a close this week in Beijing, Sarah Lande, a 74-year-old Muscatine native, was among those who closely watched the transition develop. The announcement of China's new leadership, which will be led by Xi Jinping, makes Lande, Xi's American friend, "very excited". "I believe it is an exciting time for him and for China. I believe he is the type of person that will foster a stronger relationship with the United States," Lande told China Daily. Lande was one of the host families in 1985 when Xi visited Iowa on a delegation as a young Party official to learn about agricultural techniques in Iowa. For Xi, it was a trip where he started a friendship with a small group of American people - a friendship that has lasted nearly three decades. It turned out to be a good meeting. It seemed like the friendship struck," Lande recalled. During Xi's weeklong visit in February, he made a stop in Muscatine, the small Iowa town, to visit Lande's house where 17 friends whom he met during the 1985 visit were invited. Lande says Xi's effort to reunite with them after nearly three decades "meant the world" to her. "He wouldn't have needed to do that (to come to visit us)," she said. "He laughed and remembered the times (in Muscatine), and he truly seemed like a warm, caring, listening person who could tell stories. He is a personal person you like," Lande said of the February gathering. "We were mystified why we made such an impression and were also figuring if we had this honor of having him again, we as a community will really work hard to try to be an example of how to further that relationship between the two countries," said Lande. "It meant a lot to us." As the foreign media have been speculating much about China's next leadership and Xi, Lande has her own take on her friend. "He cares about his people. He is a listener and he has had the confidence of being who he is. He is also wise to the challenges that China faces and realizes there might be step-by-step changes and also step-by-step relationship building (with the US)," Lande said. Grant Kimberley, the son of the Kimberley farm owner who met Xi when he visited the family's soybean farm in February, agreed. "He seems to be a caring, modern, open-minded and a very intelligent person," Kimberley said. "He is someone that listens and understands the interconnectedness of the global economy and its importance." Kimberley said it is a positive sign for Iowa - a leading producer of soybeans, corn pork and eggs - that Xi "understands the importance of agricultural trade with Iowa". A thorough understanding, he added, will ensure a safe and stable supply of food for China. "It can serve as the foundation for a positive relationship between the two countries," he added. Before his departure after the Muscatine visit in February, Xi invited his Iowan friends to visit China. The route of the trip in June, said Lande, was outlined by Xi. Among places the group visited were Shanghai and Hangzhou, the capital of Zhejiang province. In Beijing, Lande and the group were hosted by Xi and his wife, Peng Liyuan. Lande recalled she felt special that she sat between Xi and his wife at the meeting. "He values friendship and he believes people-to-people relationships are the basis of a good foreign policy," Lande said. The friendship with Xi also makes Lande feel responsible to promote more exchanges between the two largest economies on a more local level. "For one thing China is our banker, but is also our customer. We can work together and the future can be bright for all of us," she said. After a recent eight-day trip with the mayor's office to China this week, Lande was among a delegation to initiate a sister-city relationship between Muscatine and Zhengding where Xi was deputy secretary to the CPC Zhengding County Committee in the early '80s.

Hong Kong*:  Nov 17 2012 

Xi Jinping will still keep tabs on Hong Kong (By Chow Chung-yan and Colleen Lee) Party secretary will retain role of overseeing special administrative regions at least until March when he takes over as president - The new Politburo Standing Committee members - Xi Jinping (left), Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli - arrive. Xi Jinping has become the first top mainland leader to enter office with first-hand experience in dealing with Hong Kong and Macau, a portfolio he will still oversee until at least March. The once-a-decade leadership reshuffle that elevated Xi produced a seven-member ruling body without any official assigned to oversee the special administrative regions previously ruled as European colonies. Li Yuanchao , widely tipped to acquire the portfolio from Xi, failed to make it on the Politburo's elite Standing Committee. While the result could cause some to wonder whether Beijing has diminished Hong Kong's importance, analysts said such speculation would be unfounded. The final Standing Committee included an unprecedented number of party officials with strong Hong Kong connections. Xi, who has been tasked with overseeing the affairs of Hong Kong and Macau since 2007, will continue in the role until the National People's Congress in March, said Jiang Shigong , a former central liaison office researcher who is now a professor at Peking University. Of the six other Standing Committee members, two have experience in handling Hong Kong affairs. Both Zhang Dejiang and Zhang Gaoli regularly met Hong Kong officials during their time in Guangdong. Zhang Dejiang served as Guangdong party secretary between 2002 and 2007. Zhang Gaoli was Shenzhen party secretary from 1997 to 2001. "It's true that we now have more top leaders who have experience and understanding of Hong Kong affairs," said Jiang, "But the personnel reshuffle is less important than the overall policy. The overall policy has been set and will not change." Political analyst Johnny Lau Yui-siu agreed: "No matter who is assigned to oversee Hong Kong affairs, he will still have to follow the central government's collective directions and policy." Lau said Xi would keep close tabs on Hong Kong even if the portfolio was later picked up by someone such as Liu Yunshan , who was top censor. "Be it, say, Liu Yunshan or Li Yuanchao, he will just play a part in managing Hong Kong affairs, Xi will still play a leading role, although his primary focus will be occupied by other national and party affairs," Lau said. Jiang hinted that Li would be the most likely candidate to help Xi manage Hong Kong. "According to tradition, it should be the vice-president," he said. This position now held by Xi is widely tipped to go to Li in March. Other candidates include Yu Zhengsheng , who is to head the Chinese People's Political Consultative Conference, or Wang Qishan , who will lead the anti-graft watchdog. Jiang said Beijing's policy towards Hong Kong would focus on stability and maintaining national integrity. "The word 'balance' is the key," he said. "We need to strike a balance between maintaining the central government's authority and power and protecting Hong Kong's autonomy; between emphasising one country and two systems; and between integration and [respecting] Hong Kong's internal economic dynamics."

Hong Kong Rejects U.S. Criticism of ‘One Country, Two Systems’ (By Te-Ping Chen) Pedestrians pass by a monitor showing a news broadcast of Xi Jinping during a news conference introducing the new Politburo Standing Committee, in Hong Kong on Nov. 15, 2012. When it comes to questions about Hong Kong’s autonomy, the government’s position is fairly straightforward: Don’t worry about us, we’re doing just fine. A spokesman for the city’s government made those comments in response to a report from a U.S. government commission that argued that Beijing has increasingly interfered with Hong Kong’s affairs, for example by promoting patriotic education in the city and exerting pressure on local politics. Such interference, the report said, “casts doubt on the continued viability of the ‘one country, two systems’ framework and Beijing’s willingness to eventually grant Hong Kong universal suffrage.” The U.S. report, which is submitted to the U.S. Congress every year, was issued just as China’s 18th Party Congress concluded, wrapping up a week in which President Hu Jintao and others made a point of lauding the “one country, two systems” principle governing Hong Kong’s relationship with Beijing. At the start of the session’s opening, Mr. Hu expressed faith in the system, which will remain in place in Hong Kong until at least 2047, saying he believed that the former British colony “has the wisdom, capability and resourcefulness to successfully govern the special administrative region.” Produced by the United States-China Economic and Security Review Commission, the report appeared to fall flat in Hong Kong’s official circles, with the government calling concerns about the system’s viability “unfounded.” The government also issued further rejoinders, calling implementation of the system Hong Kong’s own “internal affair.” “We hope that foreign governments and legislatures will respect this fact,” the spokesman added. Whatever the government’s position, fears about the integrity of “one country, two systems” have been on the rise in Hong Kong this year, with journalists reporting high rates of self-censorship, while analysts have questioned whether Beijing had exerted undue pressure in the run-up to the selection of Leung Chun-ying as the city’s chief executive in March. Joseph Cheng, a local political analyst, said that while Mr. Hu expressed confidence in “one country, two systems,” the relationship between Beijing in Hong Kong is increasingly a source of worry. Despite the fact that Hong Kong was returned to China in 1997, he says, Chinese leaders know that Hongkongers’ “hearts have not returned, and therefore they think Hong Kong people need to be educated.” Mr. Leung has recently enjoyed a popularity bounce thanks to his efforts to help tackle the city’s exorbitant cost of housing. However, Hong Kong’s pro-democracy activists remain wary about close ties to Beijing. Last month, locals circulated images of Mr. Leung photoshopped to resemble a eunuch in Beijing’s Forbidden City online. In the report, the authors said the deterioration of the “one country, two systems” arrangement raises concerns about American security, and recommended that Congress review current advanced technology exports from the U.S. to Hong Kong. If the city’s independence has been undermined, they said, sensitive technologies are more likely to find their way into China. Earlier this year, a report by the U.S. Government Accountability Office found that certain integrated electronic circuits that could speed China’s military advancement had already been diverted to China via Hong Kong.

MTR will add 530 train trips per week on three lines to speed up system (By Ada Lee) Company says waiting times will be reduced on Tung Chung, Kwun Tong and Tsuen Wan lines - The MTR Corporation will add 530 train trips each week to the Tung Chung, Kwun Tong and Tsuen Wan lines. The MTR Corporation said yesterday it would add another 530 train trips each week to the Tung Chung, Kwun Tong and Tsuen Wan lines by the end of the month, in the third phase of its HK$1 billion service enhancement project. The additional trips mean that the system will carry 1.3 million more passengers a week on its trains. The railway company has bought more trains, hired more drivers, and built more lifts and toilets in its stations. Under the new arrangement, passengers on the Tung Chung, Kwun Tong and Tsuen Wan lines will find waiting times shortened. More trains will leave for Tung Chung during the evening peak hours from November 26, said head of operations Francis Li Shing-kee. Currently, half the trains terminate at Tsing Yi, but after the changes kicked in two-thirds of them would reach Tung Chung. He said that from November 24, trains on the Tung Chung Line would also run more frequently - every 6-1/2 minutes - on weekends. They currently run every eight to 10 minutes. On the Kwun Tong and Tsuen Wan lines, from 9.30am to 7.30pm on Saturdays, trains will run every 2-1/2 minutes instead of the current three minutes. And those from 7.30pm to midnight would run every four minutes instead of the current five, Li said. The MTR Corp has already increased train frequency on the Island, Tseung Kwan O and West Rail lines. But it did not do so for the East Rail and Ma On Shan lines. Sha Tin district councillor Yau Man-chun said trains on the East Rail line were often crammed, and it was urgent for the service to address the needs of passengers in the area. "There are more and more mainland travellers on the East Rail. Sometimes it's really difficult to get on a train." Yau said the district council had brought up the issue with the MTR Corp but had yet to receive a positive response. When queried, Li said the service on the East Rail line "could still satisfy residents' needs". Meanwhile, train services from Yau Ma Tei and Prince Edward were interrupted yesterday from 7.40am to 9.15am because of a signal failure. The MTR Corp said a signal wire was damaged. Li apologised to the affected passengers but said minor problems could not be avoided on the train system, which runs 7,000 trips daily. "We hope the passengers will understand," he said. Li said the increased train trips would not affect system maintenance. The MTR Corp is also building toilets in its stations at Mong Kok, Admiralty and Prince Edward. The toilets will be completed by 2015.

China’s PICC Group to raise up to US$4b in Hong Kong IPO (Reuters in Hong Kong) People’s Insurance Company of China Group takes to the road this week for an initial public offering that could raise up to US$4 billion. Chinese state-owned insurer PICC Group started meeting institutional investors in Hong Kong on Thursday to gauge demand for a listing worth up to US$4 billion, braving a slump in equity deals with the city’s largest IPO in two years. People’s Insurance Company of China Group (PICC), one of the country’s largest insurers, will offer 6.9 billion new shares in the IPO, equivalent to a 16.7 per cent stake in the company, said a source with direct knowledge of the plans who was not authorised to speak publicly on the matter and declined to be named. IPO issuance in Hong Kong has plunged more than 80 per cent so far this year, with volumes likely to shrink to their lowest since 2008 as investors shun new deals because of volatility caused by Europe’s debt troubles. “It is definitely not the best time to come to market, but capital has been a pressing issue for the group for some time,” said Stanley Tsai, an insurance analyst in Hong Kong. “The group will need capital urgently to support its growth ambitions, particularly on the life side.” “The company will have to price the IPO at a considerable discount to peers in order to generate enough interest from institutional investors,” he added. The IPO would be the biggest in Hong Kong since the US$20.5 billion listing of AIA Group Ltd in October 2010. The company will start taking orders from investors during a roadshow due to start on Nov. 22, with pricing of the IPO expected on Nov. 29, the source said. About 50 per cent of the IPO is covered by commitments from cornerstone investors, including financial institutions, Chinese corporates and other strategic investors, sources with direct knowledge of the plans said. PICC, the biggest property and casualty insurer in China and the fifth-largest life and health insurer, had planned to go public in a dual Shanghai and Hong Kong offering worth up to US$6 billion. It decided to move ahead with a Hong Kong listing first after the Shanghai portion of the deal failed to gain approval from Chinese regulators, who are concerned about weak stock market conditions on the mainland. Founded in 1949, PICC is China’s first nationwide insurer and has 2.42 million institutional insurance clients and about 130 million individual insurance customers, exceeding the entire population of Japan. The company is controlled by China’s Ministry of Finance, with an 88.7 per cent stake, while the National Social Security Fund (NSSF) holds the remaining 11.3 per cent. PICC’s revenue grew at an average annual rate of 22.5 per cent from 2009 to 2011, reaching 236.3 billion yuan (US$37.96 billion) in 2011 and 136.2 billion yuan in the six months ended in June 2012, according to its preliminary prospectus. The company posted net profits of 7.9 billion yuan in 2011 and 7.14 billion yuan in the six months to June. PICC hired a record 17 banks to help underwrite the IPO. The company is the parent of China’s largest property insurer, Hong Kong-listed PICC Property & Casualty Co. China International Capital Corp (CICC), Credit Suisse Group AG, Goldman Sachs Group Inc and HSBC Holdings Plc won mandates as sponsors of the deal. The list of banks also acting as bookrunners includes Morgan Stanley and UBS AG, as well Chinese firms such as ABC International and BOC International.

Minimum HK$1.5m needed to be happy in Hong Kong, poll finds (By Ada Lee) Survey reports that Hongkongers need HK$1.5m a year to find contentment - A survey showed more than 80 per cent of Hongkongers believed a certain level of income could bring them happiness. Hongkongers on average need to earn HK$1.5 million a year to be happy, ranking them third among 13 places in the world, according to a global survey by an investment company. The poll of 5,000 people by Royal Skandia, of whom 500 were from Hong Kong, also found the city's women were more financially demanding than men. Dubai topped the poll, with respondents there requiring HK$2.1 million year, compared with a global average of HK$1.2 million. The Gulf city was followed by Singapore with HK$1.8 million. Germany came last, with an average of only HK$664,830. Britons think they need to earn HK$1 million a year to be happy, ranking them ninth. The survey found that while only 17 per cent of men in Hong Kong said they needed more than HK$2 million a year to be content, the percentage for women was 23 per cent. Nearly half of the men said they would be happy with yearly incomes below HK$600,000, but only one third of the women felt comfortable with that number. A HK$1.5 million yearly income would mean a monthly salary of HK$125,000. According to the Population Census last year, only 4.2 per cent of the working population earn more than HK$60,000 a month, the highest category in the report. Hongkongers on average earn HK$12,800 per month. The survey also showed more than 80 per cent of Hongkongers believed a certain level of income could bring them happiness. "It may be that the relative absence of a social security net combined with the very high cost of property and rising inflation are responsible for places like Hong Kong putting a higher value on income," said Michael Leeson, Royal Skandia's head of sales in Hong Kong and Northeast Asia.

Carrie Lam says government's first four months 'productive' (By Tanna Chong in London) Chief Secretary says the new government has shown strong desire to 'get things done' despite large protests and number of scandals - Lam meets Hong Kong students in London. The first four months of government under Chief Executive Leung Chun-ying were "productive", with the team having a "strong determination to get things done", according to Chief Secretary Carrie Lam Cheng Yuet-ngor. Despite big demonstrations on issues such as national education, these would have generated just as much controversy if they had arisen under the last government, Lam said. She recognised, however, that the bad press surrounding some key officials was affecting governance. "[Their] personal problems have cast some effect," Lam said. "But governance had already become difficult during the final stage of the last administration. The national education plan could have been just as controversial if it was rolled out by the last government." Since July, members of the new government have had to grapple with personal scandals that cast doubt on their integrity. Secretary for Development Paul Chan Mo-po is accused of owning illegally partitioned flats and of drink-driving, Executive Councillor Franklin Lam Fan-keung allegedly profited from insider information on property curbs, and Leung himself was found to have illegal structures at his home on The Peak. Despite the perceived chaos and flagging popularity, "the team is still strongly determined to get things done", Lam said. The chief secretary was speaking on her first official visit to London as the government's No2. Elaborating on her conclusion of a productive government, she said: "We have implemented many policies during these four months, such as promoting barrierless access [for the disabled] city-wide, but they received little media attention." On a planned HK$2,200 old age living allowance, Lam called the friction generated in the Legislative Council an isolated case of executive-legislative relations at their worst. Opponents, including some Beijing loyalists, want the means test for elderly applicants should be scrapped. "Technically, the administration has been working well with Legco," Lam said. "The new Legco is more atomic in composition and is more radical." Many policies could be fine-tuned, "but there is no room for changes in the allowance". The hurdles of implementing policies stemmed from a highly fragmented legislature and a complicated political environment, she said. "We may have to concede on efficiency in order to secure a broad-based consensus for policies," she added. Lam will visit creative industries and social enterprises in London, and speak at a Trade Development Council dinner, before flying to Madrid today.

 China*:  Nov 17 2012

US businesses call for unimpeded Chinese FDI (By He Wei in Shanghai) Washington faces pressure to avoid discouraging potential investors - The US private sector is calling for a consistent political commitment from Washington to clear the way for direct investment from China, which is projected to hit $400 billion by 2020. The US business community agrees that current setbacks encountered by the telecom companies Huawei Technologies Co Ltd and ZTE Corp will only be temporary, as long as the US government stops sending contradictory signals that might deter Chinese investors in the long run. In the first three quarters of 2012, Chinese firms completed investment transactions worth $6.3 billion, setting the stage for a record year for outbound investment to the US, according to a latest report compiled by the non-profit group Asia Society and research company Rhodium Group. Chinese direct investment has the potential to contribute to a more balanced bilateral commercial relationship and the strengthening of US-China ties, said Brenda Foster, president of the American Chamber of Commerce in Shanghai. Daniel Rosen, Rhodium cofounder, said: More importantly, Chinese investment helps create new jobs in a much more profound way than official statistics show. Rosen said at least 30,000 people have benefited from new posts set up by Chinese companies in the country. That figure is five times higher than records from government agencies. But the many problems of Chinese investments in the US are not about how companies manage human resources or deal with supply chains. Instead, they are about the macro-policy environment, Rosen said. "The past weeks seem to leave people the impression that the US has slammed the door shut for Chinese investors and that we have gone completely overprotective", he said, referring to the Huawei and ZTE cases. A US congressional panel said that the two companies pose a security threat to the US. Recent friction over Huawei and ZTE's investments in the US reignited debate on whether Washington should use national security as an excuse to bar Chinese investors from contracts and acquisitions in the country. "I think that ZTE and Huawei should be allowed to bid on these projects," Gary Rieschel, founder and managing partner of Qiming Weichuang Venture Capital Management (Shanghai) Co Ltd, told China Daily. "Obviously, it is a mistake to exclude them." But the cases don't reflect normal Sino-US economic ties, he noted. "At the very senior level of government as well as business, there has been more collaboration and more engagement than decades ago," he said. Robert Theleen, chairman and CEO of private equity firm ChinaVest, said the cases are incredibly complicated simply because of the sensitivity of the industry. "It's safe to say that technology has overtaken the ability of political leaders so that they tend to make conservative decisions," he said. Because the IT sector is so important and sensitive, it moves faster than political minds that fail to grasp the strength of it, Theleen said. But he forecast that these companies would not be easily strained after the initial failure. Instead, they are "going back to the drawing board" right now. "The CEO of CNOOC (China National Offshore Oil Corp) once told me he would never invest in the US again, after the trial of acquiring oil company Unocal Corp. But just four years later, the company became the largest and the most welcomed investor in the energy sector in the US," he said. It is a widespread "myth" that the US, more often than not, does not welcome Chinese investment, said Mark Lewis, commercial officer at the US Embassy in Beijing. The federal government, and the US Department of Commerce in particular, spends a lot of manpower and effort trying to attract foreign direct investment, Lewis said. Washington has been pushing ahead SelectUSA, a government initiative to remove barriers to new investments. During a project roadshow in Shanghai last October, US Ambassador to China Gary Locke said that through such events, Chinese companies can learn about investment opportunities in the US through workshops and visits. But Rosen said US leaders need to tread carefully so that they don't cause problems. "We have seen 600 successful investments so far from China. So you don't really need a lot of government encouragement as this is starting to happen very well," Rosen said. Policymakers should avoid misunderstanding what the real trends are, Rosen noted. Washington should not think that all investments are Chinese-government related, and Beijing should not deem that the US market is closed. "The government can make problems. But they can really be the solution," he said.

Amendment fine-tunes nation's growth trajectory (By WU JIAO in Beijing and FU JING in Brussels) The Communist Party of China amended its Constitution on Wednesday to make the Scientific Outlook on Development part of its long-term action guide to address new challenges faced by the world's second-largest economy. Unanimously agreed by delegates to the 18th CPC National Congress, the amendment juxtaposes the Scientific Outlook on Development along with Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents, according to a resolution passed by the Party congress. Analysts said that the inclusion of the Scientific Outlook on Development means that the Party Constitution addresses the country's development needs in the current stage. President Hu Jintao and his predecessor Jiang Zemin shake hands as the 18th Party Congress concluded on Wednesday in Beijing. It also shows the leadership's determination to pursue balanced development, experts said. It is an action guide that the Party should adhere to in the long-term, said the resolution. The Scientific Outlook on Development advocates sustainable and efficient economic and social development instead of breakneck growth at the expense of the environment and society. Duan Peijun, a scholar of strategy studies at the Party School of the CPC Central Committee, said the guidance provided by the Scientific Outlook on Development will be conducive in shifting the nation from its current low-efficiency mode of development. "It's a milestone in Party history and a major theoretical innovation that fits the current social and economic situation in China," said Wang Weiguang, a renowned sociologist and a delegate to the Party Congress. Wang said the Scientific Outlook on Development enriches the Party's theories. Serving as the basic law for the CPC, the Constitution has the highest authority within the Party and supreme binding power on all of its 82 million members. Since the current constitution was endorsed in 1982, the Party has made six revisions in accordance with the country's changing situation. The Scientific Outlook on Development was first put forward in October 2003, to facilitate overall, coordinated and sustainable development. Despite the country's three decades of double-digit growth that have made it the world's second-largest economy, China now faces environmental and social challenges, including energy shortages, a widening income gap and corruption. By elevating the Scientific Outlook on Development to the CPC's action guide, analysts said the world's largest political party will be able to not only ensure the country's sustainable development, but also contribute to global growth. Sumathi Dharmawardena, secretary-general of the Sri Lanka-China Friendship Association, said that the decisions made at the congress have laid a solid foundation for the country's socioeconomic development, and made contributions to regional and global stability and development. Another noteworthy amendment to the Constitution is the detailed explanation on the strategic position of ecological progress in China's overall development plans. "Ensuring ecological progress and building a beautiful China are new concepts in our Party's Constitution. It sends a message that our Party gives high priority to people's interests," said Xia Xueluan, a renowned sociologist at Peking University. Guy Alois Magnus, head of the Brussels-based Environment and Public Health Office of the European Society for Research and Prevention on Environment and Health, said ecological awareness is extremely important. China will have to carefully monitor the environmental impact of its economic activity and promote this internationally, Magnus said.

The story gets better for publishers (By Mei Jia in Beijing and Wang Kaihao in Jiangsu) Nobel success reflects a plotline of growing confidence, report Mei Jia in Beijing and Wang Kaihao in Jiangsu. Mo Yan's Nobel prize has sparked a global wave of interest in Chinese literature and the foreign book market is hungry for China-themed publications. Mo Yan's books at the 2012 Frankfurt Book Fair. Mo's Nobel prize has sparked international interest in Chinese literature. It's all a far cry from the days when the country's publishers felt the task of selling books overseas was so hopeless that they devised a "kidnapping" strategy. The trick was to invite representatives of foreign publishers to meetings offshore for a few days of bonding on a boat. According to a joke doing the rounds at the time, the foreign businessmen weren't allowed back on dry land until at least one deal had been signed. That's an exaggeration, of course, but even when deals were agreed the odds were always stacked heavily in favor of the foreign companies. In 2002, for every Chinese book sold abroad, 15 were imported in return. Lu Jiande, director of the Literature Institute at the Chinese Academy of Social Sciences, praised Mo's talent and contribution to Chinese literature, but said he believed the writer's Nobel triumph reflects the strength of modern Chinese writing as a whole and the recent transformation of the country's publishing industry. "I don't think Mo working alone in his study can claim all the credit. His achievement must be seen in light of the wider social background," he said. A root and branch reform has swept through the Chinese publishing industry during the past decade and its impact has surprised professionals and interested observers alike. "Chinese publishing continues to shift toward becoming a consumer business. And the publishing reforms have widened the space that foreign publishers such as ourselves can operate in," said Jo Lusby, managing director of Penguin China. "Over the past few years, it has become easier for us to find partnerships for the books that we want to co-publish in Chinese," she added. Ten years ago, there were no commercially-driven publishers in China and the book market was moribund. Publishers were either fully or partly funded by the government. "Chinese publishers were hampered by the system at that time. It restricted their ability to develop a vibrant culture, especially given that other sectors of the social economy had been transformed and were beginning to operate under market principles," said Zhou Mingwei, president of China International Publishing Group. "The contrast was obvious, and things had to change so publishers could function efficiently," he added. Currently, 120 publishing groups in China, most having grown from scratch through mergers and acquisitions, stock market listings and private capital, according to a recent report from the General Administration of Press and Publication. China's publishing industry is now eight times larger than it was in 2002. The income derived from books and press publications was 1.45 trillion yuan ($232 billion) in 2011, accounting for 60 percent of the culture industry's total earnings. Meanwhile, the ratio of imported to exported titles has become more balanced — from 15-to-1 in 2002 to 2.1-to-1 in 2011, according to the GAPP, and the number of titles available in the mainstream Western market has risen dramatically. The driving force behind these changes has been a top-down cultural restructuring and systemic reform, instigated exactly a decade ago at the 16th National Congress of the Communist Party of China. The completion deadline for the first phase of reform was scheduled for the months before the CPC's 18th congress. Liu Binjie, director of the GAPP, was able to inform delegates at this year's congress that the first 10-year agenda for the reform of the publishing industry had been accomplished, "as planned". The Phoenix rises - As chairman of the first Chinese publishing group to generate income of more than 10 billion yuan and hold assets of equal value, Chen Haiyan, has been a leading figure in the Jiangsu province-based Phoenix Publishing & Media Group, building it into one of the industry's leading players. The group is notable for thinking outside the box and adopting strategies previously untried in the industry. For example, Chen insisted on establishing the new-media company Phoenix-Tangel New Media Co, despite doubts among other members of the management team. Zhang Li, the managing director, admitted that five years ago she could never have foreseen the success the company enjoys today. When she first entered the animation industry in 2007, Zhang felt trapped by the old operating structures. So she cooperated with a number of privately-owned companies, including the Internet giant Tencent Inc, to focus on online games for children. Phoenix-Tangel's first successes were books based on the games Seer and Mole Manor. Zhang was chosen to establish the new company in 2011, with the parent company holding a 51 percent stake in the new venture, worth 5.1 million yuan. Sales income exceeded 80 million yuan in 2011. The company has also revamped an old cartoon figure, a boy called Dingguagua: "We had this cartoon figure for almost 20 years, but didn't pay enough attention to promotion, but the boy will become our next superstar," said Zhang. The company has also designed a tablet computer for kids that will hit the market next year and it has also established a website to back up its content, but as yet, no release date has been set. Phoenix has listed two spin-offs on the stock markets, with a combined market value of more than 27 billion yuan. In a break from usual Chinese publishing practice, employees have been given shares in the companies. "The move will help us retain talent and maintain sufficient cash flow for business development," said Chen. PP&M is expanding overseas, including establishing Hachette-Phoenix Cultural Development Co in Beijing, a collaboration with the renowned French publisher Hachette Livre, plus a printing and publishing company in the UK. "We'll not wait for foreign publishers to select books from our lists to introduce to their local market as we did in the past. Now we offer the books and co-publish them with overseas companies," said Chen. Yilin Press, part of the Phoenix Group, was one of the first Chinese publishers to break with the practice of waiting passively for books to be chosen for overseas publication. Instead, it collaborates on books with Britain's Compendium Publishing Ltd from the earliest planning phase. Instead of simply offering titles for translation, Chinese publishers are taking a hands-on role. When planning Symbols of China in 2009, a book that presents Chinese culture by paraphrasing cultural symbols in nine categories, Yilin collaborated with the veteran British publishing expert Paul Richardson to tailor-make the content, structure and design. Even the language is a recreation and not just a verbatim translation. "There has been a growing relationship between Chinese publishers and the international market, and a good development in mutual understanding of each others' markets which should bring more results in the coming years," said Richardson. Richardson, formerly a member of the foreign consultative team for the China Book International project, said the biggest change he's observed during the past decade has been "the publishers' move from cultural institutions to market-led businesses". "And the creation of the publishing groups," he added. By 2011, the total assets of all of China's publishing-related groups reached 368 billion yuan, according to the GAPP.

A fifth of Chinese to be 'affluent' by 2020 report (By Zheng Yangpeng) Twenty percent of the Chinese population will be wealthy enough to be considered "affluent" by 2020, according to research by the management-consulting company Boston Consulting Group. By then, 280 million people are expected to form the country's affluent class, wielding $3.1 trillion a year of purchasing power, an amount equal to 5 percent of global consumption, the company said. Boston Consulting defined people who have an annual household disposable income of $20,000 to $1 million as being affluent. By 2020, their consumption will be nearly equal to Japan's total consumption for the same year, 128 percent of Germany's and three times South Korea's, the report said. Adjusted to take differences in purchasing power into account, the $20,000 starting point for the affluent class is equivalent to an annual household disposable income of $38,000 in the most-developed markets and is near to the medium household income of many developed countries, the company said in its report. "Much attention has been paid to China's middle class and high-net-worth individuals," said Vincent Lui, a Boston Consulting partner and an author of the report. "But the affluent — (who are) richer than members of the middle class but not as wealthy as the super-rich — have spending habits and attitudes that are distinct." The report said affluent consumers in China tend to replace their old belongings quickly as they pursue emotional gratification, status and recognition. It described them as being relatively sophisticated, a trait they exhibit in their willingness to travel abroad and try out new brands. "A lot of affluent consumers buy luxury brands in response to social necessity and peer pressure," added Angela Wang, managing director of Boston Consulting. "A consumer told me he thought he would be more respected for wearing luxury clothing brands. Another said he bought a Mercedes-Benz because he felt embarrassed to drive his Buick to attend a reunion of his old classmates." The report, which was written using data obtained from a survey of 24,000 consumers around the world, also found that 72 percent of the affluent consumers polled had bought "popular" — meaning less-expensive — leisure clothes in the past year. But only 15 percent of them said they would buy a popular leather suitcase, an item that tends to be conspicuous on business trips. The report said three quarters of those who make up the affluent class in 2020 will hail from relatively small cities. This emerging group, which will help drive consumption in China in the next decade, is expected to spend less time than average consumers on surfing the Internet to purchase items on e-commerce websites such as Taobao. They will instead be more likely to pay higher prices to make purchases on websites run by high-end brands. Boston Consulting Group estimated the trading value of business-to-consumer websites will increase from the current 18 percent of all online trading to 40 percent by 2015. Companies will find themselves catering for the so-called sugar generation, which is made up of the children of people now in the affluent class. In five years, those youngsters are expected to constitute 30 percent of that class, according to the report. It said one of their main shopping interests will lie in buying products and brands that set them apart from others of the same age and they will be at ease with using the Internet. One example of this behavior came with Sunday's "Singles' Day" purchasing spree. The day — set aside in honor of single people — saw many e-commerce companies offer promotions to boost their sales. Their efforts were rewarded. Alibaba Group, a giant in the industry, alone pocketed 19.1 billion yuan ($3.04 billion) in sales on the day, three times as much as it had on the same day a year ago. And the majority of the shoppers who bought goods on Alibaba's website were young. "To tap this consumer market, businesses need to continually rethink how they position their brands and how they connect with consumers," said Justin Fung, a Boston Consulting Group principal. The burgeoning purchasing power of China's affluent class, as well as that of high-net-worth people and the middle class, is a reflection of the increasing importance of domestic consumption to the country's economy. In the first three quarters of the year, consumption of such products was the source of 54 percent of China's GDP growth during that time, marking the first time it has contributed more than fixed-asset investment to that figure. "To have sustainable economic growth, China must move from having an investment-driven economy to one that is driven by domestic consumption," said Yu Miaojie, associate professor at the China Center for Economic Research at Peking University. "To free up this power, China should improve its social safety net and reduce its tax rates."

Great Hall of the People in Beijing on November 15 just elected eighth session of the Plenary Session of the CPC, the CPC Central Committee General Secretary Xi Jinping and member of the Standing Committee of the Political Bureau of the CPC Central Committee Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan, Zhang Gaoli same interview eighteen Chinese and foreign reporters cordial meeting. General Secretary of the CPC Central Committee Xi Jinping delivered an important speech: Ladies and gentlemen, friends: Hello, everybody! Let everyone waiting, I am glad to meet with you Reporters friend. Yesterday, 18 of the Communist Party of China, the successful conclusion of the National People's Congress. These days, you reporters friends made a large number of reports on the congress passed many "Chinese sound" to the world. Very dedicated, very professional, very hard, I representing the 18 Assembly Secretariat, to express our heartfelt thanks to you. Just now, we held the first plenary meeting of the Central Committee of the Communist Party of China eighteenth meeting elected the new central leading organs. The Plenary elected seven of the Standing Committee of the Political Bureau of the CPC Central Committee, electing me as the General Secretary of the CPC Central Committee. Next, I put the other six of the Standing Committee colleagues to introduce. They are: Comrade Li Keqiang, Comrade Zhang Dejiang, Yu Zhengsheng comrades, Comrade Liu Yunshan, Wang Qishan, Comrade Zhang Gaoli comrades. The Li Keqiang comrades of the seventh session of the Standing Committee of the Political Bureau of the CPC Central Committee, and other comrades are the seventh member of the Political Bureau of the CPC Central Committee, we understand they are more. Here, on behalf of the members of the new central leading bodies, our heartfelt thanks to all party comrades trust. We must trust, to fulfill the mission! The great trust of the Party comrades, the expectations of the people of all ethnic groups in the country, this is a great inspiration to do a good job for us, but also our shoulders the heavy burden. This great responsibility, it is the responsibility of the nation. Our nation is a great nation. In the course of development in the five thousand years of civilization, the Chinese nation has made an indelible contribution to human civilization and progress. Modern times, the long-suffering of our nation, the Chinese nation to the most dangerous time. Since then, in order to achieve the great rejuvenation of the Chinese nation, numerous people with lofty ideals protest, but once again failed. After the founding of the Communist Party of China, to unite and lead the people followed one after another, the tenacious work of the poor and backward old China into a growing trend of a strong and prosperous new China, the bright prospects of the great rejuvenation of the Chinese nation is showing unprecedented. Our responsibility is to unite and lead the whole Party and people of all ethnic groups, to take over the baton of history, continue to strive to achieve the great rejuvenation of the Chinese nation and the Chinese nation stronger forceful stand on its own among the nations of the world to make new human greater contribution. Major responsibility is the responsibility of the people. Our people are a great people. In the long historical process, the Chinese people have to rely on their own hard work, courage, wisdom, and create a better home for national harmony and coexistence, cultivate timeless outstanding culture. Our people love life to look forward to a better education, more stable, more satisfied with the income, the more reliable social security, a higher level of health services, more comfortable living conditions, more beautiful environment, period expecting children can grow better, work better and live better. The people's yearning for a better life, is our goal. Earthly happiness is to rely on hard work to create. Our responsibility is to unite and lead the whole Party and people of all ethnic groups, continue to emancipate the mind, persist in reform and opening up, the liberation and development of the social productive forces, efforts to solve the people's production and life difficulties, unswervingly take the road of common prosperity. This great responsibility, the responsibility of the party. Our party is a political party serving the people wholeheartedly. Party led the people have made remarkable achievements, we have every reason to be proud of, but we are proud but not complacent, and will never lie on the laurels of the past. Under the new situation, our party is facing many serious challenges within the party, there are many problems to be solved. Especially some party members and cadres of corruption, from the masses, formalism, bureaucracy, must make strenuous efforts to resolve. The whole party - must be vigilant. Blacksmith needed its own hardware. Our responsibility is to work together with all party comrades insist on that the Party itself strictly and effectively solve their own outstanding problems, and improve their working style, close ties with the masses, so that our party has always been the cause of socialism with Chinese characteristics the strong leadership core. The people are the creators of history, the masses are the real heroes. The masses of the people is the source of our strength. We are very aware that: everyone's power is limited, but as long as we unite as one, united, there is no insurmountable difficulties; everyone working time is limited, but serving the people wholeheartedly is unlimited. Responsibility is extremely heavy, and the cause of a long way to go. We must always with the people close to your heart, and the people through thick and thin, and the efforts of the people, Suye in public, hard work and efforts, to history, to the people to pay a qualified answer. Reporter friends, China needs to learn more about the world, the world also needs to know more about China. I hope you're going to continue the efforts and contributions made to enhance the mutual understanding of China and the world. Thank you! 1115日,刚刚在中共十八届一中全会上当选的中共中央总书记习近平和中央政治局常委李克强、张德江、俞正声、刘云山、王岐山、张高丽在北京人民大会堂同采访十八大的中­外记者亲切见面。中共中央总书记习近平发表重要讲话:女士们,先生们,朋友们:大家好!让大家久等了,很高兴同各位记者朋友见面。昨天,中国共产党第十八次全国代表大会胜利闭幕了。这些天来,各位记者朋友们对这次大会作了大量报道,向世界各国传递了许多"中国声音"。大家很敬业、很专业、很辛苦,在­此,我代表十八大大会秘书处,向你们表示衷心的感谢。刚才,我们召开了中国共产党第十八届中央委员会第一次全体会议,会议上选举产生了新一届中央领导机构。全会选举产生了七位中央政治局常委,选举我担任中共中央总书记。接下­来,我把其他六位常委同事向大家介绍一下。他们是:李克强同志、张德江同志、俞正声同志、刘云山同志、王岐山同志、张高丽同志。李克强同志是十七届中央政治局常委,其他同志都是十七届中央政治局委员,大家对他们都比较了解。在这里,我代表新一届中央领导机构成员,衷心感谢全党同志对我们的信任。我们一定不负重托,不辱使命!全党同志的重托,全国各族人民的期望,这是对我们做好工作的巨大鼓舞,也是我们肩上沉沉的担子。这个重大的责任,是对民族的责任。我们的民族是伟大的民族。在五千多年的文明发展历程中,中华民族为人类的文明进步作出了不可磨灭的贡献。近代以后,我们的民族历经磨难,­中华民族到了最危险的时候。自那时以来,为了实现中华民族伟大复兴,无数仁人志士奋起抗争,但一次又一次地失败了。中国共产党成立后,团结带领人民前赴后继、顽强奋斗,把贫穷落后的旧中国变成日益走向繁荣富强的新中国,中华民族伟大复兴展现出前所未有的光明前景。我们的责任,就是要团结带领全党全国各族人民,接过历史的接力棒,继续为实现中华民族伟大复兴而努力奋斗,使中华民族更加坚强有力地自立于世界民族之林,为人类作出新的更­大的贡献。这个重大的责任,就是对人民的责任。我们的人民是伟大的人民。在漫长的历史进程中,中国人民依靠自己的勤劳、勇敢、智慧,开创了民族和睦共处的美好家园,培育了历久弥新的­优秀文化。我们的人民热爱生活,期盼有更好的教育、更稳定的工作、更满意的收入、更可靠的社会保障、更高水平的医疗卫生服务、更舒适的居住条件、更优美的环境,期盼着孩子们能成长得­更好、工作得更好、生活得更好。人民对美好生活的向往,就是我们的奋斗目标。人世间的一切幸福都是要靠辛勤的劳动来创造的。我们的责任,就是要团结带领全党全国各族人民,继续解放思想,坚持改革开放,不断解放和发展社会生产力,努力解决群众的生产­生活困难,坚定不移走共同富裕的道路。这个重大的责任,就是对党的责任。我们的党是全心全意为人民服务的政党。党领导人民已经取得了举世瞩目的成就,我们完全有理由因此而自豪,但我们自豪而不自满,决不会躺在­过去的功劳簿上。新形势下,我们党面临着许多严峻挑战,党内存在着许多亟待解决的问题。尤其是一些党员干部中发生的贪污腐败、脱离群众、形式主义、官僚主义等问题,必须下大气力解决。全党­必须警醒起来。打铁还需自身硬。我们的责任,就是同全党同志一道,坚持党要管党、从严治党,切实解决自身存在的突出问题,切实改进工作作风,密切联系群众,使我们的党始终成为中国特色社­会主义事业的坚强领导核心。人民是历史的创造者,群众是真正的英雄。人民群众是我们力量的源泉。我们深深知道:每个人的力量是有限的,但只要我们万众一心,众志成城,就没有克服不了的困难;每个人的­工作时间是有限的,但全心全意为人民服务是无限的。责任重于泰山,事业任重道远。我们一定要始终与人民心心相印、与人民同甘共苦、与人民团结奋斗,夙夜在公,勤勉工作,努力向历史、向人民交一份合格的答卷。记者朋友们,中国需要更多地了解世界,世界也需要更多地了解中国。希望你们今后要继续为增进中国与世界各国的相互了解作出努力和贡献。谢谢大家!

Hong Kong*:  Nov 16 2012 

Hong Kong retail demand spurs office conversions (By Yvonne Liu) Office space being reconfigured in some key properties to cater for customer needs and to take advantage of the higher rents - The Harbour City complex in Tsim Sha Tsui is undergoing changes to convert office space to make it suitable for retail use. Strong demand for retail space from the services industry and higher rents have encouraged Wharf (Holdings) to convert some office floors at Harbour City in Tsim Sha Tsui to semi-retail use. Some lower floors of Harbour City buildings, including World Finance Tower (North), Wharf T&T Centre, and World Commerce Centre, have already been converted and more will follow. The office floors, each of about 18,000 square feet, were leased to trading, sourcing, and electronic companies, property agents said. When converted, the space will be used by retailers including spa and beauty centres. The Bazaar, an outlet for clearance sales by local and international brands, has opened on the 5th floor of the Wharf T&T Centre. Wharf (Holdings) was unavailable for comment yesterday. Helen Mak Hoi-lun, senior director of retail services at Colliers International, said the conversions mainly involved older buildings. "They have a lower floor-to-ceiling height and don't have raised floors. So the facilities they offer are less competitive in the market compared with new office buildings," she said. Demand from service industries was strong, however, since Harbour City was a key shopping destination, Mak said. "The industry is also willing to pay a higher rent than office tenants, and so conversions help the landlord generate higher rental income." According to agents, rents paid by office tenants in the buildings were about HK$35 per sq ft. This could rise to HK$60 per sq ft if leased for semi-retail use. "Some tenants from the beauty industry moved into the converted space from other, younger office buildings in Harbour City. I think the landlord wants to consolidate these types of retailers into the same area at the development," an agent said. The office-space occupancy rate at Harbour City was 99 per cent at the end of June, Wharf's interim report shows. Another major Wharf development, Times Square in Causeway Bay, has also attracted service industry tenants. The 14th floor of Tower 1 has been leased to Parsons Music Store and the 35th and 36th floors have been occupied by a beauty centre. There has been speculation the 16th to 19th levels will be converted to semi-retail use when existing leases expired. Each floor could provide an area of 17,000 sqft. However, a spokesman for Times Square yesterday said Wharf had no plan to convert the space. Office rents at Times Square are above HK$40 per sq ft. A property agent said rents could be 10 per cent higher if converted for semi-retail use. Despite retail rents slowing in recent months, landlords could still get more income by improving retail space and tenant mix, agents said. CBRE research showed prime retail rents rose by 2.4 per cent in the third quarter, compared with 2.7 per cent in the second quarter. Year-to-date rises slowed to 7.9 per cent at the end of September, against 22.3 per cent a year ago.

Top QC David Perry approved to prosecute Kwok bribery trial (By Austin Chiu) Judge says prosecution should be entitled to 'best available talent' in such a high-profile case - Prominent British barrister David Perry, who is leading the prosecution of self-styled fung shui master Tony Chan Chun-chuen, will also be the lead prosecutor in the bribery trial involving the billionaire Kwok brothers and former chief secretary Rafael Hui Si-yan. The High Court yesterday allowed an application by the Department of Justice to engage Perry after Mr Justice Andrew Cheung Kui-nung said the prosecution should be entitled to the "best available talent" in such a high-profile case. The chief judge of the High Court also allowed applications by the Kwok brothers to engage fraud specialist Clare Montgomery QC to act for Thomas Kwok Ping-kwong, 61, and John Kelsey-Fry to represent Raymond Kwok Ping-luen, 59. The pair are co-chairmen of Sun Hung Kai Properties. Perry's engagement is a surprise. It had been widely rumoured Lord MacDonald QC, the former director of public prosecutions of England and Wales, who has been advising the prosecution on the case, would be appointed. Perry was the lead prosecutor in the conviction of "milkshake murderess" Nancy Kissel at her retrial. Montgomery, a former British deputy high court judge and a fraud specialist, recently acted for the Swedish government in its bid to extradite WikiLeaks founder Julian Assange. Kelsey-Fry, with 34 years experience, is an acclaimed "star-rated" Queen's Consul specialising in fraud and conspiracy law. Graft-busters have charged the Kwok brothers and Hui, 64, with bribery and misconduct in public office. The Kwoks allegedly paid Hui more than HK$34 million in bribes. Thomas Chan Kui-yuen, 66, Sun Hung Kai's executive director, and Francis Kwan Hung-sang, 62, a former Hong Kong stock exchange official, have been charged with conspiring with the Kwoks to offer some of the bribes. The Bar Association had opposed giving the London silks permission to appear. Cheung said the case was a high-profile one because an "ex-chief secretary for administration, who also during his tenure acted as the acting chief executive from time to time", was charged with corruption. And the Kwoks were the "owner and controller of one of Hong Kong's biggest property empires". The judge said it would be in the public interest to allow the prosecution to engage the "best available talent" to ensure no stone was left unturned. Director of Public Prosecutions Kevin Zervos said the application to admit Perry as the lead prosecutor should be allowed because it was a "high profile and complicated case" where the charges spanned nine years between 2000 and 2009. "We should be entitled to prosecute a case in the best way we can," Zervos said. "It's important to ensure that our criminal justice system is successful and has the confidence and trust of the public."

Hong Kong fails to meet air quality targets (By Lai Ying-kit) Hong Kong has never met the air quality targets it adopted 25 years ago, according to an Audit Commission report released on Wednesday that reviewed the government’s efforts to improve air quality. The commission’s report found the concentration of two pollutants – nitrogen dioxide (NO2) and the PM10 particles – at roadside had “persistently and significantly exceeded the targets set by the Environmental Protection Department in 1987”. The air quality targets list the concentration levels of seven harmful air pollutants, including sulphur dioxide, NO2, and PM10 particles (those with a diameter of 10 micrometres or less). The roadside annual average concentration levels of NO2 and PM10 exceeded the targets by 53 per cent and 11 per cent respectively, and both exceeded the World Health Organisation standards by 205 per cent, the report said. The unsatisfactory results came despite adopting, since 1997, 16 major emission control measures, including the replacement diesel fuelled vehicles with those powered by liquefied petroleum gas, the requirement that newly registered cars be greener models and the introduction of emission caps on power plants. The commission also noted that the Environmental Protection Department had failed to achieve a performance target that the air pollution index not exceed the “very high” health risk level of 100 on any day of the year. However, the number of days with an API level over 100 showed an upward trend over the past five years, rising by 136 per cent from 74 days in 2007 to 175 last year. And while the ambient air pollution was partly caused by the regional pollution in the Pearl River Delta, the report said roadside pollution – mainly caused by vehicle emissions – could be reduced by vigorous efforts by the government. The report urged the government to give air quality improvement measures a higher priority to improve roadside pollution and to work closely with the Guangdong provincial government to improve regional air quality. The roadside API levels exceeded 100 in Causeway Bay, Central and Mong Kok on Wednesday.

 China*:  Nov 16 2012

Mobile phone giant Huawei eyes huge opportunity for expansion in Africa (By Bloomberg in Nairobi) Revenue from the continent could rise by as much as 30 per cent in the next three years - Huawei is China's largest phone equipment maker. Huawei Technologies, China's largest phone-equipment maker, said revenue in southern and eastern Africa may climb as much as 30 per cent in the next three years as growth on the continent outpaces most regions. The company plans to capitalise on low mobile-broadband penetration rates and increasing demand for smartphones in Africa, Li Dafeng, president for eastern and southern Africa, said in the capital Nairobi. Huawei, based in Shenzhen, will also focus on developing its enterprise business that supplies equipment to governments and companies, he said. Africa has less than five mobile-broadband subscriptions per 100 inhabitants, compared with more than 10 per cent in the rest of the world, according to the International Telecommunications Union, a Geneva-based industry group. Over the next five years, the continent is expected to be the fastest growing region in terms of mobile-phone connections, according to AT Kearney, the Chicago-based consultancy. "There is still much room to grow, so we can see that in the next three years network availability will be improved greatly," said Radoslaw Kedzia, Huawei's chief technology officer for the east and southern Africa region. "This is why we can grow 20 per cent to 30 per cent." Economic growth in sub-Saharan Africa is expected to accelerate to 5.7 per cent next year from 5 per cent this year, outpacing every other region except developing Asia, the International Monetary Fund said. Huawei's southern and eastern African business comprises 25 countries including South Africa, Angola and Kenya. The company posted revenue of US$3.42 billion in 2011, up 15 per cent from US$2.98 billion in 2010 for the entire African region, Li said. Total sales account for 13 per cent of global sales, the company said. "If you look at the penetration of mobile broadband, there is a lot of potential," Li said. "In my region, the penetration of smartphones is 10 per cent. In China, mobile-broadband penetration is 30 per cent, in Europe it is more than 50 per cent and 16 per cent in Kenya." South Africa contributes 30 per cent of the company's African revenue. Huawei plans to grow market share as the country seeks to achieve 100 per cent broadband penetration by 2020, Li said.

China appoints respected economist to target graft (By Agence France-Presse in Beijing) China appointed a respected economist to head its anti-graft drive as it sought to stress its resolve in fighting the rampant corruption identified as one of the biggest challenges for the Communist Party. Wang Qishan, China’s top finance official, will head the party’s Central Commission for Discipline Inspection, the state-run Xinhua news agency said, as the party’s five-yearly congress came to a close in Beijing. Wang is best known for representing China in key economic talks with the United States and European Union. The congress also approved an amendment to the party constitution to include a call for “attaching greater importance to conducting oversight of cadres”, Xinhua said. During the congress, delegates selected a roughly 200-strong new party Central Committee and made other appointments to key party bodies such as the disciplinary commission, which is tasked with keeping officials in line. Wang also looks poised to take a seat on China’s top decision-making body, the Politburo Standing Committee, which now has nine members and is set to be unveiled in Beijing tomorrow. “Its an interesting decision, as Wang is best known for relations with America and being a well-thought-of economic specialist,” Kerry Brown, Professor of Chinese Politics at the University of Sydney, told reporters. “He’s very capable, so his capacity being put to work in this area shows a slight readjustment to emphasise the corruption issue,” he said. The party has been stained by a series of high-profile corruption scandals in recent years, most recently the spectacular downfall of senior politician Bo Xilai, who faces trial on charges of corruption and abuse of power. President Hu Jintao said at a keynote address to the congress last week that a failure to tackle corruption by party officials could cause “the collapse of the party and the fall of the state”.

US panel urges tougher scrutiny of China investment (Reuters in Washington) The US Congress should consider tougher screening laws for investments made by China’s huge state-owned enterprises (SOEs) because of the threat they pose to US companies, an advisory committee said in its annual report on Wednesday. The US-China Economic and Security Review Commission, which typically takes a tough view of relations with China, said Beijing lavishes special favours on its state-owned companies that could give them an unfair advantage even if they build facilities in the United States. “Once invested in the United States, Chinese SOEs may continue to benefit from Chinese government subsidies that would allow the Chinese to sell their products at less than the cost of production. Once their US competitors are driven out of business, Chinese SOEs might dominate the market and even raise prices,” the panel said in its annual report. The commission’s 32 recommendations also called on Congress to carry out an in-depth assessment of Chinese cyber-spying and to weigh tougher penalties on companies found to cash in on industrial espionage. A separate study released last week by the commission forecast Chinese investment to rise rapidly in coming years. The study noted private economists put Chinese direct investment in the United States at US$30 billion through the end of last year, compared to official government estimates of just US$5.8 billion through 2010. In its report on Wednesday, the US-China commission urged Congress to require mandatory screenings of all investments by Chinese state-owned or state-controlled companies where they would gain an controlling interest in a US operation. The Committee on Foreign Investment in the United States, made up of executive branch agencies, should also be required to consider the net economic impact of a foreign investment on the United States in addition to its current focus on any potential threat to national security, the commission said. The US-China panel also recommended the US Securities and Exchange Commission be directed to look more closely at state-owned and -affiliated companies seeking to be listed on US stock exchanges “to assure US investors have sufficient information to make investment decisions.” The report follows Fortune magazine’s latest list of the world’s 500 biggest companies, which showed the United States still in the lead with 132, down one from last year. China passed Japan to move into second place on Fortune’s list. It now has 73 of the world’s biggest firms, up from 61 last year and just 16 in 2005. Many of the big Chinese firms are owned or controlled by the state, the US-China commission said. They generally receive more favourable treatment in China than foreign firms, and because of those favours and subsidies have become formidable competitors in both the United States and other markets around the world, the panel said. Congress should require the US Commerce Department to annually track Chinese investment in the United States, with a particular focus on state-owned enterprises, the panel said.

Private jet dealer exhibits aircraft models.

Hong Kong*:  Nov 15 2012 

Number of poor rising in Hong Kong (By Colleen Lee) Median household earnings of lowest-income group in Hong Kong is HK$3,400 a month, up just HK$400 in nine years, says Oxfam - An elderly woman collects tinned drink cans in Mong Kok, as number of poor in city grows. The median salary of Hong Kong's top earners is HK$88,800 a month, 26.1 times the poorest 10 per cent, government figures show. Overall, one in six people, or 17.6 per cent of 6.7 million people, struggled with poverty in the second quarter of this year, up 0.6 percentage points from last year, Oxfam Hong Kong said. The figures, retrieved by the group from the Census and Statistics Department, show that the median household income of the lowest-income group was HK$3,400 a month. That was an increase of HK$400 in the last nine years, during which time the city's richest 10 per cent saw their median monthly income surge by HK$18,800. In 2003, the top 10 per cent of the city's households made HK$70,000 a month - 23.3 times the lowest-paid group. "The income gap between the rich and the poor has been increasing over the years. The number of poor people in Hong Kong has also been steady and slightly growing," said Oxfam director general Stephen Fisher. A 10-year high of 194,100 households with at least one family member working were considered poor - living on less than half the median income for city households of corresponding size. On that basis, someone who earns less than HK$3,600, or HK$8,000 for a two-member family, is considered poor. The poverty rate among working households was 10 per cent - the second-highest rate since 2008, and the same as in 2003 and 2009. This category covers people who are doing a full-time job, yet still make an income that leaves them unable to take care of their families, Fisher said. "I think this is a serious problem." Between 60 and 70 per cent of working-poor households consisted of three or four family members, said Wong Shek-hung, acting Hong Kong programme manager for Oxfam, citing statistics since 2003. She added that while 113,500 working-poor households had a monthly income lower than Comprehensive Social Security Assistance could offer, only 9.8 per cent of them, or 11,067 households, lived on CSSA. Wong attributed this reluctance among the poor to seek the assistance to a "negative perception of CSSA recipients", which tarred those who relied on aid as lazy. Fisher, who is on the government-appointed Commission on Poverty, said he would urge authorities to introduce a low-income family allowance for the working poor who earned less than CSSA payments but were loath to apply for assistance. He also advocated an annual review of the minimum wage level. It is now reviewed at least once every two years. Meanwhile, government figures released in June showed that the city's Gini coefficient - a scale from 0 to 1 on which higher scores indicate greater income inequality - reached a record high of 0.537 last year.

Macau residents get record 8,000 pataca handout (By Jolie Ho) Chief Executive Fernando Chui Sai-on's policy address sweetened with 8,000 pataca giveaway - Macau Chief Executive Dr Fernando Chui Sai-on. Macau residents will receive their biggest cash handout next year since 2008 - 8,000 patacas for permanent residents and 4,800 for non-permanent ones, Chief Executive Dr Fernando Chui Sai-on said in his policy address yesterday, in which "Macau people, Macau land" was mentioned for the first time. The city will spend a total of about 9.8 billion patacas on various subsidies, compared with 8.6 billion patacas last year. The annual cash subsidy for the elderly will be increased from 6,000 patacas to 6,600, and each permanent resident will receive a 600 pataca coupon for medical services, up from 500 the year before. Subventions for students have all risen. University students will receive 3,000 cash handout, up from 2,000 before, while primary and secondary school pupils will get 2,400 patacas - up from 1,900 last year. Children in kindergarten will get 2,000 patacas, compared with 1,500 last year. The income tax deduction will be increased from 25 per cent to 30 per cent, and the exemption amount is 144,000 patacas. Meanwhile, 60 per cent of the income tax paid this year will be refunded in 2014. The maximum refund is 12,000 patacas. Including other tax exemptions, the Macau government will receive 1.6 billion patacas less in tax revenue. The government also announced that it would start accepting applications again for public housing in the first quarter of next year. Any person with a monthly salary of 19,355 patacas or less, or a family of two making less than 38,710 patacas, can apply for economic housing units, which are small, subsidised apartments. Chui said 80 per cent of Macau residents were eligible to apply. "Macau people, Macau land is a concept that has been raised by many sectors in Macau, especially because of the soaring property prices," Chui said. Macau lawmaker Antonio Ng Kuok-cheong explained that the idea of "Macau people, Macau land" was to ensure that housing to be built on five pieces of land now being formed by reclamation would be earmarked only for Macau permanent residents until 2049. Macau is reclaiming 360 hectares by 2015. The policy has echoes of the Hong Kong government's restriction on the sales of some flats only to permanent residents. Another lawmaker, Au Kam-san, said the subsidies answered some public needs, but he could not see any concrete measures to improve the economy or enhance government efficiency. "The measures for promoting Macau's economy are clichés. The part about enhancing the government's efficiency only accounts for two pages of the whole policy address. The government does not know how to develop other industries."

Hong Kong still No 1 for mainland Chinese tourists (By Jeanny Yu) Mainland tourists check out a few of Hong Kong's sites. Nearly 70 per cent of all tourists to the city were mainland Chinese in 2011, and they spent on average 30 per cent more than those from other countries. Hong Kong's tax-free retail sales, proximity to the mainland and reputation for genuine goods will allow the city to keep its position as the top destination for mainland shoppers, in spite of any recent anti-mainland sentiment, a Jones Lang LaSalle report says. “The growth of Chinese visitor arrivals in Hong Kong has tracked well with China’s economic growth. We expect, at least for the upcoming years, that Hong Kong will continue to enjoy a 10 to 15 per cent growth in Chinese visitor arrivals per year,” according to the latest white paper on retail sales by Jones Lang LaSalle. Even if China were to remove tariffs on goods entirely, and assuming distributors’ margins remained unchanged, the same items on the mainland would still command a price premium 12 to 37 per cent over those in Hong Kong, the report said. Over the last few months, the city has seen an increase in anti-mainland sentiment with backlashes against pregnant mainland women giving birth in local hospitals, the rising stream of tourists from across the border and mainlanders snapping up property and driving prices up. “Even though some mainlanders may cancel their trips to Hong Kong because of all the anti-mainland activities, the market potential is still going to be huge,” Marcos Chan, national director and head of research for Greater Pearl River Delta at Jones Lang LaSalle said. “The number of people interested in coming to Hong Kong would be much greater than those afraid of coming to the city.” Amidst lingering concerns over the European debt crisis and a potential hard landing for the Chinese economy, Hong Kong’s retail sector continued to expand strongly in 2011. The city’s total retail sales increased by 24.9 per cent from the previous year to reach the HK$406 billion mark. The city is a popular destination for mainland tourists – four out of ten of whom travel to Hong Kong when going abroad, according to the report. In 2011, Hong Kong welcomed 42 million tourists. In the first half this year, a total of 15.5 million mainland Chinese tourists came to Hong Kong, up 22.9 per cent year on year, accelerating from the 21.4 annual growth a year earlier, the report shows. The percentage of tourists visiting Hong Kong who were from the mainland has grown from just over 40 per cent in 2002 to almost 70 per cent in 2011, according to the paper. In 2011, the shopping expenditures of mainlanders accounted for 27.3 per cent, or HK$110.8 billion, of Hong Kong’s total retail sales. That is almost 6 per cent of the city’s GDP. Mainland tourists to Hong Kong are also big spenders, according to the report, spending an average of HK$8,200 each, 30 per cent more than visitors from other countries.

Albert Ho’s challenge to Leung Chun-ying's election victory quashed (By Austin Chiu) Former Chief Executive candidate Albert Ho Chun-yan appears at the Court of Final Appeal in Central on Tuesday. Almost eight months after the chief executive election, the court challenge against Leung Chun-ying’s March 25 victory at the polls was quashed in the Court of Final Appeal, on Tuesday morning. The three-judge panel denied permission to two lawmakers – the Democratic Party’s Albert Ho Chun-yan and League of Social Democrats’ “Long Hair” Leung Kwok-hung – to pursue their challenge by appealing against an earlier verdict that dismissed their case. Tuesday’s judgment said: “We conclude that the crucial aspects of the challenges asserted by Mr Ho against [Chief Executive] Mr C Y Leung’s election are not reasonably arguable and that such challenges must therefore be brought to an end.” The judges were Chief Justice Geoffrey Ma Tao-li, Mr Justice Roberto Ribeiro and Mr Justice Robert Tang Ching. Ho and Leung Kwok-hung claimed the chief executive was not duly elected because he made false statements before and during the campaign. He denied having illegal structures at his home on The Peak, but was later proved wrong. The legal challenge received a setback in October, in the Court of First Instance, when Mr Justice Johnson Lam Man-hon ruled that it had no real prospect of success. Therefore, Lam ruled, the court would not exercise its discretion to extend a seven-day deadline for filing an election petition. Ho, the former Democratic Party chief who finished third in the election, missed the deadline by several months. Reacting to the ruling, Ho said he was “not particularly surprised” by it, and vowed to continue to press the chief executive to come clean on the unauthorised structures at his Peel Rise residence. His party colleagues would follow up on the matter in Legco, he said. “Although Leung escaped from the election petition, [which could be] a calamity for him – he will still need to face the media, public opinion, and the Legislative Council’s query,” Ho said. Leung Kwok-hung reacted to the ruling by quoting from the Basic Law and saying: “the chief executive must be someone with integrity. [This ruling] could be dangerous because it could imply that all chief executive contestants can do all sorts of bad things the day before his election campaign started.” The two lawmakers had applied for leave to appeal against Lam’s decision not to strike down the seven-day deadline as unconstitutional. On that point, the top judges wrote: “Assuming … that the time limit was unconstitutional because it was too strict, the suggestion that [Lam] should have simply struck it down, leaving no time limit whatsoever for lodging election petitions is irrational, contrary to the self-evident legislative intent and impossible to justify in the public interest.” “The relevant intent of the legislature … is plainly and obviously to provide a mechanism for arriving at a clear-cut lawful election result with a minimum of delay, avoiding any damaging period of prolonged uncertainty,” the judges wrote. “It would be completely at odds with that policy for the court to take it upon itself to abolish the time limit altogether.” Ho further lost in his attempt to appeal against Lam’s finding that the case had no real prospect of success. The top court said it would be “contrary to common sense and the interest of justice” to grant an extension if there was no real prospect of success on the merits of the case. Central to the lawmakers’ petition was whether Leung Chun-ying made a false statement when he attacked election rival Henry Tang Ying-yen, during a televised debate over illegal structures at Tang’s Kowloon Tong home. Ho claimed that by criticising Tang, Leung implied he himself had made no unauthorised alterations to his own house. In June – almost three months after Leung won the election – the media exposed six unlawful structures at the victor’s home. The top court ruled that there was a “fundamental flaw” in the argument that Leung’s televised attack on Tang meant he had no illegal structures at his own home. “[That] is a very different thing from saying that the meaning of [Leung’s] statement denigrating Mr Tang was a claim that he … did not have any [unlawful building works] at his residence,” the judges wrote. The judges wrote that they would not deal with the other issues in the case, given their conclusion that Ho’s challenge should not proceed further. They also dismissed Leung Kwok-hung’s application on the same grounds. However, the judges did grant the two lawmakers leave to appeal certain aspects of the case on an “academic status” – just to clarify the law, because of the high level of public importance involved. But that appeal will not affect the election outcome. This clarification exercise may look into the relationship between challenges to a chief executive election by way of an election petition, under the Chief Executive Election Ordinance, and a challenge by way of a judicial review. The two lawmakers were also allowed to appeal academically as to whether the seven-day time limit on filing an election appeal infringed the right of access to a court guaranteed by the Basic Law. The top court also gave Ho and Long Hair leave to appeal against the costs orders made by Lam.

 China*:  Nov 15 2012

Party congress wraps up in choreographed steps (Associate Press in Beijing) President Hu Jintao (left) and incoming president Xi Jinping cast their ballots during the closing session of the Communist Party congress on Wednesday. China’s Communist Party was bringing its pivotal conclave to a close on Wednesday in largely choreographed steps a day before unveiling its leaders for the coming decade. President Hu Jintao is expected to step down as party chief in favour of the anointed successor, Vice-President Xi Jinping, in what would be only the second orderly transfer of power in 63 years of communist rule. The new leaders of the world’s second-largest economy will face slowing growth, rising unrest among increasing assertive citizens and delicate relations with neighbouring countries. The party’s 2,200-plus delegates filed into Beijing’s Great Hall of the People in the morning to select members of the Central Committee, a panel of a few hundred people that approves leadership positions and sets broad policy goals, ahead of the scheduled close of the congress later on Wednesday. But the next line-up in China’s apex of power, the Politburo Standing Committee, will be announced only on Thursday. Though congress and Central Committee delegates have some influence over leadership decisions, most of the line-up is decided among a core group of the most powerful party members and elders. The congress votes are “fully democratic” but “there is a degree of inevitability”, said party delegate Song Guofeng of Liaoning province as he entered the hall. “We need to have continuity in leadership to carry on. They are already in the leadership core. The stability of the party and of the county is important.” Hu and senior leaders mostly in their late 60s are handing over power to the leader-in-waiting, Xi, 59, and colleagues of his generation over the next several months. Vice-Premier Li Keqiang already was tapped five years ago to be the country’s next premier, China’s top economic official. But other top positions were up for grabs. China’s leadership transitions are always occasions for fractious backroom bargaining, but this one has been further complicated by scandals that have fed public cynicism that their leaders are more concerned with power and wealth than government. In recent months, Bo Xilai, a senior politician seen as a rising star, was purged after his aide exposed that his wife murdered a British businessman. An ally of Hu’s was sidelined after his son died in the crash of a Ferrari he shouldn’t have been able to afford. And foreign media recently reported that relatives of Xi and outgoing Premier Wen Jiabao had amassed vast wealth. The scandals have weakened Hu, on whose watch they occurred. The congress is a largely ceremonial gathering of representatives – mostly carefully selected from the national and provincial political and military elite – who have met to endorse a work report delivered by Hu at the opening a week ago. The real deal-making for the top positions on the Standing Committee is done behind-the-scenes by the true power-holders. Aside from appointing Central Committee members, delegates assembled inside the Great Hall of the People were tasked with selecting the membership of the party’s internal corruption watchdog, the Central Discipline Inspection Committee, and with voting on amendments to the party’s charter. After the congress ends, the Central Committee meets on Thursday to select the next Politburo and from that, the Politburo Standing Committee, largely on the advice of influential leaders. The leaders also will select new members of the party’s Central Military Commission that oversees the 2.3 million-member People’s Liberation Army. It is unclear if Hu will relinquish his position at the head of the party’s Central Military Commission or hold on to it for a period after retirement, as past leaders have, to retain influence. Hu will remain president until March. The next cohort of leaders face daunting challenges including efforts to pull the country’s economy into a recovery from a sharp downturn, tense territorial disputes with Japan and other neighbours and the demands of a new middle class and millions of rural migrants for a better life.

China’s Peng Liyuan: a ‘first lady’ with star power (By Agence France-Presse in Beijing) Peng Liyuan (front centre) performs during the Grand Variety Show in Hong Kong, in celebration of the 10th anniversary of the reunification. China’s next first lady Peng Liyuan is a dazzling singer whose profile long eclipsed that of her husband Xi Jinping, and who will bring a touch of glamour to a role hidden in the shadows for decades. Xi is due to take up the leadership of the Communist Party at the close of its congress this week and comparisons are already being drawn between Peng and Carla Bruni, the singer and model who wed France’s President Nicolas Sarkozy. A soprano known for singing the praises of the party, Peng holds the rank of army general and starred for 24 years in an annual Lunar New Year gala broadcast on state television and watched by hundreds of millions of viewers. Her husband, a decade her senior at 59, is set to take over next year as China’s president, but when he joined the Politburo Standing Committee, the country’s highest ruling body, in 2007 she was far better known. Peng finally retired from the television show shortly afterwards – with some speculating it was to avoid overshadowing Xi – and has since scarcely been referred to in China’s tightly controlled state-run media. But she will bring an unprecedented splash of stardust to a position whose occupants have long been expected to remain in the background. “As an artist she may suffer in the way that Carla Bruni has a bit,” said Michel Bonnin, director of the Franco-Chinese Centre at Tsinghua University. But Peng can help Xi “to have a less dull image than Chinese politicians usually do”, Bonnin added. The wives of China’s leaders have kept low profiles since the 1970s downfall of Jiang Qing, Mao Zedong’s last wife and widely-loathed member of the radical Gang of Four blamed for many of the excesses of the Cultural Revolution. “After the Mao era, the wives of senior Chinese leaders stopped appearing in public,” said Zhang Yaojie, a researcher at the National Academy of Arts. Liu Yongqing, the wife of current President Hu Jintao, has often accompanied him on overseas trips but did not speak in public, let alone cultivate a public persona. But Peng will be a deeply atypical first lady. In videos seen on the internet, the 49-year-old seizes the limelight with her high cheekbones, thick jet-black hair, and a radiant smile. Her costumes range from military uniform to richly embroidered ethnic dress, and her repertoire includes syrupy melodies and folk songs with lyrics altered to glorify the Communist Party. Her husband is a Party “princeling” who has served in the military himself, and her version of one traditional Tibetan tune describes the People’s Liberation Army (PLA) as “the saving star of the Communist Party”. In recent months she has had a behind-the-scenes role as artistic director for military troupe performances welcoming the party congress, according to the few mentions of her in state media. Peng comes from an area in the eastern province of Shandong known for its peony flowers – she was nicknamed the “Peony Fairy” by her admirers – and joined the army at the age of 18. A semi-official biography posted on Chinese web portals tells how she began as an ordinary soldier but began performing at PLA shows to boost troop morale. In the 1980s she was one of the first people to take a master of arts in folk music in China, and her professor has spoken of her dedication to her studies. She has since performed in 50 countries. But in past interviews with Chinese media Peng has been keen to convey a homespun image, telling a state-controlled magazine she has simple tastes, enjoying “going to the market by bicycle and bargaining with vendors”. She has heaped praise on the “ideal husband” she married 25 years ago and with whom she has a daughter, now a student at Harvard. “He is simple and honest, but very thoughtful,” Peng told the China News Weekly. She said he told her: “In less than 40 minutes after I met you, I knew you would be my wife.” But Peng’s parents were not keen to see their daughter marry such a senior figure, fearing she would not be treated well because of her humble origins. “He treats me like a little sister. Jinping is always busy. He is concerned about thousands of households, without thinking of himself,” she was quoted saying by a government site. “When he is at home, I cook the dishes he likes to help him relax.” Peng became a World Health Organisation ambassador for the fight against Aids and tuberculosis last year, and Bonnin suggested she could “play a Western-style first lady role”, rather than just following her husband on official visits. But Zhang was sceptical. “In China, the first lady remains a mystery,” he said.

Chinese tourists conducted more individual trips to Italy than package tours in the first three quarters of the year despite widespread economic woes in southern Europe, according to the Italian Embassy in China on Monday. In the January-September period, Chinese individual tours to Italy surged 60 percent from a year earlier, compared to a 15-percent growth rate in package tours during the period, Nikola Jovanovic, counsellor of the embassy, said at a promotional conference for Italy-bound tours. Italy, known for its ancient Roman civilization sites and fine Mediterranean cuisine, has been among the top destinations for Chinese tourists. Italy will launch more promotional activities, including themed activities on Chinese microblogging sites, in China next year, said Dott.ssa Autilia Zeccato, chief representative of the Italian Government Tourist Board in China.

More foreign companies using yuan (By By DIAO YING in London and WANG XIAOTIANin Beijing) The number of foreign companies using the yuan as their currency of choice has surged after rules introduced earlier this year allowed yuan settlements for Chinese traders. The number of French companies paying in yuan increased by 30 percent in the second quarter from the previous quarter. Australian companies closely followed that example with a rise of 25 percent in the same period, according to Western Union, a global payment company. The People's Bank of China allowed Chinese importers and exporters to settle trade using the yuan in March. "In a very short period of time we have seen a marked increase in the number, and value, of payments companies are sending to China through the renminbi," said Gareth Heald, regional finance director of Western Union Business Solutions. Western Union saw a sharp rise in British organizations, such as universities, law firms and pension funds opening their accounts in yuan. China started testing cross-border renminbi trade among 365 companies in July 2009. The program later expanded nationally to 60,000 companies. The regulation in March finally allowed all companies to price, invoice and settle business in yuan. For foreign companies, using the renminbi means they can avoid foreign exchange risks and reduce costs. They also find it easier to negotiate with Chinese companies in their own currency. More than one-third of Chinese companies expressed a preference for payment in yuan, according to a survey by Western Union of 1,000 Chinese companies last year. Their preference was based on convenience and reduced foreign exchange fluctuations. But about one-fifth of Chinese companies chose to add about 3 percent in fees in transactions in other currencies, according to the survey. Many Chinese companies were reluctant to tell their business partners in the United States and Europe to settle in yuan, according to Jenny Berlin, public relations manager at Western Union. Because settling in yuan is such a new possibility, many Western companies were unaware of the preference of their Chinese partners, she said. Only about 0.24 percent of global trade was conducted in yuan payments in 2011, and it ranked 24th among currencies, according to the Society for Worldwide Interbank Financial Telecommunication, the transaction platform for international banks. The most used currencies are the US dollar, the euro and the Japanese yen. China was responsible for about 11 percent of world trade in 2011, but this was mainly settled in US dollars. For companies from a third country, this means they are doubly exposed to the risk of currency fluctuation. Sometimes it is simply easier for foreign companies to find buyers if they can settle in the Chinese currency, Berlin said. Noel Quinn, HSBC’s regional head of commercial banking Asia-Pacific, said as China develops a regulatory framework to open up and internationalize the currency, the bank has seen increased demand for the yuan in transactions. "International businesses looking to benefit from China’s growth must explore the benefits of using the yuan when transacting with their Chinese counterparts to take full advantage of discounts that may be available," Quinn said. The yuan is on track to becoming a major trade currency by 2015, HSBC said. In recent years, China has been promoting direct transactions between the yuan and other currencies to facilitate global use of the yuan and reduce dependence on the greenback. Greater flexibility and the recent appreciation of the yuan will also increase willingness to sell dollars and hold more yuan, said Guo Tianyong, a professor of finance at the Central University of Finance and Economics. The yuan has appreciated 1 percent this year, reversing a depreciation of as much as 1.6 percent in the year by late July, according to data compiled by Reuters.

Hong Kong*:  Nov 14 2012 

Five firms plan to raise US$613m in Hong Kong as investor sentiment picks up (By Ray Chan) Companies plan to raise US$613m in total as investor sentiment shows signs of improving - At least five companies are poised to begin initial public offerings to raise more than a combined US$3.6 billion in Hong Kong this month as investor sentiment shows signs of improvement. Mainland property firms CIFI and Future Land Development, local restaurant chain operator Tsui Wah, and bedding retailer Casablanca yesterday announced they will launch their offerings this month. Between the four of them, the companies aim to raise a total of US$600 million. Joining the listings rush, bedding retailer Casablanca announced it will raise about US$13 million. It plans to use the bulk of the net proceeds for expansion on the mainland. Meanwhile, People's Insurance Company (Group) of China, or PICC, will begin its pre-marketing campaign for its H-share listing on Thursday, planning to raise about US$3 billion through a Hong Kong listing. The planned Shanghai listing has been put on hold pending regulatory approval. "PICC is likely to list on the Hong Kong stock exchange first, and will get support from state-owned financial intuitions and the sovereign wealth fund," said a market source, who declined to be identified. If it materializes, the deal could be the largest offering in Hong Kong this year, and the share could begin trading as early as December 7, the person said. The PICC deal was originally scheduled as a mega-sized dual listing in Hong Kong and Shanghai to raise more than US$6 billion in total, but the China Securities Regulatory Commission put an end to the A-share listing plan of the country's largest non-life insurer. After the Hong Kong float, 15 per cent of PICC's share capital would be listed in Hong Kong. New shares of Future Land Development, a Jiangsu-based property firm, are likely to be priced at a distress level, offering a price to net asset value discount of 60 to 70 per cent, according to two people with direct knowledge of the deal. "The new share offering of Future Land is set to ride on the theme that it offers limited downside to investors while being priced at an attractive level," said one person. Shanghai property firm CIFI is likely to offer IPO shares at a range of HK$1.33 to HK$1.65 each, representing a discount of up to 69 per cent and a price-earnings ratio of a paltry four times next year's earnings. Most of the proceeds will be used for land purchases in tier-1 and tier-2 cities, where the firm has existing projects. Local cha chan tang operator Tsui Wah Restaurant, meanwhile, plans to raise up to US$100 million after the firm delayed the IPO a few times. Tsui Wah will start taking orders from investors from Monday and begin trading on November 26.

Mid-Levels Gehry flat sets record of HK$68,000 a sq ft (By Yvonne Liu) Luxury Opus Hong Kong apartment goes for HK$455 million, or HK$68,000 a square foot - Opus Hong Kong, outside and inside: the costliest per square foot in Asia. A buyer has paid HK$68,083 per square foot for a luxury flat at Opus Hong Kong, the new Frank Gehry-designed residential building in Mid-Levels East, a record for an apartment in Hong Kong and Asia in terms of price per square foot. Data from the Lands Registry show the flat, on the 9th floor of the building at 53 Stubbs Road, was sold for HK$455 million on October 17, nine days before the government announced measures to curb property speculation. There is no information on the buyer. The 6,683 sq ft flat offers a view of the city and Victoria Harbour. The price beat the previous record, set by a duplex flat at 39 Conduit Road in Mid-Levels West, which sold for HK$360.7 million, or HK$63,999 per sq ft in April last year. Ricky Poon, executive director of Colliers International's residential sales department, believes the buyer was willing to pay a record-breaking price because there is a lack of flats bigger than 6,000 sq ft and it is the latest luxury development in the city. The price is almost 6 per cent higher than that paid for a flat on the 8th floor at Opus Hong Kong, which sold for HK$430 million or HK$63,657 per sq ft in August. The 12-storey Opus Hong Kong, developed by Swire Properties, provides 10 flats and two double-level garden apartments with private swimming pools. The flats are 6,000 to 6,900 sq ft. Gehry's previous designs include the Guggenheim Museum in Spain and the Walt Disney Concert Hall in Los Angeles. Despite the luxury residential market taking a hit from the government's new measures since the record-breaking deal was signed, Poon said he did not expect the buyer to cancel. "I don't think Swire would cut their asking prices for the remaining flats. They would rather keep the flats for leasing. And luxury residential prices have dropped a few per cent only and the buyer did not need to pay the new buyer's stamp duty and new rate of special stamp duty," he said. However, Poon said, sales of luxury flats have dropped significantly since the end of October as the new stamp duty had kept many mainland buyers away. "Transaction numbers will drop a further 30 to 40 per cent in the coming three to six months and prices will fall 10 to 15 per cent in the coming six months," he said.

Fewer want to buy Hong Kong property after stamp duty, survey finds (By Phila Siu) Interest in buying property dropped to 19 per cent after Hong Kong launched a buyer stamp duty on non-permanent residents and companies, said a Citibank survey. Hongkongers’ interest in buying property has dropped since the government launched market-cooling measures last month, according to a Citibank survey released on Monday. Between August and October, 24 per cent of Hongkongers were interested in buying property, the bank’s poll found. That fell to 19 per cent after the market-cooling measures were introduced on October 26. The government launched a buyer stamp duty on non-permanent residents and companies, and increased and extended the special stamp duty on flat sales. The Monetary Authority made its own attempt to cool property prices in September, by making second mortgages harder to get. The ceiling for monthly payments on a second mortgage was cut from 50 per cent to 40 per cent of the borrower’s monthly income. Citibank polled 2,126 people, aged 21 to 60, between May and November. They discovered that interest in buying property was 16 per cent between May and July. It was temporarily boosted by 10 government measures, on August 30, to promote the sale of subsidised and private residential units, to meet public demand for housing.

Free education is on track to be extended from 12 to 15 years to include kindergarten. Education chief Eddie Ng Hak-kim revealed the plan at a forum, saying the government acknowledges the importance of early childhood education. Accordingly to one source, another option is to give preschoolers HK$16,000 in cash instead of vouchers annually for three years. "In order to make sure Hong Kong will be able to develop one of the best, most competitive kindergarten education policies, there must be three years of free education," Ng said. He did not say, however, when the plan will get off the ground. It may also encounter divided views, said Mervyn Cheung Man- ping, chairman of the Hong Kong Education Policy Concern Organization. He said some parents, especially those who are more affluent, do not want the government to intervene. Cheung also said the cash plan may not be enough to cover fees as the operating costs of some kindergartens are high. Education Convergence executive committee member Tso Kai-lok said there may be other complications. "Kindergartens are not like primary or secondary schools, whose premises are provided or funded by the government," he said. Ng, meanwhile, also hopes that by 2015 one in every three secondary school graduates will find a place in a local university - up from the current one in four. But Tso said the target is still too conservative, adding the ratio should be increased to 40 percent in three years' time. He said because of the declining student population, the percentage of students admitted to university will rise "even if nothing is done." Chui Hong-sheung, president of Hang Seng School of Commerce, agreed that the target percentage is still "too low." He said the percentage of secondary school students going to university in South Korea is 80 to 90 percent, while in Taiwan it is almost 100 percent. In the United States and Europe, most students can find a university place if they want, he said. Chui called on the government to subsidize degree courses in private universities so as to enhance the quality of university education and foster competition among local universities. He said the students then can choose a high quality degree course, regardless of whether it is a University Grants Committee-funded or self-financed degree course.

 China*:  Nov 14 2012

Swiss watches tick to Chinese heartbeat (By Agence France-Presse in Geneva) An employee of Swiss watchmaker Hublot holds a watch intended for the Chinese market. With the Chinese increasingly coveting European luxury goods, Swiss watchmakers are eyeing a huge new market for their wares, but disagree on the best way of capturing it. The question being mulled by famous Swiss watch brands is whether to create more specialty editions aimed at appealing specifically to the Chinese or instead simply wait for fast-shifting Chinese tastes to adapt to European fashion. At a Hublot workshop in Nyon, a small town set on the shores of Lake Geneva between Geneva and Lausanne, workers clad in white lab coats huddle around an extra slim watch conceived specially for the Chinese market. As they carefully place the dainty hands on the titanium face, Hublot spokeswoman Anais Treand insists that the watch, priced at 14,300 Swiss francs (HK$116,783), will be a hit in China since it is “light and delicate”. This year, China accounted for 7.8 per cent of Swiss watch exports in terms of value, according to the Federation of the Swiss Watch Industry, and watchmakers claim there is plenty of room for expansion. “My 32-year-old son has been over there for 10 years. He is beginning to have a good feel for Chinese trends,” Hublot chief Jean-Claude Biver told AFP, nodding towards a jade-faced watch made with Chinese consumers in mind. The company, which since 2008 belongs to French group LVMH, has decided to adapt to the Chinese with special marketing and products in a bid to capture a chunk of this massive potential market, he said. Other brands have also jumped on the Chinese bandwagon, producing often very limited and exclusive models inspired by Chinese culture. Geneva watchmaker Vacheron Constantin has thus just launched the “Legend of the Chinese Zodiac” -- a series of luxury timepieces based on a 12-year cycle beginning with the Year of the Snake. Crafted in pink gold or platinum, two models have so far been issued in separate, limited 12-piece series: one with a blue water snake slithering across the face, and the other with a brown one symbolising the wood snake, whose next year won’t come around until 2025. In the famous watchmaking city La Chaux-de-Fonds, in western Switzerland, Jaquet Droz has meanwhile just launched two limited series featuring two orange tigers and two yellow dragons hand-painted on off-white enamel baked at more than 800 degrees Celsius -- a traditional Chinese technique. “These kinds of pieces are very successful in Asia, but not only there,” said Jenna Racine, a spokeswoman for the brand, which has a long history of catering to Chinese tastes; back in the 18th century it was the first to ever import watches into the Forbidden City. But others in the industry caution against pandering to Chinese tastes, which they say are changing quickly. “The extreme focus on China is dangerous,” said Thierry Stern, the head of Geneva watchmaker Patek Philippe, in an interview with Swiss daily Le Temps earlier this year. Biver of Hublot agreed that “you shouldn’t adapt too much to (the Chinese), because when they evolve, you won’t be on their wavelength any longer.” While his brand was making specialty watches for the Chinese, he said, such special models accounted for just a couple of the around 100 new Hublot models created each year. According to Marc Hayek, the head of Blancpain, another brand belonging to Swatch, future sales depend not only on the Chinese market itself but also on wealthy Chinese tourists abroad. “In that area, there has been more progress than we would have thought,” he told AFP. Swiss financial daily Handelszeitung has for instance calculated that each Chinese tourist visiting the central Swiss city of Lucern -- around 90,000 last year alone -- spends an average of 2,000 Swiss francs (HK$16,333) on Swiss watches. Hayek, the grandson of Swatch founder Nicolas Hayek, is himself wearing a Blancpain watch specially made for the Chinese, crafted in platinum and equipped with a traditional Chinese calendar and hours, one of which corresponds to 120 minutes, along with Zodiac symbols and lunar phases. But despite his own delicate timepiece worth 82,000 Swiss francs (HK$669,663), he insists catering to Chinese tastes should be undertaken with care, since watches should “remain truly 100 per cent within the DNA of the brand”. Heyek said he would never have agreed to simply decorating watches with drawings of Chinese animals, but had given his consent to specialty Chinese models that themselves were technically revolutionary and required years of research to develop. While Swiss watchmakers face off against each other, the biggest threat to their Chinese ambitions may just come from within the country. In a recent interview with Swiss trade publication Watch Around, Bruce Du, who heads Chinese watch brand FIYTA, stressed his company was focusing heavily on producing luxury watches with quality matching the famous Swiss brands. And with its recent purchase of Geneva brand Montres Chouriet, FIYTA may just have the means to be a fierce competitor.

‘World’s workshop’ China aims to reinvent itself (By Agence France-Presse in Beijing) China’s Communist leaders are promising to revolutionise the world’s second largest economy and move on from being the world’s workshop, but economists say the monumental task faces major hurdles. Outgoing President Hu Jintao said GDP would double in a decade and pledged a “transformation of the economic growth model” in his report to the nation at the five-yearly Communist Party congress under way in Beijing. China’s rulers must maintain growth in the economy to justify their claim to legitimacy – and avoid the spectre of social unrest. But while selling cheap manufactured goods to the West and spending billions on infrastructure has delivered an economic miracle in recent years, the model is seen as unsustainable in the longer term, and growth is already slowing. “We should speed up the creation of a new growth model and ensure that development is based on improved quality and performance,” Hu said, adding China would seek to become an innovative technology giant as low-cost manufacturing relocates elsewhere. The country also needs to make domestic consumption a pillar of the economy, a joint report by the government and the World Bank said in February – endorsed by Xi Jinping, who is expected to take over as party leader from Hu this week. But the changes could have enormous human costs in terms of job losses, which in turn could fuel unrest – anathema to the ruling party. And training unqualified workers to compete with Western economies is a gigantic task. A few Chinese manufacturing sectors have been able to compete directly with Western firms, including those in communications and high-speed trains. China is also said to be developing a domestic airliner that could challenge Boeing and Airbus for sales. But for now the economic boom remains firmly dependent on a cheap workforce, an undervalued currency and artificially low interest rates, Michael Pettis, finance professor at Peking University, told reporters. “To be profitable in China does not require technological innovation. What matters is access to cheap credit and government connections,” Pettis said. Labour-intensive industries, such as textiles and shoes, have already begun to leave for less-developed cheaper nations including Indonesia and Vietnam. “China will remain a manufacturing powerhouse but much of the lower end will be transferred to lower-wage countries in Asia, but also possibly to Latin America and Africa,” said Jean-Pierre Lehmann, director of the Evian Group, a think tank. China’s new economic goals may mean fewer of the huge investment projects the government prioritised in recent years, such as airports, highways and high-speed trains. Fixed-asset investment – from infrastructure to housing – accounted for more than half of gross domestic product last year, though it has been growing at a slower pace. As China places less importance on exports, future growth will also be more dependent on household spending, which made up less than 40 per cent of GDP in recent years. Top economic planning official Zhang Ping said at the weekend that domestic consumption contributed more to GDP growth than investment in the first nine months of the year. But consumption will have to grow faster to make up for any investment slowdown. And limited social safety nets in China mean households save around half their incomes in case of crises or to send their children to university – a major brake on consumption spending. Peking University’s Pettis said: “I think we should expect a sharp slowdown in GDP growth over the next decade,” as China tries to realign the economy. With China a key driver of global growth that could have significant negative effects on the rest of the world. Beijing was saying, “We no longer want to be the Christmas ornament capital of the world, we’re happy for those low skill, low value-added, low wage jobs to go to other countries,” said Andy Rothman, China economist for CLSA Asia-Pacific Markets in Shanghai. “The biggest impact is going to be felt by people who have been exporting raw materials to China,” he said, citing Australia, Brazil and Indonesia. But there will be winners as well as losers, he added. “This is actually good for more developed economies like Germany or the United States who are shipping more complicated, advanced machineries to Chinese factories.” Reforms can be “fairly painful” in the early stages and can cause short-term unemployment “even if long-term gains are significant”, said Ben Simpfendorfer, managing director of Hong Kong-based consultancy Silk Road Associates. But he added that imports from the rest of the world should increase. If China can fulfil Hu’s promises, about half of the population – around 700 million people – will join the middle class by 2020 with annual income between US$7,000 and US$23,000, the Boston Consulting Group said in a report. On a purchasing power parity basis China is expected to overtake the United States as the world’s biggest economy in 2016, the Organisation for Economic Cooperation and Development said Friday. But even then per capita gross domestic product will still be only a quarter of the US.

Hong Kong*:  Nov 13 2012 

Canada and Hong Kong end expats' double tax whammy (By Colleen Lee) Trade and investment expected to be boosted as city signs agreement No 26 on taxation - Canadian Prime Minister Stephen Harper. Hong Kong and Canada have signed a treaty to avoid double taxation and increase trade between the two economies. Currently, income earned by Canadians in Hong Kong who are still deemed residents of Canada is taxable both here and at home. Under the deal, the tax they pay here can be offset against tax payable in Canada. The same applies for certain Hongkongers working in Canada. The pact was sealed yesterday during Canadian Prime Minister Stephen Harper's visit to the city, his second since he took office in 2006. It was Hong Kong's 26th such deal and it also has implications for some corporate taxes. The city has previously signed treaties with countries such as Britain, mainland China, Japan and France, and is negotiating with others. Professor Chan Ka-keung, Secretary for Financial Services and the Treasury, signed the pact with Canada's trade minister, Edward Fast. Harper, who witnessed the signing ceremony with Chief Executive Leung Chun-ying, said: "This will increase trade and investment flows while reducing incidents of double taxation and tax evasion." There are more than 16,500 Canadians in the city - the eighth-largest expat community - while 500,000 people of Hong Kong descent call Canada home. Chan said the agreement would strengthen economic and trade ties. He expected it to provide an added incentive for firms in Canada to invest in Hong Kong, and vice versa. The pact will come into force after both sides complete ratification procedures. The Chief Executive-in-Council will make an order under the Inland Revenue Ordinance to put it into law, unless the Legislative Council opposes the order. Canada's withholding tax on Hongkongers' investment interests will be capped at 10 per cent, down from 25 per cent. Hong Kong-based airlines that fly to Canada will be taxed at the city's corporate rate of 16.5 per cent and will not be taxed in Canada. Patrick Wong Lung-tak, managing practising director of accountancy firm Wong Lam Leung & Kwok, said the move would benefit the aviation industry as carriers could save money and would no longer have to work out how much profit was generated from flights to and from Canada. A spokesperson for Cathay Pacific said such pacts had "a positive impact on the business environment".

Upstairs pubs warned over crowding and noise (By Dr Ko Wing-man) Upstairs pubs may face tighter rules on customer numbers to ensure fire safety and noise controls, the health minister has warned. Secretary for Food and Health Dr Ko Wing-man also reminded bars that their liquor licences could be shortened if they broke the law, such as selling alcohol to under-18s or hosting customers who took drugs on the premises. Bar owners warned a restriction on numbers could force many out of business. Ko joined Liquor Licensing Board inspectors in a check of pubs in Central and Tsim Sha Tsui early yesterday. "We are studying controls on upstairs bars in special situations, such as limits on the number of people inside" to ensure building safety, he said, adding that the government would increase fire safety inspections. He reminded operators to stay clear of any illegal activities, which could lead to the board suspending their liquor licences. The liquor licence for upstairs pubs normally lasts for one year. Debbie Wong, manager of an upstairs bar called Otto Lounge in Central, said many upstairs bars would close if the number of customers was further restricted. Regulations stipulate that a 1,000 square foot bar can accommodate only 30 people. "Atmosphere is very important. If a bar looks empty, many people will not enter," Wong said. "Bars on the ground floor are also noisy. If the officials are worried about the noise, bars can install soundproof glass. If the worry is on fire safety, there is only a slight difference in danger between having 21 people and having 30." She said her bar would shut down sooner or later if the regulation was put into practice. Allan Zeman, chairman of Lan Kwai Fong Holdings, agreed with the proposed safety measures. "Hong Kong is a difficult place [to do business]; rent is expensive, so many bars are forced to occupy the upper floors. But from the safety point of view, I will agree with what the experts say," he said. Ko also expressed concern about environmental hygiene at the bars and the safety of drunk customers.

ATV makes a song and dance about new TV licences (By Stuart Lau, Colleen Lee and Lo Wei) Private guards block lawmakers from Tamar while major investor rails against new operators. Major ATV shareholder Wang Zheng and the gang get in the groove during the televised rally staged to fight new free-to-air licences. ATV rallied its staff outside the Admiralty government headquarters yesterday for a live broadcast to oppose a "disastrous" pledge by the former administration to issue new licences for free television broadcasting. ATV staff were reportedly forced to join the protest, for which the station deployed its own security guards to keep order at the government offices. The private guards barred legislators and teenage counter-protesters - who supported more free-TV licences - from entry to what they called a "private event". Pan-democratic lawmakers tried to walk into the crowd. But as Claudia Mo Man-ching, of the Civic Party, approached key ATV investor Wong Ching - a mainland tycoon also known as Wang Zheng - a dozen Mr Asia contestants formed a human wall in front of him. Mo asked if ATV had breached broadcasting rules by broadcasting the protest, which was "purely based on political messages". Asia Club, an ATV subsidiary that organised the rally, put the number of participants at 400, about the same estimate as given by police. The station's artists sang 1990s Canto-pop songs while Mr Asia beauty contestants strutted their stuff on a catwalk. Wong, surrounded by a sea of reporters, said: "To issue new licences means the start of a disaster." He said "Taiwanisation" and "politicisation" of the media should be avoided. Wong dismissed suggestions that ATV's resistance stemmed from its position as an also-ran in the market. "Should there be [television stations] weeded out, ATV will be the last one. I'm not afraid of losing money. I'm prepared to make profits." ATV is the lesser-watched of the two free stations, behind TVB. Shing said issuing new licences went against the development of new media. "Why don't [the other companies] develop the online platform instead?" He questioned whether the market could accommodate more than two free-to-air stations, citing the failed Commercial Television in the 1970s. The rally was organised after City Telecom (HK) said last week that it might seek a judicial review on the government's delay in issuing new licences. City Telecom, along with i-Cable Communications subsidiary Fantastic Television and PCCW Interactive Media firm HK Television Entertainment, applied in late 2009 and early 2010 for the licences. ATV staff members denied they had attended under pressure. "I'm here voluntarily," said Lydia Luk, a veteran member of the production team. To Yiu-ming, an associate professor of journalism at Baptist University, said he believed ATV's survival was at risk. "We can experiment with having a few more free stations and see what the market reaction is," he said. A spokesman for the Commerce and Economic Development Bureau said it was considering the applications "expeditiously and prudently".

Canadian PM Harper honors war dead in Hong Kong (By Agence France-Presse in Hong Kong) Canadian Prime Minister Stephen Harper (second from right) and wife Laureen attend a Remembrance Day ceremony at Sai Wan War Cemetery. Canadian Prime Minister Stephen Harper on Sunday visited a war cemetery in Hong Kong, paying tribute to Canadian troops who lost their lives defending the city against Japanese invaders during the second world war. Harper marked Remembrance Day, an annual memorial day for the war dead that has been observed since the end of the first world war in 1918, in Hong Kong, one of the first Asian battlegrounds of the second world war. The prime minister was on the last stop of an Asian trip, during which he also visited India and the Philippines. “Of the courageous, desperate and bloody defence of Hong Kong in which badly outnumbered Canadians gave their lives, here they laid nearly three hundred of them,” Harper told a solemn crowd of more than 100 at the cemetery. “By their deaths, they made possible the freedom we enjoy, the democracy by which we govern ourselves and the justice under which we live,” Harper said. Students from local Canadian schools sang songs and laid poppies on pearly white gravestones, some of which bore no names, at the picturesque hillside Sai Wan War Cemetery laden with Canadian flags for the occasion. A total of 1,505 Commonwealth casualties of the second world war are buried or commemorated at the cemetery where 444 of the graves are unidentified. Japanese forces on December 8, 1941, attacked the former British colony, which was defended by hopelessly outnumbered and outgunned allied troops from Britain, Canada and India. The assault came a day after Japan landed what it hoped would be a killer blow on the United States at Pearl Harbour. Hong Kong surrendered on Christmas day after 18 days of desperate fighting where around 4,000 soldiers from both sides were killed in battle. About 290 Canadians were among the some 2,100 allied troops killed in the battle. Hundreds of survivors endured years of abuse and starvation as prisoners of war, leading to more than 260 additional Canadian deaths.

 China*:  Nov 13 2012

Singles Day in China launches busiest online shopping frenzy (By Associated Press in Beijing) Lei Shujie, a designer in Shanghai, piled up a wish list for Sunday, a quirky holiday dubbed “Singles Day” that has grown into China’s – and possibly the world’s – busiest online shopping day. Clothes, a pillow, a cabinet to give a friend – Lei put off buying until Sunday, when retailers promised discounts of up to 70 per cent. “The prices are irresistible,” she said. Singles Day was begun by Chinese college students in the 1990s as a version of Valentine’s Day for people without romantic partners. The timing was based on the date November 11, or “11.11” – four singles. Unattached young people would treat each other to dinner or give gifts to woo that special someone and end their single status. That gift-giving helped to turn it into a major shopping event as sellers of everything from jewellery to TVs to cars saw a marketing opportunity and launched Singles Day sales. Companies that are rushing to cash in on the holiday range from Alibaba, operator of China’s biggest e-commerce platforms, to rival platforms such as 360buy, mom-and-pop companies that sell online and delivery services. In the first 13 hours of selling on Sunday, the 50,000-plus merchants on Alibaba’s consumer-oriented took in 10 billion yuan (US$1.6 billion), the company announced on its microblog account. That would top the total of US$1.25 billion that research firm comScore said US online retailers took last year on Cyber Monday, the Monday after Thanksgiving in the US, and might make Singles Day the biggest e-commerce sales day on record. “This is very, very big for us,” Steve Wang, vice president of and head of website operations, said in a phone interview. The company said on its website that Sunday might be the “biggest e-shopping orgy ever”. The spending binge will be welcome news for Communist leaders who want to shift the basis of growth in the world’s second-largest economy from trade and investment to consumer spending and service industries. Weak global demand for Chinese exports has added to the urgency of ramping up domestic consumption. China has the world’s biggest population of internet users, with 538 million people online. Its population of online shoppers also is the biggest at 193 million, versus 170 million for the United States, according to Boston Consulting Group. It trails the US and Japan in online spending but, despite average incomes less than one-tenth the American level, is forecast to rise to first place as early as 2015. The Communist Party’s latest five-year development plan calls for more than quadrupling annual e-commerce volume from 2010 levels to 18 trillion yuan (US$2.9 trillion) by 2015. The party tries to block access to online material deemed subversive or pornographic but promotes Web use for business and education. “The internet today in China is similar to television in the 1960s and ’70s in the West – the place where consumers congregate and companies need to locate,” Boston Consulting Group said in an April report. Alibaba, founded by a former English teacher, Jack Ma, grew into one of the world’s biggest e-commerce players by linking Chinese suppliers with Western manufacturers and retailers. It branched into consumer sales with the 2003 launch of Taobao, which operates Alibaba also operates China’s biggest online payment system, Alipay. accounted for 45.1 per cent of business-to-consumer online sales in China in the three months ending in September, according to Analysys International, a research firm in Beijing. 360buy was in second place with 17.4 per cent. Boston Consulting Group said more products were sold through Taobao in 2010 – about 48,000 per minute – than at China’s top five bricks-and-mortar retailers combined. “Alibaba has so many assets that they can integrate that it’s hard to compete with them,” said Mark Natkin, managing director of Marbridge Consulting, a technology consulting firm in Beijing. Other rivals include clothing retailer, bookseller,’s joint venture with a Chinese partner, and traditional retailers such as consumer electronics chain Suning that have expanded online. Walmart Stores, which operates 340 outlets in China, boosted its online presence last month by expanding its stake in online retailer Yihaodian to a controlling 51 per cent. In addition to its e-commerce platform used by other merchants, 360buy also is China’s biggest online retailer, selling consumer electronics and other goods directly to customers. The source of Singles Day’s rise as China’s online shopping day is a matter of debate by Chinese commentators and industry analysts. Some cite demographics and timing: university graduates who adopted the holiday earn more and shop online. Singles Day comes as people receive monthly paychecks and need to buy winter clothes. Unlike other events such as the Lunar New Year, China’s biggest family holiday, it involves few other expenses such as travel or banquets, leaving more money for gifts. And there is the romantic angle that might prompt shoppers to open their wallets. “This is about giving a gift that will woo that perfect someone,” Natkin said. “If you play your cards right, you only need to make that purchase once.” Lei, the Shanghai designer, wound up buying only the pillow from her shopping list for 118 yuan (US$18) because other discounts weren’t as big as she hoped. “I will wait to see if I can get them later,” she said. Companies began preparing for Sunday months in advance. At its headquarters in Hangzhou, southwest of Shanghai, Alibaba set up 200 lounge chairs for its 800-strong staff to rest during the day. The company rented 180 rooms at nearby hotels for longer breaks. On, called Tian Mao, or “Sky Cat”, in Chinese, goods ranged from clothes, books and furniture to discounts on restaurant meals and travel packages. An auto dealer in the southern city of Shangrao offered 23 per cent off BMW 3-series luxury cars ordered on Sunday. China’s delivery companies had 800,000 employees working on Sunday, including 65,000 temporary workers hired for the holiday, the China Daily newspaper said, citing the country’s delivery industry association. One of the biggest, YTO Express in Shanghai, planned to have 30,000 vehicles on the road, the newspaper said, and expanded its daily handling capacity by 50 per cent to 6 million packages for the day. 

Tian Lipu, head of China’s State Intellectual Property Office slams West's 'distorted' view of copyright piracy - Tian Lipu holds a press conference on Sunday. China’s top official in charge of fighting copyright piracy on Sunday slammed what he said was deliberate distortion of the problem by the Western media caused by the country’s poor global image, saying important facts had been ignored. Foreign governments, including the United States, have for years urged China to take a stronger stand against pervasive violations of intellectual property rights on products ranging from medicines to software to DVD movies sold on the street. The United States in April again put China, along with Russia, on its annual list of countries with the worst records of preventing the theft of copyrighted material and other intellectual property. But Tian Lipu, head of China’s State Intellectual Property Office, said the government’s efforts were being ignored. “Speaking honestly, there is a market. People use and buy pirated goods,” Tian told reporters on the sidelines of a landmark Communist Party congress. “To a large extent, China’s intellectual property rights protection image has been distorted by Western media. “China’s image overseas is very poor. As soon as people hear China they think or piracy and counterfeiting – [Beijing’s] Sanlitun, that place in Shanghai, Luohu in Shenzhen,” he said, referring to places notorious for selling fake goods. “We don’t deny [this problem], and we are continuing to battle against it,” Tian added. The US and other countries have urged China to take a stronger stand against violations of intellectual property rights on products such as DVDs. But other facts were overlooked, he said. “For example, China is the world’s largest payer for patent rights, for trademark rights, for royalties, and one of the largest for buying real software,” he said. “We pay the most. People rarely talk about this, but it really is a fact. Our government offices, our banks, our insurance companies, our firms ... the software is all real.” Microsoft and other members of the Business Software Alliance in the United States complain that nearly 80 per cent of the software installed on personal computers in China is pirated. Tian said that if companies like Apple were so worried by piracy they would never choose China for their production bases. “Of the goods made for Apple, most are made in China. Once Apple’s brand is added to it and it is exported to the United States its value doubles,” he said. “This could only happen because China’s intellectual property rights environment sets foreign investors at ease allowing them to come to China to manufacture.” The International Intellectual Property Alliance, a US coalition of film, software, music and publishing groups, estimates that US companies lost more than US$15 billion in 2009 due to international copyright theft. About US$14 billion of the total was due to software piracy, with an estimated US$3.5 billion in losses in China and US$1.4 billion in Russia.

Online shopping bonanza breaks records - More than two billion yuan was spent in the first 70 minutes of a 24-hour shopping bonanza at China's largest business-to-customer online purchase website Saturday.

Sany vows to 'fight to the end' in lawsuit against Obama (Xinua) China's Sany Group Co Ltd reiterated Saturday it will "fight to the end" in its efforts to sue US President Barack Obama for blocking its wind farm project purchase deal in the United States. The Chinese company last month filed an amended complaint against Obama and the Committee on Foreign Investment in the United States at the US District Court in Washington, claiming that the president's order of preventing it from owning four wind farms in Oregon exceeded its constitutional rights and failed to provide detailed evidence. A court hearing due on Nov 28 will decide whether the case will be accepted, and the company will take the case to the US Supreme Court if it's not, said Liang Wengen, board chairman of Sany, at a group interview on the sidelines of the 18th National Congress of the Communist Party of China, which opened Thursday.

Hong Kong*:  Nov 12 2012 

Lawmakers shocked by Elsie Leung's remarks on Hong Kong's rule of law (By Tony Cheung) Lawmakers urge the chief executive to clarify stance on '50 years of no change' Pan-democratic lawmakers yesterday called on Chief Executive Leung Chun-ying to clarify the administration's stance on the rule of law after what one described as worrying and shocking remarks by former justice secretary Elsie Leung Oi-sie last week. Leung added fuel to the debate on Hong Kong's rule of law when she told the mainland's Global Times on Wednesday that Beijing's promise of "an unchanged way of life for 50 years" did not mean everything in Hong Kong would remain unchanged. The "legal system itself is ever changing", she said. Speaking on a radio programme yesterday, senior counsel and Civic Party leader, Alan Leong Kah-kit, said he was shocked by Leung's comments and worried she was portraying Beijing's thoughts about Hong Kong. "The Basic Law promised that Hong Kong's systems would not change for at least 50 years," Leong said. "It has only been 15 years since the handover, and I don't think [Leung's comment] is moral. I would urge the chief executive and the secretary of justice to come out with a strong stance and clarify [the issue]." Elsie Leung, who is also vice-chairwoman of the Basic Law Committee, spoke of her interpretation of the Basic Law's promise that Hong Kong's capitalist system and way of life would remain unchanged for 50 years after the handover. "Some people think that, 'unchanged for 50 years' means everything in Hong Kong will stay the way it was on June 30, 1997, and changing nothing means success. This is wrong. 'Unchanged for 50 years' is about the central government's basic principles and policies towards Hong Kong, not that all things remain unchanged," Leung said. "The legal system itself is ever changing, and many things are just like it - they develop and they will court controversy during change. We cannot say that the legal system is damaged because we encounter legal disputes, neither can we judge that the 'one country, two systems' policy has failed because we come across problems. "The so-called 'judicial independence' does not mean judges cannot be criticised, [it means] anyone must not criticise judges and affect their rulings." Acting Democratic Party chairwoman Emily Lau Wai-hing criticised Leung for taking her right to freedom of speech too far. "Leung is not a common Hongkonger; she has a very special status. Now she is repeatedly challenging Hong Kong's legal system in a high-profile manner. It is certainly creating a huge worry in the legal sector and the entire society." Last month, Leung criticised Hong Kong's legal profession, including judges, saying they lacked understanding of the relationship between the central government and the special administrative region.

Clockenflap festival charging up to HK$590 this year (By Lana Lam) City's biggest alternative-music event will cost up to HK$590, with government taking a cut; we lost a lot of money last year, organiser says - Audience listen to a music performance on stage at the Clockenflap Music & Arts Festival on The West Kowloon Waterfront Promenade last year. Organisers of a two-day music festival next month have won approval from West Kowloon Cultural District officials to charge for the formerly free event after it sweetened the deal by giving the government a cut of the ticket sales, it emerged yesterday. The Clockenflap festival - which hopes to draw 25,000 music fans over the December 1 and 2 weekend - is the city's biggest alternative music and arts festival. Last year entry - at the same venue - was free, but this year one-day passes cost HK$390 and weekend passes are HK$590. Students pay HK$290 and children under 12 are free. The ticket price was set by the organisers without government input, despite the event happening on government land and the granting of a substantial discount on the venue's rent. It is understood the rent the organisers paid was just under HK$1 million. "We have a commercial rate, but this is an arts and culture event, so we gave them a good discount on the rent," said Louis Yu, West Kowloon Cultural District Authority executive director of performing arts. He could not remember how big the discount was or the discounted rate, but emphasised that the government had not provided any cash. The government will receive less than 20 per cent of the price of each ticket. "This kind of event is not cheap, so it's justified for them to charge, but in terms of how much, it is up to them," Yu said. "We did not look into their detailed budget, this is not our role and because it's an independent event, they should have the freedom to set the ticket prices. We know some people can afford it, some people cannot afford it." Last year, about 18,000 people went to Clockenflap. "We know it is possible they will have a lot of income, so we will look at the discount and we had also charged them partly on their ticket sales," Yu said. Organiser Mike Hill said about half the tickets had been sold and with three weeks left until the event he was confident the price was appropriate. "In terms of value for money, it's off the scale," he said at yesterday's press conference at the K11 shopping mall in Tsim Sha Tsui, one of the event sponsors. Hill said the trio lost several million from last year's event and that this year, their budget was well above HK$10 million, with only 5 per cent from sponsors such as the British Council. "We spoke to a lot of people and we worked out what people would expect to pay in a town like this," Hill said. "It's not about affording it. A lot of people came last year because it was free and billed as the cool event of the year. This year, some of them won't come, but we educated a whole load of other people and they are going to pay." Jay Forster added: "And the line-up is so much stronger than last year." Two weeks later, the venue will host Freespace, a free music festival focusing on local bands.

Kenneth Fok and Guo Jingjing host Nansha wedding banquet (By Jennifer Ngo in Nansha) Kenneth Fok Kai-kong and Guo Jingjing at their wedding banquet in the Nansha Grand Hotel. After the first instalment of their HK$15 million wedding extravaganza in Hong Kong on Thursday, Guo Jingjing and Kenneth Fok Kai-kong were ready to party again - this time in the Fok family's ancestral home of Nansha in Guangzhou. Following their formal vows at the family residence in Pok Fu Lam, the 31-year-old Olympic diving queen and the 33-year-old grandson of late billionaire Henry Fok Ying-tung - and eldest son of Hong Kong Olympic chief Timothy Fok Tsun-ting - yesterday welcomed guests to a lavish banquet at the family-owned Nansha Grand Hotel. The glamorous couple were taking no chances with the possibility of gatecrashers (or unwanted media attention) and the hotel facing Nansha Bay was roped off and guarded. Security personnel lined the hotel driveway up to the doors, making sure only those with an invitation entered. Media from Hong Kong, who were driven to the hotel and allowed to set up camp at the door, were soon joined by many more mainland media colleagues. Unlike the Hong Kong wedding when cranes, with photographers perched on top, hovered above the Foks' walled estate to grab the best shots, this was a more private affair. At about 5pm a fleet of sleek black cars with tinted windows started bringing in A-list guests from Hong Kong, Macau and all over the mainland. Locals gathered outside to see the spectacle. Among the more than 500 guests were prominent figures like Lu Ping , former director of the Hong Kong and Macau Affairs Office and at least one unidentified member of the Jordanian royal family.Guests came toting gifts, with one of the most prominent ones being a large Chinese painting. After the dinner, the party moved to the lawn facing the harbour, where fireworks were set off for the celebration. But the revelry has not ended yet. Today, the couple, who met in 2004 and dated for seven years before marrying, will hold another banquet at the Convention and Exhibition Centre in Wan Chai. The Foks own many of the most profitable businesses in Nansha, which was developed as a leisure centre by Henry Fok to include a golf course, a luxury resort/hotel and a marina.

Chow Tai Fook Jewellery shares fall after profit warning (By Ray Chan) Chow Tai Fook has suffered losses from its gold hedging. Shares in Chow Tai Fook Jewellery fell yesterday as alarmed investors shed their holdings after a profit warning, which came within a year of its listing. The stock dropped 5.6 per cent to HK$10.18, a day after the company announced that its gross profit margin could contract by 2 to 3 per cent for the six months to September, citing losses related to gold hedging and a slowdown in the retail market as the key reasons for the poor earnings outlook. With yesterday's fall, the company's stock was down 32 per cent from December's initial public offering price of HK$15. The benchmark Hang Seng Index has risen 17 per cent over the same period. Analysts, however, said the reasons cited for the profit warning would be short-lived and the losses incurred from gold hedging would only be a temporary overhang on the shares price. "In theory, the hedging loss in Chow Tai Fook will be recovered in the second half of next year despite its short-term impact," said Anne Ling, a consumer analyst at Deutsche Bank, in a research note. But Ling also slashed Chow Tai Fook's target price to HK$12.58 from HK$15.68 as she expects the firm's net profit to fall by 30 per cent in the first half next year on the back of a paltry 7 per cent increase in revenue. Ling said the current environment might hurt gold and jewellery players and the tough conditions might return after next year, given the cautious spending pattern among Chinese consumers amid a slowing economy. Echoing Ling's view, CLSA Asia-Pacific Markets said the firm's underlying business is under "real short-term pressure with slow sales growth". Before the firm's profit-warning, Citi had warned that the increase in gold prices would result in a higher cost of making gold products. The bank also trimmed its earnings forecast by up to 12 per cent and lowered the target price to HK$12 per share from HK$13. Chow Tai Fook has rolled out a bold store expansion plan, under which it aims to have 2,000 stores by 2014, from the current 1,600. The company's annual net profit jumped by 79 per cent for the year to March 31 after it raised US$2 billion in the IPO.

Dow Jones Asia head fired in latest purge at News Corp unit (By Bien Perez) Dow Jones chief Lex Fenwick and Christine Brendle, who was fired. The shake-up at Dow Jones & Company moved to Hong Kong yesterday after chief executive Lex Fenwick fired Christine Brendle, the firm's Asia-Pacific managing director and publisher at Wall Street Journal Asia. Fenwick, former chief executive at Bloomberg, has swiftly revamped operations at Dow Jones, replacing several executives there, and ushering in his hand-picked managers and new recruits since joining the News Corp subsidiary in February. Brendle was the first senior manager from Dow Jones in Asia to be removed by Fenwick, following executive changes announced by its New York headquarters in June, according to a person familiar with the matter. An internal memo simply signed "Lex" that was obtained by the South China Morning Post, said Brendle "has stepped down from her post". The memo said a new publisher would be named shortly. A Dow Jones Asia-Pacific spokesman confirmed the departure of Brendle who joined Dow Jones in 2006 after a 17-year career with the Hachette Filipacchi publishing group. All senior managers in the region are to report directly to Fenwick and others at the company's New York headquarters. The source said Brendle's firing will add more uncertainty to the Wall Street Journal's Asia edition. Introduced in 1976 it has struggled since the dotcom crash in 2000. Under Brendle, the regional paper's revenue has risen steadily. She also built up its television and digital operations. According to a Reuters profile last month, Fenwick has been called a master salesman and business builder whose hard-charging style often runs roughshod over colleagues and subordinates. His makeover of Dow Jones comes at a crucial time for Rupert Murdoch's media empire as News Corp prepares to split off its global publishing assets from its entertainment businesses. It also cited analysts as saying that Murdoch needs Fenwick's shock treatment to succeed so that Dow Jones, with about US$2 billion in annual revenue, can be the growth engine for the new publishing company. Fenwick reportedly wants to change the way Dow Jones markets its news and information to financial institutions by launching a new web-based platform this year, with an eye to seize market share from Bloomberg, Thomson Reuters and others.

 China*:  Nov 12 2012

Han Suyin loved China but turned a blind eye to its excesses - Han Suyin's glowing accounts of communist China raised the hackles of those who suffered during its turmoil, but she saw no need to apologise. There are few women whose life and views on modern China have aroused as much controversy as Han Suyin, who died aged 95 in Switzerland on November 2. A Eurasian doctor and writer, Han's prolific writings and lectures on China and Asia from the 1940s to the 90s fascinated more than a generation of Western audiences. In the days when few foreigners had access to Communist China, Chinese-born Han carved out a unique role for herself as a bridge between East and West. Han, who openly lauded Mao Zedong and his Cultural Revolution, was castigated as an apologist, but her talent, beauty and glamorous life enthralled even her harshest critics. She published more than 40 books, some of which portrayed her dramatic life that spanned China (including Hong Kong), Belgium, Britain, Nepal, India, Malaya and Singapore against the backdrop of civil wars, the second world war and the Korean war. Her 1952 autobiographical novel A Many-Splendoured Thing detailed her doomed romance with Ian Morrison, a married Australian correspondent for The Times who was one of the first journalists killed in the Korean war in 1950. The book was later made into an Oscar-winning Hollywood film. Han married three times - her second husband, Dr Leon Comber, whom she married in 1952 but later divorced, described her as "an attractive and unusual person" in an e-mail last week but declined to comment further. Han - whose real name was Rosalie Matilda Kuanghu Chou - was born to a Belgian mother and Chinese engineer father in China, probably in 1916, although the exact year was unclear, said her granddaughter, Karen Shepard. A bold and charismatic woman, her life was full of contradictions. A half European who yearned to be accepted as Chinese throughout her life, she declared her roots to be in China but spent most of her life abroad. Brought up in Beijing, she took on the role of a spokeswoman for China to the West but, unlike the compatriots she claimed to identify with, did not return to live through the political turmoil. A larger-than-life personality who enjoyed the limelight, she chose the pen name, Suyin, that meant "plain voice". From 1956, she was invited regularly to China, where she was received by Premier Zhou Enlai a dozen times, and continued her visits throughout the years of the Cultural Revolution. She was received by Mao in 1966 among a delegation of Asian and African writers and was a guest of honour of Mao's wife Jiang Qing , Zhang Chunqiao and Yao Wenyuan - three of the infamous members of the "Gang of Four" - at a revolutionary dance performance in 1971, according to Xinhua reports at the time. Her visits were chronicled in People's Daily nearly 50 times between 1966 and 1977. "In the end, she regarded herself as Chinese before all else, and she felt that she shared in the long experience of Chinese history," Gittings said.

Hunan boss Zhou Qiang tipped to be top judge (By Choi Chi-yuk and Keith Zhai) Rise of Hu protégé to court president means he is likely to miss out on Politburo seat; analyst cites his mishandling of the Li Wangyang case - The leader of the province where June 4 activist Li Wangyang mysteriously died in June is likely to become China's next top judge as part of the leadership transition under way at the 18th party congress, sources said. Zhou Qiang, party chief of southern Hunan, is expected to be appointed president of the Supreme People's Court next March when the transition is completed at the annual parliamentary session, four sources told the Sunday Morning Post. Zhou, one of President Hu Jintao's top protégés, had previously been under consideration for the weighty job of Chongqing party chief, a post that would guarantee him a seat on the powerful Politburo. "Word has changed recently - around one month ago. Party personnel officials said Zhou may become top judge," said a source close to the leadership of Changsha , the capital of Hunan. A legal source who is also based in Changsha said local judicial circles were already buzzing with gossip that Zhou was the leading choice to be the high court's president. Cao Jianming, 57, the country's top prosecutor, and Shen Deyong , 58, a vice-president of the top court, could be among Zhou's rivals for the post, the sources said. The court posting would almost certainly mean Zhou, who has long been considered a rising political star with a good chance of ascending to the new Politburo, has missed his chance. The new Politburo is expected to be unveiled on Thursday. Analysts say Zhou's performance in Hunan can be described as "mediocre" at best, and the mishandling of the Li Wangyang case may have damaged Zhou's image and undermined his chances of further promotion. A public outcry erupted in Hong Kong after Li was found hanging from the window in his Shaoyang hospital room, with his feet still touching the ground, days after giving a defiant interview to Cable TV ahead of the city's June 4 candlelight vigil. Hunan authorities' verdict that the blind-and-deaf activist had committed suicide only brought further outrage. "Jockeying for power in the leadership reshuffle was particularly fierce this time, and, if Zhou fails to make it to the Politburo, it's probably because of his bad record in the Li Wangyang case," said Dr James Sung Lap-kung, a City University political analyst. Tang Jingling, a Guangzhou-based rights activist who provided legal advice to Li, doubted Zhou was experienced enough to serve as the country's top judge. As one of Hu Jintao's best-known protégés, Zhou's failure to secure Politburo membership would provide further evidence of the outgoing president's declining ability to get loyalists into key party posts. "That would mean Hu is not strong or influential enough to get his man in," said Sung.

China's economy hits turning point (Jane Cai in Beijing) No need for any big injection of stimulus, says economist as October data shows a broad-based turnaround in production and retail sales - Prices of vegetables like these Zhejiang cabbages grew only marginally last month, helping to keep inflation at 1.7 per cent. The mainland economy improved more than expected last month after inflation dipped to a 33-month low, reducing the likelihood of "big bang" stimulus measures after the new leadership takes office. Industrial output expanded 9.6 per cent from a year ago, while consumer inflation decelerated to 1.7 per cent year on year, the National Bureau of Statistics (NBS) said yesterday. The October data confirmed that China's economic slowing has "truly bottomed out", said Lu Ting, an economist at Bank of America Merrill Lynch. "We expect more easing measures in the near future, but no big-bang stimulus." The October figures would "give people confidence" in the world's second-largest economy, Ma Jiantang, head of the statistics bureau said on Thursday on the sidelines of the Communist Party's 18th national congress. Yi Gang, vice-governor of the People's Bank of China, said on Thursday that the economy had been stabilising and was set to bounce back. The Shanghai Composite Index dropped 0.12 per cent yesterday amid political uncertainties before the once-in-a-decade leadership transition. The Hang Seng Index lost 0.85 per cent. The mainland economy has slowed for seven quarters as exports were hurt by the European debt crisis and domestic demand was subdued by curbs to cool the property market. The turnaround was broad-based. Inflation eased from September, thanks to much smaller vegetable price increases. The Producer Price Index dropped 2.8 per cent year on year, but climbed 0.2 per cent from September on improved industrial demand. Electricity production rose 6.4 per cent year on year to 389.8 billion kilowatt-hours last month, the strongest growth since April, according to the bureau. Retail sales growth picked up from 14.2 per cent in September to 14.5 per cent last month, partly helped by vehicle sales which gained speed with the easing of discord with Japan over the islands in the East China Sea. Growth of fixed asset investments grew from 20.5 per cent in the first nine months to 20.7 per cent in the first 10 months. New investment projects, a forward-looking indicator on fixed investment, surged 26.7 per cent year on year, faster than the 25.7 per cent gain in September. Zhu Haibin, an economist at JP Morgan Chase Bank said the recovery could be attributed to policy easing, especially in infrastructure investment, the housing market stabilisation in recent months and the resilient domestic consumption. However, Shen Jianguang, an economist at Mizuho Securities said the pickup is entirely due to infrastructure investment. Some economists are more optimistic. Nomura expects the economy to expand 8 per cent in the fourth quarter, while Merrill Lynch says it will be 7.8 per cent. The economy expanded 7.7 per cent from a year ago in the January to September period. JP Morgan economists said "the firming of economic data implies that the downside risk is mitigated and the government does not need to push up the scale of policy easing". China is scheduled to release trade figures today. Chen Deming, the minister of commerce, said yesterday that it would be very difficult for China to realise the annual target of 10 per cent growth for imports and exports combined this year. The mainland's October exports rose more than 11 per cent on a year ago and imports grew by 2.8 per cent over the same period, Chen said.

China export growth accelerates in sign of recovery (By Agence France-Presse in Beijing) China’s export growth accelerated in October in fresh evidence of a broader rebound for the world’s second-largest economy just as the Communist Party grapples with how to boost recovery from a rare slowdown. Exports rose 11.6 per cent in October from a year earlier to US$175.6 billion, the national customs bureau said on Saturday, strengthening for a second straight month and beating economists’ expectations. Imports, meanwhile, increased 2.4 per cent to US$143.6 billion, matching September’s gain but falling short of analyst forecasts. The country’s trade surplus, a source of friction with countries including the United States, widened to US$32 billion for the month, up from US$27.7 billion in September. The size of the surplus was a surprise, surpassing the median forecast of US$27 billion in a survey of economists by Dow Jones Newswires. Those economists had also forecast a 10 per cent increase in exports and a four per cent gain in imports. China’s economic growth has slowed for seven straight quarters and hit a more than three-year low of 7.4 per cent in the three months through September, but recent data has fuelled optimism the worst may be over. Industrial production for October rose 9.6 per cent on year from 9.2 per cent in September, the government said on Friday. Retail sales, the main measure of consumer spending, also accelerated to a 14.5 per cent gain during the month. Fixed-asset investment, a key gauge of infrastructure spending, also showed improvement in October, while inflation remained well under control, dipping to a nearly three-year low of 1.7 per cent in October. Economists have seized on the recent improvement in Chinese data as a sign that economic growth will likely accelerate in the current fourth quarter through the end of December. “Today’s trade data, together with improving domestic demand indicators released yesterday, continue to support our view that China’s growth momentum has picked up,” ANZ bank economists Liu Li-Gang and Zhou Hao wrote in a commentary. The more robust reports come as China’s Communist Party is meeting to anoint new leaders for the next 10 years at its 18th congress that began on Thursday. President Hu Jintao, who is expected to be replaced as party leader by Vice President Xi Jinping before the week-long meeting adjourns, called for creating a new growth model with a robust private sector while also insisting on the primacy of the party-led state sector. He also said China should “promote balanced development of foreign trade” in a speech on Thursday at the event, held every five years to trumpet China’s political and economic leadership credentials. Independent economist Andy Xie, based in Shanghai, acknowledged that exports have come off their weakness at the same time last year. But he added the economy faces strong headwinds given weakness abroad and in domestic demand as shown by tepid import growth. “I think that in September and in October we had an export-led, small recovery and that recovery is not sustainable because the global economy is very weak,” he said.

Zhang confident economic growth target can be met (By Reuters in Beijing) Chairman and Secretary of the CPC Party Commitee of the National Devlopment and Reform Commission Zhang Ping gives a press conference on China's economic and social development at the Media Centre in Beijing on Saturday. China announced on Saturday that it is effectively turning the corner on the economy and likely to meet its growth target for the year, more good news for Communist Party policy makers meeting in Beijing to anoint new leaders for the next decade. The world’s second-biggest economy had halted a slowing trend, the head of the powerful economic planning agency said, adding that he was confident GDP growth would exceed 7.5 per cent this year. Zhang Ping, head of the National Development and Reform Commission (NDRC), was speaking to reporters on the sidelines of the 18th Party Congress at which outgoing President Hu Jintao said China should double its 2010 GDP and per capita income by 2020, as previous targets have implied. Hu said China’s development should be “much more balanced, coordinated and sustainable”. The party has in recent years tied its legitimacy to economic growth and lifting hundreds of millions out of poverty. “Signs of stabilisation in the economy were getting more obvious in October. We are fully confident that we can achieve the economic growth target for this year. In other words, we are able to maintain economic growth of above 7.5 per cent,” Zhang said, warning against complacency. “We dare not lower our vigilance,” he said. “The foundation of the economic stabilisation is not solid enough... Under the backdrop of a persistent global financial crisis as well as a new situation and problems in the economy, we must make preparations for dealing with difficulties and challenges over the long term.” China’s economy strode further along the road of recovery from its slowest growth in three years, data for October showed on Friday, as infrastructure investment accelerated and output from factories ran at its fastest in five months. Data on Saturday showed the trade surplus ballooned to its biggest in 45 months in October as export growth darted to a five-month high above 11 per cent, surpassing expectations and adding to other data that suggest a less urgent need for new economic stimulus measures. Annual economic growth slowed to 7.4 per cent in the third quarter – its weakest since early 2009 – leaving the economy on track to mark its most sluggish year since 1999. But central bank head Zhou Xiaochuan cautioned on Thursday that external risks still loomed large and the People’s Bank of China had policy room to respond if necessary. Sustainable growth - Zhang said China’s economic slowdown this year had been caused by both weak global demand and government steps to adjust economic structures to put the economy on a more sustainable footing for the future. Government officials have said repeatedly that they intend to use a period of slowing growth to make a series of adjustments to economic policy settings, particularly around prices administered by the state, which might otherwise risk fuelling inflation. Such reforms are regarded as crucial, both by foreign analysts and government think-tanks, if China is to maintain robust growth needed to close a yawning wealth gap and support an urbanisation drive core to Beijing’s development plans. Zhang said that inflation was stable in China. Official data on Friday showed consumer price inflation eased to its slowest pace in nearly three years in October, with the 1.7 per cent rise from a year ago slower than the 1.9 per cent posted in September. Economists polled by Reuters had expected it to hold steady. Investors, though, have been concerned that efforts to cool the economy had been mistimed, unintentionally coinciding with a sharp slowdown in external demand, with recovery in the United States remaining tepid and Europe still unable to escape its sovereign debt crisis. Beijing has responded by fine-tuning economic policy for a year to support growth. China has cut benchmark interest rates twice this year, lowered bank reserve ratios three times since late last year and made repeated, large-scale liquidity injections into the financial system. It also said in September it had fast-tracked approvals on infrastructure projects worth about US$157 billion.

Hong Kong*:  Nov 11 2012 

Old family firms are ripe for the picking (By George Chen and Ray Chan) Cashed up investors will find there will be businesses to buy out because the patriach is retiring and the children do not want to carry on. It will be easier to stitch up a deal for garment factories because they are considered a sunset industry in Hong Kong. Hong Kong family businesses are increasingly becoming targets of takeovers by institutional investors as the older generation of entrepreneurs retires, bankers say. Hundreds of listed companies controlled by wealthy families may be taken private in the coming decade because they face operational difficulties or the younger generation is not interested in holding on to them. One example would be companies in the garment industry, which is considered a sunset sector in Hong Kong. Potential buyers for such businesses could be capital-rich global private equity firms or powerful state-owned enterprises from the mainland that often consider Hong Kong a stepping stone before they expand into European and American markets more aggressively. Many investment banks and management consultancy firms have already pitched the idea to local family businesses for possible merger and acquisition (M&A) plans this year. "Taking a company private is not just the trend in the US, it is also going to happen in Asia and in Hong Kong. We've got the same question from many clients this year - what are the potential takeover targets that are worth pitching to in Hong Kong?" said an investment banker with an American firm in Hong Kong. The depressed valuations at which some Chinese companies were traded on stock markets in the United States, for example, Focus Media and Shanda Interactive, have prompted their controlling shareholders to take the companies private with financial support from some private equity funds. Brian Gu, head of corporate finance for China at JP Morgan, told the South China Morning Post in a recent interview that the take-private trend in American stock markets would continue next year. David Chin, head of UBS's Asia investment banking business, said there are plenty of firms in Hong Kong which could be taken private as the founders or the first-generation leaders are getting close to retirement age with no clear succession plans. "Apart from taking those once high-flying listed firms private, I definitely see other options such as outright M&A (merger and acquisitions). New blood may help the firm to turn around," he added. So far this year, a handful of Hong Kong tycoons, including Cheng Yu-tung of New World Development and Li Ka-shing, Asia's richest man who controls his Cheung Kong business empire, have announced succession plans, creating some market speculation over how the next generation of managers will deal with the challenge. The city also has a handful of family-controlled local banks, such as Wing Hang Bank and Chong Hing Bank, and they have been widely considered potential takeover targets for foreign or mainland banks. "In 10 years, Hong Kong will see first-generation leaders or founders exit. The privatisation trend applies to hundreds of privately-held listed companies in this city," said Chin.

Anya Hindmarch and other best of British fashion minds gather in Hong Kong (By Vivian Chen) Salina Yan (left) and Angel Chan. It's been a busy week of celebration for British creative kinds in Hong Kong. On Tuesday, the British fashion promotion effort, London show ROOMS, opened in Sheung Wan's The Space, while over at Central's MO Bar, the British Fashion Council held a gala celebrating great British and Chinese menswear. Famous fashion designers such as Jonathan Saunders, Nicholas Kirkwood and Peter Pilotto flew in for the events. On Wednesday, the celebration continued at Island Shangri-La Hotel's ballroom for the UK Alumni Gala Dinner hosted by the British Council. "The creative industries play an enormously important role in forging special and enduring relationships among the UK, Hong Kong and the rest of the world," said Bank of East Asia's David Li Kwok-po, chairman of the Friends of British Council. Over 200 guests turned out at the dinner party, including Harold Tillman, chairman of the British Fashion Council and fashion designer Anya Hindmarch. Works from emerging fashion talents in Hong Kong and Britain were showcased at the event, including designs from Daydream Nation, Kanchan Couture and pieces from students at the University of the West of England, Bristol. More than HK$500,000 was raised, with the money going to the Friends of British Council to support its programs.

Kai Tak venue to replace Wan Chai Sports Ground, says Tsang (By Olga Wong) The government will give up the Wan Chai Sports Ground when the world-class sports complex in Kai Tak is completed in 2019, says Secretary for Home Affairs Tsang Tak-sing. “By then, the one in So Kon Po [Hong Kong Stadium] can replace the function of Wan Chai Sports Ground, which is to provide sport facilities to people living on Hong Kong Island,” Tsang told a home affairs panel meeting on Friday. “As to what will be built on the Wan Chai site, it will be a decision to be determined by the government,” he said. Most schools and athletes currently use the sports ground in Wan Chai, next to the Hong Kong Convention and Exhibition Centre, for training, said Tsang. The sports ground will be of less use when they move to the new complex in Kai Tak seven years later. Lawmaker Albert Chan Wai-yip of People Power said his party would try to prevent the government getting the Legislative Council’s approval for the sports complex in the Kai Tak project by exercising filibuster. “The site used to build the new complex should be used to build homes to relieve the housing demands in the neighbouring districts,” he said, “The complex will eventually repeat the history of Hong Kong Coliseum in Hung Hom and hold concerts instead of sports events.”

 China*:  Nov 11 2012

China slaps anti-dumping tariffs on European, Japanese steel tubes (By Reuters in Shanghai) Workers guide high-performance stainless steel seamless tubes in a Chinese factory. China's Ministry of Commerce said the country will impose five-year anti-dumping duties on high-performance stainless steel seamless tubes imported from the European Union and Japan. China said it will impose five-year anti-dumping tariffs on high-performance stainless steel tube imports from the European Union and Japan, highlighting commercial tensions between Beijing and major trading partners. The tariff will range from 9.2 per cent to 14.4 per cent and would come into effect on Friday (November 9), the Ministry of Commerce said. China, the world’s biggest steel producer and consumer, was repeatedly cited by major trade partners for alleged dumping in its massive exports of steel products before the financial crisis in 2008. China still relies on imports of some high-grade steel products. The United States has set duties on Chinese steel products, including pipes, steel wheels and wire. In March, it said it would investigate possible Chinese dumping of stainless steel sinks. In May, China issued a preliminary ruling saying that the EU and Japan have been dumping the seamless tubes into the Chinese market. Trade relations between China and the European Union, China’s biggest trading partner, have been tense due to the imposition of tit-for-tat anti-dumping tariffs. Earlier this week, China lodged a complaint with the World Trade Organization to challenge policies that Beijing argues favour firms in Italy and Greece. China’s business relations with Japan have also deteriorated in recent months after Japan purchased a few uninhabited islands located in the East China Sea that are claimed by both countries. On Wednesday, the United States gave final approval for tax on solar-energy products from China for the next five years, protecting US producers against lower-priced imports, and raising fears of Chinese retaliation.

Haixun 31 and Haixun 183 are patrolling in the South China Sea. The maritime safety administrations of three provinces and one autonomous region - Guangxi, Guangdong, Fujian and Hainan - launch their first joint patrol on Wednesday. Cross-province patrol begins in South China Sea (By Wang Qian) 5-day mission seeks to strengthen region's maritime law enforcement - China is strengthening its offshore law enforcement capacity, with three provinces and one autonomous region launching their first joint patrol in the South China Sea on Wednesday. The five-day patrol fleet consists of ships from the maritime safety administrations of Guangxi, Guangdong, Fujian and Hainan. Haixun 31, one of China's largest patrol ships, is also part of the fleet. An official surnamed Song from the Maritime Safety Administration said the cross-province patrol will become a regular occurrence to enhance the offshore supervision capacity, but revealed no details about future patrol plans. At present, the Maritime Safety Administration will arrange two or three patrols in the South China Sea aimed at preventing illegal activities including discharging excessive pollutants into the sea. Shen Chunsheng, deputy director of the Guangxi Maritime Safety Administration, said the joint patrol is expected to travel nearly 1,000 km to detect pollution discharged by ships. The joint patrol will strengthen law enforcement capacity in the South China Sea to guarantee maritime safety, Shen added. It is the latest move the country has taken to strengthen supervision of the South China Sea. On Tuesday, the State Council approved a marine zoning plan for the southern provinces of Guangdong and Hainan before 2020, emphasizing offshore law enforcement capacity in both plans. President Hu Jintao emphasized that the country's maritime interests should be strongly protected, as he opened the 18th National Congress of the Communist Party of China on Thursday. China is preparing itself to deal with complicated marine disputes. On July 24, Sansha city, Hainan province, the country's newest city, was established on Yongxing Island to administer the Xisha, Zhongsha and Nansha islands and their surrounding waters. Another 36 inspection ships are expected to join the China Marine Surveillance fleet by 2013.

Party leaders join panel discussions with delegates (Xinhua) Wu Bangguo on Thursday called on members of the Communist Party of China (CPC) to advance the great cause of socialism with Chinese characteristics in an all-around way at the new starting point of history. Wu made the remarks while joining a panel discussion with Party delegates about Hu Jintao's report delivered to the 18th CPC National Congress Thursday morning. Hu's report is the guideline for China to build a moderately prosperous society in all respects, Wu told the delegates from east China's Anhui Province. Wu said China is faced with unprecedented opportunities and challenges, and CPC members must be profoundly aware of the new changes taking place in the conditions of the world, the nation and the Party. "We must unswervingly adhere to and develop the socialism with Chinese characteristics," he said. He also underlined the significance of the Scientific Outlook on Development at the new starting point of history. "Together with Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents, the Scientific Outlook on Development is the theoretical guidance the Party must adhere to for a long time," he said. "The Scientific Outlook on Development has a very importance meaning for the future development of the Party and the nation, and will surely become a powerful theoretical weapon in the building of socialism with Chinese characteristics," he said.

Hong Kong*:  Nov 10 2012 

Official hits back over TV license threat (By Eddie Luk) A company that invests in free television before it receives a broadcasting license only has itself to blame, a senior government official said. Secretary for Commerce and Economic Development Gregory So Kam-leung was responding to reports that City Telecom boss Ricky Wong Wai-kay threatened to file a judicial review against the government for taking so long in granting free-to-air TV licenses. City Telecom made the application three years ago and has reportedly invested about HK$300 million in facilities. "Launching a judicial review is one of the considerations [to push the government to speed up the process of scrutinizing free-TV license applications]," Wong said. "But it doesn't mean we will take any action now." Wong said the company will press further "if the government acts irresponsibly and adopts delaying tactics without giving a timetable or clarifying its licensing procedure." But So said the government cannot bypass the vetting procedure. "It is an investor's own decision to make investments before the licensing process is completed." So earlier denied lawmakers' accusations that the government has been dawdling because of political considerations. The outcome will be announced after Chief Executive Leung Chun-ying and the Executive Council have reached a decision. City Telecom, i-Cable's Fantastic Television and PCCW's Hong Kong Television Entertainment have each submitted an application. Meanwhile, a number of ATV staff have complained to the media that the broadcaster has requested them to attend a showbiz event on Sunday. Staff said management told them the event may be related to the free-TV license. ATV refused to comment. 

Hong Kong City's best hotpot spots (By Vanessa Yung) It has become a year-round treat, but the hotpot is most satisfying when there is a chill in the air. Once a seasonal treat, Hong Kong restaurants now offer hotpot all year round. But the dish is at its most gratifying on a cold winter's night. There are fans who argue that the best hotpot is one you have prepared yourself at home with all your favourite ingredients bought at the wet market. However, unless you are good friends with stall owners who reserve the best cuts of meat or you are expert at making your own soup base, you might try one of these restaurants. FF Hot Pot (G/F, 340-344 Jaffe Road, Wan Chai; tel: 2838 9392) is heaven for beef lovers. Although it's an old restaurant and a bit run down, it has some beef cuts and offal that are hard to find elsewhere. Owner Hui Fat-bo and his staff are always ready to give recommendations. To my guest's delight, first up is ox testicle. The cook cuts it into very thin slices for a slightly chewy texture. Ox testicle is not my thing, so I'm glad Hui introduces us to beef paddywhack, a tendon from the neck. It doesn't take long to cook and has a rich, unctuous flavour. You may get similar cuts from a butcher, but this place earns credit for sourcing good beef and cutting it well: the slices even have good marbling, making the meat tender. A swift dunk in the pot and it's ready. While the homemade assorted balls - pork, fish, squid and shrimp - don't bring much to the party, the homemade Chiu Chow style steamed spring roll is worth a try; the flavourful minced fish and bean curd wrap make a nice combo. Another place with homemade goodies is Megan's Kitchen (5/F Lucky Centre, 165-171 Wan Chai Road, Wan Chai; tel: 2866 8305). The creative combination of ingredients surprises without being over the top. One of our favourites is a deep-fried pastry stuffed with shrimp paste. You might expect the dough to get soggy when it's placed in the hotpot broth, but it stays crunchy. The salty ox-tongue cheese dumpling is another highlight. Wrapped in a silky smooth skin, the melted cheese adds moisture and richness to the filling, although we suggest ordering it only for large groups, as a little goes a long way. The menu is quite extensive and quality is generally high. There is a seasonal seafood menu of the day. The ambience is nice - it is clean, spacious and you can get a booth if you book early. Tables are spaced so that it's not too crowded or noisy. While freshness of ingredients is very important in a hotpot, it's a mistake to take the soup for granted. You learn exactly how crucial it is when you get an awful broth. The Sichuan spicy soup at Him Kee Hot Pot (1-2/F Workingfield Commercial Building, 408-412 Jaffe Road, Causeway Bay; tel: 2838 6116) is so bad that it almost ruins the meal. It doesn't have enough herbs, lacks fragrance and has a medicinal bitterness that is off-putting. The fish head soup we order for the other half of the pot isn't very good, either. The crystal char siu bao is acceptable but not great, as the transparent wrapper lacks elasticity. Redeeming features? It is famous for its seafood, including lobster and geoduck, which doesn't get much fresher. We also try the eel, which is very good. The chive dumplings are a winner, tasting as if your grandmother might have made them. Fans of Sichuan spicy broth can also head to Golden Valley (1/F The Emperor Hotel, 1 Wang Tak Street, Happy Valley; tel: 2961 3330). We order a three compartment pot so we can try the fish soup and mushroom soup base. But the Sichuan spicy soup is so good, we barely touch the others. The Sichuan broth is not overwhelmingly hot but is balanced and fragrant. The Sichuan pepper gives it that tingling feeling on the lips. It goes well with lamb and offal such as pig's liver as it masks their odours and adds a tang. Golden Valley's DIY condiment bar is worth a mention. It's equipped with a mortar and pestle for you to crush your seasonings and there are instructions on how to make a Sichuan-style sauce. The restaurant charges each diner a condiment fee. While FF Hot Pot's fish soup with tomato, potato and sweetcorn, and Megan's Kitchen's tomato spotted crab broth, are both recommended, the tomato crab soup from Old Man Hot Pot (25-31 Cooke Street, Hung Hom; tel: 9089 7732) is outstanding and easily the best. It's a neighbourhood venue with its tables spilling onto the street, and its crab and tomato soup base is a dish in its own right. It is a lot richer and stronger than those from Megan's Kitchen, and a whole crab - usually a meaty mud crab - is used. Those looking for an even more authentic hotpot experience should try a coal hotpot. Said to offer more evenly spread heat, especially when used with a clay pot, it may take a bit longer to come to the boil, but it simmers evenly - unlike some induction or gas hobs. For a hint of nostalgia, try Canton Kitchen (10 Kong Pui Street, Sha Tin; tel: 2686 1778) or Woo Mei Kitchen (282 Reclamation Street, Mong Kok; tel: 2388 4018).

Liaoning Huishan Dairy appoints 3 banks for its Hong Kong listing (By Ray Chan) The largest milk producer in the mainland's northeast hopes to raise up to US$1 billion. Huishan Dairy is planning to list next year. Liaoning Huishan Dairy, a Shenyang-based dairy producer in which Hong Kong business mogul Cheng Yu-tung has a stake, has appointed three banks as sponsors for its Hong Kong initial public offering planned for the second half of next year that could raise up to US$1 billion. According to two people familiar with the plan, Huishan, the largest producer of milk products in the northeast, has listed Deutsche Bank, HSBC and JP Morgan as sponsors of the deal, while the final offering size will be subject to market conditions. The three banks declined to comment, saying it was a private matter. If successful, Huishan will be the first dairy company to list in Hong Kong in almost three years since the stock offering of China Modern Dairy that raised US$447 million in November 2010. It will join five dairy companies already listed on the Hong Kong stock exchange that are trading on an average price-earnings ratio of 12.3 and price-book of 1.8 times based on next year's earnings and book value. Share trading is currently suspended in two of the listed dairy companies - Daqing Dairy and Ausnutria Dairy. Founded in 1951, Huishan has been looking to sell shares in the world's top capital-raising hub for the past three years following a domestic toxic milk scandal in 2008, caused when melamine-tainted dairy products killed at least six infants and made thousands of babies ill. Huishan's annual production of raw milk reached two million tonnes and output of baby formula powder totalled 240,000 tonnes last year, according to the group's website. It owns 400,000 cows and operates six advanced manufacturing plants in Liaoning province, a rapidly developing area in the northern region. Apart from a rising disposable income among the Chinese middle class, a case for investing in the planned listing could involve issues such as the government's low-interest loans to back the development of clean dairy farms and lower the cost of production, a Beijing-based private-equity investor said. The listing plan coincides with KKR's extended buying into the troubled Chinese dairy market. The New York-based private-equity firm, also the biggest stakeholder of Mengniu Dairy, is reported to be in talks about a potential buyout of China Modern Dairy, the largest raw milk producer on the mainland. In addition, Washington-based Carlyle owns a 24.3 per cent stake in the Chinese baby formula maker Yashili. The private-equity firm first obtained a 17.3 per cent stake in 2009 before it went public in October 2010.

Olympic diver Guo Jingjing marries billionaire's grandson in HK$15m wedding (By Jennifer Ngo) It may be the wedding of the year: Guo Jingjing and Kenneth Fok Kai-kong. It may have been the wedding of the year, as China’s retired Olympic diving queen married a tycoon’s grandson on Thursday under a cloud of paparazzi held aloft on nearby cranes. Guo Jingjing, 31, who shares the world record for the most Olympic medals won by a woman diver, exchanged vows with Kenneth Fok Kai-kong, 33, grandson of late billionaire Henry Fok Ying-tung and eldest son of Hong Kong Olympic chief Timothy Fok Tsun-ting. By 9am, three hours before the ceremony began, security guards were already stationed around the Fok family mansion, Stone Manor, in Pok Fu Lam’s Sassoon Road. Five cranes, with photographers perched on top, hovered above the walled estate while over 80 reporters and photographers were camped outside. Police had to turn away two cranes when the road became too crowded. Then a parade of glittering Jaguars, Mercedes Benzes, Porsches with tinted windows – and even a vintage Rolls Royce – began rolling up to the gate around 10am. Cameras flashed as over 100 of the couple’s family, close friends and a few celebrities arrived for the ceremony and luncheon. Sandwiches and water were given out to the media, as well as boxes of specially designed cookies – one in the shape of the bride’s dress and the other of the groom’s suit. The couple did not emerge to meet the media in person. Former justice secretary Elsie Leung Oi-sie officiated at the ceremony. All this was just the beginning of the wedding extravaganza. Banquets are planned for Saturday at the Nansha Grand Hotel in Guangzhou – the Fok family’s hometown – and on Sunday at the Convention and Exhibition Centre in Wan Chai. The price tag of all the celebrations has been reported at HK$15 million. The couple met in 2004 and dated for seven years. Their relationship was followed keenly by the city’s tabloids over the years, with rumours of an engagement flying around town early this year. Fok’s mother, former beauty queen Loletta Chu Ling-ling, finally confirmed the couple’s plan to marry in May. The groom is vice-president of the Fok Ying Tung Group.

Former chief justice urges HK to defend rule of law (By Lai Ying-kit) Former chief justice Andrew Li Kwok-nang on Thursday urged Hong Kong’s legal profession to hold steadfast to the rule of law and be fully committed the defence of an independent judiciary. Speaking at a ceremony at the Faculty of Law at the University of Hong Kong, Li said Hong Kong was facing challenging developments on both the economic and political fronts. He said that while Hong Kong must deal with – and seize the many opportunities presented by - the phenomenal growth of the mainland’s economy, it must cope with changes in our political system as stipulated in the Basic Law. The Basic Law, Hong Kong’s mini-constitution, states that the city will eventually select the chief executive and the legislature through universal suffrage. “But amid these changes, we must hold steadfast to the core value of the rule of law with an independent judiciary,” Li said. “This core value must never be shaken and must always remain sacrosanct and immutable.” He called on Hongkongers – and the legal profession in particular – to defend this value. “The continued vigour of the rule of law depends on the vigilance of everyone,” he said. “Above all, it depends on the dedication of successive generations of lawyers who are fully committed to safeguarding it.” Li’s comments followed a warning by retired Court of Final Appeal judge Justice Kemal Bokhary that clouds heralding a "storm of unprecedented ferocity" were gathering over the rule of law in Hong Kong. Last month, Basic Law Committee vice-chairwoman and former secretary for justice Elsie Leung Oi-sie launched a withering attack at the city’s legal profession, including judges, saying they lacked an understanding of the relationship between Hong Kong and Beijing. She said this had given rise to mistakes in previous rulings in which the top court, in her view, had superseded the central government’s power. Leung also said asking Beijing to interpret the Basic Law was the best way to curb the influx of mainland women giving birth in Hong Kong.

Hu says Hong Kong well governed (By Colleen Lee) People watch a large screen showing a news broadcast recorded in Beijing during the opening of the 18th Communist Party Congress, in Hong Kong on November 8, 2012. President Hu Jintao expressed confidence that Hongkongers feel proud to be Chinese and can govern the city well, in a speech opening the 18th Chinese Communist Party congress in Beijing on Thursday morning. “We firmly believe that Hong Kong and Macau compatriots not only have the wisdom, ability, ways to govern and develop the SARs [special administrative regions] well, but can definitely play a proactive role in national affairs and share the dignity and pride of being Chinese, along with all Chinese people of different ethnic groups,” Hu said. His remarks come after recent protests in Hong Kong where small groups of people waved the British flag and chanted anti-Chinese slogans. Earlier, Lu Ping, former director of the State Council’s Hong Kong and Macau Affairs Office, told the South China Morning Post: “Those who do not recognise they are Chinese should look at what is written on their passports or they should renounce their Chinese nationality.” Chen Zuoer, former deputy director of the office, also lamented the waving of the colonial flag during protests. As for some Hongkongers’ concerns about integration with the mainland, Hu stressed today that Beijing would continue to support Hong Kong and Macau, to strengthen economic ties to the mainland. The principle of “one country, two systems” was recognised around the world as a success. He said Beijing’s policy principles and significant measures regarding Hong Kong aim at safeguarding the nation’s sovereignty, security and development interests – as well as maintaining the city’s long-term prosperity and stability. He made similar comments in Hong Kong on July 1, at the 15th anniversary of the handover.

More than 8,600 students with financial difficulties were allowed to delay repayments of loans taken from the Student Financial Assistance Agency last year. In answer to a question by lawmaker Gary Fan Kwok-wai on the criteria for waiving or deferring the repayment of loans, Secretary for Education Eddie Ng Hak-kim said 10,034 deferment applications were received during the 2011-12 academic year and 86percent were approved. Ng said it is government policy that no student be denied access to education owing to a lack of means. However, those borrowing from the student loan scheme, the SFAA, are required to repay the money back upon completion or cessation of studies. "The SFAA will, on the basis of individual merits, consider approving the deferment of loan repayment, temporary adjustment of the quarterly repayment amount or extension of repayment period to relieve loan borrowers' financial burden and help them tide over difficulties," Ng said. As student loans are funded by public money, the SFAA has to consider each write-off case cautiously. The agency will only consider write-offs if the borrower has died, cannot be contacted or located or when it is advised to do so by the Department of Justice. In his question, Fan said he has received a request for help from a former student who is suffering from a brain disease and who now has a permanent registration card for those with disabilities. He said the former student has on several occasions applied for a waiver of repayment only to be rejected. However, Ng said that in the past five years the SFAA has received only three applications for a waiver on the grounds of incapacity or permanent disability and that all have been approved. Last year, the government moved to halve the interest rates for student loans from about 3.2 percent to about 1.7percent. The repayment period was also extended from 10 years to 15 years. The relief then came after figures showed about 13,000 borrowers had defaulted on repayment by the end of the fiscal year 2010-11, owing the government HK$213 million in total. Most defaulters - about 9,400 students - were on post- secondary and continuing and professional education programs.

Property developers turn to Hong Kong for IPO (By Wu Yiyao and Wang Ying in Shanghai) Tight regulation on mainland force firms to look elsewhere for capital. Mainland developers raised more than 10 billion yuan ($1.6 billion) in the overseas market in October and at least five of them are seeking to use initial public offerings to raise more than $2 billion and be listed on the Hong Kong Stock Exchange by the end of 2012. The China Securities Regulatory Commission, as part of the government's effort to cool the overheated property market, has not approved a property developer's plan for a listing on the Chinese mainland's A-share market since 2007. Many investors have said the large number of IPOs seen in the past drained away investment capital and drove the stock market into the doldrums. With the freeze on approvals, many cash-starved property companies have turned to other markets to raise capital. The greater enthusiasm for listing in Hong Kong has in large part been "stoked by mainland regulators' comments about lowering the requirements for mainland companies that are seeking a Hong Kong listing", said Wang Jianhui, chief economist with Southwest Securities Co Ltd. According to current regulations, mainland developers must have a minimum of 400 million yuan in net assets and 60 million yuan in annual net profits to be listed in Hong Kong. They also must be capable of raising a minimum of 50 million yuan. The CSRC, the country's top securities regulator, said on Friday that it is considering reducing or removing some of these requirements. Various property developers, including the Shanghai-based CIFI Group Ltd and Jiangsu Xincheng Real Estate Co Ltd, are planning to hold IPOs in Hong Kong. On Sunday, CIFI Group announced that its price per share on the Hong Kong exchange will be between HK$1.33 and HK$1.65 ($0.17 and $0.21), and it will raise between $220 million and $270 million in its initial public offering. The average price-to-earnings ratio for CIFI Group, based on the company's performance in 2012, will be between 3.5 and 4.3. Among mainland property A shares that are listed on the Shanghai bourse, the average price-to-earnings ratio is 6. Analysts said the low issuance prices that are commonly seen in Hong Kong have proved attractive to investors. Since the second half of 2008, the average price-to-earnings ratio of domestic property developers that have been listed in Hong Kong has been 5.8. The limits placed on home purchases in the mainland have also made it more risky to invest in such shares. The low issuance prices will also give property developers more opportunities to expand, said an investment bank source quoted by the Securities Daily. Mainland property developers are seeking to go public in Hong Kong as the property market and macroeconomic policies become more stable, said Hui Jianqiang, research director of Beijing Zhongfangyanxie Technology Service Ltd. In the third quarter, large Chinese developers posted stronger earnings. In the first three quarters of 2012, China Vanke Co Ltd generated 5.08 billion yuan in net profits, up 41.74 percent year-on-year. Analysts predicted the country's largest property developer by market value will have a record amount of revenue in 2012.

Wheelock boss builds SHK stake (By Victor Cheung) Peter Woo Kwong-ching, boss of property giants Wharf Holdings (0004) and Wheelock & Co (0020), has emerged as one of the biggest shareholders of rival Sun Hung Kai Properties (0016), having rapidly built up a stake worth billions this year. The HK$5.5 billion holdings in Hong Kong's largest developer amounted to a 1.9 percent stake as of Wednesday and was held by an in-house brokerage called Corrington. A Wheelock spokeswoman confirmed Corrington was owned by the Woo family. According to data provided by stock commentator David Webb, Corrington started to accumulate a stake in SHKP gradually from mid-2009. After March 2012, when SHKP shares tumbled after its bosses - the Kwok brothers - were arrested on corruption charges, Corrington's holdings soared from 11.2 million shares on March 31 to as much as 53.9 million earlier this month. Then, Corrington's holdings receded to 48.3 million shares. No shareholder of SHKP holds more than a 5 percent stake in the company other than members of the Kwok family, according to stock exchange disclosures. Corrington is not "buying and holding" SHKP shares. It did 327 trades since June 2007, or about one every four trading days. It bought 10.2 million shares on April 3, 2012 - for almost HK$1 billion - and sold roughly the same amount in the next session. This year alone it did 74 trades, or about twice a week. If calculated by the day's close, the HK$5.5 billion stake in SHKP gained 7 percent in the past five years. Since March, Corrington has spent HK$3.2 billion to increase holdings to 31.8 million shares. The Wheelock group has a very modest relationship with SHKP. Their only joint venture in recent years has been the Chengdu ICC, with Wharf, SHKP and Henderson Land (0012). Corrington holds few shares of New World Development (0017), a much closer partner of Wheelock and Wharf. However, it must be noted that Corrington may not represent the entire shareholding of Woo or the group, as there are cross transfers between the brokerage and other private banks.

 China*:  Nov 10 2012

S China's provincial regions conduct joint patrol (Xinhua) Four provincial-level administrative regions in South China have carried out their first joint patrol in the South China Sea with one of the country's largest marine patrol ships, the Beijing Daily reported Thursday. The joint patrol, launched by the maritime safety administrations of Guangdong, Hainan and Fujian provinces and Guangxi autonomous region on Wednesday, was aimed at ensuring maritime traffic security and safeguarding national maritime sovereignty, Shen Chunsheng, deputy head of the Guangxi Regional Maritime Safety Administration, was quoted as saying. The joint patrol team, led by the Haixun 31 patrol ship, is expected to travel 500 nautical miles through a number of harbors and key passages in five days. It will check the navigation, berth and operation of vessels in the South China Sea waters, verify the navigation environment in China-Vietnam maritime border areas and curb some vessels' illegal practices that result in ocean pollution, Shen said in the report. A joint patrol will cement maritime patrol and law enforcement cooperation among the four provincial regions, serve as a deterrent force and guarantee long-lasting traffic security in the South China Sea, said Shen.

Wuhan to spend 40 billion yuan on 'European town' (By Amy Li) People who cannot afford a trip to Europe might consider going to Wuhan. Wuhan, the capital city of China’s central Hubei province, will spend 40 billion yuan to build a “European town”, Xinhua reported on Thursday. The new town aims to attract tourists, businesses, as well as home owners seeking quality housing, a local government official said. Real estate developer Greenland Holdings has been selected as the contractor. It plans to finish the project within five years. Wuhan’s ambition to build the “one and only” European town in central China baffles me. As wonderful as it sounds, what’s the point of spending so much money building a “fake” foreign town? Wouldn’t tourists prefer to enjoy traditional Chinese culture in Hubei? Central China enjoys a rich history dating back thousands of years. I guess it just stopped sounding “profitable” to policy makers. What’s more alarming is the huge cost: 40 billion yuan? The last time I checked, Hubei isn’t the richest province in China. Where will all the money come from? How many secret deals and potential corruption cases will result from this? I hope by the time it’s built, the town will create more jobs and opportunities for people in Wuhan, not just for corrupt officials and greedy developers.

Unchecked corruption could cause collapse of party: China President Hu Jintao (By Reuters in Beijing) Outgoing Chinese President Hu Jintao warned on Thursday that corruption threatens the ruling Communist Party and the state, but said the party must stay in charge as it battles growing social unrest. He also promised political reform, but offered no dramatic changes and ruled out copying a Western style of government. If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state. We must thus make unremitting efforts to combat corruption PRESIDENT HU JINTAO in a “state of the nation” address to more than 2,000 hand-picked party delegates before he hands over power, Hu acknowledged growing public anger over graft and issues like environmental degradation had undermined the party’s support and led to surging numbers of protests. “Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut and long-term political commitment of the party,” Hu warned. He was opening a week-long congress at Beijing’s Great Hall of the People that will usher in a once-in-a-decade leadership change in the world’s second-largest economy. “If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state. We must thus make unremitting efforts to combat corruption,” Hu said in a nearly two-hour speech. The run-up to the carefully choreographed meeting, at which Hu will hand over his post as party chief to anointed successor Vice-President Xi Jinping, has been overshadowed by a corruption scandal involving one-time high-flying politician Bo Xilai. The party has accused him taking bribes and abusing his power to cover up his wife’s murder of a British businessman in the southwestern city of Chongqing, which he used to run. While Hu did not name Bo – a man once considered a contender for top office himself – he left little doubt about the target of his comments. “All those who violate party discipline and state laws, whoever they are and whatever power or official positions they have, must be brought to justice without mercy,” Hu told delegates, one of whom was his predecessor, Jiang Zemin. “Leading officials, especially high-ranking officials, must ... exercise strict self-discipline and strengthen education and supervision over their families and their staff; and they should never seek any privilege.” The New York Times said last month that the family of Premier Wen Jiabao had accumulated at least US$2.7 billion in “hidden riches”, a report the Chinese government labelled a smear. Hu entered the venue accompanied by Jiang, signalling the former president still wields considerable influence in the party and in the secretive deliberations to decide on the new leaders. As Hu delivered his speech under a massive, golden hammer and sickle, a healthy-looking Jiang sat flanked by senior members, party elders such as Li Peng and incoming leaders such as Xi. The congress ends on November 14, when the party’s new Standing Committee, at the apex of power, will be unveiled. Only Xi and his deputy Li Keqiang are certain to be on what is likely to be a seven-member committee, and about eight other candidates are vying for the other places. The congress also rubber-stamps the selection of about two dozen people to the party’s Politburo, and approves scores of other appointments, including provincial chiefs and heads of some state-owned enterprises. “We must uphold the leadership of the party,” Hu said. He also named health care, housing, the environment, food and drug safety and public security as areas where problems had “increased markedly”. The meeting is a chance for Hu to cement his legacy before retirement and ensure a smooth handover of power, and his prime-time speech was a chance to push his achievements and perhaps help steer a course going forward. “It was a rather conservative report,” said Jin Zhong, the editor of Open Magazine, an independent Hong Kong publication that specialises in Chinese politics. “There’s nothing in there that suggests any breakthrough in political reforms.” While Hu promised unspecified “reforms to the political structure” and more encouragement of debate within the party, he gave no hint that China would allow broader popular participation. “We should ... give full play to the strength of the socialist political system and draw on the political achievements of other societies. However, we will never copy a Western political system,” Hu said. While Hu will step down as party leader, Xi will only take over state duties at the annual meeting of parliament in March. Just weeks after anti-Japan riots swept city streets following a row over disputed islands, Hu also said China should strengthen the armed forces, protect its maritime interests and be prepared for “local war” in the information age. “We should enhance our capacity for exploiting marine resources, resolutely safeguard China’s maritime rights and interests and build China into a maritime power,” he said. China is also locked in dispute with Southeast Asian neighbours over areas of the South China Sea. Relations with the United States have been bogged down by accusations of military assertiveness in the region from both sides. The government has tightened security in the run-up to the congress, even banning the flying of pigeons in the capital, and has either locked up or expelled dozens of dissidents it fears could spoil the party. Security was especially tight on Thursday around the Great Hall and Tiananmen Square next door, the scene of pro-democracy protests in 1989 that were crushed by the military. Police dragged away a screaming protester as the Chinese national flag was raised at dawn. The party, which came to power in 1949 after a long and bloody civil war, has in recent years tied its legitimacy to economic growth and lifting hundreds of millions out of poverty. Hu said China’s development should be “much more balanced, coordinated and sustainable”, and it should double its 2010 GDP and per capita income by 2020, as previous targets have implied. But China experts say that unless the new leadership pushes through stalled reforms, the nation risks economic malaise, deepening unrest, and perhaps even a crisis that could shake the party’s grip on power. Chinese growth slowed for a seventh straight quarter in July-September, missing the government’s target for the first time since the depths of the global financial crisis, but other data point to a mild year-end rebound. Advocates of reform are pressing Xi to cut back the privileges of state-owned firms, make it easier for rural migrants to settle permanently in cities, fix a fiscal system that encourages local governments to live off land expropriations and, above all, tether the powers of a state that they say risks suffocating growth and fanning discontent.

Global private equity firm Warburg Pincus has ended its six-year relationship with Greentown China (3900) by selling its entire stake in the mainland developer. The New York-based firm sold 45 million shares of Greentown last night at HK$9.16 to HK$9.36 each, a big discount of 8.03 percent to the closing price. The sales will bring in HK$421.2 million for Warburg, which bought the shares before Greentown listed in 2006. SAR-based Wharf (0004) remains Greentown's second-largest shareholder, a position held since June. It recently bought a Chengdu residential plot for 385 million yuan (HK$476.8 million). But home prices in lower-tier cities, including Chengdu, are expected to fall next year due to oversupply, warns real estate information website Soufun. The mainland also introduced preferential mortgage rates to help first-time homebuyers, but analysts fear this may encourage speculators.

Producers protest US trade duties on solar cells from China (Xinhua) Chinese producers on Thursday protested the United States' latest decision to slash trade duties on solar energy products from China. The decision will seriously harm the Chinese solar energy industry and exports of solar energy products to the U.S., said a statement issued by the Chamber of Commerce for the Import and Export of Machinery and Electronic Products (CCCME). The duties will seriously damage the sustainability of the renewable energy industry in the two countries and across the world, the statement said. Exports of solar batteries from China have not damaged the U.S. crystalline silicon photovoltaic industry and their flagging prices are a result of global oversupply and price drops, the statement said. The U.S. decision will impact global crystalline silicon photovoltaic trade in a negative way, the statement said. "We are disappointed at the protectionist decision made by the ITC (U.S. International Trade Commission). It will reduce investment opportunities in the U.S. solar energy sector and prevent high-tech and high-efficiency batteries from entering the U.S. market," said Gao Jifan, board chairman of Trina Solar, a leading solar module company. "Although this ruling was anticipated, given the ITC's low threshold for injury determinations, we are nevertheless disappointed that they have left the Commerce Department's tariffs on solar cell imports in place," said Jigar Shah, president of the Coalition for Affordable Solar Energy (CASE), a coalition of U.S. solar companies. Shah said the scope of the decision is limited to solar cells produced in China, thereby minimizing harm to the U.S. solar industry. However, "unilateral tariffs and a trade war in today's interconnected global marketplace are unnecessary and detrimental to effective and efficient business competition," Shah said. The ITC on Wednesday gave the final approval for duties on solar energy products from China for the next five years. The ruling has cleared the way for the U.S. Commerce Department to issue anti-dumping and countervailing duties on imports of crystalline silicon photovoltaic cells and modules from China. The Commerce Department determined in October that Chinese producers and exporters sold the products in the U.S. market at dumping margins ranging from 18.32 percent to 249.96 percent, as well as received countervailable subsidies of 14.78 percent to 15.97 percent. The ruling ended a probe that commenced on Nov. 8, 2011 following a petition from SolarWorld, the largest U.S. solar panel manufacturer. It accused Chinese competitors of selling solar cells and panels in the U.S. at low prices through the use of government subsidies.

Tea ceremony added to flight training (China Daily) Student flight attendants of Wuhan Traffic School practice a tea ceremony in Wuhan, Hubei province, on Oct 9, 2012.

US ties in focus as leaders send congratulations (By By Tan Yingzi,Cheng Guangjin,Li Xiaokun) President Hu Jintao and Premier Wen Jiabao congratulated US President Barack Obama on his re-election on Wednesday, noting the "positive" achievements in relations during the past four years. In his message of congratulations, Hu said China will "look to the future and continue to strive for greater progress in the China-US partnership," Foreign Ministry spokesman Hong Lei said at a daily briefing shortly after Obama's re-election. Vice-President Xi Jinping also sent a message of congratulations to US Vice-President Joe Biden, Hong said. The election means Washington will engage more with Beijing during Obama's final term, experts said. They generally hold an optimistic outlook for China-US relations. A number of experts said one of Obama's main challenges over the next four years will concern fleshing out US policy. This includes military "rebalancing" in the Asia-Pacific region. He also has to put in place a new foreign policy team and formulate durable trade policies with China. Cai Mingzhao, spokesman for the 18th National Congress of the Communist Party of China, said on Wednesday China expects the US to "respect each other's core interests" and "effectively manage and control" friction. A number of China specialists in the US have approved of Obama's China approach so far, especially regular exchanges in trade, defense, culture, education and tourism. China and the US are each other's second-biggest trading partners. In 2011, Chinese imports of US goods and services exceeded $100 billion for the first time, making China the fastest-growing US export market, according to the Ministry of Commerce. In addition to the thousands of US investments in China, the US has become a popular investment destination for Chinese companies. The world's two biggest economic powers have worked to address pressing global and regional issues such as the financial crisis, climate change and nuclear security. Despite pressure from Congress, the Obama administration has not labeled China a "currency manipulator". Michele Flournoy, senior foreign-policy adviser to the Obama re-election campaign and a former undersecretary of defense for policy, told China Daily earlier that she didn't foresee any second-term changes by Obama toward China. "President Obama will continue to invest in this relationship, which is so critical to both of us economically and to stability across the region," she said. Bai Fengjun, research director at the United States Information Technology Office in Beijing, is optimistic. "It's easier for China to deal with an existing administration and Democrat policies are better toward China, not as tough as the Republicans," Bai told China Daily. But ties will face challenges, Bai said. One of these challenges, according to Jonathan Pollack, an expert on Asia-Pacific security at the Brookings Institution and acting director of its John L. Thornton China Center, is to find suitable replacements for his departing foreign-policy team, led by Secretary of State Hillary Clinton and Kurt Campbell, assistant secretary for East Asian and Pacific affairs. Senator John Kerry is tipped to succeed Clinton. The Massachusetts Democrat, who lost his bid for the presidency against George W. Bush in 2004, has ample experience in foreign policy. Also on the shortlist are US Ambassador to the United Nations Susan Rice and Tom Donilon, Obama's national security adviser. Da Wei, an expert on US studies with the China Institutes of Contemporary International Relations, said building trust as new people take up positions will be a priority. "As the US aims to increase engagement with countries in this region, it should not be at the cost of its relationship with China,'' Da said. Douglas Paal, director of the Asia program at the Carnegie Endowment for International Peace, said Obama should change his Asia policy by focusing more on the economy. The president of the US-China Business Council, John Frisbie, said earlier that the US should focus on better interaction with China. Such an approach has led to the yuan appreciating by more than 30 percent since 2005, Frisbie added. A survey by the council showed more than 90 percent of US firms that have invested in China have done so mainly to serve the Chinese market, not to outsource production and export back to the US. Wang Honggang, assistant director of the Institute of American Studies at the China Institutes of Contemporary International Relations, said that during Obama's second term there will probably be fewer tensions as both countries have experience in dealing with each other.

Hong Kong*:  Nov 9 2012 

Eight years later, Guo and Fok will dive in the deep end (By Sun Xiaochen) Guo Jingjing (right) and Kenneth Fok Kai-kong will be married on Thursday. Retired four-time Olympic diving champion Guo Jingjing will marry Kenneth Fok Kai-kong, the son of Hong Kong tycoon Timothy Fok Tsun-Ting, in a multi-day, multi-city celebration this weekend. The couple's romance has drawn headlines since it became public in 2004, though a wedding date hadn't been confirmed. According to the Guangdong-based Nanfang Metropolis Daily, Guo and Fok will make things official at the Fok family mansion in Hong Kong on Thursday before treating guests from sports, politics and business to a feast two days later in the Nansha Grand Hotel in Guangdong province, where the family has roots. The hotel will cater to almost 100 guests with an eight-course, three-hour banquet, which will begin at 6 pm and include a pre-dinner party and a firework show on the lawn. Guo, an animal-rights activist, will not serve shark fin, a traditional delicacy at Chinese wedding receptions. The celebration will shift to the Hong Kong Convention and Exhibition Center on Sunday, when more relatives, celebrities and political figures will help wrap up the affair. Guo's former national teammates Wu Minxia and Li Ting, both Olympic gold medalists, will attend the Hong Kong leg as bridesmaids, while Fok's two brothers - Eric Fok Kai-shan and Jeremy Fok Kai-yan - will be the best men, according to Unlike many high-profile couples, who prefer to keep their weddings private, the Fok family has invited the media to cover the event and released details to the public. According to multiple Hong Kong media reports, the wedding will cost the Fok family about 15 million yuan ($2.4 million). The family has also bought a house, reportedly worth 30 million yuan, for the couple and has given a 10-million yuan cash gift to Guo's family. Those figures are down from what they might have been, however, because Kenneth and his father were involved in lawsuits with other family members over how to split and manage their inheritance from patriarch Fok Ying-tung. The 33-year-old Kenneth, the eldest grandson of Fok Ying-tung, met Guo when she competed at the 2004 Athens Olympics, where she claimed gold medals in the synchro and individual 3m springboards. Their relationship was soon making headlines after a photograph of them was published. Guo moved on to defend her two titles at the 2008 Beijing Olympics and announced her retirement from diving in January. Her last major event was the 2009 East Asian Games in Hong Kong. After that, she returned to Remin University to continue her undergraduate studies in business management. She also began learning English, a move widely believed to be preparation for her entry into the Fok family. Inspired by Kenneth's father, the president of the Sports Federation and Olympic Committee of Hong Kong, the family has a tradition of supporting and funding sports developments both on the Chinese mainland and in Hong Kong.

Hong Kong-based jockey hailed after victory on Green Moon in Melbourne Cup (By Alan Aitken) Brett Prebble tells how he ignored advice and went for line early to snatch victory in Melbourne classic and put himself in frame with the sport's greats. Trainer Robert Hickmott, Hong Kong-based jockey Brett Prebble and owner Nick Williams celebrate with the Melbourne Cup after 19-1 shot Green Moon's sensational victory at Flemington. Hong Kong-based Brett Prebble cemented his place among the world's best jockeys and repaid millionaire owner Lloyd Williams for two decades of faith with Green Moon's victory in the Melbourne Cup yesterday. Prebble, 35, was aboard Green Moon on a fly-in, fly-out basis for the world's biggest staying event, having been booked by owner Williams only last week. But their connection goes back to his days as an apprentice. The jockey spent a good part of his indentures at Flemington with trainer John Meagher, who trained 1985 Cup winner What A Nuisance for Williams, along with most of his other horses at that time. "We've been associated with Brett for 20 years, back to when he was an apprentice," said Williams' son, Nick. "And as a senior, Brett did all our riding before he left to ride in Hong Kong. With everything he's done over there, and now this, he's established himself as probably one of the two or three best riders in the world." Prebble's previous best Cup finish was third in 2009 on C'est La Guerre for Williams. Green Moon was the fourth winner since 1981 for the wealthy businessman, who has spent vast fortunes in search of Cup glory. "The four have all been trained by different trainers, ridden by different jockeys and each one was different in its own way," Lloyd Williams said. "I'm a Melburnian. I was a committeeman at the Victoria Racing Club. I love this race." Prebble looked to ride a perfect race on Green Moon, parking him a few lengths off the pace throughout the race. But he confessed he went for home early and threw out tactical advice he had sought from career mentors like Meagher, Melbourne Cup-winning trainer David Hall and Lloyd Williams himself. "Johnny Meagher told me to count to 10, David Hall told me to count to 10 and Lloyd told me count to 15 - I counted to five," Prebble laughed. "Actually, I pressed him a bit soon but it's hard to wait when you've got so much power underneath you. "As far out as 1,200 metres, I knew nothing would go with me if he sustained the distance and he ran right through the wire. It's my life's dream." Prince Charles attended the Cup for the first time since 1985 when, coincidentally, he presented the trophy to Williams after What A Nuisance's success. Prebble's wife Maree did not fly to Melbourne for the Cup but stayed in Hong Kong watching his triumph on television in their Sha Tin apartment. "I stayed here with the kids and when he got to the front, we all went absolutely crazy," she said last night. Prebble was due to return for rides at Happy Valley tonight, but Jockey Club stewards acceded to a request from the hosting club for Prebble to be released from those rides "to allow him to fulfil a considerable number of media and sponsorship obligations". Chief steward Kim Kelly said: "We did the same for Gerald Mosse two years ago after he won on Americain and we thought it was important to take a pragmatic view." The world's biggest handicap became a blowout for punters, even though a local turned back the tide of visiting northern hemisphere trainers. Robert Hickmott landed his biggest success with Green Moon's win at 19-1, while leading Sydney trainer Gai Waterhouse finished runner-up for the third time in the Cup with 30-1 chance Fiorente. The third horse, Jakkalberry (80-1), was the first foreign-trained finisher for Marco Botti, while Australian-trained horses also took fourth and sixth. Defending his Cup, 6-1 favourite Dunaden finished 14th, while 2010 winner Americain battled home in 11th place.

Healthy 'youtiao'? Chengdu vendor finds breakthrough recipe (SCMP) Congee and youtiao, traditional breakfast foods in China. Chinese youtiao-lovers will be thrilled to learn about a recent breakthrough by a Chengdu vendor to make healhy versions of the deep-fried dough stick. Youtiao is a popular but unhealthy breakfast food in China. Li Gang, a street vendor in Chengdu, the capital of Sichuan province, took the initiative to try to make healthier ones – without using a raising agent that contains high levels of aluminum, a newspaper reported. “I have conducted more than 50 experiments,” Li told Chengdu Business Daily. His efforts paid off when he finally came up with a way to make youtiao without aluminum, the unhealthy but essential ingredient that makes youtiao crispy. The secret is to add eggs in the dough before frying the dough, Li said. The newspaper says results from Chengdu’s food safety testing centre show Li’s youtiao contains 16mg/kg of aluminium, much lower than national safety limit of 100mg/kg. Over-consumption of aluminium can lead to damage to the nervous system, which can contribute to the loss of memory, according to the food safety testing centre. Li’s new creation boosted his daily youtiao sales, he told reporters. Each cost only 1 yuan. Reports about Li’s new invention quickly led to an online buzz. Li won public praise as the recent food safety crisis in China played on everyone’s minds. He was even given the nickname “youtiao brother” by people online. “‘Youtiao brother’ has brought shame to the illegal food produces,” one person commented. Another wrote: “His sincerity and good fair has deeply moved me.” A well-known angel investor Xue Manzi even invited Li to launch a business in Beijing.

Ex-TVB boss Stephen Chan’s lawyer retracts comment in bribery case (By Austin Chiu) Former TVB general manager Stephen Chan arrives at Hight Court for day two of his hearing. A lawyer for ex-TVB general manager Stephen Chan Chi-wan retracted an argument in court on Wednesday, after a judge warned him it was a “dangerous” justification for anyone to accept bribes. Chan is in court this week facing an appeal by the ICAC against his acquittal in District Court last year, on corruption charges under the anti-bribery ordinance. The case turns on Chan’s acceptance of a HK$112,000 payment from Olympian City in 2010, behind the back of his employer TVB, to perform in the live talk show Be My Guest, which was held at the mall. Joseph Tse Wah-yuen SC, for Chan, had said on Tuesday that the celebrity’s appearance on the show was “beneficial” to TVB, which gave him a reasonable excuse to think he was justified in accepting the payment. On Wednesday, however, Tse abandoned the argument, saying: “We … will not rely on the submission that if the act was beneficial to TVB then it is a reasonable excuse [for Chan to have received the reward].” Tse was reacting to a warning from Mr Justice Wally Yeung Chun-kuen, in Tuesday’s session, that his suggestion was dangerous, and asking for a clarification because “people can use it as an excuse to receive [a] reward by saying that their act is beneficial to their principal”. The Independent Commission Against Corruption is asking the Court of Appeal to reverse a District Court verdict and to find Chan, and his then assistant Edthancy Tseng Pei-kun, guilty of three charges under the Prevention of Bribery Ordinance. Acting Chief District Judge Poon Siu-tung acquitted Chan last year, ruling that he had appeared on the show as a celebrity or an artiste, not as a TVB general manager. On Wednesday, Tse stressed that in deciding whether Chan was guilty, his state of mind at the time of accepting the reward should be considered. Because Chan did not intend to influence or affect TVB’s business, he should not be convicted, Tse said. The appeal continues before Yeung, Mr Justice Peter Cheung Chak-yau and Madam Justice Maria Yuen Ka-ning on Wednesday afternoon.

Tsang defends market-intervention, old-age allowance policies (Stuart Lau) The government is using market-intervention policies only as temporary measures to restore “balance” to weak sectors, Financial Secretary John Tsang Chun-wah said on Wednesday morning. Speaking at a forum on welfare populism, Tsang said: “We are still a firm believer in the market and, it is only when the market begins to fail that, in selected areas, we introduce intervention helping to restore the balance.” “Once the balance has been restored, we return to the status quo.” His remarks were in response to earlier speakers who raised doubts about current government measures to curb the property market uptrend, including stamp duty policies. Tsang then gave a speech in which he defended the government’s plan to have the Legislative Council approve its new old-age allowance scheme. “Some members in the legislature continue to advocate that all people in our community – regardless of their state of wealth – should receive the allowance as a right, and insist that it should not be means-tested. “Some people go as far as to justify that the allowance should be the first step to a universal retirement protection scheme for all, which is another question altogether.” That suggestion, he said, is “a really slippery slope for us to embark upon”. “I believe that any welfare programme should be affordable now, without placing too heavy a burden on future generations,” Tsang said. “Politicians worldwide are often tempted to introduce welfare measures … but the cost will often only become evident in the future,” he said, citing the Greek and Argentine examples of economic breakdown. The forum was co-organised by the Fraser Institute, a Canadian free-market think tank, which has ranked Hong Kong first in its latest index on global economic freedom.

 China*:  Nov 9 2012

Modern agriculture pushes county forward (China Daily) After adjusting measures to the local environment and taking advantage of its unique geographic and climate conditions, She county in Hebei province has greatly developed its characteristic and modern agriculture and improved output efficiency. From January to September this year, the per capital income of farmers in She county reached 5,132 yuan. 

Japanese investors 'will not exit China' (By Bao Chang) Market potential too important for companies to ignore, envoy says. Japanese companies are not pulling out of the Chinese market despite tension over the Diaoyu Islands, a Japanese envoy said. "Japanese investors will not exit China because of the importance of the Chinese market and Japanese companies will not give up," said Atsuyuki Oike, the economic section minister of the Japanese embassy in Beijing. Oike said he has not received any information of a Japanese company deciding to withdraw. Japanese companies are boosting their presence overseas due to sluggish domestic demand. By the end of 2010, the number of Japanese enterprises in China had reached 22,307, with total registered capital of $94.08 billion. Tian Xue, a spokeswoman for the Tianjin Economic-Technological Development Area, a major investment destination for Japanese companies in China, said that no Japanese company had left the area. However, Oike said some Japanese investors had concerns over investment in China following tension between the two countries. The Japanese government "purchased" the islands in September from so-called Japanese private owners, a move that caused widespread anger in China. Reuters released a survey illustrating that almost a quarter of Japanese manufacturers are rethinking investment plans in China and some may shift production. "Japanese investment in China may see a slowdown in the next two months, because of a slump in sales in China," Oike said. "But in the long term, investment will return to normal levels. Any plans to suspend investment are temporary," he said. In the first nine months of this year, Japanese investment in China hit $5.62 billion, a year-on-year rise of 17 percent, making it the leading overseas investor, according to the Ministry of Commerce. Commenting on Japanese companies reportedly increasing investment in Southeast Asian countries, Oike said that it doesn't necessarily mean that Japanese companies are shifting away from China to elsewhere. "The investment plan in Southeast Asian countries, such as Thailand, only aims to meet demand from the local market through localized production," Oike said. Yao Haitian, a researcher from the Institute of Japanese Studies at the Chinese Academy of Social Sciences, agreed. Citing the potential of China's market, Yao said it would be hard for Japanese companies to give up investment plans in this country. "Compared with the investment environment in Southeast Asian countries, China has its own advantages, including mature infrastructure, workforce and market mechanisms, which tailor to the needs of Japanese companies," Yao said. But tension over the islands is likely to cast a shadow over economic ties, he said. The auto sector was worst hit, according to the Japanese embassy. Toyota said it sold 45,600 vehicles in China in October, the second straight month of falling sales, which are down 44.1 percent from the same period last year. Honda reported monthly sales of 24,115 cars in October. This represented a drop of 53.5 percent from a year earlier and Nissan sold 64,300 cars in October, down 40.7 percent year-on-year. Auto sales in China account for nearly a quarter of Japanese global vehicle sales, experts said. "Although they are suffering big drops, Japanese car giants will get through the difficult times thanks to their strong international competitiveness," Oike said. Oike said it is the small and medium-sized Japanese car component suppliers that are confronted with the most serious problems. Japanese retailers in China have seen business recover, he said.

Expats in China turn out largely for incumbent (By By Cheng Guangjin and Li Xiaokun) A US embassy staff worker in Beijing tries to reset the cardboard cutout of Mitt Romney after an invited guest (center) accidentally bumped the cutout in trying to take a photo with the cutouts of Romney and Barack Obama. From a US embassy reception to cafes and bars in major Chinese cities, American expats gathered from early on Wednesday morning to watch the outcome of the election. It seems young US nationals are more supportive of Obama, a cafe manager in Beijing said. Some US expats also told China Daily they chose to support Obama as he is friendlier toward China and will help ensure stable relations between the world's two biggest economies. Joseph Halvorson, 27, said he had mailed his vote for Obama, as he liked his bill that allows people under 26 to be covered by their parents' healthcare plan. Halvorson, a reporter for the Beijing Review, was attending an election results party held by the US embassy in a hotel. Hundreds of people, including Chinese and other nationalities, were at the event, where five large screens fed live TV coverage from the US. Edward Han, an American national of Chinese origin and director of Asian Affairs with the Recreation Vehicle Industry Association based in Reston, Virginia, voted for Obama, saying "he deserves another four years". "He took over an awful mess from his predecessor," he said. "And the economy was not good in the last four years. Considering all these, Obama has actually done a quite good job." Andrew Bradner, vice-president of marketing and strategy in China for Schneider Electric, said he liked Obama's foreign policy, which was "more engaging on a global level", while on social policies he agreed more with Romney. At the Bridge Cafe, in the Haidian district, surrounded by several famous universities, the first customer arrived just after 7 am. "FREE BEER if Obama Wins!" read the cafe's promotion for the event. "Now we have more than 100 US nationals here watching CNN, and they are quite enthusiastic," said cafe manager Nell Chen, adding that it was her American business partner's idea to hold the occasion. "He wants the US expats to feel the atmosphere of the election, even though they are staying far away in Beijing," Chen said. "It seems that many youngsters support Obama, while senior people are more in favor of Mitt Romney." The atmosphere at Camel Sports Bar in Xuhui, Shanghai was also heated, with more than 80 US nationals, mainly aged 20 to 30, gathering to show support for Obama. The bar has said in its advertisement that is especially welcomed those who voted for Obama, though the boss is an Australian. "The atmosphere here is even hotter than that in the US," Gavin Chen, from North Carolina, told China Daily. "There are not many US nationals in Shanghai, so they choose to gather together to wait for the result, while in the US people tend to stay at home."

US-China relations to stay the course in 2nd Obama term (By ZHANG YUWEI in New York) Obama supporters are celebrating cheerfully in Times Square, New York as Barack Obama has been re-elected. The culmination of the US presidential race on Tuesday would also seem to end the slew of anti-China remarks from both major-party candidates, but experts say the outcome won't alter the nature of US-Chinese relations. By turns, the newly re-elected Barack Obama and Republican hopeful Mitt Romney raised the specter of China as a threat to US economic prosperity but also as a potential partner — provided the Asian nation hews to Washington's version of fair trade. In televised debates and campaign commercials, and at rallies for supporters, a litany of complaints against Beijing was unfurled — currency valuation, job outsourcing, the bilateral trade imbalance. Critics of such "China-bashing", including senior figures in each candidate's party, said the campaign would have done well to focus on domestic solutions to these problems rather than China's supposed role in creating them. In the second Obama term, which begins in January, trade disputes with China that erupted this year or earlier will mean continued friction between the world's two biggest economic powers. Unlike Romney, the Democratic president didn't promise to brand China a "currency manipulator" come January, but a series of decisions by Obama seemed to provide a glimpse into the near-term future of US-Chinese economic ties. Chen Zhiwu, a Yale University finance professor who is an expert on China's economy, said he expects more bilateral economic disagreements and further signs of protectionism by the United States under Obama. "More restrictions are likely, especially during his second term," Chen said. "He will have to pay back those voters in Ohio, Wisconsin and, of course, Michigan." He was referring to manufacturing-reliant states in which Obama had campaigned heavily but where voters have long felt stung by the outsourcing of jobs to low-cost labor markets including China. In September, while campaigning in Ohio, a state where one in eight jobs is tied to the American auto industry, the president announced his administration's trade complaint against Chinese automakers and auto-parts suppliers with the World Trade Organization. It was a move seen by many as an attempt to win "swing" state voters in the election. As Obama stressed in his final debate with Romney, his administration has brought more cases against China to the WTO than George W Bush did during his two presidential terms. That record was also cited by US Ambassador to China Gary Locke at a recent town hall discussion in Beijing. "We are constantly pressing China to do even more," Locke said. This year alone, the Obama administration has imposed tariffs of as much as 250 percent on imports of Chinese solar-energy panels. Industry players in both countries have warned that the tariffs — meant to punish China for State subsidies of its solar industry — would be mutually damaging. A final determination on whether to implement the tariffs is expected sometime this month. A study by the Coalition for Affordable Solar Energy, a group of US solar firms, found that a 100 percent or 50 percent tariff on imported Chinese panels would lead to the loss of about 50,000 or 43,000 American jobs, respectively, over the next three years. Ann Lee, an economics professor at New York University and author of What the US Can Learn from China, said the Obama tariffs are in stark contrast to Romney's rhetoric. "In fact, Obama's stance against China is so hawkish that it makes former president George W Bush look soft in comparison, she said. Obama is likely to try to mend the US-China relationship and "initiate greater diplomacy over a range of issues to find common ground", Lee expects. Romney, she said would probably have done "the opposite, given the strong interest groups in Washington that want to label China an enemy". The US economy has rebounded — slowly — from the subprime-mortgage crisis and resulting financial tumult Obama inherited in 2009. While his policies, some a continuation of Bush's, helped avert catastrophes in the banking and automotive industries, Obama is also blamed for an unemployment rate that has hovered around 8 percent, spending that helped push the government's debt to $16 trillion and a health care overhaul that Republicans claim is too costly. At least 37 US states are home to some form of Chinese investment, supporting about 30,000 jobs in sectors including auto parts, information technology and services, according to consulting firm Rhodium Group. The upside of this economic activity was offset by the candidates' campaign talk of China as an economic threat. Obama in September blocked Ralls Corp, which is owned by executives of China's Sany Heavy Industry Co, from buying four wind farms near a US navy test site in Oregon, citing national-security concerns. It was the first time in more than two decades that a US president barred a foreign investment. In October, the House of Representatives Intelligence Committee capped a yearlong investigation with a report accusing Chinese telecommunications providers Huawei Technologies Co and ZTE Corp of allegedly unfair and illicit practices. The report warned US companies and the federal government that the two Chinese suppliers threaten national security and shouldn't be trusted as business partners. Jon Taylor, a professor of political science at the University of St Thomas in Houston, said that a continuation of China-bashing would be "good politics, bad economics". "It is counterproductive for bilateral relations that are far more extensive than just economic issues," he said. "Blaming China for jobs lost during a recession may be popular with the average American voter, but the worst thing that could happen to the American economy is if China's economy were to falter." Zhu Zhiqun, a professor of political science at Bucknell University in Pennsylvania and author of US-China Relations in the 21st Century: Power Transition and Peace, said Obama's victory means there will be no change in White House policy toward China and Asia. "Democrats tend to have a fuller agenda and often have conditions attached to commercial relations," Zhu said. "They are more likely to emphasize universal values such as democracy and human rights in the relationship."

Hong Kong*:  Nov 8 2012 

Hong Kong child piano prodigy wows American TV audience (By Amy Nip) A Hong Kong child prodigy has wowed one of America's biggest talk shows, after his piano playing went viral on YouTube. Dressed in a white tuxedo, six-year-old Andy Lee could just about reach the grand piano on the Ellen DeGeneres Show on Monday. But if he at first appeared tense, Lee quickly showed his flair as a precocious player, his fingers darting along the keyboard as he charmed viewers with Rimsky-Korsakov's Flight of the Bumblebee. After the last note, Lee threw his hands in the air, like a gymnast after a golden Olympic performance. The audience of 100 erupted in a standing ovation. Lee was invited onto the weekday programme - which has earned 35 Daytime Emmy Awards during its eight seasons - after his YouTube video won almost two million views since going viral in September. Lee began playing piano aged three, has already climbed to grade five standard and cites Mozart as his favourite composer - and perhaps role model. He told Ellen: "He plays well and he is a music prodigy." Showing his age, Andy added he chose a white outfit to meet America because it is prettier and said he would like pet dogs named Teddy and "little flower". Music teachers say it usually takes a pupil four to five years to reach grade five, while an outstanding student may accelerate to this level in two or three years. Wilson Chu, consultant of the Vienna Music Examination Board, who has seen local children learning instruments at age two due to parental pressure, warned against hot-housing, saying students cannot learn effectively before the age of four. "Putting too much pressure on them could backfire," he said, adding that it is better for children to play an instrument for a few years before sitting exams. The London-based Associated Board of the Royal Schools of Music sees about 310,000 non-British candidates every year. Hongkongers make up one third of them.

Yan can and has done it (By Anna Healy Fenton) Chef Martin Yan, Chariman of Chef Martin Yan's Culinary Arts Center. As a success story television chef Martin Yan is one of the more inspirational. Raised in a Guangdong village, his father died when he was five, and his mother did not get the chance to be educated, so the fledgling chef, who started cooking at 13, had to make his own way in the world via Hong Kong and later California, where he now lives, on a half-acre plot, complete with herb garden. “And no, I don’t eat dogs, I have a dog,” he says. Now firmly established as the chef who put Chinese cooking on television and made it fun, with his kung fu knife swirling antics, he says, "When I started there were no television chefs, now there are thousands." He was visiting Hong Kong’s Tung Chun soy sauce and food manufacturers on Saturday. He loves Hong Kong, and says we still have the world’s best Chinese restaurants. One of the first things to happen to him during his visit was a random cold call from Citibank’s tele-marketing folks. Just how do they expect to get business when they do something so annoying? “They should only call people who have money,” joked Yan, and continued with tales of his new San Francisco restaurant, opening soon in Union Square, and how the World Bank flies him across the globe for a day to entertain conference delegates’ wives and spouses with a cooking demo. “Now they have lots of money, “he said. Good for him, but interesting how they choose to spend all that loot. Made in Hong Kong – now the Gold Standard - Remember not so many years ago when “Made in Hong Kong was synonymous with cheap and tacky? Well not any more. Yan says that in the US a “Made in Hong Kong” label is now seen as the gold standard, especially for Chinese food and food products. Hong Kong’s glowing reputation for excellence has spread far and wide in recent years, he said, adding that people in the US always ask if Chinese food and food products come from Hong Kong or China. If it’s China, they won’t touch it, he said, but if the origin is Hong Kong, they are very happy. The irony of this of course, is that, apart from a handful of homegrown companies like Tung Chun, few true Hong Kong brands survive and very little is actually manufactured here any more. Yan, on the other hand, has no worries about his brand. Crowds of Mongkok shoppers had no trouble recognising him from across the street. 

Singapore model Stephanie Chai promotes luxury holiday site in Hong Kong (By Vivian Chen) Stephanie Chai (left) and Upper House GM Dean Winter. Mention flash-sale websites and most people imagine a few dollars off on a facial package or steak dinner. But in a market saturated with players, some sites are targeting a more niche audience in order to stand out. Singaporean model-turned-entrepreneur Stephanie Chai was in town last Friday to introduce her site The Luxe Nomad, which offers luxury hotel and resort packages with discounts up to 70 per cent off. Chai hosted the media at the Upper House, the luxury hotel in Admiralty, joined by celebrity couple Jocelyn Luko and Anthony Sandstrom. Every month, a different celebrity will take one of the holiday trips The Luxe Nomad offers and share the experience on the site's blog. Luko and Sandstrom are this month's big names. Chai says she was inspired by her own globe-trotting lifestyle. "As someone who is always flying last minute and makes it a point to get out of town once a month, I felt it was every travellers' dream to have a site like this," she says. For the coming holiday season, she is planning to hit the beach. "Since launching the site, I don't think I've ever worked harder. So for once in my life, I don't mind forgoing the traditional New Year's Eve party and just having a quiet one with the sun, sea and sand." For her, the key to the perfect getaway is good company. "Sometimes having too many friends can be an issue though - I once had a hen party in Bali with 20 girls, half of whom I had gone to school with. Let's just say the bossy girls - including me - were still bossy and it would take at least half an hour to decide where to eat."

Jewellery-inspired high tea with Ritz Carlton-Qeelin collaboration (By Vivian Chen) Jewellery designer Dennis Chan (left) and pastry chef Richard Long. Jewellery-inspired high tea - surely no tai tai can resist the allure? Dennis Chan, the creative director of French jeweller Qeelin, has joined with the Ritz-Carlton's culinary team to use his Chinese-inspired, often whimsical designs as the basis for a special afternoon tea set. In place of the usual logo-emblazed cupcakes and fruit tarts, executive pastry chef Richard Long and his team have created a chocolate financier that mimics the goldfish figure from Qeelin's Qin Qin collection, panda-shaped chocolates inspired by its Bo Bo line, and chocolate raspberry crème with the Chinese symbols of fortune from its Wu Lu range. The desserts, which appear strikingly similar to the pieces of jewellery from which they were inspired, wowed the designer himself. "The chocolate version of our signature Wu Lu piece looks very real and tastes superb as well," Chan said at a tasting session last Friday. He said jewellery design and culinary art shared some similarities. "They both focus on details," he said. "This is especially true when it comes to desserts. The size of the item is small, like a piece of jewellery, and both stimulate a person's visual sense. The Qeelin afternoon set, which comes with a special gift from the jeweller, is available throughout the month at Ritz Carlton's The Lounge and Bar on the 102nd floor.

Morgan Stanley cuts private banking staff (By Lulu Chen) Morgan Stanley this week laid off several people in its private banking department in Hong Kong, including one vice-president and some associates and analysts. The bank joins several of its peers in the city that have been cutting back on staff in this area in a year marked by weak markets, dwindling client appetite for investment and trading, and intense competition. Julius Baer and Goldman Sachs are among others that have also laid off staff recently. Morgan Stanley declined to comment. The dismal investment environment in Hong Kong, which has led to much lower than usual trading activity, and the fragmented market – exacerbated by increasing competition from new players – have made this year especially difficult for private banks. "The market slowed down considerably compared to last year. Trading revenue has reduced substantially. Market outlook remains uncertain and banks are taking a cautious approach to reduce cost to income ratio," said Jerry Chang, a director of recruitment firm Barons & Company. Kenny Lam, a McKinsey partner who specialises in private banking, said: “Costs remain high while revenues have dropped. Profit margins are down to the lowest point in the past five years, based on our estimates.” Even so, banks are seeking access to rising wealth on the mainland through bases in Hong Kong. In doing so, some banks, including DBS, Bank of Singapore and Credit Suisse, have been looking for talent. The mainland is estimated to contribute over 50 per cent in the revenue growth for Asia’s private banking business. In terms of the number of high-net-worth individuals, 40 per cent are located in the Pearl River delta, 31 per cent in the Yangtze delta and 11 per cent in the Bohai region, according to a report by McKinsey. The global management consulting firm expects the number of high-net-worth individuals with investable assets of more than 10 million yuan (HK$12.3 million) and ultra-high-net-worth individuals with investable assets of more 100 million yuan to grow by about 20 per cent a year up to 2015 on the mainland. 

Which does Hong Kong care about more: US election or China party congress? (By Hedy Bok) As the US and China gear up for potentially momentous transitions in their capitals, what do people in Hong Kong think of the implications? And which do they care about more – the presidential election across the Pacific or the Communist Party congress in Beijing? It turns out (according to our unscientific sample, see video) many locals think that the Chinese leadership transition is more important because it is closer to home. A few are following the US elections more closely because it represents partisan involvement as opposed to the perceived secrecy of the selection process in the 18th party congress. In fact, less than 26 per cent of locals trust the Beijing government, according to a September poll of 1,000 people by HKU’s Public Opinion Program. Several respondents also expressed general apathy about political events. The Chinese Communist Party's 18th congress, scheduled to start in Beijing on Thursday, is the most important political meeting in China in 10 years. A new generation of leaders, including Xi Jinping and Li Keqiang, are expected to be placed in the party's top positions, replacing the current leadership headed by Hu Jintao. The United States' 57th quadrennial presidential election takes place on November 6. Incumbent President and Democrat Barack Obama is running for a second term. His major challenger is the former Massachusetts governor, Republican Mitt Romney.

C.Y. Leung refuses to shelve HOS flat sale, citing shortage (By Lai Ying-kit) Home Ownership Scheme flats at Yau Tong. The government will go ahead with a plan to sell 5,000 second-hand subsidised flats to middle-class buyers, Chief Executive Leung Chun-ying said on Tuesday. Leung was speaking after legislators on Monday passed a non-binding motion calling on the government to suspend the new measure, which he announced in July. The motion passed by a 9-5 vote in a housing panel meeting. Under Leung’s plan, 5,000 “white-form” applicants for Home Ownership Scheme flats – prospective buyers of a subsidised unit currently living in a private flat and who did not receive a housing subsidy – will be able to buy second-hand HOS flats without paying a land premium, from next year. Market analysts say the prices of second-hand HOS flats have jumped as much as 10 per cent since the new policy’s announcement, because applicants now face keener competition for flats. Dismissing the calls to shelve the plan, Leung said on Tuesday that the recent rises in flat prices were due to a general shortage of housing, not due to his new policy. His plan, he said, would speed up transactions in the secondary property market, which would in turn increase the flat supply. The scheme was an essential part of his multi-pronged approach to solving the city’s housing problems, Leung said. “If we shelve this plan, and if at the same time other plans to increase supply are delayed – such as the development plan for northeastern New Territories – we will only see a longer queue for public housing, higher flat prices and rents, and more cage homes,” he said.

ICAC appeals acquittal of former TVB boss Chan (By Austin Chiu) Stephen Chan Chi-wan leaves the District Court after being acquitted of corruption and fraud charges in September, 2011. The Independent Commission Against Corruption on Tuesday appealed against the acquittal of former TVB general manager Stephen Chan Chi-wan and his former assistant on corruption charges. The prosecution asked the Court of Appeal to reverse the acquittal by the District Court, saying the trial judge had made mistakes in applying the law. The original case arose after Chan was paid HK$112,000 to host a live talk show, Be My Guest, in a 2010 New Year’s Eve countdown programme held at Olympian City. He was paid through a company run by the co-accused – Chan’s former assistant EdthancyTseng Pei-kun. Eric Kwok Tung-ming SC, for the graft buster, said Chan should have been acquitted only if the hosting work had been “genuine moonlighting” – unrelated to his manager’s job with TVB. Chan confirmed he would appear on the show only after TVB agreed to host it. In September last year, Acting Chief District Judge Poon Siu-tung acquitted Chan of three charges under the Prevention of Bribery Ordinance, ruling that he had played host as a celebrity or an artiste, not as a TVB general manager. Kwok said Chan should have been convicted because the work was not “genuine moonlighting”, but instead was “in relation to his principal’s [TVB’s] affairs or business” Kwok said Chan’s hosting of the talk show was related to TVB business because it would affect whether the station would need to find a replacement programme. Chan’s performance would also affect the rating of the programme, Kwok said. TVB produced and broadcast the countdown show for the Olympian City shopping mall for HK$1.3 million. Chan could moonlight lawfully if the work had no relation to TVB’s business – such as a cleaning job – Kwok said. Nor could Chan rely on the defence of reasonable excuse – that a reasonable man, looking at the circumstances of the case, would exonerate him. “He had not even asked for permission,” he said. “How would that be reasonable?” The lower court had heard that Chan did not seek prior permission from his boss before accepting the hosting job. If the appeal court found Chan guilty, then Tseng should be found guilty as well, Kwok said. Joseph Tse Wah-yuen SC, for Chan, said the trial judge did not make a mistake in law. Tse said they would rely on the defence of reasonable excuse – that his client genuinely believed that he had permission to take on the job and receive the payment. The prosecution plans to appeal against a court order – made after the appeal court reached its verdict – that Chan and Tseng’s legal cost be paid from public funds. The appeal continued on Tuesday afternoon.

Grade 1 'highly likely' for West Wing (By Kelly Ip) Antiquities Advisory Board chairman Bernard Charnwut Chan said it is highly likely that the West Wing of the former government headquarters will be designated a Grade 1 historic building. That would mean scrapping the government's plan to demolish the building in Central and redevelop it into a 32-story commercial tower. Chan's comment came after The Standard reported that the West Wing may remain intact. "It is very likely that the West Wing will be rated Grade 1," he said. "If it gets the top rating, the whole building should be preserved. At least the most important part of the building should remain." Chan said public opinion is leaning toward giving the currently Grade 2 building the higher rating of Grade 1, which stipulates that every effort should be made to preserve it. Over 2,000 feedback messages received during a public consultation that ended on August 31 had more than 90 percent support the top grading. A controversial vote in June saw the board only raise the rating to Grade 2 from Grade 3. It is expected to decide next month on whether to raise the rating further to the top level. When board members voted for the rating in June, ballots were evenly split at eight for both Grade 1 and 2. But Chan used his casting vote to decide the matter and the West Wing was temporarily rated Grade 2. The four members who voted for the lower grade, including Chan, have since quit the board following a public outcry. This means they will not vote this time and a Grade 1 rating is more likely. Lee Ho-yin, who quit the board after backing a Grade 2 rating, said the West Wing is part of collective local memory and the last rating will have to take public opinion into account. "Its social value is relatively high among Hong Kong people and public opinion on local development should not have been ignored in view of the current political atmosphere," the University of Hong Kong assistant professor of architecture and director of its Architectural Conservation Programme said. But he said the building's historic value is not as high as the main building or East Wing. Former board member Andrew Lam Siu-lo, who also quit in June, said he does not see the urgency to demolish the West Wing as there are other more important issues the government should address. Katty Law Ngar-ning, convener of conservationists Government Hill Concern Group, suggested declaring the entire area be made a monument, including Government House and StJohn's Cathedral. "Why not preserve the whole area when the old government headquarters East Wing and main building have already got high gradings?" she said. Both buildings have Grade 1 status.

 China*:  Nov 8 2012

China set for East Asia trade bloc talks to stymie US (By Teddy Ng and Reuters in Geneva) Pact, including India, Japan, South Korea and Australia, a response to American proposal. Premier Wen Jiabao, in Laos yesterday, is expected to be at the Asean summit in Phnom Penh, Cambodia. China will join negotiations to create a 16-nation East Asian free-trade bloc at a regional summit this month to counterbalance a similar move spearheaded by the United States that excludes China, says the South Korean trade minister, Bark Tae-ho. Bark said in a lecture in Geneva that the bloc, known as the Regional Comprehensive Economic Partnership (RCEP), would include the 10 members of the Association of Southeast Asian Nations (Asean) plus China, India, Japan, South Korea, Australia and New Zealand. Its launch is to be formally announced at the Asean summit in Phnom Penh, Cambodia, later this month, with the goal of reaching a deal to lower trade barriers across the region by the end of 2015. Premier Wen Jiabao is expected to attend. The RCEP framework was endorsed by leaders at last November's Asean summit, and Asean has sent invitations to the six nations, a grouping favoured by Japan. Bark said China at first only wanted to have Asean and three other nations, China, Japan and South Korea, included in the pact, but the US proposal for a Trans-Pacific Partnership (TPP) had pushed it to enter into talks for a wider-ranging pact. The Obama administration strongly advocated the TPP, which excludes China, at last year's Asia-Pacific Economic Co-operation summit in Hawaii. "China preferred anything without the United States," Bark said. "I don't know how much they hope to get but they want to do it because of the TPP." Fan Hongwei , an expert on Southeast Asian affairs at Xiamen University, said China was becoming more aware of the possibilities of using multilateral platforms to offset the impact of US proposals. "But it is possible that the US will attempt to block the initiative because it would hamper Washington's effort to strengthen its presence in Asia," he said. Du Jifeng, a specialist in Southeast Asian affairs at the Chinese Academy of Social Sciences, said some countries in the region were already negotiating free trade deals with Asean and might not be interested in RCEP. China, facing a stronger US presence in the region, has been keen to further cement ties with its neighbours. During an Asia-Europe summit that ended in Vientiane, Laos, yesterday, Wen called on the two continents to step up co-operation on energy security. Kyodo News, quoting Japanese sources, said Prime Minister Yoshihiko Noda had a "war of words" with Foreign Minister Yang Jiechi yesterday over the disputed Diaoyu Islands, known as the Senkakus in Japan. Noda said overcoming conflicts peacefully was important to Japan, but Yang, who took over from Wen at the meeting, replied that the outcome of an "anti-fascist" war should not be denied.

Firms look to UK railway projects (By By Diao Ying in London) Britain seen as gateway to other mature markets for Chinese - Top Chinese contractors are looking to take part in railway projects in the United Kingdom, seeing that as a way to promote their brands in developed economies. A high-speed train passes through Weifang, Shandong province. Chinese infrastructure companies have already completed projects in developing economies, such as Algeria, Libya and Nigeria. "We hope we can work on some good railway projects in the UK," said Liu Yuling, general manager of China Civil Engineering Construction Corp, which has built railways in Algeria, Libya, Nigeria and other countries. His words were echoed by CITIC Construction Co Ltd, another Chinese company, whose projects include a $3.5 billion housing project in Angola. "We've been looking at the UK market for about a year," said Xu Mingguang, vice-president of the company's investment department. CITIC is considering undertaking large projects concerning transportation, water, and energy, among other things, Xu said. The proposed cooperation comes on the tail of large investments Chinese companies have made into the UK. Last week, China Investment Corp, manager of China's sovereign wealth fund, bought shares in Heathrow Airport Holding, the operator of London's Heathrow airport. Before that, in January, it had invested in Thames Water Utilities Ltd, which supplies water services to London and other places in Britain. Chinese contractors, though, are only starting to work on large projects in developed economies and have not taken part in any in the UK. That comes in contrast to what they have done in the Middle East and in African countries such as Libya and Nigeria, where they have helped build prominent railways. A source of strength for Chinese companies is the support they receive from large State-owned Chinese banks, which have been expanding into developed economies. Even so, they have little experience in investing in developed economies, according to Wang He, chairman of China International Contractors Association. Unlike many developing economies, the UK has long-standing legal, regulatory and technology requirements, and Chinese companies need to make sure they understand those before they bid on projects there. The UK also has a history of letting foreign companies take part in infrastructure projects. Among the operators of its national railways are companies from Germany and the Netherlands. Perhaps the greatest opportunity for Chinese companies lies in High Speed Two, a project that is to eventually result in a high-speed railway running from London to possibly as far north as the central belt of Scotland. The project will start around 2015. Robin Groth, deputy director of Rail, Department for Transport, said it is not yet known where the money for the project will come from. "We are looking at all of the different options," he said. "There are lots of opportunities." "UK rail has a strong appetite for foreign investment," said Stuart Westgarth of the professional services company KPMG.

US, China in race to create exclusive Asia trade pact (By Reuters in Geneva) Regional Comprehensive Economic Partnership, (RCEP), also called "ASEAN plus six", is a regional trade agreement involving the 10 ASEAN nations and six of their trade partners -- Australia, China, India, Japan, South Korea and New Zealand. Its goal is to help reach a deal to lower trade barriers across the Asia-Pacific region by the end of 2015. A crane removes a container at the Jakarta international container terminal in Tanjung Priok port in Jakarta July 26, 2012. China will later this month enter talks to create an Asian free-trade bloc covering 28 per cent of world GDP, a reaction to U.S. progress in forming a Trans-Pacific Partnership that excludes China, South Korean Trade Minister Taeho Bark said on Monday. The RCEP, or Regional Comprehensive Economic Partnership, will be comprised of the 10-nation ASEAN club plus six others: China, India, Japan, South Korea, Australia and New Zealand. Its launch is to be formally announced at the ASEAN summit in Phnom Penh later this month, with a goal of reaching a deal to lower trade barriers across the region by the end of 2015. RCEP adds to a growing web of regional and sectoral trade negotiations that has sprung up after a decade of talks failed to conclude a global trade deal, the so-called Doha Round. The Trans-Pacific Partnership (TPP) championed by President Barack Obama’s administration aims to tear down traditional trade barriers and break ground in new areas, streamlining trade between the United States and 10 other countries. “We’re organising trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards,” Obama said in a presidential debate with Governor Mitt Romney two weeks ago. Bark said RCEP had grown out of a plan to launch trilateral trade talks between China, Japan and South Korea. Some ASEAN countries, worried about the trilateral initiative, pushed for a wider deal. “China’s position on this economic integration in East Asia was pushed by TPP,” Bark said in a lecture organised by the Centre for Trade and Economic Integration in Geneva. “In the past, China didn’t want to have ASEAN plus six, they only wanted plus three. Japan preferred ASEAN plus six. China preferred anything without the United States,” he said. “I don’t know how much they hope to get but they want to do it because of the TPP.” If both RCEP and the TPP came into existence, they would be similar in economic size to the European Union. “Those are the three big blocks in the future,” Bark said. In the long run, the goal of the 21-member Asia-Pacific Economic Cooperation (APEC) group is to merge RCEP and the TPP, he said. That would bring the United States and China into an agreement to deepen trade liberalisation, succeeding where 10 years of talks at the World Trade Organization failed. But achieving that final goal depends on RCEP achieving a ”high quality” deal, not just simplifying an existing tangle of bilateral agreements, which Bark called “the spaghetti bowl”. “At this moment we are setting very high ambitions. We include all tariff lines,” he said. But many developing country members might want to water down RCEP by asking for special treatment. South Korea will demand an exemption to protect its rice farmers, while Japan is also likely to want carve-outs for agriculture. If the signatories’ squeamishness at opening their markets does not devalue RCEP, they might be forced to lower their sights in any case to meet the three-year schedule. If so, RCEP could end up having little influence on regional trade. The trilateral talks are still expected to go ahead, although the planned launch, originally set for the Phnom Penh summit, is likely to be postponed to later in the year due to a territorial dispute between China and Japan, Bark said. South Korea is also separately negotiating a bilateral free trade agreement with China, which would enable some 25,000 South Korean firms operating in China to supply the domestic market, rather than exporting their Chinese-produced goods as they are obliged to do now, he said. China wanted quick negotiations, Bark said, while South Korea hoped for a bilateral deal within two or three years.

Dispute with China over islands leads to 20pc cut in Nissan full-year profit forecast (By Agence France-Presse in Tokyo) Nissan’s Chief Operating Officer Toshiyuki Shiga explains the company's results and forecast at a press conference in Tokyo. Nissan on Tuesday slashed its full-year profit forecast by 20 per cent as it pointed to the effect of a strong yen, weakness in Europe and slumping sales in China over a bitter territorial row. Japan’s second-biggest carmaker now tips net profit for the year to March of 320 billion yen (HK$31 billion), down from its earlier estimate of 400 billion yen. It also said first-half profit slipped 2.8 per cent to 178.3 billion yen on sales of 4.54 trillion yen, which were up 4.1 per cent. “After factoring in the projected negative impact of a strong yen, disruption in China and continuing weak market conditions in Europe, Nissan revised downward its full-year forecast,” the company said in a statement. The company also cut its full-year sales forecast for China by 13 per cent as the diplomatic spat between Tokyo and Beijing sparked a Chinese consumer boycott of Japanese goods. Nissan, part-owned by France’s Renault, said it now expected to sell about 1.18 million vehicles in China, the world’s largest vehicle market, in the year to March, down from a previous forecast of 1.35 million. Japan’s carmakers have seen a steep drop in sales in China in recent weeks, with Honda blaming the ongoing row for a 20 per cent cut to its annual profit forecast. The row stems from Tokyo’s nationalisation in mid-September of an East China Sea island chain – known as the Senkakus in Japan and the Diaoyu Islands in China – that is also claimed by Beijing. Protests over Japan’s claim to the islands led to violent protests on the mainland and a widespread boycott of Japanese companies and goods. “The China factor is still unpredictable as this is politics, not business,” Shigeru Matsumura, auto analyst at SMBC Friend Securities in Tokyo said. “Foreign exchange risks will also remain a key factor with a considerable impact on [carmakers’] earnings.” Toyota, less dependent on the China market than Nissan and Honda, on Monday warned it would sell about 200,000 fewer vehicles in China in the second half of its fiscal year and take a 30 billion yen hit to the bottom line. “The number of visitors to dealerships in China is recovering gradually...and we are making our utmost efforts to normalise the business as quickly and swiftly as possible,” Nissan’s chief operating officer Toshiyuki Shiga told a press briefing on Tuesday. “It is too early to think about changing our strategy for China,” he added. But Nissan’s chief executive Carlos Ghosn warned that Nissan would think twice about making new investments in China amid the row. It has several production plants in China with a new factory in the northeastern city of Dalian planned for 2014.

Neil Heywood an 'informant' to British spy agency, WSJ says (By SCMP) Businessman Neil Heywood, who was murdered in China in a scandal involving one of the Communist Party’s rising stars, Bo Xilai, was an informant to Britain’s Secret Intelligence Service, said a newspaper report on Tuesday. Heywood, whose murder last November triggered the country’s biggest political scandal in two decades, knowingly provided information about the powerful Bo family to MI6 for more than a year, according to an investigation by the Wall Street Journal. The revelation about the Briton sheds new light on a scandal that has led to the downfall of Bo, the former party secretary of Chongqing, and the imprisonment of his wife, Gu Kailai, who was convicted of murdering Heywood in August. Gu received a suspended death sentence, and former Chongqing police chief Wang Lijun was sentenced to 15 years in jail for defection and other charges after he entered a US consulate claiming knowledge of the murder. The case unravelled when Heywood was found dead in his hotel room in Chongqing. Local police said he died of “excessive alcohol consumption”, and Heywood’s body was cremated. Gu was later found guilty of poisoning him with potassium cyanide. The British government asked China for an investigation into Heywood’s death in March. Reports surfaced that Heywood, who was a part of Bo’s inner circle, feared for his life after falling out with Gu over business dealings. The Wall Street Journal also reported in March that Heywood consulted for a British strategic-intelligence firm founded by ex-spies. The report led British Foreign Secretary William Hague to issue a statement saying Heywood “was not an employee of the British government in any capacity”. It was a rare step for the official to comment on intelligence matters. In Tuesday’s article, the investigation found that Heywood met an MI6 officer regularly in China and provided information about Bo’s private affairs. Heywood is characterised as a potentially risky choice as an informant; he even drove a silver Jaguar with “007” in the licence plate.

Shanghai student journalists turn sights on US election (By By Wei Wei) Zhou Zongmin works on his video report in front of camera operator Li Kaiyu outside a Democratic Party campaign office in State College, Pennsylvania. The student journalists are in the US to cover Tuesday's elections. Seventeen student journalists from Shanghai International Studies University will be covering Election Day live in the US online. From a base in State College, Pennsylvania, on Tuesday, the young Chinese will stream news of results from the presidential race between incumbent Barack Obama and challenger Mitt Romney as well as information about congressional contests across the country. Their webcast will also feature reports in real time from the campus of Penn State University as well as polling places and local Democratic and Republican party campaign offices. Penn State journalism students will contribute to the project of their Shanghai counterparts with post-election reports. The coverage will be streamed via Sina Weibo, often described as "China's Twitter", and presented as a live blog on Phoenix Blog and "Many Chinese media organizations have only a handful of correspondents (in the US), but we have 17. We are confident of being able to present the magnitude of this historic event," said Zhu Ye, deputy dean of the Shanghai university's journalism school and one of three faculty members leading the students. The US election-reporting project is part of a course at the university. It's predicated on real reporting of important events such as the Shanghai World Expo. To qualify for their Election Day assignment, the 17 juniors and seniors, as well as 13 classmates reporting from home, had to pass rigorous tests in English and news-reporting techniques. Since May, they have been brainstorming story ideas and attending lectures on American politics, culture and society. Since arriving on Oct 27, they have traveled to Washington, Philadelphia and New York, presenting the run up to the election with photos, video, print articles and social-media blurbs in Chinese and English. During their stay in Washington, and neighboring Virginia, they interviewed American students, protesters outside the White House and white-collar workers, asking whom they planned to vote for. "As student journalists, we are not focused on macro things like trade or foreign policy. Instead, we try to present what we see and prefer stories about ordinary people," said Ren Pinting, a senior who is the group's student leader. She cited "dramatic stories" such as a married couple who support different candidates as an example of what the students are seeking. Ren said she was surprised at Americans' openness in sharing their political opinions, including displays of candidate and party signs on front lawns and in windows. One street in the Washington suburb of Alexandria, she said, illustrated Virginia's status as a "swing" state in the 2012 election: All the lawn signs on one side of a street were for Republicans, while pro-Democrat signs adorned the other side. Reporting on the final stages of the campaign is a privilege for the students, most of whom hadn't visited the US before. Shen Xinyi, a 21-year-old senior, said her most unforgettable moment was visiting a makeshift Democratic campaign office in State College with the help of two volunteers the Shanghai students met at Penn State. An experienced camera operator, Shen was too thrilled to test her microphone before her first interview. "It's completely different from what we're doing at school," she said. "It's time for the real test!" There have been hurdles, as even veteran campaign reporters can attest. In Alexandria, the student group was denied access to Obama's local campaign office for lacking credentials. Their attempt to cover a Romney event in Virginia was thwarted by the inability to rent a car. At the time Washington's subway system was shut down last weekend due to Hurricane Sandy, the group was scheduled to visit the National Press Club. With storm winds howling outside their window, the students had to remain in their Alexandria motel. "You can't face a bigger challenge than trying to cover the US elections and deal with a hurricane simultaneously," said Mark Schoeff, vice president of the Press Club's publications committee, who talked to the students at their motel once the subway reopened the following day. That same day, the students met James Grimaldi, who won a Pulitzer Prize at the Washington Post in 2008, in the Washington bureau of the Wall Street Journal. They also interviewed Julia Chang Bloch, a native of China who immigrated to the US as a child and became the first Asian-American ambassador, serving in Nepal in the early 1990s. To arrange these opportunities, Zhou Zongmin, the student "vice-captain" tasked with planning his cohort's trip, hadn't slept for 30 hours. Zhou tapped the network he began establishing as an intern last spring at a Washington television station. The job put him in contact with journalists from the National Journal, Politico and the Wall Street Journal, and he attended the taping of NBC's "Meet the Press" and the MSNBC politics program "Hardball With Chris Matthews". "They understand our anxiety, and also show great interest in meeting with us," Zhou said of his Washington contacts. The networking seems to have paid off. Within five days of landing in the US, the students had cranked out 45 stories across media platforms, some gaining as many as 5,000 hits on China's Phoenix Blog with one reported published in a local Chinese newspaper. "The influence of their coverage will largely decide their final grade," said faculty member Zhu, who also led a team of six students from Shanghai International Studies University in covering the 2008 US presidential campaign, along with anchor Cao Jingxing of Hong Kong-based Phoenix Television. The current trip is drawing more attention, Zhu said. Ford Risley, head of Penn State's journalism department, who met the Shanghai students both times, believes this year's election will be exciting but less momentous than the 2008 election of America's first black president. "This election is certainly very important because of the problems especially the economic problems that the United States is faced with. It is a very close election. We still don't know who the winner is going be," said Risley, whose department will send 17 Penn State journalism students to report in China next year. A survey by the nonpartisan Pew Research Center found that Chinese are more interested in the US election this year than they were in 2008, with 36 percent of respondents in China saying they would pay close attention compared to 19 percent four years ago. With 2,500 followers so far on Sina Weibo and even more on Facebook-like, the student journalists are getting immediate feedback. Their first video package, recorded in and around Washington's Capitol Hill, was criticized by some as unbalanced because all the interviewees expressed support for Obama. One poster questioned the point of doing such a story given that a huge majority of registered voters in the District of Columbia are Democrats. Those and other comments were discussed among the reporting team at its nightly editorial meeting. Zhao Tao, another of the group's three professors, who has been teaching news writing at SISU for 18 years, said it was necessary to present the views of individual voters but that in-depth reporting would also be expected in the coming weeks. Shen, the senior, was asked to predict the outcome of the presidential race. "As journalist, we shouldn't take sides," she said. "But according to my observation, Obama will win, as he has reportedly dominated in Ohio and Virginia, two major swing states. The vote will be very close, though."

Premier Wen displays confidence in economy (By Li Xiaokun, Zhou Wa) The economy is stable and GDP goals are attainable, Premier Wen Jiabao said during an address on Monday to the Asia-Europe Meeting in Vientiane, Laos. His remarks will help boost global confidence as Europe battles its debt crisis, experts said. "The Chinese economy has grown steadily," the premier said after analyzing figures for the first three quarters. Premier Wen Jiabao joins Asian and European leaders at the opening of the Asia-Europe Summit in Vientiane, Laos, on Nov 5. China's GDP grew by 7.7 percent in the nine months to the end of September, with a total of 10.24 million jobs created. And "in September, major economic indicators registered an increase", Wen added. China's exports grew 9.9 percent that month, exceeding market expectations. "When all policy measures are put in place and produce results, the Chinese economy will head toward steadier growth," Wen said. "We are not only confident of meeting development targets for this year, but also have the confidence, the conditions and ability to achieve development of a better quality, at a higher level, in the long run." China has set a growth target of 7.5 percent for this year. The premier's remarks were a rebuttal of the view that China is heading for a hard landing, said Zhao Junjie, a specialist on European studies at the Chinese Academy of Social Sciences. "Wen cited figures to let the world know that China has the determination and capability to improve its economy," he said. Wen arrived in Laos on Sunday night. He will leave the summit to prepare for the 18th National Congress of the Communist Party of China, which opens on Thursday, after giving a speech on global issues on Tuesday morning. Foreign Minister Yang Jiechi will remain at the meeting. The arrangement reflects the importance Beijing attaches to the international economic situation, experts said. In his speech on Monday, the premier noted China has taken a responsible role in handling the global crisis. For instance, China has pushed for the reform of the international financial system and sent 33 major commercial missions overseas to boost global trade, Wen said. He added that based on the significant appreciation of the yuan in recent years, the real exchange rate of the currency has risen by 16 percent. The ratio of the current account surplus to GDP has dropped from 10.1 percent in 2007 to the current 2.6 percent. "These figures show that China is an important engine for world economic growth and has played a crucial role in driving global economic recovery," he said. However, the world still faces "downside risks", Wen said. The summit comes days after German Chancellor Angela Merkel and leaders of five global financial organizations said on Oct 30 that "the recovery of the global economy is on a fragile track and prospects still remain uncertain". They called for fiscal consolidation and structural reform. According to the International Monetary Fund, the world economy is estimated to grow 3.3 percent in 2012 and 3.6 percent in 2013. AFP said that Europe's "heavyweight contingent, including French President Francois Hollande and Italian Prime Minister Mario Monti", at the meeting "underscores Europe's growing engagement with Asia's rising stars". European exports to its 19 Asian ASEM partners rose by 12.8 percent year-on-year in the first half of 2012. Their imports from Asian members also grew by 1.6 percent. The EU should work closer with Asia, China in particular, to cope with the debt crisis, said Chen Fengying, a researcher of global economics at the China Institutes of Contemporary International Relations. "The EU should remove its high-tech export ban to Asia, and end trade protectionism against China," Chen said. Switzerland and Norway, along with South Asia's Bangladesh, joined the summit, taking membership of the group up to 51, covering about 60 percent of both the world's population and trade volume. "The eurozone crisis has heightened awareness of their economic interdependence: Europeans need Asia's still-growing markets to boost flagging growth while Asians recognize their vulnerability to eurozone woes," Shada Islam, head of policy at the Brussels-based think tank Friends of Europe, told AFP. The ASEM summit, launched in Thailand in 1996, is held every two years.

Hong Kong*:  Nov 7 2012 

Hong Kong takes dollar down a peg (By Carl Berrisford) As is well known, United States Fed Reserve chairman Ben Bernanke announced a third round of quantitative easing (QE3) in September, and then the Hong Kong dollar did exactly what it has done the two previous rounds of QE: trade at the bottom of its band against the US dollar at HK$7.75. So far it's unclear whether this is due to money coming from offshore, or because funds holding foreign currency in Hong Kong have decided to buy investments such as stocks and property. In any case, lots of people are buying Hong Kong dollars in preparation to buy Hong Kong assets, creating appreciation pressure on the local currency. Two weeks ago the Monetary Authority traded HK$14.4 billion for foreign currencies, effectively weakening the local dollar. It was the authority's first such intervention in two and a half years. This was remarkable in itself but it also flagged up the possibility that Hong Kong was riding a liquidity bubble. After all, previous rounds of QE drove prices up for local stocks and property, in 2009 and 2010. According to market-data provider EPFR, aggregate net inflows from overseas-domiciled funds into Hong Kong rose more than US$400 million since early September. This reflects investors' appetite for investments in the local currency. The Hang Seng Index reached its highest level in more than 18 months in the third week of October, driven partly by strongly performing H shares (Hong Kong-listed stocks from mainland incorporated firms) and Hong Kong property stocks. Daily turnover at the Hong Kong exchange reached an average of HK$52 billion since September, up almost 20 per cent from June to August (some seasonality is at play; trading volumes typically pick up in the fourth quarter). Turning our focus to property, it is more difficult to isolate the impact of QE3 on local prices. Monetary Authority chief executive Norman Chan Tak-lam has warned of a property bubble, linking the risk to money unleashed by QE3. The Hong Kong government has announced a series of strong measures to cool property prices. Nevertheless, transaction data through September from Midland Realty, a property agency, and the Land Registry show only a small rise in property sales since mid-July. And this does not appear to be directly related to QE3, given the time lag between sale-and-purchase agreements and transactions. Weekly transactions at 35 large housing estates in Hong Kong show that volumes have been relatively stable from July to now, although there was an upswing in July and August following the announcement on July 16 of the Home Ownership Scheme, which starts in 2013. The upshot is that QE3 has had no conclusive impact on Hong Kong's property market. UBS remains positive on the residential property market, forecasting a 5 per cent to 10 per cent increase in prices in 2013. There is still potential upside for prices given that home ownership in Hong Kong is a moderate 52 per cent, according to the Census and Statistics Department. And 60 per cent of owner-occupiers had paid off their mortgages in 2011 against 48 per cent in 2001. Affordability, measured by the ratio of home prices to household incomes, is starting to reach the same levels as in 1997, but a prolonged period of low interest rates in Hong Kong suggests that the 1997 level will likely be broken.

Bernard Chan fears about-turn on West Wing (By Olga Wong) The chairman of the Antiquities Advisory Board, Bernard Chan, has warned the government that it will send a bad message if it scraps the west wing redevelopment plan in response to public lobbying. Chan's comment came yesterday as a source close to the government said the administration was now keen to spare the wing at the old government headquarters in Central from the wrecking ball. Officials also found it likely that the building would be given the highest historic grading in a board meeting next month, the source said. Members of the Antiquities Board are expected to give a final rating in the meeting after the initial grade-two rating was opened for two-month public consultation in June. However, the Development Bureau said it had not changed the redevelopment plan. "I'm not surprised if most of the public views submitted to the government are asking for conservation. You won't express your opinion if you don't care about the building," Chan said, "It is likely that the building could be given the highest rating … because of the public's views." But Chan also warned: "It would be unhealthy if the government gives in completely. We need a compromise." Chan said that if the building were to be preserved, "certain modifications or extensions should be allowed". Under the government's plan announced earlier this year, the west wing - which is more than 50 years old - will be redeveloped into a 32-storey office tower. After the announcement, advisory board members in June voted on whether to give the west wing a grade of one, which calls for complete preservation, or two, which calls for "selective preservation". Chan cast a deciding vote for the latter after 16 members were evenly split. A grade-two building is not generally safe from demolition, while a grade-one listing may be protected if it is then declared a monument. Amid intense criticism for their apparent stance favouring the government, Chan and three board members resigned. The four eventually agreed to return to their posts, but will abstain from voting in the next meeting. A spokeswoman for the Antiquities and Monuments Office said it had received more than 280 written submissions and over 4,500 signatures during the public consultation.

Retiring consumer chief Connie Lau to head new UN body (By Amy Nip and Patsy Moy) Connie Lau's hopes of a well-earned break are put on hold by job as head of new UN body - Connie Lau, who is quitting the Consumer Council and taking up a United Nations post. Connie Lau Yin-hing, who retires this month as chief executive of Consumer Council, is to head a newly created UN consumer rights body. Lau, who has worked for the consumer watchdog for 38 years and has been its chief executive since 2007, had been expecting some leisure time after her last day on November 15. But her break will now be shortened - she will start work in a few months as chairwoman of a working group set up by the UN Conference on Trade and Development, helping developing countries build consumer-protection frameworks. "I'll continue to work on consumer protection, but at the global level," she said yesterday. An important task will be reviewing and revising the UN Consumer Protection Guideline, introduced in 1985. "Online shopping is now popular. There are also a lot of complex investment products in the market," she explained, adding that changes were necessary to bring the guidelines up-to-date. Lau, who will remain in Hong Kong, joins two other leading local figures working for the world body. Former health director Dr Margaret Chan Fung Fu-chun is director-general of the World Health Organisation. Hong Kong Observatory director Shun Chi-ming is vice-chairman of the World Meteorological Organisation's typhoon committee. Lau said she had high hopes that her successor in the council, Gilly Wong Fung-han, would continue the fight to promote recently passed consumer protection measures. "The passing of the three consumer rights-related ordinances has been the most precious present for my retirement," Lau said, referring to the Competition Bill, Residential Properties (First-hand Sales) Bill, and Trade Descriptions Bill, which were passed at the end of the last legislative term. "But passing the bills is not an end to the matter. It is just the beginning of a new mission, which is to promote the new law and educate the public about their rights protected under the ordinances," she said. Three items remain on her wish-list, two of them being a follow-up to the new laws. These are a cooling-off period for pre-paid service contracts during which consumers can withdraw from the contracts at no cost, and allowing individuals to launch lawsuits against companies under the new Competition Law. With the latter being banned for now, individuals can take their complaints only to the future Competition Tribunal, which involves a lengthy process. She would also like to see the stepping up of the regulation of beauty centres. Referring to the death of a woman after receiving a blood transfusion during "health therapy" last month, she said clear definitions to separate medical treatments from beauty treatments would be an effective measure for the unregulated trade.

Calls for independent chief prosecutor for Hong Kong rejected (By Simpson Cheung) Despite mounting pressure for new role amid a series of high-profile corruption cases, current chief Kevin Zervos says system is 'working well'. The chief prosecutor has dismissed suggestions that there is a pressing need for Hong Kong to have an independent director of public prosecutions (DPP). Kevin Zervos SC said it was "too simplistic" to call for an independent DPP without looking carefully at how the post would function. He said the most important thing was to ensure whoever was responsible for deciding how prosecutions were handled did so with the utmost integrity, honesty and professionalism, while being open and accountable. Final decisions on prosecutions currently rest with Secretary for Justice Rimsky Yuen Kwok-keung. Zervos was speaking after a previous director, Grenville Cross SC, and the chairman of the Basic Law Institute, Alan Hoo SC, pushed the idea of an independent DPP amid a series of high-profile corruption and misconduct cases involving government officials and tycoons. Such an appointment has also been "examined" by the government. He said the Department of Justice examined the matter last year and had exchanged views with the Bar Association in June. "The system is working well as it currently exists," he said. "We have a good accountability mechanism in place. We have independent decision-making in relation to prosecutions." Zervos also said the chief prosecutor should not hold the position for too long, with a term of about seven years most appropriate. "It is healthy to have a change of personnel because it brings in new thinking and new approaches," he said. Asked if he was suggesting that Cross, who held the position for 12 years, had been in the job too long, he said: "I don't agree with a long-term appointment." Justice secretaries have from time to time handed the decision on a prosecution to the director in sensitive cases. The former and current secretaries gave prosecution power to Zervos in the bribery case involving the Kwok brothers of Sung Hung Kai Properties and former chief secretary Rafael Hui Si-yan to avoid a conflict of interest. He was also handed the misconduct case involving former secretary for development Mak Chai-kwong for the same reason. But Cross said this was not enough and the public needed to be reassured that all prosecution decisions were made by a politically neutral chief prosecutor. "Justice must not only be done, it must be seen to be done," he said. He added that the city should follow other common law jurisdictions such as England and Wales. The prosecutions branch said in its annual review last year that the idea of an independent DPP had been examined and was still under discussion. Also last year, the Department of Justice said in a letter to the Legislative Council that an independent chief prosecutor would contravene the Basic Law.

Hong Kong losing its advantage as China's 'go-between' with world: Report (By Tony Cheung and Phila Siu) Conflict inevitable as mainland market becomes more internationalized and less reliant on the city as an intermediary, trade report reveals. Hong Kong and the mainland further integrate in economic and social aspects, some problems and conflicts that were less obvious before will gradually emerge. Hong Kong's advantage as an intermediary between the mainland and the outside world is on the wane, and it is natural for conflicts to emerge between the city and the mainland, says a report compiled by several central government agencies. These problems will surface as the pace of economic and trade development between the city and the mainland slows, the report on economic and trade co-operation between Hong Kong and mainland China, said. The paper, published yesterday, was compiled by the State Information Centre, the Hong Kong branches of Xinhua and People's Daily, and Hong Kong-based China Institute of Culture. Speaking at a seminar on the launch of the report, Dr Fang Zhou, assistant chief research officer at Hong Kong's One Country Two Systems Research Institute, said that to deal with the conflict, the SAR government must improve its economic planning and clarify the city's orientation as China moves forward. Referring to late US president John Kennedy's famous quote, Fang said: "Hong Kong should not just ask what the country can do for you, ask instead what Hong Kong can do for China." He was responding to a view in the report that "as Hong Kong and the mainland further integrate in economic and social aspects, some problems and conflicts that were less obvious before will gradually emerge, especially those deep-rooted problems implied in the '[one country,] two systems' concept". The paper noted that the mainland's direct investment in the city had dropped 8 per cent, from a record US$38.6 billion in 2008 to US$35.7 billion last year. It said Hong Kong and mainland China must assess the situation "objectively and calmly". "They must not blame each other, nor be discouraged, nor anxious … and they must definitely not turn to a road of retrogression," the paper said. While the mainland market was quickly opening and becoming more internationalised thus causing Hong Kong's advantage as an intermediary to wane, the report said, Hong Kong would still keep its other advantages for the long term. "Hong Kong's core competitive advantages" such as its free market, independent judiciary, graft-free administration and internationalised society "could further stand out," it said. Meanwhile, Zhang Huiguang, representative of the State-owned Cultural Assets Supervision and Administration Office in Beijing, said the office was willing to "use every channel" to boost co-operation between Hong Kong and Beijing in cultural and creative development. Speaking at a forum in Hong Kong, she said the two cities had their own advantages. Hong Kong companies could use Beijing to enter the cultural and creative industries in the mainland, while Beijing could use Hong Kong to spread their influence in the international market. Zhang, who is also head of the Beijing Tourism Administration, said she had noticed that more Beijing people were visiting Hong Kong after the relaxation of permit rules in September. Until September 1, Beijing's non-permanent residents had to return to their hometowns to get a permit to visit Hong Kong.

HSBC likely to face criminal charges for money laundering (By Lulu Chen and Bloomberg) HSBC is likely to face criminal charges stemming from US anti-money laundering investigations. HSBC Holdings, Europe's largest bank by market value, said yesterday it was likely to face criminal charges stemming from US anti-money laundering investigations. It said the cost of a settlement could "significantly" exceed the US$1.5 billion the bank had already set aside. HSBC had in July made a US$700 million provision for possible fines after a US Senate committee found it had given terrorists and drug cartels access to the country's financial system. The bank made an additional US$800 million provision in the third quarter to cover the costs of the investigation. "The final amount of the financial penalties could be higher, possibly significantly higher," HSBC said in a statement. "The resolution of at least some of these matters is likely to involve the filing of corporate criminal as well as civil charges." HSBC chief executive officer Stuart Gulliver said: "We are actively engaged in discussions with US authorities to try to reach a resolution, but there is not yet an agreement." The bank's underlying pre-tax profit was up 125 per cent to US$5 billion in the third quarter, but missed the US$5.6 billion median estimate of eight analysts surveyed by Bloomberg. HSBC had hoped to settle the money laundering case by September, but could have been impeded by another case in which the New York State Department of Financial Services accused Standard Chartered of laundering US$250 billion for Iran. In its latest profit announcement, HSBC said 267,000 people were under its employ at the end of the quarter, almost 22,000 lower than the number at the end of last year after global restructuring plans to boost efficiency. At midday on the London Stock Exchange, HSBC shares were trading at 616.4 pence, down 1.55 per cent from last Friday's close.

 China*:  Nov 7 2012

Angry protesters shun Japanese businesses in China over Diaoyus (By Daniel Ren in Shanghai) The intensity of anger in China over the latest Sino-Japanese dispute has some businessmen wondering if things will ever be same again - "I'm going home," said Naohito Sato, a Japanese entrepreneur based in Shanghai for 10 years, who feels the anti-Japanese sentiment now sweeping China is more than just fiery rhetoric. "I think it's totally different from the previous rows between the two countries," said Sato. "I have made up my mind to go home. China is no longer a good market for Japanese companies." A nationwide boycott against Japanese brands since the territorial dispute between the two Asian giants escalated in September has caused numerous companies to either suspend or slash production on the mainland. Sato, a 40-year-old who speaks fluent Putonghua, has an agency serving several major Japanese companies operating on the mainland. Back in September he was set to open a Japanese-food restaurant in Shanghai's bustling Hongqiao area when all hell broke loose. Chinese protesters took to the streets of mainland cities in fury at Japan's purchase of three islets in the Diaoyu Islands, which are at the heart of a territorial dispute between the two countries. In nationalistic fervour, Japanese cars were smashed and Japanese restaurants attacked. Anti-Japan slogans were chanted at mass demonstrations amid calls to stop buying Japanese goods. Sato had just sunk 1 million yuan (HK$1.2 million) into his restaurant. He decided to put back the opening for a month, but since the doors opened in October, business has been bad. "It's not just because my restaurant is new and not many people know about it yet," he said. "The other Japanese restaurants in the neighbourhood are also doing pretty badly." The anger against Japan has been more widespread and more violent than in any previous protests, for example, when Japanese dignitaries visit Tokyo's controversial Yasukuni shrine - which includes memorials to war criminals sentenced to death for crimes committed during the second world war. The territorial dispute over the tiny, uninhabited islands in the East China Sea, which are known as the Senkakus in Japan, inflamed popular anger across the mainland like never before. Shen Yong, a senior executive at a Shanghai consultancy, speaks for many when he says: "The boycott should be upgraded to a government-led sanction on Japanese businesses. The government should send a message to consumers that it's a shame if they buy Japanese products." Not that the man on the street needs any cues from the government. There is enough evidence Japanese businesses are already hurting as many Chinese consumers shun their products. Japan is China's fourth-largest trading partner, trailing the United States, the European Union, and the Association of Southeast Asian Nations. Bilateral trade between the two largest economies in Asia was valued at US$345 billion last year. Japanese companies, from Toyota to Nissan, have been among the biggest winners from China's breakneck economic growth and rising income levels in the past three decades. According to a JPMorgan report, Japan's economy is expected to contract 0.8 per cent in the fourth quarter of this year, battered by dwindling demand from China. That is down from its previous estimate of zero growth in quarter to December 31. Japan's big carmakers have reduced output in China by 40 per cent, according to reports, while sales are down by nearly half - with the latest figures showing things could be getting worse. Its two major air carriers Japan Airlines and All Nippon Airways saw 60,000 tickets cancelled by mainland residents planning to visit in the September-October period. Spring Airlines, the mainland's largest budget carrier that had been offering 2,000 free flights to Japan in a promotional campaign, bowed to a chorus of protests and halted the offer in mid-October. South Korea emerged the winner from all this - it received a record 125,000 mainland tourists during the recent National Day "golden week" holiday. Domestic brands have also seen a windfall as mainlanders shy away from Japanese products and bought homegrown goods to show their patriotism. "But the boycott of Japanese brands doesn't appear long-lasting, consumers will eventually go back to Japanese products because of their better quality and higher value," said Professor Liu Ming , director of international relations studies at Shanghai Academy of Social Sciences. Though the extent of the damage to Japanese businesses is difficult to gauge, economists say these companies just can't afford to lose their slice of the vast Chinese market. "The Japanese government and businesses will try to cut losses by actively seeking a solution in political terms," said Liu. "It's unlikely that Japanese businesses can fully regain the lost ground in China, but there could be a recovery in six months." Zhang Zhiwei, an economist at Japan-based Nomura Securities, also predicts Sino-Japanese trade and investment will return to normal in the medium to long term. "The two economies are highly complementary. Both know that the economic relationship with the other is very important," he said. Still, an official at a Shanghai-based Japanese financial institution admitted that mainland regulators look set to slow down or suspend approval to Japanese firms applying for licences for new businesses and branches. "The regulators might want to soothe public anger now," she said. "Eventually, we believe we will obtain the approvals, as long as we are patient." At a Sharp Electronics factory in Shanghai's Jinqiao industrial zone, several Chinese workers were busy loading products into a container. Production halted temporarily in mid-September when demonstrations broke out across the nation, fuelled too by the anniversary of the Mukden incident - which started the Sino-Japanese war in 1937. "Since production resumed, the factory has been speeding up work to fulfil orders," said a middle-aged worker. "We know only that more products are going to be exported to other countries, but we don't care. We just want to keep our jobs." A recent Reuters survey showed that about a fifth of Japanese companies doing business in China would consider relocating their mainland production lines to other markets. Economic analysts contend that plans to withdraw from China had not necessarily been triggered by the islands row. Instead, the mainland's higher costs in labour and raw materials had been a major concern for some Japanese businesses, they added. But Sato thinks otherwise. His consulting firm has lost several contracts with Japanese clients since September's violence. Some clients even said they plan to leave the Chinese market altogether. Sato recently got a rude jolt from a cold caller, who, after realising he was talking to a Japanese man, told him to go home. "I think he's right. My million yuan investment in the restaurant has been a complete waste. I don't blame anyone because it's a political issue but it's pointless to stay here any longer. I'll go home next year."

Shanghai property firm CIFI Holdings to check market's IPO appetite (By Ray Chan) Shanghai developer to go on roadshow next week in preparation for a listing in Hong Kong that is expected to be priced at a big discount - CIFI Holdings is selling about 1.3 billion shares to retail investors to buy land and repay bank loans. Shanghai property developer CIFI Holdings is planning a pre-listing roadshow as early as next week, following the listing of Shanghai Fosun Pharmaceutical last week. The property company hopes to raise as much as US$250 million by selling about 1.3 billion shares. The proceeds will be used to buy land and repay bank loans, according to two sources familiar with the deal. One source said the firm began a week-long pre-marketing campaign yesterday to gauge investors' appetite. It will start the roadshow on Monday and begin selling the shares to retail investors from November 13. If everything goes smoothly, the shares could begin trading on November 23. "The new shares sale of CIFI is likely to be priced at a distressed level, offering a price to NAV (net asset value) discount of more than 60 per cent," said a fund manager, who declined to be named. The manager said most private enterprises received a higher discount because their shares were more volatile and corporate governance structures were less transparent than state-owned companies. Government-owned companies tend to perform well because they have to strictly follow instructions from the State Council and adhere to the national policy, such as the 12th five-year plan to 2015. "In the face of poor market demand for new shares, a large discount from CIFI could provide a buffer to investors who have been extremely sceptical of the performance of newly listed shares," said the manager. Shares of Fosun Pharmaceutical closed lower than their issue price on their debut last week even though they were priced at the low end of the valuation range. Other candidates expected to list on the stock market after CIFI are Jiangsu Future Land and Modern City Development, which are looking to raise a combined US$300 million, according to sources. Meanwhile, the much-delayed PICC listing is also expected to hit the market early next month after the company slashed the offer size by half to US$3 billion. That said, the opportunity to raise funds has grown because there has been a gradual improvement in investor appetite for property companies. These companies had suffered from a credit squeeze and government policies to curb property prices since 2010. People familiar with CIFI's share offering did not give the number of cornerstone investors that will be involved. Such institutional investors, which commit their participation early in return for a sizeable portion of shares, have become crucial to any successful initial public offering in Hong Kong's subdued market. Cornerstone investors usually agree to not selling their shares for six months, giving jittery smaller investors the confidence to subscribe to the offering. Prudential Financial of the United States and the International Financial Corp raised their commitment to Fosun Pharmaceutical's offering to a combined US$75 million, up from US$50 million in the initial proposal. Haitong Securities, the country's second-biggest broker by asset, secured US$557 million from 11 cornerstone investors in its offering in April. The amount represented about one-third of the entire deal size.

China boasts of 'world-class' uranium deposit discovery, but experts wary (By Stephen Chen) Nuclear industry experts remain wary of China's grand claims for the Inner Mongolia reserve, saying there have been exaggerations in the past. The Qinshan nuclear plant in Haiyan, Zhejiang. China announced the discovery of a "world-class" uranium deposit in Inner Mongolia yesterday but kept its exact size a secret. Some nuclear industry experts said the secrecy could be a deliberate government strategy to add to its bargaining power in negotiations to buy uranium mines in other countries. The reserve, although the largest of its kind in China, could be small by world standards and insufficient to meet the country's growing demand for uranium given that it is building the world's largest network of nuclear power plants, they said. Xinhua said it was found in the Daying area, in central Inner Mongolia. "It is a world-class reserve. It will significantly help the increase of domestic, independent supply," the report, quoting the Ministry of Land and Resources, said. But Professor Jiao Yangquan , the chief scientist of the project, from China University of Geosciences in Wuhan , refused to confirm the "world-class" claim. "I am not allowed to discuss the size of the reserve," he said. Jiao led a research team on the site and reported the estimated size of the reserve to senior land ministry officials in July, the university's website said. Neither the ministry nor its Central Geological Exploration Fund, which funded the project, responded to inquiries. Some foreign and domestic experts doubted the "world-class" claim, saying China was known as a country with low uranium reserves and that status was not going to be changed by the discovery of a few uncertain sites. A sales manager with a major foreign uranium trading company in Beijing said the last time China announced the discovery of a "world-class" and "mega-sized" deposit, in Yili in Xinjiang , the actual reserve turned out to be only about 10,000 tonnes. "I don't think the find in Inner Mongolia will be much bigger this time, partly because the government has a record of exaggeration," he said. According to the World Nuclear Association, China had reserves of 171,000 tonnes in 2009, only a tenth of Australia's and three per cent of the world total. It produced 1,500 tonnes last year, while Kazakhstan produced almost 20,000 tonnes. Gu Zhongmao , the deputy director of the China Institute of Atomic Energy's scientific board, said there had been embarrassing exaggerations of uranium reserves in the past with "over-optimistic" claims. "Most of the uranium reserves that have been nailed with certainty in China are small, of low quality and costly to excavate," Gu said. "That's why Chinese companies are actively seeking to buy uranium mines all over the world. Uranium is [a] non-recoverable resource and the more we can import the better. I don't think that policy will change. "But any news of large domestic reserves will certainly help as leverage in buyout bargaining."

China slams UN Tibet comments (Xinhua) A spokesman for China's Foreign Ministry on Monday slammed accusations by Navanethem Pillay, the UN high commissioner for human rights, involving Tibet and urged her to stop making remarks interfering in Chinese domestic affairs. "We are dissatisfied with and strongly opposed to the high commissioner's statement," said Hong Lei of Pillay's remarks on Friday that urged China to address frustrations with human rights in Tibet. Hong told a regular press briefing that people in Tibet are enjoying economic growth, social stability and a settled life. Their religious, political, economic and cultural rights are guaranteed. With regard to the self-immolations taking place lately in China's Tibetan-populated regions, Hong said the Dalai Lama clique clamorously prettified such activities that were against China's laws and religious doctrine. "The clique has talked black into white, passed the buck to the Chinese government, and made accusations about China's national and religious policies. Such despicable behavior with the sacrifice of other people's lives goes against human morals and conscience, and should be severely condemned," Hong said. He added that China hopes the high commissioner will uphold an objective, fair and neutral stance, and stop issuing remarks interfering in China's domestic affairs. According to the spokesman, people in Tibetan-populated regions are satisfied with the current situation. He stressed that China opposes any foreign government, organization or people interfering in its internal affairs in any form.

Hong Kong*:  Nov 6 2012 

Cheung Kong (Holdings) (0001) became the first major developer to absorb an increase in property prices due to the imposition of the 15 percent stamp duty on non-local home buyers. The developer will slash the prices of two villas at its Uptown project in Yuen Long by 15 percent - the amount of the additional levy. The move - just days after executive director Justin Chiu Kwok-hung vowed not to cut prices - makes Cheung Kong the first developer to cut the sale price of new homes. The two villas, originally priced at HK$18.7 million each, will now carry a tag of HK$15.8 million. That also represents a 1 percent discount to the price at which similar homes were sold in June last year. Other developers, while not mentioning price cuts, have said they will change strategy and become more cautious on acquiring land. "We will adjust the ratio of sale and leasing of the Marinella project in Aberdeen, keeping more units for investment," said Wilson Chan Yuk-sing of K Wah International (0173). Nan Fung Development deputy general manager Raymond Lai Hok-leung said: "The new duties have made it inconvenient for mainlanders as most of them buy luxury flats in the name of companies. "So the new measures will pull down property prices and transactions, and therefore we will react according to market changes." A survey conducted by property agency Midland after the new measures were revealed on October 26 has found that 62 percent of potential home buyers from the mainland will now stay away from the Hong Kong property market. Real Estate Developers Association executive committee chairman Stewart Leung Chi-kin said the new taxes are too harsh and will have an adverse impact. "There is something unclear in the curbs, including details on old building acquisition for redevelopment," he said. "The association will have a meeting on the new measures today and may submit a written report on our concerns." Sources said the meeting will also discuss issues on whether home sales in the form of corporate transfer should face the additional stamp duty of 15 percent. Fitch Ratings questioned if the new curbs might contain the risk of a large property bubble developing. But it said they will buy time for the authorities to deal with the short supply of homes.

Lawmaker wants review of trade missions as costs rise (By Lana Lam) Lawmaker says overseas offices should be reviewed to ensure they offer value and don't overlap with other investment agencies. Hong Kong's network of trade missions around the world spent HK$70 million more this year than they did in 2006, prompting calls from lawmakers and economists for renewed scrutiny of the benefits they bring to the city. The calls come ahead of Legislative Council inspection later this month of the annual reports from the 11 economic and trade offices, which detail their activities, including how many foreign companies they have brought to Hong Kong in the past year. The offices, which employ 146 staff, are expected to cost about HK$303 million to run this financial year, up from HK$232 million in 2006. Their activities include helping companies set up in Hong Kong, hosting trade visits and organising trade promotion seminars and fairs. New IT sector lawmaker and pan-democrat, Charles Mok, a member of Legco's commerce and industry panel, which scrutinises the work of the overseas missions, has suggested that a fresh look be taken at whether the work of the missions overlaps with that of the Hong Kong Trade Development Council and InvestHK, agencies that also promote inward investment. "We should look at whether there is an overlap with the trade offices, the TDC and Invest HK," Mok said. "We also need to look at whether or not circumstances have changed and if some offices are not needed any more, as well as considering new, emerging markets. "It's always good to have regular, periodic reviews and it's not just about cost saving but about maximising return, because in some cases, maybe we need to spend more." Since 1997, the government has had 11 economic and trade offices in key markets including London, New York, Geneva, Brussels, Singapore, Sydney and Tokyo. It also has four on the mainland. Each office is tasked with promoting Hong Kong as a place to do business and works in conjunction with TDC counterparts in each country. Dr Li Kui-wai, associate professor with City University's economics and finance department, said the offices were as relevant today as 15 years ago when they were established because companies wanting to access the lucrative mainland market looked to Hong Kong as an easy gateway. "Without [the missions], nobody knows about Hong Kong unless they go through the Chinese consulate," Li said. But he said there was a need to review their reach, and called on the government to look at whether existing offices might refocus on markets such as Saudi Arabia and Mexico. A spokesman for the Commerce and Economic Development Bureau said there were no plans to close any trade offices or to open new ones. He said a fifth one on the mainland was managed by the Constitutional and Mainland Affairs Bureau. The bureau spokesman said budget figures for the offices before 2006 were not available.

Architects unveil plans for floating columbarium (By John Carney) Designers say vessel with 37,000 niches could solve land problem and dock during festivals. Artist's impression of Floating Eternity berthed at the new Kai Tak cruise terminal. A local architecture firm has come up with an ingenious way to alleviate the growing shortage of burial space - by turning a ship into a floating columbarium. Bread Studio has developed the concept, which it calls Floating Eternity, with space for 370,000 niches. The vessel would float in waters off Hong Kong and dock only during the annual Ching Ming and Chung Yeung festivals, when people traditionally pay respects to their loved ones. On normal days throughout the year, visitors would be able to take a ferry to the columbarium anchored offshore. Bread Studio co-founder Paul Mui believes the idea makes financial and practical sense. "Some might say it's too expensive to renovate a ship into a floating columbarium, but this isn't true," Mui, 33, said. "When you look at the current land values in town and the area required to build a columbarium of a similar size as this model, this is much more economical in the long run." During the festivals, the ship could dock at different piers over several days to avoid traffic congestion. And when the new Kai Tak cruise terminal comes into operation next year, the columbarium operators could choose from an even greater variety of well-equipped piers, Bread Studio architects said. The development is only just off the drawing board, however, and will need serious investment - as well as government approval - for it to become a reality. But Mui is confident of Floating Eternity's appeal, considering the huge importance Hongkongers place on on good fung shui and their superstitions surrounding death. "In Hong Kong there are three things that are essential today. These are hospitals, landfills and columbaria. The only issue is that no one wants one of these located beside them," Mui said. "What better way of avoiding all this than by having a columbarium floating far out at sea and well away from anyone? It's definitely one way of solving the problem."

Bordeaux to promote mid-range wine in China (Xinhua) China's wine market is maturing, with the customers diversifying their tastes from costly wines to cheaper ones, and Bordeaux plans to promote mid-range wine in the Chinese mainland to grab more market share in the future, Georges Haushalter, the president of Bordeaux Wine Council has said. Attending the four-day Wine and Dine Festival held in Hong Kong starting on Thursday, Haushalter told Xinhua that many Chinese wine collectors used to buy Bordeaux wines through Hong Kong, the global auction center for fine wines, and pushed up the prices for Bordeaux wines. However, the market cooled quite a bit recently, he said, adding that it is a normal process in a maturing market. "People start to realize there are not only five, but 10,000 chateaux in Bordeaux. This diversified their choices." The current average price of Bordeaux wine per bottle in Hong Kong is 21 euros ($27), almost three times than the 7.4 euros of the global average price, Haushalter said, while it is 5.1 euros in the Chinese mainland. He said the growth potential for Bordeaux wines in the Chinese mainland market is "huge", and although Bordeaux represents 60 percent of imported wine on the mainland, the whole scale of imported wine market is still very small. "What we want to do is to help the Chinese customers learn about wines, so that they can discover new chateaux and diversify their tastes," Haushalter said, adding the main strategy for Bordeaux in the future will be focusing on the mid-range wines in the mainland market. In addition, some mainlanders' passion for Bordeaux wines has broadened from buying bottled wines to the chateaux, Haushalter said. There were only two chateaux owned by the Chinese in Bordeaux three years ago, while now there are 30, with 25 transactions having taken place over the past two years, he said. "I have met some of the Chinese owners, and they are really passionate about Bordeaux wines. They are also wise businessmen, because they see the potential of wine market, and take good care of their chateaux to provide more diversified products to the Chinese market," he said. "It is a wise business decision based on passion." According to data provided by the Bordeaux Wine Council, over the past year, the overall export value of Bordeaux wines has hit a record high at 2.3 billion euros, and among which, the export to the Chinese mainland rose 38 percent year-on-year to 354 million euros, right after the United Kingdom and surpassing Hong Kong for the first time. In terms of volume, the mainland bought 55 percent more wines to 15 million bottles, ranking the first and exceeding Germany, the second largest importer of Bordeaux wines by over 90 percent.

 China*:  Nov 6 2012

Giant copper mine offers Mongolia a cash bonanza (By Agence France-Presse in Ulan Bator) The Oyu Tolgoi mine in Mongolia is expected to produce 450,000 tonnes of copper concentrate a year at its peak. Deep in the heart of the Gobi Desert in Mongolia amid a landscape of sand dunes and ice canyons, one of the world’s biggest copper mines is about to come on stream. Anglo-Australian miner Rio Tinto and Canada’s Turquoise Hill Resources have jointly led construction of the US$6.2 billion Oyu Tolgoi mine which is expected to produce 450,000 tonnes of copper concentrate a year at its peak. Oyu Tolgoi has estimated that by the time the mine is in full production in 2019, peak earnings could provide up to one-third of government revenue, averaging 800 billion tugriks (about US$575 million) per year over the life of the project. That holds out the promise of vast revenues for the government that can be spent on infrastructure and education if corruption can be kept in check. “Most countries that have natural wealth have failed,” President Elbegdorj Tsakhia said in an interview. “Those that succeed are open countries, meaning they have open policy and democracy,” said the 49-year-old, who studied at Harvard’s Kennedy School of government and was elected in 2009. “I regard my country as an open country.” The state owns 34 per cent of the joint venture, which is expected to be in operation for at least 50 years. But according to a 2010 study by the IMF, the government will take 55 to 71 per cent of revenues because of royalties and taxes. The first trucks are envisioned rumbling towards the Chinese border within the first half of next year, where Chinese buyers will take the concentrate to copper smelters for further processing. The metals are expected to be used in construction materials and consumer electronics, such as copper pipes, iPads and iPhones. An estimated nine tonnes of gold will also be extracted from the concentrate each year, worth about US$553 million at today’s market rate. How Mongolia will manage its revenue from the project is a key question for Elbegdorj’s administration, says Oscar Mendoza, managing partner at Mongolia Asset Management, an investment adviser group based in Ulan Bator. “Will it be Nigeria or Norway? Will it be the Philippines or Qatar?” he said. Mongolian officials are aware of the so-called “resource curse” that often afflicts developing nations whose enormous natural riches fail to translate into better lives for citizens. The president cited Norway, Australia and Chile as models for his landlocked nation of 2.7 million people whose average per capita income was US$3,140 last year, according to the World Bank. To fight possible corruption, the government has put in place what it claims will be a transparent treasury system across its ministries in order to track the flow of money. “We have been working with them for several years and they have made great progress in many areas. They do have transparency of revenues,” said World Bank resident representative Coralie Gevers. Mongolia is compliant with the Extractive Industries Transparency Initiative (EITI), a Norway-based organisation which uses third-party auditors to inspect mining revenue data provided by governments and mining companies. One of Mongolia’s great hopes for spreading wealth is a so-called Human Development Fund, established to boost social welfare projects. Rio Tinto has already contributed US$803 million to the government in taxes, pre-payments and other fees. But the mine – open pit initially and underground starting in 2016 – faces objections from some local residents concerned about the environmental impact. Herders have complained about dust kicked up by trucks, which they say harms livestock. In October, the campaign group OT Watch filed a claim against the mine on behalf of herders seeking compensation. The mine has also run into political headwinds as vocal backbench legislators demand the government amend its 2009 investment agreement to increase its stake in the project to 50 per cent. Prime Minister Altankhuyag Norov has not endorsed the calls, but says Mongolia “will revisit and reconsider some aspects of the agreement” because of higher development costs – to the angst of the private developers. “When a few parliamentarians push government to renege on past deals, it’s not just investors who are hurt, its Mongolians, Mongolian businesses, the entire supply chain,” Rio Tinto spokesman Houston Spencer told a recent conference. Another pending issue is finalising a power purchase agreement with China which remains incomplete amid ongoing negotiations between Rio Tinto and Beijing, according to the company. Until it is inked, Oyu Tolgoi cannot switch on key equipment that reduces raw ore to concentrate, a process which makes it economical to export. The delay could hurt Mongolia’s economy, which has found itself on softer ground in recent months due to falling coal revenue in July and August. Third-quarter GDP growth was 5.6 per cent, compared with 16.5 per cent in the first quarter, according to the National Statistics Office. “Any delay in commercial production at the mine could also impact the near term growth outlook,” a World Bank report noted last month.

CCTV election coverage opens new front in media war (By Niall Fraser) CCTV's ambitious global expansion takes a giant step this week with live coverage of the US election, but can the service garner credibility? The striking CCTV headquarters in Beijing, from where it has been branching out across the globe. The headquarters of CCTV America in Washington sits just 10 blocks from the White House. By the time the identity of the next resident of 1600 Pennsylvania Avenue is known later this week, China will have opened a new front in what it sees as a war to wrest control of the global news agenda from Western-dominated media giants such as CNN and the BBC. From 8pm US time on Tuesday, 50 million people around the world - just a tiny fraction of them in mainland China - will be able to watch uninterrupted English-language coverage of a US presidential election in real time through a Chinese - albeit state-controlled - prism for the first time. In one of China Central Television's biggest journalistic undertakings outside its home market, the station will air up to six hours of live coverage of the election results as ordinary Americans find out whether Barack Hussein Obama, 51, or Willard Mitt Romney, 65, is to be the next president of the United States. More than 100 journalists, producers and technicians will staff the output, which will consist of live debate and discussion from CCTV's studios in the American capital, plus reaction from correspondents based in 10 cities around the world. This will be no tour of the hot spots favoured by the traditional behemoths of global 24-hour news. As well as Beijing, anchor Mike Walters will link up with correspondents in Havana, Moscow, Rio de Janeiro, Cairo, Tel Aviv, Nairobi, Mexico City, Bogota and London. The content, say senior executives at CCTV America, will be "free and open" on all the issues raised as the results come in, a not inconsiderable pledge from a broadcaster strictly controlled by the apparatus of a one-party state. Since 2009, Washington-based Jim Laurie, a veteran television journalist and former University of Hong Kong journalism scholar, has been working as a senior consultant with CCTV in Beijing, Shanghai and Washington. He was closely involved in the setting up of CCTV America, which began broadcasting in February, and in the production of the election night coverage. The November 7 live special has been masterminded by the director general of CCTV America, Ma Jing, who could not speak to the Sunday Morning Post because she was directing coverage of the carnage wreaked by Hurricane Sandy. But a press release from CCTV America describes the coverage as "an important first" for the channel "during an important political week for both the United States and China" as it comes ahead of the start of the 18th Communist Party congress on Thursday, which will see a new generation of leaders ascend to power in Beijing. Laurie says while the coverage - which CCTV is also billing in the run-up as "unique" - will be accented on the economic and world trade implications of the presidential campaign and its results, nothing will be off limits. "Looking at the content and the line-up that we have, all of the issues that have been brought up in the US election campaign will be addressed in this broadcast," he says. "For example, we are excerpting the two presidential debates in which China was mentioned. "We will fully explore Romney's statement that from day one of his presidency he would declare China a 'currency manipulator'. "The Chinese position is this; whereas Fox News and other channels in the States will simply let ride a statement like China is a cheat or currency manipulator, we will broadcast these sound bites, but we will have the riposte to that. That seems to be the guidance that we are getting here in Washington." The coverage is the latest expression of China's attempt to boost its presence in the global media milieu after President Hu Jintao defined "soft power" development as a key national strategy in his political report to the 17th party congress in 2007. Beijing has spent billions of dollars expanding its global "transmission capacity" in a media marketplace that it perceives as being dominated by Western outlets that "victimise" China, whether by design or habit. At a time when most Western broadcasting and newspaper companies are retrenching, China's state-run news giants are expanding rapidly in Africa and across the developing world as Chinese investment there explodes. CCTV has opened up a Washington-style operation in Nairobi, Kenya, which broadcasts to the whole of the African continent. Laurie says next on the Chinese radar is South America, which, thanks to Al Jazeera's refocusing on the Middle East as a result of the Arab spring, is getting under-reported. A potential dilution of Western media domination came in the shape of the upwardly mobile Arab channel Al Jazeera English in 2006. Indeed, a number of CCTV's recent hires who will take part in the live broadcast are formerly from the BBC, CNN and Al Jazeera, which China looks to as a model of sorts on how to do rolling 24-hour international news from a non-Western-centric perspective. Among them is Anand Naidoo, most recently of Al Jazeera and before that CNN. Naidoo will chair panel discussions on politics and international relations with a long list of notable guests, including former US national security adviser to president Jimmy Carter Zbigniew Brzezinski. "Chinese media outlets are benefiting from the fact that the traditional networks, including the BBC, are being forced for various different reasons to cut back," Laurie says. "This has made some pretty good journalists available to CCTV. In Havana, we have Michael Voss, who was with the BBC for many years, including five or six years as Havana correspondent. We've got Stephen Gibbs, formerly the BBC's man in Mexico, who's just moved to Rio de Janeiro and who will give the Brazilian perspective on the election." Of course, two former BBC swallows don't make a summer, as David Bandurski of the China Media Project at the HKU pointed out in a recent article. "The most salient symbol of China's official failure to grasp the game rules of soft power and credibility is in fact Melissa Chan, the Al Jazeera correspondent China sent packing earlier this year," Bandurski writes on the project's website. "Al Jazeera was feted by many Chinese officials and scholars as the act to follow, a new international channel that was non-Western but could gain a high degree of credibility for its coverage. By ejecting Chan and forcing the closure of Al Jazeera's Beijing bureau, China has effectively admitted the impoverishment of its hopes of building a credible international news channel. "Whatever its ambitions may be, it is determined to control the 'voice' of China - as though it were not the product of the full complexity of China's culture and ideas, but rather a megaphone to shout over the heads of international audiences." On top of this, the fact remains that the vast majority of China's 1.3 billion people will be unable to watch CCTV's groundbreaking coverage of the US polls, even if they wanted to. Laurie admits that the tone and scope of the CCTV coverage within mainland China's borders will be significantly different from that of the English-language broadcast out of Washington. Baptist University professor of journalism Huang Yu says: "In contrast to the much freer and more candid discussions to which international viewers are expected to have access, domestic coverage is likely to refrain from some contentious issues in bilateral relations, instead focusing on issues such as US strategy in other parts of the world. "The unprecedented coverage of the election in the United States aims to demonstrate to the world that CCTV is as good as any other international news organisation. The North American branch has undergone huge expansion and done a lot of preparation since earlier this year." Qiao Mu , associate professor at Beijing Foreign Studies University, who specialises in international communications, says Beijing wants to use the election as a platform to give a Chinese perspective on a global event. On domestic coverage, Qiao says: "[CCTV] will definitely try to soften US criticism of China while stressing the importance of ties and intertwining of the economies of both nations." However, making real inroads into what they perceive as a Western-dominated global media landscape could be a long, hard slog, according to both Huang and Qiao. "The Chinese government has long aspired to have a big say via greater presence of Chinese media internationally to match its economic clout and it has the resources, the technology and a pool of professionals to deliver such ambition," Huang says. "However, the government might not be ready to allow CCTV to run independently in line with the professional international standards of other international news outlets." The main obstacle CCTV will face is the global perception of it as a government tool, Qiao says, in contrast to most of the private or publicly funded but independently run media outlets. "The sustainability of its overseas operations could be called into question if, after the leadership transition, the new leadership wants to give top priority to domestic issues, such as addressing a widening wealth gap and raising the standard of living, instead of spending on media expansion overseas. The government might also be forced to scale back or cancel certain expansions because of rising public discontent as a result."

Droves of overseas reporters in capital for Party congress (By Zhu Zhe) The number of overseas reporters registered to cover the upcoming 18th National Congress of the Communist Party of China has seen a remarkable increase over the previous congress, showing the world's rising attention to a rapidly changing China. Although there was still more than one day to go until the registration deadline on Friday night, the number of overseas journalists registered by Thursday noon had surpassed the number for the last Party congress by a big margin, Zhai Huisheng, director of the media center of the congress, told China Daily on Thursday afternoon. He would not disclose the exact number, but said that the figure is still rising. About 1,200 overseas reporters registered to cover the 17th CPC National Congress in 2007. Zhai said overseas reporters this year are from more media organizations, many of them from developing economies. "Many reporters are not based in China and they come here for the congress," he said. "It shows the huge attention of the international community to the congress." At a meeting on Sept 28, the Political Bureau of the CPC Central Committee proposed convening the 18th CPC National Congress on Nov 8 in Beijing. To prepare for the congress, the seventh plenary session of the 17th CPC Central Committee opened in Beijing on Thursday. Thursday also marked the official opening of the congress's media center in Beijing Media Center Hotel. Zhai said that the center would arrange news conferences, group interviews, online talks or reporting tours every day before and during the congress, all on major issues. During the 16th CPC National Congress in 2002, only two reporting tours were held and four were arranged during the 17th Party congress in 2007. This year, dozens of reporting tours will be arranged for registered overseas reporters to different areas and industries in Beijing, nearby Hebei province and Tianjin municipality, Zhu Shouchen, deputy director of the media center, said on Thursday. Since Thursday, reporters can also submit interview requests through an online system at — the information portal of the congress — if they want to talk to any individual delegate. The site, which opened on Thursday, provides the congress agenda, latest news, announcements and background information on past CPC national congresses in Chinese and English. Zhai said that during the 17th Party congress more than 60 percent of such individual interview requests were fulfilled, and this year he is confident the success rate would be higher.. Ilsa Rodriguez, a correspondent for the Cuban news agency Prensa Latina, said she would like to do some interviews on China's social and economic development. Rodriguez is on her second tour of duty as a resident reporter in China and had covered the 16th Party congress in 2002. "Politics will be the main part of the upcoming Party congress. I also want to know more about how China addresses its social security, healthcare and education issues," Rodriguez said. Yang Chao, deputy director of the news department of Taiwan's Eastern Broadcasting Co, said his biggest concern is the future development of cross-Straits relations. "I hope negotiations and cooperation between the island and mainland will expand from the existing cultural and economic sectors to politics," he said. Yang also said he's pleased reporters can register and submit interview applications online this year. "Before, we had to do lots of paperwork and there was a bigger chance for mistakes," said Yang. Free Wi-Fi is also provided at the media center. "We must keep pace with the times," said Zhai, director of the media center.

Hong Kong*:  Nov 5 2012 

New stamp duties fail to deter 16 bids in two residential land block tenders (By Paggie Leung) Government tenders for two housing sites attract at a total of 16 bids each before closing. Developers do not appear to have been put off from buying land by the latest measures aimed at cooling the property market. The government received at least seven bids for each of two housing sites for which tendering closed yesterday. A site near the Tseung Kwan O MTR Station that can yield a total gross floor area of 563,300 sq ft drew seven bids, the Development Bureau said yesterday. Another site, in Lok Wo Sha, Sha Tin, with a potential gross floor area of 562,000 sq ft, attracted nine bidders. "It seems the new tightening measures have not had much impact on developers' buying sentiment, but we will need to see the prices they bid," said Ringo Lam Chun-chiu, director for valuation at A.G. Wilkinson & Associates. These were the first land sales by the government after it introduced a buyer stamp duty on non-permanent residents and companies last Friday and increased and extended the special stamp duty on flat sales to curb soaring home prices. Cheung Kong, New World Development and Wheelock Properties bid for both sites. "The good response is due to a lack of investment channels for developers and investors, particularly when the global economy is not good," Vincent Cheung Kiu-cho, property consultancy Cushman & Wakefield's national director for valuation, said. "Local demand is still high amid a low-interest-rate environment." Although surveyors said the number of bidders had exceeded their expectations, some revised downwards their valuations of the two sites by up to 10 per cent. The Tseung Kwan O site is now expected to fetch HK$2.3 billion to HK$2.648 billion, equating to HK$4,083 to HK$4,700 per buildable square foot, according to six property consultancy firms surveyed by the South China Morning Post. The Lok Wo Sha site is expected to fetch HK$2.22 billion to HK$2.76 billion, or HK$3,949 to HK$4,910 per sq ft. Centaline Property Agency's Centa-City Leading Index, which tracks changes in home prices in the secondary market, has set a new high for six consecutive weeks and closed at 114.35 for the week from October 8-14.

Chief Secretary Carrie Lam 'shaken' by old-age allowance outcry (By Joshua But, Tony Cheung and Jennifer Ngo) Carrie Lam admits it is worrying that even a relief measure for the elderly poor can prove controversial in a city that is so 'ideologically divided'. Chief Secretary Carrie Lam responds to questions from Chinese University political scientist Ivan Choy Chi-keung yesterday. Chief Secretary Carrie Lam Cheng Yuet-ngor has admitted the old-age living allowance saga has shaken her confidence about achieving a consensus on political reforms. Speaking frankly at a Chinese University lecture yesterday, Lam said politics in a city as ideologically divided as Hong Kong was a complex process. "Look at the old-age living allowance saga - even a relief measure for the elderly can be controversial. We can see how big the differences in ideology are [in the current political climate]." Fielding questions from 500 students, the No 2 in the government said she still aspired to achieve a wide consensus on the controversial arrangements for universal suffrage in 2017, which was likely to affect the election of the chief executive. She expressed similar hopes for reforms to take effect by the 2016 Legislative Council election. On her philosophy of leadership, Lam said she believed a good premier needed to "rock the boat". She stressed that government policies must be driven by "pragmatism" rather than "romanticism". The government is currently trying to pass the funding application of the old-age living allowance, which proposes to give poor elderly a monthly payment of HK$2,200. However, it failed to go to a vote in the Finance Committee on Tuesday, as the government and opposition lawmakers, who want to scrap a means test, both refused to back down. The government will bring it forward again next week. Students following such political battles did not shy away from tricky questions, asking Lam if she had been able to "get past her own conscience" to sleep well in the past four months as chief secretary. Lam replied: "I will give myself 10 points on a scale of 10 [for conscience]. I sleep well every night, but just not quite enough." Lam refused to comment on the pro-democracy protest in Tiananmen Square in 1989, although she did answer critics who mistrust Chief Executive Leung Chun-ying. "Some people think he is an underground communist and have doubts about him. From what I see and hear, he acts according to the interests of Hong Kong people," she said. Lam said she was deeply worried that the administration could meet with even greater difficulties if it could not regain the trust of the public quickly. Lawmaker Wong Kwok-kin, of the Federation of Trade Unions, said Lam had acknowledged that the current political climate had made it difficult to reach a consensus in society. But Labour Party lawmaker Cyd Ho Sau-lan disagreed. "The consensus is already set out in the Basic Law as it suggests that Hong Kong will achieve universal suffrage with genuine democracy … So how could there be no consensus?" The Democratic Party's Helena Wong Pik-wan said: "[Consensus] is always difficult … and the previous administration failed its job," she said. "This time the government must take the initiative to win the support of two-thirds of the lawmakers."

Hot money pushes up Hong Kong stocks to 15-month high (By Jeanny Yu) Hong Kong stocks hit a 15-month high yesterday, breaching the 22,000 level for the first time in 15 months as investors were cheered by positive data from the US and the mainland. The Hong Kong Monetary Authority (HKMA), the city's de facto central bank, stepped into the money market for the 10th time over the past two weeks as hot money continued to flow into the city. The HKMA sold a total of HK$5.04 billion in Hong Kong dollars yesterday in the latest move to stabilise the currency. The benchmark Hang Seng Index closed 289.46 points, or 1.33 per cent, higher at 22,111.33, the highest figure since August 2 last year. The Hang Seng China Enterprises Index (HSCEI), which tracks the performance of Hong Kong-listed mainland firms, added 132.52 points, or 1.24 per cent, to finish at 10,833.73. The mainland's official Purchasing Managers Index on Thursday showed factories were back in expansionary mode for the first time since May this year. "People were not as bearish as they were in the middle of the year because China is stabilising. The worst is over," said Vincent Chan, Credit Suisse's China equity strategist. He said the HSCEI had the potential to test 12,000 in the months ahead, with mainland firms to outperform the benchmark HSI on valuation. Investors were also upbeat about fresh US economic data. The Labour Department said 171,000 new jobs were added last month - well above expectations. And US consumer confidence jumped to its highest level in more than four years, the Conference Board said. Daily turnover yesterday of HK$70.12 billion was the highest since October 18, compared with a year-to-date average of around HK$53 billion, a sign that abundant liquidity buoyed by consistent hot money inflows are building positions in equities. Yet Chan is conservative about the impact of hot money inflows on equity prices in Hong Kong. He said: "Although the situation is improving, foreign investors are no longer as bullish on China as they were when QE 2 was launched in 2009. Some were still quite conservative on the China story due to shadow banking, unclear political signals and social stability issues." Macau casino operators made gains after the city's gambling revenue hit a record high last month. Sands China gained 6.33 per cent to finish at HK$31.9 and SJM Holdings added 6.11 per cent to HK$18.06. Meanwhile, retail stocks gained momentum after the city's September retail sales posted better-than-expected 9.4 per cent growth to HK$34.1 billion. Jeweller Chow Tai Fook surged as much as 9.6 per cent to finish at HK$10.58, while Hengdeli Holdings jumped 9.6 per cent to close at HK$2.86. Morgan Stanley analyst Denise Yam wrote in a note: "We expect retail sales growth to remain largely stable for the remainder of this year, averaging slightly less than 10 per cent for the full year."

Director serves 3-D slice of Life (By Liu Wei) Academy Award-winning director Ang Lee's first foray into 3-D, Life of Pi, will open in China on Nov 22, the same day as its United States premiere. Lee's adaptation of Yann Martel's book that has sold more than 7 million copies and spent years on the bestseller lists follows a young man who survives a disaster at sea and is hurtled into an epic journey of adventure and discovery. While cast away, he forms an amazing and unexpected connection with another survivor, a Bengal tiger. Director Ang Lee was in Beijing on Friday to promote his first 3-D film, Life of Pi, which will open in China on Nov 22. The film encompasses three continents, two oceans and a huge budget. 20th Century Fox did not reveal the exact number, but in 2010 Lee and his producer Gil Netter reportedly proposed a budget of $70 million. Li fulfilled the epic in four years, during which the pressure was so profound that he felt he was Pi, floating on an ocean and having no idea when he would see land again. "I had emotional moments of telling myself I am the big director, so I will do whatever I want, a most-expensive art-house film that has a position in history," he said. "But it turns out that I actually want more from the film - it should be a universal story inspiring to a wider group, not only a group of elites." The film challenged the 3,000-person crew by gathering the three most difficult things to shoot: an animal, water and a child - and in 3-D. "Making the novel into a film was like a mission impossible at first, until I turned to 3-D to expand the scope of the film and envelop the audiences in the story's emotional hold," he said. "3-D is a new cinematic language, and in Life of Pi it's just as much about immersing audiences in the characters' emotional space as it is about the epic scale and adventure." In Taichung, Taiwan, Lee kept four Bengal tigers in what he called "five-star cages". Every tiger had its own garden. They played only part of the scenes, most of the time serving as references for visual artists to create the big cat on screen. "I was delighted every time the tiger gave the movement I wanted and no one got eaten because of that," Lee joked. Animal protection organizations in the US, Taiwan and India visited from time to time. Once Lee had to explain a computer-generated take that was so vivid that some Indian animal protectionists thought he must have used drugs to make a real tiger faint. The team also built the world's largest self-generating wave tank in a deserted airport in the city, which worked as a functional working movie studio. Lee said he never found any shots of water that really amazed him before, so using 3-D he tried to achieve a new high-water mark, so to speak. "Water is an important element in the film, serving as a magnificent stage where the story is told, as well as a mirror reflecting the characters' inner world." The film has only publicly screened at the New York Film Festival in September, receiving overwhelming good reviews. Todd McCarthy of the Hollywood Reporter commented: "This exceptionally beautiful 3-D production should prove accessible to and embraceable by all manner of audiences, signaling substantial commercial possibilities domestically and probably even more so internationally." Pete Hammond of hails it as "an instant awards contender" for Oscar 2013. As the only Academy Award-winning Chinese director, Lee sees the event like the presidential election in the US. "You have to eat rubber chicken at, at least, 15 to 20 dinners before building up some reputation," he joked about the campaign before the awards season. The award would be a great acknowledgement for him and the whole team, he added, but the most beautiful thing about making a film for him is to provoke thoughts among viewers. "Like what Pi says at the end of the film, at last we all have to tell our own stories," he said. "You can never make a film the audience wants exactly, so every time I leave some time for them to think about the film in their own minds. That is the most beautiful thing about filmmaking."

 China*:  Nov 5 2012

China's purchasing managers' index rises to 55.5 (By Reuters in Beijing) China’s official purchasing managers’ index (PMI) for the services sector rose to 55.5 in October from 53.7 in September, the National Bureau of Statistics said on Saturday, adding to signs of a modest economic recovery. A reading below 50 indicates activity is contracting and one above 50 signals expansion compared with the previous month. The services sector index follows two manufacturing PMI surveys that showed the world’s second-largest economy is finally regaining some steam in October following a series of pro-growth policy steps, including interest rate cuts and quickening infrastructural spending..China’s fast-growing services industry has so far weathered the global slowdown much better than the factory sector, with the PMI consistently signalling healthy expansion and hitting a 10-month high of 58.0 in March.

US farming machinery maker Deere set to reap rich harvest (By Zhou Siyu in Harbin) The head of Deere & Company, the world's largest agricultural machinery manufacturer by revenue, says the US company is to invest further in China over the next few years, as the country strives to update and improve the agricultural sector to feed its growing population. Samuel Allen, chief executive officer of the company, best-known as John Deere, highlighted the government's plan to introduce more advanced agricultural machinery, which may help raise China's grain yields by between 20 and 30 percent. "We will continue to invest in China, on localizing our production facilities, on research and development centers, and by optimizing our current facilities," Allen told a news conference on Friday in Harbin, capital of Heilongjiang province. He was there to open its latest site in the country - a 1.6 billion yuan ($250 million) investment, covering 400,000 square meters, which encompasses R&D facilities and an assembly plant, which will produce nearly all of its models of agricultural machinery. Allen said that the company's eventual total investment in China could be huge, but declined to disclose the exact amount. John Deere first came to China in 1976, one of the earliest US companies to invest in the country, and it has managed to achieve steady expansion ever since. Its latest move was setting up a construction machinery plant in Tianjin in June, and it now has eight production facilities across China, two of which are in Heilongjiang province, which accounted for a seventh of the country's total grain output in 2011, according to government data. "Heilongjiang is the frontline of China's mechanization in the agricultural sector, and our Harbin plant will be of significant importance to our business in China," added Liu Jinghui, the company's China president. As a result of China's recent slowdown in economic growth, the appreciation of its currency and rising labor and other costs, a number of US manufacturers have recently expressed concern over their business in the country, and suggested they could move production back to the United States. But Allen said that John Deere has a solid perspective for its business in China over the next 20 to 30 years, partly because of the sheer size of the country's market, but also because of its need to boost food production as the population rises. China achieved bumper harvests for eight consecutive years up until last year, with annual grain output currently standing at 571 million tons. The Ministry of Agriculture recently said that there will be further increases in this year's grain yields. Allen highlighted the government's policies to meet the country's growing agricultural demands as key to John Deere's expansion plans, particularly the planned introduction of more advanced agricultural machinery, to raise grain yields by between 20 and 30 percent. "These government policies are very helpful for us to better position our business in China," Allen said.

Hong Kong*:  Nov 4 2012 

Li & Fung to issue bonds to fund offshore acquisitions (By Celine Sun in Beijing) Toy and clothes supplier's plans to take on more debt prompts credit downgrade and stock rise. Demand from the United States is expected to rebound, bolstering Li & Fung's position. Li & Fung, the world's biggest supplier of clothes and toys to retailers, saw its credit rating outlook downgraded after announcing plans to offer US dollar-denominated perpetual bonds to fund overseas acquisitions. Despite the plans to take on more debt, the stock rose nearly 1 per cent yesterday as investors bet the supplier would be able to use the acquisitions to boost its declining core earnings. Li & Fung said in a filing to the Hong Kong stock exchange yesterday that it intended to issue the bonds to professional and institutional investors mainly for business development and acquisitions. The company said the sizing and pricing of the bonds would be finalised after a book-building process. Bloomberg quoted a source as saying the company might offer as much as US$500 million of notes at a yield of about 6.25 per cent. The securities would be listed on the Singapore stock exchange. Standard & Poor's Rating Services lowered the rating outlook on Li & Fung to "negative" from "stable" yesterday, saying operating conditions in Europe and the United States, which generate 80 per cent of the company's turnover, remained challenging. "We believe Li & Fung may need additional funding to support accelerated acquisitions to try to meet its three-year target," Standard & Poor's said. Li & Fung's share price rose 0.92 per cent to close at HK$13.12 yesterday, compared to a 0.83 increase in the Hang Seng Index. "It's a usual practice adopted by Li & Fung to use its own money to acquire small companies and raise funds from the capital market when doing big acquisition projects," Credit Suisse analyst Gabriel Chan said. "The investors are positive for the move as they believe the acquisitions can help raise the company's earnings." In addition, he said, demand from the US was expected to see a short-term rebound after Hurricane Sandy caused widespread damage and huge losses in the country this week. Moody's has affirmed Li & Fung's rating outlook of "stable", and gave a (P)Baa2 rating for the securities it proposed to issue. "Li & Fung's debt leverage will increase moderately but will still be manageable given its capital-light business model," said Franco Leung, a Moody's assistant vice-president and analyst.

Wine a bond between Hong Kong and France (By Stephen Quinn) Alain Juppe, right, answers questions at the launch of the Wine and Dine Festival. Wine has become a key part of the relationship between Hong Kong and France since the removal of duty on wine in the city in 2008. French wine exports to Hong Kong have more than doubled every year since then, and were worth $HK 3 billion last year. French wines represent more than 60 per cent of the wine sold in Hong Kong, with Bordeaux accounting for four out of five bottles purchased. Hong Kong has become the world's main hub for wine trading. This has created thousands of jobs and a strong wine culture in the city. November is the month which sees the most activity in the wine industry, with the Wine and Dine Festival in Kowloon from November 1 to November 4 followed by the Hong Kong International Wine and Spirits Fair from November 8 to November 10. Alain Juppe, mayor of Bordeaux, was in Hong Kong as a guest of the government. Juppe said 700 new companies linked with the wine business have been created in Hong Kong since 2008. Juppe, a former French prime minister, noted that Hong Kong's Wine and Dine Festival had been modelled on the Bordeaux Wine Festival. Georges Haushalter, president of the Bordeaux Wine Council, admitted that prices for high-end Bordeaux had declined after years of escalating values.

A good leader needs to 'rock the boat', says Carrie Lam (By Jennifer Ngo) A good leader needs to “rock the boat” sometimes, Chief Secretary Carrie Lam Cheng Yuet-ngor told a women’s leadership conference on Friday morning. “Trying to get everyone to like you is actually a sign of mediocrity,” said Lam, who was the morning guest speaker at the Women of Influence Conference and Awards at the Four Seasons Hotel. Her comments came after a tumultuous first four months for the city’s new administration, when many policy moves sparked criticism from the public. Lam, however, said she thinks Hong Kong people still believe in the government despite the recent opposition and discontent. As the only woman in the top tier of government officials, Lam said that being mission-driven, pragmatic and people-oriented are key parts of how she defines successful leadership. “My mission for the next five years is the alleviation of poverty,” said Lam. She will focus her energies on setting up a commission on poverty and establishing the city’s first official poverty line, Lam said. A pragmatic approach is crucial, she said, in ensuring the government delivers on its promises. Leaders must also be “compassionate, even emotional” about people, she said. The chief secretary acknowledged that the balance between work and the rest of her life needs to improve. “I hope you don’t make the same mistake I did,” she said, addressing an audience of mainly women. “I’ve put too much into my career.” “I’ve failed in this aspect. Never become too consumed by your career that you have left nothing for yourself and your family.” Lam acknowledged that the past four months have been difficult, especially as her husband and sons were not in Hong Kong. She looks forward to having quality time with her family in December, when she will get a “well-earned leave”.

Financial secretary defends Hong Kong dollar peg (By Reuters in Hong Kong) HKMA intervened in market on three occasions on Thursday - Hong Kong has no plans to change its currency peg against the US dollar, the financial services secretary said on Friday, dismissing talk of the authorities rethinking policy after being forced into heavy sales of the Hong Kong dollar to curb its strength. Chan Ka-keung, Secretary for Financial Services and the Treasury, asserted Hong Kong’s commitment to the pillar of its monetary policy during a Legislative Council panel discussion on financial affairs and housing that was available via webcast. “We have no plans to change the Hong Kong dollar peg,” Chan said in response to a question from a legislator. The 29-year-old peg has come under pressure recently, along with other Asian centres, becoming favoured destinations for funds unleashed by major quantitative easing measures in the US, Europe and Japan. During the past two weeks, the Hong Kong Monetary Authority (HKMA) sold a total of US$3.5 billion worth of Hong Kong dollars into the market via nine interventions to curb the strength of the local currency. Established in 1983, and the last major change to the peg was in 2005 when the trading band was widened to allow the Hong Kong dollar to trade between 7.75 and 7.85 against the US dollar. Under the peg, the HKMA is obliged to intervene when the local currency hits the upper or lower limit. In June, Joseph Yam Chi-kwong, an adviser to China’s central bank and a former Hong Kong Monetary Authority chief, suggested Hong Kong may want to consider ditch its exchange rate target, fuelling speculation that the peg might be abandoned. However, most analysts believe the peg remains the most suitable system for Hong Kong for the time being, given the benefits of switching to another currency regime are unclear. “We continue to expect the HKMA to maintain the integrity of the HKD peg and do all it needs to in order to keep the system intact,” Paul Mackel, HSBC’s head of Asian FX research, said in a recent report. Many analysts expect the big change in policy will only happen when the yuan becomes freely convertible, in which case the Hong Kong dollar could be re-pegged against the Chinese currency. Since it was adopted, the peg has survived a number of speculative attacks as well as regional and global financial crises, and authorities have continued to reiterate their commitment to the peg. In the meantime, the most worrying aspect of the surge of funds into Hong Kong has been the effect on property prices, which have risen about 20 per cent in the first nine months of this year, with even small and medium-sized units climbing some 21 per cent. Fearful of the social impact, the city introduced new measures to curb runaway prices last Friday, including a 15 per cent tax on overseas buyers and an increase of the stamp duty on short-term transactions. The Hong Kong Monetary Authority (HKMA) stepped into the currency market during New York hours on Thursday, its third intervention for the day, as the local currency repeatedly hit the strong end of its trading range. It sold HK$2.751 billion (US$355 million) in Hong Kong dollars in the latest move, bringing the total injection for the day to HK$7.4 billion, data showed.The three interventions bring the total number of interventions from the HKMA in the past two weeks to nine. According to Reuters data, the latest intervention will lift the aggregate balance – the sum of balances on clearing accounts maintained by banks with the HKMA – to HK$175.83 billion on November 5. The Hong Kong dollar is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85 to the US dollar. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact.

S&P: Big Four banks' balance sheets strong (By Gao Changxin in Hong Kong) The New York branch of the Bank of China. Standard &Poor's said the global push of Chinese banks won't affect their ratings over the next two to three years. Lending institutions' expansions overseas won't affect ratings. Large Chinese banks' balance sheets remain strong despite their rapid international expansion in recent years, the credit rating agency Standard & Poor's said on Thursday. In a report published in Hong Kong, the agency said the banks' global push won't affect their ratings over the next two to three years, though some lenders' profitability might be hurt in the domestic market due to escalating competition. China's Big Four State-owned banks, Industrial and Commercial Bank of China Ltd, China Construction Bank Corp, Agricultural Bank of China Ltd and Bank of China Ltd, are rated in the top class of ratings by the agency. Generally, aggressive overseas expansion increases a bank's risk exposure by subjecting it to swings in the overseas market, though it will benefit in the long run. The agency sees it as "an unlikely scenario" that Chinese banks will be substantially affected by overseas markets. Part of the reason is that Chinese banks mostly expand through organic growth rather than acquisitions and, despite their fast growth, their overseas assets remains low as a percentage of their total assets, at below 10 percent. Chinese banks started to venture overseas in recent years, following in the footsteps of other Chinese companies, whose growing overseas operations created huge demand for financial services. Overseas investment and acquisitions by Chinese companies more than doubled to $380 billion at the end of 2011 from $170 billion at the end of 2008. Chinese banks currently have 1,148 overseas branches in Asia, Europe, the Middle East and the Americas, up 29 percent from 2010. Their overseas assets have also increased rapidly. Industrial and Commercial Bank of China, the nation's biggest lender, has seen its offshore assets increase at an average annual rate of 39 percent since 2010. Hong Kong, given its status as the world's biggest yuan center, serves as a springboard for mainland banks' global push. China's five biggest banks currently have 42 percent of their overseas assets in Hong Kong. Jin Lin, a banking industry analyst with Orient Securities Co Ltd, said that Chinese banks' global push, at its current stage, is unlikely to damage their balance sheets. "The expansion is fast but also with a measure of prudence. I don't think their overseas operations could damage their overall profitability," said Jin. However, some Chinese banks could be squeezed in the domestic market, as the central bank's moves toward interest rate liberalization encourage competition and the country's economic growth concentrates more on quality than quantity. S&P said in its report that it estimates that the People's Bank of China's decisions earlier this year to allow deposit rates to rise to 110 percent of the benchmark rate and the lending rate to fall to 70 percent of the benchmark rate will cut the banking sector's average return on assets this year by 10 basis points, or $17 billion, and by 20 to 25 basis points, or $42 billion, in 2013. As a result, a market consolidation will take place in which large lenders take over smaller players felled by escalating competition.

 China*:  Nov 4 2012

Chinese industrialist buys Bordeaux vineyard (By Richard Warren) The famous Bordeaux wine growing region in southwestern France. Another Bordeaux vineyard will soon come under Chinese ownership. It is not just any vineyard. Chateau Bellefont-Belcier is the first top-graded estate to accept an offer from a Chinese buyer – an unnamed industrialist. A price of 20 million pounds is believed to have been agreed for the 13-hectare Saint-Emillion Grand Cru Classe estate which has been on the market for several years. This is the 40th Bordeaux vineyard purchased by Chinese investors, says Joel Palous, managing director of viticulture consultancy, AIM Vineyards. Eighteen months ago, only five Bordeaux estates were owned by Chinese investors. But interest in buying them has increased considerably. Other recently reported acquisitions include Chateau Millaud Montlabert, the 10th estate purchased by the Haichang Group, and the 12.5 hectare Chateau Lucas bought by Chinese architect Wencheng Li, owner of Wencheng Castle near Beijing. Other nationalities investing in Bordeaux include Australians and South Africans, says Matthew Hodder-Williams, a spokesman for global property consultancy Knight Frank, in south-west France. There are few signs of Chinese investors venturing elsewhere in Europe. However, they may want to note that French viticulturists are investing in southern England – where award-winning sparkling wines are being produced. Fuelling French interest is the theories that global warming could make southern England more suitable for future sparkling white production than northern France. Consequently, Champagne houses are reportedly investigating Kent, Sussex and other southern English counties. Global warming does not bode well for Bordeaux’s future wine production. An expert from the French National Institute for Agricultural Research warned last year that in the most pessimistic scenario the region would not be suitable for Cabernet and Merlot wines by the middle of the century. Across the English Channel, English wines are now beating Champagne houses in competitions.

Honda's China sales drop 54pc amid Diaoyus dispute (By Reuters in Beijing) Honda Motor’s China car sales plunged 54 per cent in October from a year earlier, marking the second monthly sales slump as Japanese automakers continue to suffer the backlash from a territorial dispute between Beijing and Tokyo. Honda, which earlier this week cut its full-year earning forecast by a fifth, has warned it could be February before business returns to normal in its second-largest market, where consumers are turning to German, Korean and US cars instead. “People no longer take to the street anymore as they did in mid-September, but they aren’t buying a lot of Japanese cars either,” said Zhang Xin, an industry analyst at Guotai Junan Securities, speaking before the latest figures were released. “There will be some recovery down the road but it will be very slow.” Violent protests and calls for boycotts of Japanese products broke out across China in September after Japan nationalized two disputed islands in the East China Sea, known as the Diaoyu in Chinese and the Senkaku in Japanese, by purchasing them from their private owners. The street protests have since eased by diplomatic tensions continue to fester, with both Japan and China sending patrol ships to waters near the uninhabited islands in recent weeks. In further evidence that South Korean and some European car makers were benefiting at the cost of their Japanese rivals, Hyundai Motor said its China sales climbed 37 per cent in October from a year earlier. Honda, which builds cars in partnership with Dongfeng Motor Group and Guangzhou Automobile Group, sold 24,115 cars in China in October, down from 51,826 a year earlier. The decline had accelerated from September, when sales plunged 41 per cent from the year-ago level. Sales in the first 10 months climbed 2.7 per cent to 494.108, the company said in a brief statement. Toyota’s China sales were down 44 per cent in October after a 49 per cent fall in September. Honda said on Monday that its two biggest China plants would continue to run on one shift, rather than two, until at least the middle of next month, with output then gradually picking up ahead of Lunar New Year in February – a traditional buying season. It has cut its full-year China sales forecast by 17 per cent to 620,000 vehicles, but said it would stick to the plan to invest $880 million to expand capacity at its factories in Guangzhou and Wuhan over the next few years.

Film festival spotlights US-China co-productions (By WANG JUN and KIMIA MOSTAGHIMI in Los Angeles) Moderator Jonathan Landreth (left), managing editor of, exchanges ideas with William Feng (center), general manager and chief representative of Motion Picture Association- China, and Leon Gao, president of Entgroup, at a panel of the 3rd Annual US-China Film Summit. Chinese films are in sharp focus on the west coast. Till Nov 24, around 150 Chinese films are being shown at venues in Hollywood, Los Angeles, and San Francisco, at the 8th Chinese American Film Festival, which opened last week in these cities. On Oct 26, the Motion Picture Association of America (MPAA) held the second China International Co-production Film Screenings event in Los Angeles. Christopher Dodd, MPAA chairman and CEO, and Jim Gianopulos, chairman and CEO of 20th Century Fox Film co-hosted the co-production screening. "These screenings represent another important step in the deepening of the relationship between the Chinese and international film industries. It builds successfully on the first ever US-China Co-Production Forum we held in Beijing in 2009, and the US-China Co-Production Film Screenings we held in Washington DC last year," said Dodd. Tong Gang, director-general of the Film Bureau of China's State Administration of Radio, Film and Television, who heads the Chinese delegation currently attending the screenings, said: "We hope exchange programs and events such as this will allow American audiences to see more high quality co-production films. We also hope movies such as these will inspire more studios to participate in Sino-American film co-productions and in turn, continue to help elevate quality and standards." On Oct 30, the 3rd Annual US-China Film Summit was held at the University of California, Los Angeles. With a slightly different perspective, the summit, organized by the Asia Society, focuses on the trends and dynamics facing the US-China film industry relationship and recent advances in Hollywood-China partnerships and collaborations. Thomas McLain, Chairman of Asia Society Southern California said: "Hollywood is always anxious to join the perfect partner, but it's not an easy marriage." He believes with US-China co-productions they might be able to make it happen. Peter Shiao, CEO of Orb Media Group and Chairman of Entertainment / Media Asia (EMAsia) said: "America and China must come together in a profoundly important way, those of us who make movies, we make culture and we know culture influences people, and that's a conversation we could not have anywhere in the world today, but through movies." Jonathan Lendreth, who had recently come back to the US after eight years of journalistic experience in China, said: "Each January annual box office growth made my eyes pop in china. They grew more than 25 percent every year when I was there." He added: "China is now on track to become Hollywood's largest export market of the box office by the end of this year, supplanting Japan. Some forecasts show China will be the world's number one movie market by 2020." During Vice President Xi Jinping's visit to the US in February, US Vice President Joseph Biden announced that China would raise the number of imported films to 34 each year, up from the previous limit of 20. Additionally, China would raise the percentage of sales given to copyright holders to 25 percent, up from a previous average of around 15 percent. China would also welcome DreamWorks to Shanghai to build a studio with media investment funds, so Kong Fu Panda 3 would be co-produced in China utilizing the time-tested expertise of Hollywood executives. Among the topics covered in the panels at the summit were talent and investment in co productions. Stephen Saltzman, an entertainment lawyer based in Los Angeles, said: "In the past few years we've certainly seen a dramatic increase in the number of American actors both with and without Chinese heritage who were working in films produced in China both in English language films, Mandarin language films and even films that are mixed language such as Flowers of War and Inseparable." Jeff Lin, managing director of Strategic Bang Group said: "Our objective should be creating synergy between creativity and capital; we should make this our business model." China is currently one of the biggest movie markets globally, and one signifying the greatest potential. According to MPAA, the Chinese gross box office was up 41 percent (1.3 billion USD total) for the first half of 2012. New cinema screens continue to be added at an average rate of eight screens per day in 2012. The total number of cinema screens stands at more than 11,000, and is expected to more than double to 25,000 by 2012. At the summit gala dinner, Dominic Ng, chairman and CEO of East West Bank said: "The best way for us to most effectively utilize the resources in China is to team up with Hollywood, because Chinese indeed have great, deep culture and have a lot of rich stories to tell; on the other hand Hollywood has the best story tellers." He added: "The best way to build trust between China and US is through the film industry." In 2008 Han Sanping, chairman of China Film Group Corporation, was named the Economic Individual of the Year by China Central Television. In 2012 he was named the China Entertainment Visionary of the Year. Director James Cameron commented: "There's more opportunity than ever before for our country's film industry to collaborate and become stronger and better together…We see this new endeavor as an opportunity to learn from China. We look forward to supporting the great work that Han Sanping will continue to do and look forward to learning from him." "America's movie industry needs China; they both need each other," Han said.

Bird's nest taken off menu for travelers (By He Dan and Jin Zhu in Beijing and Li Wenfang in Guangzhou) List of banned products covers food and animals - Fines are being imposed on individuals attempting to bring bird's nest, a traditional delicacy, into the country as new regulations came into force on Thursday. The delicacy, made from the saliva of a cave swift, has been added to the list of banned products, along with fresh fruit and vegetables. Bird's nest is a popular gift in China, particularly in the south. However, only canned varieties are allowed past customs. A street advertising of a bird's nest product in Hangzhou, capital of East China's Zhejiang province, Sept 16, 2012. According to the rules approved by the General Administration of Quality Supervision, Inspection and Quarantine in August, people entering the country should also declare if their luggage contains genetically modified products, endangered animals or plants. Those who fail to declare or provide false information face fines up to 5,000 yuan ($800). Even if the goods are declared they must be accompanied by a valid certificate or else they will be destroyed. Passenger numbers into and out of China are rising about 10 percent annually, and this increases the risk of foreign species threatening the domestic ecological system, the e-mail said. People carrying endangered wild animals and plants out of the country also cause huge damage, it added. Several people were stopped on Thursday as they attempted to bring in fruit at Guangzhou East Railway Station in Tianhe district where a service from Hong Kong terminates. All the fruit was destroyed, said Chen Yan, a spokesman for Guangdong Entry-Exit Inspection and Quarantine Bureau. Ports of entry across Shenzhen, also in Guangdong, confiscated 1 metric ton of banned items on Thursday, mostly seafood, meatballs, yogurt and fruit, according to the city's quarantine bureau. "Bird's nest is one of the key targets because it can often carry the bird flu virus and some improperly processed bird's nest products also contain excessive nitrite that is harmful to humans," said Zhen Jianchuan, deputy director of animal quarantine for the bureau. The canned bird's nest products are permitted as they are processed at temperatures high enough to kill most viruses, Zhen said. He added that the authorities will make sure the new regulations are well publicized. Liu Liping, from Guangzhou, said she was unhappy about the restrictions. "We can buy bird's nest products from Southeast Asian countries and Hong Kong at much cheaper prices and the quality is better," she said. "The new rules only help protect domestic businesses and this is a profitable industry." Meanwhile, the new quarantine regulations stipulate pet dogs and cats are allowed entry but there is a limit of one pet per person. All quarantine and vaccination certificates are required. Pets from areas that had rabies will be quarantined for 30 days. Others will be kept in quarantine stations for a week. Mary Peng, co-founder of the International Center for Veterinary Services in Beijing, said the new regulations on pets are in line with measures taken in many countries. "I bought cats in and out of China many times and I have witnessed China is becoming more humane, compassionate and caring in quarantining pets carried in by their owners from abroad," said Peng, a US citizen who has lived in China for more than two decades.

Hong Kong*:  Nov 3 2012 

Macau posts record gambling revenue for October (By Jolie Ho in Macau) While under-21s are now barred from Macau's casinos, this will not end gaming addiction among young people, counsellor says. Gambling revenue in Macau rose 3.2 per cent last month year on year to a record high, buoyed by an eight-day National Day holiday during which mainland gamblers flocked to bet in the world's largest casino hub. October's revenue of 27.7 billion patacas was the strongest monthly figure in Macau's history, though the pace of growth was actually the second lowest for the year and slightly higher than the 1.5 per cent growth in July. The former record of 26.85 billion patacas was set in October last year. "The opening of new projects this year, strong mass-market revenue growth, casinos' improvement in table efficiency all speak to the record gaming revenue," said Chelsey Tam, an analyst at financial services firm Emperor Securities. Aaron Fischer, head of consumer and gaming research with CLSA, said the monthly growth is slightly above his expectations. "We expected 2 per cent growth." "The fact that October was an all-time record should dispel any panic," Fischer said. Macau has been plagued by concerns this year that a slowing in the mainland economy will drag down the island's revenues. The imminent power transition in Beijing has cast uncertainty over the future policy towards the gaming destination and has kept away many cash-rich Chinese from the gaming tables. However, while wealthy high-rollers have cut down their expenses, the mass-market that caters for middle-class tourists has witnessed impressive growth. Tam said a rebound in VIP revenue growth is likely in the final quarter of the year, adding that she expects "the announcements of more accommodative monetary policies and expansionary fiscal policies after the 18th Party Congress", which should bode well for consumer confidence. Not everybody is as optimistic. Deutsche Bank recently revised down its 2013 forecasts for Macau's casino revenue growth to 7 per cent from 11 per cent. Over 1.05 million travellers visited Macau during the holiday in the first week of October, up 7 per cent from the same period last year, according to official data. In October, the Macau government approved land concession contracts for the Chinese arm of MGM Resorts, MGM China, and local player SJM, opening the door for them to expand to the Cotai Strip against rivals Sands China and Galaxy Entertainment. Macau gaming shares rose in Hong Kong trading yesterday on the better-than-expected monthly results. Sands China was up 2.9 per cent and Wynn Macau up 2.7 while the Hang Seng Index rose 0.8 per cent.

Bird flu expert to lead push for first vets' school (By Mary Ann Benitez) City University has hired a senior government official who was closely involved with outbreaks of bird flu to head a team that is planning the territory's first veterinary medicine school. Veterinarian and epidemiologist Howard Wong Kai-hay left his post as principal veterinary officer after 16 years at the Agriculture, Fisheries and Conservation Department early last month to become executive director of CityU life sciences programs. Wong also helped draft food safety laws that came into effect last year when he was seconded to the Food and Health Bureau. He said his job at CityU is to establish a vets' school that will find "a synergy or a focal point" for its existing life sciences programs, such as biology, bioengineering and biotechnology. "We are not just looking at a vets' school in isolation of everything else. "There is a lot of collaboration that could be done even with public health, for example, with other universities." Wong, who earned his veterinary medicine degree at Cambridge University and master's degree in preventive veterinary medicine at the University of California, said CityU will build a small-animal hospital on campus. He said the university expects to launch the six-year veterinary medicine course in 2014-15, with 30 students. "There is no vet training of any sort in Hong Kong so we hope to develop these specialists in food safety and public health so they can raise the standard in the whole region and fill in gaps," Wong said yesterday. "The unique thing is we are doing it with Cornell University [in New York], the No1 vets' school and the oldest in the United States so the partnership with Cornell is fantastic." Cornell will help develop the curriculum and facilities. About 200 Hong Kong students go overseas each year to study veterinary medicine. Out of 600 registered vets, only 330 are practicing vets in the territory, 30 of whom work in the government and the remainder in the private sector. There is also no post-graduate training, with fewer than 10 specialist vets in Hong Kong. Wong also said food and safety is going to be a much more important issue, but there are no such specialist vets in the region.

Wheels in motion for new landmark (By Winnie Chong) The government is going ahead with the construction of a giant ferris wheel on the Central waterfront. According to a tender document published by the Lands Department, the ferris wheel will be located in front of piers 9 and 10 and should be at least 50 meters in diameter. The project site is about 9,620 square meters. Kowloon East Constituency lawmaker Paul Tse Wai-chun, the former tourism sector legislator, said he "cautiously welcomes" the initiative. He stressed Hong Kong has very few tourist spots along the coast and there is no holistic plan for the touristic development of the waterfront. "But the land at the Central waterfront is a prime location and very expensive," Tse added. "The cost effectiveness of the ferris wheel should be carefully considered." Joseph Tung Yiu-chung, Hong Kong Travel Industry Council executive director, also noted the plan. But he hopes the administration will consider the traffic flow when building the ferris wheel. The proposed project, however, will be smaller than the London Eye by the River Thames and the Singapore Flyer on the southeast tip of the Marina Centre. According to the tender document, the tenderer should have at least 10 years' experience and the minimum construction time is set at 12 months. The deadline for submitting tenders is noon on December 14. Other criteria for selecting the tender include promotion strategy, fares, the ability to enhance the waterfront and fire and security measures. Tenders should include a monthly rent proposal. The contract will be short-term at three years with quarterly extensions. According to records, a Britain-based company applied last year to the Lands Department to build a ferris wheel with a 60m diameter. The Hall Organisation Limited has built 25 ferris wheels in nine countries, including the Singapore Flyer. The company proposed last year to build a ferris wheel with white LED lights outside. The maximum capacity of riders in one day is up to 10,000, although it estimated that about 2,000 people will ride on weekdays and 4,000 on holidays and weekends. Each ride could last 10 to 15 minutes, with a fare of about HK$100. Its proposed ferris wheel could be set up in 10 to 14 days and removed in seven to 10 days. The firm said the operation would not cause great noise. The proposal also said the entire installation and transportation would cost about HK$95 million, with an annual operation cost of about HK$10 million. And some 75 to 100 people would be hired in Hong Kong. The Lands Department conducted a consultation exercise after it received the proposal. Another company, from Dubai, has also shown interest in building a ferris wheel. Freij Entertainment International Limited operates a ferris wheel in Paris and has held the Winter Wonderland Hong Kong. It has also applied to build a ferris wheel at Kai Tak. The company said earlier it can build a bigger ferris wheel with a diameter of 80m. Henderson Land Development said it has to study the location and details of the project and cannot comment at the moment.

The two sons of the late joint owner of famed roast goose restaurant Yung Kee have pledged to fulfill their father's wish to open a new eatery after the High Court yesterday dismissed a petition to wind up Yung Kee's private holding company. (By Kelly Ip) With the family involved in a bitter feud over ownership, Kinsen Kam Kwan-sing's sons Kevin Kam Shung- hin and Hardy Kam Shun-yuen said they may sell their shares in Yung Kee to an outsider if their uncle Ronald Kam Kwan-lai, Kinsen's younger brother, refuses to buy them out at a reasonable price. Kevin said justice has not been done to his father and that he and his brother will discuss with lawyers whether to appeal against the ruling. He said their grandmother Mak Siu-chun and most employees at Yung Kee had been supportive to their late father. "We will continue our father's spirit to promote traditional dishes and roast goose, but we won't use the Yung Kee trademark," Kevin said. "We will have a positive competition with them." He does not rule out the possibility of opening the new restaurant in Central where the award-winning Yung Kee is located. But Ronald rebuffed his nephews, accusing them of refusing to mediate on the sale of their stakes. "In the past few years, we have tried to contact them for mediation but they don't get back to us," he said. Ronald said he is still studying whether to buy the shares or not. The verbal exchanges took place barely a week after the funeral of Kinsen, 66, who died after being found unconscious in his Happy Valley home three weeks ago. Satisfied with the result, Ronald said he hopes to continue the spirit of Yung Kee, which was founded by his father Kam Shui-fai in 1942. But he is still saddened by his brother's death. "We were brothers for more than 60 years and I had hoped to develop our business together," Ronald said at the Yung Kee Building on Wellington Street. "The petition should never have gone to court," he said, accompanied by son Carrel Kam Lin-wang and daughter Yvonne Kam Kiu-yan. "The court cannot solve the things between my brother and I that have accumulated over several decades." If both sides agree to buy and sell the shares, the next issue would be a commercial decision, Carrel added. When Kam Shui-fai passed away in 2004, both brothers inherited a 35 percent share. Their mother passed her 10 percent share to Kinsen while Ronald bought 20 percent from a younger sister and brother. Kinsen had offered to buy out Ronald's majority share in Yung Kee Holdings, the restaurant's parent company. He also offered to sell his shares to his brother. In dismissing Kinsen's petition, Justice Jonathan Harris said he hopes the two families can resolve their differences. He added that should the two sides agree that it is sensible for Ronald to acquire Kinsen's shares, the method of how a company should be valued will be useful in estimating the price without the court's assistance. Kevin said he agreed with the judge's comment regarding the valuation. Justice Harris said he rejected Kinsen's petition, first lodged in 2010, on the grounds the company was registered offshore in the British Virgin Islands and fell outside the court's jurisdiction. "I would emphasize that this result is not a consequence of the 1st and 2nd respondents [Ronald and Carrel] taking a clever, technical point, although the submissions advanced on their behalf have been both skillful and comprehensive," the judge said. It is rather "a consequence of Kam senior [the founder], on advice from a professional, consciously distancing the ultimate ownership of his assets from Hong Kong through a complex corporate structure with a view to avoiding paying estate duty and contributing to the income of the Hong Kong government." Earlier, Ronald said Yung Kee Holdings has HK$888 million in cash and the restaurant is estimated to be worth HK$1.3 billion.

Exco convener comes to Lam's rescue amid property allegations (By Patsy Moy) Franklin Lam Fan-keung is an Executive Council member. He obtained his bachelor’s degree in Economics from the University of Manchester and is a founder of HKGolden50, an independent non-profit policy research organisation. During the Asian financial crisis in 1997, Lam served as a part-time member of the Central Policy Unit. He then became a managing director at UBS from 2000 to 2011. The Executive Council’s convenor came to the rescue of an embattled colleague on Thursday, saying Franklin Lam Fan-keung could not have benefited from advance knowledge of government property measures when he sold two flats last month. Convenor Lam Woon-kwong told reporters that the cooling measures to bring down property prices were unveiled so carefully that Franklin Lam could not have known they were coming. The measures were revealed to Exco immediately before they were announced in the Legislative Council last Friday, the convenor said. All members of Exco were given only three hours’ notice of that meeting. When the meeting began, Chief Executive Leung Chun-ying first required all appointed Exco members to outline their financial interests and asked whether they had recently sold any properties they owned. “During the meeting, the chief executive carefully reminded all non-officio members that they must declare their financial interests, and asked whether they had recently sold any flats, before they were provided with the document,” Lam said. Only then were the councillors told the details of the two new property measures – a stamp duty of 15 per cent on non-permanent-resident and corporate buyers, and discouraging quick resales by increasing the existing stamp duty and time period involved. The convenor noted that Exco members were from all walks of life, and that it was impossible to prevent them from having their own business or properties. The current system for monitoring councillors’ financial interests is working well, he said. Franklin Lam, a property-market analyst, earned a profit of HK$10 million by selling two Mid-Levels flats to a suspected mainlander about two weeks ago. He said on Monday he did not know about the new measures when he sold the flats.

No concessions on old-age allowance, Leung insists (By Lai Ying-kit) Chief Executive Leung Chun-ying addresses lawmakers at Legco. The chief executive asserted yet again on Thursday that the proposed old-age allowance will have a means test, as legislators demanded further measures to help the poor and elderly. Speaking at a Legislative Council question and answer session, Leung Chun-ying also said he would not make any concession on asset limits or on backdating the benefit to an earlier day. The long-term financial burden on future generations would become hard to bear if the government failed to exercise prudence, he said. “We must maintain the means test and asset cap requirements so that government resources can give the maximum assistance to the most needy,” Leung said. Funding for the old-age allowance scheme has yet to be approved, after legislators this week deferred a vote on funding the plan due to disputes over its means test and asset caps. People Power lawmaker Raymond Chan Chi-chuen called for the allowance to be backdated to October 1 when lawmakers passed it. But Leung rejected the suggestion, saying it would set a bad precedent. “The scheme involves considerable expenditure,” Leung said. “It will be dangerous for the government to violate its financial discipline. I do not want to set a precedent.” Thursday’s 90-minute meeting touched mostly on other bread and butter issues, with Leung updating his work progress on a universal retirement plan and standard work hours. Leung said the government would report to Legco next month about a study on standard work hours, while the Central Policy Unit would complete a feasibility study on universal retirement protection by year’s end. The chief executive also highlighted the need for Hong Kong to draw up a long-term development strategy. He said a new authority would be created to push for the development of the financial sector, and his administration would conduct long-term development studies for the construction and garment manufacturing sectors.

Hong Kong Leader Touts Early Months in Office (By Te-Ping Chen) Four months after taking office, Hong Kong’s leader says he’s proving skeptics wrong. In a question-and-answer session with legislators on Thursday, Leung Chun-ying—who ran on a platform with a populist tilt—said his administration had been working hard to resolve problems ranging from overly “exuberant” housing prices to tense mainland-Hong Kong relations. Such efforts have already begun to yield results, he said. In particular, Mr. Leung highlighted his success in clamping down on the number of mainland mothers rushing to Hong Kong to give birth, a trend that has enraged some locals who worry about overextending the city’s health services. Some locals have taken to calling mainland Chinese in Hong Kong “locusts,” a derogatory term used to refer to such mainland Chinese who come to the city to shop, give birth, buy property and more. “The problem is now under control,” Mr. Leung said. In September, he said, on average less than one mainland Chinese woman per day was appearing in city emergency rooms to give birth. “This shows that even if people question our proposals—I think questioning is healthy—but you have to have confidence in the [government] and our civil servants,” he told legislators. Mr. Leung also pointed to various measures adopted to try to ventilate the city’s red-hot property market, including a controversial “Hong Kong land for Hong Kong people” pilot policy that restricts the sale of property to Hong Kong residents on certain plots of newly sold land. “When I raised that, some people objected,” said Mr. Leung, “but [it was] implemented after I took office, step by step.” During the session, Mr. Leung was peppered with questions about welfare, infrastructure and property, while some other members called him “arrogant” and accused him of trying to ram his policies through the legislature. Meanwhile, the city’s most famous radical legislator, nicknamed “Long Hair” for his flowing locks, cursed at Mr. Leung and pelted the chief executive with small objects from the rear of the room before being bundled away by half a dozen men. As he has in the past, Mr. Leung also described the relationship between Hong Kong and mainland China as “getting closer,” and said some tensions were the natural byproduct of integration. “There are certain scarce resources, with supply that cannot be increased in short time, including milk powder and land,” said Mr. Leung, referring not only to the number of mainland Chinese who buy property in Hong Kong, but also those who shop for daily necessities in Hong Kong, where products are seen as more trustworthy. Still, Mr. Leung said his administration has been successful in responding to fears about greater integration, citing his efforts in September to thwart the expansion of a visa program that would have made it easier for more residents of Shenzhen, a neighboring city across the border, to enter Hong Kong. “We took into account the wishes of the people and we called it to a halt,” said Mr. Leung. “We’ll continue to uphold the interests of the people of Hong Kong and we’ll serve Hong Kong,” he said.

IPOs expected to remain weak in Q4, says Deloitte (By Li Tao in Hong Kong) Executives of CITIC Heavy Industries Co celebrate the company's listing on the Shanghai stock exchange in July. The third-quarter performance of the A-share market was the weakest since 2009, according to a Deloitte report. Report cites tough global economy, tight credit, poor earnings as causes - IPO activities in the A-share market are likely to remain anemic in the fourth quarter after a slump in the first three quarters, which saw a nearly 60 percent decline in fresh capital raised, according to a report released by Deloitte in Hong Kong on Wednesday. Only 153 companies were newly listed on the A-share market during the first 10 months of the year, down 37 percent from 243 over the same period a year earlier. Total proceeds raised fell 59 percent to 103.4 billion yuan ($16.6 billion) during the 10 months from 249.5 billion yuan last year. The report also noted that the third-quarter performance of the A-share market was also the weakest one since 2009. A significant slowdown of listing application review was observed since May 2012, with no offering review meeting held in August, andone each in September and October, according to Deloitte, which added that market confidence was "chilled" as the indices plunged this year. The Shanghai Composite Index, which tracks trading of all A shares and B shares on the Shanghai Stock Exchange, closed at 2068.88 on Wednesday, having lost nearly 400 points or 16.2 percent since the beginning of the year. It fell below 2000 during trading on Sept 26 and was close to the January 2009 level, in comparison to its record high of 6,092.06 registered on Oct 16, 2007. Not only were fund-raising activities muted, the deal size of most listings shrank with the six largest ones raising a total of 16.6 billion yuan, accounting for merely 16 percent of the total funds it raised. Only one listing in Shanghai has raised more than 5 billion yuan this year, in comparison with four deals during the first 10 months last year, and nine and three listings registered over the same period of 2010 and 2009, respectively, said Deloitte. The international accounting firm expected the A-share market to remain challenging this quarter as market transformation, tight liquidity and weak corporate earnings will continue to stem IPO activities on the mainland. Although 91 companies so far have obtained listing approvals, Deloitte expects "only a small fraction of them will proceed with their listings plans" due to the dismal market sentiment. It forecast a total of 170 companies would proceed with listings in Shanghai by the end of the year, down 40 percent from the 281 in 2011. Total proceeds are estimated to reach 120 to 140 billion yuan this year, down 50 to 57 percent over 2011's 282.4 billion yuan. Hong Kong, which has led the global IPO market for the past three years, only raised a total of HK$48.9 billion ($6.3 billion) in the first 10 months, down 78 percent from last year. The city was ranked in sixth place globally in terms of funds raised, trailing the two largest stock exchanges in the US, Japan, Shenzhen, Malaysia, and one spot ahead of Shanghai, according to Deloitte. Hong Kong posted the worst 10-month performance since 2004 this year as the market choppiness stymied appetite of both corporate and individual investors. Listing applications received by the city's stock exchange slumped 51 percent year-on-year, while lapsed cases, rejection and withdrawal of listing applications are at record high this year since 2004. Chinese mainland companies remained dominant in "all respects" of the IPO markets in Hong Kong, with 33 out of the 51 IPO deals in the first 10 months being from the mainland, up from 61 percent to 65 percent over last year, according to Deloitte. Although Deloitte expected Hong Kong's IPO market to rebound on optimistic growth signs on the mainland as well as in the US, Alvin Chung, a Hong Kong-based analyst with Prudential Brokerage, said the local market is unlikely to duplicate its success in the near future. "Given that most major mainland companies have completed their listings in Hong Kong over the years, the upcoming smaller deals are unlikely to draw much attention from the local investors given the current lackluster economic environment," Chung told China Daily in a telephone interview. Deloitte expects a total of 65 companies to be listed in Hong Kong by the end of 2012 and to raise about HK$70 billion to HK$90 billion, significant decreases of 28 percent and 67 to 74 percent, respectively, over last year.

Mahjong twist (China Daily Hong Kong) People dressed as mahjong to celebrate Halloween in Lan Kwai Fong, Hong Kong. The bar area, one of the largest outdoor hot spots for partying, attracted hundreds of visitors on Wednesday night. 

 China*:  Nov 3 2012

China launches trade probes on EU solar products (By Reuters in Beijing) China has fired a fresh salvo in the battle over solar subsidies, with a new probe into imported European Union solar-grade polysilicon. China said on Thursday that it would launch anti-dumping and anti-subsidy investigations into imported European Union solar-grade polysilicon, in the latest instance of tit-for-tat trade tensions in the global solar industry. The move comes as the EU’s executive body mulls duties targeting Chinese solar producers, a probe launched in September after companies accused Chinese rivals of “dumping”, or deliberately selling products for less abroad than at home. The Commerce Ministry, in two statements posted to its website, said it would “merge” the EU investigations into ongoing probes of US and South Korean-made solar products “to evaluate the accumulated impact of products from the three regions”. In October, China’s largest state-owned utility, the State Grid Corp, said it was working on policies to help ailing solar power producers, including subsidies and easier access to the grid. China’s export-focused solar panel industry has been hit hard by excess manufacturing capacity and waning foreign demand as European nations cut back subsidies for green power. Companies have slashed prices 30 percent this year as stockpiles grow, virtually erasing the industry’s profits. The Commerce Ministry said the probe was in response to complaints made by several Chinese companies, including Jiangxi LDK PV Silicon Technology Co., a subsidiary of LDK Solar ., one of China’s hardest hit solar manufacturers. Major producers, including Suntech Power Holdings and Trina Solar, are turning to the domestic market, now one of the world’s biggest, for solar energy development. Western solar firms have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper pricing. EU solar firms have said Chinese solar panel makers benefited from low interest rates thanks to government policy, and if loans could not be paid back they might be written off, extended indefinitely or paid off by government-controlled entities. The United States levelled steep final duties on Chinese-made solar products in October, a move Beijing warned would provoke greater trade frictions in the new energy sector. Chinese companies sold about 21 billion euros (US7.1 billion) in solar panels and components to the EU in 2011 - about 60 per cent of all Chinese exports of the products and some 7 per cent of all Chinese exports to the EU. Europe is the top market for solar products, accounting for 74 per cent of global installations in 2011, according to industry association EPIA.

China's manufacturing picks up in October - The purchasing managers' index (PMI) rose to 50.2 percent in October from 49.8 percent in September.

International education-exchange firms may be banned (By Cheng Yingqi and Luo Wangshu) New regulations are likely to ban international agencies from providing education-exchange services in China, according to the Ministry of Education. A man walks by advertising for a company that provides overseas study services for Chinese students, in Nanjing, Jiangsu province, in June. A recently published draft regulation allows provincial-level educational authorities to approve or reject qualifications of intermediary agencies, bans foreign agencies entering the market and strengthens supervision of the agencies. The draft also requires agencies to build an emergency fund, supervised by educational authorities, so that clients can be refunded when the intermediary agencies cannot provide services. The ministry has published the draft regulation on its website and is soliciting opinion at until Nov 5. According to Xinhua News Agency, the ministry said some unqualified agencies provide advisory services to people wishing to study abroad, and some help clients forge materials required for applications or cheat clients out of money. In July, New Zealand immigration officials found 279 applications submitted by Chinese students contained some forms of fraud, and intermediary agencies were to blame for the fake materials. "I think the ministry simply cut foreign agencies out without good reason. If foreign agencies can forge materials or cheat clients of money, domestic agencies can do that too," said Chen Naibo, who works for an intermediary agency based in the United States. Chen declined to give the name of his company. Chen's company mainly provides consultant services to Chinese students who plan to attend high schools in the US. "Since the students are too young to take care of themselves, most prefer living in a homestay, and we can find reliable homestays for them, which is much more difficult for agencies based in China," Chen said. "Intermediary agencies win the trust of clients from good word of mouth. An agency, either domestic or foreign, can't survive a long time by cheating clients or forging materials," said a staff member of a Canadian agency, who refused to give her name because of the interview provisions of the company. "I think the administrative intervention will not work effectively in the consulting market for overseas study," she said. Zhao Kun, 20, a student from Beijing, was shocked when she found out about the new draft regulation. "The draft regulation did not specify the extent, though. If Hong Kong-based companies are involved, I will be totally lost. It is so urgent that I don't have time to look for a new agent," she said. Being busy preparing for the IELTS test, Zhao, who is planning to enter college in the United Kingdom in the spring of 2013, handed her application process to an education agent, Amber Education, a Hong Kong-based education-counseling firm. "I hope it will not pass this term," she said. However, domestic agencies gave the new regulation the thumbs up. "It makes the industry more transparent and reliable, and reduces the risk," said a staff member of an education agent based in Beijing, who declined to give her name. "If the companies are located on the Chinese mainland, students and parents can easily visit the companies to see the qualifications and environment, getting a feel for the company. However, if the companies are located overseas, it is not easy to judge their qualifications by looking at their websites and other non-face-to-face means of communication." She explained that some unqualified agents on the Chinese mainland usually have overseas partners that help them run overseas businesses. However, the cost increases. "Agents with qualification usually have connections with overseas schools, which may not need help from overseas partners," she added.

Mahjong's magic casts a growing spell (By Wang Huazhong) Game attracting more players overseas, Wang Huazhong reports in Qianjiang, Chongqing. After spending most of his life working as a security guard at a State-owned factory, Liang Jianguo took on a role he never imagined. "I never thought we would host the World Mahjong Championships or that I would travel overseas as a referee," he said. Liang was head referee at the third World Mahjong Championships in Qianjiang, Chongqing municipality. Saturday saw a convoy of police cars shepherding 13 buses carrying the 12 referees, including Liang, and 186 players from 13 countries to local government buildings for the championship's opening ceremony. The 84 overseas players demonstrated their skill and exchanged strategy during the championships that also drew 102 domestic competitors. According to World Mahjong Organization officials, a "steadily growing" number of people outside Asia are also playing the game, and mahjong associations have been organizing national- and continental-level tournaments and championships since the 1990s. "As a healthy, scientific, friendly mind game, Mahjong will become more popular and gain wider significance," said Yu Guangyuan, the WMO chairman and a former vice-president of the Chinese Academy of Social Sciences, in his opening address. Mahjong has a checkered history in China. Some sources claim the game was devised thousands of years ago by the sage Confucius, while others date its beginnings to the 1880s and 90s. Either way, the game - in which players attempt to collect suits of tiles, similar to Western card games such as bridge or rummy - provokes strong reactions. While devotees praise it as an intellectual pursuit, opponents vilify it as the basest form of gambling. The perception of a game for unruly gamblers resulted in mahjong being outlawed when the People's Republic of China was founded in 1949, and it wasn't until the 1980s that it was played openly again. Even now, many view the game with suspicion and enthusiasts are sometimes embarrassed to admit their passion for fear of appearing anti-social. Pavel Anokhin, a computer programmer from Russia, first heard about mahjong when he read The Murder of Roger Ackroyd by the British thriller writer Agatha Christie. The book, first published in 1926, includes a chapter An Evening at Mahjong, where the game is described as "simple entertainment, very popular in King's Abbot". The characters describe mahjong as a peaceful game, one that won't lead to acrimony with your partners, and discuss whether to shout "Chee" or "Chow" as some Chinese do when picking up discarded tiles. Intrigued, Anokhin began playing the game himself. "I don't see much difference between mahjong and chess in terms of the level of mental difficulty. I hope more people in Russia will learn the game," said Anokhin. "By playing mahjong, we can learn more about China and its culture," he added. Meanwhile, members of the British rock band Pink Floyd were so enamored of the game that they even called one of their songs A Pillow of Winds, a reference to a particular scoring combination. The European Mahjong Association said more than 500 professional players compete in regular national and intra-continental tournaments, hoping to rise ever higher in the rankings. The development of mahjong leagues across Europe inspired the associations in Denmark and the Netherlands to propose the establishment of the World Mahjong Organization. Founded in 2005, the WMO has branches in 24 countries across the Americas, Europe and Asia. Almost all the member countries have their own leagues, and four European Mahjong Championships have been held to date. Moreover, clubs have been mushrooming in major European cities from Amsterdam to Zurich. Desiree Heemskerk, who organized the Open European Mahjong Championship in 2005 and the Dutch Mahjong Association in 2004, said clubs and tournaments have been opening across the continent since the 1990s. People in the Netherlands used to play by the typical Dutch rules, which was boring, but when a match was organized using Hong Kong and world competition rules, the game began to flourish, she said. "Since then, more people have come to play because it's more official and you have a greater chance of playing against people from other countries. That makes all the difference - we don't play the Dutch rules anymore," admitted Heemskerk. She noted that the Internet is a popular destination for many players and that European devotees can even subscribe to Mahjongnews, an independent online newspaper. Europeans taking part in the World Mahjong Championship in Chongqing described the game as a fun mental exercise played simply for enjoyment. For them, gambling never enters the equation. Joel Ratsimandresy, a French civil engineer, who took an oath on behalf of all the competitors to play the game in the correct manner, morally and in a spirit of fairness and friendship, may have understated his enthusiasm when he said he is "fond of the game". The 30-year-old plays three times a week, for five hours at a time at clubs in Paris. Another Frenchman, physicist Quentin Porcherot, 27, said he started playing with his parents and grandparents 20 years ago. "Some Western families play mahjong. It was very fashionable 85 years ago. The Americans brought mahjong from China to the Western world, translating and adapting it to simpler rules." "I love the game because it's relatively comprehensive. It mixes the random with strategy and psychology."

China slams US accusation of hacking (Xinhua) A spokesman for China's Foreign Ministry on Wednesday slammed US intelligence agency accusations of hacking by Chinese firms, saying China also falls victim to cyber crime. Hong Lei made the remarks at a daily press briefing when questioned by a reporter on accusations from an unspecified US source that Chinese firms had used hacking to steal commercial secrets. Hong said China has responded to hacking-related issues on many occasions, and that it is "grossly irresponsible" to allege that China steals information and conducts hacking online without evidence and investigation. "China also falls victim to hacking," Hong said, noting that cyberspace security is an international issue and China hopes for cooperation with the international community to safeguard online security together.

Hong Kong*:  Nov 2 2012 

Hong Kong again takes world top spot in financial rankings (By Lulu Chen) World Economic Forum says city's finance system still the best on the planet, while China slips to 23rd out of 62 countries. The World Economic Forum has given Hong Kong the best marks in its Financial Development Index for a second year running. Hong Kong has been named the world's top financial centre for the second year running by the World Economic Forum. The independent organisation gave the city top spot again because of its solid business infrastructure, abundant human capital and low-tax environment. The ranking was based on performance in a range of categories, including legal environment and financial stability. The mainland fell to 23rd place from 19th last year as its score dropped 0.12 points to 4, on a scale of 1 to 7. This is the first time the mainland has slid in its overall score since the forum started its Financial Development Index in 2008. "The biggest drop China posted was in financial access," forum associate director Isabella Reuttner said. The mainland's foreign direct investment, capital market liberalisation, access to credit, as well as equity financing all weakened, Reuttner said, adding that instability in its banking system also grew. But the mainland scored high in non-banking financial services, with especially robust initial public offering and merger and acquisition activity. Business environment - which includes factors such as human capital, tax, infrastructure and cost of doing business - remains the biggest problem. Hong Kong took the No1 spot in a list of 62 countries, scoring 5.31, up 0.15 percentage points from last year. Last year, Hong Kong leapfrogged the United States and Britain to top the forum's Financial Development Index for the first time, after coming fourth in 2010. Analysts said then that Hong Kong's explosive listing volume, low tax rates and status as the top offshore yuan trading centre had boosted its ranking. The city's status as a financial hub would help attract more fund-raising activity and financial talent, they predicted. "The fact that Hong Kong has maintained its status shows critical qualities such as free flow of capital and information, rule of law and financial infrastructure are still in place," Raymond Yeung, an economist at ANZ Bank, said. Yeung added that Hong Kong's leading position as an international yuan centre also helped boost its ranking as a financial centre. Of the seven categories in the forum's assessment, Hong Kong topped the charts in banking financial services, came second in business environment and fourth in financial markets and financial access. The other parameters were institutional environment, financial stability and non-banking financial services. The US ranked second this year, Britain third and Singapore fourth.

Love China or lump it, Lu Ping tells would-be secessionists (By Gary Cheung and Stuart Lau) "Those who do not recognise they are Chinese should look at what is written on their passports or they should renounce their Chinese nationality." So says Lu Ping, former director of the State Council's Hong Kong and Macau Affairs Office. "Our country, which has a population of 1.3 billion, would not be bothered losing this handful of people," Lu stated in an exchange of email with the South China Morning Post. Lu made the comments when attacking people in the city who do not want to acknowledge their nationality. Under the Nationality Law of the People's Republic of China, people can apply to renounce their nationality if they are a close relative of a foreign national, are settled abroad, or for other legitimate reasons. Lu told the Post he noted some people had waved the British flag and held up posters calling for "Hong Kong independence" at a recent protest in the city. "They claim the only way out for Hong Kong is to become an independent nation," he said. It was the second time Lu has commented on calls for Hong Kong independence. In a letter to the Post on October 12 he said "these guys who advocate for Hong Kong independence are sheer morons". "Deprived of support from the mainland, Hong Kong would be a dead city." Lu said it was good his remarks had triggered controversy. Last week, Lu's former deputy, Chen Zuoer, said "the rise of a pro-independence force in Hong Kong is spreading like a virus" and should be dealt with firmly. Yesterday, an editorial in the state-run Global Times described the notion of an independent Hong Kong as a "false proposition". It said a minority of Hongkongers had stirred up anti-mainland sentiment because they were losing their sense of superiority over mainlanders. Dickson Cheung - the spokesman of a group that has set up a Facebook page called "We are Hongkongers, not Chinese" - had this to say in response to Lu's latest attack on those who did not want to acknowledge their Chinese nationality: "We do not even want an SAR [Special Administrative Region] passport. But what can we do?" Executive Council convenor Lam Woon-kwong said he did not see the emergence of a movement for independence, even though some people had waved the British flag during protests.

Robin Tse Shu-chun, the retired New Territories South regional commander, is tipped to become political assistant to the security minister. Last month former deputy police commissioner John Lee Ka-chiu was appointed undersecretary to the Secretary for Security, Lai Tung-kwok, himself a former immigration director. If Tse's appointment is confirmed, the top three figures in the bureau would all be people with strong backgrounds in the disciplined services.

High rents force consulates out of Central district (By Gary Cheung and Amy Nip) Soaring rents in world's priciest city for offices mean diplomats are quitting core districts for other areas, where costs are up to 60pc cheaper. The high cost of renting an office in Hong Kong is forcing more consulates out of core districts. At least three have relocated recently or are planning to do so. The consulate of Sweden has moved from the Hong Kong Club Building in Central to the Bank of East Asia Harbour View Centre in Wan Chai, while the Romanian consulate has shifted from the Lippo Centre in Admiralty to 148 Electric Road in North Point. The Canadian consulate is also moving. It decided several months ago to move its visa department from Exchange Square in Central to the DCH Commercial Centre in Quarry Bay. Hong Kong remains the priciest office market in the world. The cost of occupying an office fell 17.2 per cent to US$249 per sq ft per annum in the first quarter year-on-year, the largest decrease in all global markets. But this was still 11 per cent more expensive than the West End of London, which ranks second at US$220, and 33 per cent ahead of Tokyo at US$186, according to a CBRE report released yesterday. "One European country saw the rent for its consulate in Hong Kong rise by 60 per cent when the two-year tenancy expired recently," a Hong Kong-based Western diplomat said, without naming the country. "The problem of soaring rent has emerged as a hot issue in diplomatic circles in Hong Kong." Office rents in Admiralty are about 28 per cent lower than in Central, while levels in Wan Chai are 40 per cent lower. Offices in other parts of Hong Kong Island are up to 60 per cent lower. With tenants turning their backs on Central, vacancy rates in different districts have reversed. In September last year more than one-third of all available office space could be found in East Kowloon and just one fifth in Central. By the end of last month, one-third of available space was in Central, with just 7.5 per cent in East Kowloon. Estimates based on GDP growth projections show the city could face a big shortage of grade A office space by the end of the decade, the report warned, with the projected increase in supply of 8 million square feet less than half the 17 million sq ft needed. Overall, the demand for office space in Asia remains robust. Six of the 10 fastest growing markets worldwide in terms of costs are located in the region, with two areas in Beijing - Jianguomen central business district and Finance Street - taking the top two spots with annual growth rates of 49.4 per cent and 42 per cent. Nineteen of the 50 most expensive office markets are in Asia. Andy Yuen, DTZ's director and head of its Hong Kong office, said it had been a trend for consulates to opt out of Central over the past decade. "It makes perfect sense in terms of cost." Nine European Union member states - the Czech Republic, Finland, Italy, Latvia, Luxembourg, Poland, Spain and Sweden and cash-strapped Greece - have their consulates in Wan Chai. Eleven, including France, Germany and the UK, are in Central or Admiralty.

Singer Sandy Lam promotes album … and awareness of breast cancer (By Vivian Chen) Despite plugging her new album, Gaia, Canto-pop diva Sandy Lam Yik-lin still found time to promote awareness of breast cancer. "Very often we take a lot of things that are happening around us for granted, like our loving family members, good friends and colleagues. We often see flaws in things and don't learn to cherish them until we lose them," Lam said. She was in Taipei at the weekend, where Estee Lauder was celebrating the 20th anniversary of its Pink Ribbon breast cancer awareness initiative. Lam is a world pink ribbon ambassador for the beauty brand. "We actually have a lot of things in life that are worth celebrating," she said. The star has been globetrotting lately. She was at the Paris Fashion Week early this month and returned to Hong Kong only briefly before heading to Taipei to film music videos for her album. The video for her song Crowded Loneliness went online this week.

Petition in Yung Kee family feud dismissed in court (By Austin Chiu) Famed roast goose restaurant Yung Kee in Central became the talk of the town after the Kam family took their ownership battle to court. A court has denied a legal petition at the heart of a family feud among the owners of Yung Kee restaurant on Wednesday. The Court of First Instance dismissed a petition from the late Kinsen Kam Kwan-sing to have the famed roast goose restaurant wound up. Kam’s estate must pay legal costs to his feuding brother, Ronald Kam Kwan-lai, Mr Justice Jonathan Harris ordered in his 91-page judgment. Speaking outside court, Ronald’s son, Carrel Kam Lin-wang said: “We are satisfied with the result. The most important thing is my father can have relief now.” He estimated the legal costs at about HK$30 million. When asked whether they would buy out his late uncle’s shares, Carrel said: “It will be purely a business decision.” “It takes two to make the decision. The other party has to be willing to sell before we can buy. We have no concrete plan at this moment,” he said. The situation was slightly embarrassing, he said, because the court did not order either side to buy out the other side’s stake. His family will hold a media conference at 3pm at Yung Kee restaurant when his father will also be present. Concluding his judgment, Judge Harris wrote: “I hope that notwithstanding my decision to dismiss the petition, the estate of the late petitioner [Kinsen] and Kwan Lai are able to find an amicable solution to the differences that caused the unfortunate breakdown in the relationship between the two brothers.” He dismissed Kinsen Kam’s petition on a technical point, noting that Yung Kee Holding was an offshore company in the British Virgin Islands. The judge wrote: “If I had not dismissed the petition for want of jurisdiction I would have found that the petitioner had been unfairly prejudiced by [Ronald] Kwan Lai’s conduct, and ordered the Kwan Lai purchase the petitioner’s [shares].” Yung Kee, in Wellington Street, Central, is a Kam family business known for its roast goose and fine cuisine. The family became the talk of the town after Kinsen challenged his younger brother, Ronald Kam Kwan-lai, in court over the ownership of Yung Kee. Kinsen petitioned the court in 2010 to have the holding company wound up unless Ronald bought his 45 per cent stake or sold Kinsen his own 55 per cent. The case was heard in late January after mediation failed. The judgment was handed down seven months after the hearing was concluded and 27 days after Kinsen died in October. Five family members of founder Kam Shui-fai, who died in 2004, inherited the assets and shares of the restaurant. Kinsen and Ronald each received 35 per cent of the holdings. Ronald later received another 20 per cent stake from his siblings, making him the majority shareholder. Subsequently, Ronald’s son, Carrel Kam Lin-wang, was appointed a director and, in effect, took over the business, the court heard. Kinsen said he was stripped of his power because Ronald and his son always barred his proposals by outvoting him on the board of directors. The company reportedly owns assets worth at least HK$1.5billion. Yung Kee was first a modest stall selling cooked food. In 1942, Kam Shui-fai used his savings of HK$4,000 to rent a unit at Wing Lok Street and start the restaurant. Its food earned Yung Kee a place in Fortune magazine’s top 15 restaurants in the world in 1968. Yung Kee was also awarded one Michelin star from 2009 to last year.

 China*:  Nov 2 2012

China adds new fifth-generation stealth fighter to arsenal (By Minnie Chan) China tested a new type of stealth fighter on Wednesday morning, becoming the second country after the US to have two fifth-generation stealth fighters. The test of J-31, whose pictures were posted on the mainland’s leading military website, was a success, according to the website, which is run by the Global Times. China tested its first fifth-generation stealth fighter J-20 on January 11, last year, the day when the visiting former US Defence Secretary Dr Robert Gates met President Hu Jintao in Beijing. Andrei Chang, editor-in-chief of the Canadian-based Kanwa Asian Defence Monthly, said the J-31 was a hybrid model of the US stealth fighters F-22 and F-35. It was manufactured by the Shenyang Aircraft Industry Corporation, a subsidiary of Aviation Industry Corporation of China. J-20 was designed and produced by Chengdu’s Aircraft Design Institute. Its successful test flight more than one year ago surprised the world, with many asking how it could develop a sophisticated plane so secretly and efficiently. Military experts said today’s test flight was only the beginning of an intentional display of military advancement by Beijing. See Thursday’s paper or for a more extensive version of this story.

Envoy urges China to play ‘active role’ in Syria crisis (By Agence France-Presse in Beijing) UN-Arab League peace envoy Lakhdar Brahimi (left) meets with Chinese Foreign Minister Yang Jiechi at the Ministry of Foreign Affairs in Beijing. UN-Arab League peace envoy Lakhdar Brahimi said on Wednesday he hoped China would play an active role in helping end the violence in Syria as he met Foreign Minister Yang Jiechi for talks in Beijing. Greeting Yang at the foreign ministry in front of reporters, Brahimi said he hoped “China can play an active role in solving the events in Syria” but did not elabourate. China is generally suspicious of intervention in the internal affairs of other nations. Both China and Russia have exercised their veto in the UN Security Council to block resolutions aimed at putting more pressure on Syrian President Bashar al-Assad. Yang thanked Brahimi for his work and said he hoped their discussions – their third in two months – would promote “mutual understanding” and “the appropriate handling of the Syrian issue”. China’s foreign ministry did not reveal the content of the talks but reiterated that Beijing would push for a “political resolution in Syria”. “China has been playing an important and positive role in pushing for the political resolution to the Syrian issue and will continue to work with the international community,” spokesman Hong Lei said. Yang also met the Syrian president’s envoy in August and an opposition delegation the next month, both times stressing the need for dialogue, according to the foreign ministry’s website. He warned the opposition about outside forces directing any political transition, while he told the president’s envoy that both sides in the conflict should work with international mediation efforts. Analysts say China’s hesitancy in supporting further action in Syria may stem from its discomfort with Western-led military intervention after last year’s uprising in Libya, which eventually led to the fall of leader Moamer Kadhafi. China opposed military action in Libya but did not veto a March last year Security Council resolution authorising the operation. Yet it believes the West misinterpreted the resolution and went too far. Michael Stephens, a Royal United Services Institute analyst based in Qatar, said China has eased its backing of Assad during the course of the conflict. “There was a more overt support for Assad which has now changed to trying to find a solution,” he said. “They’ve condemned violence on both sides and as a result... it doesn’t allow them leverage on either side.” Brahimi, who succeeded former United Nations chief Kofi Annan after he quit over what he called a lack of international support, is due to present new proposals for resolving the Syria conflict to the UN Security Council next month. His two-day visit to China, which ends on Wednesday, came after he met Russia’s foreign minister in Moscow on Monday and described the conflict, now in its 19th month after a failed four-day truce last week, as going from bad to worse. Brahimi had hoped the truce, timed for the Muslim Eid Al-Adha holiday, might lead to a longer ceasefire and a political solution to a conflict that rights groups say has claimed 35,000 lives. “I have said it and it bears repeating again and again that the Syrian crisis is very, very dangerous, the situation is bad and getting worse,” he said in Moscow. “If that is not civil war, I do not know what is.” A Syrian fighter jet on Tuesday dropped bombs inside the capital Damascus for the first time since the conflict began, the Syrian Observatory for Human Rights reported, in an escalation from helicopter gunships. The military also renewed shelling of the northern city and province of Aleppo and other parts of the country.

China's new-type rescue ship to be put into service - China's self-designed ship, named "Dong Hai Jiu 101", will be put into service for rescue missions at the eastern sea areas.

Chinese tourism overseas on the rise - Residents from the Chinese mainland spend $874 on shopping overseas on each trip on average, the most among Asian countries and regions, according to a survey released by Travelzoo Inc, a global Internet media company for travel and entertainment based in the US.

Joint visa center to increase Chinese tourists (By Zhou Wa in Beijing and Fu Jing in Brussels) German-French joint facility to increase Chinese tourists to Europe. Germany and France officially opened the first joint visa application center in Beijing on Tuesday, to ease the application process and attract more Chinese to Europe. The newly built center can make the process of applying for a visa more convenient, but Chinese are still required to provide extensive material in the application process, analysts said, urging that the process should be made more transparent. Chinese who want to apply to Schengen countries - 26 European countries that signed a mutual borderless zone pact - can hand in visa applications to the center instead of going to the German or French embassies. The center can handle more visa applications at the same time than was previously possible. Applicants can get visas within two weeks on average, said Alejandro Taylor-Escribano, a project manager from the TLScontact company. The company helps applicants understand visa regulations and application procedures and prepare their applications to the embassies. The new center was built to reduce the waiting time for an appointment to submit visa applications and facilitate the application process for Chinese passport holders, said German Ambassador Michael Schaefer. The number of Chinese traveling to Europe has grown enormously in recent years, resulting in longer waiting periods throughout the application process, especially during peak tourism season. Sylvie Bermann, the French Ambassador to China, said she believes that more Chinese will travel to Europe in the future, and the center can handle more than the possible number of Chinese visa applicants. Rainer Gehnen, general manager of the German-Chinese Business Association in Cologne, said the center is just the beginning, and in the long run, the European Union should have an office in charge of the visa approval for all member countries. "I welcome joint initiatives by Germany and France because they show the world the political integration of the EU," he said, adding that what most concerns him is that the application procedure should be transparent and efficient. "Over the long term, we hope that one day that Chinese visiting Europe and Europeans visiting China will need no visa at all," he said. Chinese still have to face cumbersome regulations for visa applications to European countries, said Liu Jianming, an expert on European studies at the China Institute of International Studies. They are usually asked to submit a wide range of private information during the process, including certification of property and income, health insurance, marriage licenses and even the names of dead relatives. EU countries should remove some unnecessary requirements, not just shorten the waiting time, he said. Song Yang, a violin dealer in Beijing who wants to do business in the EU, said she still has concerns about applying for a Schengen visa because she may have to visit the center repeatedly to submit seemingly irrelevant material. As European countries are struggling through the deepest recession in more than half a century, they want to capitalize on the growing number of travelers, so they are trying to ease the visa application for Chinese. Jose Pons, consul general of Spain, said his country opened a similar visa application center just one month ago, cooperating with another visa service company. "We want to welcome 30 or 35 percent more next year And in the long term, we expect an annual increase of more than 30 percent." The United Kingdom is also considering making entry easier for Chinese tourists, as a proposal to allow dual processing of British and Schengen visas was presented to the UK Border Agency in early October.

US 'welcomes investment from China' (By By Cheng Guangjin in Beijing, Zhang Yuwei in New York and He Wei in Shanghai) The United States still welcomes Chinese investment that creates jobs in the country, a top US diplomat said on Tuesday, while referring to recent trade frictions involving some Chinese companies as "exceptions to the rule". Gary Locke, US ambassador to China, made the remarks during a webcast of this year's China Town Hall in Beijing, organized by the New York-based National Committee on US-China Relations. The event, occurring a week before the US presidential election, was held amid bilateral trade frictions resulting from the US government's rejection of investments by Chinese enterprises under the pretext of national security.

Hong Kong*:  Nov 1 2012 

Vote on old-age allowance put off; lawmakers critical of government (By Tony Cheung and Colleen Lee) Government disappointed with delay, but even allies accuse it of mishandling the proposal. Old Age Allowance - Commonly known as "fruit money", the old age allowance is a monthly cash subsidy the Hong Kong government pays to senior citizens aged 65-69 with low incomes, and all elderly citizens aged 70 and over. The Leung Chun-ying administration in 2012 proposed to introduce a new means-tested subsidy called the Old Age Living Allowance, which provides HK$2,200 per month for the needy only. A Legco committee last night put off a vote on the government's proposal to introduce a HK$2,200-a-month old-age living allowance, meaning the intended beneficiaries will not be paid the allowance this month. A four-hour meeting of the finance committee ended with lawmakers still scrutinising the government's application for HK$3.1 billion to fund the measure. Committee chairman Tommy Cheung Yu-yan said discussions would resume on November 16 unless the government sought to bring forward debate. Secretary for Labour and Welfare Matthew Cheung Kin-chung voiced his disappointment. He reiterated that payments could not be backdated to October 1 unless the proposal was passed this month. The government says everyone aged 65 and over would be eligible for the allowance - an improvement on the current HK$1,090-a-month allowance - but would have to undergo a means test. They would qualify if their monthly income was not more than HK$6,660 a month and their assets did not exceed HK$186,000. At least 30 of the 69 lawmakers on the committee back the plan, with 24 pan-democrats opposed. Radical pan-democrats want the means test scrapped, while the Beijing-loyalist Federation of Trade Unions and the Democratic Party wanted those aged 70 and over exempted from the test. Lawmakers criticised the government for its poor handling of the issue and for polarising society. Industrial-sector representative Lam Tai-fai, seen as a government ally, said: "You are holding the elderly hostage … You are well aware that lawmakers do not oppose the allowance ... They are just saying your policy is not comprehensive." Another government ally, real estate and construction-sector lawmaker Abraham Razack, of the Business and Professionals Alliance for Hong Kong, criticised the administration's refusal to consider raising the asset cap. "I believe that the proposal will be passed …. But … your way of handling of the issue is hardly acceptable … [The government] has polarised society," he said. It was driving a wedge between old people with assets under HK$186,000 and those with more, he said, and between the younger generation and the elderly by warning of escalating public spending on the allowance if the government acceded to the critics' demands. Cheung said lawmakers planned to move at least 15 motions in connection with the proposal. The Labour Party's Dr Fernando Cheung Chiu-hung plans to table one to condemn the government for publicising the plan before Legco had approved it. Earlier in the day, Chief Executive Leung Chun-ying said he would not scrap the means test or raise the asset cap. "The government's stance on the proposal is that it will not make any adjustment to it," Leung said, speaking before an Executive Council meeting.

A whole New World of real estate fireworks (By Yvonne Liu) The real estate group hopes to emerge from the property pack and restyle itself as a major challenger to the biggest players in town. Sun Hung Kai Properties and Henderson Land pulled out of sponsorship of the New Year's Eve fireworks last year, creating a headache for the Tourism Board. But the organisers will not have trouble creating an exciting display this time round, with rival developer New World Development taking over funding of the show. To be called "New Year, New World", the show is a sign to many of the start of a new era for the property market. New World has ambitions to again become the third-biggest developer in the city. More strong players should be welcome in the market, which has long been dominated by Cheung Kong (Holdings) and Sun Hung Kai Properties. New World has a new sales and marketing team, following the retirement of former executive director Stewart Leung Chi-kin early this year. Their first project, The Riverpark in Sha Tin, was launched in June. The new team is already making a difference. The sales office, which cost HK$50 million to build, has a small theatre to play its television advertisements. The design and decor of the sales office are now on the same level as the other major developers. Other touches also are telling. Even with a mass residential project, the company provides high-end kitchen appliances. That's not new for the other major developers, but it is for New World. New World is trying to improve its brand image, something that could help it achieve higher selling prices and profit margins. The changes at New World may be partly due to the fact that the third generation of Cheng Yu-tung's family is more involved in the business. It may also be because the company is aware that housing supply will increase significantly and so will competition in the small-flat market. Sino Land, for example, is improving building quality and leading the market in the design of clubhouses, which became a major attraction of their projects. Data from the official "Hong Kong Property Review 2012" report suggest that the new housing supply will grow by 26 per cent next year. About 91 per cent of the flats would be less than 1,076 sq ft, compared with 74 per cent this year. With the supply of small flats set to grow, developers have to package mass residential projects as luxury developments in order to achieve higher prices. Also, as construction costs continue to rise, developers will have to resist cutting prices to lure buyers, even though supply is increasing. Packaging is their best tool for maintaining a high profit margin and competing with other developers. Advertisements, top-brand appliances and luxury clubhouses can perhaps convince buyers that the flats are value for money. Henderson Land is the most successful case of a company improving flat quality and running fancy ads to attract buyers in last few years. In 2004, it ditched its old-fashioned marketing strategy of hiring one-time stars to perform in its sales offices and adopted the new approach to promote the Grand Promenade in Sai Wan Ho. The switch helped it grab record-breaking prices for the project, a feat it repeated again and again, reaching a peak five years later with 39 Conduit Road in Mid-Levels. New World knows that when your competitors are improving, you can't avoid joining in.

HKMA steps in to market to defend Hong Kong dollar peg (By Reuters in Hong Kong) The Hong Kong Monetary Authority (HKMA) said on Tuesday it had stepped into the market by selling HK$2.7 billion (US$348.38 million) as the currency repeatedly hit the top end of its trading range. This is the fifth time in the past two weeks that the HKMA, the city’s de facto central bank, had stepped in as "hot money" continues to flow into the city. The authority had to intervene significantly after the 2008 global financial crisis to manage an inflow of capital between October 2008 and the end of 2009 that the authority has estimated at HK$640 billion. The latest intervention will lift the aggregate balance – the sum of balances on clearing accounts maintained by banks with the HKMA – to HK$165.72 billion on November 1. The Hong Kong dollar is pegged at 7.8 to the dollar, but can trade between 7.75 and 7.85. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact. The currency was trading at 7.7500 against the US dollar at 6.25pm.

DAB lawmakers vow support for old-age allowance (By Lai Ying-kit) The government moved a step closer to passing its controversial old age allowance scheme on Tuesday, when the city’s largest pro-establishment party pledged its support for the measure. The Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), with 12 votes in the 70-member Legislative Council, will vote for the proposal at a Finance Committee meeting this evening, party chairman Tam Yiu-chung told a press conference on Tuesday morning. Despite some reservations, the party is backing the plan in its current form to ensure speedy passage, to let poor elderly people receive the HK$2,200 monthly benefit with no further delay, he said. In recent days the DAB has remained unclear about how its members would vote, while asking the government to raise the cap for eligibility from the current level of HK$186,000 in assets. Tam said the party would continue to press its demand for a higher asset cap. “If we insist on our demand at this stage, we may go into a long-running deadlock,” he said. “Although the scheme has some imperfections, many people will be disappointed if its funding is rejected [by lawmakers].” The party decided to support the allowance partly because of a recent DAB opinion poll, in which 47.5 per cent of the 1,300 respondents said the allowance should be passed even with its current means test and asset limits. Thirty per cent said lawmakers should veto the scheme, while 22.5 had no opinion. When asked whether the decision would reinforce the public impression that the DAB is pro-government, Tam said, “The DAB is pro-elderly.” Lawmakers will hold a special Finance Committee meeting on Tuesday evening to discuss, and vote on, the allowance’s funding proposal. Earlier on Tuesday, Chief Executive Leung Chun-ying said he would scrap neither the means test nor asset cap requirements. “The government’s stance on the proposal is that it will not make any adjustment to it,” Leung said, speaking before an Executive Council meeting. Meanwhile, radical pan-democrats have said they are planning a filibuster for Tuesday evening’s meeting, in an attempt to gain concessions from the government.

Jewellery show held in Hong Kong - Models presented jewelries by the Emperor Watch and Jewellery in Hong Kong, south China, Oct. 30, 2012.

Hong Kong will still be offshore yuan center: US offcial (By Oswald Chen) - Hong Kong is still poised to be the leading offshore yuan financial center even if yuan currency becomes fully convertible immediately, Under Secretary for Financial Services and the Treasury Julia Leung reckoned. "Even though the US dollar and the Euro are two fully convertible international currencies, London is still the leading offshore trading center of these two currencies," Leung said. "(Similarly) in the process of the yuan becoming fully convertible gradually, Hong Kong will still have room to develop into a leading offshore yuan financial center." Leung, who gave the media briefing after the Hong Kong Investment Funds Association's 6th annual conference held in the city on Monday, warned that Hong Kong should not be complacent. "Once the yuan is fully convertible, it will threaten Hong Kong's position as an offshore yuan financing center. If Hong Kong cannot maintain its competitiveness and slash the cost of financial services activities, investors may turn toward the mainland onshore market." As to whether the recent yuan rally against the US dollar would provoke another capital inflow into the city, Leung said that she expected more "hot money" to flow into the city to search for more returns. However, the Hong Kong government would not introduce any measures to curb capital inflows, she added. Leung envisaged that the yuan appreciation prospects will induce more international organizations based in Hong Kong to adopt the Chinese currency as more yuan funds flowed into the city through the trade settlement channel. She expected offshore yuan financing activities in the city to be more broad-based as the issuance of dim sum bonds burgeoned, while yuan-denominated investment products would become more diversified and yuan trade settlement to balloon. At the same conference, Ashley Alder, the chief executive officer of the Securities and Futures Commission (SFC), said that the SFC will act proactively to understand the yuan currency policy of the mainland. He also noted that the SFC is liaising with the fund management industry to understand the Hong Kong Investment Funds Association's proposal to introduce yuan-denominated funds related to Hong Kong and overseas equity and bond investments. "The discussion will be based on whether there are adequate yuan liquidity, market demand and risk disclosure," Alder added. Yuan-denominated investment products in Hong Kong reached another milestone when the Hopewell Highway Infrastructure became the first company to issue yuan-denominated and Hong Kong dollar-denominated share tranches simultaneously in the city on Monday. Hong Kong Exchanges and Clearing Ltd (HKEx) Chief Executive Charles Li said that the "Dual Tranche Dual Counter" (DTDC) share-trading model will become a new channel for corporations to raise yuan capital. "If the market liquidity and legitimacy toward the DTDC model is adequate enough, this can help support the development of the DTDC share-trading model. Corporations which have strong yuan income streams will be induced to issue shares using the DTDC model because the channels can be utilized to raise yuan funds," Li said, admitting that the current yuan liquidity pool of nearly 600 billion yuan is still thin and not large enough to propel large-scale development of yuan-denominated share issuance activities.

 China*:  Nov 1 2012

PLA, U.S. army bands hold joint concert in Beijing - The Military Band of the Chinese People's Liberation Army (PLA) and the visiting United States Army Band Pershing's Own held a joint concert on Monday in Beijing.

Philip Morris Seeks an Edge in China (By Mike Esterl) Marlboro is the world's top-selling cigarette, but it has a minuscule 0.3% share of the market in China, where roughly a quarter of the population smokes. Now, Philip Morris International Inc., which makes and markets Marlboro outside the U.S., is trying to raise its profile in that enormous Asian nation by moving beyond simple smokes. In one curious effort, it is setting out to develop flu vaccines derived from a type of tobacco plant. In another project, closer to its core business, it is developing less harmful cigarettes, which it would aim to sell all over the world, but especially in China, where about 40% of the world's cigarettes are smoked but state-owned China National Tobacco Corp. enjoys a virtual monopoly. In September, Philip Morris said it would be licensing rights from Medicago Inc., a small Canadian biopharmaceutical company, to develop vaccines for sale in China. The seemingly incongruous move is underpinned and motivated by several different situations. Philip Morris already owns about 40% of Medicago. Philip Morris also has a goal of diversifying into different tobacco-related products. More important, the vaccine agreement in China has as much to do with cultivating relations with government officials as diversifying into a new business that may or may not take root, highlighting how much of a long-term play China remains for Switzerland-based Philip Morris, the world's second-largest cigarette company by volume, after China National Tobacco. "This is one other way they could endear themselves to the Chinese,'' said Bonnie Herzog, a global tobacco analyst at Wells Fargo. At a recent investor conference, Philip Morris acknowledged traditional cigarettes from foreign companies will continue to be a hard sell in China, where the government generates tens of billions of dollars in profits from tobacco. Retail cigarette sales in the country topped $160 billion in 2011, roughly a quarter of the global market, according to estimates by Euromonitor, a data service. "Why would they share their market?'' Philip Morris Chairman and Chief Executive Louis Camilleri told investors in June. "To come up with new technology is really the only avenue to get into a place like China.'' Thus Philip Morris's effort to develop next-generation cigarettes that are less harmful than current versions, with a serving of public health on the side. There are rising health concerns about cigarettes in China. More than 1 million people die annually in the country from tobacco-related diseases and officials have warned the number could triple by 2030 without action. Health authorities have been pushing to turn more public buildings smoke-free. Philip Morris is investing hundreds of millions of dollars trying to develop less-harmful cigarettes and executives have described the strategy as a potential "game changer'' in China. One version generates smoke at temperatures below combustion, releasing fewer toxins, but aims to mimic traditional cigarettes more closely than alternatives already on the market such as electronic cigarettes. Philip Morris has begun discussing its next-generation plans with CNTC and Chinese officials "are extremely interested,'' Andre Calantzopoulos, Philip Morris's chief operating officer, recently told investors. But he estimated the new cigarette products wouldn't be launched before 2016 or 2017. The vaccine is perhaps even further off in the future. Philip Morris said its China flu business hinges on the successful completion of clinical trials and securing regulatory approvals. "We're definitely talking years,'' added a spokeswoman for Philip Morris. Medicago specializes in producing flu vaccines from Nicotiana benthamiana, a relative of Nicotiana tabacum, the tobacco plant used in cigarettes. It represents one of several plant and cell-based alternatives to chicken eggs, which have been used for decades to make vaccines but are seen as slow and expensive. China has been among the countries hardest hit by H5N1 over the past decade and was swept up in the H1N1 outbreak of 2009 and 2010, which killed an estimated 280,000 people world-wide, according to a recent estimate. Under the Medicago deal announced in late September, Philip Morris will pay an initial $4.5 million for the rights to develop Medicago's pandemic and seasonal influenza vaccines for China. Medicago produced more than 10 million doses of an H1N1 or swine flu vaccine within 30 days earlier this year in a research project with the U.S. Department of Defense. It also has reported positive results from a Phase II clinical trial for an H5N1 or avian flu vaccine. The China program represents publicly traded Medicago's first foreign-licensing deal. Philip Morris began investing in Medicago in 2008, when it acquired a large minority stake in the Quebec-based company for roughly $15 million—pocket change for the cigarette maker. Both the next-generation cigarettes and the flu vaccines are expected to take several years to come to market, if ever. Philip Morris got its foot in the door in China in 2005, when it inked a strategic partnership with China National Tobacco, or CNTC. Under that arrangement, CNTC began producing Marlboros under license in China four years ago. Philip Morris also helps distribute CNTC brands outside China, including Poland and the Czech Republic. But as of last year, CNTC still boasted a 97% market share in its home country, according to Euromonitor International. Marlboro's 0.3% market share puts it behind more than three dozen CNTC brands including market-leading Hongtashan. China's biggest foreign brand last year, British American Tobacco PLC's 555, had a 0.5% market share.

GDP growth in 24 regions beats national average (By Zheng Yangpeng) A total of 24 provinces, autonomous regions and municipalities across China have delivered economic growth above the national average in the first three quarters, while growth in coastal regions ramped up in the third quarter, according to local government data. The Airbus A320 assembly line in Tianjin. The municipality in North China led the nation with 13.9 percent year-on-year GDP growth in the first three quarters. North China's Tianjin led the nation with 13.9 percent year-on-year GDP growth in the first three quarters, while Guangdong, the country's economic powerhouse, posted 7.9 percent year-on-year growth. In the first three quarters, China's economy grew 7.7 percent, the lowest in the past three years. National figures are not necessarily a compilation of local data. But an improvement for coastal regions' GDP figures suggests the country's growth decline might be stabilizing, as eastern provinces are regarded to be the most sensitive to economic fluctuations. Among the 11 regions that saw more spirited economic activity in the third quarter, seven are coastal areas. Guangdong's GDP growth in the first three quarters was 0.5 of a percentage point higher than that recorded for the first half of the year, while Zhejiang's growth in the first three quarters was 0.3 of a percentage point higher than in the first half. Li Wei, an economist at Standard Chartered Bank in Shanghai, said the acceleration in the eastern provinces' growth is "restorative" as it had generally been declining since the middle of 2011. Li attributed the growth to the slow recovery of the US economy and a batch of local government stimulus packages. "But the positive effects of the massive investment stimulus package introduced by the central government in 2009 are fading, while its negative effects are surfacing, which is taking its toll on central and western China," Li said. He added that the current economic slowdown is mostly cyclical rather than structural, as the absence of massive investment schemes and a global economic malaise, rather than weakening domestic demand, were the major contributory factors. Domestic consumption contributed to 55 percent of GDP growth in the first three quarters, which was the first time it had contributed to growth more than investment. But Ha Jiming, vice-chairman and chief investment strategist of Goldman Sach's investment management division for China, said in a recent interview that structural factors, such as rising labor costs, accounted for 40 percent of the current slowdown. "If structural factors, rather than cyclical ones, are the major causes, a large stimulus plan from the government would be of little help," Ha said.

Struggling tea village copes with lost glory (By Hu Meidong and Sun Li in Xiamen, Fujian) The first thing you notice when you enter Junying is the subtle fragrance of tea leaves that permeates the air. Located in the steep, verdant mountains of Fujian province, the village has been producing tea for 300 years, and today its plantations cover 386 hectares. Yet, get any one of its residents on the subject of tea, and you will likely be met with a deep frown. "The word 'tea' used to lift my spirits," said Gao Shuzu, who farms three-fifths of a hectare. "Now it just makes me more worried, as we've had a lot of setbacks in the past two years. "The tea I harvested this spring made me only about 10,000 yuan ($1,600). I was making six times that four years ago." Workers process tea leaves at a workshop in Junying, a small village and home of tieguanyin (Iron Goddess of Mercy), a variety of oolong, a dark tea, in Xiamen, Fujian province. Gao is among 500 residents in Junying - 80 percent of its population - who make a living growing and selling tea leaves. Another is Hong Mugen, who until early this year had stored about 10 metric tons of tea wrapped in plastic bags in a warehouse in the vain hope that prices would go back up. "Some of it was harvested in the spring of 2010," the year prices began to drop dramatically, the 42-year-old said. Hong said that eventually, he faced up to reality and decided to sell what he had in storage along with the leaves picked this spring from his 2-hectare plantation. The lowest price he got was 10 yuan a kilogram, and in the end he made less than 30,000 yuan net profit. "The situation has dampened the mood of villagers," he said. "Many stopped planting tea and became migrant workers in cities." Sunshine and water - Junying, about 66 km from downtown Xiamen, is more than 800 meters above sea level and is the home of tieguanyin (Iron Goddess of Mercy), a variety of oolong, a dark tea. "We have plenty of sunshine and water, but no industrial pollution," said Gao Quanyang, the village head. "The difference in temperature between day and night in the mountains is huge, meaning tea trees are less vulnerable to disease and pests. It makes the village a nice place to plant fine quality tea." Despite the low prices of the past two years, he said the village still produces more than 300 tons of tea annually. Wang Guiqing, general manager of Fujian Tea Import and Export, said the tea price issue is partially due to European countries' raising the testing standards on imports from China. China is the world's third-largest tea exporter, with its products sold to more than 120 nations and regions. Tea exports absolutely contribute to the profits for growers in Junying, Wang said. In 2011, the European Commission issued an order calling for stricter testing on Chinese tea exports to the European Union, stipulating that 10 percent of the goods should undergo onsite inspections for pesticide residue. Given the restrictions, the right thing to do is deal with tea in the domestic market, village head Gao Quanyang said. However, he said, despite the high quality of Junying tea, the village's products do not sell well in China, reflecting a lack of brand image. "Of course, we won't be sitting ducks. Changes have been made to tackle the crisis," he said. The first such change has been developing the production of organic tea. The village has contacted Xiamen's major tea companies, which will help coach grassroots growers about quality-control measures, including the use of pesticides and final processing. "Safety and quality are everything," Gao Quanyang said. "They are the fundamental elements of strengthening the brand, wining customers and meeting the testing standard set by other parties."

Hospitals to prevent theft of babies (By Cang Weiand Song Wenwei in Nanjing) Hospitals in Nanjing, Jiangsu province, are using security bracelets to keep newborn babies from being stolen from the maternity ward. Chu Zhiping, matron of the maternity department under the No 2 Hospital affiliated with Nanjing Medical University, said the security bracelet will sound an alarm if a baby is taken outside certain areas of the department. "Warnings will also be shown on nurses' computers so they can immediately know which baby has been taken and take action together with the guards," Chu said. She added that the bracelet, which contains all of the baby's information, such as health, mother's name and hospital-bed number, can be removed only by staff members. A newborn wears a security bracelet around his leg to keep him from being stolen from the maternity ward at the No 2 Hospital affiliated with Nanjing Medical University in Nanjing, Jiangsu province, on Friday Zhang Guoqiang. "The bracelet will sound an alarm if other people try to untie or cut it off, and it's very safe for the baby to wear the bracelet because the radiation it produces is very low," Chu said. No 2 Hospital has used the security bracelet since 2008. Other hospitals in the city have started using them or taken even stronger measures to prevent baby stealing. Gulou Hospital has security guards on duty round-the-clock. Only two visitors at a time are allowed during visiting hours. Babies can be taken out of the hospital only if a discharge certificate is provided. "Medical workers in our maternity ward must wear a special sign in front of their chest if they want to take babies from their mothers for treatment", said a matron named He at a hospital affiliated with Southeast University, who was previously interviewed by Yangtze Evening News. "Even a matron like me is no exception," He said. In Nanjing Maternity and Child Healthcare Hospital, the first class that the parents-to-be have to take is on how to check the identities of medical workers. In addition, more than 500 surveillance cameras have been installed as the facility. Hospitals and parents in China have been on high alert after repeated media reports of babies being stolen. In October, a 3-day-old boy was stolen by a woman in Huaiyuan county, Anhui province. In November 2011, a 6-day-old girl was taken out of a hospital in Xinghua, Jiangsu. A 1-day-old baby boy was reported stolen in Shanwei, Guangdong province, in the same month. "Though the security measures seem complicated, they are necessary because my wife and I cannot be alert every second," said Zhang Lei, who lives in the city's Gulou district and who became a father in October. "I can't imagine my baby being stolen or exchanged by mistake in the hospital. For me, the more complicated, the better."

Smiles abound for Air China's newest jumbo jet (By Wang Jun and Deng Yu in Seattle) Boeing delivers one of its 777-300ER jets to Air China at a ceremony on Monday at Seattle's Future of Flight Aviation Center. Boeing Co formally delivered one of its 777-300ER jets to Air China, the nation's flag carrier, at a ceremony on Monday at Seattle's Future of Flight Aviation Center. Air China representatives from Beijing and Los Angeles celebrated the delivery of the jet with Boeing management teams. Chi Zhihang, vice-president and general manager of Air China North America, said the Boeing 777-300ER provides a better customer experience and offers more legroom for passengers. The extended-range aircraft, which can fly up to 7,900 nautical miles (about 14,500 kilometers) before refueling, sports a distinctive paint job: Forty smiling faces of Chinese people adorn the exterior to honor the national aviation industry's role in linking China to the world. Twenty of the people pictured on the fuselage are front-line employees of Air China, each with a personal story that reflects the growth of civil aviation in China. The other faces belong to people selected by the airline and Boeing from a Chinese social media campaign this summer. Users submitted a photo and an inspiring message. "We hope this especially lively airplane will make the connection of bringing a smiling, confident and friendly China to the world," said Feng Run'e, Air China vice-president. "With the airplane flying around the world, we hope more business travelers will experience the superior in-flight comfort offered by Air China's 777-300ER," she said. "Boeing is celebrating its 40th anniversary in China. Over the past four decades, we have witnessed the rapid development of China's aviation industry and we're honored to be part of its success by providing our best products and services," said Ihssane Mounir, Boeing's senior vice-president of sales for Greater China, Japan and South Korea. "We look forward to carrying on this great tradition of growth and development over the next 40 years," he added. Two of the people whose faces were selected for the plane's exterior participated in the ceremony. Wang Yulin, flight attendant and one of Air China's image ambassadors since 2010, said she feels honored to be selected. She joined Air China in 2004 and started to fly the Boeing series one year later - mainly between China and the United States. Rong Kai, who joined Air China in 2008 and works at Ameco, Air China's maintenance, repair and overhaul provider, said he invented Air China's first landing gear kit to be used for Boeing 737NG landing gear overhaul. "It's the first time that we (Air China) worked with aircraft manufacturers to develop our own kit, which meets our needs better," Rong said. The kit is currently used by Ameco. Rong and his team have been collaborating with Boeing and Airbus to develop more new technologies and products. To date, 63 customers around the world have ordered a total of 1,380 Boeing 777 planes, the largest twin-engine jet. Air China has 167 Boeing planes, 55 percent of its fleet. Yang Rui, deputy general manager of Air China North America, said the airline has advocated use of fuel-efficient aircraft such as the 777-300ER, which is also designed to be quieter in flight than other commercial jets. In Air China's configuration, the 777-300ER has eight seats in first class, 41 in business class and 257 in coach. All offer improvements in privacy, comfort and entertainment options, Yang said. The airplane delivered Monday is the tenth of 19 Boeing 777-300ERs that Air China has ordered since 2008. The carrier received its first 777-300ER in the Chinese mainland in July 2011. Air China has been using the planes to expand routes, particularly in Europe. The nine Air China 777-300ERs currently in service have helped boost the carrier's competitiveness domestically and overseas. Cities served include Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Los Angeles, Frankfurt and Paris. Air China's 777-300ERs will gradually replace the Boeing 747-400s, which currently fly between China and North American cities. The airline currently uses 777-300ERs for twice-daily flights between Beijing and Los Angeles.

'No embargo' of rare earths on Japanese firms (By Wang Zhuoqiong) Exports decline due to sluggish economy not islands: Expert - Declining exports of rare earths are due to sluggish global demand and not tension with Tokyo, industry leaders said. No embargo has been placed on Japan over the Diaoyu Islands, Liu Yinan, vice-chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, said. The drop in exports to Japan reflects a general trend, Liu said, adding that exports of rare earths may experience an overall decline this year. Exports were 9,967 metric tons between January and September, according to the China Customs Statistics Information Center. That means, Liu said, only one-third of China's 2012 quota of 30,996 tons, had been used. Export volume dropped 11.5 percent from a year ago and was valued at $702 million, a sharp fall of 61.5 percent.

Yuan set to be more flexible (By Wang Xiaotian) Renminbi trading band may be broadened this year, say analysts - China might, in the last two months of the year, further broaden the permitted fluctuation limits of the yuan to the daily mid-point set by the central bank, analysts forecast. "We expect such fluctuation limits to be extended from the current 1 percent to 2.5 percent after the United States presidential election, and the 18th National Congress of the Communist Party of China (due to start on Nov 8)," said Lu Zhengwei, chief economist at the Industrial Bank. He said interest rates and banks' reserve requirement ratio are unlikely to be adjusted in November given the current economic situation.

Hong Kong*:  Oct 31 2012 

Beijing failed HK administrations on patriotism, says ex-think tank chief (By Gary Cheung) Think tank chief says Tung, Tsang fell short of central government's expectations on patriotism. The administrations of Tung Chee-hwa and Donald Tsang Yam-kuen never fully responded to Beijing's call to groom "patriotic forces" in Hong Kong, a former top government adviser says. In his new book, Governance and New Regime Building in the Hong Kong SAR since the Handover, Professor Lau Siu-kai writes that there were few Hong Kong officials who fully understood Beijing's policies towards the city and the legislative intent of the Basic Law. "As a result, the Hong Kong government did not fully govern in accordance with Beijing's policy towards Hong Kong," Lau said. "At times, the central government complained in private about the work of the Hong Kong government." Lau says that the central and Hong Kong governments held different views on the key question of "who were friends and foes?" "The central government never trusted the opposition force but the Tsang administration initially attempted to win them over to boost its popularity," he said. Lau, who stepped down in June after a decade as chief of the Central Policy Unit, the government's main think-tank, said the central government wanted to groom "patriotic forces" in Hong Kong but neither the Tung or Tsang administrations fully responded to Beijing's call. "Given the discrepancy in analysing the political situation and political strategy, it was unavoidable that the central and Hong Kong governments faced difficulties co-operating on the political front," Lau writes. He notes that the Hong Kong government had not taken the lead in safeguarding the central government's authority because it feared criticism that it proactively invited Beijing's interference in Hong Kong. In February 2010, the State Council's Hong Kong and Macau Affairs Office issued a statement saying that any "so-called referendum" - a reference to by-elections triggered by the resignations of five pan-democrat lawmakers - would be inconsistent with the city's legal status and a blatant challenge to the Basic Law and the central government's authority. "But the Hong Kong government said only that there was no legal ground for bannning the 'de facto referendum' and did not touch on the central government's solemn position," Lau said. "The central government was visibly dissatisfied with the Hong Kong government on this issue." Lau, who is now an emeritus professor of sociology at Chinese University, said that the Hong Kong government had asked the central government in recent years to come up with measures to improve cross-border economic co-operation. "But from the viewpoint of some mainland officials, these proposals were put forward only from the angle of Hong Kong interests and did not take into account the risks for the country," Lau said.

Regina Ip pledges loyalty to C Y and Carrie Lam in Exco (By Tony Cheung) Former rival says city's government is 'the weakest in history' but that the chief executive can count on her best advice to make it work. Regina Ip in her Wan Chai office. She believes her advice will help the administration to improve its public image. The government's ministerial team is "the weakest in Hong Kong's history" but the Executive Council will be well positioned to help it formulate policies that will win public support, according to new Exco member Regina Ip Lau Suk-yee. Ip, a former chief executive candidate, said that as an Exco member she would work with Chief Executive Leung Chun-ying and advise him on how to be more politically sensitive. Speaking to the South China Morning Post - in her first interview with an English-language newspaper since her appointment to Exco this month - Ip also dismissed concerns of rivalry on the council between herself, Leung and Chief Secretary Carrie Lam Cheng Yuet-ngor, Leung's most senior official. In September, Ip suggested Lam had tried to salvage her declining popularity by breaking down in tears on television and said that Lam's credibility had suffered in the administration that took office on July 1. Despite these remarks, Ip - believed by many analysts to be a likely contender for chief executive in 2017 - said there would not be any rivalry among the three on Exco. "We all have different roles to play. C. Y. plays the role of [chief executive], Mrs Lam, being [chief secretary], is tasked to assist him, and me, being a member of Exco, my constitutional role is to give him sound advice, the best advice that I see fit," said Ip, a lawmaker and chairwoman of the New People's Party. One of the most important issues facing Leung's administration was the lack of experienced civil servants to help with policy matters, she said. "In terms of experience and expertise … [Leung's ministerial team] is the weakest in the history of Hong Kong," Ip said, speaking in English. "There are only a handful of experienced officials who can provide continuity … and it is these experienced [administrative officers], experienced civil servants who perform better than newcomers because they have a known track record." Ip's appointment to Exco on October 17, along with functional constituency lawmaker Jeffrey Lam Kin-fung, took its membership to 31. In addition to the 16 non-official members (who include Ip and Jeffrey Lam), it includes the three senior principal officials (the chief, finance and justice secretaries) and 12 principal officials, or ministers. Ip identified Leung's three key challenges as the public's negative perception of him, a weak ministerial team and problems inherited from his predecessor, Donald Tsang Yam-kuen, such as shortages in housing and land. She believed that while it would take time to deal with the deep-rooted problems, Leung should nevertheless tackle his public image first. "It is a matter of perception that [Leung] seems to be too 'red', or pro-mainland, and actually there is a lot more he can do. [For example] by adjusting his image [and] avoiding doing things like calling on the [central government's] liaison office immediately after [his] election [as chief executive] … he could be more politically sensitive." In February, Ip declared her bid to run for chief executive but dropped out less than two weeks later, after she failed to secure the minimum 150 nominations required to file a bid with the Election Committee, which later chose Leung as chief executive.

Blackstone cashes up for more big mainland deals (By Ray Chan and George Chen) Conditions are right, says chairman of firm on lookout for 'below the trend' property targets. Stephen Schwarzman says Blackstone is not quitting the mainland's property market. Blackstone Group, the world's largest alternative asset manager, is on track to make big-ticket deals in Asia's property market. Stephen Schwarzman, a co-founder and chairman of Blackstone, said during a brief visit to Hong Kong on Friday that his firm would not quit the mainland's property market despite growing concerns about the outlook of the real estate sector. The worries come after years of efforts by Beijing to check rising property prices and speculation. Blackstone, already one of the largest property investors globally, raised a record US$13.3 billion this month for its seventh real estate fund for Asia and aimed to buy assets at "discount for size", said Schwarzman. The fund's mandate was to make deals when acquisition targets were "below the trend", he said. Conditions in Asian markets supported making large purchases, said Schwarzman, citing India, which generated double-digit returns on an unleveraged basis for the firm last year, while Australia also posted meaningful yields. "We look for deals that allow us to add value by making improvements, and changes to an existing project," he said. Blackstone would not buy a building just because "it looks nice". Antony Leung Kam-chung, Blackstone's Greater China head, said he was aware of some regulatory struggles between the various mainland government bodies that had become a factor in slowing approvals for fund-raising and deal-making by international private equity investors. In April, the South China Morning Post reported that the financial community was concerned about two big regulatory agencies that were battling it out behind the scenes for control over the fast-growing private-equity industry. The China Securities Regulatory Commission, the country's top securities watchdog, argued it should oversee private equity, while the National Development and Reform Commission, the top economic planner, contended it should police the industry. More recently, even the tax authority on the mainland has been mulling some new rules about investment returns for the private equity business. Leung, a former financial secretary in the Hong Kong government, said the private-equity industry on the mainland was still in its infancy and private equity investors there faced liquidity issues in the midst of an economic downturn. Leung, who accompanied Schwarzman during his visit to Hong Kong, said valuation levels for private-equity investors on the mainland were now closely related with values on the public market. Property valuations on the mainland had become more attractive "on the back of rising income growth and urbanisation, helping overall affordability", he said.

Nevada struggles with dark side of Macau casinos (By Joseph Menn) Macau junket operators move millions through Las Vegas with scant oversight. Macau is so influential that its favourite game, baccarat, has overtaken blackjack as the most lucrative card game in Las Vegas casinos. Macau, the only place in China where gambling is legal, opened its doors to Western casinos nearly a decade ago. Sands, Wynn and MGM all plunged in, and soon found themselves in close association with junket operators - middlemen that organise trips to the casinos, largely from Hong Kong and the mainland. Collectively, they're responsible for some 70 per cent of the Macau gambling trade. Mainland residents legally can move only US$50,000 per year out of China, but the junkets advance credit well above that level to their clients. They also collect payments due within China's old borders, where casinos can't advertise or use the legal system to recover debts. The US State Department has repeatedly identified Macau as a jurisdiction of "primary concern" for money-laundering, largely because of the junkets. Macau regulators have limited experience with the modern market and have yet to establish "robust oversight of junket operators" or an anti-money-laundering system "that meets international standards," according to a March report by the State Department's Bureau of International Narcotics and Law Enforcement Affairs. Macau requires the junkets to list their directors, but triads have grown adept at disguising their investments, just as the Mafia once did in Las Vegas. "If criminals are employing the best attorneys and accountants, and setting up more elegant ways of hiding ownership, it's possible that Nevada won't be able to find them easily," says Michael Rumbolz, of casino solutions company Global Cash Access. Even as Nevada has declined to crimp US casinos' behaviour in Macau, federal authorities have grown more concerned about the companies bringing cash and techniques from Macau to Las Vegas. Junkets have advanced millions of dollars in credit from Macau to their clients' accounts at Sands and MGM properties in Las Vegas, according to casino officials and ledgers recently exposed in a lawsuit between Sands and the fired head of its Macau operations, Steve Jacobs. As previously reported, one of the beneficiaries of a US$100,000 Sands transfer was Charles Heung Wah-keung, named in a 1992 Senate committee's investigation as an office bearer of the Sun Yee On triad. Other junket affiliates have registered as "independent agents" commissioned to bring high rollers to Las Vegas. In one sign of how important the Asian trade has become, baccarat, long the game of choice in Macau, has displaced its cousin blackjack as the most lucrative Nevada card game. Revenue from baccarat is now growing 10 times faster than any other form of gambling in Vegas. A particular weakness in Nevada's regulatory approach appears to be oversight of the agents. Applicants fill in an 11-page form with their business and legal histories, and casino sponsors pass them on to the state; no full suitability review is required, as would be the case for key employees at casinos. Virtually every time the control board has asked aspiring agents for more data, the applicants have simply withdrawn, suggesting a systemic problem, one state investigator says. Regulators fear that shadowy backers of the agents simply submit new names with cleaner records, he says. Registered agents, including junket representatives, can get credit from the casinos and re-lend to their clients, raising the prospect of loan-sharking. "Once [an agent] has chips, it's hard to have control. He could hand US$50,000 to his friend," says one former Sands executive. Tracking agent histories is not easy, and some with questionable associations have slipped through. At least three people with ties to just one of the many junket companies, publicly traded Hong Kong firm Neptune Group, became agents in Nevada for Sands, Wynn, MGM and Caesars Entertainment, which owns baccarat hub Caesars Palace, according to public records. A key former backer of Neptune is Cheung Chi-tai, named in the same 1992 Senate report as a top lieutenant of the Wo Hop To triad. In a more recent Hong Kong criminal trial, an informant testified that Cheung was a triad leader, and in 2008 ordered him to murder a card dealer suspected of cheating in a Sands VIP room in Macau where Cheung had an ownership interest. Lower-level triad members were convicted in the case, while Cheung was not charged. Cheung helped underwrite Neptune's purchase of a stake in junket operator Hou Wan in 2007, and for a time owned 8 per cent of Neptune. Though Cheung disposed of his stake, he has maintained other connections to Neptune, corporate records in Hong Kong and Macau show. For example, his 50-50 partner in a company begun in 2003, Lei In Peng, also owns a firm that has more than 18 per cent of Neptune's stock. Lei couldn't be reached for comment. Neptune's chairman, Lin Cheuk Fung, was an independent agent from 2005 to 2009, signing up to bring gamblers to Wynn and MGM casinos in Las Vegas. Neptune didn't respond to requests for comment and Lin couldn't be reached. Wynn acknowledged using Lin as an agent but wouldn't comment further. MGM spokesman Alan Feldman says only that his company had "a comprehensive and robust compliance programme that involves several former regulators and law enforcement officials who review all of our junket operators". Though Neptune's links are complex, they are easier to untangle than most junket operators because the company is publicly traded. Investigators in both Las Vegas and Macau say they simply don't know who stands behind many of the other junkets. Overall, says casino consultant and author Jim Kilby, the junket issue, "may be too big for gaming regulations".

Henderson Land has too many square feet (By Khor Un Hun) From 2008 to 2010 Henderson Land expanded its vast holdings of real estate in the mainland, Hong Kong and the New Territories. Hong Kong property developer Henderson Land Development has a peculiar problem: too much land. The company is the biggest agricultural land owner in the New Territories and owns millions of square feet of floor area in Hong Kong and the mainland. Between 2008 and 2010, Henderson Land, which was bullish on the mainland property market, aggressively expanded its land bank there at what it considered to be cheap prices. It also bought a lot farmland in the New Territories in the expectation the area would be developed into towns. Its property inventories rose by more than 60 per cent in that period. Property sales failed to keep pace, dropping from HK$11.1 billion in financial year 2008 to a low of HK$3.6 billion in 2010. The company as a result has a lot of property inventories on its books. Roughly speaking, it would take Henderson Land eight years to use all its property inventories at the current rate it is selling developments. By comparison, Cheung Kong (Holdings) and Sun Hung Kai Properties (SHKP) would use all their land in more than three years, and New World Development would take 4½ years. One might think a developer could never have too much property in Hong Kong. But the market discounts Henderson Land precisely because of its property excess. Let's break this down. Henderson Land's chairman Lee Shau-kee constantly reminds the market that the firm trades at a steep discount to its book value. On the surface, Henderson Land's price-to-book ratio of around 0.7 times is in line with conglomerates with extensive property interests such as Cheung Kong, SHKP and New World Development, which are trading between 0.68 and 0.83, according to Bloomberg. To recap, property companies are commonly valued using the price-to-book ratio, a comparison of the firm's equity value with its "book value", or the theoretical value of the firm if it goes into liquidation today. (See last week's column: "Cheap at twice the price".) However, Henderson Land's price-to-book ratio is inflated by its huge 40 per cent stake in Hong Kong and China Gas, which accounts for more than half of its market value. The latter, which supplies gas in Hong Kong and various parts of the mainland, has a market capitalisation of more than HK$170 billion and trades at more than four times its book value. The company also owns stakes in the listed firms Henderson Investment, Hong Kong Ferry and Miramar Hotels, which together with the investment in Hong Kong and China Gas, are worth a combined HK$72.6 billion. Stripping out these assets, Henderson's property development business on its own is priced by the market at about 0.4 times book value, and about 5.2 times earnings. One could perform a similar analysis for the company's fellow property conglomerates such as Cheung Kong, SHKP and New World Development by stripping out their non-property assets (Hutchison Whampoa and CK Life Sciences for Cheung Kong, SmarTone Telecommunications for SHKP and New World Department Store for New World Development), and see how Henderson stacks up against them (see table). This offers a like-for-like comparison of the big developers' valuations, as we are excluding non-property businesses that might muddy the picture. Based on this comparison, Henderson Land registers the second highest price/earnings ratio among its peers. So why does this company look so cheap based on the price-to-book ratio? Land is to property developers what inventory is to manufacturers. Too little of it and markets worry where profits are going to come from. For instance, Sino Land recently allayed investor concerns over its dwindling land bank after it bought two big pieces of land in Long Ping MTR West Rail Station and Tseung Kwan O Station jointly with K Wah International. However, having too much land lying around is not necessarily a good thing either, as it involves significant opportunity costs. Developers only make more money when they are developing and selling properties. Idle land ties up capital - forgoing the opportunity to invest that money elsewhere - and incurs financing costs. Based on the price/earnings ratios, it seems that the markets are pricing Henderson Land in line with its peers. But its return on equity, depressed by non-income producing land bank, is the lowest among its peers. Because it takes Henderson Land longer than its peers to realise profits on its property inventories, they are worth less - a dollar made tomorrow is worth less today one earned today. Henderson's land excess is risky - property prices could drop - and there are concerns over its ability to ramp up property sales if the real estate market goes into decline. Finally, in volatile markets, investors might not like taking a long view on Henderson Land's payoff potential. The land bank may turn out to be a shrewd investment; it may not. All things considered it may be best to go with the developer that it rapidly turning over its property inventory and fully utilising today's sky-high real estate prices.

Bauhinia think tank may lower profile (By Joshua But and Gary Cheung) Departure of Anthony Wu may be a sign that the think tank's influence is on the wane. Anthony Wu has ended his five-year chairmanship of the Bauhinia Foundation Research Centre. A major supporter of chief-executive contender Henry Tang Ying-yen has quietly stepped down as chairman of a once-key think tank that reportedly intends to keep a lower profile under the new administration. Anthony Wu Ting-yuk ended his five-year chairmanship of the Bauhinia Foundation Research Centre on September 17, but the news was announced only on the centre's website. Co-founded by Wu and Norman Chan Tak-lam, who is now the Monetary Authority chief executive, the centre was seen as Hong Kong's flagship think tank during the administration of chief executive Donald Tsang Yam-kuen. Tsang took office in 2005 and the centre was set up the following year. But it has lain almost dormant in the months following Leung Chun-ying's election. A person familiar with the think tank's management said it had purposefully taken a low profile since the leadership change. Another insider said its future was unclear. Wu was succeeded by director Dr Donald Li Kwok-tung and will remain one of the centre's two directors. Chinese University political scientist Ivan Choy Chi-keung said the fortunes of think tanks in the city were closely related to the rise and fall of the political power they belonged to. "The fading prominence [of the research centre] just mirrors the city's political landscape," he said. The South China Morning Post understands that the centre has scrapped its quarterly Hong Kong Consumer Confidence Survey. The survey, conducted by Lingnan University since 2009, sought to predict consumer confidence through economic expectations and behaviour. Preparation for this year's Leadership Conference, which the centre has organised annually since 2009, is also on hold. Wu acknowledged that the centre had conducted fewer studies in the past year compared with the initial years after its establishment. "But it has nothing to do with the political situation … We face no funding problems," he said. He said the centre stopped commissioning the confidence survey from the third quarter of this year, as it was drawing less attention than before. "The survey doesn't serve our original purpose as a think tank any more," he said. "We are now focusing on long-term policy studies, on topics such as land supply and housing." He said he and co-founder Chan agreed that the chairman's tenure should not exceed five years. "It's time to pass the torch to the younger generation," Wu said. A spokeswoman for the centre said the new management was putting together fresh ideas and directions, and would continue to research local policies.

Banks support Hang Seng as local developers hammered (By Reuters in Hong Kong) Hong Kong shares slipped on Monday as local developers tumbled on fears that new measures to cool soaring property prices will sap demand, but broader losses were limited by strong earnings by Chinese banks. The Hang Seng Index ended down 0.2 per cent at 21,511.1, the lowest close since October 17. The China Enterprises Index of the top Chinese listings in Hong Kong finished up 0.9 per cent at 10,546.2. In the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings shed 0.5 per cent, its fifth-straight loss. The Shanghai Composite Index lost 0.4 per cent. They each closed at their lowest since September 26. Hong Kong real estate stocks reeled after the city’s government imposed a new 15 per cent tax on foreign and corporate real estate buyers and stiffened the resale stamp duty fees in the hope of calming property prices, which have surpassed historical highs hit in 1997. New World Development, which had soared more than 100 per cent year to date, dived 6.4 per cent. Agricultural Bank of China gained 3.1 per cent and China Construction Bank rose 0.9 per cent after both “Big Four” Chinese banks posted third-quarter earnings over the weekend that topped expectations.

Special meeting set for funding of old age allowance (By Lai Ying-kit) The chairman of the legislature’s Finance Committee invoked special powers on Monday to speed up scrutiny of the government’s proposed old age allowance. Lawmakers voted to schedule a special meeting, for Tuesday evening, when the Legislative Council committee will discuss the funding proposal. Committee chairman Tommy Cheung Yu-yan used his discretion to waive the normal five-day notice period required for the government to table the funding proposal. Cheung said that if the proposal were not put to a vote – and approved – by Wednesday, about 400,000 low-income elderly people might lose out on the new HK$2,200-per-month subsidy. But Cheung said it remained unclear whether legislators would complete their scrutiny, and be ready to put the funding proposal to a vote, after Tuesday’s special meetings. Also on Monday, Legco’s welfare panel spent the afternoon discussing the details of the allowance scheme, to which 57 concern groups sent representatives. The Finance Committee was originally scheduled to vote on the funding last Friday, but members delayed the ballot due to concerns over a means-test for applicants. The pan-democrats want the government to waive the means test for those age 70 and above, and the pro-establishment Democratic Alliance for the Betterment and Progress of Hong Kong wants the asset cap, currently set at HK$186,000, to be raised.

Hong Kong developers slump after new property curbs (By Reuters in Hong Kong) Number of second-hand buyers drops 40 per cent over the weekend to year-low. Hong Kong shares edged lower on Monday, as local developers tumbled on fears that new measures to cool soaring property prices will sap demand, but broader losses were limited by earnings-driven strength in Chinese banks. The Hang Seng Index ended down 0.2 per cent at 21,511.1 points, the lowest close since October 17. The China Enterprises Index of the top Chinese listings in Hong Kong outperformed, rose 0.9 per cent. On the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings slipped 0.5 per cent, while the Shanghai Composite Index was down 0.4 per cent. Both indices closed at their lowest since late September. Shanghai volume was the lowest in about one week. Hong Kong turnover sank to the lowest in almost two weeks, with the Hong Kong property and Chinese banking sectors seeing the bulk of the day’s trading. “There’s some rotation from Hong Kong developers into the Chinese banking sector today after CCB and AgBank posted pretty good results over the weekend,” said Jackson Wong, Tanrich Securities’ vice-president for equity sales. Late on Friday, the Hong Kong government imposed a 15 per cent tax on foreign and corporate real estate buyers and stiffened the resale stamp duty fees in the hope of calming the city’s property prices, which have surpassed historical highs hit in 1997. “I think many were quite surprised by the severity of the 15 per cent special duty, so they took profits on the sector, which has done very well this year so far,” Wong added. Shares of New World Development, which before Monday were up more than 100 per cent this year, tumbled 6.4 per cent to their lowest close since September 28. Monday’s fall was the stock’s biggest daily loss in almost seven months. Both Henderson Land and Sino Land also slumped 6.4 per cent. Sun Hung Kai Properties lost 5.1 per cent and Cheung Kong Holdings shed 4.7 per cent. In a report on Monday, Citi analysts said any dip in the sector represented “an enhanced buying opportunity”, believing that stabilising home prices will remove policy risks and asset bubble concerns. In Hong Kong, China Construction Bank (CCB)rose 1.2 per cent and Agricultural Bank of China (AgBank) jumped 3.1 per cent after posting positive third-quarter corporate earnings over the weekend. Analysts had expected the profitability of banks to be hit by two central bank interest rate cuts since June. But the earnings had been supported by China’s landmark decision to let lenders set their own loan rates. Still, CCB’s 12 per cent rise in third-quarter net profit growth lagged AgBank’s 16 per cent gain and Bank of China’s (BOC) 17 per cent increase. BOC rose 1 per cent in Hong Kong on Monday, while Industrial and Commercial Bank of China (ICBC), which on Tuesday will be the last “Big Four” Chinese bank to post third-quarter earnings, inched up 0.6 per cent. China Petroleum and Chemical Corp (Sinopec) climbed 2.9 per cent in Hong Kong and 1.1 per cent in Shanghai after posting a smaller-than-expected drop in third-quarter earnings over the weekend. A positive China October purchasing managers’ index (PMI) reading, expected on Wednesday, could further suggest a stabilising of the Chinese economy and buoy interest in growth-sensitive sectors, particularly those with encouraging third-quarter earnings. Data over the weekend showed China’s industrial profits rose 7.8 per cent in September from a year earlier to 464.3 billion yuan ($74 billion), the National Bureau of Statistics said on Saturday, compared with a 6.2 per cent drop in August.

 China*:  Oct 31 2012

China watches US election avidly, but without envy (By Agence France-Presse in Beijing) A clay figurine of US President Obama is found among ones of Asian celebrities at a stall in Jilin, northeastern China's Jilin province. The world’s two biggest economies choose their next leaders in early November, an accident of timing that lays bare the vivid contrast between China’s opaque communist state and America’s riotous democracy. The rhythm of the presidential election in the United States has been set by three televised debates watched by tens of millions of voters, with campaigning carried out online as well as at boisterous rallies that draw thousands. On the other side of the Pacific, the power games are under way behind closed doors, as Communist Party leaders jostle for positions ahead of the regime’s once-in-a-decade leadership change starting on November 8 at a special congress. The victor of the November 6 contest between Democratic President Barack Obama and Republican challenger Mitt Romney is too close to call, but it is almost certain the new Chinese president will be Xi Jinping, currently vice-president in the one-party state. At a university campus in Beijing, Chinese students from diverse backgrounds said they were following closely the change in Washington, which was more lively and entertaining than the transition at home. State television relays events on the US campaign trail, while websites such as ifeng provided live streaming of the debates and social media networks buzz with discussion of the process and perceived China-bashing by the candidates. But many of the students’ comments made clear they had no desire to import Western-style democracy to China immediately. “Copying in a mechanical way American democracy would cause a lot of problems in China, even if we need to go that way in order to make progress here,” said 24-year-old Zheng Kailun, a philosophy student. Others admired how the US candidates faced off in the televised debates and even poked fun at each other at a gala dinner last week in New York. “Obama is a great performer in front of the public. He’s got a magnetic personality,” said Tu Zongchi, a student of international relations. But he also said he thought the American electoral system was “not applicable for China at the moment”. One issue with particular resonance in both countries is the personal finances of the candidates for high office. Obama has sought to highlight Romney’s enormous personal wealth and investments in China. The Republican released some of his tax returns – something unimaginable in China where leaders’ lives are meant to stay private. Last week, a New York Times investigation into investments said to total US$2.7 billion by Chinese Premier Wen Jiabao’s family was quickly blacked out by official censors. Zhang Shuo, a student of mechanical engineering who says he is avidly following the US election, said China’s system “largely meets our national needs”. “Perhaps in 30 to 50 years we will also reach the same level of democracy [as the US]. It’s an evolution,” he said. The students’ views that political reform will evolve slowly chime with most analysts’ and are in sharp relief to the clamour for democracy that filled the air of Beijing in mid-1989. Then, hundreds if not thousands of students were gunned down around Tiananmen Square after weeks of protests. Now, a new generation has come of age seeing the fruits of rapid economic growth. China’s leadership craves stability above all as a means to continue the rise, which has made the country a global diplomatic force and helped finance a military upgrade enabling Beijing to project its power. The growing might of the Middle Kingdom is a source of friction in the Pacific, where China’s ambitions clash with Washington’s desire to retain its role as the region’s pre-eminent force. On several occasions China has stressed its desire for stable US ties, and warned that it must not be made a scapegoat for America’s economic problems, as both candidates assail the country on the campaign trail. A victory for Romney could have an immediate impact on relations with the Republican candidate vowing to label China a currency manipulator on his first day in the White House. The move, avoided by the administrations of both Obama and former president George W Bush, would enable the United States to impose harsh retaliatory penalties on Chinese goods and has led some analysts to warn of a trade war. Chinese media have urged readers to take such declarations with a pinch of salt. “Willing or not, Democratic or Republican, the next US president shall have to tone down his get-tough-on-China rhetoric made along the campaign trail,” state news agency Xinhua said last week.

Christie's auction preview held in Beijing - The auction preview displays more than 300 items including Chinese paintings, Chinese porcelains, watches and so on.

Hotels buck weak global economy (By Hu Yuanyuan) Average daily room rate still growing across major locations - The average daily room rate - an index to gauge the prosperity of hotels - in Beijing, Hong Kong and Macao continued to grow despite the weak global economy, international real estate service provider Knight Frank said in its latest report. The Oriental Plaza in Wangfujing, in downtown Beijing. Robust economic development and growing numbers of tourists in China make it an attractive hotel market in need of more rooms. Hong Kong experienced the largest year-on-year growth among the five cities in the first half of 2012, with ADR gaining 12 percent, followed by Beijing with a growth of 11.4 percent, according to the report. "We believe China's tourism market will continue to grow rapidly in the next few years despite the gloomy global economic outlook," said Thomas Lam, head of Research at Knight Frank Greater China. Around 425 million people visited tourist sites around the country during the Golden Week holiday starting on Sept 30, up 40.9 percent over the same period last year. Revenue from tourism hit 210.5 billion yuan ($33 billion), an increase of 44.4 percent year-on-year, figures from the National Tourism Administration showed. Robust economic development and growing numbers of tourists in China make it an attractive hotel market in need of more hotel rooms. International hotel operators have shown strong confidence in China's market and are pursuing aggressive expansion plans. For example, Accor's upmarket brand Pullman is planning to open 25 hotels in the country by 2015, on top of its 14 existing hotels. Club Mediterranee plans to open five new resorts on the mainland by 2015, which will make China its second largest market in the world. Starwood Hotels & Resorts has opened 40 hotels in China over the last five years, with an additional 90 in the works. InterContinental, which now operates 162 hotels in China, has an additional 143 under development. "Sentiment in the Greater China hotel market is set to remain strong, with demand for hotel rooms being driven up by the increasing numbers of both local and international visitors," said Lam. "In our judgment, the hotel market in all the five major cities - Beijing, Shanghai, Guangzhou, Hong Kong and Macao - will benefit from increasing demand from tourists and business travelers, including those coming from the MICE (meetings, incentives, conferences and exhibitions) and corporate segments," Lam added. In the first half of 2012, hotel operators continued to expand in the Greater China region. Among the five major cities covered by this report, Guangzhou was the most active market in the first half of 2012, with more than 300 rooms added in the city. The bi-annual Canton Fair is the largest trade fair in China and attracts more than 400,000 visitors every year. Given its position as a major Asian business and exhibition center, Guangzhou should continue to generate a steady stream of business visitors. Shanghai's hotel market, in particular, is expected to benefit from the completion of major tourism projects, such as Shanghai Disneyland in 2015. Meanwhile, Shanghai is to be developed into a regional transportation hub for the Yangtze River Delta region with infrastructure projects in the pipeline such as Hongqiao Transportation Interchange linking the Huning Intercity High-Speed Railway with air and municipal public transport lines. A number of large convention and exhibition centers in Pudong, including Shanghai New International Expo Centre and Pudong Expo and Shanghai International Convention Center, will be holding many major international exhibitions in the coming years. The hotel markets in Hong Kong and Beijing, according to the Knight Frank report, are expected to grow steadily. Although already well developed, they offer unique competitive advantages that cannot be easily substituted. Also, both cities have a number of tourism projects in the pipeline that should further boost hotel demand. Beijing would benefit from the expansion of the MICE industry in the country and the central government's plans to develop the tourism industry into one of the pillars of the Chinese economy. New hotel supply is expected to be limited in Beijing in 2012 and the ADR and occupancy rate should increase steadily and rebound to pre-2008 levels, according to the report. Demand for hotel rooms in Hong Kong is expected to grow further, with a number of tourism-related projects in the pipeline, such as the expansion of Ocean Park and Hong Kong Disneyland as well as a new cruise terminal in Kai Tak.

China unveils huge radio telescope in Shanghai (China Daily) A 70-meter-high radio telescope, the fourth largest in the world, is unveiled at Shanghai Astronomical Observatory on Oct 28, 2012. The radio telescope, which will be used for space observation, differs from optical ones in that they use radio antennae to track and collect data from satellites and space probes.

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

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