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

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

Wine-Biz - Hong Kong Brand Hong Kong Video

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

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

  Year of the Snake - February 10 2013 -  Dance w/ Firework http://www.youtube.com/watch?v=-VoFfOglJuI 

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

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

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

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

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

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

Hong Kong*:  Feb 2 2013

Wheelock wins Tuen Mun residential site for HK$1.4b (By Yvonne Liu and Paggie Leung) Ricky Wong Kwong-yiu, Wheelock's managing director. Wheelock Properties has won a tender for a residential site in Tuen Mun with a bid of HK$1.39 billion. The Lands Department said Wheelock outbid eight developers and acquired the site for HK$3,683 per square foot. The price is in line with market expectations, which ranged between HK$1.13 billion and HK$1.5 billion. Vincent Cheung Kiu-cho, a national director of the valuers Cushman & Wakefield in Greater China, said the price was 26 per cent higher than another site in the area sold in February last year. "It showed the developer has confidence in the market outlook and was willing to offer an aggressive price for the site," he said. Wheelock's managing director, Ricky Wong Kwong-yiu, said the company would spend HK$3.5 billion to develop the site into a luxury residential project. The project will be ready for pre-sale in two years. "The project will provide more than 20 houses sized about 3,000 sq ft and the rest will be flats. The flats will be sized from 800 to 1,000 sq ft," Wong said. The site is at the junction of Kwun Chui Road and So Kwun Wat Road in So Kwun Wat and next to Avignon, a luxury villa project developed by Sun Hung Kai Properties. The villas are valued at between HK$7,000 and HK$8,000 per square foot. Wong said Wheelock chose to bid for the site because it could be developed into a low-density residential project. "It has the potential to be developed into special flats. As the site is well connected by a number of infrastructures, such as Kong Sham West Highway, we expect the project could attract mainland buyers," he said. The site covers an area of just under 290,000 sq ft and could yield a gross floor area of almost 377,000 sq ft. Under the restrictions imposed by the government, the building height of the site has been limited to 10 floors. The developer has to provide at least 460 and not more than 480 flats.

Means-tested old age allowance to launch in April (By Lai Ying-kit) The HK$2,200 new, means-tested old age living allowance will be made available to some 290,000 elderly people starting from April, the government said on Thursday. The new allowance, which will be launched in three phases, comes after months of delays in the Legislative Council as lawmakers attempted a filibuster to demand that the government to scrape the means-test or ease its limits. At a press conference on Thursday, Director of Social Welfare Patrick Nip said the first phase would involve an auto-conversion of some 290,000 existing recipients of the so-called “fruit money” to the new scheme. These recipients will receive the payments in their designated bank accounts if they do not raise objections to the change after a letter is sent to them by the Social Welfare Department. The second phase will involve recipients of another old age allowance and the disability allowance applying directly for the new benefit. The third phase will allow elderly people currently not receiving existing welfare, but in need of financial support, applying for the benefit. The payments will be retroactive to December 1, last year. The department also announced on Thursday the income and assets limits for applicants eligible to receive the allowance. A single-person applicant has to have a monthly income of less than HK$6,880 and a total asset of less than HK$193,000. The total monthly income for a married couple cannot exceed HK$10,940 and their total assets have to be less than HK$292,000.

Donald Tsang turned down CPPCC membership (By Lai Ying-kit) Former chief executive Donald Tsang Yam-kuen refused an offer to join a top mainland advisory body, saying he considered it an inappropriate thing to do while still under investigation by the city’s anti-corruption agency. Questions about Tsang’s participation in the new Chinese People’s Political Consultative Conference arose after sources said his name was absent from a list of delegates to the advisory body tabled earlier this week. His absence would mean Tsang would not follow his predecessor as chief executive, Tung Chee-hwa, in becoming a CPPCC member. "After I had left my position as chief executive, the central government approached me and enquired whether I intended to participate in the work of the new session of the CPPCC,” he said in a statement issued via the Government Information Services on Thursday. “I considered the proposition thoroughly and subsequently replied that it would be inappropriate for me to join the CPPCC at a senior level while relevant investigations of the Independent Commission Against Corruption were apparently still ongoing,” he said. The ICAC began investigating Tsang last February after there were allegations that he accepted favours from some of his tycoon friends while still in office. The allegations included accepting rides in their private jets and on their yachts, and agreeing to rent a luxury penthouse in Shenzhen at a bargain rate. At the end of Thursday’s statement, Tsang said: “Other opportunities will exist for me to make contributions to my country and to serve Hong Kong after the relevant investigations have been completed." Tsang’s statement was issued on behalf of the Office of Former Chief Executives, which said it was made in response to media enquires.

The Hong Kong government recorded a 51.7 billion HK dollars (about 6.66 billion U.S. dollars) surplus in December, bringing its fiscal reserves to 709.1 billion HK dollars, the Financial Services & the Treasury Bureau announced Thursday. Announcing its financial results for the nine months ending Dec. 31, the bureau said Thursday that expenditure for the nine-month period amounted to 281.4 billion HK dollars, with revenue of 321.4 billion HK dollars. It said the December surplus was mainly due to the receipt of 37.7 billion HK dollars in investment income on fiscal reserves. The revised estimates for the current financial year will be published along with the 2013-14 Budget on Feb. 27. (1 U.S. dollar= 7.757 HK dollars)

The Hong Kong Monetary Authority Thursday announced that total deposits with authorized institutions rose by 1.8 percent in December. As the expansion in demand and savings deposits exceeded the contraction in time deposits, Hong Kong-dollar deposits expanded by 1.9 percent during the month. Overall foreign-currency deposits grew by 1.6 percent in December, and renminbi (RMB) deposits in Hong Kong increased by 5. 6 percent to 603 billion RMB (about 96.8 billion U.S. dollars). The total remittance of RMB for cross-border trade settlement amounted to 264.1 billion RMB in December, compared with 243 billion RMB in the previous month. Total loans and advances picked up by 1.5 percent in December. Loans for use in Hong Kong rose by 0.9 percent and loans for use outside Hong Kong expanded by 2.8 percent. As Hong Kong-dollar loans increased at a slower rate than deposits, the Hong Kong- dollar loan-to-deposit ratio declined to 79.8 percent at the end of December from 80.7 percent a month ago. In the final quarter of 2012, loans for use in Hong Kong expanded by 2.5 percent, after rising by 1.6 percent in the previous quarter. Analyzed by economic use, the quarterly expansion in loans was led by loans for building, construction, property development and investment, residential mortgage loans, and lending to financial concerns. Seasonally adjusted Hong Kong-dollar M1 increased by 2.1 percent in December and expanded by 15.8 percent year on year. Unadjusted Hong Kong-dollar M3 rose by 1.9 percent during the month and picked up by 12.1 percent from a year earlier. (1 U.S. dollar = 6.22 RMB)

 China*:  Feb 2 2013

Hainan Airlines to begin direct Chicago flights (By Deng Yu in Seattle) Hainan Airlines on Monday announced that it will begin a nonstop service between Chicago's O'Hare International Airport and Beijing in early September. Hainan will fly Airbus A330-200 aircraft configured for "premium" business and coach classes on the route. Starting Sept 3, there will be two flights - one in each direction - every Tuesday, Thursday, Saturday and Sunday, for a total of eight a week. Flight 498 will depart O'Hare at 3:30 pm Chicago time and arrive at 6:40 pm the following day; Flight 497 is scheduled to leave Beijing at 1:20 pm and land at O'Hare at 1:30 pm the same day. Cargo service will be offered, the airline said. Chicago officials welcomed the move. "Securing new investment and interaction between Chicago and China is a high priority for Mayor Rahm Emanuel, and new air service from Hainan, a carrier based in Chinese mainland, is a critical step in that direction," Rosemarie Andolino, the city's aviation commissioner, said in a statement. "We continue to invest in O'Hare's amenities and services for travelers across the globe, including those from Asia." Liang Pubin, North American managing director for Hainan, pointed to the carrier's top ranking based on surveys of airline passengers by UK-based Inflight Research Services. "As a Skytrax five-star airline, we have been providing consistently safe, high-quality service and have received praise from customers for our Beijing-Seattle route since 2008. However, passengers look for flexibility and variety," he said. "We expect the new route connecting Chicago to offer a greater variety of travel options for passengers in both countries, and I believe more and more will know, like and trust Hainan." The airline is "looking forward to welcoming more travelers from Chicago and throughout the eastern United States", said Ji Chun Liu, director of Hainan's international division. "China is on its way to becoming both the world's largest international destination as well as a source of travelers so that the market continues to expand." The Chinese government this month introduced a policy of allowing visa-free transit of up to 72 hours through Beijing for citizens of the US and 44 other countries. The change is meant to enhance the capital's status as a hub for international travel. Hainan's premium business class includes priority check-in and access to the airport lounge. Passengers are provided seats that convert to a flat bed, along with other amenities. Meals consist of gourmet Chinese or Western cuisine. There is also espresso, a selection of teas and gift bags featuring Bulgari cosmetics. An entertainment system offers over 100 movies, audio selections and games on demand. With a reservation, premium-class fliers can get a free, private ride to and from the Beijing airport in a Mercedes-Benz limousine. Economy-class passengers also get free meals, beverages and snacks as well as the same state-of-the-art entertainment system on individual seat-back screens. Those connecting in Beijing have access to Hainan's transit lounge. Hainan Airlines, founded in 1993, is owned by Chinese conglomerate HNA Group. With a 119-aircraft fleet, it carries 23.3 million passengers a year. In addition to its large domestic market, Hainan flies to European cities including Berlin, Brussels, Moscow, St. Petersburg and Zurich, as well as destinations in Africa and across Asia.

Mayor looks to China for city development (By Hu Haiyan) Tibby DeJulio (center), vice-mayor of Sandy Springs in Georgia, said the city is looking to cooperate with Chinese cities to co-develop in a more environmentally friendly way. A city in the United States is hoping to benefit from China's increasing urbanization to improve its own development in a more healthy and environmentally friendly way. Tibby DeJulio, vice-mayor of Sandy Springs in Georgia, about 24 kilometers north of Atlanta, wants to attract Chinese investors to help in the development of his city's service industries, including medical care. "Our city attaches great importance to the development of the modern service industry, which is profitable and environment-friendly," said DeJulio, who was speaking at the third China County Economy Development Forum held by national broadcaster CCTV on Tuesday. "This is also in line with Chinese cities' sustainable development mode, and we can further cooperate in this field." According to Dejulio, Sandy Springs is the 17th richest city in the US, with a per capita GDP reaching $200,000 last year. The medical care service industry contributed about a third of the city's GDP. "As our citizens are aging and need more medical care services, we have been investing a lot of effort to attract more companies in this field to come into this city," said DeJulio, adding that Sandy Springs had set up vocational schools to develop skills and specialists for the industry. "I hope Chinese developers are interested in the city, and their investment could be a driver for the local economy, providing more employment opportunities and making the city more famous," said DeJulio. The mayor said he had visited Sandy Spring's sister city Taicang in East China's Jiangsu province several times over the past three years, and learned a lot from its development. His counterpart, Wang Jianfeng, mayor of Taicang, said that despite big differences between the US and Chinese city's organization mechanisms, the two share a desire to improve citizens' living standards in developing the economy. "To build a more environmentally friendly development mode, Taicang is seeking opportunities of developing the local service industry, including the biomedicine industry," said Wang. DeJulio said that compared with Chinese cities, Sandy Spring's government is much smaller in terms of scale and just had six formal public officials. "To save costs, many of our government services have been outsourced to private companies. And the government is similar to a company's board of directors," said DeJulio. He also said that although Sandy Springs was established as a city as late as 2005, because the region where the city is located has been developing for about 50 years, the areas have been already modernized. Sandy Springs enjoys a relatively more modernized city infrastructure, different from many Chinese cities which evolves from rural areas, said DeJulio. "Many Chinese cities are trying to increase GDP and want to introduce many manufacturing industries, yet since we are in a process of re-urbanization, we are focusing more to develop the environmentally friendly industries such as modern service industry."

Hong Kong*:  Feb 1 2013

Hongkongers appeal to Barack Obama over baby formula shortage (By Emily Tsang, Joanna Chiu and Amy Nip) A shortage of baby formula has hit the city. Hongkongers are appealing for help from US President Barack Obama as infant formula supplies continue to run low despite the government having pledged to guarantee supply. A petition, entitled "Baby hunger outbreak in Hong Kong, international aid requested", was created on Tuesday on the White House website's "We the People" section. There, individuals can create and sign petitions to request action by the US federal government. By 7.30am on Thursday, more than 4,600 people had signed it. "Local parents in Hong Kong can hardly buy baby formula milk powder in drugstores and supermarkets, as smugglers from mainland China storm to this tiny city to buy milk powder and resell it for huge profits in China," it reads. "We request international support and assistance as babies in Hong Kong will face malnutrition very soon." A minimum 100,000 signatures are necessary before a February 28 deadline to trigger a response from the White House. The appeal comes just days ahead of an expected government announcement of measures to deal with the shortage. Speaking on RTHK yesterday, Secretary for Food and Health Dr Ko Wing-man said the government was studying the feasibility of making baby formula a reserved commodity like rice. That would curb trading by mainlanders, who are blamed for the shortage and inflated prices. "In two or three days, the government may be able to announce some new measures. We are now discussing the details," Ko said. Executive councillor Regina Ip Lau Suk-yee, who proposed the measure, has also suggested that each traveller be allowed to carry at most two cans of formula out of the city. Ko said in case of a quota, an exemption would be made for local parents. Many pharmacies in the New Territories were sold out of formula yesterday, with government announcements having aggravated the usual rush of mainland shoppers ahead of the Lunar New Year. Most stores in Sheung Shui appeared to be out of stock. But outside one branch of Watsons, a mainland woman and her son packed 40 tins of formula into bags and suitcases to take home. "My children are grown, but I give these as gifts to family members for the New Year," she said. "I bought some extra when I heard the government was thinking of restricting purchases."

Kent & Curwen: a classical day at the races (By Charley Lanyon) Eric Fok, Allan Zeman and Thomas Tsang - Hanjin Tan and Alex Lam - Fok Kai-man, Ian and Jo Jo Fok, and David Au - Almen Wong - Kevin Lam, Aaron Kwok and Sabrina Fung - Amanda Strang - Horse racing is very much on people's minds these days. The sport of kings always reaches fever pitch around the Lunar New Year, with numerous new cups and promotions. On Sunday, British menswear brand Kent & Curwen got in the game by hosting the Kent & Curwen Centenary Sprint Cup at the Jockey Club's Sha Tin racecourse. To honour its founding spirit, the brand transformed the event into a celebration of all things classically British. The Jockey Club Box was made over, given an exclusive private club feel, with a whiskey bar and a real Dominican cigar roller. Actors dressed as members of the Queen's Guard stood at the ready, and brand ambassador and racing buff Aaron Kwok Fu-shing was also present. Sabrina Fung Lam, managing director of Kent & Curwen, took advantage of a lull in racing to announce the launch of the Kent & Curwen Lion Jack Club. So the private club vibe wasn't a show after all. Back on the turf, Olivier Doleuze riding Eagle Regiment won the HK$4.5 million prize.

Singapore population push puts spotlight on Hong Kong (By Colleen Lee and Agencies) Rival's plans to allow in thousands of expats raises stakes for city, after its own attempts to halt fall in birth rate were branded a failure - A major push by Singapore to boost immigration over the next two decades has led to calls for Hong Kong to get its act together on population policy. The Lion City unveiled ambitious plans yesterday to open its doors to hundreds of thousands of expatriate workers. The move could see foreigners making up nearly half of Singapore's population by 2030. It was inspired by concerns about the falling birth rate and ageing population, which mirror those in Hong Kong. In a controversial white paper, Singapore officials said the city's population needs to rise by as much as 30 per cent over the next 17 years, to between 6.5 million and 6.9 million. They plan to meet that target by taking in between 15,000 and 25,000 new citizens, including foreign-born professionals, and granting about 30,000 permanent resident permits each year. The Singapore proposals prompted accusations from some that an expatriate-led solution is a betrayal of locals. They come days after Hong Kong's attempts to reverse its falling birth rate were branded a failure by Professor Paul Yip Siu-fai, of the University of Hong Kong. He is a member of a new steering committee, headed by Chief Secretary Carrie Lam Cheng Yuet-ngor, tasked with formulating a population policy blueprint. In response to Singapore's plan, Yip described the situation facing Hong Kong as "very urgent". He blamed a lack of top-level planning, the responsibility for which he said could be laid in part at the door of the administration of former chief executive Donald Tsang Yam-kuen. It would be difficult to import foreign workers to Hong Kong as the community is unlikely to reach a consensus on such a move PAUL YIP SIU-FAI, UNIVERSITY OF HONG KONG He acknowledged that the Singaporean government did not face the same "political obstacles" as the SAR and also pointed out that the path the Lion City was taking might not be suitable for Hong Kong. "It would be difficult to import foreign workers to Hong Kong as the community is unlikely to reach a consensus on such a move. However, the problem is very urgent as the city's workforce is on the decrease," he said. Chinese University Professor Hau Kit-tai, also a member of the steering committee, said it would be difficult for Hong Kong to follow the Singapore model. "Home prices are already high in Hong Kong. It could further push up the prices if more people move in," said Hau. The policy paper, released by the National Population and Talent Division, said the proportion of Singaporean citizens would fall to 55 per cent by 2030, from 62 per cent last year, when the population was 5.31 million. Minister for National Development Khaw Boon Wan said: "Hong Kong in terms of density is much higher, and we must never try to reach that area."

Controls on milk formula likely soon, says health chief (By Emily Tsang) Travellers at Sheung Shui station weigh bags of milk formula. The government will decide in a few days whether to protect baby formula as a “reserved commodity”, like rice, to ensure local needs, the health minister said. Speaking on a RTHK programme on Wednesday morning, Secretary for Food and Health Dr Ko Wing-man said the government was studying the feasibility of adding the formula under the Reserved Commodities Ordinance to prevent parallel trading. “The problem must be tackled by multiple methods,” said Ko. “Unfair sale practices among retailers should be curbed, but relying on retail level is not the best way. We must find ways to stop parallel traders from targeting infant formulas.” “In two or three days, the government might be able to announce some new measures. We are now discussing the operating method in detail,” he said. He later confirmed that amending the ordinance was one of the options under consideration. “We need to set a quota if we are to limit the number of tins to be brought across the border, and there should be an exception to allow local parents to bring some milk to feed their children when they are travelling.” Rice, a staple food, is the only reserved commodity under the ordinance, which controls imports and exports to ensure a stable supply.

Henry Tang and supporter nominated for CPPCC (By Lai Ying-kit) Former chief secretary Henry Tang Ying-yen. Failed chief executive contender Henry Tang Ying-yen and one of his supporters have been nominated as new delegates to the Chinese People’s Political Consultative Conference, one delegate said on Wednesday. Tang and Hospital Authority chairman Anthony Wu Ting-yuk appeared on a list of suggested Hong Kong delegates for the next five-year term, said Chan Wing-kee, a member of the CPPCC Standing Committee. The list will be finalised during the committee’s four-day meeting, which ends on Friday. Tang, a former chief secretary, lost in the chief executive election in March, when Wu supported him. Chan was speaking in Beijing on Wednesday morning after attending a Standing Committee meeting in the capital, in which members discussed the list of delegates for the nation’s top political advisory body in the new term. Also missing from the suggested line-up is Hong Kong businessman Lew Mon-hung, who made a scathing attack on Chief Executive Leung Chun-ying last week, Chan said. Lew, a former staunch supporter of Leung, alleged in an interview with iSun Affairs magazine that the chief executive had lied about his handling of illegal structures at his home, and also reneged on a promise to appoint Lew an executive councillor in return for his backing. Also absent from the list were former chief executive Donald Tsang Yam-kuen and former chief secretary Rafael Hui Si-yan, Chan said. One new face on the list was former head of the Independent Commission Against Corruption, Timothy Tong Hin-ming, Chan said. He said former Hong Kong chief executive Tung Chee-hwa was expected to be re-elected as a CPPCC vice-chairman when Standing Committee members meet in March.

 China*:  Feb 1 2013

Los Angeles cracks down on Chinese 'birth tourism' (By Reuters in Los Angeles) Officials are cracking down on maternity hotels helping Chinese women give birth in US amid the growing national debate over immigration - A diaper box sits outside a group of houses that were illegally modified into a maternity ward in San Gabriel, California. Los Angeles is moving to crack down on so-called maternity hotels that have sprung up across Southern California, as pregnant Chinese women travel to the United States as part of a "birthing tourism" trend. Los Angeles County Supervisor Don Knabe asked colleagues to approve a series of steps designed to ultimately close the hotels - typically single-family homes illegally carved into a dozen or more bedrooms - where visiting women pay to stay in anticipation of giving birth to a US citizen. "They're a moneymaking machine. They're totally unsafe," Knabe said. "It's so obvious that they jeopardise not only the health of the baby, but the mother as well." The issue of maternity tourism bubbled to the surface in recent months when residents of an upscale Los Angeles suburb protested against what they said was a maternity hotel operating in their neighbourhood to host pregnant women from China. They said it caused sanitation problems and other issues. Since then the county has received some 65 complaints about maternity homes operating in San Gabriel Valley, home to a large Chinese population. The US Constitution grants citizenship to any child born on US soil, regardless of parentage, and immigration experts said there was nothing inherently illegal about foreigners travelling to give birth in the country. Burnett said Knabe's action was directed at zoning, and health and safety issues associated with the hotels, noting that county officials had no jurisdiction over immigration laws. She said US Immigration and Customs Enforcement would be asked to determine how the women were entering the country in the first place. Burnett said the board of supervisors was expected to approve the motion next week, directing a number of county agencies to investigate the hotels. It also orders the county council to draft zoning ordinances that would put them out of business in Los Angeles county. In addition, child welfare investigators will look for signs of child abuse and neglect, such as newborns crowded into makeshift nurseries, said Neil Zanville, a spokesman for the county Department of Children and Family Services. "We'd not only ask about sleeping arrangements, we'd ask, 'Has this baby been seen by a doctor? Has it had its shots?'" Zanville said. Chinese women are paying US$30,000 to go to California and give birth to a US citizen at “maternity hotels”. A report on the issue commissioned by the county board of supervisors in December said zoning enforcement agents had investigated 20 such illegal maternity hotels that it described as part of a booming "birthing tourism" trend in the county. Southern California immigration activists suggested that the "birth tourism" issue was being blown out of proportion, saying it may have been stoked by an ongoing national debate over illegal immigration. "If you've got a home and it's unsafe for one reason or another, you certainly want a public safety interaction making the place safer," said Dr Manuel Pastor, a professor of sociology at the University of Southern California. "But this is playing out against the terrain of pretty heated immigration politics that's likely to get even more heated in next few months," Pastor said.

Three Chinese ships in disputed island waters, says Japan (By Agence France-Presse in Tokyo) Three Chinese government ships were in waters around islands at the centre of a dispute with Tokyo on Wednesday, a day after Japan’s premier suggested a summit could help mend frayed ties. Japan’s coastguard said the maritime surveillance boats entered waters around a chain of Tokyo-controlled islands known as the Senkakus in Japan, which Beijing calls the Diaoyus, at around noon. China has repeatedly sent ships to the area since Japan nationalised some of the chain in September, a move that triggered a diplomatic dispute and huge anti-Japan demonstrations across China. Beijing has also sent air patrols to the archipelago in the East China Sea, and recently both Beijing and Tokyo have scrambled fighter jets, though there have been no clashes. On Tuesday, Japanese Prime Minister Shinzo Abe suggested a summit with China would improve a relationship that has been badly troubled for months. “A high-level meeting should be held because there is a problem. If necessary, there might be a need to build the... relationship again, starting with a summit meeting,” he told a television show.

China's central bank has issued a set of two commemorative coins marking the official launch of the BeiDou Navigation Satellite System, or BDS, last December. The set includes one gold and one silver coin, both of which are fiat money of the People's Republic of China, according to the People's Bank of China. The coins both feature a variety of decorative elements, including the national emblem, images of satellites and binary codes. The PBOC will issue 30,000 gold coins with a face value of 150 yuan ($24.08) and 60,000 silver coins with a face value of 10 yuan. The BDS was developed by the government in order to take a share of the GPS-dominated domestic navigation market. The first BDS satellite was launched in 2000. The system went into official use on Dec 27, 2012 following a trial period that began in 2003.

Sanya crushed by Spring Festival tourist rush (By HUANG YIMING and WANG QIAN in Haikou) A beach is crowded with tourists spending their New Year holiday in the tropical city of Sanya, Hainan province, on Jan 2. Sanya may be the country's most popular resort during the coming Spring Festival, but the city's infrastructure is not yet ready for the booming tourism. "Downtown Sanya is designed for 300,000 to 400,000 residents, but during the peak tourism season more than 1 million people will flood into the city," Wang Yong, mayor of Sanya in Hainan province, said on the sidelines of the provincial legislative body's annual session on Monday. Authorities are speeding up construction, but because of the short annual construction period, it is not an easy job, he added. Due to the four-month typhoon season, the construction period in the tropical city is generally from December to September, and all construction is suspended during tourism seasons such as national holidays and in winter. The lagging road construction is causing traffic jams and increasing the risks of accidents, especially during the peak traveling season, Wang said. Besides traffic jams, many tourists in Sanya complain about the difficulty of getting a taxi. According to the Sanya transport bureau, there are 1,234 taxis and another 100 will be arranged in Sanya Phoenix International Airport and other hot tourist spots like Yalong Bay to ease traffic pressure over the coming Spring Festival. But for Cao Qian, a 31-year-old traveler from Qingdao of Shandong province, the traffic isn't a relief from the winter chill in Shandong. She arrived in Sanya on Saturday and will return home for work on Feb 15. "I just gave up getting a taxi because there were no empty taxis coming along for half an hour," Cao said, adding that staying in the hotel to enjoy the sunshine is a good option. While the traffic problem didn't worry Zhang Chi, a 36-year-old Beijing resident taking his 6-year-old son and wife to Sanya, he said compared with the cold and smoggy days in Beijing, the blue sky and ocean is more attractive. According to Wang, more than 90 percent of the hotels in Sanya have been booked for the coming Spring Festival, posing a great challenge to the city. In order to fight price gouging for the coming Chinese New Year, he added, the local price supervision authority published prices of standard rooms in 267 hotels during the holiday with a price cap of 5,000 yuan ($760) for a night. According to the city's 12th Five-Year Plan (2011-15), Sanya plans to invest more than 180 billion yuan in 243 important projects, mainly for tourism, real estate and infrastructure. Having received more than 11 million visitors in 2012, an increase of 10 percent over 2011, Sanya has become a preferred tourism destination with tourism revenue reaching 19 billion yuan last year, and the number of tourists is expected to grow by 8 percent in 2013.

US approves Wanxiang's $257 billion purchase (By Zhang Yuwei in New York) A US government panel has approved the purchase by China's biggest auto parts maker, Wanxiang Group, of nearly all the assets of A123 Systems Inc, a Massachusetts-based maker of electric-car batteries that declared bankruptcy last year. Ni Pin, president of the Chinese company's US subsidiary, Wanxiang America, said company lawyers were working on final details of the $257 million sale at a court-supervised bankruptcy auction in December. Regarding the decision by the Committee on Foreign Investment in the United States, Ni said in an interview: "Symbolically, it is a sign of how the US government deals with foreign investment." Wanxiang America on Tuesday announced the committee's decision. The federal interagency committee, led by the Treasury Department, reviews large or sensitive deals involving foreign investors in the US. The CFIUS panel has rejected acquisition attempts by Chinese companies in the past. Some members of Congress and retired military officers had asked CFIUS to reject the Wanxiang bid on national-security grounds, citing A123's defense contracts. "It is a process issue. A long as you are transparent, you follow the procedure and follow the rules, and address the issue, then it should be OK," Ni said. Wanxiang will acquire all of A123's assets in three business segments - automotive, grid and commercial operations - and their technology, products and customer contracts. Also included are manufacturing plants in Massachusetts, Michigan and Missouri; a cathode-powder plant in China; and an equity stake in Shanghai Traction Battery Systems Co, a joint venture with Shanghai Automotive Industry Corp. "We've been in the battery business for more than 10 years, so it's a natural expansion," Ni said. "Whoever is available, we will be interested." Mergers and acquisitions have long been a key part of strategy in the US for the company, which completed five deals in 2012. Still, he acknowledged that the lobbying effort had been difficult. "This is the most politically complicated issue in the past few years," Ni said. Wanxiang's bankruptcy-auction bid for A123 was higher than that submitted jointly by Wisconsin-based Johnson Controls Inc, which makes batteries and other automotive equipment, Japan's NEC Corp and German conglomerate Siemens AG. Johnson Controls had appealed a US bankruptcy judge's approval of Wanxiang as the winner. "Everyone has the right to have their voice heard, so you can hear from both sides. But this just means this asset (A123) is very valuable from their point of view," Ni said. A123 received $249 million in grants from the US Department of Energy in 2009 to build a factory in Michigan, but the company struggled until filing for bankruptcy protection from creditors last October. That was just two months after Wanxiang came forward with a $465 million offer for the battery maker's automotive-business assets, pushing aside a planned sale to Johnson Controls. The initial Wanxiang offer, however, didn't succeed. "Given the overwhelming difficulties on the political side of this particular deal, that does mean if you know how to handle it, and handle it professionally and rationally, you might still be OK," Ni said, referring the CFIUS review. While lawmakers could ask for a briefing on its decision, CFIUS has no appeal process. Wanxiang entered the US market in 1994 and now has manufacturing operations in 14 states. Its US operations generate annual revenue of about $2.5 billion and employ 6,000 local people.

Hong Kong*:  January 31 2013

Barristers brace for competition in High Court (By Patsy Moy and Thomas Chan) As high courts open to solicitors it may be time for further education, says Bar Association chief - Hong Kong's barristers are bracing for a more competitive legal sector in which many solicitors will have the right to take cases to the High Court, the new leader of the Bar Association says. Paul Shieh Wing-tai SC told the South China Morning Post recently that he is considering various options - such as compulsory continuing legal education for barristers - to meet the new competition. The new right, for properly qualified solicitors, was approved two years ago and may come into use as early as April. The high courts have long been the exclusive domain of barristers. "Barristers are facing many challenges these days, one of which is the solicitors' higher right of audience," Shieh said. "It goes beyond the issues of simply whether they should wear a wig or have new titles equivalent to those of senior counsels [barristers]. The solicitors' right of audience is a bigger issue." Shieh was speaking in his first media interview since taking the helm of the 1,100-member professional body on January 18. "As barristers, one of our challenges is how to improve ourselves to further sharpen our distinctive edge. "Should the Bar Association consider introducing compulsory CPD [continuing professional development]? I don't have a stance at this moment. However, this may be an area we [the association] should explore and study," Shieh said. It is not clear how many lawsuits solicitors will take to the High Court and the Court of Final Appeal, Shieh said. Barristers have the edge in handling long, complicated trials, he said, because they can afford the time and effort to concentrate on a handful of cases. Solicitors are usually overwhelmed with day-to-day contact with clients. "Even so, we cannot be complacent," he said. The right of audience was likely to create more competition for junior and middle-ranking barristers who rely heavily on short trials in the High Court, Shieh said. "Therefore we have to make the public understand clearly the differences between barristers and solicitor-advocates who have the higher right of audience." In the new era of competition, Shieh wants the public to understand that all barristers abide by the so-called cab-rank rule, which obliges them to accept any work in a field in which they profess themselves competent to practise. Like taxi cabs in a rank, they must take the first client who comes along. This means they exercise their profession "independently", with "minimal affiliation with any business interests", Shieh said. "We can proudly say we would not turn down an ordinary litigant and selectively represent major business interests. "At the same time, no major business interests would refuse a barrister who has previously represented an individual litigant against big business enterprises. "So parties, regardless of their background, can come to us without any worries of whether a barrister would turn down their cases," he said.

Oldest girls’ commerce college to close over lack of students (By Amy Nip and Joyce Man) Sacred Heart Canossian College of Commerce, the oldest girls’ school of commerce in Hong Kong, will close in August due to a shortage of students, according to a notice sent to students. Founded in 1905, the college, located on Caine Road in Central, is a non-profit-making post-secondary educational institution run by the Daughters of Charity of the Canossian Institute. It has 221 full-time sub-degree students, according to the government’s Information Portal for Accredited Post-secondary Programmes. On Monday, students received a notice saying the school would stop operating in the coming academic year. Those who have yet to finish their programme may be transferred to Open University, Caritas Institute of Higher Education, the Hong Kong College of Technology or the Caritas Bianchi College of Careers to continue their studies. Louie Chui, a third-year student with one year left before completing her higher diploma, said she was concerned about the uncertainty this has caused. “We don’t know what we will study,” she said. “We don’t even know whether we will be able to study in the coming year.” She and other students in her year wanted to continue for one more year, to complete their diploma. During her three years of study at the school, Chui has seen the number of students and teachers dwindle. About two teachers left every year, including some who had taught there for decades, she said. Another third-year student, who declined to give her name, did not like the school’s suggestion that they try other institutions: “We came here for the Sacred Heart Commerce name. It has over 100 years of history. We do not want to study at other schools.” An Italian missionary named Clelia Martinelli founded the college in 1905, according to the school’s website. The first class consisted of 25 girls from English, Portuguese, Irish and Chinese families who attended the Italian Convent School. They were taught secretarial skills including shorthand, typing and bookkeeping. It was later transformed into a sub-degree programme provider for secondary school graduates, launching the accredited Higher Diploma in Business Studies programme in September 2011, which consists of three streams: accounting, management and marketing. The school could not be reached for comment on Tuesday afternoon.

Regina Ip urges restrictions on milk formula supply (By Lai Ying-kit) Traders carry Friso milk formula-labelled boxes of goods at Sheung Shui station. New People’s Party chairwoman Regina Ip Lau Suk-yee on Tuesday suggested listing infant milk formula as a reserve commodity to maintain a sufficient supply to Hong Kong babies. Ip, who is also an executive councillor, said such a move would limit the amount of the goods a person can carry out of Hong Kong. “Once there are restrictions, there will be no more room for cross-border parallel goods traders to take advantage of,” Ip said on a radio program. “It is just like the zero quota imposed on mainland women wanting to give birth in Hong Kong.” She added that the proposed move could be quickly implemented as it would only require the approval of the chief executive and the Executive Council. Parallel goods traders buy commodities in bulk from Hong Kong and sell them on the mainland at a higher price. Some locals blame them for pushing up commodity prices, leading to shortages, and for obstructing passageways with their heavily loaded trolleys. On Sunday, about 20 activists who rallied online gathered outside Mong Kok East MTR station in a bid to block people carrying cans of formula or boxes of other goods. Chief Executive Leung Chun-ying said on Tuesday his government would work with the mainland to ensure a sufficient supply of milk formula to local mothers. He said he would put the needs of Hong Kong mothers and babies as his first priority. “We hope that through co-operation with the mainland we can ensure that milk formula can go to the hands of mothers and babies more easily,” he said. Leung was speaking before attending an Executive Council meeting at the entrance of the Chief Executive’s Office in Admiralty.

 China*:  January 31 2013

China’s thirst for Australian wines still growing (By Reuters in Sydney) Australian bottled wine exports to China soared by 15 per cent year on year last year. China’s growing thirst for Australian wines may be a golden ticket for now, but whether demand will last remains unknown even as Australian vintages gain new fans amid a surge of growth in broader Asia. Australian bottled wine exports to China soared by 15 per cent year on year last year, according to official data, bolstered by a sales push targeting the country’s wealthy drinkers and making Australia the top overseas market for wines priced at more than A$7.50 (US$7.90) a litre. Overall, exports gained 3 per cent globally, with declines in bottled wine exports to some countries offset by increases in bulk wine sales. “In South Australia, it’s going to be a fantastic year,” said Damian Torresan, a winemaker at Koppamura wines in South Australia. “China has been a bit of a golden ticket for a lot of places sitting on bulk wine for the last few years.” Though China was the leading export market, bottled wine exports were good across the board in Asia, with those to Japan up by 11 per cent, those to Hong Kong gaining 6 per cent and exports to Thailand up 7 per cent. In many nations, the changes reflected an increase in wealth and status, with wine the means of showcasing both. “In terms of Thailand, what we’re hearing is there’s an increase in wealth and increasing wine awareness so people are experimenting and buying more,” said Louisa Aherne, a spokeswoman for Wine Australia, a government agency that supports the wine sector. “It’s a social status associated with drinking wine so it’s a similar story to that of China, to a lesser degree obviously.” To a certain extent, the current success is due to luck. There has been good Australian production in the face of a poor US season in 2011 and low volumes in Europe last year. While growers were pleased with their gains, they remained wary, noting that while China is an area of massive potential growth, some of the gains may well have been due to short-term conditions. “Absolutely celebrate all of the positives and hope that it does reflect the beginning of a substantial turnaround, but at the very least I think we could say a full industry turnaround is probably a couple of years away yet,” said Lawrie Stanford, executive director of Wine Grape Growers Australia. A study last year by Australian Growers and Resources Economic suggests that in the next two years production-bearing areas will grow, potentially posing a different challenge. “As an organisation, we really do believe that we are capable of producing more than can be sold profitably – the positive signs at the minute are definitely higher prices but lower volumes,” he added. One big advantage for Australia is that unlike many other wine growing regions in the world, growers there can plant new varieties in close proximity, enabling them to ride out problems that could hit one variety of grape. “In Australia we’ve got a region like McLaren Vale where there’s Cabernet, Pinot, Shiraz, Chardonnay, Riesling,” said winemaker Torresan. “One hundred different varieties all within a 25 kilometre aspect of the area with everyone having a real go as best they can.” China’s vast population means there is plenty of market to share, Torresan added, but it’s still far too early to make any predictions for next year. “Anything to do with growing – until it’s in the bottle, your money’s not in the bank.”

Nation's wind farms heading offshore (By WANG QIAN and JIANG XUEQING) The fans at the 150-megawatt off shore wind power farm in Rudong county, Jiangsu province. China Longyuan Power Group completed the farm and put it into production in November. China's wind farms are moving offshore, with the largest project going into commercial use in coastal Jiangsu province. The 150-megawatt farm opened off Rudong county in November and will supply up to 190,000 residents with renewable energy a year, according to the China Longyuan Power Group, which runs the farm. "It marks the country's entry into the new era of developing large, offshore wind-energy projects," said Zhou Qinsheng, a climate and energy expert with Greenpeace. A Greenpeace report last year said wind energy in southeastern China can generate 500 gigawatts of power, about twice the country's hydropower consumption in 2012 of about 249 gW, according to the State Electricity Regulatory Commission. Compared with onshore wind farms, offshore facilities are competitive in terms of wind resources, land and ecology, Zhou said. China's offshore wind power generating capacity is expected to reach 5 gW by 2015 and 30 gW by 2020, according to the 12th Five-Year Plan (2011-15) on wind power. "It is a huge market. China is a newcomer and a fast learner," Zhou said. However, he warned wind power companies to think twice before rushing into the market because it entails high costs and demanding technologies. He estimates that the early-stage assessment for a potential offshore wind farm takes three to five years — sometimes dozens of years — and the costs are at least double those of land projects, with additional seabed cables to be installed and high maintenance fees. Jia Nansong, a spokesman for China Longyuan Power Group, said in November that the average cost of offshore wind power is 15,000 yuan ($2,409) a kW, about 5,000 yuan more than that generated through hydropower. Despite the difficulties, Goldwind Group, one of China's biggest manufacturers of wind power equipment, has stepped into the market, supplying 20 wind turbines of 2.5 megawatts each to the intertidal wind farm operated by China Longyuan Power Group in Jiangsu. Offshore wind turbines are more demanding technically than those onshore, as they have to resist salt fog, typhoons, floating ice and other tough environmental conditions, said Ma Jinru, vice-president and secretary of the board of Goldwind Group. "If an offshore wind turbine breaks down in strong wind, it may take days for engineers to be able to reach the turbine and fix it," she said. Technology matures - Unexpected weather at sea is a worry for Song Lili, chief scientist at the China Meteorological Administration's Wind and Solar Energy Resources Center. "There are extreme weather events, such as tsunamis and typhoons, that can cause severe damage to offshore wind farms," she said, suggesting that weather reports every 15 minutes will help keep wind farms operating safely. Although China is a newcomer to offshore wind power, it has highlighted renewable energy in its future energy map. In the 12th Five-Year Plan (2011-15), enhancing offshore wind power projects is mentioned in the local marine economy guidance for most coastal provinces, including Shandong, Jiangsu, Fujian, Liaoning, Zhejiang and Hainan. The plan states that by 2015 the country will support offshore wind power projects, improve meteorological support and improve the installation capacity of offshore wind power turbines. Jia, of the China Longyuan Power Group, said his company will enter the offshore wind power market in Jiangsu and Fujian. Li Yan, who heads the climate and energy campaign for Greenpeace, said: "There is every reason that China should support wind power. Resources are abundant, production costs are being lowered and the technology is maturing, all of which make commercial development very promising." Many see wind energy as crucial to reducing the carbon emissions scientists believe are responsible for global warming, and it may play an important role in China's sustainable development. The nation put its first offshore wind power project out to tender in October 2010. Ma, at Goldwind Group, said: "The first round of official bidding for the operation of offshore wind power projects has shown that the Chinese government strongly supports the trend in offshore wind power construction." Side effects - While authorities are giving the go-ahead to boost the offshore wind power market, environmentalists are concerned about the potential impact. China requires offshore wind power projects to avoid areas involving marine transport, military use, marine protection and mineral resources. Greenpeace expert Zhou said this is far from sufficient, as large offshore wind farms may have side effects on wildlife, fishing and bird migration. An official at the State Oceanic Administration, who did not want to be identified, conceded there are possible side effects, but said that before an offshore wind power project is given the go-ahead, a comprehensive environmental assessment is carried out. By the end of 2011, China had installed a wind power generating capacity of 260 megawatts, ranking third in the world after Britain and Denmark.

NZ moves to restore trust (By Wang Zhuoqiong) Fonterra Cooperative Group Ltd promotes its milk powder products at a dairy expo in Beijing. The New Zealand dairy giant said its products are safe after media reported that trace chemical residues were detected in its products. Ambassador insists its dairy products are safe. The New Zealand government and the country's dairy giants have tried to restore confidence in their products after China's quality watchdog asked New Zealand authorities to hand in a detailed risk assessment report. The move follows the detection of chemical residues in dairy products originating from the country. Carl Worker, the country's ambassador to China, insisted at a news conference on Monday in Beijing that all of the country's dairy products are safe, including all of the products exported to China. Worker apologized for the confusion that has surrounded the suspension of the use of DCD, or dicyandiamide, on farmlands in New Zealand and the concerns that occurred in China. "There is no food safety risk," Worker said. "New Zealand assures all consumers that New Zealand dairy products are safe." He stressed that the detection of small DCD residues posed no food safety risk and that the chemical itself is not hazardous to health. DCD is used to improve water quality on farms by reducing nitrate levels, as well as to cut greenhouse gas emissions. Traces of DCD were first discovered in September but Fonterra didn't disclose the findings then because it believed there was no food safety risk, said Kelvin Wickham, president of Greater China & India of Fonterra Cooperative Group Ltd. A person weighing 60 kilograms would have to drink more than 130 liters of milk to be over the European Commission's acceptable daily intake of DCD, and "considerably" more to have adverse health effects, according to Wayne McNee, director-general of New Zealand's Ministry for Primary Industries. Worker said the country has voluntarily suspended DCD use because New Zealand's international dairy customers expect their products to be residue-free, and there is no internationally accepted standard for residues for particular compounds. An international standard has yet to be agreed for DCD, Worker said. "The decision was taken not because of concerns for health or safety issues," Worker said. "But because of the desire to take precautions to avoid the risk of uncertainties and confusion." But the ambassador said he regrets the lack of forewarning to the Chinese regulatory authorities, which would make it easier to stop confusion, uncertainty and doubts among Chinese consumers of New Zealand dairy products. Worker met officials of the General Administration of Quality Supervision, Inspection and Quarantine on Monday morning, with the latter requesting a more detailed report from New Zealand authorities. Wickham said at the news conference that he felt sorry for the confusion surrounding the issue, adding that he believes that there is some misunderstanding. "It is not a safety issue and never has been," Wickham said. "China is an important market to New Zealand and we take it very seriously." He said Fonterra is working with regulators to provide more information. The news has prompted concerns among Chinese consumers and trade partners as New Zealand dairy products take up nearly 80 percent of China's dairy imports. New Zealand dairy products, of which 95 percent are exported, will be hit by the latest news, said Jian Aihua, an analyst at CIConsulting. Wang Jing, the mother of a 1-year-old and a loyal buyer of New Zealand milk powder brands, was disappointed after she heard the news. "We buy foreign brands for their product safety. Which brand should I trust now?"

Hong Kong*:  January 30 2013

Gucci owner targets luxury brands to cash in on Chinese consumers (By Ray Chan) Men make up 55 per cent of China's luxury goods sales. Alexis Babeau, managing director of the luxury division at PPR - The firm that owns the Gucci and Yves St Laurent fashion labels is targeting more big brands in the luxury market, to cash in on the demand for status symbol fashion items among Chinese consumers with rising incomes and a growing willingness to spend. PPR, the French luxury and sportswear group headed by the billionaire Francois-Henri Pinault, which owns the sportswear brand Puma as well as Gucci and YSL, bought a large stake last month in Qeelin, the Hong Kong jeweller founded by local designer Dennis Chan and the French entrepreneur Guillaume Brochard in 2004. Qeelin has seven shops on the mainland, four in Hong Kong and three in Europe. PPR did not disclose its holding in Qeelin or what it paid for it. Alexis Babeau, managing director of the luxury division at PPR, said the Paris-based conglomerate will focus on "making small and high-growth investments, which should offer synergies and avoid cannibalisation of our existing portfolio". Babeau said the purchase of Bottega Veneta, an Italian luxury brand known for its leather goods, demonstrated the company's acquisition strategy, as sales in the bag maker surged to €683 million (HK$7.1 billion) in 2011 from €54 million in 2004, a compound annual growth rate of more than 40 per cent. Growth in the men's segment in China is significantly stronger than in the women's, notably in leather goods and watches as well as clothing, Babeau said. "The acquisition of the men's clothing label Brioni, which once dressed James Bond, has broadened our reach to tailor-made suits, representing our commitment to the market for male fashion," Babeau said. He said the relatively fast economic growth in China should lift overall income levels, driving the consumer market. The luxury goods market for men in China grew 48 per cent between 2005 and 2009, because shoppers were buying more for themselves or with the intention of giving gifts to significant others or business acquaintances, the consulting firm Bain & Co said in a recent report. It found men tended to see shopping as less of an indulgence than women, suggesting that male spending could help weather an economic downturn.

London beats Hong Kong in office leasing costs (By Paggie Leung) Hong Kong no longer the most expensive place in the world to rent as cost-cutting tenants exit Central for cheaper areas around the city - Hong Kong has the second-most expensive office space to lease in the world, behind London's West End. Photo: Hong Kong lost its position as the world's most expensive place to lease an office to London's West End last year as tenants fled pricy Central for more affordable areas. A study by property consultancy DTZ found annual grade A office occupancy costs in Hong Kong dropped 12 per cent year on year to US$22,190 per workstation in 2012, the second-most expensive in the world. The figure dropped mainly because high rents and the stormy world economy forced tenants to cut costs by downsizing or moving outside the central business district. "There is new supply in areas outside [the CBD] such as Hysan Place in Causeway Bay and other offices in Kowloon East. Companies that need a lot of floor space and don't need to stay in Central moved to other areas to lower occupancy costs," said David Ji Yanxun, head of Greater China research at DTZ. He said 1.5 million square feet of new office supply was added in Hong Kong last year, most of which was in Kowloon East. "Hence rents in Central softened last year," Ji said, adding that worries over the global economy also caused tenants in Central to try to cut operating costs. London's West End reclaimed its title as the world's priciest district despite its rents remaining stable last year at US$23,500 per workstation annually, the report found. Geneva was third and Tokyo fourth. Beijing, which had the mainland's priciest offices, was 28th, with annual occupancy costs at US$10,410 last year. Globally, average rent for grade A offices increased 1 per cent to US$7,495 per workstation in 2012, the study found. The report surveyed 126 business districts in 49 counties worldwide, ranking each location based on costs per workstation in a year. The figure includes rent and other expenses such as maintenance costs and property taxes. DTZ expects stronger growth in occupancy costs in Hong Kong in the next two years. It forecasts the costs will rise at 7.9 per cent per annum from the end of last year to next year, with a more stable economic outlook and tight office supply in Central having a rebounding effect on rents. "I think office rents in Central should remain stable this year after the decline last year, as the mainland economy is still doing quite well and with some mainland companies still looking for offices in Hong Kong," Ji said. He added that monthly rents in Central, now at HK$103 to HK$104 per square foot on average, should climb again in the middle of this year to about HK$108 per square foot by the end of the year. Daniel Wong Hon-shing, chief executive at commercial realtor Midland IC&I, said that as stock and financial markets had improved more companies would begin looking for premises again this month. "The decline in prime grade A office rents should have ended and will remain stable this year, while for grade A strata title buildings, rent may jump by 10 per cent," Wong said.

Tourists get fresh ways to sample HK (By Cheung Chi-fai) Tourists tired of shopping till they drop in Hong Kong will soon be offered some unconventional options. These include sampling the city's most famous street snacks, learning to make traditional delicacies in a centuries-old fishing village - and even a cross-border cycling trip to a world heritage site. They are among fresh packages to be put together by tour agencies and co-funded by the Tourism Board. Board executive director Anthony Lau Chun-hon said yesterday that seven of 15 applications for money from a fund set up by the board to develop new packages had been approved. Each will be offered a matching grant of up to HK$500,000. "There will be a HK$200 to HK$300 package for tourists to learn how to make traditional handicraft and gourmet items in Tai O [on Lantau Island], food trips that explore street delicacies and Michelin-starred restaurants, and a cooking class based on goods bought from the wet market," Lau said. One of the agencies was planning to offer a cycling trip to the Unesco-listed village of Kaiping in Guangdong, known for its diaolou village houses that mix Western and Chinese styles. The trip is expected to cost about HK$8,000, which would include accommodation. Lau also said the Kai Tak cruise terminal operator was studying the possibility of providing ferry services between the terminal and Central, which he said could offer the cruise passengers a magnificent tour of the harbour. He said the popular Wine and Dine fair formerly held on the West Kowloon cultural hub site would be moved to the open space outside Tamar, Admiralty, this year and reorganised to give it more flavour and colour. The board was also looking at ways to improve the annual fireworks display in Victoria Harbour to celebrate New Year's Eve on December 31, including seeking new sponsorship, but Lau would not give details. Increased international interest has been shown in the event, with 1,000 live or delayed broadcasts of the 2012-13 event compared with about 500 broadcasts the previous year. The board was also looking at the possibility of holding dragon boat races in waterfront districts other than Tsim Sha Tsui, where they are usually held.

Tourism chief warns mainland tourists might stop coming to Hong Kong (By Cheung Chi-fai and Stuart Lau) Tourism chief says that if hostility continues, mainlanders might turn their backs on city and head for Paris – and we’ll be all the poorer for it - Mainlanders are the biggest drivers of tourism growth in Hong Kong - and its official promoters want to keep it that way. Hong Kong could become "very dull" if the backlash against mainland tourists continues - and they might just spend their cash in Paris instead, the city's tourism chief warned yesterday. Tourism Board chairman James Tien Pei-chun said it was "sandwiched" between rising anti-mainland sentiment and its mandate to promote tourism. While its tourism campaign on the mainland remained unaffected for now by recent protests over cross-border parallel traders, he said the board was concerned about their impact. "If there is too much noise about this anti-mainland sentiment and mainlanders stop coming here, Hong Kong will become very dull. Don't forget that nowadays these mainland tourists can easily go to Paris to shop instead," Tien said. He added that there was also uncertainty about the annual influx of 800,000 business travellers from the mainland - who are usually more willing to spend money - after Beijing's recent move to curb extravagance by officials. Tourism, Tien said, was the city's only pillar industry with sustained growth. Spending by tourists reached HK$305 billion last year, up 16.5 per cent. Overnight visitor numbers also increased, by 6.5 per cent. And this growth was being driven by mainland tourists. Of the 48 million arrivals, 70 per cent, or 34 million, were from the mainland - up 24 per cent from 2011. Of those, 66 per cent were solo travellers. The Tourism Board was among those behind the solo visitor scheme for mainland travellers - an arrangement now being blamed for problems such as cross-border parallel traders, who are accused of buying up stocks of infant milk formula and driving up shop rents. Labour Party lawmaker Cyd Ho Sau-lan told the security panel meeting in the Legislative Council yesterday: "These tourists are destroying our local culture. What degree of social chaos will it take for the government to do away with these permits?" But Secretary for Security Lai Tung-kwok sidestepped the call. "Hong Kong has always been a city of tourism. We welcome people from all over the world," Lai said, adding that the government "understands" the limited capacity to accommodate tourists. Earlier yesterday, Secretary for Commerce and Economic Development Greg So Kam-leung said a review of tourism infrastructure was under way - and the findings would be communicated to Beijing. But he dodged calls from lawmakers to set up a shopping zone near the border. Tien said that such a zone would not get the support of customs officials in Shenzhen. And he would not say whether he plans to step down as chairman when his term ends on March 31. He has been elected chairman of the legislature's economic development panel and said he could not hold both roles.

Diners bid goodbye to 42-year-old Lei Yuen Congee Noodles (By Jolie Ho) People queue outside Lei Yuen noodle and congee shop in Causeway Bay, sad to be getting their last taste of the goodies inside. Nearly a hundred people queued outside a 42-year-old congee and noodle shop in Causeway Bay yesterday to say goodbye on its second last day of business. Lei Yuen Congee Noodles, behind the Sogo department store in Lockhart Road, has been forced to close after rent for the 1,000 sq ft shop was doubled to HK$600,000 a month. Kwok Woon-wing, 51, the owner's youngest brother, said the business had picked up about 20 per cent since the media reported the shop's impending closure last week. He was grateful for the public support, he said. "It's sad … We've been working so hard, and it's been so long," said Kwok, who has worked at the shop for 30 years. "But we have to accept it … We cannot lay all the blame on the developers; it's the demand and supply of the market." The family has no plans yet to move to a new location. Lei Yuen, known for its old-fashioned decor and appliances, was especially famous for its wonton noodles, pork liver congee and rice dumplings. The latter sold out well before lunch yesterday. Australia-based businessman Philip Uy, 52, who has a home in Hong Kong and returns every few months, said he flew back earlier than planned when he heard Lei Yuen was closing. "My home is nearby, and I always get a late-night meal here whenever I come back," he said. "Lei Yuen's congee and rice dumplings are awesome. I want it to reopen in another place." Uy added that he would give the shop owner a red packet. Kwok said the shop had decided against prolonging its business hours - 11am to 2am - or offering special prices. "The price is already very low," he said. "We may even close earlier, after everything is sold out." A bowl of wonton noodles cost HK$28, while a bowl of pork liver congee was HK$30. One of the shop's suppliers said Lei Yuen's pork liver and pork kidney were unique. "Needle-like tubes are used to pierce the capillary blood vessels to pump in water to cleanse [the organs]," he said. "They're very dainty and you can't find them elsewhere." The 100 people queuing to get in at lunchtime yesterday had to wait for about an hour. The diners included frequent guests, first-time visitors and tourists. Passers-by not in the know were curious about the long queue outside the shop. Student Nick Chu Man-fai, 21, said he had been visiting the shop since he was a child. "It's a pity," he said. "The shop is special and traditional; the food is of high quality, but not expensive for Causeway Bay." He expected other time-honoured shops in the district to close down because of the soaring rent.

Grand Hyatt Hong Kong launches 'Be My Valentine' campaign (By Vanessa Yung) (From left) Hervé Mazella, Marcus Mathyssek and David White - It seems that the macaron craze is not going to fade soon. Not when Valentine's Day is just round the corner, at least. While we have Ladurée added to the shop options alongside Jean-Paul Hévin, Le Goûter Bernardaud and Paul Lafayet, Grand Hyatt Hong Kong is offering guests a chance to make the treats themselves together with their loved one. The Wan Chai hotel is launching a "Be My Valentine" campaign from today to February 3, calling for people to 'like' their Facebook page and write at least 100 words in English, or 50 words in Chinese, answering the question: "What is Valentine's Day to you?" Four winners will be selected and each of them can bring one guest to attend a macaron-making class hosted by the hotel's executive chef, Marcus Mathyssek, executive pastry chef David White and F&B Executive assistant manager Hervé Mazella on February 7. The results will be announced on February 5 at noon and winners will be notified via Facebook.

Security chief faces heat over cross-border parallel traders (By Stuart Lau) The security minister was grilled by lawmakers on Monday who criticised the government for not doing enough to curb cross-border parallel traders. Lai Tung-kwok, secretary for security, repeatedly dodged critical remarks in a security panel meeting in the Legislative Council as lawmakers expressed worries that the illegal trades have intensified some Hongkongers’ hatred towards mainlanders. Lai only pledged to take action against the masterminds behind these activities “at the appropriate time”. “We will closely monitor the modus operandi of parallel trade activities, [and] continue to adopt the strategy of cracking down at source. “We will also maintain close intelligence exchange with mainland authorities to combat organised parallel trade activities,” Lai said. But lawmakers – both pro-establishment and pro-democracy – slammed the bureau for failing to curb the situation. “The ineffective and incapable policies have created a state of rivalry [between Hongkongers and mainland Chinese],” said pro-establishment legislator Lam Tai-fai. “I can’t see any policy by which you can solve the problem at its root.” Beijing-friendly lawmaker Paul Tse Wai-chun said: “The policy of multiple entry [for mainlanders] has gone uncontrolled.” On the pro-democracy camp, Gary Fan Kwok-wai, of the NeoDemocrats, asked for the multiple entry scheme to be completely scrapped. Cyd Ho Sau-lan, of the Labour Party, said: “These tourists are destroying the local culture. Under what degree of social chaos will the government be willing to take back the right to issue these permits?” The right currently rests with the mainland authorities. Lai did not reply to the question directly. Lai said the scope of the multiple entry scheme will be based on the capacity of Hong Kong’s border and tourist facilities, but Ho argued the criterion should be Hong Kong’s overall capacity. Meanwhile, Lai repeated the government’s stance that putting the Basic Law’s Article 23 into legislation was not a focus of work “in the coming year”.

Qianhai cross-border loan scheme starts with 2b yuan (By Reuters in Hong Kong) Qianhai special economic zone in Shenzhen. China kicked off its cross-border yuan loan scheme in Qianhai on Monday with Hong Kong-based banks signing some 2 billion yuan (US$321.5 million) in lending to mainland Chinese firms for 26 projects, a banker with knowledge of the matter told reporters. The agreements are a step towards opening China’s capital account and internationalising its currency. China had announced it would let firms in Qianhai, a US$45 billion special economic zone in Shenzhen, take out yuan loans from banks just across the border in Hong Kong, with tenors and interest rates to be set independently, also a major step towards liberalising the country’s interest rate mechanisms. Fifteen banks agreed to provide a total of 2 billion yuan in loans for 26 projects in Qianhai, the banker who attended the signing ceremony said. The Bank of China Hong Kong Group said on Monday that Bank of China Hong Kong and Nanyang Commercial Bank signed agreements with five enterprises registered in Qianhai, to provide them directly with cross-border yuan loans. “The new policy offers banks in Hong Kong a new channel to deploy their RMB funds and promotes RMB circulation between the two places, facilitating the development of cross-border RMB business,” said Gao Yingxin, Deputy Chief Executive of Bank of China Hong Kong, in a statement. The new policy offers banks in Hong Kong a new channel to deploy their RMB funds and promotes RMB circulation between the two places - Standard Chartered Bank Hong Kong also said it had entered into a cross-border yuan lending framework agreement without elaborating. China set up the Qianhai business zone offering freer currency movements and Hong Kong professional standards last June. The government released rules in December for companies that incorporate in the area to borrow yuan loans from Hong Kong banks with interest rates and tenors to be fixed independently. Analysts say the offshore yuan loan market still carries a lower interest rate than the onshore market, which makes the offshore yuan loan market attractive to Chinese enterprises. The new loan business will also offer Hong Kong banks more options to diversify their yuan investments, in addition to existing channels such as interbank lending and dim sum bond investments. Banks involved include HSBC Holdings, Hang Seng Bank, Bank of East Asia and Hong Kong branches of several Chinese banks, such as the Industrial and Commercial Bank of China, China Construction Bank and the Agricultural Bank of China. Outstanding yuan loans in Hong Kong stood at around 70 billion yuan by November last year, more than double the amount at the end of 2011, according to the Hong Kong Monetary Authority. China has been steadily expanding the role Hong Kong plays in internationalising the yuan, which it hopes one day will be a global currency like the dollar, and in building up China’s financial markets. Yi Gang, vice governor of China’s central bank, said the Chinese government’s promotion of the internationalisation of the yuan was proceeding. He added that China was removing discrimination against the yuan and letting it act as other reserve currencies do.

 China*:  January 30 2013

Ex-ambassador Uichiro Niwa calls Japan too quick to buy Diaoyus (By Julian Ryall in Tokyo) Tokyo's former ambassador says he questioned move that helped escalate tensions with Beijing - Former Japanese prime minister Tomiichi Murayama (centre) arrives in Beijing yesterday. Uichiro Niwa, Tokyo's former ambassador to Beijing, has criticised the Japanese government for rushing into the purchase of the disputed Diaoyu Islands and appealed to both China and Japan to bring the territorial row to a peaceful resolution. Niwa, who saw Sino-Japanese relations decline to their worst level in years before leaving the post last month, said the only option for both countries was to put aside their differences. His criticism came as former Japanese prime minister Tomiichi Murayama arrived in China in the latest effort to use diplomatic backchannels to restore ties. Former prime minister Yukio Hatoyama also recently visited. Both senior leaders are considered friendly to China. Niwa said he questioned the haste of then prime minister Yoshihiko Noda in deciding to buy the islands - known as the Senkakus in Japan - from the Japanese Kurihara family for about two billion yen (HK$170.6 million) in September. "As ambassador I did ask why the Japanese government was in such a rush and took the decision to purchase the islands in a matter of two days," Niwa said. "It is possible they [the Japanese government] had information that will never come to light, but personally speaking, I don't think the timing of the decision was ideal." It is widely believed that Noda's hand was forced by Shintaro Ishihara, who was then governor of Tokyo and had six months before announced his own plans to purchase the islands and administer them as a part of Tokyo. A fund to carry out Ishihara's plan had managed to raise 314 million yen in a matter of weeks. A number of analysts have suggested that if Ishihara, a well-known nationalist, had purchased the islands instead of the national government, hostilities with China may have broken out. Niwa played down that suggestion: "Knowing what I do about the two nations and their people, I cannot think that would have happened. "For Japan and China, there is only one road for us to take as we go forward and that is to follow the path of friendship." He added: "Although we are in a very difficult situation at the moment, the appearance of the cherry blossoms here in Japan comes after the snow has melted. "There are many things that affect relations between China and Japan, but I believe there will be an environment that is conducive to the ice melting in the near future." It's unclear whether that optimism is shared by newly elected Japanese Prime Minister Shinzo Abe, whose envoy met Chinese Communist Party chief Xi Jinping in Beijing last week. In his inaugural policy address to parliament yesterday, Abe steered clear of China and the disputed islands, but conceded that "the situation around Japan is increasingly severe". "My cabinet will resolutely protect lives, assets and territory of Japan, both on the water and in the air, strengthening development and control, as well as security of remote islands on the border," he said without elaborating.

Learning etiquette in a global context (By Wang Zhuoqiong) Chinese businesswomen seek international sophistication as they go abroad more often - Fashion consultant Jiang Zaozao didn't feel confident when dining at Western restaurants until recently. "Most of the time I didn't really know how to use a fork properly or which knife to use to cut meat," said the 30-year-old Beijing socialite, who has frequent meetings with executives and designers from Europe. "I want to feel good about myself and be respected by my friends." Sara Jane Ho (right), an etiquette specialist,demonstrating to her students the etiquette of dining at a Western restaurant at Park Hyatt Hotel in Beijing. A recent course to teach Chinese nouvelle riche women etiquette has boosted Jiang's confidence. She learned European etiquette through real-life practice, from handshaking, folding napkins and how to walk elegantly in heels. Sara Jane Ho, a Beijing-based etiquette specialist and founder of Institute Sarita, brought what she learned from Switzerland's last traditional finishing school to China to create Western-style table manners, business etiquette, appropriate dressing and hostess skills. A native of Hong Kong, Ho left at an early age to attend Phillips Exeter Academy, an elite boarding school in the United States. She graduated from Georgetown University and earned an MBA from Harvard Business School. After Harvard, Ho went to Swiss Institut Villa Pierrefeu, where she was inspired to start teaching etiquette in China. Of a class of 30 students, there are only two or three Europeans. Most of them were from developing countries, she recalled. As China's economy grows, Chinese citizens are getting richer, creating an explosion in Sino-foreign exchanges on citizen-to-citizen levels in recent years, Ho said. Negative media reports and shared stories from her overseas friends about Chinese misbehaving abroad prompted Ho to bring the concept of etiquette to China. "I want to empower people to become etiquette-aware," she said. "Even I know I will only influence a few people. I do believe if they go on to change people around them we can create an etiquette movement." Her school currently only recruits female students. Most of them are second generation rich or wives from wealthy families and some are top business professionals from the private sector and even State-owned enterprises. "We are training leaders of Chinese social circles. Some of my students work at State-owned enterprises and they are keen to interact with foreigners and to establish the rules of courtesy," she said. "To me it is very promising. The fact the individual is so interested in learning is a very positive sign for the Chinese economy." Ho said her school will teach her students about self conservation and help them understand why they do what they are doing." Some people are not aware of their actions and cause offence because they haven't been taught the framework and references for what etiquette is," she said. "We are teaching, not lecturing. It is a daily practice or a rehearsal," she said. "Students become accustomed to use and apply etiquette in everyday life so it becomes second nature. Practice makes perfect." She gave an example, placing a knife blade on the plate in front her. "The knife blade is sharp. You don't want to face your neighbor with it. Behind every seemingly superficial move is a Chinese value of consideration and selflessness."

Indonesia to import 2,500 ships from China (By Xinhua) Indonesia Chamber of Commerce and Industry (Kadin) will import 2,500 units of short sea ship from China aiming to improve the logistics and distribution performance among ports scattered throughout the archipelago, an Indonesia official said here Monday. Natsir Mansyur, Vice Chairman of Kadin's Trade, Distribution and Logistics division said Kadin has signed the agreement with China and the total of 2,500 units ship worth $5 billion will be delivered gradually within 5 years starting 2013. "Indonesia's logistic costs are quite high due to the limited infrastructure and armada, we needs to boost the logistics operations," Natsir said, as quoted by Indonesia's news portal merdeka.com. Transporting goods in Indonesia, the world's largest archipelago with 17,000 islands, is very costly due to poor logistics and bad infrastructure. A report released by World Bank shows Indonesia's position in 2012 Logistics Performance Index at 2.94 in the scale of 5, while its rank is in the position of 59, lagging behind its regional peers such as the Philippines and Vietnam.

NZ govt, wine industry target China with training program (By Xinhua) The New Zealand government's trade agency and the country's wine industry body have begun a wine certification program for Chinese experts as part of a bid to boost sales in China over the next three to five years. A joint initiative by New Zealand Trade and Enterprise (NZTE) and New Zealand Winegrowers (NZW), the program has been tailored for Chinese wine professionals to increase their knowledge and enthusiasm for New Zealand wine. The first group of eight Chinese experts had just completed the course with a 90-minute exam after a three-day intensive course in New Zealand's Hawke's Bay region, prior to attending Pinot Noir NZ 2013 in Wellington from Monday to Thursday, NZTE announced Monday. NZW marketing manager Asia Monty James told Xinhua on Monday that the New Zealand Wine Education program would provide influential wine trade, media and educators with in-depth information about New Zealand wine. "The course is ultimately designed to provide information that builds confidence to tell and sell the New Zealand wine story, which will supplement the promotion from the individual wine companies and their Chinese importers," James said in an e-mail interview. "What we are piloting, through education and tasting, is a base of clear, concise Chinese-language materials, presentations that position New Zealand as a unique, premium and diverse wine producing country with a world-class sustainability program." NZW and NZTE planned to run the course in China to target a mix of importers and distributors who were already selling premium New Zealand wine, as well as professionals in the food and beverage sector who sold New Zealand wine. Those taking part in the course were selected according to their standing and influence in the China wine market and their personal and professional experience with existing wine certifications, he said. They graduated with a Level 2 New Zealand Wine Professional certificate demonstrating that the bearer had a professional understanding of New Zealand as a winegrowing region. "The wine education program is designed to build the brand story of New Zealand wine, to position New Zealand wine as a premium wine producing country, whether the trade professional is working in a bar, in a restaurant or premium wine retail," he said. New Zealand Trade Commissioner to Shanghai Mike Arand told Xinhua in the same e-mail interview that the program was part of a wider NZTE and NZW program being rolled out in China to raise the profile and awareness of New Zealand wine, leading to greater opportunities for New Zealand wine sales. "The introduction of the wine education program aims to capitalize on the growing trends and market opportunities and is in line with our long-term strategies to build the presence of New Zealand wine and provide greater opportunities for sales of New Zealand wine in China over the next three to five years," Arand said. "New Zealand wine can already be found in various channels from bars and restaurants to supermarkets and specialized wine outlets, and even on the fast-growing online market. It is clear however that the potential for New Zealand wines in all channels is far greater than the current position," he said. NZTE and NZW firmly believed that working in a coordinated and collaborative way would lead to greater penetration in all channels, he said. In May last year, NZW completed its biggest-ever road show, in Beijing and Shanghai, which saw a huge growth in attendance from the previous year's events. The Beijing event saw a 91-percent increase in trade attendance numbers, with 465 attendees, while Shanghai saw a 25-percent rise to 402 attendees, according to NZW.

Shanghai to lure multinationals (By YU RAN in Shanghai) 'Four Centers' plan to confirm status as international city and regional hub - Yang Xiong (left), acting mayor of Shanghai, made a speech at the first session of the 14th Shanghai Municipal People’s Congress on Sunday. - Shanghai is expected to attract 150 more foreign multinationals' regional headquarters by 2020 — in addition to the 403 today — as it also works to nurture more domestic multinationals, Acting Mayor Yang Xiong said in the Report on the Work of the Government at the first session of the 14th Shanghai Municipal People's Congress on Sunday. Transforming the city into the international economic, financial, trading and shipping centers ("Four Centers") has been the focal point of Shanghai's 12th Five-Year Plan as it pursues innovation-driven economic transformation. Yang pointed out "openness represents Shanghai's biggest advantage" in moving the international goal forward. The city's major objectives for the next five years are to become a world-renowned base for service trade and a major import-export hub. "The report turned out to be more practical and pragmatic compared with previous years by having fewer overly detailed targets, but more attainable tasks with examples to make sure the city has the potential to achieve them," said Li Xunlei, a deputy to the Shanghai People's Congress and deputy CEO and chief economist of Haitong Securities Co Ltd in Shanghai. "The city is opening up to welcome more foreign investors to advance the economic development of Shanghai and quickly turn it into a global trading center," said Huang Renwei, a deputy to the Shanghai People's Congress and vice-president of the Shanghai Academy of Social Sciences. 

Fish from diaoyu islands (By China Daily) A customer with the fish she bought from a fair that sells seafood caught by fishermen from Zhejiang province in waters near the Diaoyu Islands, in Shanghai on Saturday.

China's first luxury liner cruises into service - Henna, the first passenger cruise liner from the Chinese mainland, begins its maiden voyage from Sanya in Hainan province to Halong Bay in Vietnam on Jan 26, 2013. Henna will return to Sanya on Jan 28. The voyage marks the first liner from the Chinese mainland formally entering the cruise tourism market. Henna is 223 meters long, 31 meters wide, has 739 passenger cabins which can accommodate 1,965 people. The ship boasts a restaurant, duty free shop, theater, banquet hall, meeting rooms, bars, swimming pools, spa and fitness center. 

Hong Kong*:  January 29 2013

Paraglider takes off on Dragon's Back trail in Hong Kong (video) (By SCPM) A paraglider takes off from the Dragon's Back trail near Shek O in Hong Kong on Sunday afternoon. The spot is known for high-flying enthusiasts, and the weather conditions - at 17 degrees, and cloudy and cool - were ideal for the adventure sport. http://www.youtube.com/watch?feature=player_embedded&v=9uJgr4kl3l4 

Philippines 'as risky as Syria' for Hong Kong tourists, as black travel alert remains (By John Carney) Despite rising visitor numbers, black travel alert stays in place after hostage crisis - More than two-and-a-half years after the Manila hostage crisis, the Philippines is still under black travel alert. The Philippines remains as dangerous a country to visit as war-torn Syria, according to the Hong Kong government. More than two-and-a-half years after the Manila hostage crisis, security chiefs still refuse to lift the black travel alert. And that's despite new figures showing that more Hong Kong and mainland tourists are visiting the Philippines than ever before. Seven Hong Kong tourists and their guide were shot dead when a sacked Manila police officer hijacked their tour bus in the city's Rizal Park in August 2010. Since then the Philippines has had a black alert against it under the Outbound Travel Alert (OTA) system, which means Hong Kong tourists face a severe threat in the country and should avoid travelling there. The only other country for which there is a black alert is Syria, where civil war has left at least 60,000 people dead, reducing villages, towns and cities to rubble and creating a massive wave of refugees. But according to the Philippines Department of Tourism, Hong Kong is now the ninth-highest source of visitors to the country. Figures released last week showed the number of arrivals from Hong Kong rose 2.78 per cent from 2011 to 118,666. Arrivals from the mainland rose 5.87 per cent year on year to 250,883. And even with a new chief executive and administration in place in Hong Kong, there are still no plans for the Philippines travel status to be changed. A Security Bureau spokesman confirmed that no amendment would be made, although the situation would be reviewed regularly. "The Incident Investigation and Review Committee of the Philippines are reported to have reviewed the mechanism and procedures for handling emergency incidents," he said. "We hope that the relevant report will lead to concrete measures to enhance the crisis management mechanism, improve the safety of travellers and avoid a recurrence of such an incident in the Philippines." Tourism sector lawmaker Paul Tse Wai-chun believes the government's stance has political overtones. He said the government is continuing to punish the Philippines for one tragic, but isolated, incident. "If the government is waiting for the Philippines to restructure their internal security before downgrading the travel warning, it will be level black for ever," he said. The OTA system aims to help people better understand the risk or threat to personal safety in travelling to 85 countries - those that are the most popular travel destinations for Hong Kong residents. There are three alert levels. After black there is red, which denotes a significant threat, meaning travellers should adjust their travel plans and avoid non-essential travel. Then there is amber, which indicates signs of a threat in a country, meaning travellers should monitor the situation and exercise caution.

Treatment of torture claimants in breach of laws and treaties (By Joanna Chiu) Landmark ruling by top court over way torture claimants are screened when seeking sanctuary could lead to hundreds of cases being re-opened. Vision First, an NGO that helps the torture claimants - The way Hong Kong screens people who arrive seeking sanctuary from oppression in their home countries faces a major overhaul after the city's top court ruled the government had breached laws and international treaties. The landmark decision - handed down by the Court of Final Appeal late last month - means hundreds, possibly thousands, of claims by foreign nationals seeking refuge may have to be re-examined. News of the judgment is only now spreading among torture claimants, largely with the help of NGOs, such as Vision First. "Today, I wrote to my lawyer to ask him to get me out and reopen my case," said Masood from Pakistan, who is being held at the Castle Peak Bay immigration detention facility. "I thought I would have to die in here." For years, Hong Kong has relied heavily on concerns that people would face torture if they were deported when making decisions on protection claims. The court ruling means officials will now have to give equal weight to the prospect of "cruel, inhumane or degrading'' treatment on the person's return. Hong Kong's screening process has in the past invited abuse by some migrants, who file torture claims as a way to stay in the city and work illegally, often for years, as the applications winds its way through the system. The ruling could discourage such people from coming. Rights experts have dismissed concerns the ruling could lead to an influx of refugee and torture claimants. "A fair and efficient screening system that meets the high standards … required by Hong Kong courts will actually deter people from trying to abuse the system," said Kelley Loper, director of Hong Kong University's Human Rights Law LLM program. The Immigration Department has rejected all of the nearly 2,800 claims received in the past few years, with 4,800 pending. In the case before the court, Edward Wilson Ubamaka, from Nigeria, challenged a deportation order handed down in 2008. Ubamaka's lawyers argued deporting him would violate Article 39 of the Basic Law and Article 3 of the Hong Kong Bill of Rights Ordinance. Both articles prohibit "torture, cruel, inhumane or degrading treatment or punishment". Hong Kong is also bound by seven core international human rights treaties, but has not adopted the UN refugee convention. The court agreed with Ubamaka's lawyers. It cited judgments by the European Court of Human Rights and Britain's House of Lords in relation to similar provisions of the European Convention on Human Rights in ruling that rights under Article 3 of the Bill of Rights are "absolute". "Such jurisprudence shows that the absolute character of the protection against torture and [inhumane treatment] is an internationally accepted standard," it noted, and said the same rights were "entrenched" by Article 39 of the Basic Law. The legal community is awaiting a formal reaction from the Immigration Department. Several lawyers have submitted letters asking the government to explain any new procedures and guidelines for submitting claims in light of the court's decision. The Immigration Department told the Sunday Morning Post it respected the decision, but it did not say whether its screening procedures would change. "We are studying the judgment and will map out the way forward carefully, including seeking legal advice as necessary," a department spokesman said. Lawyers have already used the decision to help torture claimants. "I have already relied upon Ubamaka in four of my cases … and another lawyer I know has successfully secured bail for a torture claimant who was held in remand pending trial, where he cited the Ubamaka case as part of the bail application," Robert Tibbo, a lawyer, said. Vision First said the Ubamaka judgment had given failed claimants a "glimmer of hope". But lawyers warn that the decision does not necessarily mean more claimants will see their claims accepted. The court maintained a claimant would still have to "meet … requirements … that he faces a genuine and substantial risk of being subjected to such mistreatment". It added: "It is clear that a very high threshold must be surmounted." The court dismissed Ubamaka's appeal against deportation, ruling that he failed to show to a convincing degree that he faced ill-treatment if repatriated.

 China*:  January 29 2013

China seeks summits on fugitives (By Zhang Yan) The Ministry of Public Security is working to set up an annual high-level meeting with US judicial officials in a bid to catch and return more Chinese fugitives. "We're negotiating with the US Department of Homeland Security and will try to arrange the first summit this year," said Wang Liqiang, a senior official in the ministry's international cooperation bureau. The meeting is expected to bring together the minister of public security and senior officials from the Ministry of Foreign Affairs with their US counterparts to discuss cooperation on intelligence, operations, suspect repatriations and the recovery of stolen assets. An annual roundtable has already been held between the international cooperation bureau, the Foreign Affairs Ministry's legal treaty department and several US agencies, including the Department of Justice. "This is far from enough, and we urgently need a senior-level platform that can help law enforcement in North America better understand Chinese law and legal procedures, and assist us in fugitive repatriation and asset recovery," Wang said. With the aim of boosting cooperation, China has been sending police liaison officers abroad since 1998. Today, the country has 80 officers stationed at 24 Chinese embassies in 23 countries and regions, including the US, Canada, Russia, France and Japan. "Police liaison officers work on the front line and serve as the best bridge between Chinese judicial bodies and foreign counterparts," said Liao Jinrong, who is also with the international cooperation bureau. However, Wang Zhigang, who held such a post in the US from 2004 to 2008, said legal differences, as well as complex and lengthy procedures, remain the biggest hurdles to finding and returning Chinese fugitives from North America. During his time, he said more than 200 economic fugitives were at large in the US and he was one of only three officers charged with bringing them back. "It usually took three to five years to repatriate an economic crime fugitive after constant communication with US judicial authorities," he said. "US law enforcement had no knowledge of our legal system." Chinese liaison officers do not have judicial powers, so they must only rely on local police to investigate and obtain evidence. "First, we had to submit detailed case files, including warrants issued by Interpol, to the FBI and US Immigration and Customs Enforcement, and request their assistance," Wang Zhigang said. However, they did not further investigate the alleged crimes, he explained. "Only if the fugitives were suspected of illegal immigration or money laundering, and after grasping solid evidence, would US police consider detaining and charging them under local law." Meanwhile, fugitives often appealed to higher courts and hired attorneys to delay the hearing, all of which slowed the repatriation process, he said. Pursuing fugitives is only part of a liaison officer's work. Wang said he paid more attention to combating cross-border crime targeting overseas Chinese, such as telecom fraud, smuggling of drugs or firearms, and human trafficking.

China could prove ultimate winner in Afghanistan (By Associated Press in Kabul) The China Merchandise Trade Center in Kabul, Afghanistan. An Afghan man looks at pants made in China at a store in Kabul. Tools made in China are sold in Kabul. China, long a bystander to the conflict in Afghanistan, is stepping up its involvement as US-led forces prepare to withdraw, attracted by the country’s vast mineral resources but concerned that any post-next year chaos could embolden Islamist insurgents in its own territory. Cheered on by the US and other Western governments, which see Asia’s giant as a potentially stabilising force, China could prove the ultimate winner in Afghanistan – having shed no blood and not much aid. Security – or the lack of it – remains the key challenge: Chinese enterprises have already bagged three multibillion dollar investment projects, but they won’t be able to go forward unless conditions get safer. While the Chinese do not appear ready to rush into any vacuum left by the withdrawal of foreign troops, a definite shift towards a more hands-on approach to Afghanistan is under way. China is the only actor who can foot the level of investment needed in Afghanistan to make it succeed and stick it out. Beijing signed a strategic partnership last summer with the war-torn country. This was followed in September with a trip to Kabul by its top security official, the first by a leading Chinese government figure in 46 years, and the announcement that China would train 300 Afghan police officers. China is also showing signs of willingness to help negotiate a peace agreement as Nato prepares to pull out in two years. It’s a new role for China, as its growing economic might gives it a bigger stake in global affairs. Success, though far from guaranteed, could mean a big payoff for a country hungry for resources to sustain its economic growth and eager to maintain stability in Xinjiang. “If you are able to see a more or less stable situation in Afghanistan, if it becomes another relatively normal Central Asian state, China will be the natural beneficiary,” says Andrew Small, a China expert at The German Marshall Fund of the United States, an American research institute. “If you look across Central Asia, that is what has already happened. ... China is the only actor who can foot the level of investment needed in Afghanistan to make it succeed and stick it out.” Over the past decade, China’s trade has boomed with Afghanistan’s resource-rich neighbours in Central Asia. For Turkmenistan, China trade reached 21 per cent of GDP in 2011, up from 1 per cent five years earlier, according to an analysis of International Monetary Fund data. The equivalent figure for Tajikistan is 32 per cent of GDP, versus 12 per cent in 2006. China’s trade with Afghanistan stood at a modest 1.3 per cent of GDP in 2011. Eyeing Afghanistan’s estimated US$1 trillion worth of unexploited minerals, Chinese companies have acquired rights to extract vast quantities of copper and coal and snapped up the first oil exploration concessions granted to foreigners in decades. China is also eyeing extensive deposits of lithium, uses of which range from batteries to nuclear components. The Chinese are also showing interest in investing in hydropower, agriculture and construction. Preliminary talks have been held about a direct road link to China across the remote 76-kilometre border between the two countries, according to Afghanistan’s Foreign Ministry. Wang Lian, a Central Asia expert at Beijing University, notes that superpowers have historically been involved in Afghanistan because it is an Asian crossroads – and China would be no exception. A stable Afghanistan is of vital importance to [China]. China can’t afford to stand aside following the US troop withdrawal and in the process of political transition. “It’s unquestionable that China bears the responsibility to participate in the political and economic reconstruction of Afghanistan,” he says. “A stable Afghanistan is of vital importance to [China]. China can’t afford to stand aside following the US troop withdrawal and in the process of political transition.” A stable Afghanistan, Wang says, is vital to the security of Xinjiang, China’s far west where Islamic militants are seeking independence. Some have gained sanctuary and training in Pakistan and along the Pakistan-Afghan border. Beijing fears chaos, or victory by the Taliban, would allow these groups greater leeway. The US is encouraging Beijing to boost its investment and aid in Afghanistan and backs its participation in various peace-seeking initiatives, including a Pakistan-Afghanistan-China forum that met last month for the second time. Afghan Foreign Ministry spokesman Janan Mosazai says there has been a greater sharing of intelligence between his country and China, and a joint US-Chinese programme to mentor junior Afghan diplomats. In one of the only cases of such co-operation in the world, the US brought 15 diplomats to Washington, DC, last month, after they had received similar training in China. Similar three-way programmes are being developed in health and agriculture. “Recently, China has taken a keener interest in the security situation and the transition process, and we are more than happy that this is increasing,” Mosazai says. “It’s certainly a change, a welcome change.” He adds that Beijing could play a crucial role in forging peace in Afghanistan because of its close relations to Pakistan, which has long-standing links to the Taliban, whose leadership is widely believed to operate from the country. Davood Moradian, who heads the Afghan Institute for Strategic Studies in Kabul, says the Chinese are treading carefully, realising they lack expertise in a complex political landscape that has tripped up other great powers. “The Chinese are ambiguous. They don’t want the Taliban to return to power and are concerned about a vacuum after next year that the Taliban could fill, but they also don’t like having US troops in their neighbourhood,” he says. Should the Chinese step into the peace process, either as a principal intermediary or through Pakistan, they could carry considerable weight. “They are rare among the actors in Afghanistan in that they are not seen as having been too close to any side of the conflict. All sides are happy to see China’s expanded role,” Small says. Though China doesn’t want a Taliban takeover, Beijing regards the group as a “legitimate political force”, says Small. Beijing was on its way to recognising the Taliban as the government of Afghanistan before the September 11 attacks that led to the 2001 invasion of Afghanistan. The Afghan government has backed off from earlier criticism that the Chinese were not contributing their share to security and reconstruction of the country. “There was an attitude that the Chinese were just interested in profiting from other people’s loss, the blood and sweat of American and other troops,” says Moradian. “But that is changing.”

Myanmar’s Suu Kyi keeps door open to US and China (By George Chen in Honolulu) Rotary International president Sakuji Tanaka presents Aung San Suu Kyi with the Hawaii Peace Award. Stronger ties with the United States, which is keen to increase its political influence in Asia, should not be considered a challenge to Myanmar’s long-time relationship with China, opposition leader Aung San Suu Kyi said. Myanmar’s democracy icon also called it presumptuous that Beijing should learn from her country’s democratic reform – though the two countries may share one thing in common: corruption, said the Nobel Peace Prize winner. Suu Kyi was speaking to the South China Morning Post in a small group interview on the sidelines of the Rotary Global Peace Forum on Saturday in Honolulu. Citing Myanmar’s long road to democracy, she said China’s political direction should be ultimately decided by Chinese people rather than external factors. Suu Kyi believed Myanmar was not faced with an either/or decision when it comes to US and China ties. “I don’t think [Burma-US] needs to be an exclusive relationship. Nor does it mean we have to be friends either with the US or China. We need to be friends of both,” she said. “China is a neighbour and the US is a very, very powerful nation that is eager to help with emerging democracy,” she said. Suu Kyi was kept under house arrest by Myanmar’s military regime for two decades over political dissent. She returned to the political stage last year after President Thein Sein launched reforms that allowed her to be elected to the parliament. On Friday, she voiced confidence that the country’s powerful military will support changes to the constitution that would allow her to become president. She said she was hopeful that parliament would approve constitutional revisions even though the army controls a vital number of seats. “I am not unduly worried by it. I think that the members of our military, like the rest of our nation, would like to see Burma a happier, stronger, more harmonious country,” she said, referring to Myanmar by its former name. “Because of that, I do not rule out the possibility of amendment through negotiated compromise,” Suu Kyi said on Friday at the East-West Centre in Hawaii. Suu Kyi was visiting island state as part of an initiative by Hawaii to share its values. In a scene that would have been unthinkable just a few years ago, Suu Kyi spoke fondly about dining with friends on Honolulu’s sun-kissed Waikiki beach. Suu Kyi has toured Europe and North America since her release from house arrest. US President Barack Obama paid a landmark visit to Myanmar in November, hoping to encouraging reforms.

New Year wishes made by shoppers in Beijing - Cards with people's New Year wishes written on them are tied to a wishing tree at a shopping mall in Wangfujing, a commercial area in Beijing.

Successful flight for China's 1st jumbo airfreighter (China Daily) China on Saturday successfully tests its first domestically made jumbo airfreighter, Yun-20, or Transport-20, a multi-function plane for long-distance transport of cargo and passengers. 

Hong Kong*:  January 28 2013

Shippers renew low-sulphur fuel pact (By Keith Wallis) Firms agree to continue using greener diesel while berthed here to ease air pollution but say it could all end if there is no mandatory regulation - A raft of shipping companies have extended, for another year, their voluntary scheme to use low-sulphur fuel to reduce air pollution from ship emissions while berthed in Hong Kong. But they warned they could end the initiative, called the Fair Winds Charter, if "there is no substantial progress towards mandatory regulation by December 31, 2013". The firms, who are members of the Hong Kong Liner Shipping Association (HKLSA) or the Hong Kong Shipowners' Association (HKSOA), also urged the government to improve and simplify the incentive scheme launched by the Environmental Protection Department in September. Nearly 570 ships have been registered for the scheme, which gives a 50 per cent reduction in port- and navigation-related charges for oceangoing ships using low-sulphur diesel. Tim Smith, chairman of the HKLSA, said the incentive scheme covered only part of the extra cost of using the more expensive cleaner low-sulphur fuel. He said the actual proportion varied among shipping companies but for Maersk Line, where Smith is chief executive for north Asia, the cost was between US$1.5 million and US$2 million. Smith, speaking at yesterday's event extending the charter, said more help "would be better". Christine Loh Kung-wai, undersecretary for the environment, said legislation requiring oceangoing ships to use low-sulphur fuel was expected to be lodged with the Legislative Council after the summer recess. Loh hoped it could be approved by Legco "sooner rather than later". Secretary for the Environment Wong Kam-sing said mandatory fuel switching at berth was the government's "near-term target", while an internationally recognised emission-control area covering the whole Pearl River Delta "is a long-term goal". This would be similar to control areas in North America and Europe. Loh said preliminary discussions with officials in Guangdong and the Ministry of Transport in Beijing to create the emission-control area had begun and they were "aware of what we would like to do". The Civic Exchange think tank says marine sources of sulphur dioxide account for 519 premature deaths a year in the Pearl River Delta, including 385 in Hong Kong. If all container lines calling at the city switch to the cleanest fuel available, sulphur dioxide emissions from shipping will drop 80 per cent. Loh said some initial consultation with the shipping industry over mandatory use of low-sulphur fuel started on the day of the policy address. But the government was also aware that smaller firms, whose ships may not be able to use low-sulphur fuel or find it difficult to switch, were not members of either association. The department would "in a matter of days engage with them" to get their feedback on the plans, Loh said. Arthur Bowring, HKSOA managing director, hoped shipping firms would discuss their difficulties with a compulsory fuel switch, adding that "outright objection is not an option".

Stephen Chow's role as political adviser sees rocky start (By Qiu Quanlin in Guangzhou) Stephen Chow, the Hong Kong comedian, film director and a political adviser to Guangdong province, is surrounded by reporters in the provincial capital, Guangzhou, on Friday. Stephen Chow was in Beijing on Thursday to promote his new film, Journey to the West. However, the popular Hong Kong actor and director's new role as a political adviser is not proving easy, as some advisers have criticized him for not fully exercising it. After being absent for the first two days of the annual session of the Guangdong committee of China's political advisory body, Chow showed up on Friday morning in Guangzhou, the provincial capital. "I'm very sorry. I did not attend the conference for the first two days because of my film's tight schedule. But I'm very honored to become part of the political advisory body," Chow said. Chow arrived at the city's conference hall about 9:40 am, more than half an hour after the opening of the Guangdong annual legislature session. Chow's assistant told reporters that they began the car trip from Hong Kong at 6 am. "We arrived in Guangzhou before 9 am. But the driver did not know how to get to the hall and we were delayed by the traffic jam," he said. Surrounded by dozens of reporters at the downtown Baiyun International Conference Hall, Chow blamed his late arrival on the heavy traffic. "I came here to learn," Chow said. "I will try my best to perform my new role well." Chow is not the first celebrity from Hong Kong to be appointed a political adviser in Guangdong because the cultural and artistic cooperation between the special administrative region and the mainland has been greatly boosted in recent years. Eric Tsang, a Hong Kong actor, film director and television host, is also a member of the Guangzhou political consultative conference. In a proposal to the annual session of the Guangzhou political advisory body, which ended on Tuesday, Tsang said a Hollywood-style movie center should be developed in the city's southernmost Nansha district, which faces Hong Kong across the sea. In an earlier interview, Tsang said he believed Chow would do a good job in the political advisory body. "People may think he is only an actor and film director, but he pays a lot of attention to issues outside the film industry," Tsang said. Tsang said that Chow's experience in acting and making films will help him make useful proposals. "You reporters should give him some time to prepare for the conference. And I believe he will do well in the new role," Tsang said. Chow also said he needs time to prepare before he makes a proposal. "My proposal is related to the culture and film industries," he said. Su Zhengwu, an official with the Guangdong committee, said the participation of Hong Kong celebrities in local political affairs will help boost cooperation in the artistic field. "A political adviser has to be influential in his or her own field. Chow, as a celebrity, is certainly qualified for the post," Su said. "Chow has promised to perform the duties required of a political adviser. But he needs some time to understand the process," Su added. After the opening of the local legislature session, Chow did not attend a panel discussion on Friday afternoon. "Political advisers, especially influential participants, should balance their work and the conference," said Lin Qiucheng, a Guangdong political adviser. "The conference only lasts a few days. Chow's absence in the first two days has some negative impact. He should take his duty as it is defined," he said. At the first day of the advisory body's session on Wednesday, more than 10 advisers asked for a leave of absence. "Chow's absence is a great pity, both for the conference and himself. As a comic star, he should tell the public that he is not a person who simply makes jokes," said Ma Dingsheng, a host on Phoenix Television.

 China*:  January 28 2013

China levies anti-dumping tax on US, EU chemicals (By Associated Press in Beijing) China says it will impose anti-dumping duties on two chemicals from the United States and European Union for five years. The Chinese Ministry of Commerce says it has ruled that U.S. and EU companies have been selling the chemicals at unfairly low prices. The two chemicals, ethylene glycol monobutyl ether and diethylene glycol monobutyl ether, are widely used in applications such as metal cleansing, paint stripping, dry cleaning and printing. The ministry said Friday it will impose a 10.6 percent duty on those chemicals manufactured by American companies Equistar Chemicals LP and Eastman Chemical Co., and a 14.1 percent duty on those made by Dow Chemical Co. and all other U.S. companies. It said it will levy duties of 9.3 percent to 18.8 percent on the products from EU companies.

Li Na loses to Azarenka at 2013 Australian Open final - Top seed and defending champion Victoria Azarenka of Belarus won the title of the Australian Open after beating Chinese Li Na 4-6, 6-4, 6-3 on Saturday.

Obama's choice for top diplomat stresses links - Kerry envisions greater Sino-US cooperation as global partners (By Chen Weihua in Washington and Chen Guangjin in Beijing) US Senator John Kerry (right) smiles after his confirmation hearing on Thursday to become the country's next secretary of state. Kerry has served on the Senate Foreign Relations Committee for 28 years and has been chairman for four of those years. US Senator John Kerry, who is expected to replace Hillary Rodham Clinton as secretary of state, said on Thursday that he wants to broaden his country's relationship with China. Kerry said he envisions China playing a far more significant role as a partner in any number of efforts globally. "China may be viewed as competitors in the marketplace, but we shouldn't be adversaries in some way that diminishes our ability to cooperate on a number of things," he said during his confirmation hearing before the Senate Foreign Relations Committee, which he has headed since 2009. Kerry said China is cooperating with the US on Iran and there might be more cooperation on the Democratic People's Republic of Korea and other parts in East Asia. "There could be more we could do in other parts of the Far East. And hopefully, we can build those relationships that will further that transformation. We make progress. It's incremental. It's a tough slog," said the 2004 Democratic presidential candidate. The 69-year-old - surrounded by his wife, Teresa Heinz, and other family members - said the two countries can find a better sense of mutual interests in the common goals they work with. Foreign Ministry spokesman Hong Lei said at a regular press conference on Friday that China is willing to make concerted efforts with the US to continue enhancing the Sino-US cooperative partnership and build a new type of big-power relationship. Kerry said he supports and will develop the US repivoting in Asia-Pacific, which started less than two years ago, describing it as "critical" for the US "to strengthen our relationship with China." But he is not convinced that a military ramp-up is critical, adding that he will look at the issue more carefully after being confirmed. Kerry told lawmakers that the US has more bases in the region than any other nation, including China. He also acknowledged the concern in China after the US increased the number of Marines in Australia. "The Chinese ask what the United States is doing - 'They try to encircle us, what's going on?' - and so every action has its reaction," said the 69-year-old Vietnam War veteran who became an anti-war activist. "We have to think thoughtfully about not creating a threat when there isn't one and understand where we can find a basis for cooperation," Kerry said. "I am not talking about retreating, I am simply trying to think about how we do this, not creating the reaction you don't like to create," he said. The US rebalancing, or pivot in Asia, has shifted more from the military front to the economic and trade front in the last year. The senator from Massachusetts voiced his support for the Trans-Pacific Partnership, which he said would establish greater leverage on the notion of broadly accepted rules. Hong, the spokesman, noted that the Asia-Pacific region is where China and US have the most converging interests and frequent interaction. "Both China and the US should play a constructive role in protecting peace, stability and prosperity in the Asia-Pacific area," Hong said. Hong said the two countries can achieve benign interaction in this area through their existing mechanisms including the strategic and economic dialogue and the Asia-Pacific consultation. Kerry pointed out that the US still faces significant challenges in China on intellectual property rights, market access and currency. "China is, you know, the other sort of significant economy in the world and obviously has a voracious appetite for resources around the world, and we need to establish rules of the road that work for everybody," he said. Kenneth Lieberthal, a senior fellow at the Brookings Institution, a think tank in Washington, praised Kerry as a good candidate for secretary of state. "He is someone who believes strongly to know well the people you are dealing with, to understand their perspectives and their concerns," he said. "I would think that bodes well for his being an effective secretary of state as well as in dealing with China, among other issues," Lieberthal said.

Hong Kong*:  January 27 2013

Skyscrapers of Victoria Harbour - built to display wealth and power (By Jennifer Ngo and Stuart Lau) The dizzy heights of the city's skyscrapers are where the rich and powerful gravitate. This last Neighbourhood feature takes a look upwards - The king of the skyline is the ICC tower, which stretches up 490 metres above sea level with its 118 storeys. Victoria Harbour in 1975. Victoria Harbour is circled by skyscrapers today. The growth upwards is an inevitable trend, architect Tony Tang argues. Hong Kong is an architects' playground. Against a backdrop of steep hills and framing the city's crown jewel that is Victoria Harbour stand impossibly tall structures, packed as tightly as trees in a jungle - a testament to wealth and power. Jammed into that narrow band of land between hills and sea, the soaring skyscrapers, glittering with lights come dusk, are seen as the symbol of Hong Kong's success. And behind all the glass and steel are some of Asia's most powerful people, high-rise neighbours in one of the city's most exclusive communities. But down on the ground, there is a growing determination to preserve the existing skyline. After the closure of Kai Tak Airport in 1998, developers took advantage of a decade of relaxed height restrictions to raise the city's skyline before new height limits were imposed. By the time the government acted in 2007, a wall of skyscrapers had risen up. There are now more than 650 buildings that are at least 100 metres tall, and 41 that are over 200 metres tall. Dubbed the "vertical Wall Street" due to its overwhelming number of banking tenants, the International Commerce Centre (ICC) on the reclaimed land of West Kowloon is the tallest structure in the city - 490 metres above sea level and 118 storeys high. Occupying the 2,500,000 sq ft of office space are prominent international banking giants and hedge funds, such as Deutsche Bank and Credit Suisse. Even the smallest office is 3,000 sq ft, while the biggest - home to investment bank Morgan Stanley's Asia-Pacific headquarters - takes up 600,000 sq ft over 16 storeys. The ICC and the 415 metre high Two International Financial Centre (Two IFC) across the harbour - both owned by developer Sun Hung Kai Properties - are the tallest skyscrapers in the city. Two IFC, in the Central business district, was built in 2003. The top 14 floors house the operations centre of one of Asia's most powerful central banks, the Hong Kong Monetary Authority, which sparked controversy back in 2001 when it bought the offices for HK$4 billion. The money came from the massive reserves in its Exchange Fund, which had assets of nearly HK$2.8 trillion at the end of last year. Two IFC is also home to property giant Henderson Land Development, owned by Lee Shau-kee, the third-richest man in Hong Kong and ranked 29th on the Forbes World's Billionaires list. Other prominent tenants include the French bank BNP Paribas, British financial services company Standard Chartered, the MTR Corporation, and Japanese multinational the Nomura Group. Rents at Two IFC are HK$120 to HK$130 per sq ft, according to Sun Hung Kai Properties, and HK$70 to HK$80 a sq ft at ICC. But these big contributors to gross domestic product aren't necessarily welcomed by locals. There are complaints the skyscrapers have blocked views, as well as the flow of air, and have created temperature hot spots. When the government started reviewing outline zoning plans of various districts in 2007, its new building height restrictions were aimed at creating steps of rooftop levels to preserve views of the hills, skyline and water. "The change came too late," said Roy Tam Hoi-pong of conservation group Green Sense. One structure approved before new height restrictions came into force on the Kowloon peninsula is a 63-storey complex of offices, shops and a hotel being built by New World Development. "The view of Lion Rock behind Tsim Sha Tsui will be blocked in future from Wan Chai," Tam said. The development will stand "awkwardly" in the middle of Tsim Sha Tsui, surrounded by shorter buildings, the campaigner added. Meanwhile, The Wharf (Holdings) has in its possession approval for a plan to redevelop part of its Harbour City mall into a 96-storey tower - some 386.7 metres tall, just 100 metres shorter than the ICC next door. The approval dates back to 1999. Even when the new height curbs apply, developers are still able to damage the cityscape, former Town Planning Board member Bernard Lim Wan-fung said. "For city planning, height is not the only consideration; a three-dimensional approach is needed when examining plans," Lim said. He and Tam both expressed worries over a new trend for short but "fat" designs. Tam said his concerns stemmed from Chief Executive Leung Chun-ying's announcement in the policy address that the government would look into ways to increase plot ratios to provide more flats. "Such an increase must be dealt with cautiously," Tam said. "Urban land intensity is already very high." But, ultimately, tall is all for developers. Tony Tang Wai-man, architect and project manager with Sun Hung Kai Properties, said developing upwards was an inevitable trend and a testament to the city's growth. "Hong Kong has always been moving forward. Every 10 years we reach some kind of benchmark - which is why we need development," Tang said. "Hongkongers care most about efficiency and convenience, so will be able to accept and understand these upward developments." He said recent demands to conserve historical sites showed Hongkongers were also now caring more about their architectural heritage. "It is understandable Hongkongers want to protect some heritage," he said, "but there needs to be a balance between conservation and development as they go hand in hand." Height has another value in Hong Kong, a spiritual one. Fung shui master Raymond Lo explains: "Staying high means when people look down, they see a lot of lower things - we call that water." And water represented wealth, a reason why companies liked offices perched above the city, Lo said. A race was going on in those upper echelons, he added - a desire to beat others to the highest spot and attract ever-more wealth, even if it was achieved at the expense of other people's fung shui.

Hunt for auditor amid ICAC probe (By Natallie Cai) Pearl Oriental Oil (0632), of which Lew Mon-hung is vice chairman, is understood to be at the center of an ongoing investigation by the Independent Commission Against Corruption. Lew last night admitted he and chairman Wong Kwan had been arrested by the ICAC on January 8 and are both now on bail. This came as the company said it is in the process of securing a new auditor after Grant Thornton Hong Kong resigned from the post on Friday. The stock last traded at HK$0.63 on January 8, when it was suspended pending the release of an announcement "in relation to inside information." On the day, rumors surfaced about Wong being questioned by the ICAC. Lew told reporters he had no idea of Wong's whereabouts after he failed to show up at a scheduled tea gathering. Wong holds a 24.63 percent stake in Pearl Oriental to Lew's 5.65 percent holding as of June 30. Last month, the firm said it may buy up to 83 percent of Toronto-listed energy firm Petrox Resources, which has potential oil reserves of 160 million barrels. Last week, Wong declared to the media that he was fine but added: "My company has been facing tough challenges." He then added: "I will try my best to sail through." Lew was appointed as vice chairman of Pearl Oriental at the end of 2009. It is believed his biggest contribution to the company was raising HK$500 million for the acquisition of overseas gas fields. Lew has been active in the foreign exchange and futures markets for a long time and served as chairman of several listed companies in the past. Wong also used to be very a high- profile person. But he has become less so in recent years. His last public appearance was at a November 2011 function to support Chief Executive Leung Chun- ying's election campaign. It is believed Wong had been persuaded by Lew to attend the event. Wong, 64, said he has known Leung for two decades as both were in the property business. Before tapping the natural resources sector, Wong was active in property investment, which turned him into a billionaire in the 1980s and 1990s. The cook-turned businessman bought two well-known homes on The Peak in 1996, only to sell them at huge losses after the Asian financial crisis. One of the homes was bought by comedian Stephen Chow Sing-chi. Both Lew and Wong are from humble backgrounds and came to Hong Kong from the mainland when young. They are said to have remained friends.

Cruise industry sets sail for Asia's growth (By Keith Wallis) Insiders say millions more passengers could come from the region but infrastructure and immigration pose challenges to expansion. HNA, the mainland airline, hotel and property group, will launch its passenger cruise business tomorrow when its first cruise ship starts its maiden revenue voyage from Sanya to Vietnam. The move comes amid mounting interest by cruise lines in Asia and especially China, although senior industry executives said there was a raft of challenges to overcome. William Ng Ko-seng, the chief operating officer of Star Cruises which is managing the ship, confirmed the HNA liner, Henna, would set sail on a series of cruises lasting four or five nights. The initial trips will be between Sanya, Ha Long Bay and Da Nang. Ng said the ship, which can carry up to 1,965 passengers and is the mainland's largest cruise liner, is being managed on behalf of HNA Tourism Cruise. HNA is expected to redeploy the ship by the summer to launch cruises between Tianjin and South Korea. "I am sure they will grow," Ng told delegates to the Seatrade Hong Kong cruise forum, adding that "in a short … time Hainan will be a very busy [cruise] hub". Pointing to the growth of the cruise industry in Asia, Liu Zinan, chairman of the Asia Cruise Association, told the forum the "potential is huge". Pier Luigi Foschi, chairman and chief executive of Carnival Asia, expected seven million cruise passengers would come from Asia by 2020, adding he "could be wrong, it could be 10 million". Foschi confirmed that Princess Cruises, one of the cruise companies controlled by Carnival, the world's largest cruise outfit, was opening an office in Hong Kong. Industry insiders said this showed Princess was serious about developing its Asian business from Hong Kong, especially as its US$500 million cruise liner Diamond Princess would make four visits to the Kai Tak cruise terminal between October and April 2014. Princess Cruises will deploy its 1,990-passenger Sun Princess to Asia this year, while Costa Crociere, also part of the Carnival group, will add a second ship, the Costa Atlantica, to the Asian market from May. But the ship's home port will be Singapore rather than Hong Kong. Foschi said Carnival was eyeing the development of cruise-focused resorts in North and Southeast Asia. He said the Asian resorts would need hotels and beaches along with infrastructure to handle the cruise ships. Foschi outlined a number of challenges in developing the cruise market in Asia. These included persuading people in Asia to take cruises and getting travel agents to understand what cruising was about. Other challenges included infrastructure issues and the difficulty people had travelling outside their own country. Antonio de Rosa, vice-president of Asia fleet operations at Costa Crociere, echoed the view, describing the immigration approval process for mainland passengers to visit Taiwan as "a complication". Jeff Bent, general manager passenger services and director of cruise projects at Worldwide Flight Services, said Beijing was in the final stages of clarifying arrangements for mainland cruise passengers to join passenger liners in Hong Kong for voyages to Taiwan and beyond. Commenting on infrastructure issues, De Rosa thought some spare sea freight capacity at ports, including in southern China, could be converted relatively cheaply for cruise ship use. Lee Tai Hsin, president of the Taiwan International Port Corp, said US$300 million was being spent to build two cruise centres at Keelung and Kaohsiung. Lee said the corporation, which was formed recently to take over the operation of Taiwan's leading ports, was "planning to change some of the cargo terminals into cruise terminals". Other cruise experts at the forum questioned if there were sufficient destinations for Asian cruise passengers. Liu said that while Hong Kong "is one of the key cruise destinations", the "shortage of destinations [in Asia] was one reason why cruise lines don't put as many ships in [the region]". He thought there was scope to develop cruise itineraries from Hong Kong to locations in the South China Sea, while there were potentially 80 cities in Asia that could be cruise destinations. This needed the "support of central governments of each country to invest in infrastructure". "Build the infrastructure and cruise ships will come," Liu and others said.

Ship-owners to stick with voluntary emissions agreement for now (By SCMP) A group of some of the world's largest shipowners have vowed to renew their voluntary initiative to cut emissions from ships in the region, but have warned that they might abandon the plan if the government does not pass laws requiring all ships to clean up their act while in Hong Kong. The 17 shipowners signed a ‘Fair Winds Charter 2013’ renewing until the end of 2013 an existing commitment to switch to fuel with a sulphur content of 0.5 per cent or below while berthed in Hong Kong “to the maximum extent possible”. The group included CMA-CGM, Maersk, Hapag-Lloyd, Mitsui OSK, COSCO, Hanjin Shipping, and China Navigation. The group said it would cooperate with the governments of Hong Kong, Shenzhen and Guangdong to introduce laws that were consistent with international standards. It asked the Hong Kong government to gazette legislation for at-berth fuel switching “or equivalent measures” by next January to offer a level playing field for the industry, and to simplify an existing incentive scheme to help operators switch fuels. It called on Hong Kong to help develop a common control system to apply across the Pearl River Delta, but warned that currently the signatories to the charter were “shouldering the cost of such actions whilst competitors are not obliged to bear the cost of reducing emissions”. “If there is no substantial progress towards mandatory regulation by December 31, 2013, participating members may cease their voluntary reductions in marine emissions,” the charter statement said. Emissions from the shipping sector have been in the spotlight in recent years because of concerns that the bunker fuel that ships use is high in sulphur and particulates. Hong Kong Chief Executive Leung Chun-ying's said in his policy address last week that ships would soon have to switch to low-sulphur fuel to cut emissions.

Cross-border students cause shortage of school places in North District (By Jolie Ho) Cross-border pupils queue up to go through immigration at Lo Wu border checkpoint. North District is short of about 1,400 Primary One school places in Sheung Shui, Fanling and Sha Tau Kok because of an increasing number of cross-border students, says the Education Bureau. But despite promising to increase school places, including by building more classrooms, the bureau is not guaranteeing an admission priority for local families. However, Education Bureau permanent secretary Cherry Tse Ling Kit-ching told a Legislative Council education panel on Friday that cross-border students had been diverted to eight different school areas because they did not have fixed addresses in Hong Kong. Students who were residents of North District would be allocated where possible to the school area in which they belonged. Education sector legislator Ip Kin-yuen said the pressure on public school places from Hong Kong-born children living on the mainland would continue. The number of cross-border kindergarten pupils for 2011-12 was 5,700 – more than cross-border primary pupils who numbered about 5,300. In the same period, 70 per cent of almost 13,000 cross-border students were in North District, even though they accounted for only 1.35 per cent of the total number of Hong Kong students. Nearly a quarter of primary pupils in North District are cross-border students. “Hong Kong as a whole can take in [the cross-border students], but they are highly concentrated in North District, so the problem is how to allocate them,” Ip said, adding that pupils could be allocated to various districts according to the immigration control points they used. He blamed the bureau for failing to foresee the problem, as the number of cross-border students had been increasing since 1999. Ip urged the government to discuss with Guangdong officials the possibility of letting Hong Kong-born students go to public schools in the province and open classes especially for them. Meanwhile, education minister Eddie Ng Hak-kim said the government planned to come up with proposals in the next two years for free education over 15 years for students. He said that a committee would be set up in the middle of this year to study the feasibility of the plan. “There will be five to six working groups to study different aspects, such as the subsidising mode, teachers’ qualifications and salaries,” he said.

Rafael Hui, Kwok brothers back in court in graft case (By Lai Ying-kit and Thomas Chan) Former chief secretary Rafael Hui Si-yan arrives at the Eastern Court in Sai Wan Ho for a preliminary hearing into his corruption case on Friday. Raymond Kwok Ping-luen leaves Eastern Court in Sai Wan Ho after appearing at a preliminary hearing into his corruption case on Friday. Thomas Kwok Ping-kwong leaves Eastern Court in Sai Wan Ho after appearing at a preliminary hearing into his corruption case on Friday. Former chief secretary Rafael Hui Si-yan and properties tycoon brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen appeared in court again on Friday for a preliminary hearing in their corruption trial. Hui, the Kwok brothers and two others arrived in the Eastern Court on Friday afternoon separately. Raymond Kwok and Thomas Kwok are co-chairmen of Sun Hung Kai Properties, Hong Kong’s largest developer by asset value. Prosecutors told the court 72 witnesses would give statements during the trial, up from 41 in previous hearing. The defendants were not required to enter plea at this stage. Acting Principal Magistrate Bina Chainrai extended bail for the five and set the date for a next hearing for March 8. Chainrai said the court would decide whether the trial should open in the High Court or a district-level magistrate court. Hui, 64, Raymond Kwok, 59, and Thomas Kwok, 61, were charged with bribery and misconduct in public office. The Independent Commission Against Corruption alleges that Hui took more than HK$34 million in bribes from the billionaire brothers in return for favours. 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 tycoon brothers on Friday were represented by Graham Harris SC and Gerard McCoy SC. The prosecution team is led by prominent British barrister David Perry. Magistrate Chainrai reminded the defendants not to discuss directly or indirectly with any listed witnesses any matters related to the present proceedings. Some of the witnesses were the employees of Sun Hung Kai Properties, the court heard.

 China*:  January 27 2013

Xi Jinping to consider summit with Japan over Diaoyu Islands (By Teddy Ng) Party chief is handed letter from Japan premier Shinzo Abe and tells envoy that top-level talks could be held if 'right conditions' are created - Japanese envoy Natsuo Yamaguchi hands a personal letter from Prime Minister Shinzo Abe to Xi Jinping in Beijing. Party leader Xi Jinping called yesterday for dialogue to resolve a territorial dispute with Japan and said he would consider the possibility of a summit meeting between leaders of the two nations if there was a "proper environment". Xi made the remarks at a meeting in Beijing with Natsuo Yamaguchi, an envoy of Japanese Prime Minister Shinzo Abe. Yamaguchi, the head of New Komeito, a member of Japan's coalition government, handed Xi a letter written by Abe calling for more communication between Tokyo and Beijing. It was the highest-level meeting between the two countries since the row over the Diaoyus, known as the Senkakus in Japan, intensified in September, when Japan announced it was buying three of the uninhabited islands. "Your visit to China comes when Sino-Japanese relations face an unusual situation," Xi told Yamaguchi. Yamaguchi told a press briefing that Xi said he would "seriously consider" a proposal for a high-level summit, but conditions should be created to make it possible. However, the official account of the talks by Xinhua made no mention of the summit. Analysts said Beijing was being cautious to avoid angering nationalists who have urged tough action against Tokyo. "Under the new circumstances, we should … display political wisdom, just like the elder generations of leaders of the two countries, to overcome difficulties and advance … relations," Xinhua quoted Xi as saying. Analysts said the mention of "elder generations" was a veiled reference to premier Zhou Enlai's comment, in a meeting in 1972 with Japanese prime minister Kakuei Tanaka, that the dispute should be shelved. Xi also said both sides should respect the principles of the four documents - agreements on promoting bilateral ties reached by the two nations between 1972 and 2008. Chinese analysts said a summit would not happen soon, though tensions may ease. Liu Zhenmin , Beijing's ambassador to the UN in Geneva, said at the World Economic Forum in Davos yesterday that China hoped the new Japanese government would "take the right measures to … bring relations back on track". But as Yamaguchi wrapped up his four-day visit, Tokyo said it would modify its national defence guidelines and vowed to enhance its ability to protect its sovereignty. Lin Xiaoguang , of the Central Party School, said: "China does not want Japan to send government vessels and military planes to the islands or engage in tough rhetoric. Beijing does not want to talk when Tokyo sticks to its old, tough approach."

Clinton praises success of China study programs (By Chen Weihua in Washington and Caroline Berg in New York) Nonprofit group aims to step up student exchanges - Jennifer Whitman, a student at New York's Fordham Law School, may never have planned for a career linking her to China, but the prospect emerged from her experience of studying abroad two years ago. While attending Sichuan University's law school in southwestern China as a Fulbright scholar, she observed the impact of legal aid outreach on local female migrant workers. "My experience in Chengdu (the capital of Sichuan province) gave me a good idea of what it looks like to practice law in China," she said. She said she hopes to live in China and work in international law after she graduates. Whitman is among thousands of students from the United States who have come to China since 2010 through the 100,000 Strong Initiative. Announced by US President Barack Obama during his visit to China in November 2009 and launched in Beijing the following May by Secretary of State Hillary Clinton, the program aims to send 100,000 Americans to study in China by 2014. "We focused on student exchanges because we believe that the future is very clearly in the hands of the young people of both of our countries," Clinton said at a State Department ceremony on Thursday for the launch of the 100,000 Strong Foundation, a nonprofit group that will carry out the initiative. The foundation, based at American University in Washington, will go beyond the goal of 100,000 students. It will engage in efforts to strengthen the bonds of student exchanges for years to come, said Clinton. "The more we can foster exchanges and understanding, mutual trust, the better off not only the relationship will be, but each of our countries individually," she said. Clinton recalled her 2010 visit to the USA Pavilion at the Shanghai Expo. She found that the biggest attraction was US students, who had been studying Chinese, working as hosts and greeters. "So many of these young people were first-generation college students in America who had just become taken with China, and so they were studying Chinese and now they were there as official representatives of the United States government," the former US senator said. "Our relations, government-to-government, are obviously essential, but it is those people-to-people ties that are going to determine the quality of the relationship for the future. "We want to see Chinese youngsters here, American youngsters in China, and we want to see them breaking down the barriers that exist between any peoples from different cultures and experiences and histories and backgrounds." As more US students head to China, the number of Chinese on US campuses is at a record high. China sent more than 194,000 students to the US for the 2011-12 academic year — about one-quarter of all international students here. That was 23 percent more than the number of Chinese students in the US the previous year. China's ambassador to the US, Zhang Yesui, said the Chinese government continues to be a strong supporter of people-to-people exchanges as it has been since the 100,000 Strong Initiative began. The government is offering 20,000 scholarships for US students to study in China. During her visit to Washington two years ago, State Councilor Liu Yandong announced 10,000 Chinese government scholarships. To date, 6,535 Americans have received a scholarship through the program, said Zhang. According to the Open Doors report, more than 26,000 US students took part in study abroad activities in China during 2011. Nancy Yao Maasbach, executive director of the Yale-China Association, said some Yale University alumni who studied in China are now working for companies there and the American Chamber of Commerce in Shanghai.

China's Xi meets Japanese ruling party leader - Xi Jinping, general secretary of the Communist Party of China Central Committee, met with Natsuo Yamaguchi, leader of the New Komeito party Friday. China and Japan should address "sensitive" issues effectively and in a timely manner, Xi Jinping said Friday. Bilateral relations soured amid Japan's move to "purchase" part of the Diaoyu Islands last year, Xi, general secretary of the Communist Party of China (CPC) Central Committee, made the remarks as he met with Natsuo Yamaguchi, leader of the New Komeito party. The New Komeito party is the smaller of Japan's two ruling parties. "China's stance on the Diaoyu Islands is consistent and clear," Xi said, urging the Japanese side to respect history as well as reality and make joint efforts with China to seek effective methods for appropriately controlling and resolving problems through dialogue and consultation. "Only by using history as a mirror can one look into the future," Xi said, adding that the Japanese side should respect the feelings of the Chinese people and appropriately address historical issues. The Chinese leader said both sides should keep the overall situation in mind and stick to the proper path for advancing the China-Japan relationship in a sustained, healthy and stable way. Yamaguchi, who arrived in Beijing on Tuesday, is the first senior member of Japan's ruling bloc to travel to China since the Japanese government decided to "purchase" the Diaoyu Islands in September, a move that damaged bilateral relations. Xi said the Chinese side attaches importance to Yamaguchi's visit, as bilateral ties are facing an "unusual" situation, adding that he hopes the New Komeito party will continue to play a constructive role in the development of the bilateral relationship. The "unprecedented" cooperation seen during the four decades following the normalization of diplomatic relations has strongly driven both countries' development, Xi said, adding that China remains committed to developing its ties with Japan. Xi called on the two nations to continue to honor the "four political documents," which have served as "a ballast stone" for stabilizing bilateral relations. The documents -- the China-Japan Joint Statement on Comprehensively Advancing Strategic and Reciprocal Relations, the Sino-Japanese Joint Statement, the China-Japan Treaty of Peace and Friendship and the Sino-Japanese Joint Declaration -- were signed by the two sides in 1972, 1978, 1998 and 2008, respectively. "Under the new circumstances, we should shoulder national and historical responsibilities as well as display political wisdom, just like the elder generations of leaders of the two countries, to overcome difficulties and advance China-Japan relations," said the Chinese leader. Yamaguchi said the New Komeito party is committed to expanding the friendship between the two nations and holds that both sides should follow the principles established in the "four political documents." As a party of Japan's ruling coalition, the New Komeito party will carry forward the traditional friendship and work to facilitate exchanges and cooperation between the two countries, with an aim of appropriately resolving problems through dialogue, said the Japanese party leader. During the meeting, Yamaguchi delivered a letter to Xi from Japanese Prime Minister Shinzo Abe. In his letter, Abe wrote that the relationship between Japan and China was among the most important bilateral relationships. He also wrote that the two countries shared the common responsibility of peace and development in the Asia-Pacific region, as well as the world at large. According to the letter, Abe is willing to pursue ties with China while looking at the big picture and advancing the strategic, mutually beneficial relationship between the two countries.

FTA agreements with Iceland, Switzerland on horizon (By Fu Jing in Davos, Switzerland and Ding Qingfen in Beijing) Swiss watches on display at an expo in Wuhan, Hubei province. Jacques de Watteville, Switzerland's ambassador to China, said good progress has been made in FTA talks, and the country could become the first in Europe to have a free trade agreement with China. Free trade talks with Switzerland and Iceland make good progress - Iceland and Switzerland are racing to become the first European countries to ink free trade agreements with China, in an effort to boost trade with the world's second-largest economy amid lingering global economic woes. President of Iceland Olafur Ragnar Grimsson and President of the Swiss Confederation Ueli Maurer told China Daily that both countries have achieved "smooth and decisive progress" with China in the FTA talks, as the European Union has not put such negotiations on its agenda despite Beijing's proposal for a feasibility study. Grimsson said China and Iceland are making efforts to finalize and sign the FTA within "one or two months" during Prime Minister Johanna Sigurdardottir's visit to Beijing in February or March, which he said is yet to be arranged. "I hope we can finalize it then. It is high time to conclude it," Grimsson told China Daily at the World Economic Forum annual conference on Wednesday, adding that both sides kicked off talks in 2005 when he made a state visit to Beijing. Grimsson said if the prime minister's visit can be arranged, it is very likely that Iceland will be the first European country to sign an FTA with China. "I was told the negotiations are at the final stage now," Grimsson said. An official from the Ministry of Commerce who is close to the matter said on Thursday that China and Iceland have reached consensus on the framework of the bilateral trade pact and a majority of related issues, which paves the way for conclusion of the China-Iceland FTA. But, the two sides still differ on a few minor issues that are not related to the bilateral FTA itself, he said. "It's possible that the two countries will sign the deal in a month or two, if the north European nation adopts a more sober attitude and doesn't make demanding requests," he said. "The two-way FTA is good for Iceland," he added. Chen Deming, minister of commerce, said during the annual commerce work conference held late last year in Beijing that China will try to wrap up FTA negotiations with a few nations as soon as possible, including Iceland, in 2013. Compared to the talks with Iceland, China's talks with Switzerland, which started a year ago, are progressing faster. "I hope that the negotiations can be concluded soon - and successfully. And this will give a new and added boost to the economic relationship which has already developed very well in the past," said Swiss President Ueli Maurer in a written reply to China Daily. Jacques de Watteville, Switzerland's ambassador to China, further elaborated on the progress of the negotiations. "Overall, good progress has been achieved. If the agreement is concluded in the near future, it would be the first of its kind between China and a European nation." Despite the fact that both European countries are eager to sign the FTA with China to further reinforce bilateral economic and trade relations after China's leadership transition in November, Brussels seems to have ignored Beijing's proposal to do a feasibility study to kick off FTA negotiations. Instead, amid a double-dip recession, Brussels has increasingly resorted to trade protectionism to hamper China's exports. "The current focus with our Chinese partners is to make progress toward an investment agreement and further market access," said John Clancy, the EU trade spokesman. "Only with positive and concrete developments on an investment deal on both sides will we be in a position to examine broader trade ambitions, such as an FTA with China," Clancy said. He cited EU Trade Commissioner Karel de Gucht as saying that such an investment deal is Brussels' first priority and both sides have to show progress in this field first. Among other measures, Brussels has launched an anti-dumping investigation against China's solar panel exports, which has stirred mounting criticism. Meanwhile, insiders said negotiators from Beijing and Bern have already finished the lion's share of the FTA draft with food and agriculture still being the thorny issues on which an agreement has not been reached. Switzerland is trying to protect the sector, as it is a net importer of agricultural products. According to de Watteville the main objective of the agreement is to promote trade and investment between both countries by eliminating or reducing tariffs on most goods, removing non-tariff barriers, improving market access for goods and services, and by intensifying economic cooperation. "If these objectives are met, this would create favorable conditions for companies from both sides and boost two-way trade and investment," he said, adding that China and Switzerland have highly complementary economies and would therefore greatly benefit from such an agreement. Iceland's President Grimsson has also pinned high hopes on the conclusion of the FTA. Under the new Chinese leadership, Grimsson said the agreement could further reinforce the constructive and active economic cooperation between China and Iceland. Grimsson said Premier Wen Jiabao's visit to Iceland last year has consolidated the bilateral relationship and the two countries will further enhance cooperation on the environmental and clean-technology fields. He also said the two countries will boost cooperation on ice-covered areas, especially in the Himalaya and Arctic regions. "We share many mutual interests in these areas," said Grimsson. Together with China's new leaders, Grimsson said he would continue to push forward the reinforcement of bilateral relations and also issues of global importance. 

Kerry to strengthen Sino-US relations (By Chen Weihua in Washington) Senate Foreign Relations Chairman John Kerry sits before the committee he has served on for 28 years and led for the past four as he seeks confirmation as US secretary of state. US Senator John Kerry, who is expected to replace Hillary Clinton as the secretary of state, says he wants to broaden the relationship with China. Kerry said he envisions that China can play a much more significant role as a partner in any number of efforts globally. "China may be viewed competitors in the market place, but we shouldn't be adversaries in some way that diminishes our ability to cooperate on a number of things," he told the Senate Foreign Relations Committee on Thursday during his confirmation hearing. He has chaired the committee since 2009. Kerry said China is cooperating with the US on Iran and there may be more cooperation over the Democratic People's Republic of Korea and other parts in East Asia. "There could be more we could do in other parts of the Far East, and hopefully we can build those relationships that will further that transformation. We make progress. It's incremental ... It's a tough slog," said the 2004 Democratic presidential candidate. The 69-year-old, surrounded by his wife Teresa Heinz and other family members, said China and the US can find a better sense of mutuality of their interests and common goals they can work on. Citing climate change, on which he has been a strong campaigner, Kerry said that China is going to double its emissions and "we got to get these folks into unified efforts". Kerry said he supports the rebalancing policy in Asia which started less than two years ago, describing it as "critical" for the US to strengthen its relationship with China. But he is not convinced that increasing military influence is critical yet, adding that he would look at it more carefully after being confirmed. Kerry told lawmakers that the US has more bases in the region than any other nation, including China. He also acknowledged the concern in China after the US increased the number of marines based in Australia. "The Chinese ask what the United States is doing. They try to encircle us, what's going on and so every action has its reaction," said Kerry, the 69-year-old former Vietnam veteran, who later became an anti-war activist. "We have to think thoughtfully about not creating a threat when there isn't one and understand where we can find bases for cooperation. "I am not talking about retreating, I am simply trying to think about how we do this, not creating the reaction you don't like to create." The US rebalancing policy in Asia has shifted more from the military front to the economic and trade front in the past year. The senator from Massachusetts voiced his support for the Trans Pacific Partnership, which he said would establish greater leverage on the notion of broadly accepted rules. However, China has always been suspicious of US intentions in pushing aggressively for the TPP, of which China and India will not be a part. China, on the other hand, has been supportive of another trade framework known as the Regional Comprehensive Economic Partnership. Kerry pointed out that the US still faces significant challenges in China on intellectual property rights, market access and currency. "China is, you know, the other sort of significant economy in the world and obviously has a voracious appetite for resources around the world, and we need to establish rules of the road that work for everybody," Kerry said. Kenneth Lieberthal, a senior fellow at the Brookings Institution, a Washington-based think tank, praised Kerry as a good candidate for secretary of state. "He is someone who believes strongly to know well the people you are dealing with, to understand their perspectives and their concerns," he said. Lieberthal heard that privately Kerry feels that politics is the art of possible. "So if you want to understand what can be done, you've got to not only understand what your own interests are, but to understand the interest of the other side," Lieberthal said. "When you understand both of those things, then you can figure out what you can accomplish together. That's very much his style of approaching things. "I would think that bodes well for his being an effective secretary of state as well as in dealing with China, among other issues."

Hong Kong*:  January 26 2013

Great Eagle set to spin off its Hong Kong hotel holdings (By Sandy Li) Income thanks to influx of mainland tourists soars versus sluggish performance elsewhere - Langham Hong Kong is one of Great Eagle's Hong Kong hotels. Great Eagle Holdings is to spin off its hotel properties in Hong Kong to try to cash in on an influx of mainland travellers that drove the city's tourist arrivals to a record of more than 46 million last year. In a statement filed with the stock exchange, Great Eagle said a proposal has been submitted to seek a separate listing of its hotel properties on the exchange's main board in the form of share-stapled units. A stapled security is a combination of two or more securities, such as a share in a corporation and a unit in a unit trust, which cannot be traded separately. Great Eagle's Hong Kong hotels include the 495-room Langham Hong Kong in Causeway Bay, the 649-room Langham Place in Mongkok and the 461-room Eaton Smart in Jordan. Adrian Ngan, an analyst at Citic Securities International, said: "It is a smart option as the Hong Kong hotels are the jewels of its portfolio. The move is to ensure a higher valuation." The company said hotel income from Hong Kong, fuelled by the surge in mainland tourists, recorded a year on year 16 per cent rise to HK$282 million for the six months to June 30 last year. First-half profit from its Hong Kong hotels accounted for almost 64 per cent of total group profit of HK$442 million. By contrast, income from its Europe hotels for the same period dropped 26 per cent to HK$50.6 million, while North America saw a bare 4.2 per cent increase to HK$39.6 million. Great Eagle said it would hold not less than 51 per cent of the share-stapled units in issue. Average room rates at Eaton Smart, a mid-priced hotel focusing on visitors from the mainland and Southeast Asian countries, registered the biggest growth among the three hotels, with a 13.4 per cent increase to HK$1,006 for the six months to June 30, Great Eagle said. Its Langham Place Hotel managed to raise average room rates in the first half by 7.6 per cent year on year to HK$1,850 thanks to increased corporate and leisure travellers from China and North America, while the Langham, Hong Kong saw a 6.4 per cent year-on-year rise to HK$2,221. Before the announcement, shares in Great Eagle dropped 2.3 per cent to close at HK$27.80.

Hong Kong has fastest peak internet speed in world (By Christy Choi) Want the high definition version of the movie Battleship? It could be yours in about four minutes, at the peak broadband internet speed enjoyed in Hong Kong - the fastest in the world. The top recorded speed of 54.1 megabits per second was documented in Hong Kong in the third quarter of 2012, according to the State of the Internet report issued by Akamai Technologies yesterday. No country previously had gone beyond 50 Mbps. "It wouldn't have been possible without changes in policy earlier to force competition between internet service providers," Edmon Chung Wang-on, chief executive of DotAsia, and vice chairman of the Internet Society of Hong Kong, said yesterday. "Without the competitive environment we wouldn't have such a good network at such a low cost. Before there were only a couple of providers, and when the new guy came in things started to move." Society executive committee member Cheng Che-hoo said Hong Kong since the 1990s had had an open telecommunications market with no restrictions on the number of licences that could be issued. Chung said much of the credit went to the Hong Kong Internet eXchange for making it cheaper for different internet service providers to share content. Normally providers would need to pay to access an outside network's traffic, but the exchange, based at Chinese University, provided a place where they could share traffic more quickly and cheaply. "Even through we think of the internet as being global, the flow of traffic is much more local," Chung said. "We're more likely to visit the SCMP, rather than CNN, so fast local connectivity is a big contributing factor." The exchange connects to 190 different networks in Hong Kong and overseas, including major content providers like Google and Yahoo. South Korea recorded the second-fastest speed of 48.8 Mbps, while Japan at third had a peak download speed of 42.2 Mbps. China in comparison has a peak average of 7.1 Mbps. While Hong Kong might have the highest peak speed, South Korea leads the table for fastest average speed at 14.7 Mbps. Japan came in second at 10.5 Mbps, while Hong Kong is at 9.0 Mbps. China averages about 1.6 Mbps. Akamai estimates that a billion Internet users connect to its platforms each quarter. Its quarterly State of the Internet report includes information on broadband connection speeds, attack traffic, network connectivity, traffic patterns across major websites and digital media providers, broadband adoption and mobile connectivity.

Hong Kong’s century-old trams revamped but here to stay (By Agence France-Presse in Hong Kong) A tram carries commuters across Hong Kong island. A maintenance station for Hong Kong trams. Aerial view of a tramline bisecting Hong Kong’s central business district at night. Trundling along slowly against a backdrop of glittering skyscrapers, Hong Kong’s trams are entering a new phase of their life but their well-loved retro look is here to stay. Since 2011 a handful of vehicles have had their wooden seats replaced and some now have air conditioning, but the network’s operator says that the small steps towards modernisation will remain subtle. The 109-year-old trams, fondly referred to as “ding ding” from the sound of their bells, retain a special place in the hearts of Hong Kongers, despite their sharp contrast to the rest of the fast-paced Asian metropolis. “We ensure that the facelift maintains the iconic image of the trams,” Hong Kong Tramways managing director Tsang Wing-hang told AFP. “The newly renovated tram is a combination of modern interior design with traditional tram body exterior.” Every day the city’s 163 trams carry 230,000 passengers, from office workers and students to tourists, all travelling on what is the largest double-deck tram system in the world. The city’s network has lived through Japanese occupation, Hong Kong’s transformation into one of the world’s biggest financial hubs and the handover from British to Chinese rule in 1997. It has also survived the development of modern public transport, including a vast subway system, making it a rare symbol of the city’s rich history while much of Hong Kong’s colonial heritage has been demolished. The double-decker streetcars, with their facades in red, green and blue, are nowadays emblazoned with advertising, but most still operate without air conditioning and rattle along at the speed of a bicycle. They also go against the tide of rising prices in the city, with a flat fare of just HK$2.30 (30 US cents) for a ride anywhere on the 120-stop system. A leisurely tram trip is one of the best ways to see the many faces of the former British colony, from its bustling financial district, traditional markets and colourful nightlife hotspots. “It has become a Hong Kong symbol. Hong Kong would not be the same without the sound of the ‘ding ding’,” 61-year-old retiree Kuok Yee-tung said as he took his daily tram ride across the city, his favourite pastime. 

More pupils vying for elite secondary school places (By Dennis Chong) Direct applications are up as much as 10pc despite there being fewer places on offer. Principals have warned parents to expect more competition for elite secondary school places this year, as more tried their luck in the latest allocation exercise. Places could be further limited after the Education Bureau reduced class sizes ahead of an expected reduction in student numbers in the next few years, the educators said. Even though there were fewer places on offer, the principals of some elite secondary schools said they had 10 per cent more direct applications from parents in this year's discretionary allocation exercise, which ended yesterday. In the allocation exercise, public schools - excluding some direct subsidy schools that do not participate in the scheme - can reserve up to 30 per cent of their Form One places for direct applicants. The rest are selected via a random, centralised allocation exercise to be conducted later. The vice-principal of one elite girls' school said that although there would be 5,000 fewer students eligible for secondary education in the city this year, he expected applicant numbers to rise. "Parents have seen an overall drop in student numbers, so they think there is a better chance of getting their kids into an elite school," said Cho Kong-sang, vice-principal of Ying Wa Girls' School in Mid-Levels. One mother handed in her documents just minutes before the Queen's College office in Causeway Bay stopped taking applications yesterday. "I just downloaded the form yesterday because my friends said I shouldn't waste this chance," she said. Parents can choose up to two schools in the allocation exercise. Queen's College assistant principal Leung Wai-shun said more than 600 students had applied directly for one of their 43 discretionary places - meaning at least 14 people vying for each one. It did not participate in the class reduction scheme. Yip Wai-ming, principal of the St Louis School in Sai Ying Pun, expected a 10 per cent rise in the number of direct applicants. In a bid to stave off redundancies, the Education Bureau asked schools to reduce class sizes by two pupils from the coming academic year beginning in September, and again by one student in each of the next two years. But some schools only reduced the size of each Form One class by one, and some government schools refused to reduce the numbers because of strong demand. The exercise is estimated to have resulted in the loss of 600 places in total at schools that teach mainly in English. "This is a crisis waiting to happen. How do we know how many of the 200,000 [children born to mainland parents] might come to the city," said Wong Tsang-Cheung, the principal of Fung Kai No 1 Secondary School in Sheung Shui, adding that it may have to increase class sizes in the future.

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Top of the pots (By Dorothy So) Claypot rice is one of the city's most popular winter warmers. Dorothy So names her favourite dishes and where to get them - Choi's Kitchen eel claypot rice. Making beef and egg claypot rice at Wing Hap Sing restaurant. Chuen Moon Kee's scallops with garlic and prawn claypot rice. Chuen Moon Kee's scallops with garlic claypot rice. Despite its humble appearance, claypot rice is a time-consuming dish that takes plenty of know-how to get right. The results are well worth the effort and a properly made claypot rice is one of the most comforting of winter treats. It all starts with the rice, which should be soft, dry and slightly al dente. The grains on the side should form a golden brown crust that separates easily from the pot. Finally, there needs to be a balance between all the toppings you pile onto the rice. Most dai pai dong and cha chaan teng offer this dish during the colder months but the following five places edge out the competition. Expect to wait for a table at Kwan Kee in Sai Wan. This tiny eatery is always packed and for good reason: it's one of the few places in town that still makes claypot rice the traditional way, over a charcoal fire. Everything is cooked fresh to order and, although it takes close to 30 minutes to prepare, this process guarantees a layer of perfectly crisped, crusty rice at the bottom of every pot. Another plus is the extensive menu, with more than 20 savoury toppings. The preserved Chinese sausage is easily a favourite, boasting meat that's satisfyingly greasy and tinged with sweetness. Fans also swear by the eel. It's exceptionally tender and is best enjoyed when served under a blanket of chillies, garlic and black bean sauce. You can enjoy the eel as a solo topping but regulars pair it with succulent chunks of chicken. While Kwan Kee's charcoal stoves give it an obvious edge, other places, such as Wun Hing Lung have done well for themselves without this added luxury. Formerly a dai pai dong located in the Lower Ngau Tau Kok Estate, its claypot offerings have become popular despite being prepared over a humble gas hob. The restaurant highlights bold, savoury flavours with most of its claypot dishes based around preserved ingredients or heavy sauces. The favourite topping is minced pork with bits of diced cuttlefish or pickled vegetables. Another variation of this meat patty is available with a salted egg yolk glistening in the centre. The rice is given a quick stir in the pot about two-thirds of the way through cooking to ensure that the crust browns evenly without burning. There is the occasional miss when the rice turns out a little too sticky, but on most tries the grains remain distinct, especially when coated in a film of sweet soy sauce. Wing Hap Shing is a family-owned cha chaan teng in Sheung Wan that's been in operation for more than four decades. The claypot selection here has always been highly regarded. Instead of cooking the dish on the stove top, the claypot rice is baked in the oven. Owner Hui Song-chiu claims that this heats the rice evenly and keeps the flavours consistent throughout the dish. The only downside to this method is that it doesn't produce a definite charred rice crust, but Hui makes up for it by ensuring that the rice itself is nothing short of flawless. He achieves this by first rinsing the rice under hot water before baking. This simple step cooks the surface of each grain and the resulting rice becomes fluffy and easily separated. Wing Hap Sing's rice is the perfect canvas for the dozen or so traditional toppings on the menu. Try the signature sliced beef rice, which has a raw egg mixed in while it's still piping hot. Aside from cooking technique, the quality of ingredients also makes a huge difference in a claypot dish. That's why there's no fixed menu at Choi's Kitchen in Tai Hang. Items change regularly depending on the freshest ingredients available on the day. Similar attention is given to the rice - a blend of several Thai varieties flavoured with garlic oil. If available, order the pork marinated in shrimp paste. The flavours are expertly balanced with the pungent condiment drawing out the meat's natural umami before it soaks into the rice. Eel in chilli-spiked black bean sauce is another solid effort, especially since the owners only make this dish with the best, fattiest catch from the market. For something slightly more offbeat, head over to Chuen Moon Kee in Mong Kok. This place offers a few classics, but it's the novel ingredients that set it apart from the rest. Market-fresh seafood is the speciality here - impressive since claypot restaurants tend to shy away from delicate ingredients that are easy to overcook. Diners can top their rice off with anything from scallops rested on garlic and vermicelli to baby abalone flavoured with mandarin peel. Chuen Moon Kee constantly updates its selection. The most recent additions to the menu include a black truffle paste. After all, anything goes when it comes to claypot rice.

North Point MTR service resumes after fire (By Clifford Lo) About 300 commuters were evacuated from the station - Firefighters are called to the scene after a blaze broke out at North Point station. Rail service at the North Point MTR station resumed at around 1pm on Thursday after a fire near a platform screen door disrupted service to the station for about 2½ hours. But the screen doors at the station's platform 3 still could not be closed. As a result, MTR employees are standing on the platform reminding passengers about the problem. Some passengers said it was still dangerous and that the MTR should not have resumed services until the screen doors were back in operation. The fire started at 10.23am, forcing the evacuation of about 300 commuters from the station. Signs inside the station at the time read: “Serious incident, please leave the station.” Eight fire engines and one ambulance were deployed to the scene from the Sai Wan Ho and Tung Lo Wan fire stations. The Fire Services Department said it was a second-alarm fire. “Initial investigation showed a small fire broke out at the screen door at the No 3 platform,” a spokesman for the Fire Services Department said. He said firefighters used a carbon-dioxide extinguisher to douse the flames. No casualties were reported. Due to the “station fire”, MTR services on both directions of Tseung Kwan O Line between North Point and Tiu Keng Leng were suspended, according to Transport Department. “MTR services on both bounds of Island Line will not stop at North Point station,” it said. The Kowloon Motor Bus, Citybus and New World First Bus were asked to monitor bus passenger demand. “The bus companies will strengthen bus services as appropriate when necessary,” the department said. At 11.30am, two firefighters and engineers were seen climbing up ladders to inspect the space above a screen door in the Lohas Park-bound platform in the station. Firemen are investigating the cause of the incident.

 China*:  January 26 2013

Japan urged to make moves to mend China ties (By Teddy Ng) Beijing tells hardline PM’s special envoy that Tokyo should take ‘positive steps’ to ease tensions over claims to Diaoyu/Senkaku islands - A Japanese coast guard ship turns its water cannon on a boat carrying Taiwanese activists 32km from the disputed islands. Yang Jiechi (right) greets Natsuo Yamaguchi. Senior officials in Beijing yesterday responded for the first time to new Japanese Prime Minister Shinzo Abe's hawkish rhetoric in the territorial dispute over the East China Sea by urging Tokyo to take "positive steps" to mend ties. Top officials in Beijing said the appeal was made in talks between Abe's special envoy Natsuo Yamaguchi and two officials from the party's International Department, Wang Jiarui and Foreign Minister Yang Jiechi , aimed at easing tensions over rival claims to the islands China calls the Diaoyus and Japan the Senkakus. Abe adopted a tough approach towards Beijing after becoming prime minister last month, including bolstering ties with Southeast Asian nations also involved in territorial disputes with China. Relations have been tense since September, when the Japanese government announced it was buying three of the islands. Both nations have sent military planes to areas around the islands, triggering fears of armed clashes. Yang appeared to adopt a friendly tone during his talks with Yamaguchi, who is leader of the New Komeito party, a coalition partner in the Japanese government. "We hope the tour contributes to maintaining and pushing forward ties," Yang said. Yang called for the development of ties based on the principles of four historical political documents agreed between the two nations. One of the established principles was respecting each other's sovereignty, and he said both countries should properly resolve territorial disputes through dialogue. "I hope the new administration of Japan can implement positive and stable policies towards China, and take concrete actions to improve Sino-Japanese ties together with China," he said. Yamaguchi said both countries should seek to resolve differences through dialogue, Xinhua reported. In a separate meeting, Wang told Yamaguchi that friendly ties between the two nations were "hard to achieve", calling on Japan's government to overcome difficulties facing relations. "It is normal for any relations between the two nations to be bumpy sometimes, and we have to strengthen communications to enhance mutual understanding during such a period," he said. Yamaguchi, the first senior Japanese government politician to travel to Beijing since September, told both Yang and Wang that he wanted to hand a letter from Abe to Communist Party general secretary Xi Jinping . Tensions remained high around the Diaoyus yesterday, with a boat carrying seven Taiwanese activists attempting to place a statue of the Goddess of the Sea on the disputed islands. Their boat was blocked by eight Japanese coastguard vessels when it was within 17 nautical miles of the islands. Taiwan's coastguard had dispatched four vessels to protect the boat and coastguard vessels from Japan and Taiwan fired water cannon. The boat was badly damaged, with the activists forced to jump into the water. Three mainland maritime surveillance vessels were also seen in the area at the time. Yamaguchi will meet a senior leader in Beijing today before returning to Tokyo, but whether Xi will be present is unconfirmed.

China’s tainted chicken scare hit McDonald's (By Reuters in New York) A workman repairs a McDonald’s sign in Beijing. The fast food giant said sales have been affected by a tainted chicken scare even though an official investigation cleared it of any wrongdoing. Scares over the safety of China’s chicken supply are taking a small bite out of McDonald’s sales in that country, executives for the fast-food chain said. Chinese authorities have cleared McDonald’s and KFC owner Yum Brands of charges they had served chicken laced with excessive chemicals, but the iconic US chains - long considered to serve safer and higher quality food than domestic chains - remain under fire from local media and consumers. The chicken scare “minimally impacted” McDonald’s sales in China during the fourth quarter and continues to hurt business this year, chief executive Don Thompson said on a conference with analysts. McDonald’s sales at established restaurants for China fell 0.9 per cent during the fourth quarter. “We are committed to ensuring the highest food safety and quality standards are met around the world,” Thompson said. Earlier this month Yum apologised to customers in China over its handling of the scare, which is hitting sales in its biggest market. Yum has more than 5,100 restaurants in China and is the largest Western restaurant operator in China. McDonald’s - the world’s biggest restaurant chains by revenue - is rapidly building restaurants in China and has set a goal of having 2,000 in the country by the end of this year. McDonald’s forecast a decline in global restaurant sales for January, as it and other fast-food chains fight for customers who are spending cautiously during continued economic uncertainty. The world’s biggest restaurant company by revenue also reported an unexpected rise in December sales at established US outlets, which helped lift its fourth-quarter profit above analysts’ estimates. Wall Street expected the early part of this year to be tough for McDonald’s as it runs short of quick fixes for its business in the United States, and bumps up against strong year-earlier results that were bolstered by unseasonably warm weather. McDonald’s forecast for a decline in this month’s global same-restaurant sales suggests a “pretty clear drop off between December (last year) and January (this year),” Morningstar analyst R.J. Hottovy said. Global same-restaurant sales were flat in December, aided by an unexpected 0.9 per cent rise in the United States - its second-largest market for revenue behind Europe. The company’s push to keep more restaurants open on Christmas Day and its shift of the limited-time offering of the popular McRib sandwich to December from October bolstered the December US results. Analysts polled by Consensus Metrix had expected those sales to drop 1.78 per cent. McDonald’s expects near-term top and bottom-line growth to remain pressured in part because the company must top strong results from a year ago, Chief executive Don Thompson told analysts. Last year’s global sales at McDonald’s restaurants open at least 13 months increased 6.7 per cent for January and 7.3 per cent for the first quarter. Fast-food chains like Burger King Worldwide and Yum Brands’ Taco Bell have introduced new US menus and are doing a better job of competing with McDonald’s. At the same time, US consumers have less money in their pockets since the end of the payroll tax cut. “We suspect choppy demand trends and the impact of the loss of the payroll tax deduction (in the United States) are in part to blame” for the company’s downbeat guidance, Lazard Capital Markets analyst Matthew DiFrisco said in a client note. And, in what could signal a troubling “trade-out” trend for restaurants this year, US consumers last month made their biggest spending shift from restaurants to grocery stores since August 2011, ITG Investment Research analyst Steve West said. Fourth-quarter net income at the world’s biggest restaurant chain rose 1.4 per cent to US$1.40 billion, or US$1.38 per share. That topped analysts’ average forecast of US$1.33 a share, according to Thomson Reuters I/B/E/S. Total sales rose 1.9 per cent to US$6.95 billion. To continue to remain competitive, McDonald’s doubled down on promoting its value menus - such as the US Dollar Menu. That effort has pressured profitability, raising concern among analysts.

China economist at Davos predicts growth after ‘soft landing’ (By Associated Press in Davos, Switzerland) Fan Gang, head of China’s National Economic Research Institute. China’s economy is now recovering from a “soft landing”, but the big challenge this year will be to prevent overheating while still promoting growth, the head of China’s National Economic Research Institute said on Wednesday. Fan Gang told a session on China’s growth prospects at the World Economic Forum in this Swiss Alpine resort that the world’s second-largest economy should grow faster this year than it did last year. China posted growth of 7.8 per cent last year, its weakest performance since the 1990s, but its economy started reviving at the end of the year when growth rose to 7.9 per cent, up from the two previous quarters. “Now I can say the ‘soft landing’ has landed last year, and now it’s under way to recovery,” said Fan, whose institute is part of the Chinese government. Now I can say the ‘soft landing’ has landed last year, and now it’s under way to recovery. The recovery would coincide with China’s new leadership. Vice-President Xi Jinping, who was chosen in November to succeed President Hu Jintao as party leader, will take over the presidency in the spring. Fan said growth could be supported by local governors’ plans for infrastructure spending and new housing construction spurred by migration from rural areas to cities. The challenge will be, he said, to see how the central government and the banking system can work together to maintain growth while not allowing the added government spending to promote further heavy borrowing and overheating of investments. If that happens, Fan said, “I do believe that this year China can grow around 8 to 8.5 per cent, and that will lay down a good foundation for the next couple of years”. Fan said 2013 could also be the year to start the new round of financial, economic, regulatory and social reforms that the Chinese are all expecting. “The new leadership is now talking about reform and reform and reform, and restructuring, restructuring and restructuring,” he said. The leaders are calling for recommendations, Fan said. He said “all kinds of people – not only the reformers but also people that want to go back to the planned economy, people that want to go back to the government social welfare” – are submitting ideas. But, Fan said, “we expect the new leadership will mainly keep the direction of reform, in a market-oriented direction”. Hopefully, he said, this will lead to a new round of reform that keeps growth going in the next five to 10 years. Fan said new policies and reforms might be announced at a meeting of the People’s Congress in the fall. He said key reforms needed are in the central government’s relationship with local governments and the markets, the monopoly of state companies and how to promote fair competition, and on social security issues including income distribution and redistribution, and taxation. Wang Boming, editor in chief of the Caijing financial magazine, said the economy did bounce back in the fourth quarter last year “but people are asking, is that sustainable?” He said what was really surprising about last year’s growth of 7.8 per cent was that for the first time, more than half of the growth came from consumption, not exports and investment which have driven China’s economy for the past 10 to 20 years. Wang cited two key reasons for the upsurge in consumer spending – a 100 per cent increase in online shopping last year and an increase in the income of people in rural areas, partly due to high grain prices. He said there was also a little bit of new financial reform and regulation. At another session looking ahead to China in 2020, Li Jingtian, senior vice-president at the Central Party School of the Communist Party of China, stressed the government’s commitment to reform. He also said he was “very confident” of maintaining economic growth, though there will be difficulties because of the international economic environment and determining how to drive internal consumption. Ma Weihua, president and chief executive of China Merchants Bank, said consumption holds the greatest potential because it is still low in China – 35 per cent compared with 70 per cent in the United States. But he said if the government wants to increase spending it needs to address social security issues and income disparities. Xu Xiaonian, professor of economics and finance at China Europe International Business School, said there was too much financial regulation and a clear bias toward state-owned companies. The key question is whether the government has “political will to reform” and not just talk about it, he said. “We have to give freedom to the press and media,” Xu said, adding that that is the only way to know whether the party is serious about reforms. “Otherwise, it’s just lip service,” he said.

Tallest Buddha statue goes up in E China (China Daily) The world's tallest Buddha statue is being built in Xingzi county, Jiangxi province, and is expected to be completed this week. The statue is located at Donglin Temple and is thus called the Donglin Buddha. It is 48 meters in height and is a statue of Amitabha Buddha, the construction foreman said, and it is the first outdoor bronze Buddha in China. The project cost nearly 1 billion yuan ($161 million), and is plated in 48 kilograms of gold. It was totally funded by private donations.

Xi, ROK envoy vow to enhance ties (By ZHOU WA) Ties between China and the Republic of Korea are expected to get warmer under their new leaderships, as the two countries agreed to deepen relations during a meeting between China's top political leader and the special envoy of the ROK's future leader on Wednesday. Party chief Xi Jinping emphasized the importance of maintaining the two countries' strategic and cooperative partnership, as he met with Kim Moo-sung, the special envoy sent by ROK president-elect Park Geun-hye. Park sent her first envoy delegation to China, a deviation from the tradition of her predecessors, who had sent their first round of envoy delegations to the United States, China, Japan and Russia at the same time. The US is usually the first country to meet such an envoy. Observers said that Park's change shows her attempt to balance the ROK's ties with China and the US, and the balance will help ease tensions on the Korean Peninsula. Park said in a letter, which she asked Kim to give to Xi, that she attaches great importance to China-ROK ties and hopes to deepen trust, promote cooperation and further develop the strategic and cooperative partnership with China. Xi said that China also highly values Beijing-Seoul ties and appreciates Park's willingness to deepen the nations' strategic and cooperative partnership. Xi told Kim that China-ROK ties were at a historical starting point with new, important opportunities. China hopes to embrace these opportunities together with the ROK, maintaining high-level exchanges and cooperation in fields including politics, economics and people-to-people communication. During her election campaign, Park said that she will improve the partnership between China and the ROK, as well as maintain her country's alliance with the US. While ROK officials told media earlier that Park plans to pay her first state visit to Washington in May, to further consolidate the ROK-US alliance by strengthening bilateral political, economical and military cooperation. Wang Junsheng, a researcher in Northeast Asia studies at the Chinese Academy of Social Sciences, said Park's decision to send an envoy to China first shows her attempt to find a balance between Seoul's ties with Beijing and with Washington. Improving ties with China can reduce the ROK's dependence on Washington, Wang said, adding that it will also help reduce the tension on the Korean Peninsula, because China can play a positive role, mediating between the ROK and the Democratic People's Republic of Korea. "The special envoy emphasized the importance that Park's government attaches to ties with China and guaranteed that the US-ROK alliance will not be directed against China or harm China's interests," said Zhu Feng, a professor on international affairs at Peking University who held talks with members of Park's envoy delegation on Tuesday. Meanwhile, Xi and Park agreed to make efforts to maintain stability on the Korean Peninsula and keep peace and prosperity in Northeast Asia. It is in line with the interests of both China and ROK, and China maintains to solve the DPRK nuclear issue and realize the denuclearization through dialogue and consultation, Xi said.

Bid to educate Congress about China trade (By Chen Weihua in Washington) As President Barack Obama and Congress settle in for the next go-round of policy debates, the top Washington lobby for US companies doing business in China hopes to focus attention on trade between the world's two economic superpowers. "China and the US Economy: Advancing a Winning Trade Agenda", issued on Wednesday by the US-China Business Council, addresses 10 major issues including US exports, manufacturing, the Chinese currency and China's investment in the US. "China is the United States' third-largest export market,behind only Canada and Mexico, our closest neighbors. China is an important market for many US companies and American workers, but many Americans are unaware of the facts about America's commercial relationship with China," said John Frisbie, president of the council, which represents some 240 US companies that operate in China. China, he said, offers many challenges for the US but also plenty of opportunities. "We have an obligation to current and future American generations to get this relationship right, but that will require us to focus on the real issues," Frisbie said. "America has a great opportunity to build a constructive relationship with China that will benefit our economy and our businesses, workers and farmers across the nation." US exports to China have soared 542 percent since 2000, compared to just 80 percent for US exports to all other countries, according to the USCBC report. During that time, all but two of the 50 states have registered growth in exports to China in triple-digit percentages or more, far outpacing what they sold to the rest of the world. Exports benefit not only US manufacturers but also farmers and a range of service industries, the report said. It counted US-based multinationals as well as small and medium-size companies among the winners. "Even those US imports from China have US content," it said. The business group's report dismisses an often-cited statistic that US manufacturing has lost more than 2.7 million jobs to China since 2001.It said that calculation assumes every product imported from China would have otherwise been made domestically. A more likely scenario is that those goods would have been imported from another country, according to the report. "Maintaining America's manufacturing strength has more to do with our policies and actions here at home than what happens in China," it said. Leading up to November's presidential election, Republican challenger Mitt Romney repeatedly vowed to label China a currency manipulator if elected, but the USCBC report said the dollar-yuan exchange rate doesn't significantly affect US employment or the country's long-standing trade deficit with China. "Some lawmakers on Capitol Hill have made China's currency value the sole focus of attention, despite the fact that it has appreciated more than 30 percent against the US dollar since 2005," Frisbie said. USCBC spokesman Marc Ross said the report aims to inform new members in Senate as well as freshmen members of the House about the benefits and challenges of US-China trade. "The views on Capitol Hill sometimes are one-sided," Ross said. "Everyone recognizes the challenge of doing trade with China, but there are lots of opportunities. "The report really tries to debunk some of the conventional wisdom or misunderstandings about the size of the relationship," he said. Chinese companies investing in the US create jobs, which is why numerous governors and mayors from US states and cities have been seeking Chinese investment, according to the report. Despite the overall trade gap with China, US exports of services enjoyed a surplus of over $15 billion in 2011, with room for substantial growth, the council said. The report also argues that, amid criticism of companies for moving jobs to China, most do business in China to fight for a share of the world's fastest-growing consumer market and that those operations strengthen these companies back home. The report also notes problems facing US companies, however. In its 2012 survey of member companies, the USCBC found that despite market growth, optimism about business operations in China was tempered by domestic competition, continuing regulatory and market-access barriers, and rising costs. It also cited members' complaints of favoritism toward Chinese firms - in administrative licensing, competition with Chinese enterprises, uneven enforcement and implementation of laws and policies, investment restrictions,and assessment of standards and conformity. "Despite tremendous market growth over the last decade, there are significant challenges that American companies face in China and that need to be addressed and need US government leadership," Frisbie said. The report recommends a US "action plan" to address those issues and suggests dialogue with China as a way to resolve them. If negotiations fail, "rules-based" tools, such as cases at the World Trade Organization, should be pursued, provided the action is well-defined, supported by industry and winnable. US Ambassador to China Gary Locke, in a recent talk at the Asia Society in New York, said Chinese and US leaders understand the degree to which their countries are intertwined economically. "So we have to figure out how we get along, not because of our self-interest, but because the history of the Asia-Pacific region will be written by the US and China," said Locke, who is a former US commerce secretary.

Hong Kong*:  January 25 2013

 

Tony Leung dismisses rumours of soured ties with Wong Kar-wai (By Associated Press in Singapore) Tony Leung (left) and Wong Kar-wai attend a press conference before the premiere of their movie 'The Grandmaster' in Singapore, on Wednesday. For a director and actor who have worked together for about two decades, there did not seem to be much chemistry between Wong Kar-wai and Hong Kong actor Tony Leung Chiu-wai at a news conference promoting their new movie The Grandmaster on Wednesday. Wong kept his arms folded most of the time and Leung did not look his way when Wong answered questions from the media. However, Leung, who suffered two broken arms while preparing for the role, dismissed rumours of tensions and unhappiness with his director over having some of his scenes cut. “I don’t harbour any unhappiness or ill feelings toward Wong because I respect and understand his decision,” Leung said in response to a question. “The decision is entirely up to him to decide how his story should be told.” The Grandmaster, which reportedly took 17 years to complete, is Leung’s seventh collaboration with Wong and recounts the life story of Chinese martial arts legend Ip Man, famous for having trained Bruce Lee. “I wanted to see a different Tony for this movie and I believe that The Grandmaster has proven to be a new challenge for him both physically and emotionally with the amount of time taken to film it,” Wong said in support of Leung. “It is a new way of showcasing the character of Ip Man so it was physically challenging for Tony to undergo training for so many years just to prepare for the role.” While the two seemed to be on civil terms toward the end of the news conference while posing together for photos, they still maintained a certain amount of distance. Leung and Wong’s collaboration in the 2000 movie In the Mood for Love won Leung international recognition and the Cannes Film Festival’s Best Actor award. Their relationship is said to have soured when Leung learned that scenes from The Grandmaster had been cut to favour his co-star, Zhang Ziyi, who plays the daughter of his rival. As the co-stars were reported to have filmed their scenes separately, Leung remained oblivious to Zhang’s screen time. Leung also said that his work in the movie served as second fiddle to Zhang’s role. Wong, however, defended his decision to reduce Leung’s film time by saying that Ip Man was a man of few words and thus he felt it necessary to remove as many dialogue scenes as possible. The move prompted Leung’s wife, Hong Kong celebrity Carina Lau, to take to her microblog to criticise her husband’s role in the movie as being a “silent, colourless ghost”. The movie has faced its fair share of obstacles, including Leung developing chronic bronchitis as a result of shooting at least 30 action scenes in the rain. Leung is also believed to have spent three years mastering the martial art of Wing Chun required for the role, and broke his arms twice in the process. But the film’s misfortunes turned into box office success by grossing US$26 million in its opening week in mainland China. It also scored more than double the box office sales of competitor Jackie Chan’s action-comedy CZ12 and went on to gross US$1.04 million in its opening weekend in Hong Kong. Three previous films about the life of Ip Man, which were not released in North America and most of Europe, made over US$36 million. The Grandmaster is to open next month’s Berlin Film Festival, where Wong is to serve as jury president.

Yuan transactions tail off in US, flat growth for year (By Reuters in Hong Kong) Yuan transactions in the United States slid 38 per cent in December from November, making last year a flat year for growth of the Chinese currency in the world’s largest economy, global transaction services organisation SWIFT said on Wednesday. “We expect that most US flows we currently see in RMB are non-trade related and are subject to more variability than countries with strong underlying trade flows like Europe, so this is not unexpected,” Lisa O’Connor, RMB director for the organisation, said in its latest report. As a currency for payments, the yuan, also known as the renminbi, needs to overcome a number of challenges including inertia and systems set up to invoice only in US dollar, she added. Beijing has been stepping up its efforts to promote wider use of its currency globally through bilateral currency swaps and trade settlement deals, aiming for the yuan to match China’s rising clout as the world’s second-largest economy. But analysts say it may prove difficult for the United States to widely adopt the “redback”, since broader use of the yuan as well as the enhanced economic status of China will pose a threat to the world’s No 1 country and its currency. “I don’t think the US has the incentive to help promote the internationalisation of the yuan, since they worry China will become a threat if the yuan can be used more widely,” said Chi Lo, BNP Paribas’ senior strategist in Greater China. As for US corporates, some may also be reluctant to use the yuan if they do not expect rapid development and adoption of the Chinese currency by other companies and countries in the coming years. The United States represented 4.1 per cent of yuan payments by value in December, compared with 6.6 per cent in November (excluding China and Hong Kong), SWIFT data showed. While dollar payments still dominated transactions between the United States and China/Hong Kong, comprising 95.5 per cent of transaction in December, followed by the Hong Kong dollar at 2.7 per cent, Malaysian ringgit 0.9 per cent, Japanese yen 0.4 per cent and Chinese yuan at 0.3 per cent. In December, overall yuan payments fell 4.2 per cent from November, compared with an average 5.7 per cent decline across all currencies. However, the yuan remains the world’s 14th most widely used currency with a market share of 0.57 per cent, SWIFT said. China will steadily push forward market-based liberalisation of interest rate and improve the yuan exchange rate formation mechanism, while expanding the international use of the yuan to gradually realise capital account convertibility of the currency, Premier Wen Jiabao said on Monday.

Chinese opera theatre name sparks fears of ‘mainlandisation’ (By Lai Ying-kit) A model of the new Chinese opera theatre is displayed in the Central Government Offices in December. The use of a Putonghua term as part of the English name of the new Chinese opera theatre that will be part Hong Kong’s multi-billion dollar cultural hub has touched the nerves of internet users concerned about the “mainlandisation” of the facility. As of Wednesday, hundreds of users had posted messages on the social networking website Facebook to express their concerns about the decision to call the facility “The Xiqu Centre”. “Xiqu” represents the Putonghua characters for Chinese opera, a general term that encompasses various forms of opera from many regions. In Hong Kong, the most popular form of the opera is performed in the Cantonese dialect and has many Guangdong-specific features. This version of Chinese opera is commonly known as Cantonese opera to a western audience. The theatre’s English title was first revealed when the government announced the results of a design competition for the opera house on December 10. A cultural critic and assistant professor at Lingnan University, Dr Horace Chin Wan-kan, said the term “Xiqu” was only intelligible to experts, and that general public and a foreign audience would find “Xiqu” difficult to understand. The internet users questioned why the authority would want to use a term largely strange to the city’s local population and international visitors in the venue’s title and were concerned that its use will do little to aid in one of the centre’s key functions, that of promoting traditional Cantonese theatrical arts. Up to 100 users in one Facebook group said they had written to the West Kowloon Cultural District Authority, which oversees the cultural hub, to oppose the use of the term in the centre’s title. “[The authority] uses Pinyin in the theatre’s English name... This raises suspicion that the authorities are trying to play up to or flatter the mainland and sell-out Hong Kong,” said one member of the Facebook group Hong Kong City-State Autonomy Movement. Many online users urged the authority to rename the venue using a simpler, more understandable term in English, for example, the Chinese Opera House. According to the authority, the theatre is a platform for various opera troupes to “interact, develop, produce the finest examples of Cantonese and other Chinese opera performances”, “attract new audiences, educate and collaborate with and host international cultural programmes.” A spokesman for the authority said the term “xiqu” had been used by academics for some years to differentiate Chinese opera from Chinese-language western-style opera. But he said the centre’s English name had not been finalised yet and “The Xiqu Centre” was only a working name. He said the authority would welcome comments from the public on the English name.

Taiwan firm to launch transparent cellphone (China Daily) Serena Chen, Deputy Manager of Polytron technologies, Inc. displays the prototype of a transparent cellphone in Taoyuan City, northern Taiwan, on Jan 21, 2013. Polytron is reportedly hoping that the phone will be on the market by the end of 2013. 

 China*:  January 25 2013

Heavy smog grounds flights at Beijing airport (By Ernest Kao) This picture taken on January 23 shows traffic on a main avenue near Beijing's central business district, covered in thick smog. Heavy smog has cancelled at least 20 flights at Beijing’s Capital International Airport on Wednesday morning. Nearly half of the cancelled flights were international arrivals and departures. These included flights to and from Singapore, Kuala Lumpur, Warsaw and Munich. Eighteen domestic departures were also grounded, according to the BCIA website’s flight schedule, which was last updated at 9.45am. The airport released a statement on its Chinese-language website saying severe haze would affect flight traffic until 10am. It advised passengers to check the local weather report and to contact their airlines for the latest flight arrangements. The US embassy’s air pollution index reading for PM2.5 – or respiratory particulates smaller than 2.5 micrometres in diameter – stood at 434 per cubic metre that morning, a level considered to be hazardous. The Beijing Meteorological Bureau issued a yellow alert for heavy fog on Tuesday, indicating visiblity had fallen to less than 100 metres. Similar air and weather conditions have affected air traffic across northern China in the previous three weeks. On Sunday, Beijing issued an orange fog warning after visibility had fallen to less than 200 metres. Ten flights were cancelled the following day. Flights were also affected in Hebei, Hunan, Yunnan, Guizhou, Zhejiang, Jiangsu, Jilin, Heilongjiang and Sichuan provinces, with visibility reduced to about 100 metres at some airports. Heavy snow over the weekend forced the cancellation of 111 flights at BCIA, 16 of which were international. Nearly 70 flights were delayed on Sunday morning.

U.S. launches Section 337 probe on Chinese paper shredder producers (By Xinhua) The U.S. International Trade Commission (USITC) on Tuesday initiated a Section 337 investigation on eight Chinese and one U.S. producers of paper shredders. The probe is based on a complaint filed by Fellowes, Inc., of Itasca, Illinois and Fellowes Office Products (Suzhou) Co., of Suzhou, China, in late December 2012, said the USITC in a statement. The accuser claimed Section 337 violations involving patents infringement and misappropriation of trade secrets, and requested an exclusion order and cease and desist orders, according to the federal bipartisan panel. The institution of the investigation does not mean the USITC has made any decision on the merits of the case. Within 45 days the body will set a target date for completing the investigation. Should the complaint be approved, the panel will issue remedial orders, such as a ban on importation of accused products. The United States has launched several antidumping and Section 337 investigations against Chinese products in recent months. The Chinese Ministry of Commerce has repeatedly urged Washington to abide by its commitment against protectionism and help maintain a free, open and just international trade environment.

Ministry proposes more mergers in key industries (By Wei Tian) Measures aim to increase global competitiveness and efficiency - Companies across nine of China's key industrial sectors are being encouraged to increase their merger activities in an effort to become more competitive overseas, and more efficient. According to a document released on Tuesday by the Ministry of Industry and Information Technology, jointly with 11 other ministries, the "guideline for merger and reorganization of key sectors", also proposes various industrial fine-tuning measures to cut, for example, price competition and surplus production, and the duplication of research and development. A shipyard in Yichang, Hubei province. The shipbuilding industry is being encouraged to improve efficiency and trim surplus production capacity, according to a document released on Tuesday by the Ministry of Industry and Information Technology. The industries being targeted are steel, automotive, cement, shipbuilding, electrolytic aluminum, rare earths, electronic and information, pharmaceutical, and industrialized agriculture. "A common feature of these nine industries is their economies of scale," said Zhu Hongren, chief engineer of the MIIT. However, he said these sectors also have defective structures, isolated enterprises, and lack sector leaders, which results in problems such as duplicated development activities, surplus production and vicious price competition. "Promoting mergers and reorganizations will help improve the efficiency of resource allocation, adjust and optimize industrial structures, and improve the global competitiveness of key enterprises," he said. In the automotive sector, for instance, the new guidelines call for the production of the top 10 automakers to account for 90 percent of the industry's total amount. The guidelines also promise to create three to five large auto corporations that will be encouraged to focus on exploring global markets.

Hong Kong*:  January 24 2013

Opera Hong Kong celebrates 10th anniversary (By Vanessa Yung) From left: Opera Hong Kong's Warren Mok, with Lui Che-woo, Edward Ho and Tsang Tak-sing - Vinny Chu, Jimmy Tang and Pauline So - Joy Chung and Lynn Hsieh - Under the artistic direction of Warren Mok Wah-lun, Opera Hong Kong has energised the local opera scene by organising a number of operas, concerts and youth education programs. The tenor co-founded the troupe in 2003 as the city's first professional opera company and it celebrated its 10th anniversary this year with a gala concert on Sunday at the Cultural Centre in Tsim Sha Tsui. Mok sang a wide repertoire of works, alongside other well-known singers such as Shen Yang, Jennifer Rowley, Nancy Yuen, Aurhelia Varak and Gong Dongjian. There were performances of songs from the classics, including Carmen, Don Giovanni, La Bohème, Madama Butterfly, The Tales of Hoffmann and Turandot. Perry So conducted The Hong Kong Philharmonic, while Opera Hong Kong's chorus and children's chorus also joined in. Guests included property tycoon Lui Che-woo and wife, Lynn Hsieh Ling-ling, and the chairman and chief executive of Prince Jewellery & Watch, Jimmy Tang Kui-ming.

Jockey Club tempts revellers with lucky Lunar New Year bonanza (By Charley Lanyon) TV stars Wayne Lai and Liza Wang - Veteran DJ and celebrity chef So Sze-wong - Fung shui master Mak Ling-ling, Celebrities, jockeys and equestrian sport fans descended on the Happy Valley racecourse for the Jockey Club's announcement about plans for a lucky Lunar New Year. The festive season is considered auspicious and Hongkongers have long celebrated it with a visit to the track. In order to ensure festive revellers continue to attend the races, and have the best luck possible, the Jockey Club is pulling out all the stops for the Sha Tin race day - from a propitious menu featuring dishes with especially lucky names, to appearances from celebrities such as television stars Liza Wang Ming-chuen and Wayne Lai Yiu-cheung, to a multimillion-dollar jackpot. Celebrity chef So Sze-wong will also be mingling in the crowd on the big night, which is set for the third day of the holiday, February 12. On Monday, he walked hungry spectators through the menu. Fung shui master Mak Ling-ling was there to share some tips for race day: the lucky numbers are three, six and eight; the lucky colours are yellow and gold; the luckiest time to gamble is 11am to 3pm.

Norman Chan pitches Hong Kong yuan services in Dubai (By Enoch Yiu and Anita Lam) HKMA chief urges region's fund managers to take heed of mainland's currency expansion - HSBC's Anita Fung says slower rise in yuan normal. Monetary Authority chief executive Norman Chan Tak-lam and top Standard Chartered executives yesterday met more than 150 businesspeople in Dubai to pitch Hong Kong's yuan services. Although the yuan is not fully convertible, Beijing has since 2009 encouraged the use of the currency for trade settlements and investment services. In the past two years, the HKMA has been holding similar roadshows in Britain, the United States and Australia to promote Hong Kong as the leading offshore yuan trading centre. Chan said this would be the first time such a promotion had been attempted in the Middle East. "Trade activities between the [United Arab Emirates] and China have grown more than 10 times over the past decade, from less than US$3 billion in 2001 to US$37 billion in 2011. China is the UAE's second-largest non-oil-trading partner and the second-largest source of the UAE's imports," he said. "The greater use of yuan in bilateral transactions will provide further impetus for trade and investment links between China and the Middle East to expand in the times ahead, which will be mutually beneficial." Chan also said that as China was in the process of encouraging more international usage of the yuan, this would provide fund managers in the Middle East the opportunity to diversify their investment portfolio. Standard Chartered executives teamed up with the HKMA to arrange the Middle East roadshows. The lender is one of the most active banks in Hong Kong expanding its footprint in the yuan business. Jonathan Morris, the chief executive of Standard Chartered UAE, said: "In the UAE, Standard Chartered has been at the forefront of supporting the increasing needs of our corporate, SME [small and medium-sized enterprises] and financial-institution clients with links to China. This event comes at an ideal time, when the yuan is increasingly becoming an international trade and reserve currency." Morris said that over the past few years, Standard Chartered had witnessed a significant increase in demand for yuan services in the UAE, and the bank expected demand would continue to grow in future. Meanwhile, HSBC said it expected dim sum bond issues and certificates of deposit to reach up to 360 billion yuan (HK$448.4 billion) by the end of this year despite a slowdown in the growth of yuan-denominated bond issues. The bank also said it expected the yuan to appreciate 1 per cent by the end of the year. Chief executive Anita Fung Yuen-mei said the slowdown in appreciation was normal as the conversion rates of yuan and other currencies had more or less reached a state of "structural equilibrium". Fung said that with further loosening of the yuan's convertibility and greater demand worldwide, the yuan would soon replace sterling as the third-most popular currency for global trade settlement. The bank expects a third of the mainland's merchandise trade to be settled in yuan by 2015, compared with 10 per cent now. The HKMA said yesterday the city's yuan deposits stood at 700 billion yuan at the end of last month, up 5 per cent from a year earlier and 10 times the figure in 2009.

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Operation Santa Claus raises record HK$18.8 million (By Lo Wei) Generous Hongkongers and companies have dug deeper for the yearly fundraiser and the money will benefit 18 charitable organisations - Operation Santa Claus' quest to raise a record amount for charity in its 25th anniversary year falls into place with help from Regina Leung Tong Ching-yee, wife of Chief Executive Leung Chun-ying, at a ceremony at the Grand Hyatt yesterday. Leung was given the honour of inserting the final figure in a display confirming that the South China Morning Post and broadcaster RTHK's annual charity drive had raised almost HK$18.8 million. Bryan Curtis, Herve Mazella, Robin Hu, Cardinal Joseph Zen, Regina Leung, Roy Tang and Phil Whelan yesterday. Hongkongers have once again dug deep for the Operation Santa Claus campaign - and helped celebrate its 25th anniversary in style, raising a record-high HK$18.8 million for the needy. From corporate high fliers to schoolchildren, participants have enjoyed plenty of laughs along the way too - some have even shared the joy face-to-face with campaign beneficiaries. "Hong Kong has always been an example of caring and generosity. I'm sure we'll always keep this marvellous virtue," said officiating guest Cardinal Joseph Zen Ze-kiun at a ceremony to mark the end of the campaign at the Grand Hyatt hotel yesterday. "Operation Santa Claus is a successful initiative of displaying love. It is our duty to care for others, donate what we can, and even sacrifice what we would have wanted for ourselves." The campaign is organised by the South China Morning Post and RTHK. Post chief executive Robin Hu said it was close to the newspaper's heart: "It is all about doing things right, doing it with love - and accurately. This year's participation was brilliant." Bryan Curtis, head of English programming at RTHK, said it was a successful combination of different people coming together to raise funds - and the two media organisations telling their stories to inspire donations. The campaign has raised HK$188 million since inception - through the generous support of corporations, organisations, schools and individuals - and supported 176 charity projects. It began in 1988, when HK$101,000 was raised for a single charity. The project has expanded each year, raising a record HK$17.5 million last year. The funds will go to 18 charitable organisations. Each will submit a progress report in July, and another when their sponsored projects end, to the OSC beneficiaries' selection committee. Many of the campaign's long-term supporters went the extra mile this year to raise even more than in previous years. Among them was Morgan Stanley, once again the top fundraiser. Its charity bake auction and the dulcet tones of its directors' choir singing Christmas carols raised HK$2.5 million. The top school fundraiser was the Discovery Mind Kindergarten, which raised HK$150,000 with a sponsored charity walk. Cathay Pacific won the most creative fundraiser award for a flash mob dance staged by cabin crew which raised HK$20,000. RTHK director of broadcasting Roy Tang Yun-kwong gave special thanks to community groups that organised the Wing Ding Squash Tournament and Five-a-Side Football Tournament, both of which are long-time donors. The latter event was largely supported by CBRE.

Hong Kong to spend HK$31b to solve waste crisis (By Cheung Chi-fai) Seven-year blueprint confirms controversial incineration project remains top priority, with recycling measures and landfill expansion - Trucks at the South East New Territories Landfill at Tseung Kwan O - now further landfill expansion is being planned. Hong Kong will spend at least HK$31 billion on waste-handling infrastructure in the next seven years, it was revealed yesterday. And included in the measures will be a bitterly contested plan for an incinerator put forward by the previous administration, which has been stalled by opposition in Legco and the courts. Moves spelled out yesterday by deputy environment minister Christine Loh Kung-wai gave the first clear indication that incineration remained a priority as the government seeks an ultimate solution to the city's waste crisis. But the target date for commissioning the waste-burner - 2021 at the latest - is about three years later than proposed by the previous government. Loh also gave no indication whether the proposed site had been changed and outlined plans for food-waste disposal, recycling and landfill expansion - which are also contentious issues. Secretary for the Environment Wong Kam-sing said it would be irresponsible to leave discussion about an incinerator out of any debate over waste, although reduction remained the priority. "We need to look at what the incinerator's role is holistically, how big it needs to be and what technology can be used," he said. Environmentalists and residents were outraged by the previous government's plan for the incinerator on Shek Kwu Chau, an island between Cheung Chau and the Sokos. Lawmakers rejected a funding request for the incinerator and for landfill expansions last year. The incinerator has also been challenged in court and a verdict is pending. Hong Kong is at the crossroads in dealing with its mounting waste crisis. Its waste-generation rate is more than a third higher than cities such as Taipei and Seoul, and its landfills - now the only means of disposal - will be full by 2019. Loh said at a forum organised by a media group: "Between now and 2020, Hong Kong will have to invest HK$31 billion plus in hardware. We need to continue these investments and we can't run away from it. "And after the HK$31 billion, we might spend some more." She said the food waste "hardware" would be ready between 2015 and 2017. Preparations for product responsibility schemes, recycling and landfill expansion would be complete between 2014 and 2020. A timeframe of 2020 to 2021 was given to the waste-to-energy incinerator for solid waste. If endorsed, it would mean a decision would have to be made as a soon as next year. Last year, Environmental Protection Department officials put the cost of two landfill expansions at more than HK$8.3 billion and an organic waste treatment plant at HK$500 million. A 3,000-tonne incinerator would cost HK$14.9 billion. Loh also said that consultation would start soon over a scheme to charge importers up to HK$1 for wine and beer bottles made from glass. Friends of the Earth director Edwin Lau Che-feng said the new government appeared to understand the urgency of the problem. "We have wasted many years and failed to move forwards," he said. But Lau questioned whether officials should review the planned siting of the incinerator on the island. He suggested that using a site in Tuen Mun would mean the waste-burner could be completed two years earlier and would also cause less environmental damage. Martin Williams, an opponent of the island project, said an incinerator was "only a glorified bonfire" with toxic emissions. But he said the new government was more open in discussing the issues, including the incineration technology.

Award-winning French baker, Eric Kayser, opens first restaurant in HK (bY Vanessa Yung) Arnaud and Elisa Barthelemy, and Eric Kayser. A dream Eric Kayser had when he was barely out of diapers revealed what he would do with his life. "When I was three years old, I saw my life, in a dream as I slept, that I would become a baker and patissier and travel around the world," the Frenchman said. His family had been bakers for three generations. He got his own start at 16 and went on to receive several awards. He taught at France's National Institute of Baking and Patisserie for almost a decade and started his own bakery in 1996. Unsurprisingly, he is nicknamed "the world ambassador of French bread". There are now more than 80 Maison Kayser in 15 countries, making artisanal bread using the Fermentolevain, a machine he developed with friend Patrick Castagna that keeps liquid yeast at the ideal temperature. Kayser travels a lot, just as he foresaw in his dream, in order to check on his many shops. Last Wednesday, he launched his first outlet in the city. Featuring a grab-and-go shop with a variety of bread and pastries, the venue in Tsim Sha Tsui's Harbour City also has a spacious restaurant serving French dishes. Kayser said the menu included spaghetti, which he loves. But at the end of the day, it's mostly about the bread. "Bread is always the star," he said. "For example, we're starting a burger made with a croissant, which has a special taste."

 China*:  January 24 2013

China holds competitive edge (By Zheng Yangpeng) Despite rising labor costs and an aging population, China is still regarded as the top destination for manufacturing, and will retain this top spot over the next five years, according to an international survey released on Tuesday. The survey, co-launched by Deloitte Touche Tohmatsu Ltd and the United States Council on Competitiveness, was based on interviews with more than 550 chief executive officers and senior leaders at manufacturing companies around the world. Germany and the US came after China in terms of manufacturing competitiveness. But they will be replaced by India and Brazil over the next five years, according to the survey. Ricky Tung, co-leader of the manufacturing industry group of Deloitte China, said the CEO ratings seem to suggest China is becoming more of a developed economy competitor than its emerging economy counterparts. "In addition to supportive policies, China still has relatively lower labor costs and is above average in the attractiveness of its corporate tax rates. With its focused efforts to localize supply chains and create innovation hubs, China is also seen by CEOs as the only emerging economy offering the same supplier network advantages as developed economies." But some Chinese experts and exporters are more pessimistic about the future of the nation's manufacturing sector, citing rising wages, an aging labor force and a rising exchange rate. Zhou Shijian, a senior trade expert at Tsinghua University, said the top spot was an "overestimate". He said that Chinese manufacturers are losing their competitive advantage. "When I talked with a diplomat recently, he told me that Chinese products used to close in that of the Japan and South Korea. But now it is Southeast Asian nations' products closing in ours," Zhou said. The renminbi's appreciation against the US dollar is particularly negative for Chinese products' competitiveness, Zhou added. Exporters in China's eastern provinces are suffering from a labor shortage, with factory owners often complaining about their high staff turnover rate. At a news conference on Friday, Ma Jiantang, head of the National Bureau of Statistics, said China's working-age population fell 3.5 million to 937 million in 2012. Rising labor costs are a direct result of the nation's shrinking labor pool. According to the Japan-China Economic Relations and Trade Center, the average monthly wage for a worker in Guangzhou is 1,850 yuan ($295), while it is 752 yuan in Vietnam. In the survey, global CEOs rated Vietnam and Indonesia as rising competitors of China, ranking them 10th and 11th respectively. A more telling fact is the decline in foreign direct investment. Total FDI flowing into China fell 3.7 percent in 2012 to $111.72 billion, according to the Ministry of Commerce. This is the nation's first annual decline in FDI since 2009, shortly after the outbreak of the global financial crisis. Manufacturing FDI took an even greater hit in 2012, dipping by 6.2 percent. Well aware of the trend, many foreign companies have started to invest in other emerging markets to hedge their China exposure. Many Japanese companies are adopting a "China plus one" strategy, a policy of managing risk by locating plants and facilities in China and one other Asian nation. According to a Reuters survey, 37 percent of Japanese companies said they had grown more cautious toward using China as a production hub over the medium term. But there are still optimistic voices insisting that China's advantages remain apparent. "China may lose its edge in low-end manufacturing, but is still very competitive in medium- and high-end manufacturing," said Li Yushi, vice-president of Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce. Li, who is a guest economist of China Daily, said Chinese workers are more skilled and have a stronger work ethic than their counterparts in many emerging economies. Andrew Heath, director of international marketing division of Shenyang Machine Tool Co Ltd, China's largest machine tool producer, said China's manufacturing strength lies in its established supplier network. "Those who are talking about relocating do not know the basics of business. It is not so easy to relocate plants," he said. "We need to have natural resources. We have to purchase and have a supply chain. And we have the huge market. Why would I move?" The service industry is another potential growth point for FDI flowing into China, and an area that could absorb workers laid off from manufacturing companies. Despite the drop in manufacturing FDI, China's service sector saw an increase of 4.8 percent in its FDI in 2012.

China says top 10 steel mills to control 60pc of capacity by 2015 (By Reuters in Beijing) The Chinese government has unveiled a blueprint to rationalise its steel industry over the next two years. China, the world’s largest steel producer, aims to bring around 60 per cent of total steel capacity under the control of its top 10 steel mills by 2015 as part of a wide-ranging plan to restructure its industries. The Ministry of Industry and Information Technology (MIIT) announced on Tuesday it would encourage big state firms to acquire smaller rivals in a variety of industrial sectors, including automobile and machinery manufacturing as well as agriculture, metals and cement. It said it would also seek to bring 90 per cent of automobile production under the control of its top 10 firms by the end of 2015 as well as 90 per cent of aluminium production capacity. The government also plans to cut the number of firms involved in the exploration, smelting and separation of rare earths over the next three years. Around half of China’s total steel capacity is now owned by the 10 biggest steel firms following previous restructuring programmes, but Beijing has struggled to overcome obstructionism and red tape from local bureaucracies, or change the economic incentives that have allowed small and private mills to thrive. “It is still quite difficult to consolidate and the key issue remains the local governments -- they remain big supporters of steel mills,” said Henry Liu, head of commodity research at Mirae Asset Securities in Hong Kong. Overcapacity has been identified as one of the biggest problems facing the sector and the reason why profit margins remain perilously thin. Chi Jingdong, vice-secretary general of the China Iron and Steel Association, told a conference in December that total steel capacity now stands at 980 million tonnes -- a surplus of nearly 300 million tonnes. China said last month that it would also winnow down the number of small and private mills by raising environmental requirements, forcing steel producers to improve efficiency and install new equipment. According to new guidelines included in a “five-year plan” to combat pollution, steel mills will not be permitted to build new capacity in 47 large cities, including Beijing, Shanghai, Tianjin and Chongqing. While the new rules are likely to increase environmental costs, the majority of small and profitable private mills are likely to have the resources to upgrade and -- if necessary -- relocate, but most have already done so, said Liu. Analysts say market forces are likely to be the determining factor in the end, and while the faltering economy has hurt the industry, officials have said it could also be a blessing if it puts the minnows under more pressure to restructure. But Liu said conditions were still not bad enough to force some of the smaller players out of business. “Even though we talk about the economic slowdown, the steel mills are fine -- they are still making a decent return.”

Huawei set to beat Ericsson (By SHEN JINGTING) Visitors try devices made by Huawei Technologies Co Ltd at the International Consumer Electronics Show in Las Vegas on Jan 8. The Chinese telecom equipment maker is expected to report sales revenue of 220 billion yuan ($35.4 billion) in 2012. Huawei Technologies Co Ltd is poised to become the world's biggest telecom equipment maker by revenue, beating Sweden's Ericsson AB. The Chinese company expects its 2012 sales to rise 8 percent year-on-year to reach 220 billion yuan ($35.4 billion). Ericsson is scheduled to report its earnings at the end of the month. However, analyst estimates compiled by Bloomberg News suggest that it will likely post 2012 sales of 226.9 billion Swedish kroner ($34.8 billion), little changed from 2011 figures. Huawei beat Ericsson for the first time in July 2012. The company reported that month that its first-half revenue was $16.1 billion, about $850 million more than Ericsson's first-half sales. Cathy Meng, chief financial officer of Huawei, said at a news conference in Beijing on Monday that the company expects its net income to climb 33 percent to 15.4 billion yuan in 2012. "Huawei achieved effective growth in 2012 by focusing on customers, streamlining management and improving efficiency," Meng said. She added that Huawei expects its overall revenue to grow between 10 percent and 12 percent in 2013. The event was the first media briefing for Meng, 40, the daughter of Huawei founder Ren Zhengfei. She said Huawei's three business groups — the carrier network business, consumer business and enterprise business — achieved performance in line with expectations. The carrier network unit recorded sales of 160.3 billion yuan last year. Sales for the consumer business unit reached 48.4 billion yuan, and sales for the enterprise business unit were 11.5 billion yuan, Meng said. "The troubled economies of Europe and North America curbed telecommunications spending, which had a negative impact on Ericsson's performance," said Ji Chendong, a telecom analyst at KPMG. Meanwhile, Huawei expanded to new areas such as mobile phone manufacturing and enterprise IT solutions. In contrast, Ericsson tried to focus on the telecom network business and exited from a mobile phone joint venture with Sony Corp, Ji said.

China's vehicle exports top 1-million mark for first time (By LI FANGFANG) China's vehicle exports topped the one-million mark for the first time in 2012. The latest statistics from China Association of Automobile Manufacturers show that the country delivered a total of 1,056,100 units abroad in 2012, a 29.7 percent rise on 2011. Though the year-on-year growth slowed to 30 percent from 50 percent in 2011, the rate is still much higher than the 4.3 percent increase for the domestic market. Passenger cars accounted for 45 percent of the exports while trucks accounted for 27.9 percent, said the association. The figures mean that China's vehicle exports have increased by an average of 46.3 percent year-on-year since 2001, when there were just 19,000 units exported. Chinese automakers Chery Automobile Co Ltd and Zhejiang Geely Holding Group both saw exports of over 100,000 units in 2012, making them the top exporters, followed by Great Wall Motors Co Ltd, SAIC Motor Corp Ltd and Chongqing Lifan Industry (Group) Co. Statistics from the General Administration of Customs show that in the first 11 months of last year, the revenues of China's total vehicle exports increased 8.6 percent year-on-year to $67.82 billion. During 2012, China's domestic automobile sales jumped 4.3 percent over the previous year to 19.31 million units. Within those sales, total sales of China's homegrown passenger vehicles stood at 6.49 million units, accounting for 41.9 percent of the sector. The share of domestic brands in the passenger vehicle market dropped by 0.4 percentage point from a year earlier. Analysts said the slowing market at home had forced many Chinese carmakers to look abroad. But Zhao Ying, a professor at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, said that the latest export figures showed that domestic brands had started increasing their profile and reputation globally, and that further overseas expansion will naturally mean they will raise their quality standards and their levels of technology. "These rapidly increasing overseas sales should emphasize the growing importance of exports in their long-term development strategies," said Zhao. Anhui-based Chery, which has maintained its leadership in vehicle exports among Chinese automakers for the past seven years, said that it expects its overseas sales to surpass 200,000 units in 2012. During the first 10 months of last year, the company had exported more than 164,000 vehicles to more than 80 countries. It had also established 17 manufacturing bases in 15 countries in five continents by the end of 2012. Chery's exports have surged by 163 percent annually on average since 2001 to 160,200 units in 2011. China's privately owned automaker Geely said that its exports surged 164 percent year-on-year in 2012, making it one of the fastest-growing players in the sector. Geely, the parent of Swedish luxury brand Volvo, exported 100,300 units overseas during the year, including 11,000 units in December alone. The company said that 40 percent of its total exports were attributed to its premium brand Emgrand, with sales of more than 40,000 units overseas. Zhao Ying added that he considers the current booming overseas sales as just the start, given the ambitions of many companies to expand their businesses into fast-developing countries, such as Russia, Algeria, Iraq, Iran and Chile. The establishment of manufacturing bases in many overseas markets will help increase Chinese auto sales abroad. Chery, Geely, Jianghuai Automobile Co Ltd, Beiqi Foton Motor Co Ltd and Chang'an Automobile Group all have plans to build production bases in Brazil, for example, which is considered the world's fourth-largest automobile market.

Hong Kong*:  January 23 2013

Christine Loh offers time frame for cleaner fuel law for ocean vessels (By Phila Siu) Cruise ships could see change next year, but power facilities at Kai Tak will take longer - Christine Loh said people's health was a priority. It will take several years for the government to introduce onshore electricity power facilities at the Kai Tak cruise terminal but a law requiring ocean-going vessels berthing at the city to use cleaner fuel can be in place next year at the earliest. Undersecretary for the Environment Christine Loh Kung-wai made these remarks at a forum yesterday when challenged by green activists about emission levels after the Kai Tak cruise terminal opens in June. According to the think tank Civic Exchange, vessels visiting Ocean Terminal emitted 252 tonnes of sulphur dioxide in 2007 - comparable to the 286 tonnes of vehicle emissions in Hong Kong in 2010. Loh said the government planned to build onshore electricity facilities for cruises berthing at the Kai Tak terminal as soon as possible, but it could take several years. She said the government first needed to draft a proposal, which then has to be passed by the Legislative Council's environmental affairs panel and the Finance Committee. The next step would be to invite a tender. The whole process would take several years, she said. Explaining why the government had not introduced the measure before now, Loh said: "There had been no international standard on how it should be done until around the middle of last year. Now that we know how to do it, it [the standard] will be very useful to us in the future." Loh also said that the government planned to introduce a law next year at the earliest requiring all ocean-going vessels - not just cruises - to use fuel with a cleaner sulphur content when in the city. Hong Kong would be the first city in Asia to have this law if it were passed, although some European countries already had it, Loh said. "We are determined … we need to protect Hongkongers' health," she said. Other speakers at the forum, including Friends of the Earth's senior environmental affairs officer Melonie Chau Yuet-cheung, agreed these two measures needed to be taken. But they wanted more to be done as the Kai Tak cruise terminal will open in June, meaning there will be a "time gap" in between. "Vehicles do not generate the most pollution. They are only the third on the list. Topping the list are the vessels," Chau said. Labour sector lawmaker Kwok Wai-keung, from the Federation of Trade Unions, said the situation was "worrying", and suggested that the government charge a higher fee for vessels using more polluting fuel than those using cleaner fuel when they berth at the city. Loh said that the government had introduced a programme in which vessels switching to low-sulphur fuel could get a 50 per cent reduction on port and navigation charges. She also said that there was already a voluntary scheme, the Fair Winds Charter, under which vessel operators agreed to switch to low-sulphur fuel to the maximum extent possible for two years from January 2011. The public should not underestimate the effectiveness of these programmes, Loh said.

 China*:  January 23 2013

China labour camps set to be abolished, legal official confirms (By Agence France-Presse in Beijing) China’s hugely controversial “re-education” labour camps are set to be abolished this year, state media quoted a senior legal official as saying on Monday. It is another signal that the widely criticised system – where people can be sentenced to up to four years’ re-education by a police panel, without an open trial – is coming to an end. The comments come after the Communist Party’s newly installed leader Xi Jinping said the organisation recognised as a “pressing problem” that it was “out of touch with the people”. Opponents say the camps are used to silence government critics and would-be petitioners who seek to bring their complaints against officials to higher authorities. Earlier this month reports emerged briefly that the system – known as laojiao – would be abolished, but they were swiftly deleted and replaced with predictions of reforms, with few details and no timetable. Chen Jiping, deputy director of the China Law Society, was quoted by the China Daily as saying that a key meeting had agreed to limit use of the system tightly until it could be scrapped by China’s rubber-stamp parliament, the National People’s Congress (NPC). It added in reported speech that he described laojiao as having “made its contribution at a time when the Communist Party of China was consolidating the republic and rectifying social order, but now China has well-established legal systems”. “Ending the system requires the approval of the top legislature which originally endorsed laojiao in 1957,” the paper said. The NPC is due to meet in March. Currently, people sentenced under the laojiao system are forced to perform manual labour such as farm or factory work, but do not receive a criminal conviction. Authorities will need to replace it with alternative punishments for those accused of petty offences, the paper added. “Chen’s remarks suggest offenders are likely instead to get a court hearing, short-term detention or a fine,” the newspaper said, citing “experts”. The scheme has faced growing criticism for being open to abuse and public anger has previously erupted over sentences deemed too harsh. In a case which shocked the nation, Tang Hui, a mother whose 11-year-old daughter was abducted, raped and forced into prostitution, was sentenced to 18 months of laojiao after she demanded death penalties for seven men convicted in the case. The 40-year-old also accused two police officers in her home city of Yongzhou, in the central province of Hunan, of being complicit in the crime. She was released within a week following public outrage. Party officials visited Tang on Friday as part of an investigation into the decision to punish her. She is claiming compensation. Earlier this month, the official microblog of the CCTV state news channel quoted Meng Jianzhu, a member of the powerful 25-strong Politburo who oversees politics and legal affairs, as saying that China would stop using the system. The reports were quickly removed, but the following day the China Daily said the government “will push reforms”. At the time news of the changes was widely welcomed on China’s hugely popular microblogging sites.

Americans keep coming back for more of China (By Caroline Berg in New York) These days, everyone's talking about China, with more Americans traveling to China for business and leisure than ever before. According to a study by the Office of Travel and Tourism Industries at the US Department of Commerce, the number of US tourists traveling to China rose dramatically from 562,000 in 2003 to 1.067 million in 2004, and in 2012, the number was around 1.5 million. "Prior to 2004, China really didn't have a tourism marketing presence in North America," said Paul Cohen, president of travel marketing company Partner Concepts. During a seminar on the weekend at the New York Times Travel Show in New York, Cohen cited the 2008 Summer Olympics in Beijing and 2010 World Expo in Shanghai as the driving forces behind China's rising popularity as a tourist destination. "It wasn't too long ago that people knew nothing about China," said Mark Grundy, president of Wendy Wu Tours. "But now, when you turn on the news or watch television, pretty much every day you hear something about China, and invariably most of it is positive." Increasingly, Grundy said, he finds his clients return for a second, third or even fourth time to China. "China was once considered a one-time trip," Grundy added. "But people go, they see it's a beautiful country with so much to do and explore, and they want to go back." According to Cohen, emphasis is now shifting toward promoting the nature, outdoors and adventure sides of China. Locations growing in popularity include national parks, such as Jiuzhaigou "Valley of Nine Villages" in Sichuan province, and also the mountains and forests of Zhangjiajie in Hunan province, made famous by the Hollywood blockbuster Avatar. Apart from the culture, ecology and history found in China's distinct provinces and regions, Grundy believes it is the general welcoming nature of the Chinese people that really makes the country shine. "When you're just out on the street, the Chinese people will come up to you and engage you," Grundy said. "They're very friendly people and they like talking with you." LaDonna Allen, sales manager for Nexus Holidays, which specializes in China travel packages, believes the most important marketing tool has been the rave reviews generated by travelers. "You can tell that all of the local Chinese people are really friendly to travelers," Allen said, adding that the constant reinforcement of their friendly atmosphere for travelers helps spread the word back home. China is also regarded as a compelling travel destination because it is more affordable than the average European trip, while still offering an eclectic range of tour options. "From a travel agent's perspective, I can book you a $699 cruise out of Venice and do Europe, but I've got to get you to pay $2,000 in airfare to get you there first, whereas in China I can send you on a really great tour for 12 days for $2,299 complete with airfare out of the west coast," said Allen, who has spent 23 years as a travel agent. "It's a phenomenal difference."

Hong Kong*:  January 22 2013

Outsized jewels attract biggest stars at Bulgari's Hong Kong anniversary bash (By Charley Lanyon) Bulgari's Francesco Trapani joins film stars Michelle Reis and Cha Seoung-won at the event. How time flies. Central's Bulgari flagship store celebrated its 10-year anniversary on Thursday night with cocktails, canapés, a black tie dinner, and a raucous party afterwards at the Hong Kong Maritime Museum. In honour of the occasion, Bulgari displayed jewellery worn by the actress Elizabeth Taylor, including a brooch and ring that she wore on her wedding day to Richard Burton, and necklaces with stones so large they would be impossible to find in jewellery stores today. Obviously big stars were needed to compete with the outsized jewels and Bulgari did not disappoint. Adrien Brody and Hilary Swank both made the trip all the way from Hollywood. Brody was in fine form, charming and dashing as ever. He seemed to fit in nicely in Hong Kong and was clearly enjoying himself at the after-party. In fact, although his planned stay was coming to an end, he was already considering extending his trip to spend a few more days exploring. The party lasted well into the night. Thanks to Gena West, one of Britain's favourite jazz and gospel singers, guests were in high spirits and even as the clock struck 12 they showed no signs of wanting to turn in.

Abe's adviser blasts China in barbed Hong Kong speech (By Chow Chung-yan) Abe aide's address read out at HK forum accuses Beijing of using force in islands row - Pan Zhenqiang. Japan's top foreign policy adviser, in an inflammatory speech delivered at a regional forum in Hong Kong yesterday, accused China of asserting a territorial claim by force and breaching the international order. Yachi Shotaro's speech, read on his behalf by a former Japanese official, at the third Sino-US Colloquium, was immediately rebuffed by Chinese participants. Retired People's Liberation Army major general Pan Zhenqiang, now a government adviser, described Yachi's statement as "very rude and arrogant", and warned Tokyo to treat China as an enemy at its peril. The fiery exchanges came as Chinese Foreign Ministry spokesman Qin Gang yesterday expressed "strong discontent" about comments by US Secretary of State Hillary Rodham Clinton over the Diaoyu Islands. Clinton said earlier that the United States acknowledged Japan's control of waters near the disputed island although it did not have a stance over who had ultimate sovereignty. This is the first time that Japan has sent delegates to the annual forum, organised by the China Energy Fund Committee in Hong Kong. Among its speakers were two former US four-star generals, one PLA general and two former Japanese commanders, as well as top thinkers and government advisers from the three countries. All attention was on the speech by Yachi, widely believed to be the architect of Prime Minister Shinzo Abe's foreign policy and who was recently appointed a special foreign adviser. Yachi did not attend the talk in person but wrote the speech read by Takujiro Hamada, a former deputy foreign minister of Japan. Yachi warned China to be careful of its behaviour or risk being isolated by its neighbours. He said Chinese leaders "made absolutely no claim" over the Diaoyu Islands after the second world war or in 1997, when the countries normalised their ties. "You are now asserting the claim by force," said Yachi, referring to Beijing's dispatching of surveillance planes and ships to waters near the Diaoyus, which Japan calls the Senkakus. "One must say that the act alone is breaching the rule of international order," he said. "I should like to ask you: is this a China you want to show to the world? Is this a China that your children will be proud of? "My message to the Chinese is that now it is time for you to be content about who you are and what you have accomplished. Now it is time for you to be a good neighbour of Japan, a good neighbour to the Philippines and a good neighbour to Vietnam. "Use of force and intimidation will buy you no goodwill from your neighbour or that of the international community. You will be a superpower - much feared but not much liked." He called for the US to strengthen ties with Japan and said Tokyo was ready to "activate the dormant right of collective defence" - which could be interpreted as a step for Japan to rearm. General Pan rebuffed Yachi's remarks. "I feel shocked and a bit sad about his historic view and his value system," he told the forum. "Mr Yachi's comments are so rude and arrogant. It is confusing [on who is in] the right and the wrong. [He] is saying that China can only be a responsible member if it totally complies to Japan's demands, otherwise China is irresponsible. "When Japan invaded China [in the 1930s and 40s], this was the kind of attitude they showed to Chinese people: you can only enjoy peace and prosperity if you listen to our command. Do they still want to send that message to [the] Chinese today?" Pan called Japan Asia's revisionist power, as Abe's government was trying to change the international order established after the second world war, which imposed a peaceful constitution on Japan and banned it from full-fledged militarisation. "I just want to remind Japanese friends: is it in Japan's interest to treat China as an enemy? Is this the way for Japan to win respect by insisting on such strange historic view?" Pan said.

Car trader set to reopen in Tsuen Wan after permit victory (By Ada Lee) Automall prepares to get back to business in Tsuen Wan outlet after permit is renewed - A car mart forced by the Town Planning Board to close down last year is to reopen after its operator won an appeal on Friday. The Automall showroom on the top floor of a multi-storey car park in Discovery Park, Tsuen Wan, had stopped operating in September after the board refused to renew its approval for use of the premise. But the decision was overturned in a board meeting last week, and the showroom is now allowed to continue operations "with conditions". Automall managing director Henry Au Cheung-yuen welcomed the result of the appeal. He said he would reopen the showroom upon receiving a confirmation letter, adding that he did not expect the conditions to be harsh as the showroom had operated at the premises without trouble in the past years. "The dealers have had some hard months," said Au, estimating that each of the showroom's 30 dealers had lost about HK$150,000 to HK$250,000 during the five-month closure. He said he hoped the government could have better planning for the second-hand car industry so that more places could be used as long-term showrooms. Approval for use of the Tsuen Wan site has to be renewed every three years. The South China Morning Post had on Monday reported on Au's letter to Chief Executive Leung Chun-ying, urging his government to pay more attention to the second-hand car industry. He said demand for such cars was high, but the number of legitimate bays could fall from 1,900 in August last year to just 900 by March, as pre-owned car traders faced similar problems. In the Town Planning Board's original decision rejecting an application by Automall for use of the Discovery Park premises, it had said the availability of commercial parking spaces could be compromised if the site continued to be used as a showroom for cars. Residents have also raised concerns about security on the estate.

Chow Tai Fook to start joint venture with Swiss watchmaker Richemont (By Agence France-Presse in Geneva) Chow Tai Fook and Richemont would each control 50 per cent of a new company to distribute watches on the mainland. Swiss luxury goods group Richemont and the world’s largest jewellery chain, Chow Tai Fook, have agreed to create a joint venture, Swiss daily Le Temps reported in its online edition late on Saturday. Citing a source inside Richemont, the newspaper said that the two luxury brands would each control 50 per cent of the new company, which would distribute watches made by Richemont luxury watchmaking brand Baume & Mercier in mainland China. It will be tasked with boosting the Geneva brand’s sales in China, the world’s second largest market for luxury goods, Le Temps reported. Chow Tai Fook, which was founded more than 80 years ago and went public in late 2011, meanwhile views the deal as a way to accelerate its watch distribution business, according to the report. The Hong Kong company already distributes a long line of Swiss brands, several of them owned by Richemont, including Cartier, Piaget and Jaeger-LeCoultre. No financial details of the deal were revealed.

 China*:  January 22 2013

Beijing blasts Washington over islands (By ZHANG YUNBI in Beijing and CAI HONG in Tokyo) Beijing on Sunday blasted Washington's latest intervention in the Diaoyu Islands issue, warning the US to be "responsible" and "choose its words carefully". The warning came as Beijing prepared to receive a high-ranking member of the governing coalition in Tokyo who will reportedly deliver a letter "aimed at improving ties''. But sending messengers to Beijing will be of little value, observers warned, if Washington's support for Tokyo's stance risks the situation getting out of control. US Secretary of State Hillary Clinton on Friday revealed Washington's lack of neutrality when she said the islands were "under the administration of Japan", a phrase that China rejects. Clinton told reporters after meeting with visiting Japanese Foreign Minister Fumio Kishida that the US opposes "any unilateral actions" that would seek to undermine Japan's "administration", a remark observers see as clearly backing Japan. Dong Manyuan, vice-president of the China Institute of International Studies, said Clinton's remarks show an evident preference for Japan's stance, and this runs the risk of bolstering far-right nationalists in Tokyo. The comments are "ignorant of facts and indiscriminate of rights and wrongs", and Washington cannot deny its historical responsibility on the issue of the islands, Foreign Ministry spokesman Qin Gang told reporters on Sunday. "Tokyo may feel less inhibited in carrying out further provocation, and the situation will become more unstable," Dong warned. "A major conflict breaking out over the islands, along with further confrontation between China and the US, does not serve US national interests." Yet Dong added that as "Clinton is retiring soon, it remains to be seen if the incoming secretary of state, John Kerry, will follow the existing policies". The Diaoyu Islands and affiliated islets have belonged to China for centuries, but Japan illegally grabbed the islands at the end of the 1894-95 Sino-Japanese War. Key wartime documents, including the Cairo Declaration, covered the return of the islands. Yet, despite opposition from China, the US and Japan cut a backroom deal in 1971 giving Japan so-called "administration" over the islands. Beijing urges the US to be "responsible" and careful with its words, Qin said. Dong Manyuan said that perhaps Washington is also privately reining in Tokyo to prevent a serious escalation. Meanwhile, Natsuo Yamaguchi, leader of the pacifistic New Komeito, the junior coalition partner of the ruling Liberal Democratic Party, said on Saturday night that he will take a handwritten letter from Japanese Prime Minister Shinzo Abe to Beijing. Yamaguchi told reporters after meeting Abe that they both agreed that political talks are the "first step" to mending relations. Yamaguchi said he hopes to deliver the letter to Party chief Xi Jinping during his four-day visit from Tuesday, Japan's Kyodo News Agency said. The China-Japan Friendship Association, a non-governmental organization, will host Yamaguchi. It is not clear whether Yamaguchi's proposal of meeting Xi has been confirmed by Beijing. Shotaro Yachi, a former senior diplomat now advising the Japanese prime minister on foreign policy said in an interview with Reuters that "there must be a tacit understanding between Yamaguchi and the prime minister for seeking improved ties''. Notwithstanding Abe's proposed letter, Tokyo has not eased off on its attempts to lobby Washington for more support, said Shen Shishun, a specialist on Asia-Pacific studies at Haikou College of Economics in Hainan province. "Tokyo's seemingly friendly postures are not feasible to resolve the tension,'' Shen warned. Yamaguchi may press for a summit meeting between leaders of the two countries, Japanese newspaper Mainichi Shimbun said. However, the Japanese government has long denied the existence of any dispute over the Diaoyu Islands. The tense situation helps the Abe cabinet shift domestic public attention from the sluggish economy, said Zhu Feng, a professor of international relations at Peking University. Shen said Japan has long been "obsessed in its illusion" of maintaining economic ties with China while posing tough on territorial disputes.

Le Chinese tour de luxe (By Bloomberg in Shanghai) Europe's luxury boutique staff polish up their Putonghua as groups of Chinese tourists shun museums and make a beeline for the shops - Mainland Chinese shoppers are bolstering prospects for luxury European brands like Milan-based Prada. Move aside Mona Lisa. More Chinese visitors are headed to Paris and they are picking luxury stores such as Galeries Lafayette over visits to the Louvre. Europe will be among the top destinations for the 94 million mainland Chinese who are expected to travel abroad by 2015, according to McKinsey & Co. Their tour-group itineraries are showing day-long trips to luxury outlets - squeezing short visits to the Eiffel Tower and Louvre museum in between. By turning their holidays into lengthy shopping excursions, the Chinese are propping up European sales and aiding the outlook for brands from Prada to Gucci, even as the euro zone faces a second year of economic contraction. Close to a third of Chinese luxury buyers will shop in Europe in 2013, McKinsey estimates, up from a fifth last year. "Consumption is happening more and more outside than within China," said Erwan Rambourg, HSBC's head of consumer and retail research in Hong Kong. "It's cooler to say you bought a Vuitton handbag in Paris than in China." At Harrods department store in London's upscale Knightsbridge district last summer a sign welcoming Chinese visitors was prominently displayed at the entrance, and some employees milled about wearing badges that asked "Can I help you?" in Chinese. London-based Burberry had doubled the number of Putonghua-speaking staff in Europe in the past 12 months, chief financial officer Stacey Cartwright said. "We have a love story between us and the Chinese," said Desiree Bollier, chief executive of Value Retail, which has nine Chic Outlet "shopping village" outlets in Europe selling brands from Dolce & Gabbana to Jimmy Choo. That's hardly surprising when Chinese visitors to Europe, Hong Kong or Singapore spent €11,000 (HK$113,670) on shopping per trip, according to a survey published last year by Global Blue, the world's biggest operator of tax-refund points for tourists. Chinese buyers now account for a quarter of global luxury spending, from 10 per cent three years ago, according to a September HSBC Global Research report. Value Retail opened its centre in Madrid two hours early to cater to a group of 1,500 Chinese tourists, and added faster choices such as pasta and salads in its restaurants after noticing that mainland visitors didn't want meals eating up shopping time. Now, the company is decorating for next month's Lunar New Year holiday. Helping drive the overseas purchases are China's import taxes on luxury items and added rebates on European taxes available to non-residents. The cost of 20 luxury items in China, including bags and watches, was 72 per cent higher than in France and 45 per cent higher than in Hong Kong, according to a 2011 survey by the Ministry of Commerce. Chinese from richer cities are also picking Europe and the US over nearby Hong Kong as they seek out new experiences, according to UBS Securities. "If you travel to Hong Kong three times a year and you've done that for the past three years, you probably feel your next trip should be somewhere else," UBS analyst Spencer Leung said. Less affluent shoppers, who preferred smaller items such as belts and small handbags, were filling Hong Kong's void, he said. Almost three million Chinese visitors a month arrived in the city of seven million people, government data show. "There are too many tourists shopping in Hong Kong these days," said Summer Xia, a 35-year-old finance executive from Zhejiang province who travels at least once a year to Europe or the US to shop. "I can save up to 40 per cent on some luxury items." Xia said she spent as much as 300,000 yuan (HK$373,800) a trip, and past purchases included Harry Winston diamond jewellery and an 80,000 yuan red Hermes Birkin bag. Chinese visitors like her will contribute about a third of luxury sales in Western Europe this year, Credit Suisse Group forecasts. That is helping to insulate the industry from a second year of economic contraction in the euro zone, forecast by the World Bank at 0.1 per cent. Milan-based Prada's sales rose more than 40 per cent in Europe in the first nine months of last year, double the pace of the company's Far East and China regions. Louis Vuitton sales rose 9 per cent in Europe between January and September, outstripping Asia's 5 per cent. Prada's Hong Kong-listed shares surged 53 per cent in the past six months. In Paris, LVMH Moet Hennessy Louis Vuitton gained 20 per cent; PPR, the owner of Gucci, jumped 43 per cent. Chinese tourists' shift toward Europe, which started last year, is "quite an established trend at the moment", Prada chief executive Donatello Galli said.

Caterpillar writes off most of China deal (By Reuters) US$580m charge over accounting misconduct at arm of company US giant recently bought - Caterpillar would take a non-cash goodwill impairment charge of US$580 million. US multinational Caterpillar said it had uncovered "deliberate, multi-year, co-ordinated accounting misconduct" at a subsidiary of a Chinese company it acquired last summer. The find led it to write off most of the value of the deal and wiping out more than half its expected earnings for the fourth quarter of 2012. Caterpillar, the world's largest maker of tractors and excavators, said on Friday it would take a non-cash goodwill impairment charge of US$580 million, or 87 US cents per share, in the quarter. Caterpillar's experience with the Chinese company, Siwei, may renew focus on the stand-off between the US Securities and Exchange Commission and audit firms over access to accounting documents of US-listed Chinese firms suspected of fraud. While Siwei was not US-listed, the broader accounting question has been a thorny one for US companies looking to grow their business in China. Caterpillar closed the purchase of ERA Mining Machinery and its subsidiary Siwei last June, paying HK$5 billion, or US$653 million. ERA had been publicly traded in Hong Kong, doing business through Siwei, which is known for making equipment to support roofs in mines. A Caterpillar board member said the board was distracted at the time by a larger transaction and paid relatively little attention to the Siwei acquisition. "It came as a complete surprise to us," the former board member said of the fraud, speaking on condition of anonymity. "It was presented to us as a pretty straightforward transaction. It's a shame. It should have been investigated further." The source said the driving force behind the deal was Ed Rapp, the former Caterpillar chief financial officer who now serves as a group president with responsibility for China, among other operations. A Caterpillar spokesman declined to comment on Rapp's role. Rapp could not be immediately located for comment. Caterpillar said an ongoing investigation launched after the deal closed "determined several Siwei senior managers engaged in deliberate misconduct beginning several years prior to Caterpillar's acquisition of Siwei". According to a question-and-answer dialogue Caterpillar included in its statement, the company found discrepancies in November between the inventory in Siwei's books and its actual physical inventory, triggering the Investigation. The company also said it had replaced several senior managers at Siwei, adding that their conduct was "offensive and completely unacceptable". The company employs about 4,000 people in Zhengzhou , Henan province .

Book review: Mo Yan's Boxer Rebellion novel is an orgy of pain and pleasure (By James Kidd) Mo Yan's Boxer Rebellion novel is an emotional see-saw, a magical, operatic, violent historical epic, writes James Kidd - Mo Yan's first novel to be published in English since he won last year's Nobel prize for literature is a strange, gruesome, vivid and ambitious historical novel set during the Boxer Rebellion (1898-1901). As the 20th century struggles into being, the grand narratives that will dominate most of the next 100 years (war, genocide, empire, economics, technology, guerilla warfare) are played out in ways that are at once intimate and epic, personal and political, realistic and surreal. At the centre of Sandalwood Death is a slippery young woman, Sun Meiniang, whose dieh (father), Sun Bing, is imprisoned for helping lead the revolution. In her opening chapter alone, Meiniang is adulterous and loyal, loving and lustful, conniving and innocent. Conveniently enough for the reader (though not for Sun), her father's fate will be decided by two men in her most intimate circle. The political and legal judgment falls to Qian Ding, the newly appointed magistrate of Gaomi County. He not only has history with Sun (an intense love-hate rivalry that culminates with a splendidly odd "battle of the beards" contest), he has more than a little with Meiniang: the pair have had a love-love relationship - until Sun's incarceration that is. "Magistrate, I presented you with a body silkier than the finest Suzhou satin and sweeter than Cantonese sugar melon … now after all the pampering and voyages into erotic fairyland, why will you not let my dieh go free?' The other major player in Sun's fate is Zhao Jia, Meiniang's father-in-law ( gongdieh) and the most feared executioner in all of China: "Your dieh never held official rank," he tells Xiaojia, his doltish son and Meiniang's husband, "but the number of red-capped heads he has lopped off could fill two large wicker baskets. So, for that matter, could the heads of nobles and aristocrats." Famed for devising the most excruciating, devilish and drawn-out punishments known to man (the Yama Hoop, the 500 Cuts), Zhao Jia's most dastardly invention gives Mo's novel its title: "The gist of it is that a pointed sandalwood stake is inserted into the subject's grain passage and forced up all the way to the nape of his neck and out. Then he is bound to a tree." This tree binding seems oddly innocuous given what has come before. Suffice to say, death is a welcome release from all that pain. The opening section eases the reader into these intertwined relationships through monologues inspired by operatic aria. Each chapter is narrated by a single character, and begins with a condensed, rhyming character summary seemingly extracted from a libretto for a Maoqiang opera called Sandalwood Death. This was the musical form practised by Sun until he swapped music for guerilla warfare. The tone in Howard Goldblatt's admirable English translation is a frothy combination of opposites. Mo can be lively and vulgar one moment, lyrical and romantic the next. What unites both halves is a sensual awareness of the body and nature: whether through pleasure or, when Zhao is around, pain. Mo is gifted at crude curses ("Stinking castrati, f*** you and your mothers") but can quickly shift to poetic bursts of erotic feeling: "Rivers roiled, seas churned, you swallow me, I devour you … he and she shed their cocoons and emerged with natural beauty as they achieved immortality." What makes even this vividly imagined first consummation of Meiniang's love/lust so nuanced is that she had crept into Qian's chamber to kill him. This central duality is also signalled by Mo's literary menagerie. Animals are everywhere, both in reality (dog's legs are Qian's favourite meal) and imagery: each character has a spirit animal, for instance. Meiniang's husband Xiaojia's one goal in life is to find a white tiger's whisker so he can see a human's true animal essence: she obliges by giving him a hair from her head. Yet somehow Xiaojia is granted visions that his murderous father is a slavering panther, his duplicitous wife a snake. His tragedy is that he is still unable to draw conclusions from these seemingly mystical visions. Magic and naturalism vie throughout the novel in much the same way they did for the Boxers themselves: they fused nationalist politics, revolutionary protest and a spiritual devotion to martial arts training. This is made explicit in the novel's long middle section, which discards the first-person arias to narrate the rebellion in the third person. As the dramatis personae expands, so does the back-drop which broadens from the personal to the widescreen. Mo's focus extends from the populous imperial court to Sun's terrified isolation on a mountainside, where he witnesses his wife and children's murder by German soldiers. Even these more action-packed scenes appear in a hallucinatory way. The narrative progresses in reverse: an event (say, the beheading of the dissident Six Gentlemen) is described, then explained by recourse to the past. The effect is a little like walking down some steps backwards to see what happened at the top. Mo's prose in these more detached passages is still powerful, if slightly less striking than the monologues that bookend Sandalwood Death. Nevertheless, he writes movingly of the massacre of Masang by German troops, and with gut-wrenching pathos about the beheading of the Six Gentlemen or the torture of Qian Xiongfei, Qian Ding's younger, and wilder, brother. Sandalwood Death is a multi-layered historical epic bubbling over with language, ideas, perspectives and entertaining sub-plots. Like so many of its characters and indeed China itself, the moral of the story is often hard to grasp. Allegiances shift in a second. Motivations are rarely clear-cut or stable. Love swaps places with hate (and vice versa). The government's chief torturer can be moved to tears by his admiration for a stranger, but remain contemptuous of his own child. The emperor is disgusted by the very punishments he has just ordered. Those like Salman Rushdie who dismiss Mo as simply a "patsy" of an authoritarian government would do well to read this complex, and subtle novel that illuminates the darkest corners of power, control and political violence. The results are chilling, but always human.

China ‘strongly dissatisfied’ with US over Diaoyu remarks (By Agence France-Presse in Beijing and Associated Press) “We do not want to see any action taken by anyone that could raise tensions or result in miscalculation that would undermine the peace, security and economic growth in this region,” US State Secretary Hillary Clinton said at a press conference with Japanese Foreign Minister Fumio Kishida in Washington. Tensions continued between China and Japan over control of disputed islands as China said it was “strongly dissatisfied” after US Secretary of State Hillary Rodham Clinton issued a veiled warning to Beijing and Tokyo said on Sunday it might fire warning shots to keep aircraft from violating its airspace. China is “strongly dissatisfied with and resolutely opposes” the remarks by Clinton, Foreign Ministry spokesman Qin Gang said in a statement on the ministry’s website. “We urge the US side to treat the issue of the Diaoyu islands with a responsible attitude,” Qin said, referring to the territory by its Chinese name. Japan calls the islands the Senkakus. Qin’s response came after Clinton said on Friday: “We oppose any unilateral actions that would seek to undermine Japanese administration” of the islands. She was speaking at a press conference with Japanese Foreign Minister Fumio Kishida in Washington. Clinton did not mention Beijing directly, but said she wanted China and Japan to settle the issue peacefully. “We do not want to see any action taken by anyone that could raise tensions or result in miscalculation that would undermine the peace, security and economic growth in this region,” she said. On Sunday Japan says it may fire warning shots and take other measures to keep foreign aircraft from violating its airspace. Japanese officials made the comments after Chinese fighters tailed its warplanes near the islands recently. The incident is believed to be the first scrambling of Chinese fighters since the tensions began to rise last spring. According to Chinese media, a pair of J-10 fighters was scrambled after Japanese F-15s began tailing a Chinese surveillance plane near the disputed islands in the East China Sea. China has complained the surveillance flight did not violate Japanese airspace and the F-15s were harassing it. It was the first time the Chinese media has reported fighters being mobilised to respond to Japanese air force activity in the area and comes amid what Japan says is a rapid intensification of Chinese air force activity around the islands, where Japanese and Chinese coast guard ships have squared off for months. Though there have been no outright clashes, the increased sea and air operations have fuelled worries that the situation could spin out of control. Such concerns have grown over official comments suggesting new Japanese Prime Minister Shinzo Abe and his cabinet are considering the use of “tracer” fire as a means of responding to airspace incursions. Tracer rounds are designed to burn brightly to get the attention of a pilot who may have missed other warnings due to a radio malfunction, while also indicating that the aircraft firing them is prepared to take further action. “Every country has procedures for how to deal with a violation of its territory that continues after multiple cautionary measures,” Japanese Defence Minister Itsunori Onodera said on Wednesday when asked if tracer shots would be fired against intruding aircraft that refuse to change course. “We have response measures ready that are consistent with global standards.” Onodera said the use of warning shots has long been provided for under Japan’s defence policies and is widely accepted under international rules of engagement. Japan’s air force has not actually resorted to them since 1987 — against a Soviet aircraft — and none were fired last week. But Chinese and Japanese media have suggested Tokyo is publicly floating the possibility to test China’s reaction. In Beijing last week, a Foreign Ministry spokesman said China is on “high alert” and suggested Japan is escalating the tensions over the islands. “Chinese planes and ships are exercising normal jurisdiction in the waters and airspace surrounding the Diaoyu Islands,” spokesman Hong Lei said. “We are opposed to the operations of Japan’s planes and ships, which violate our rights around Diaoyu. We are on high alert against this escalation.” As is often the case, Chinese media quoted military academics with a much more fiery response. “Japan’s desire to fire tracer warning shots as a way of frightening the Chinese is nothing but a joke that shows the stupidity, cruelty and failure to understand their own limitations,” Major General Peng Guangqian of the Chinese Academy of Military Sciences was quoted as saying by the China News Service and other state media. “Firing tracer bullets is a type of provocation; it’s firing the first shot,” he said. “Were Japan to dare to fire tracers, which is to say fire the first shot, then China wouldn’t stint on responding and not allow them to fire the second shot.” Peng said Japan may have put out the report to generate discussion and gauge China’s response.

Hong Kong*:  January 21 2013

TVB drama draws complaints for fuelling Hong Kong-mainland conflict (By Vivienne Chow) A promo for TVB's new series Inbound Troubles, which has drawn criticism for showing locals behaving badly. A drama on commercial television channel TVB has been accused of contributing to the already frayed relations between Hongkongers and mainlanders by depicting the worst of locals. Inbound Troubles, which began showing on TVB Jade on Monday, tells the story of young mainlander Choi Sum (played by comedian Wong Cho-lam) who comes to Hong Kong to live with his local tour guide cousin Ng Ka-yi (Roger Kwok Chun-on). But the cultural differences between the two men's lifestyles cause friction between them. The Communications Authority said that as of Friday, it had received 70 complaints about the 20-episode series. The complaints blamed the show's misleading content for deepening the conflicts between Hong Kong and the mainland, it said. The drama, which is based on a story idea by Wong, contains scenes alluding to real life, including mainlanders queuing up for designer handbags and infant milk formula as well as conflicts between local tour guides and their mainland tourists. Last year's case of locals allegedly being banned from taking pictures of the Dolce & Gabbana store in Tsim Sha Tsui was also featured. Kwok's character speaks heavily accented Putonghua in typical Hong Kong fashion, while his girlfriend (played by Angela Tong) appears to be based on Li Hau-chun, the "bus auntie" tour guide who in 2010 sparked headlines after her tirade against mainland clients for not shopping enough and thus not generating enough commission. The authority said viewers were unhappy that the show made a mockery of Hongkongers, while mainlanders appeared more civil. Some even said the drama destroyed the city's image as a shopping haven. TVB said it received six complaints about the series, which was watched by an average of more than 1.9 million viewers. "The drama was never meant to cause conflicts," TVB's deputy controller of external affairs Tsang Sing-ming said. "It's about unity between Hong Kong and the mainland … the essence of the show is about how mainlanders can integrate themselves into Hong Kong society."

Victoria Harbour snubbed over nomination for World Heritage site status (By Helene Franchineau) Historic waterfront given thumbs down for nomination to Unesco list, with government officials favouring rebuilt nunnery at Diamond Hill - Chi Lin Nunnery, set to be placed on China's tentative list for World Heritage site status despite being rebuilt in 1998. Victoria Harbour has been snubbed as a potential Unesco World Heritage site by Hong Kong government officials, who instead favour the nomination of the Chi Lin nunnery in Diamond Hill rebuilt in 1998. The rejection came despite the harbour being the top choice of three independent experts drafted in by the government because of their knowledge of the evaluation process. Just last week, Chief Executive Leung Chun-ying confirmed the creation of a new Harbour Authority in his maiden policy address. Antiquities Advisory Board members expressed their concerns over the harbour's rejection, with one describing the process as "a fiasco". The experts - all of whom have spoken to the Post but who prefer not to be identified - said officials from the Development Bureau and the Antiquities and Monuments Office seemed "focused on the nunnery". They said the officials also failed to give them a proper explanation of why the harbour would not be considered. The experts argued that the harbour fulfilled the majority of Unesco's criteria and that a compelling case for World Heritage site status could be made. They also said the status would not mean a halt to development as the city already had laws and bodies in place to manage the future of the harbour. Meetings with the heritage experts - one based in Hong Kong, one in Asia and one an international consultant - began in the second half of 2010 after the Commissioner for Heritage's Office, the Development Bureau and the Antiquities and Monuments Office set up an ad hoc committee. They were asked about the requirements for World Heritage status and the nomination process. According to Unesco, each government is responsible for nominating sites in their country from a tentative list. Of the six criteria spelled out in the guidelines of the World Heritage convention for cultural heritage sites, the harbour appears to meet several. Meeting one of them is enough to qualify. The experts agreed that, given its important role in global maritime trade and its evolution over the past 150 years, the harbour would certainly meet the fourth criterion - being "an outstanding example of a type of building, architectural or technological ensemble or landscape which illustrates … significant stages in human history". One expert said: "Given Hong Kong's iconic place in the development of global sea commerce during the 19th and 20th centuries, the inscription of the harbour and its evolving transformation through innovative engineering during this period is a cultural expression which may well deserve recognition on the World Heritage List." Another expert said: "The government was very keen to have the Chi Lin nunnery, but they were open to other ideas too.'' The Chi Lin Nunnery was founded in 1934 but rebuilt in 1998 in the Tang dynasty style. It is unclear whether the nunnery's application came from the nunnery itself or from the government. The Development Bureau, the Antiquities and Monuments Office and the nunnery did not reply to questions posed by the Post. Unesco guidelines stipulate that sites on the world heritage list must have clearly defined boundaries, a so-called buffer zone that protects the site itself and have adequate management in place to maintain the status of the site. Another heritage expert involved in the meetings - and who supported the harbour's application - said the Protection of the Harbour Ordinance and the urban design guidelines from the Planning Department would offer sufficient safeguards. One of the experts, an international heritage consultant, expressed "great concerns" to various government officials when asked to comment on a possible application for the nunnery. "I did not recommend the site to be on the potential list because I thought it did not meet the requirement of authenticity," said the expert. Tim Ko Tim-keung, a member of the Antiquities Advisory Board, was vocal in his opposition to the nunnery's application, calling it a "fiasco". He said: "It has nothing to do with the historical developments of Hong Kong at all. "During my two years at the board, there has been no mention of the nomination of a World Heritage site at all." Bernard Chan, a former Executive Council member and until recently chairman of the Antiquities Advisory Board, said the controversy about Chi Lin was not to do with how old the site was, but whether people were asked their opinion. The three heritage experts believed the biggest chance of the harbour one day making it onto the World Heritage List and flying Hong Kong's flag would be if it was considered a living and constantly changing organism. "It does not mean the site is frozen in time," said one expert, who said there must have been misconceptions and "unfounded fears" from government officials about an outside organisation monitoring the harbour's development. "If the key feature of the site is a monument, then it would be more restrictive. "In the case of Victoria Harbour, we are talking about the ridgeline, the waterfront and the harbour itself. They are already constantly evolving."

HSBC says China's economy to take centre stage in 'new world' (By Paul Soh) Hit by debt and deleveraging, HSBC says outlook for the old world's US and Europe still bearish - Stephen King, Group Chief Economist of HSBC. The United States, Japan and Europe are set to take the back seat to China's economy, which will take the centre stage of the "new world", according to HSBC. The "old world's" outlook remained bearish, said Stephen King, HSBC's chief economist, adding that debt and deleveraging had slowed growth in the US and Europe. The failure of countries in the "old world" to exploit the opportunities presented by China's growth is one of the key reasons for their demise, King said. In an outlook report, HSBC notes that countries such as South Korea, Malaysia and Singapore have all experienced big increases in their export exposure to China. Commodities producers, Australia, Chile and Saudi Arabia have also benefited from China, leaving countries such as France, Canada, Italy and Britain trailing in their wake. The report forecast US gross domestic product growth to drop to 1.7 per cent this year from the 2.2 per cent forecast for last year. Europe is expected to improve but will still see negative growth. Interestingly, HSBC has chosen to take a contrarian stance on Japan's quantitative easing policies. Japan's GDP growth is forecast at 0.2 per cent, against 1.9 per cent predicted for last year. David Bloom, the bank's global head of foreign exchange strategy, said: "Japan won't be successful in their aggressive policies to revive their economy. Instead of weakening, the yen will strengthen." King said quantitative easing policies did not work in Britain, with the pound strengthening. "Bond buying by the Japanese government will not work," he said. "Britain and the US in the past have demonstrated that it won't. Japan has to make a radical move to make a change." Frederic Neumann, a managing director and co-head of Asian economic research, said historically, the Japanese government had not been able to spend all that they planned. Neumann also questioned Tokyo's 2 per cent inflation target, saying a 1 per cent rate was a more realistic number to expect. Despite bearish forecasts for the US, Europe and Japan, Hong Kong is expected to be back on track this year. HSBC said the city's GDP growth would jump to 4.7 per cent from last year's 1.7 per cent. "[Mainland] China's growth and Hong Kong's record low interest rates place Hong Kong in a good position. Property prices will continue to rise," Neumann said. On Hong Kong's equity market, Gary Evans, HSBC's global head of equity strategy, recommended A shares over H shares. "H shares have outperformed. A shares will have to play catch-up. Therefore, A shares will be at a discount."

Housing chief warns against 'panic' buying of flats (By Colleen Lee) Secretary for Transport and Housing Anthony Cheung Bing-leung. Secretary for Transport and Housing Anthony Cheung Bing-leung said on Saturday that Hong Kong people should not "panic" and rashly buy flats. He made the comments because many people selling homes have been marking up prices - as demand for properties surged after Wednesday’s policy address by Chief Executive Leung Chun-ying. “People should not buy flats in a panic,” Cheung advised. The housing chief stressed that the government would work to ensure a stable supply of flats. “Most of the working class need mortgages to buy homes and repay loans in instalments. They have to consider their affordability in the long run and future market changes,” Cheung said after a radio program. His remarks come a day after the Greenview Villa project by the Housing Society and revised Home Ownership Scheme (HOS) by the Housing Authority received an overwhelming public response. Meanwhile, Secretary for Development Paul Chan Mo-po, discussing calls for the government to use sites on the land application list for subsidised housing, explained that eight of the 23 plots were too small for public housing or HOS flats. And in RTHK’s Letter to Hong Kong, Leung Chun-ying said if the government came up with any feasible measures on home supply beneficial to the public, “we will roll them out any time”.

Ang Lee mulls directing historical epic ‘Cleopatra’ (By Agence France Presse in Taipei) Oscar-winning director Ang Lee said on Saturday he will “probably” accept an offer to direct historical epic “Cleopatra” starring Angelina Jolie, after the Hollywood actress wrote to him asking him to come on board. Lee, whose 3D adventure “Life of Pi” has earned 11 Oscar nominations, said he would read the script before making a decision but the project was “very attractive”. “Sony has asked me to shoot the movie and Angelina Jolie wrote to me to express her wishes to collabourate. We admire each other... the project looks very attractive,” the Taiwanese-American told reporters in Taipei. “It’s a big-budget movie so I am carefully evaluating it ... this is a rare opportunity and I will probably take it.” Lee returned to his birth place over the weekend to celebrate after “Life of Pie” earned 11 Oscar nominations, including best picture and best director. The movie, based on the novel by Yann Martel about about an Indian boy cast adrift with a Bengal tiger, has become Lee’s highest-grossing film ever with more than $450 in global box office sales, according to 20th Century Fox. About 70 per cent of the movie was shot in Taiwan, including at a now-abandoned airport in the centre of the country where Lee’s team built a specially designed wave-generating tank. Asked if he plans to cast his son Mason Lee, who starred in “The Hangover Part II”, in his future projects, Lee joked that he would rather not “torture” his kin. “He likes acting and I give him my blessings... I am tough on actors but it’s difficult to be tough on your own son and it’d be an unnecessary torture for us. I’d rather torture other people’s kids.” The filmmaker, who is based in New York, was hailed as the “glory of Taiwan” after becoming the first Asian to win a best director Oscar for his gay cowboy drama “Brokeback Mountain” in 2007.

 China*:  January 21 2013

Chinese scientists awarded top prize (By Xinhua) Chinese President Hu Jintao (C) awards certificates to explosions expert Zheng Zhemin (R) and radar engineer Wang Xiaomo in the awarding ceremony of the State Scientific and Technological Award in Beijing, capital of China, Jan 18, 2013. Zheng and Wang won China's top science award on Friday. . Explosion mechanics expert Zheng Zhemin and radar engineer Wang Xiaomo won China's top science award on Friday. They were honored for their remarkable contributions in scientific and technological innovation, according to a government statement. Their awards were presented by President Hu Jintao at a ceremony held on Friday morning. Senior Chinese leaders Xi Jinping, Wen Jiabao, Li Keqiang and Liu Yunshan also attended the ceremony. The government has given the annual award to elite scientists and researchers since the year 2000. Zheng, 88, is member of both the Chinese Academy of Sciences and the Chinese Academy of Engineering (CAE). Zheng has devoted himself to research in the areas of elastic mechanics, explosive processing and underground nuclear detonations. Wang, 74, is a CAE member who has engaged in radar-related research and design for the past 30 years. He is regarded as the "father" of aerial warning and control systems in China. Xi, general secretary of the Central Committee of the Communist Party of China (CPC), said at the awards ceremony that China needs to realize a growth pattern that is driven by innovation. He encouraged Chinese scientists and researchers to follow the example set by the two scientists and contribute their wisdom to the country and the people. Premier Wen Jiabao called for a closer integration of research entities and enterprises, as well as promised to support enterprises that wish to establish research and development centers. Wen said the country needs breakthroughs in the development and marketing of high-tech products. The government will devote more resources toward science and technology that are considered to be vital for China's long-term development, he said. The government will also create an environment that promotes fair play and encourages creativity and initiative among scientists and researchers, he added. Awards were also bestowed on a number of other scientists, as well as scientific research programs, at the ceremony. Chemist Richard N. Zare from the United States, as well as another four foreign experts from the US, Canada, Denmark and Japan received the International Cooperation Award in Science and Technology. Chinese moon orbiter Chang'e-2, as well as another two projects, were honored with the State Special Award for Scientific and Technological Progress. Another 41 projects received second-level prizes in the State Natural Sciences Award competition. No first-level prizes were awarded, marking the ninth time in the last 13 years that the first-level prize was not awarded. Three projects earned first-level prizes in the State Technology Invention Award competition, while 74 others received second-level prizes. 

Railways Ministry stops plug-in browsers after heavy traffic crashes site (By Peony Lui) Passengers line to enter the Zhengzhou Railway Station in Zhengzhou ,Henan Province. As Chinese New Year approaches, demand for train tickets rises in China with many migrant workers eager to return home. Plug-in browsers that speed up the online train ticketing process have generated a huge amount of traffic to the Ministry of Railway’s official website and caused crashes on China’s shared-hosting network servers, such as GitHub. The Ministry of Railway conducted a meeting with Jinshan Network on Friday in an attempt to halt the company’s plug-in browser, according to media reports. A representative from Jinshan Network said that they having a discussion with the ministry, but declined to elaborate. It is not clear whether the Ministry of Railways plan to hold talks with other browser vendors. Meanwhile, a couple in Foshan, Guangdong was arrested on Tuesday for helping migrant workers purchase train tickets with plug-in browsers. They had charged a fee of 10 yuan. The incident sparked debate among Chinese netizens. “Many workers don’t know how to get tickets online. Where can they turn to for assistance if it’s illegal for someone to help them with purchasing tickets?” one said. The spring season might be the most stressful time for migrant workers eager to go home to festive celebrations, but struggling to buy train tickets. Currently, passengers can secure tickets by queuing at a ticketing office at railway stations, booking by phone, or making online reservations through a newly digitalised ticketing system on the official website of the Ministry of Railway’s customer service department. Nevertheless, these channels are not guarantees for a ticket due to their long and complicated booking procedure. The ticketing website, commonly referred to as 12306, was reportedly developed with 300 million yuan in 2012. Despite its cost, the website was criticised for its difficult navigation, slow speed and poor service quality. Plug-in browsers for 12306 have grown in prominence as they provide easy navigation and allow users to enjoy a higher chance of getting a ticket for a train ride home. Since the launch of plug-in browsers, traffic of 12306 has soared, selling up to 300,000 tickets in an hour. Tickets for popular train routes “were sold out in less than 5 minutes,” according to media reports. While effective tools for getting tickets, these browsers disrupt the order of online purchase since they essentially enable users to “jump the queue”. They also increase security risks associated with the disposal of personal information.

Slower economic growth prompts Beijing to shift focus (By Victoria Ruan) With the mainland's economy growing at its slowest pace in 13 years, officials are shifting their focus from speed to sustainability, addressing the issues of an ageing population and social inequality. The economy expanded 7.8 per cent last year, the slowest since 1999, the chief of the National Bureau of Statistics, Ma Jiantang, said yesterday. HSBC projected gross domestic product will grow 8.6 per cent this year, against a market 8consensus of 8.1 per cent. In the long run, Ma said, growth of between 7 and 8 per cent "may be more appropriate". Ma spent a long time discussing the challenges ahead, indicating that Beijing's new leadership is focusing on reforms. Labour, resources and environmental constraints had grown. "We should shift more energy to transforming the growth model", he said, and bring people "more real benefits". The bureau released figures for the national Gini coefficient, a measure of the wealth gap, for the first time since it said the figure in 2000 was 0.412. It fell to 0.474 last year from a peak of 0.491 in 2008 but still exceeded the danger line of 0.4, indicating a potential rise in social unrest. The closer the coefficient is to 1, the greater the wealth gap. Li Shi, of Beijing Normal University, an expert on the wealth gap, said: "The official Gini figures should be basically reliable. China should urgently reform the income system." Shawn Xu Xiaonian, professor of economics and finance at China Europe International Business School in Shanghai, said the economic data was fake. On the Gini figures, he said: "Even in fairytales they wouldn't dare to write like that." Ma also said the workforce shrank for the first time last year, and the country needed an "appropriate and scientific" population policy for the times.

Hong Kong*:  January 20 2013

Graft laws apply to Zhu Rongji's son and other members of new body (By Enoch Yiu, Dennis Chong and Peggy Sito) Body's status as a company had caused concern; members include five influential mainlanders - Laura Cha Shih May-lung. The son of former premier Zhu Rongji and other financial heavyweights appointed to the new Financial Services Development Council will be subject to the city's anti-corruption laws as if they were public officials. A government spokesman said yesterday the 22-member council, which includes five influential mainlanders, would be treated as a "public body" as defined in the anti-corruption ordinance and all members would be treated as "public officers" subject to the scrutiny of the law. Legislator James To Kun-sun had voiced concerns that the council, set up on Thursday, may escape the scrutiny usually given public bodies and its members because it is registered as a private company and may receive private donations to finance its operations. Analysts said setting up the council as a private company was a way to fast-track it. If it was set up as a statutory body, it might take years to receive lawmakers' approval, they said. Its status as a private company means the council has no power to set policy or introduce fees, so it may have to rely on donations. It is also not qualified to negotiate with mainland and overseas governments. "If the council has no power and cannot lobby other governments, how can it help to promote the local financial industry?" asked Christopher Cheung Wah-fung, legislator for the financial services sector. Besides the council, the government also appointed heavyweights to the Economic Development Commission to set overall strategy for Hong Kong's further economic growth. This commission includes Alan Tung Lieh-sing, the son of former chief executive Tung Chee-hwa and executive director of Orient Overseas (International), and Kerry Logistics' chairman George Yeo Yong Boon, a vice-chairman of Kerry Group, controlling shareholder of SCMP Group, which publishes this newspaper. "All of us who live here want to see Hong Kong do well," said Yeo, Singapore's minister for trade and industry from 1999 to 2004. "Singapore and Hong Kong share much in common, and each has much to learn from the other … Singapore also has a more interventionist government because of historical reasons and the fact that it is an independent city state, while Hong Kong has all the advantages and disadvantages of 'one country, two systems'." The new council's chairwoman, Laura Cha Shih May-lung, said on a radio show that its work would not overlap with that of regulators such as the Hong Kong Monetary Authority. "We do not only focus on the securities and banking business but we also look at insurance, fund management, private equity and hedge funds," she said. Cha denied the council was dominated by mainlanders, saying it also had 12 local and five overseas members.

Prepare for the time of your life, Dirty Dancing to hit Hong Kong stage (By Vanessa Yung) Dirty Dancing will run from April 19 at the Hong Kong Cultural Centre. The 1987 film Dirty Dancing was a huge hit although it had a low production budget and relatively unknown cast, thanks to neat choreography and a romantic storyline revolving around 17-year-old Frances "Baby" Houseman and dance instructor Johnny Castle. The movie was adapted for the West End stage in 2004 by Eleanor Bergstein, the film's scriptwriter and co-producer. It went on to break ticket sales records in Britain and Germany. This year, Hong Kong fans reminiscing about classic songs such as Hungry Eyes and Hey Baby from the show will be in for a treat . The cast of 35, backed by a live orchestra, will perform at the Cultural Centre from April 19 . Tickets, priced from HK$395 to HK$995, go on sale at Urbtix ticketing outlets on Tuesday. The first 100 buyers at the Cultural Centre will get a free copy of the musical soundtrack from the Dirty Dancing original London cast. CitySeen has two pairs of A-Reserve tickets (worth HK$795 each) to give away to Dirty Dancing fans. To win the tickets, tell us the name of the actress who played Baby in the original movie. E-mail your answers to cityseen@scmp.com with your name, contact number and address, and include "Dirty Dancing" in the subject line, by 6pm next Friday.

From Canto-pop to cantering, Aaron Kwok reveals his passion for horsing around (By Charley Lanyon) Aaron Kwok poses with a prancing steed. Aaron Kwok Fu-shing was in the mood to reminisce. The actor and Canto-pop "heavenly king" had horses on his mind. "The first horse I ever saw was when I was a student. My father liked horses and he would bet a little. I would watch the races with him on television at home," he said. In fact, everybody had horses on their minds as they crowded into the Cucina restaurant at the Marco Polo hotel in Tsim Sha Tsui on Wednesday afternoon. Representatives from Swiss watchmaker Longines and EMM World announced the inaugural Longine's Hong Kong Masters would be held from February 28 to March 2. The event will give the best riders in international show jumping, including Kenneth Cheng Man-kit, a chance to strut their stuff. Kwok has come a long way since his days of watching the ponies on television. He is now a racehorse owner but that doesn't mean the thrill is gone. "It's amazing. You hear the sounds of their footsteps on the grass. You feel your heart beating in your chest. You see the horses; all of them are so strong. The jockeys are all so colourful. It is like a carnival."

URA to redevelop Cheung Sha Wan industrial building (SCPM) The URA's Joseph Lee, Director, Acquisition & Clearance - Industrial Buildings points to Wing Hong Factory Building, Yu Chau West Street in Cheung Sha Wan. The URA's Lawrence Mak (left to right), General Manager, Planning & Design; Joseph Lee, Director, Acquisition & Clearance - Industrial Buildings; and William Wan, Director, Property and Land. A 10-storey industrial building in Cheung Sha Wan will be redeveloped into a commercial building at a cost of HK$1.7 billion in the latest project of the Urban Renewal Authority, announced on Friday. The project, the authority’s second redevelopment of a factory building, is expected to incur a loss of up to HK$500 million by the time it is completed in 2019-2020. The 50-year-old Wing Hong Factory Building on Yu Chau West Street has about 40 owners and 40 business operators. The 1,400 square metre building will be replaced with one of 16,700 square metres. The URA said the loss was only slight and would not constitute a big problem. The acquisition price will not be made known for about six months. “It would be irresponsible to announce the price now,” William Wan Shiu-wah, director of property and land of the URA, said on Friday. “Firstly, the two surveyors are not decided yet. Secondly, if I announce the price now it will give a price guide to other surveyors. Thirdly … the acquisition will be made several months later and there are big fluctuations in the property market.” The URA will pay owner-occupiers the market value of the property plus an “ex-gratia”, or special allowance equal to four times the amount the government usually pays. Owners of vacant or leased units will receive the market value of the property plus 1.5 times the allowance while tenants will get 2.5 times the allowance. Owners’ corporation chairman Dickson Chau Chi-wai, who has four units in the building, said the owners were interested in the acquisition but would have to see to the price. “It is definitely not reasonable for tenants to comply with the acquisition before knowing the price,’ he said, adding that it was quite difficult to find similar units in the same district. The URA’s first such project, turning an industrial building in Kennedy Town into a residential block, met serious resistance in late last year because of what was seen as a low acquisition price. The affected parties can file their objections to the URA in the coming two months. In the following three months, the authority will review and deal with the complaints before seeking approval of the project from the Development Bureau. Opponents can then file their complaint again in the ensuing month. Two surveyors will be employed to assess the market value of the building and announce the acquisition price.

Doing business with former LDC 'painful' experience: Li (By Austin Chiu) Victor Li Tzar-kuoi, vice chairman of Cheung Kong Holdings, appears at High Court in Admiralty. Cheung Kong No 2 Victor Li Tzar-kuoi has described business dealings with the former Lands Development Corporation as a “painful experience”. The corporation, predecessor of Urban Renewal Authority, was a “half-governmental institute” which carried out its work in a “rather high-handed” fashion with staff who were “not the most courteous” people he had met, Li told the Court of First Instance. He was giving evidence in defence of an HK$23 million claim by the authority over their joint venture to build The Center in Central, initial dealings for which were with the corporation. The authority says Cheung Kong owes it the money for the resumption, or buying back of the land on which The Center, a 346-metre steel skyscraper in Central, was built. Cheung Kong contends that at a meeting in May 2000 between Li, corporation chief executive Abraham Razack and chairman Lau Wah-sum it was released from any further payment after stumping up the balance of a guaranteed HK$1.9 billion profit. In court on Friday Li also gave the public a glimpse of his business practice. He said many would assume he had “absolute authority” to make business deals because he was the son of Hong Kong’s richest man, Cheung Kong chairman Li Ka-shing. As a result, he would ask those he was dealing with whether they had authority to negotiate. “It has been my habit in the past 25 or 30 years that when someone believes that I have the authority, I will ask him back whether he has the authority,” Li said. “There is no need for us to talk if he doesn’t have the authority.” Li said he might not be able to remember every detail of a business deal but he usually would have a good recollection of the “hand-shaking moments”. Speaking of the May 27 meeting between him, Razack and Lau, Li said he remembered clearly that he confirmed with the two that they had authority to settle the matter before they struck the deal. He said that as Lau was a traditional Chinese man, they referred in the meeting to the Chinese saying “no delays, no owing and no more money dealings” in settling the matter. Li said he remembered the meeting clearly because he shook hands with Lau. “For dealings that involve an international element, we usually shake our hands briefly, like two times. But it was a traditional Chinese-style handshaking with Lau. We shook hands many times,” Li said. Li said many staff of the former corporation did not show respect for their seniors because it was difficult for supervisors to fire a subordinate, unlike the situation in a private company. He also particularly attributed his headache to one Marina Lo of the corporation, who he said was “famous” within Cheung Kong and corporation for having “selective memory” and for creating problems and disputes. Li said she would disregard decisions if she was not involved in the decision-making process and did not agree with the result. He avoided having dealings with her and preferred to discuss business matters with her superiors, Razack and Lau.

 China*:  January 20 2013

China ships head to waters around disputed islands (By Agence France-Presse in Tokyo) Three Chinese government ships on Saturday entered Japanese territorial waters around disputed islands, Japan’s coastguard said, hours after a veiled US warning to Beijing not to challenge Tokyo’s control. The surveillance vessels entered waters around the islands known as the Senkakus in Japan and Diaoyus in China shortly after 8am, the coastguard said in a statement. The ships were spotted by Japanese coastguard vessels patrolling areas surrounding the islands in the East China Sea, controlled by Tokyo but claimed by Beijing, a coastguard official said. China has repeatedly sailed into the waters since Japan nationalised the chain in September, a move that triggered anger and demonstrations in China. US Secretary of State Hillary Clinton, speaking at a joint news conference with Japanese Foreign Minister Fumio Kishida in Washington on Friday, said the disputed area was under Japan’s administration and hence protected under a US security treaty with Tokyo. “We oppose any unilateral actions that would seek to undermine Japanese administration,” Clinton said. Clinton did not mention Beijing directly but said: “We want to see China and Japan resolve this matter peacefully through dialogue.” “We do not want to see any action taken by anyone that could raise tensions or result in miscalculation that would undermine the peace, security and economic growth in this region,” she added. The United States insists it is neutral on the ultimate sovereignty of the islands. China has repeatedly criticised the US position and the sending of maritime surveillance ships to the potentially gas-rich area is seen by experts as a way to contest the notion that Japan holds effective control. Kishida took a measured tone on China, describing the relationship with Beijing as “one of the most important” for Japan. “While Japan will not concede and will uphold our fundamental positions that the Senkaku islands are an inherent territory of Japan, we intend to respond calmly so as not to provoke China,” Kishida said.

Slower economic growth prompts Beijing to shift focus (By Victoria Ruan) Ma Jiantang. With the mainland's economy growing at its slowest pace in 13 years, officials are shifting their focus from speed to sustainability, addressing the issues of an ageing population and social inequality. The economy expanded 7.8 per cent last year, the slowest since 1999, the chief of the National Bureau of Statistics, Ma Jiantang, said yesterday. HSBC projected gross domestic product will grow 8.6 per cent this year, against a market 8consensus of 8.1 per cent. In the long run, Ma said, growth of between 7 and 8 per cent "may be more appropriate". Ma spent a long time discussing the challenges ahead, indicating that Beijing's new leadership is focusing on reforms. Labour, resources and environmental constraints had grown. "We should shift more energy to transforming the growth model", he said, and bring people "more real benefits". The bureau released figures for the national Gini coefficient, a measure of the wealth gap, for the first time since it said the figure in 2000 was 0.412. It fell to 0.474 last year from a peak of 0.491 in 2008 but still exceeded the danger line of 0.4, indicating a potential rise in social unrest. The closer the coefficient is to 1, the greater the wealth gap. Li Shi, of Beijing Normal University, an expert on the wealth gap, said: "The official Gini figures should be basically reliable. China should urgently reform the income system." Shawn Xu Xiaonian, professor of economics and finance at China Europe International Business School in Shanghai, said the economic data was fake. On the Gini figures, he said: "Even in fairytales they wouldn't dare to write like that." Ma also said the workforce shrank for the first time last year, and the country needed an "appropriate and scientific" population policy for the times.

GDP grows 7.8% to top $8 trillion (By Chen Jia in Beijing and Cecily Liu in London) China's GDP for the first time passed $8 trillion, or about 55 percent the size of the US economy, after the world's second-largest economy struggled to speed up growth in the fourth quarter. Based on yearly growth of 7.8 percent, the government announced on Friday that the country's 2012 GDP was 51.9 trillion yuan ($8.28 trillion). GDP grew 7.9 percent in the final quarter, compared with 7.4 percent in the third and 7.6 percent in the second. China's growth continued to be the highest among leading world economies, although it was its slowest in 13 years. What was special about the year, according to Ma Jiantang, chief of the National Bureau of Statistics, was that consumption surpassed investment to become the largest contributor to the economy's growth. Its contribution to GDP was 51.8 percent, opposed to 50.4 percent from capital investment, while the contribution from net exports was minus 2.2 percent. Rather than chasing an increasing speed of growth, the government has been focused on rebalancing the economy and improving its growth model, Ma said. Progress was achieved in the economy's structural adjustment, he said. The Chinese economy is likely to grow steadily in 2013 and maintain an annual growth rate between 7 and 8 percent in the long term, Ma said. Lian Ping, chief economist with the Bank of Communications, said that investment will be the main driving force for growth. Investment is expected to increase faster and the housing market, now under government curbs, may be showing a stronger tendency to rise, he said. Lian predicted that GDP growth may accelerate to 8.5 percent in 2013. Steve Tsang, professor of Contemporary Chinese Studies at the University of Nottingham, hailed China's 2012 performance as "impressive". The growth "is actually on par with what the Chinese government has wanted", he said. The more important issue is where the growth comes from, he said. China's economy has relied heavily on infrastructure spending since the outbreak of the global financial crisis in 2008. But the country is now trying for a transition into a consumption-driven economy. "It is encouraging to see from today's figure that a lot of the growth comes from retail sales, which means domestic consumption is growing," Tsang said. The biggest challenge of further increasing domestic consumption is the need for the government to maintain a high rate of employment and growth, Tsang said. "This is easy to achieve through capital growth, but much harder to achieve through consumption growth, as people may choose not to spend even if their incomes increase," he said. JPMorgan revised its forecast of 2013 GDP to 8.2 percent from 8 percent on Friday, cheered by the better-than-expected economic indicators in the fourth quarter. "The solid growth in the fourth quarter suggests that the momentum of economic recovery continued to firm up," said Zhu Haibin, JPMorgan's chief China economist. "The domestic factors are likely to play a more important role in supporting economic growth in the first half of 2013." He expected that the consumer price index, a main gauge of inflation, may trend up to an average of 3.2 percent this year amid the modest economic recovery, compared with the full-year CPI of 2.6 percent in 2012. "The central bank is expected to keep policy rates on hold throughout the year, while continuing to run a fiscal deficit and expand structural tax cuts to support targeted sectors, including services and new strategic industries," Zhu said. Among the economic data released by the National Bureau of Statistics, the working-age population decreased for first time, with the number of people between 15 and 60 shrinking by 3.45 million from 2011 to 937.2 million last year, adding concerns of a labor shortage. "The working-age population may continue to shrink steadily, but China will retain labor advantages. It is urgent to improve the labor force quality and promote social productivity," said Ma, chief of the National Bureau of Statistics.

China polysilicon makers buoyed by ‘revenge’ import tax (By Reuters in New York) Employees process solar panel components at a solar power plant in Anhui province. After a year of inactivity, China’s biggest polysilicon plants are resuming output to meet a demand recovery anticipated when Beijing imposes a retaliatory tax on US and European imports of the material key to solar panel production. Shares of the Chinese producers that stand to benefit most, Daqo New Energy Corp and GCL Poly Energy Holdings Ltd , have risen by 64 per cent and 44 per cent, respectively, in the last month. But the rally might be nearing its end, investors said, as foreign suppliers find ways to circumvent any duties and Chinese plants compete with each other in a crowded market. “There may be a short-term bounce in these stocks but I don’t think it will be a long-term differentiator, because there is enough polysilicon supply in China,” Edward Guinness, co-portfolio manager at Guinness Atkinson Asset Management, said. China, the world’s biggest energy consumer, will more than double its installed solar power capacity this year. More than 80 per cent of the polysilicon consumed by its panel makers last year was supplied by the United States, Europe and South Korea. A tit-for-tat trade dispute could redraw these supply lines. Drawing on evidence from Daqo New Energy, GCL Poly and fellow polysilicon maker LDK Solar, China is investigating whether US, European and South Korean suppliers breached anti-subsidy rules. A ruling is expected by February. The probe follows the introduction late last year of US duties on imported solar panels made from China-made cells. The European Union is conducting a separate investigation into alleged state subsidies and “dumping” of panels. “There’s a high probability that China will impose tariffs on foreign poly makers,” said Himanshu Shah, chief investment officer of Shah Capital, which owns shares in Chinese panel makers Trina Solar Ltd and Yingli Green Energy. A rush to meet orders ahead of the Chinese import duty spurred global polysilicon prices to rise in early January for the first time in 11 months. Assuming a 50 per cent Chinese duty atop current prices of around US$16 per kilogram, polysilicon industry specialists Bernreuter Research forecasts prices will recover to US$24 per kilogram in the next few months. The average price for high-purity polysilicon fell 47 per cent last year to a record-low US$15.35 per kilogram, extending a 59 per cent drop in 2011 as global supply outpaced demand, data from Bernreuter showed. With prices falling, about 90 per cent of China’s polysilicon producers had suspended production, China’s state news agency Xinhua reported in December. Only the lowest-cost Chinese polysilicon makers would be equipped to grab extra market share from a decline in imports, investors said. Shah said smaller producers would only break even at prices above US$30 per kilogram, almost double the current spot price. “I see the market getting more and more concentrated around the top five to 10 players,” said Shah. Daqo, one of these leading players, is ramping up production at one of its plants and upgrading another with a view to resuming output in May or June, should the market price at the time exceed reduced cash costs, said company spokesman Kevin He. The company is targeting production costs of US$20 per kilogram by the end of the first quarter, a level already achieved by bigger rival GCL. But Shah said he would not be looking to buy shares in Chinese polysilicon makers as he believed tariff-related gains had been largely priced in. US, European and South Korean producers are still likely to shed some value, however, should Beijing proceed with import duties, investors said. “It will definitely be an extra headwind for them ... This will potentially make these stocks less attractive to investors,” said Guinness, whose asset management firm owned shares of Chinese polysilicon maker ReneSola Ltd as of September. Norwegian Renewable Energy Corp, which has lost 74 per cent of its value in the last 12 months, said on January 11 it would temporarily reduce polysilicon production in the United States. Rivals are also revisiting production plans. Michigan-based Hemlock Semiconductor Group, a joint venture between Dow Corning, Shin-Etsu Handotai and Mitsubishi Materials, said on January 14 it would cut about 400 jobs on weak demand. “My customers are cautiously looking at what’s happening in China,” said Thomas Guttierez, chief executive of GT Advanced Technologies, which makes furnaces and reactors for polysilicon producers. Foreign suppliers hope Chinese panel makers will continue to buy their polysilicon for its high quality. An alternative method of supply would be to deliver polysilicon to Taiwan and manufacture cells there, which would then be delivered to panel plants in mainland China. “We already have scenario plans in place in the event of a tariff,” said Helena Kimball, spokeswoman for panel maker Yingli Green. She gave no details of the planned response, but added: “We are confident in our ability to continue supplying the global market.”

China lets Gini out of the bottle over wealth gap (By Reuters in Beijing) China’s statistics chief declared on Friday there was an urgent need for reforms to narrow the income gap between rich and poor, addressing head-on an issue that officialdom has ducked for years. Releasing a recalculated indicator of economic inequality on Friday, Ma Jiantang, the head of the National Bureau of Statistics, said the wealth gap remained “relatively large” though the Gini coefficient, a measure of income disparity widely used by economists, has narrowed since peaking in 2008. China’s Gini coefficient stood at 0.474 last year, down from 0.477 in 2011 and from a peak of 0.491 in 2008, Ma said. “This curve of Gini coefficient demonstrates the urgency for our country to speed up reform of the income distribution system to narrow the poor-rich gap,” Ma told reporters at a press conference on last year economic performance. This curve of Gini coefficient demonstrates the urgency for our country to speed up reform of the income distribution system to narrow the poor-rich gap - “A Gini coefficient between 0.47-0.49 shows that the gap in income distribution is relatively large.” China had not provided an official Gini coefficient since 2005, claiming that it was too difficult to calculate given rampant under-reporting of incomes, particularly by the wealthy. The index ranges from 0 to 1, with the 0.4 mark viewed by analysts as the point at which social dissatisfaction may come to a head. In China, the economic gulf between the urban and industrialised workforce and the rural population complicates the calculation. Ma said there was a three-fold income gap between rural and urban areas while there was a four-fold gap between workers in the most profitable industry and those in the least lucrative industry. “We should improve our efforts to divide the cake. When we are building our ‘well-off’ society, we should not only double people’s average income and GDP, but also better distribute the national wealth and give mid-to-low income residents a bigger part of the pie,” Ma said, echoing policy priorities among some fiscal reformers. Details have yet to emerge in a promised plan to better distribute income in part by tapping more revenues from state-owned firms. Ma said the World Bank put China’s Gini coefficient at 0.474 in 2008. The World Bank’s last published figure – 0.425 – was for 2005. A recent survey by a Chinese university in Chengdu, the Southwest University of Finance and Economics, put the country’s Gini coefficient at 0.61 in 2010. Purged populist politician Bo Xilai, who was angling for a top national post before being detained in a murder scandal earlier this year, needled his rivals during his final press conference in March by announcing that China’s Gini coefficient had exceeded 0.46. Bo’s revelation underscored his appeal to leftists and others who feel left behind in the midst of China’s growing prosperity. The figure he used appeared to come from a 2006 study by the Ministry of Finance. Still officially Communist, China has witnessed a growing disparity between the prosperous cities and the impoverished countryside since the early 1990s, while lower-income city residents have been left out of a property boom that enriched many since the housing market debuted in the late 1990s. China has 2.7 million US dollar millionaires and 251 billionaires, according to the Hurun Report, but 13 per cent of its people live on less than US$1.25 per day according to United Nations data. The average annual urban disposable income is just 21,810 yuan (US$3,500). Even relatively well-off Chinese resent the luxury cars and other signs of conspicuous consumption by elite insiders and their children. Since 2008, the growth rate in rural incomes exceeded the growth in urban incomes, while programs to expand health insurance and pension coverage were rolled out as part of a national stimulus to stave off the impact of the global financial crisis. The newly-appointed head of China’s ruling Communist Party, Xi Jinping, has taken a number of steps to establish an image of openness and plain-speaking to appeal to citizens disenchanted with corruption and stifling bureaucracy.

IPR fears won't derail bullet train exports (China Daily) Fears over intellectual property rights will not derail China's exports of bullet trains, as the technology is home-grown, the vice-minister of science and technology said as he dismissed as "nonsense" copycat claims by a Japanese company. The country had developed its own version of high-speed technology through years of innovation, Cao Jianlin said in an exclusive interview. The G502 high-speed train departs from the Changsha South Railway Station in Central China's Hunan province on Dec 26, 2012. The train is on the new Beijing-Guangzhou high-speed rail route. Cao also encouraged Chinese companies to file for patents overseas. China's high-speed rail industry has been booming since 2004, and Cao said the sector "will further research patent strategy and the global IPR situation to better understand the laws and policies of countries they export to". His comments come after Kawasaki Heavy Industries suggested China had not developed its own high-speed technology. The Japanese company teamed up with CSR Sifang, which then produced China's bullet trains after the Ministry of Railways launched a bidding process to build a high-speed network. Purchasing contracts and technology transfer agreements were signed with Chinese counterparts. Other global companies, such as Siemens of Germany, Alstom of France and Canada's Bombardier, also signed the contracts and agreements. "China says it owns exclusive rights to that intellectual property, but Kawasaki and other foreign companies feel otherwise," the Japanese company said in a statement quoted by The Wall Street Journal. The statement added that Kawasaki was looking to solve the issue through talks. "We did buy trains that could travel at 200 kilometers per hour from Kawasaki, but the purchase was based on legitimate contracts," Cao said. "Chinese companies paid technology transfer fees according to the contracts, so it is nonsense to accuse China of copying their technology." Kawasaki constructed the Shinkansen, Japan's bullet train. However, like other manufacturers, a drop in global demand prompted the company to look at overseas markets. "If Kawasaki really believes China copied its Shinkansen technology, it should have sued the Chinese companies, instead of complaining to the media," Cao said. "Maybe the company did not expect China's high-speed railway to grow so quickly, making the country a world leader." Based on the transferred knowledge, China's scientists developed a wide range of technologies, including system integration and component parts, the vice-minister said. Before 2005, China had few patents relating to high-speed trains. The numbers soon started to increase and in the first half of 2012, 163 patents were registered in China. Of these patents, 90 percent were held by Chinese companies with German, Japanese, French and US companies making up most of the balance, according to Cao.

Air China to open nonstop flight to Houston (By Wang Jun in Houston) From left: Congresswoman Sheila Jackson Lee, Houston Mayor Annise Parker, Chinese Consul General to Houston Xu Erwen, Director of Aviation for the Houston Airport System Mario Diaz, and Vice-President of Air China and General Manager of Air China North America Chi Zhihang, pose for a photo at the announcement to launch the Beijing-Houston nonstop flight on Jan 15. Houston holds a special place in the history of diplomacy between the United States and China: Many in China remember a photo of Chinese leader Deng Xiaoping wearing a cowboy hat in the Texan city during his American visit weeks after the two countries formalized relations in 1979. That same year, Houston became the first US city outside Washington with which China established a diplomatic mission. Still, the nation's fourth-biggest city by population hasn't had the stature of New York City or Los Angeles when it comes to air travel to and from China. So Mayor Annise Parker was happy to announce this week the start of direct flights between her city and Beijing on flag carrier Air China. "This is a gift which we truly appreciate," Parker told Chi Zhihang, Air China vice-president and general manager for North America, at a news conference announcing the service launch.The Houston-Beijing route is expected to open on July 11 with four flights a week. "Our ties with China and Asia are growing stronger every day," said Parker, who visited China twice in recent years to help prepare for the new air service. Houston-Beijing is the first new direct service for Air China in the US in 32 years. The airline currently offers nonstop flights between Beijing and four North American cities: New York City, Los Angeles, San Francisco and Vancouver. "With its vibrant business community and fast-growing Asian community, Houston is a perfect choice for an additional gateway for Air China," Chi said. "It offers the most convenient connections to China and beyond for our passengers from Texas and neighboring states." The flights take on added significance considering Houston's role in the history of US-Chinese relations. "The photo in which Deng Xiaoping wore a cowboy hat in a rodeo show has sent a clear and strong message to the whole world that China can be and will be a friend," said China's consul general in Houston, Xu Erwen, Houston in 1979 was chosen as the site of China's first consulate in the US beyond the Chinese Embassy in Washington. As bilateral ties have strengthened, so have the city's links to China. Trade between Houston and China totaled $11.9 billion in 2011, and over 500 Houston-based companies have set up operations in China. Also, a number of Chinese companies have come to Houston to invest and do business, creating jobs. Chinese basketball star Yao Ming played for the NBA's Houston Rockets and continues to promote the city, Xu noted proudly. "I was shocked to find out there is no nonstop flight between Houston and China when I came here to work three years ago," Xu said. "This is the only city that holds a Chinese consulate that doesn't have a nonstop flight connecting the city and China. Since then, pushing for a direct flight became an aspiration for many like-minded people. I'm so proud to be the first consul general in Houston to see the dream of many finally come true," she said. "When Air China arrives, Houston will provide the sole nonstop service to China across the southern and central regions of the United States. That geographic area makes up half of the United States - that's how important this is," said Mario Diaz, aviation director for the Houston Airport System, which operates George Bush Intercontinental Airport (named after the 41st US president, who served from 1989 to 1993). Diaz said Air China's move will enhance Houston's position in the global economy as well as visitors' experience in the city. In addition to Houston, Air China will beef up operations at its four other North American gateways. On March 31, the airline's New York-Beijing service will increase to 11 flights a week while upgrading aircraft used on the to the Boeing777-300ER. The Los Angeles-Beijing route will resume its schedule of two daily flights that same date. Vancouver-Beijing service will increase to 11 weekly flights on May 17, and bigger Boeing747-400 aircraft will be used for San Francisco-Beijing daily flights starting March 31. Air China isn't alone in capitalizing on increased demand for air travel between the US and China. In 2012, there were 31,748 flights connecting the US to the Chinese mainland, Taiwan and Hong Kong, according to the trade group Airlines for America, formerly the Airport Transport Association of America, (There currently is no direct service between the US and Macau.) In the recent years, China's three biggest airlines - Air China, China Eastern Airlines and China Southern Airline - have bought about 300 new planes, at a cost of $40 billion. To finance their purchases, the Chinese carriers tapped international capital markets. In December, East West Bank, a California-based bank that focuses on the US and China, financed a $90 million loan to the Export-Import Bank of China. "The $90 million loan facility is part of China Eximbank's $1.39 billion transportation external debt program for aircraft importation," said Emily Wang, East West Bank's marketing director. US Representative Sheila Jackson Lee, whose congressional district includes parts of Houston and who is the ranking Democrat on the House Homeland Security subcommittee on transportation security and infrastructure protection, said at the news conference that Air China's new service will deepen US-China relations. "The friendship between China and the United States truly exhibits that where there's a will, there's always a way," the congresswoman said.

Hong Kong*:  January 19 2013

QE2 cruise liner may be bound for Hong Kong or Shanghai as hotel (By Associated Press in Dubai) After more than four years sitting idle in a Dubai port, the storied Queen Elizabeth 2 passenger liner is again bound for the high seas, as part of deal to convert the vessel into a luxury hotel in Asia, officials said yesterday. The precise destination of the QE2 was not disclosed, but a map noted its planned voyage ending in China, suggesting either Hong Kong or Shanghai. "We promise to take good care of her," said Daniel Chui, managing director of the Oceanic Group, a Singapore-based maritime firm leading the renovation of the ship into a 500-room hotel. The deal marks the latest twist in the fate of the QE2, which has been docked in Dubai since it was purchased by state investment company Istithmar World for US$100 million in 2007, at the height of the city's boom era. In July, plans were announced to keep the vessel there as a hotel and hub of a seafaring centre. But Dubai's economic rebound has been sporadic, and officials have already pledged huge investments into new entertainment and retail projects, including theme parks and a shopping centre to outshine Dubai Mall, which is now billed as the world's largest. The move is also another sign of the expanding economic influence of China, which has a fast-growing tourism sector that already includes a host of themed resorts, such as a recreation of a Swiss alpine village. Before heading east, the QE2 will undergo full checks for seaworthiness in Dubai that could take up to three months, said Khamis Juma Buamin of shipyard operator Drydocks World. The ship's interior has been meticulously maintained since its last voyage in late 2008, and Dubai will retain ownership after its conversion to a hotel. Buamin said technicians would now do any needed upgrades to the hull, engine and other systems. He gave no cost estimate but noted it would be "a lot" to get the more than 45-year-old ship ready for the seas. "Once we are finished with it, she'll be 18 years old again," he said. After that, millions will be spent to restore the rest of the ship to its "glory days", said Chui. The QE2's fate has been the subject of intense speculation since its arrival in Dubai in November 2008. Since it went into service in 1969, it has made at least 26 round-the-world trips. Dubai officials also leave open the possibly that the ship could return. "It's a global ship," said Buamin. "This ship may come back to Dubai. This is what ships do. Ships have to travel."

Cathay and Dragonair dumping hot meals in favour of sandwiches (By Charlotte So) Sandwiches and box meals for regional flights as Cathay, Dragonair seek savings and more sales - Cathay and Dragonair dumping hot meals in favour of sandwiches. The humble sandwich is becoming standard fare on some Cathay Pacific Airways flights as the carrier cuts costs. Cathay Pacific and its wholly owned subsidiary Dragonair are cutting back on hot meals on some short hauls as their bottom line comes under pressure. Since January 1, Dragonair has replaced hot meals with sandwiches for flights to Taiwan and Manila. Cathay is already serving sandwiches on Taiwan flights. An airline spokesman said the carrier would make sure the sandwiches were heated and served with juice and biscuits. The cost-cutting measures are expected to be unpopular, given Asian travellers' penchant for hot meals. One traveller at web-based forum flyertalk, said: "I usually pick the KA [Dragonair] flights for the Taiwan routes over CX [Cathay] since they had nice hot meals and CX was just that cold sandwich." Dragonair said it would listen to feedback and review inflight services as appropriate. "We believe the change will enable passengers to enjoy a smooth and more relaxed journey on such a short flight as the time for serving and retrieving the meal trays will be shortened," a spokesman said. Replacing hot meals with sandwiches not only allows carriers to cut costs, it also generates income. Shorter serving times means cabin crew can focus more time and energy on inflight retailing, a lucrative side business for carriers. Cathay says that since January 1, two late-night flights, CX 798 departing from Jakarta and CX 791 destined for Kuala Lumpur, have been serving box meals with sandwiches instead of hot meals. "We are conducting service trials on two late-night flights, both with departures after midnight," a spokesman said. It is expected that Cathay will extend the box-meal service to other flights. The spokesman said the aim was to develop an efficient meal service that allowed passengers to maximise their rest time. "I have a feeling that they will try to cut back on staff to save money," said "Carfield", a contributor to the discussion on flyertalk. It takes an additional flight attendant to serve hot meals at the back end of the cabin. Other carriers have downgraded or even ditched meals to cut costs, and British Airways scrapped sandwiches for all short-haul flights in 2009, except for breakfasts. Continental Airlines, the last US carrier serving free meals and snacks on domestic routes, stopped offering free pretzels on most domestic flights in 2011.

CY maintains housing plans in line with election vows (By Tony Cheung) Chief Executive Leung Chun-ying said in his election platform last year that he would “expedite the construction of the planned 75,000 public rental housing flats". Chief Executive Leung Chun-ying emphasised on Thursday that his maiden policy address did not deviate from his election platform and earlier promises, saying that he expected the amount of public housing being built in the next five years to exceed the 75,000-unit vow in the speech. But as he spoke on a radio phone-in programme in the morning, Leung still faced a barrage of criticism from listeners who complained that he did too little to help those with pressing housing needs, and to tackle problems such as inflation. During the run-up to last year’s race for the top job, in October 2011, Leung said in a public forum that the government should provide 35,000 public housing rental flats every year in the next few years to shorten the queue. He later promised, in his platform, to “expedite the construction of the planned 75,000 public rental housing flats in the next five years … and bring forward by one year the completion of about half of the flats scheduled for completion in later years”. In his policy speech, Leung said the government had “secured land for the development of about 75,000 new public housing flats over the next five years”. Leung told radio interviewers on Thursday morning that 75,000 public housing units “is something of which we could be certain, and the number that we could tell the public, but those public flats that will be built and added, with our short term efforts, are not in the policy speech. Once we know that figure, we will announce it to the public.” In response to a caller identified as Mr Wong, who lives with his family of five in a subdivided flat and complained about the lack of a solution to his housing problems, Leung said he “felt very disturbed” to hear about those living in substandard homes, and emphasised that the government is determined to alleviate the housing needs of the lower class.

 China*:  January 19 2013

PLA Navy in live-fire attack drills in East China and South China seas (By Minnie Chan) Live fire by missile-carrying aircraft in East China and South China seas bare the sabre to neighbours and mark a shift in strategy - The Chinese marine surveillance ship Haijian No. 51 cruising as the Japan Coast Guard ship Ishigaki sails near the disputed islands, called Senkaku in Japan and Diaoyu in China, in the East China Sea. The People's Liberation Army's naval air force has carried out attack drills in both the East and South China seas in a show of force directed at countries involved in territorial disputes with China, according to naval experts. Photos posted on the website of the PLA Navy on Wednesday showed several J-10 fighter jets that had been sent by the East China Sea Fleet to the waters of the East China Sea close to the disputed Diaoyu Islands, known as the Senkaku Islands in Japan, which are claimed by both Beijing and Tokyo. The website said the drill took place "recently", without saying when. The photo captions said that air-to-air missiles were carried thousands of kilometres by the military aircraft and then launched in a live-fire drill, to more accurately simulate a real combat scenario. The drill marked the first time that the naval air force fired air-to-air missiles far out at sea. Another drill was conducted by the South China Sea Fleet on January 8 and featured day and night air raids by Hong-6 bombers, which had to evade enemy radar and electromagnetic interference en route to an attack on a harbour more than 1,000 kilometres away from the naval base in Zhanjiang , Guangdong, according to the navy's website. Pilots who took part in that drill had to fly more than eight hours from Zhanjiang for the staged attack, which took place in an open sea area. The naval drills came amid escalating tensions between China and Japan over the territorial row that has seen ties between the nations deteriorate since the Japanese government purchased the disputed chain from a private owner in September. Last week, Beijing confirmed that it had scrambled two J-10 fighter jets to monitor Japanese aircraft near the Diaoyus, while Tokyo said it was considering stationing F-15 fighter jets on Shimoji-jima Island in Okinawa prefecture to deal with Chinese aircraft. Ni Lexiong , director of the sea power and defence policy research institute at the Shanghai University of Political Science and Law, said the drills indicated that the PLA Navy had changed its strategy from inshore defence to open-sea counterattacks far offshore. "The drills in the East and South China seas were obviously also intended to warn Japan and [other Southeast Asian] countries that the army is well prepared for any possible battles if our sovereignty is threatened," Ni said. The Beijing-based naval expert Li Jie said the PLA naval fleet's improved combat abilities should also aid in China's increasing role in international anti-piracy and escort missions. "We have never hidden our desire to sail into deep waters, and this also enhances our navy's combat abilities in dealing with a crisis or attack," Li said. Li said that more naval drills on the high seas, as well as other military exercises held in tough situations, would be carried out by the PLA in the future.

Chinese GDP up 7.8pc in 2012, snaps losing streak (By Agence France-Presse in Beijing) Workers prepare clothing in a Huaibei clothing factory in Anhui province. China has broken seven straight quarters of slowing growth after posting 7.9 per cent growth in the fourth quarter of 2012, and posting 7.8 per cent growth for 2012 overall. The Chinese economy expanded 7.8 per cent last year, the government said on Friday, as annual growth slowed for a second straight year in the face of weakness at home and in key overseas markets. But gross domestic product grew 7.9 per cent in the final three months of last year, the National Bureau of Statistics said, as the world’s second-largest economy snapped seven straight quarters of slowing growth. Separately, China’s retail sales rose 14.3 per cent last year from the year before, it said. Retail sales rose 15.2 per cent in December compared with the same month in 2011, it said. The bureau also said production at China’s factories, workshops and mines rose 10.0 per cent last year from the year before, and industrial output increased 10.3 per cent in December year-on-year.

 

Former Japanese PM apologizes for wartime crimes in China (Xinhua) Former Japanese Prime Minister Yukio Hatoyama (front) and his wife bow as they mourn for the Nanjing Massacre victims at the Memorial Hall of the Victims in Nanjing Massacre by Japanese Invaders in Nanjing, capital of east China's Jiangsu Province, Jan. 17, 2013. Former Japanese Prime Minister Yukio Hatoyama on Thursday apologized for Japan's wartime crimes in China and expressed his hope that the tragedy would not be repeated. Hatoyama made the remarks while touring the Memorial Hall of the Victims of the Nanjing Massacre by Japanese Invaders in the eastern Chinese city of Nanjing. Hatoyama was the third former Japanese prime minister to visit the memorial after Tomiichi Murayama and Toshiki Kaifu. During the visit, he often stopped to pay silent tribute to photos or the remains of the victims of the Nanjing Massacre, which was committed by the invading Japanese army in the late 1930s. Hatoyama nodded as Zhu Chengshan, the memorial's president, told him that it is an undeniable fact, as stated in the verdicts of the Tokyo and Nanjing martial courts, that Japanese invaders killed more than 300,000 people in Nanjing. "The Japanese government had made it clear when signing the Treaty of San Francisco 1951 that it accepted the verdicts of the Far Eastern International Military Court of Justice and others verdicts regarding its war crimes," Zhu said. After seeing slogans reading, "To remember the historical lesson of Nanjing, but not for revenge, and to seek eternal world peace for great love," Hatoyama said the words touched him and he hopes that all people will work hard for peace. "After the tree of peace I planted blossoms and bears fruits, I will come back again," he said at the end of a two-hour visit when he planted a ginkgo tree in a park. Hatoyama, 66, served as Japan's prime minister between September 2009 and June 2010.

China's economy may be starting to recover (By Victoria Ruan in Beijing) China’s trade growth remained one of the world’s best despite slowing significantly to 6.2 per cent from 22.5 per cent in 2011. China’s economy may have grown close to 8 per cent last year, with economists estimating the better-than-expected momentum at the end of 2012 will likely continue into 2013. Economists surveyed by Bloomberg estimated growth of 7.8 per cent in the fourth quarter, rebounding from a more than three-year-low of 7.4 per cent in the previous quarter. For the full year, the consensus was for growth of 7.7 per cent, the slowest since 1999. Premier Wen Jiabao may express satisfaction at an annual legislative meeting in March when he wraps up his decade-long term of running the world’s second-largest economy, given he has been able to achieve stable economic growth despite a slump in global trade and business activities. GDP grew 9.3 per cent in 2011. The forecast expansion would exceed the official annual target for GDP growth of 7.5 per cent. China’s trade growth remained one of the world’s best despite slowing significantly to 6.2 per cent from 22.5 per cent in 2011. Foreign direct investment fell for the first time since the 2009 global financial crisis, but the mainland’s share if global FDI gained. Inflation has stayed benign. “We believe an improvement in GDP would reinforce positive market sentiment,” said Standard Chartered Bank analysts. “This growth momentum should continue in 2013.” The bank projected fixed-asset investment to have grown by 20.7 per cent in the full year of 2012, with a significant pickup in investment in the infrastructure sector. Industrial production and retail sales were both expected to gain slightly in December from the previous month. The World Bank said China’s growth could accelerate to about 8.4 per cent this year due to monetary easing, local fiscal stimulus and more rapid approval of large investment projects. But for the new leadership, it may be too early to cheer. Top leaders Xi Jinping and Li Keqiang will no longer enjoy the luxury of high economic growth as did their predecessors, who saw GDP soaring at an average 10 per cent pace in the past decade. Last time the GDP growth fell below 8 per cent was in 1999. They are instead facing a list of daunting problems: widening wealth gap, excessive industrial capacity, rising local government debt, an aging population, serious pollution in major cities including Beijing, as well as numerous oppositions from interest groups against any reforms to correct these problems. A Bank of America Merrill Lynch survey of fund managers this month found that 63 per cent still anticipating a stronger mainland economy this year, but one in seven sees a Chinese hard landing as a number one risk. While inflation was just 2.6 per cent last year, analysts expect it to rise to as high as 4 per cent in the second half as a result of an economic upturn and a low comparison base, pressuring the central bank to shift to a tighter policy bias. “In 2012, the macro environment was anemic to asset prices in the first half but turned increasingly supportive in the second half. In 2013, we expect exactly the opposite,” Bank of America Merrill Lynch said. Chinese growth has bottomed out, as easing measures have started to filter through, boosting domestic demand and leading to the end of the inventory destocking cycle and a rebound in output growth,” HSBC economists Qu Hongbin and Sun Junwei said in a report. Although they expected global demand to remain “fragile”, they predicted that China’s recovery would be sustained, predicting GDP growth in 2013 of 8.6 per cent, compared with a consensus forecast of 8.1 per cent.

Sharp in talks to sell Chinese TV plant to Lenovo (By Reuters in Tokyo) A shopper looks at Sharp LCD screens in a Tokyo shop. Sharp is in talks with Lenovo about selling an LCD TV plant in Nanking and tying up with the Chinese computer company. Sharp may sell its Chinese TV assembly plant to Lenovo as the cash-strapped Japanese TV maker looks to sell assets to bolster its finances, sources said. Sharp is in talks with Lenovo about selling the LCD TV assembly plant in Nanking and also about tying up with the Chinese company in its other subsidiaries there, two industry sources familiar with the discussion told Reuters. Sharp said in a statement to the Tokyo Stock Exchange that it had not announced any talks. The talks were first reported in the Nikkei business daily in Japan. The maker of Aquos TVs in November said it may not be able to survive on its own after it doubled its full-year net loss to US$5.6 billion. To repay short-term commercial paper loans and stave off failure in October it won a US$4.4 billion bailout from its banks. Sharp had been in talks to sell its Chinese TV plant to Taiwan’s Hon Hai Precision industry along with an assembly plant in Mexico. Hon Hai, which is also in talks to buy a stake in Sharp and earlier bought a share in the Japanese company’s advanced LCD panel plant in Sakai western Japan, may now buy only the North American facility. Sharp mortgaged its domestic factories and offices to secure emergency financing from lenders including Mizuho Financial and Mitsubishi Financial, limiting its ability to raise cash from asset sales. In December Qualcomm agreed to invest as much as US$120 million in Sharp, giving it a boost in its effort to remain viable. As part of the agreement Qualcomm, through its Pixtronix subsidiary, will work with Sharp - which supplies screens to Apple for its latest iPhone - to develop new power-saving screens based on Sharp’s IGZO technology. In the second half of its business year ending March 31, Sharp expects to return to operating profit, allowing the banks to justify the fresh financing.

Corruption curbs crimp luxury market (By Wang Wen) Government moves to fight corruption will have some surprising effects, including putting a possible dent in the market for luxury goods, as Wang Wen finds out. Strict government regulations to ban officials' consumption of luxury items are expected to soften the luxury goods market and change patterns of consumer consumption. Statistics from the Federation of the Swiss Watch Industry show that Swiss watch exports to the Chinese mainland dropped 27.5 percent year-on-year in September. A pedestrian walks by a Swiss watch advertisement in downtown Shanghai in September 2011. China's demand had been weakening through the year, but September was the worst, followed by another 12.3 percent fall in October, noted Ren Guoqiang, a partner at Roland Berger Strategy Consultants in China, a consulting firm based in Germany. Ren said government officials, who used to be the main recipients of luxury watches as gifts, were unsure about the future policy environment. Several government officials who were noticed by the public to own luxury watches were investigated for corruption in 2012. One was the director of the provincial administration of work safety, who wore a Swiss watch when appearing at the site of a highway accident. Officials are cautious now about receiving gifts, Ren said. "It hurts the luxury watch business a lot," since more than 25 percent of the luxury items sold on the Chinese mainland were used as gifts. The government has made a new regulation banning government officials from using public funds to buy luxury items. The regulation was made in July and came into effect in October. The regulation specifically restricts buying luxury items as gifts, especially products such as men's watches and garments, said Bruno Lannes, a partner of Bain & Co, a consultancy based in the United States. Bain & Co shows that the yearly sale of luxury watches would fall 5 percent on the Chinese mainland in 2012, whereas in 2011 the figure rose as much as 40 percent. Domestic distributors were also hit. "The ban will have an adverse effect on our watch sales," said Sun Xuguang, the operations manager at Sparkle Roll Group Ltd, a Hong Kong-listed luxury dealer of Swiss independent watch brands, including Parmigiani and DeWitt. Very high-end watches are eye-catching and easily recognized by the public and so will be affected more, Sun added. The recent ban on public money for luxury goods has had an impact not only on sales, but also on consumer trends. Buying gifts, which will remain an important part of luxury spending, is moving away from items with logos due to the extensive exposure on social media, said Lannes. Meanwhile, low-key luxury products, or those without obvious logos, are likely to get more popular, such as tailor-made suits and shirts, said Zhou Ting, director of Fortune Character Research Center. On the other side, the consumer market will change. "The new money in second- and third-tier cities will become the main consumers of luxury watches, rather than government officials," Zhou predicted. The future consumers of luxury watches are mainly private entrepreneurs. The number of China's multimillionaires surpassed 1.02 million in 2011, according to the China Rich List released by Hurun Report. "The multimillionaires can support the luxury watch market," Zhou said. As China's economy develops along with the public's ideas of consumption, ordinary consumers will also buy luxury watches, even if they have to save money for a while, Zhou said. Luxury watch brand companies are still optimistic about China's market, although its growth is slowing. Some niche brands recently entered China and some attracted Chinese consumers even before they appeared in the market. "We do not have any distributors in China yet, but our products already have Chinese consumers who bought the watches overseas," said Laurent Lecamp, founder and managing director of Cyrus Watches RL SA, a Swiss manufacturer of sporty-looking watches. Despite the recent low growth in watch sales in China, Lecamp said his company will still come to the country.

An EC135 helicopter for VIP use flies over Beijing Olympics center on Jan 15, 2013. Beijing plans to open its first helicopter air route, between the capital and tourist attraction Wutai Mountain in North China's Shanxi province, before the upcoming Spring Festival, which begins on Feb 9 this year. The one-hour flight will cost at least 40,000 yuan (US$6,428). 

Hong Kong*:  January 18 2013

Breitling opens its first boutique in Causeway Bay (By Charley Lanyon) - (From left) Aldo Magada, David Reid, Gilbert Ho, Jacques Bothelin. After a conspicuously long wait, Breitling watch lovers finally have a dedicated boutique space to shop in. Breitling's powers that be were in Hong Kong on Tuesday for a ribbon-cutting ceremony at its Causeway Bay boutique. Among the smart suits sipping champagne, one man stood out. Decked in fighter pilot uniform, Jacques Bothelin is leader and manager of the Breitling Jet Team. The watch brand has long been associated with aviation, and its team has performed in air shows from Paris to Zhuhai . Bothelin was quick to point out that the pilot-chronograph connection was not a publicity stunt. "We work very much on timing and synchronisation. With just a glance, you must get all of the information you need. These are truly instruments for professionals," he said. "In air shows … we really have to be accurate. At some air shows, if you're late by more than 30 seconds, you're diverted. If it's more than one minute, you're not allowed to fly the following days. We really play by the second hand."

Second wind as Li moves to broaden HKEx earnings (By Victor Cheung) Hong Kong Exchanges and Clearing (0388) said income from businesses other than equity trading will rise to 50 percent in the next three years. The bourse's push to diversify its sources of income will begin with the development of more derivative products and clearing services. In announcing a second three-year strategic plan yesterday to mark his next three years at the helm of the bourse, chief executive Charles Li Xiaojia said the HKEx has to grab the opportunities presented by China's moves to open up its capital account. He said the bourse benefits from rising cross-border investments by developing fixed-income, currency and commodity products, and providing clearing services for over-the-counter trading. In the short term, the HKEx will launch yuan bonds and exchange-traded funds under the renminbi qualified foreign institutional investor scheme. London Metal Exchange, which the HKEx has just bought, can be a fully commercial outfit by 2015. To this end, the HKEx will further seek collaboration opportunities with mainland exchanges, like expanding LME's warehouse network in China and encouraging cross-border trading. The LME is expected to add a variety of products such as iron ore and coking coal. Li expects it to launch trading in the Asian time zone in 2014 as well as its own clearing system by mid-2014. Not in the system is a surge in capital expenditure now that the Tseung Kwan O data center and Orion trading platform are in operation. The LME add-ons will be self- funded, he said. The HKEx will reintroduce a closing auction for its cash equities market, but will need more consultation and education so that people can understand it. There are no plans to extend trading hours, he said.

HK Chief Executive makes first policy address - Hong Kong Special Administrative Region Chief Executive CY Leung delivered his first policy address on Wednesday morning at the Legislative Council. Hong Kong Special Administrative Region (HKSAR) Chief Executive CY Leung delivered his first policy address on Wednesday morning at the Legislative Council here, outlining the city government's policy direction in 2013. "My team and I have taken expeditious actions to address the most pressing needs of the community," Leung said in the annual policy address which was live broadcast for Hong Kong's 7.1 million people. The policy address, entitled "Seek change, maintain stability, serve the people with pragmatism", laid out the government's major governance principles, policies and initiatives. By emphasizing the relationship between pursuing people's livelihood and the economic development, Leung said that "we promote economic development for the purpose of improving people's livelihood, and that in turn will provide a more stable business environment." "In our drive to improve people's livelihood, we must take timely actions to address the pressing needs of the community. Speedy actions are required on both these fronts," he continued. Leung summarized that on the fronts of economy, housing and people's livelihood, the government has set up task forces, introduced new measures and undertaken a variety of initiatives to help the needed. "These examples demonstrate the determination of the current- term Government, with the support of our civil servants, to meet public aspirations as promptly as possible," he said. According to Leung, the Hong Kong government must be " appropriately proactive" to promote economic development. The government should refrain from intervention when the market is functioning efficiently, but the government must take appropriate action to address the problem in cases of market failure. ADDRESSING HOUSING NEED - To address the housing need, Leung said the government is " determined to uphold the principle of assisting grassroots families in moving into public housing and the middle-income families in buying their own homes." Leung admitted that supply shortage lies at the heart of the prevailing housing problem. According to him, in the past five years, on average only 9,800 private residential flats and about 15,000 Public Rental Housing (PRH) flats were completed each year; the figure for Home Ownership Scheme (HOS) flats was zero. With the concerted efforts of various departments, the government have secured land for the development of about 75,000 new PRH flats over the five years from 2012-13 and about 17,000 HOS flats over the four years starting from 2016-17, he concluded, adding that a total of 67,000 first-hand private residential units should come on the market in the next three to four years. "Clearly, the total supply of public and private housing over the next five years will be higher than that in the past five years," Leung commented. For the short-to-medium term in the future, Leung promoted seven specific measures to increase the supply of Subsidized Housing. The report set the goal of PRH supply as at least 100,000 units over the five years starting from 2018. Besides, more subsidized houses are to be built and the first batch of 2,100 new Home Ownership Scheme flats will be offered for pre-sale next year, he announced. Leung also said that the Housing Department will step up its efforts to combat the abuse of PRH resources. Meanwhile, the Development Bureau (DEVB) and the Transport and Housing Bureau ( THB) will examine all projects in the pipeline to increase the plot ratio appropriately. As for the long term housing strategy, the Steering Committee is conducting a comprehensive review of public and private housing demand, including the demand for rental housing and home ownership, and devising a new long-term housing strategy. Also, the Committee will assess the medium and long-term housing needs of different social strata and groups, set priorities and make long-term plans, he further elaborated. In terms of land supply, Leung said the government will " continue to adopt a multi-pronged approach and step up its efforts to meet housing and other needs." The government is obliged to increase land supply in the short, medium and long term through optimal use of developed land and identifying new land for development at the same time, Leung mentioned. BUILDING CARING SOCIETY - Leung said while Hong Kong is a generally affluent society, there are still many people who live a hand-to-mouth existence. " We must recognize poverty as a real problem, understand the problem's nature, and formulate specific and feasible policy measures to alleviate it," he noted. Regarding helping the poor, Leung said governmental task forces concerned will work on different fronts, including supporting the underprivileged who have special needs, promoting education, employment and training, and engaging the community and fostering cross-sectional collaboration among the government, businesses and other sectors. Leung said the government Commission on Poverty has identified setting a poverty line in light of the actual situation in Hong Kong as one of its priorities. "By setting a poverty line, the current-term Government shows its will and commitment to alleviating the poverty problem," he said. As for social security and retirement protection, Leung said these are "two recurrent themes that often appear prominently in our discussion of the poverty issue." Taking that into consideration, he emphasized the government will reinforce and enhance the existing three pillars, namely, private savings and family support, the social security system, and the Mandatory Provident Fund (MPF) System. To cope with the city's aging challenge, Leung said the government is committed to strengthen community care services, provide a convenient living environment for the elderly, and offer elderly people more diversified choices through a wide range of new and flexible modes of subvention and service delivery. Moreover, Leung mentioned the government is to adopt a multi- pronged approach to meet the current and future needs of welfare services, as well as to strengthen support for workers at the grassroots level, including providing the relief for their work- related traveling expenses. "The Government has invested heavily in education and training. But my conviction is that only through employment can those groups with special needs, including persons with disabilities and ethnic minorities, be truly integrated into the community," said Leung. He urged all employers to give these people more employment opportunities and the government will work with the private sector and NGOs to add jobs. PROMOTING PUBLIC SERVICES - In his policy address, Leung also promoted various measures for public services, addressing people's need. In terms of the improvement of environment, Leung said the government will engage the public in discussion and foster co- operation among policy bureau in introducing various environmental protection initiatives to tackle key issues such as waste management and air quality. According to Leung, the government will set out clear objectives and a roadmap to achieve cleaner air, better fuel mix, energy conservation, emission reduction, resources recovery and nature conservation in a comprehensive and systematic manner. "Our next priority will be improving roadside air quality," he said. On the education front, Leung said the Education Bureau is setting up a committee to examine the feasibility of free kindergarten education and recommend specific proposals to enable all children to have access to quality kindergarten education. As for health care, Leung believed Hong Kong should remain committed to the twin-track system for public and private healthcare sectors. Under the system, public medical services will provide a safety net for the people, with private healthcare services giving more choice for those who can afford to pay. "We should ensure the balanced and continuous development of both public and private healthcare sectors," Leung said, adding that "to achieve this, we should reinforce the public healthcare system by enhancing its services and effectiveness, while facilitating the development of the private healthcare sector and improving the regulatory mechanism." Regarding public transportation, Leung said the government needs to have comprehensive and long-term planning for public transport, which is closely related to people's livelihood, economic development and environmental protection. "Our long-term planning for public transport will revolve around a railway-based network complemented by bus services," He outlined. The policy address is an annual address by the chief executive of the Hong Kong Special Administrative Region. Leung was elected as the third chief executive of Hong Kong in March 2012 and came into office in July the same year. His full term will be five years.

 China*:  January 18 2013

A Chinese government crackdown on lavish spending by officials has pushed expensive liquor and high-end watches out of favor in the luxury gift-giving market, a survey from the Hurun Report, known for its annual China Rich List, showed yesterday. Top alcohol maker Kweichow Moutai Co Ltd saw its clear baijiu liquor - widely imbibed at official banquets and presented as a premium gift - fall to 13th place on the "best brand for gifting by men" table, down from fifth last year when there was a single, mixed-gender table, according to the report. Swiss watchmaker Longines was the only watch brand to make the "gifting by men" list at number 15, replacing Rolex, which was ninth in 2012 but dropped off the list altogether this year. The report surveyed 551 Chinese with personal wealth of 10 million yuan (HK$12.4 million) or more. The results follow a government crackdown, launched in March last year, on using public funds to buy luxury items such as baijiu, which can cost several thousand yuan per bottle. In December, alcohol was banned at military events. "Watches and liquor have been influenced by government policies and have been pulled down by a change in leadership," Hurun founder Rupert Hoogewerf said. "It's traditionally been that in government there are people who can influence policy in your favor." State media have reported a wave of corruption and abuse-of-power cases since November's senior leadership transition in the ruling Communist Party. In one case, an official was sacked after internet photos showed him wearing a number of different luxury-brand watches. Xinhua News Agency reported in late December that the luxury ban on officials had hit the share prices of listed liquor distillers. Market leader Moutai had 12.5 billion yuan wiped off its market value after the new regulations were announced. Moutai's fall meant there was not a single Chinese brand in the top 10, and only one in the top 15 on the men's gift list. France dominated with six brands out of the top 10 in the men's list and four in the women's, including luxury accessory and apparel makers Louis Vuitton and Chanel. However, less expensive gifts were the order of the day. "With the current anti-corruption drive, officials can no longer receive blatantly expensive products, so we're seeing a trend towards less-expensive giving," said Hoogewerf.

Cold front dispersing Beijing smog (Xinhua) Beijing sees first sunshine in seven days on Wednesday. The mist will clear in the afternoon, when wind is expected to blow through the city at a speed of around 30 km per hour. Experts with the center said the average AQI on Wednesday in the urban area will reach a "fairly good" level. The central meteorological station lifted its haze alert at 10 am in the country's central and eastern areas. As the cold front is affecting vast part of China from north to south, the smog that has been staying in these regions is likely to disperse from Wednesday afternoon, according to the station.

Hong Kong*:  January 17 2013

Linda Chung and Jason Chan in Lunar New Year celebration (By Vanessa Yung) Actors Linda Chung and Jason Chan had Care Bears as youngsters - Although the last episode of TVB drama Missing You aired last Friday, two of its actors are proving difficult to separate. Jason Chan Chi-san and Linda Chung Ka-yan, who play a couple in the series, were at Causeway Bay's Windsor House on Sunday to launch the mall's Lunar New Year campaign. To celebrate the 30th anniversary of the Care Bears soft toys, figurines of the characters were displayed to enhance the festive decorations. Chan and Chung both said they had Care Bears when they were young. Chan said he and his two brothers had one each, while Chung said she loved the bears' protruding bellies. Chung sang the Missing You theme song and prompted the audience to sing along. It seemed she attracted a younger fan too. Josephine Lau Sau-wah, daughter of property tycoon Joseph Lau Luen-hung, and girlfriend Chan Hoi-wan, was happily snapping away at Chung with the help of her mother.

Ma to stand down as Alibaba chief executive (By Reuters in Hong Kong) One of China’s best known corporate leaders, Jack Ma, will step down as CEO of Alibaba Group, the e-commerce firm he founded in 1999 to tap the nation’s enormous online shopping potential, saying younger people are better placed to run the company. Ma said he would name a successor by May 10, when he switches to the role of executive chairman. He said most of Alibaba’s leaders “born in the 1960s” would also pass their leadership responsibilities to younger colleagues. “As a founder CEO, stepping down ... is a difficult decision. It’s not because I wanted to take things easy (though the job of Alibaba CEO is no easy task), it’s because I see that Alibaba’s young people have better, more brilliant, dreams than mine, and they are more capable of building a future that belongs to them,” Ma wrote in an e-mail to employees. Reuters obtained the letter on Tuesday from a source close to Alibaba. The shift is a significant one for Alibaba and follows moves announced last week to chop the group into 25 smaller divisions – to give managers more flexibility. It also comes after a transformative deal Alibaba struck with Yahoo Inc last year, in which the Chinese company agreed to buy back about half of the stake in itself held by its US partner. Alibaba had long sought to buy back the shares to help regain control over its own corporate destiny. In an interview with The New York Times, 48-year-old Ma acknowledged he was feeling the strain. “When I was 35, I was so energetic and fresh-thinking. I had nothing to worry about,” he said, adding the role of executive chairman would let him focus on broad strategic issues, as well as corporate development and social responsibility. “I will still be very active,” he said. “It is impossible for me to retire.” Alibaba Group includes Alibaba.com, an online market for small businesses; Taobao, a consumer shopping site; and Alipay, an online payment platform.

HKEx to launch Asian trading on London Metal Exchange (Reuters in London) Traders and clerks on the floor of the London Metal Exchange. Hong Kong Exchanges and Clearing said on Tuesday it will introduce Asian time-zone price discovery and clearing on the London Metal Exchange (LME), in a move that could hold off competition from its Shanghai rival. The initiative was unveiled by Chief Executive Charles Li in the exchange’s 2012-15 strategic plan in Hong Kong, along with plans to establish an LME-licensed warehouse network in China and potential to extend the LME’s production suite into the Hong Kong market. Introducing a third, earlier, round of trading sessions is the biggest shift in the way the 135-year old LME operates since the launch of its electronic platform over a decade ago, and runs counter to the global industry trend toward shutting down trading pits in favour of faster, cheaper electronic platforms. An Asian session is the most concrete effort yet to increase business from Asian investors since the LME extended electronic Select trading hours in 2006 and introduced Asian reference prices in 2011. The LME has seen its share of the global copper futures market eroded by both the Shanghai Futures Exchange, where Chinese speculators are active, and CME Group, whose active electronic platform and familiar futures structure has attracted high-frequency traders. Li said HKEX would expand the LME’s offerings by lowering barriers to trading from Asia, extending the LME’s warehouse network in the region, particularly mainland China and developing Asian time zone clearing and possibly Asian time zone price benchmarks and developing renminbi clearing. “When China begins exporting capital, that’s when they’ll want to talk on their terms,” Li told a presentation in Hong Kong. “That’s why we need to be ahead of that by allowing for Asian trade of commodities, in an Asian time zone.” HKEX will also use the LME’s status as the world’s biggest metals marketplace to extend HKEX’s commodity platform into ferrous metals, such as iron ore, coking coal and energy, Li said. “We need to extract the value that LME can bring to us,” Li said. “As a metaphor, we need to extract US$10 from every US$1 we put into LME.” HKEX, the world’s No 2 exchange operator by market value, paid US$2.2 billion for the LME last year, as it seeks to expand beyond its traditional business in equities trading. Li has hailed the acquisition as “transformational”, giving the Hong Kong bourse operator access to the LME, but has come under pressure to justify the high price tag. HKEX’s share price has risen almost 30 per cent since mid-October last year, compared with a 10 per cent rise in the Hang Seng Index.

Director Ang Lee and actress Lucy Liu arrive at the Golden Globe awards ceremony in Beverly Hills, California, on Sunday. Ang Lee's Life of Pi won the award for best original score. 

 China*:  January 17 2013

China sovereign wealth fund may cut US debt holdings (By Agence France-Presse in Shanghai) CIC President Lou Jiwei speaks at the Asian Financial Forum. China’s sovereign wealth fund, which has more than US$480 billion in assets, could cut holdings of US Treasury Bonds as they are becoming a less attractive investment, state media said on Tuesday. The Shanghai Securities News quoted Lou Jiwei, chairman of sovereign wealth fund manager China Investment Corporation (CIC), as telling a conference in Hong Kong on Monday that the US economic recovery had made other investments appealing. China has the world’s largest foreign exchange reserves and according to US government figures is the largest foreign holder of US Treasuries with US$1.16 trillion at the end of October last year, the latest available statistic. “In line with the future US economic recovery, the appeal of US debt is weakening,” Lou said. “From a long-term perspective, it is not a good investment target.” However, he added that completely stopping buying of US Treasuries could hurt the fund’s ability to manage risk. “For this reason, CIC’s method is to buy relatively less US debt with hopes of allocating more to stocks and other assets,” Lou said, without specifying whether he was specifically referring to US-dollar assets. Last year, the fund was overweight in investments in the United States and developing countries but underweight in Europe given the continent’s sovereign debt crisis, the report said. CIC saw the manufacturing and property sectors as attractive for future investments, it said. CIC could not be reached for comment on the report on Tuesday. It was established in 2007 to invest some of China’s massive foreign exchange reserves, which stood at US$3.31 trillion at the end of last year. China’s sovereign wealth fund suffered a 4.3 per cent loss on its overseas investments in 2011 due to the weak global economy. It was the first loss since 2008, when CIC was hit by the global financial crisis. China on Monday announced it had set up a new office under the foreign exchange regulator to funnel some of the reserves to domestic companies, in the form of commercial loans to support their overseas expansion.

China to survey Diaoyu Islands: FM spokesman (Xinhua) Chinese authorities will survey the Diaoyu Islands in an aim to "safeguard China's marine rights," a Chinese Foreign Ministry spokesman told a routine press conference on Tuesday. Spokesman Hong Lei made the remarks in response to questions concerning the announcement made earlier on Tuesday that China plans to survey the Diaoyu Islands in the East China Sea as part of a program to map its territorial islands and reefs. "Diaoyu Island and its affiliated islets have been the inherent territory of China since ancient times," Hong reiterated. The first stage of the island surveying and mapping was launched in 2009. Work to monitor islands located within 100 km of the coastline has been completed, according to a document issued at a press conference held by the National Administration of Surveying, Mapping and Geoinformation. The second stage will cover islands including the Diaoyu Islands, the document said. Hong also briefed reporters on a Monday meeting between Chinese Vice Foreign Minister Fu Ying and Kenji Kosaka, the former Japanese education minister who is now a House of Councillors member of Japan's ruling Liberal Democratic Party (LDP). Hong added that China and Japan have maintained communication on how to settle current disputes at various diplomatic levels, and China is also listening to messages delivered via various channels from Japan. According to Hong, Fu briefed Kosaka, who privately visited China on Monday, about current perceptions held by the Chinese government and its people toward Japan and China-Japan relations. Hong said Fu reiterated China's policies and principles on the development of bilateral relations. Bilateral relations are currently facing difficult situations and stand at a vital moment, Hong quoted Fu as saying. He added that Fu welcomed efforts from various Japanese communities to diminish negative effects on the development of China-Japan relations. Responding to questions concerning the former Japanese Prime Minister Yukio Hatoyama's visit to China that started Tuesday, Hong said the Chinese government has always maintained normal exchanges and visits with Japan's ruling and opposition political parties, as well as friendly groups from the country, to improve communication and resolve bilateral disputes.

China helps drive Rolls to record year (By Li Fangfang) Luxury British car brand now plans expansion of dealerships across nation - Rolls-Royce Motor Cars Ltd, the luxury British car producer, made around 30 percent of its total sales last year in the Chinese mainland, its second-largest market in 2012. Without publishing exact figures for individual markets, Chief Executive Officer Torsten Muller-Otvos told China Daily that the exclusive brand sold a total 3,575 cars in 2012 worldwide, in its third consecutive year of record sales. Rolls-Royce Motor Cars Ltd shows its latest luxury car in Kunming, Yunnan province in November 2012. The company's two dealerships in Beijing and Shanghai are among its top three worldwide in terms of sales in 2012. The US remained its biggest market, with China now a very close second, he said. "The growth in the first half was slower due to the challenging local economic climate, but we have seen a remarkable pick-up since the second half as the economy recovered," said Muller-Otvos. In 2011, its sales figures for China overtook those in the United States, to be the brand's largest market. Though the US market reversed that trend in 2012, the Chinese mainland is now only around 40 to 50 units behind it, said Muller-Otvos. "We are cautiously optimistic about our business in China in 2013, and I would not be surprised to see China as our No 1 market again this year," he added. He attributed his confidence to China's "fantastic" and "reliable" economic growth, predicted this year to be at 8 to 9 percent. "It's certainly a positive market compared with many other mature markets." He added the company expected to continue expanding its network of China showrooms in 2013, especially in second-tier cities and in the western part of the country, without disclosing detailed numbers. Rolls-Royce currently has 15 dealers across the country.

Peak strives to reach top of US market (By Zheng Yangpeng) Chinese sportswear producer is investing heavily in an attempt to raise its visibility and profile in the American market, as Zheng Yangpeng reports from Los Angeles. At the crossroads of Melrose and Harper avenues in Los Angeles, it's hard not to notice the distinctive bright red logo shining brightly. The sign is above the new flagship store of Peak Sport Products Co Ltd, which represents the latest effort by the Chinese sportswear brand to raise its visibility and profile in the United States. Occupying 250 square meters, the outlet sells the full range of the company's sports products including running and training wear, and of course basketball shoes, its core product. A Peak Sports outlet in Culver City, California. The sportswear maker is among an increasing number of Chinese brands that are expanding in the United States. Su Jia, CEO of Peak Sports USA, said the new LA store is a key part in the company's overall retail strategy in the US. Others strands to that strategy include taking space within large US retail outlets, e-retail and franchises. Last year, Peak opened an outlet in California's Westfield Culver City mall, and Su said the company is now negotiating with Footlocker, the US national sportswear retailer, to become one of its main suppliers. Founded in 1989 in Quanzhou, Fujian province, Peak Sports has grown into one of China's leading footwear manufacturers. However, its US business is still a relatively new development, started in 2010, about five years after it first decided to launch its "going global" strategy. The company has established strategic partnerships with a number of high profile NBA teams such as the Houston Rockets and the Miami Heat over the years. That started in 2006, when Peak signed its first personal deal with NBA star Shane Battier after he left the Memphis Grizzlies for the Houston Rockets, to become the first top player from the NBA to sign with a Chinese company. Since then, Peak has signed with 19 leading NBA players, including Tony Parker of the San Antonio Spurs, making it the biggest Chinese corporate sponsor of the NBA, after Nike and adidas, according to officials, and it plans to expand its roster in the next year.

Hong Kong*:  January 16 2013

Hong Kong Exchange Fund posts three-fold increase in returns (By Reuters in Hong Kong) HKMA chief Norman Chan Tak-lam speaks at the Asian Financial Forum. Investment income from Hong Kong’s Exchange Fund, which is used to back the Hong Kong dollar, hit HK$108.6 billion (US$14.01 billion) last year, the second highest on record, thanks to an improvement in the global economy and financial markets. The fund, whose total assets rose to HK$2.78 trillion at the end of last year from HK$2.49 trillion a year earlier, reported an investment gain of HK$27.3 billion in the fourth quarter. The full-year investment return was 4.4 per cent last year, compared with a 1.1 per cent return or HK$27.1 billion investment gain in 2011. “In the long-term growth portfolio, we will continue to expand our investment in private equity and property. We will include more PEs that we think have high growth potential, especially in the industries of energy, telecommunications, technology and health care,” said Eddie Yu, deputy chief of the Hong Kong Monetary Authority (HKMA). “In the property market, we’ll focus on the high-quality renting properties in major international cities.” The fund’s investment in Hong Kong and foreign equities recorded a profit of HK$11.8 billion and HK$10.3 billion, respectively, in the fourth quarter, leading the full-year profit to reach HK$30.7 billion and HK$42.6 billion. For bond investment, income came in at HK$2.5 billion in the fourth quarter and and HK$33.1 billion in the full year. The average return of the Exchange Fund was 3.0 per cent over the last three years, 1.8 per cent over the last five years, 4.9 per cent over the last 10 years and 5.6 per cent since 1994. Hong Kong’s Hang Seng Index climbed 22.9 per cent last year, and the China Enterprises Index of the top Chinese listings in Hong Kong climbed 15.1 per cent, the best year since 2009 for both benchmarks. “At present, sentiment in the US and European stock markets is rather positive. However, we must be mindful that the current asset prices are the result of both close-to-zero interest rates and the massive quantitative easing by the US and other major advanced countries,” Norman Chan, chief executive of the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, said in a statement. The valuations of the equity markets did not appear to be supported by improved fundamentals, and it was unclear how long they could hold, he added. The HKMA is the key manager of the Exchange Fund, which is under the control of the financial secretary and invests in equities, bonds, foreign exchange and other securities and assets.

Hong Kong Fashion Week for Fall/Winter, World Boutique kick off - Hong Kong Fashion Week for Fall/Winter and World Boutique will be held at the Hong Kong Convention and Exhibition Center from Jan. 14 to Jan. 17, 2013.

Ang Lee's film wins best original score at Golden Globes - Composer Michael Danna won for best original score of the 70th Golden Globe Awards for composing the melody of Ang Lee's 3-D fantasy film "Life of Pi".

 China*:  January 16 2013

China approves new US$11.2b Beijing airport (By Agence France-Presse in Beijing) Chinese leaders have given final approval for a long-awaited new US$11.2 billion international airport in Beijing to ease crushing congestion at the existing facility, state media said on Monday. The state-run China Daily newspaper reported the decision, made on Sunday, citing a spokesman for the country’s State Council, or cabinet. The existing international airport, which saw a major expansion in the run-up to the 2008 Olympics, is the world’s second-busiest, reflecting China’s relentless economic rise. The new airport is likely to be in the south of the sprawling capital but other details including a start date for construction and its design were still being decided, the Daily said, quoting spokesman Li Shengbo. The newspaper also reported, citing the CAAC News – a paper affiliated with the country’s aviation administration – that large-scale construction would begin next year, with the airport due to open by the end of 2018. CAAC News, quoting an aviation administration official, said the new airport would cost at least 70 billion yen (US$11.2 billion), with six runways for civilian aircraft and a seventh for military use. Beijing Capital International Airport, in the north of the city, has been ranked as the world’s second biggest airport for three years, the newspaper said, handling 81.8 million passenger movements last year. It ranks second globally behind Hartsfield-Jackson International Airport in Atlanta in the United States. A new airport would put Beijing alongside the likes of New York, London, Paris and Tokyo as cities with more than one major facility. Passengers in Beijing have long complained of delays, with another complicating factor being airspace distribution between civil and military flights.

Chinese PVs' shares soar in New York (By Bloomberg News in New York) The first week of 2013 saw Chinese stocks climb for a fifth week in New York, rallying the most since September, as manufacturing data added to signs the economy is recovering and as the US budget deal boosted China's second-largest trading partner. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the United States jumped 5.1 percent during the first week to 101.71, capping the longest stretch of weekly gains in 11 months. LDK Solar Co surged 59 percent in the week and Suntech Power Holdings Co soared 34 percent, as China took more measures to lift solar energy demand. Web game developer Giant Interactive Group Inc rallied 20 percent to a 16-month high, while Ambow Education Holding Ltd sank 7.1 percent. LDK Solar Co's logo behind a lifebuoy. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the United States jumped 5.1 percent during the first week of this year to 101.71, capping the longest stretch of weekly gains in 11 months. LDK Solar Co surged 59 percent in the week and Suntech Power Holdings Co soared 34 percent. Early January data showing manufacturing expanded for a third month in December compounded evidence the economy is emerging from its slowdown, while legislation to avert US spending cuts and tax increases burnished the outlook for China's exports. Asia's largest economy is poised to grow 8.1 percent this year, from 7.7 percent in 2012, according to the median estimates of 49 economists surveyed last month by Bloomberg. "China's economy will definitely rebound this year, and I would expect Chinese equities to do better," Stephen Leeb, chairman of Leeb Capital Management Inc, said by phone in New York. "The US economy starting to recover could be very positive as a strong US economy is going to help all economies."

Hong Kong*:  January 15 2013

JACKIE CHAN'S COMMENTS ON "CORRUPT" USA CAUSE INTERNAT FRENZY (SCMP and Agence France Presse) Controversial opinions are retweeted and shared across internet - Movie star Jackie Chan, pictured earlier this month in Yau Ma Tei, has generated huge debate among netizens. Hong Kong action hero Jackie Chan’s comments on America being the “most corrupt” country in the world have sparked huge reactions online. SCMP.com readers took to their keyboards to post a record number of comments on the story, in which the controversial star told Phoenix TV: “When you talk about corruption - the whole world, is there corruption in the United States? The most corrupt in the world!” Chan reaffirmed his view after the show’s host questioned him. “Of course! Where did the great breakdown come from? The world, the United States started it,” Chan said, referring to the financial crisis and gesticulating as he spoke. Chan’s comments, which were retweeted and shared thousands of times, were rebuked last week by Max Fisher, a foreign affairs blogger for the Washington Post, who called them “anti-American” rhetoric that was rooted in China’s insecurity. “To the degree that Chan’s comments were anti-American, they likewise reflect a common Chinese view of the United States, one that is rooted not just in attitudes toward America but in China’s proud but sometimes insecure view of itself,” Fisher said. Chan also said China is a relatively young country, where in the first half of its history it was “bullied by so many people”, and that it only achieved “real success” in the past decade. “Our country’s leaders admit they are corrupted, etcetera. We are improving - I can see our country is constantly improving and learning,” he said, adding that everyone is making an issue out of China because it is “powerful” now. Chan, who is known for his martial arts skills and daring stunt work, sparked criticism in Hong Kong, which was returned to China in 1997, after he reportedly told a Chinese magazine last December that protest in the city should be restricted. In the same interview, he said that he was bullied by Hong Kong triads and had to hide in the United States. He also said he needed to carry a gun everyday to protect himself, leading to a police investigation. He said: “Hong Kong has become a city of protest. The whole world used to say it was South Korea. It is now Hong Kong. “People scold China’s leaders, or anything else they like, and protest against everything. “The authorities should stipulate what issues people can protest over and on what issues it is not allowed.” http://www.youtube.com/watch?feature=player_embedded&v=9KM7njgVfhY#

Asia's health care boom is here to stay (By Carl Berrisford) Asian health care services look to be a good bet, writes Carl Berrisford - For those who find it nerve-racking trying to time share markets, why not choose a powerful investing theme that is sure to run for decades, and buy and hold? For example, Asian health care. The sector is recession proof and growing strongly. There are powerful demographic and social trends that make this growth an inevitable, multigenerational trend. The fact is well supported by the numbers. According to a UBS CIO research report, consumer spending on health care in Asia Pacific will grow to US$1 trillion by 2016 at an annual growth rate of 13 per cent. Why? Asia is getting older. The number of those aged 65 or above will rise 50 per cent by 2020, according to the report. Asia is also getting richer, and demanding higher quality medical support from its governments. Asian governments have been historically frugal when it comes to health care spending. Medicalised Middle Kingdom - The best example of this twin trend of an ageing population and rising government health spending lies with the mainland. At present, the mainland spends only 5.1 per cent of its gross domestic product on health care (the global average is 9.4 per cent). Decades of one-child policy has had its effect. China is producing fewer young people relative to its elderly, who are tending to live longer thanks to rising income and improved treatment. Over the next 20 years, the mainland will see 200 million people reach the age of 60 or above. Government health care funding has grown 18 per cent a year over the past five years - one of the highest growth rates in Asia. The mainland's plan to recognise the 160 million to 200 million migrant workers who live in cities with no formal residency status will have a big impact on medical spending. That's because these people will suddenly be eligible for state-provided medical support. The scheme is part of a broader plan to promote urbanisation in the mainland, which in itself will drive up medical spending. Rural health services largely revolve around infection fighting, through the use of antiviral or antibiotic medicine. Urban dwellers, by comparison, are more prone to "rich world" sickness such as hypertension, diabetes and heart disease. This requires a more specialised, involved and costly treatment than, say, a prescription for antibiotics. The reality is that rising urbanisation across Asia is raising demand for health care. Urbanisation raises demand for medical services as residents come within reach of facilities. It's also a lot more efficient to offer medical services to a large number of people in the city, compared with the smaller scale facilities in rural areas. The combination of increased health care spending and industry reforms could allow the Chinese health care sector to grow by a comfortable 20 per cent a year over the next five years. The tourist dollar - Meanwhile, as the rich world struggles with its own ageing burden, people are searching for cheap treatment in Asia. This leads to part two of our health care boom theory: a sustained rise in medical tourism, especially in Singapore, Thailand, Malaysia and India. Medical tourism is the practice of travelling overseas for medical treatment. The savings can be considerable. For example, the average US$113,000 price tag for heart bypass surgery in the US costs only US$20,000 in Singapore, and half this price in India. Even for minor cosmetic procedures such as breast implants, US patients can expect to pay one-third of the cost of treatment in Asia than they would at home. Singapore and Thailand are Asia's main medical tourism hubs, although India is catching up. Singapore stands out as having one of the world's most advanced health care infrastructures, placing sixth out of 191 countries in the World Health Organisation's ranking of global health systems. Thailand competes with its combination of quality, affordable services and natural attractions, which allows patients to seek treatment while vacationing. India's main advantage is cost. According to industry research, Asia's medical tourism market could double between 2011 and 2015, with medical tourist arrivals exceeding 10 million by 2015. Much of the tourism so far has been intra-regional, as patients from Asian countries travel to neighbouring countries with better facilities. For example, many of Singapore's medical tourism receipts (US$765 million in 2011) are the result of Indonesian and Malaysian travellers. Hong Kong also benefits from medical tourism from neighbours. Tens of thousands of expectant mainland mothers arrived in the territory in 2012, attracted by superior private obstetric care. Mainland patients in private Hong Kong hospitals pay up to 20 times the cost of giving birth in a mainland hospital, a testament to their rising wealth, and their willingness to spend it on premium health care. Driven by increased health care spending, and more affordable air travel thanks to the rise of low-cost carriers in the region, intra-Asian medical tourism is likely to continue to grow robustly.

Stop using Java, government warns PC users (By Stuart Lau and Reuters) Or use it with care, the Chief Information Office says after US finds a flaw in the software. Oracle has promised to fix the bug - The Hong Kong government has advised internet users to stop using Java or to only use it on trusted websites. The advice follows the US Department of Homeland Security's recommendation that computer users disable Java in web browsers before a fix is available from Oracle. Oracle said it was preparing an update to address a flaw in its widely used software that has been installed on hundreds of millions of computers, after the US government warned last week that hackers have been exploiting a security bug in Java to launch cyber attacks. "A fix will be available shortly," the company said on Friday but did not say how quickly the update would be available. Oracle added that the recently discovered flaw only affects Java 7, and Java software that is designed to run on browsers. The Office of the Government Chief Information Officer said that "most Hong Kong government websites and services were unaffected". The Department of Homeland Security and computer security experts said that hackers have figured out how to exploit a bug in Java that is used with browsers to install malicious software on PCs. That has enabled them to commit crimes from identity theft to infecting a computer in a network that can be used to attack websites. Attackers could trick targets into visiting malicious websites that would infect their PCs with software capable of exploiting the bug in Java, it said. Java is a computer language that enables programmers to write software using just one set of codes that will run on virtually any types of computer, including ones that use Microsoft Windows, Apple OS X and Linux, an operating system widely employed by corporations. It is installed in internet browsers to access web content and also directly on PCs, computer servers and devices that use it to run a variety of programs. Java is so widely used that the software has become a prime target for hackers. Last year, Java surpassed Adobe Systems' Reader software as the most frequently attacked piece of software, according to security software maker Kaspersky Lab. Java was responsible for half of all cyber attacks last year in which hackers broke into computers by exploiting software bugs, Kaspersky said.

Christians in prayer rally to fight gay law proposal (By Johnny Tam) Religious groups say their freedom of speech is threatened by move to protect the rights of sexual minorities - Protesters at the government headquarters, where organisers said 50,000 gathered. Police put the figure at 5,000. Thousands of Christians staged a rally outside government headquarters yesterday to show their opposition to proposed legislation that would outlaw discrimination against sexual minorities. The Evangelical Free Church of China Yan Fook Church, which organised the event, estimated that up to 50,000 people joined the "Inclusive Love Praying Concert" at Tamar Park, Admiralty, to voice their disapproval through singing and praying. They said such a law would restrict their freedom of speech on gay rights. Police put the turnout at 5,000. "If this becomes the law, those who oppose homosexuality will have their freedom of speech restricted," said the Reverend Jayson Tam, convenor of the "praying concert". In a separate public event, Secretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen said Chief Executive Leung Chun-ying would disclose shortly whether a public consultation would be launched. "In this regard, our colleagues have already made preparations. We are ready [for a public consultation] once the chief executive finds it is the appropriate time … Once there are further communications and public discussions [in the community], I believe there will be an opportunity to conduct a public consultation, details of which will be addressed in the policy address," Tam said. The chief executive delivers his maiden policy address on Wednesday. The Reverend Tam said there were examples in Western countries of similar legislation leading to "reverse" discrimination. He added they did not oppose the government launching a consultation on the law, but they would voice their opposing views. Wong Man-leung, 55, a Christian at the event, said: "I respect [gay people]. But I may be in trouble if I carelessly say something wrong about them." He said homosexuality was against the idea of family in traditional Chinese culture. Ann Chan, 22, a student, said: "I don't want the legislation as homosexuality goes against our Christian values." She was open to a consultation but would express her opposition. Openly gay lawmaker Raymond Chan Chi-chuen said participants were misled. "I believe they were mobilised to come because there were people saying if legislation is approved, they can't talk about homosexuality in church or even Christian doctrine anymore," he said. Chan said he was not hopeful that the chief executive would include the consultation in his policy address, but he would continue fighting for it as the first step to legislation to protect gay rights. A gay-friendly clergy said Christians should be more inclusive of homosexuality. "The world has changed. We should give gay people more reasonable treatment," said Silas Wong Kwok-yiu of the Blessed Minority Christian Fellowship. The South China Morning Post reported on Wednesday that there was no timetable within the government for rolling out the consultation because it wanted to deal with "livelihood matters" first, a government source said. In November, the Legislative Council voted down a motion to launch a public consultation. "The government is open-minded on whether to consult the public [about] the legislation of the anti-discrimination law. The chief executive will further explain the matter … in the policy address," the minister reiterated.

Surfers flock to Taiwan's east coast (By Secluded Black Sand beach, north of Taitung) The world's biggest ocean brings some of its biggest waves to Taiwan's unsheltered east coast along with winds strong enough to knock you off your feet. Add to this mix a dangerously fast current just offshore, and these beaches are usually empty save for the odd tent camper or bonfire builder. But Taiwan's expatriate community has led a movement to bring surfers to the beaches, raising interest among locals. Taiwan enjoys year-round surf with sea temperatures in the south of the island always warm. And despite the government ban on bathing when a typhoon warning is up, some 200 rebels take the plunge ahead of the late summer and early autumn typhoons, which generate ideal swells for seasoned surfers. Experienced surfers suggest trying the beaches of Taitung county. This stretch of coast is undeveloped, with Taiwan's highest mountains and elements of indigenous culture just inland. The county hosted international surf contests in 2011 and 2012. The white sandy beach at Shanyuan, north of the county seat Taitung, is another haven for surfers, snorkellers and outdoor enthusiasts. Further south, Jiupeng beach near sand dunes of the same name in Pingtung county draws surfers looking to test the wind-driven waves. In Hualien county, Jici beach has been rated as prime spot for beginning surfers. It is a 45-minute drive south of Hualien city. But the top beaches are often kept a secret to thwart crowds and overdevelopment. "From the core surfers' point of view, giving away info about the more obscure but happening spots would make me very unpopular," says Clayton Wholley, general manager of Quiksilver Taiwan.

 China*:  January 15 2013

Netherlands wants more high-tech Chinese exports (By By DING QINGFEN in Amsterdam) Key European trade center wants more high-value Chinese exports - China was one of the leading providers of high-tech goods to the Netherlands in 2012, leaping ahead of the United States and Germany, according to an embassy official. China also looks set to maintain this position over the coming years. The Netherlands is home to Europe's largest port, Rotterdam, and has a proud trading tradition, and China is playing an increasing role in that trade, said Li Fei, economic and commercial counselor at the Chinese embassy in The Hague. "Made in China no longer means cheap and low quality here." Li cited figures from Statistics Netherlands, a government body that compiles information about the country. In 2011, China passed Germany and the US to become the largest source of high-tech products imported by the Netherlands. "It's exciting news, and there is little doubt that China can maintain this position in the coming years," he said. The European Union is China's largest trade partner, and the Netherlands is China's second-largest trade partner in Europe. Li described the Netherlands as "the barometer of the European economy" as it's a key hub for both exports and imports. In 2011, the Netherlands imported high-tech goods valued at 96 billion euro ($128 billion). Of these imports, 18 percent came from China. More than half of China's exports to the Netherlands are high-tech products, mainly laptops and mobile phones, Li said. Previously, China's shipments to the Netherlands consisted mainly of garments and toys. While China's overall export growth weakened in 2012, the proportion of exported technology goods continued to expand. "We have full confidence in our high-end goods, although we also need to improve the quality of the low-end categories," Li said as he rebutted claims that Chinese goods were low quality. China overtook the EU in 2006 as the world's largest high-tech products exporter, a position it still holds, Li said. In 2012, about 60 percent of China's exports were mechanical and electrical goods. China is the second-largest source of foreign direct investment in the Netherlands, following the US. In 2011, 29 of the 193 FDI deals in the Netherlands were done by Chinese companies, and the investment was focused on electronics, high-tech, services and agriculture. As many as 330 Chinese companies have established a permanent business presence in the Netherlands, and investment is growing. In 2010 Chinese companies conducted 24 investment deals and this number increased to 30 in 2011. "China will maintain its position as the second-largest investor in the Netherlands in 2012 and in the years ahead," Li said. There are growing opportunities for Chinese investors in the country, Li said, and many companies in the country that are facing difficult times would welcome Chinese investment. A government survey in November showed that one-third of the country's companies were in difficult financial circumstances. The economy shrank by 1.1 percent in the third quarter last year and the central bank warned of an even worse scenario in 2013. As Chinese companies increasingly enter the Netherlands, "demand for financial support grows," said Zhao Caiyan, general manager of (Luxembourg) S.A. Rotterdam Branch of Bank of China. Bank of China opened a branch in Rotterdam in 2007, the first Chinese financial service provider in the Netherlands. "Our customers are in a wide range of sectors. We help them settle down and register businesses here, paving the way for expanding further into Europe," said Zhao. Despite the growing presence, much more could be done, according to a leading consultancy firm. Amsterdam-based consultancy Boer & Croon said that only 3 percent of Chinese merger and acquisition deals conducted in Europe over the past four years were in the Netherlands. But the consulting firm predicted a growing number of Chinese companies would seek deals in the "high-tech sector" in the Netherlands. According to the Ministry of Commerce, the top three destinations in Europe for Chinese overseas direct investment are Luxembourg, France and the United Kingdom.

Futures broker expected to mark restart of mainland IPO market (By Daniel Ren in Shanghai) Yongan Futures expected to spearhead new listings as CSRC bids to revive trading in stocks - Guo Shuqing, Chairman and Party Secretary of China Securities Regulatory Commission. Beijing will give priority to the first share listing application from a home-grown futures brokerage when it reopens the initial public offering market, in a further sign of the regulators' determination to bolster the market. Yongan Futures is likely to secure the distinction of becoming the country's first listed futures brokerage with the support and backing of Zhu Congjiu, a vice-governor of Zhejiang province and a former senior official at the securities regulator. Initial public offerings have been suspended as the regulator avoids allowing fresh equity inflows so as to bolster the weak stock market. According to two people close to the regulator, the China Securities Regulatory Commission has decided to soon approve several listing applications by futures firms to enable them to raise capital and quicken their expansion. The decision was in line with a consensus among top securities officials, who are now fully acknowledging the positive role of futures trading, the people said. The change of heart comes after regulators were previously reluctant to develop the market because of concerns that it might be undermined by rampant speculation. Instead, against a background of breakneck economic growth and increasing demand for commodities, regulators turned their attention to liberalising the derivatives market, hoping that this would help the country gain global pricing power over major raw materials such as copper. It was not until late 2011, when reform-minded Guo Shuqing became the chairman of the commission, that the regulator decided to turn its attention to developing the futures market. "A listing by a futures brokerage is a symbolic move, but it could be a prelude to major changes on the market," said He Fuqiang, a director at Beijing ZHY Money & Bond Market Investment Consulting Centre. "At the same time, fundraisings by futures brokerages can help them get stronger while supporting the growth of the market." Several other big futures companies, including Ruida Futures, Luzheng Futures and Nanhua Futures, have also made plans to launch their initial share sales. Annual turnover of futures trading climbed 24.4 per cent to 171 trillion yuan (HK$213 trillion) last year, and the regulatory commission accelerated preparations for the launches of bond and crude oil futures.

Hong Kong*:  January 14 2013

Modest growth expected at Hong Kong airport in 2013 (By Toh Han Shih) Operator cautiously optimistic, as it reports monthly record for flight numbers in December - Hong Kong International Airport expects to achieve modest traffic growth in 2013, after reporting slower passenger traffic growth last year than in 2011. "We are cautiously optimistic about achieving mild traffic growth at Hong Kong International Airport in 2013," said Airport Authority chief executive Stanley Hui Hon-chung. The euro zone's debt problems and weak US economy will persist, but that will be offset by strong economic growth on the mainland and in Southeast Asia, which will boost traffic, he said. The airport reported 30,800 flight movements in December, a 5.1 per cent year-on-year increase and new monthly record. Passenger traffic grew 4.7 per cent to 56.5 million passengers last year, the airport said. That is slower than growth of 5.9 per cent in 2011. Thanks to a rebound over the past five months, the airport handled four million tonnes of cargo during the year, 2.2 per cent more than 2011. In contrast, cargo volume dropped 4.6 per cent in 2011. Passenger traffic grew 3.9 per cent last month, and cargo volume rose 7.6 per cent. The increase in passenger traffic was driven mainly by travel by Hong Kong residents, which rose 7 per cent from the same month last year. Growth in cargo throughput last month was primarily due to an 8 per cent year-on-year growth in exports. Cargo throughput to and from North America and the mainland outperformed throughput to other regions, the airport said. "Despite the challenging global economic environment, regional economic growth continued to drive traffic increases at Hong Kong International Airport in 2012," Hui said. "This past year, we welcomed nine new airlines and expanded our global network to about 170 destinations." Meanwhile, Shenzhen, the second-busiest mainland port and fourth-busiest in the world, suffered a 2 per cent drop in container throughput to 1.89 million twenty foot equivalent units (teu) last month. Cargo throughput fell 1.8 per cent to 19.49 million tonnes, according to the Shenzhen Ports Association. For the whole of last year, Shenzhen's container throughput increased 1.64 per cent to 22.94 million teu, while cargo throughput grew 2.16 per cent to 228 million tonnes. Reflecting the weak European market, the container throughput of Chiwan port in Shenzhen fell 4.3 per cent to 3.95 million teu last year, the association said. Chiwan port handles exports mainly to Europe. Ningbo, the third-busiest mainland port and sixth-busiest globally, expects to post much faster growth of container throughput of 11.2 per cent to 16.83 million teu and cargo growth of 15.3 per cent to 443.25 million tonnes for last year, the Shanghai-listed port operator said on the Shanghai Stock Exchange website. Container throughput at Shanghai's port rose 2.5 per cent to 32.53 million teu last year, according to the Shanghai International Port (Group), the city's operator. This consolidates its status as the world's busiest port, ahead of Singapore, which handled 31.6 million teu.

Actress Shu Qi takes trip down memory lane at Kenzo launch (By Vanessa Yung) Actress Shu Qi has filmed a new advertisement for Kenzo to be released in March. Actress Shu Qi certainly knows the power of perfume. At Kenzo's event on Thursday, she talked about how a person's scent can make a totally different impression on her. "A scent tells a lot about a person's taste and character. I once fell in love with a man because of his nice smell. Years later, a man wearing the same scent caught my attention and made me turn my head to check if it was him. "Of course it wasn't, but it evoked so many memories," recalled Shu, who was speaking at The French Window in Central's IFC mall. "However, this smelly waiter - although he was all dressed up and handsome - ruined the entire meal I had at a French restaurant. Although the ambience of that restaurant was great, my mood was totally destroyed when he served me my food." Aptly dressed in a backless floral long dress, Shu was recently named the global ambassador of Flower by Kenzo, the poppy-inspired flagship fragrance launched in 2000. After her first stint with the French fashion brand in 2007-2009, she has filmed a new advertisement to be released in March. Also at the event were global president Patricia Tranvouez and artistic director Patrick Guedj. After Stephen Chow Sing-chi's movie Journey to the West, Shu's latest work includes a collaboration with Chang Chen in Taiwanese director Hou Hsiao-hsien's martial art period drama The Assassin.

Security fears over seized-ivory stockpile (By Lana Lam) Huge stockpile of 'white gold' that has been seized by customs officers needs to be better secured, says head of conservation group - Hong Kong Customs seized a total of 779 pieces of ivory tusk, worth about $10.6 million, inside a container shipped to Hong Kong last week. A leading expert on elephant conservation has urged the government to step up security at a top-secret location housing a massive stockpile of elephant ivory. She cited fears it may be targeted by criminal syndicates looking to steal the lucrative contraband known as "white gold". "It's always a concern having a stockpile in any location," said Grace Ge Gabriel, regional director for the International Fund for Animal Welfare, which has been tracking the illegal trade in ivory for more than a decade. "Last year in Tanzania and Zambia, stockpiles were stolen. It's important to keep up security, because employees were implicated in both those ivory thefts - an indication of the level of corruption in these countries." Gabriel said the chance of workers stealing ivory was much lower in Hong Kong, but it was still a worry, especially given recent huge hauls. More than 1,200 tusks weighing 3.8 tonnes were seized last October, one of the world's biggest finds since 2007. Gabriel commended the city's customs officials, who along with Agriculture, Fisheries and Conservation Department staff, have increased their efforts to stop smugglers using Hong Kong as a transit point. "But it puts an extra burden on Hong Kong's law enforcement in terms of storing the ivory," Gabriel said yesterday. In the past three months, more than six tonnes of elephant ivory worth close to HK$50 million was confiscated in Hong Kong. At the same time, the wholesale price of ivory has tripled since 2006, alongside increased demand for the precious item at auction houses, according to a 2011 report by Gabriel's organisation on ivory markets in China. Gabriel said there was only one option to ensure the ivory never fell into the wrong hands. "The best way to dispose of it after investigation is to destroy it by burning it, so that it is beyond use," she said, but this process could take years. A spokeswoman for the department said the confiscated ivory was in "secure custody" at a classified location. "We accord high priority to the security of confiscated items," she said. Thousands of tusks as well as carved items are packed away in boxes under lock and key. "Due to the high commercial value of the ivory, the storage premises are equipped with adequate security measures, including security guards and CCTV surveillance."

Hong Kong stock market to benefit from new mainland investor scheme (By Bien Perez) Central bank prepares for 'QDII2' trials to boost private buying of overseas stocks - The Hong Kong stock market is poised to receive a windfall from a renewed effort by Beijing to allow more mainland citizens to buy securities listed on overseas exchanges. The People's Bank of China announced late on Friday that preparations are under way for trials of its so-called qualified domestic individual investor (QDII2) scheme. The scheme is part of a big initiative this year to increase outbound investment by the private sector. The mainland's central bank did not provide details. It is a key step towards greater financial liberalisation that is likely to be ushered in by premier-in-waiting Li Keqiang, who has vowed to pursue major policy reforms to stimulate further economic growth. China, which had US$3.31 trillion in foreign-exchange reserves at the end of December, has been moving steadily since 2009 to develop the yuan into an international currency. Individual mainland investors now can purchase stocks and other securities in foreign capital markets only through authorised funds under the qualified domestic institutional investor (QDII) initiative established in 2006. "I expect the Hong Kong stock market to directly benefit from the QDII2 initiative," Hu Yifan, the chief economist at Haitong International Securities, said yesterday. "It could have a positive impact on the Hang Seng Index." Hu said the new scheme appeared to be similar to the so-called through-train investment programme announced in 2007 to allow mainland citizens to trade Hong Kong stocks directly under a trial run. It was a ground-breaking move to direct capital outflow and boost investor participation in mainland companies listed in Hong Kong, which traded at a huge discount to their A-share counterparts. The through-train programme triggered a buying stampede even before its official launch, with the benchmark Hang Seng Index surging past 29,000 points for the first time to set a record high in October 2007. But the State Administration of Foreign Exchange scrapped the through-train initiative's implementation in January 2010 and merely expanded the QDII scheme for overseas investments through designated funds. Hu said the People's Bank of China was expected to provide more details about QDII2, including the cities where it will be implemented, the qualifications for investors, and the Hong Kong or mainland banks involved. Last April, Hong Kong Exchanges and Clearing said it would set up a market-data hub in Shanghai this year to provide details on Hong Kong stocks

 China*:  January 14 2013

New hubs to cushion exodus from Pearl River Delta (By Toh Han Shih) Pearl River Delta eventually seen losing status as world's factory but inland provinces will ensure the mainland remains a production powerhouse - Some manufacturing, such as textiles, is leaving the mainland, but most are moving inland for tax breaks and cheap land. An exodus of factories from the Pearl River Delta has led some to question whether China can remain the so-called factory of the world, but even if the delta loses its pre-eminent status, the mainland will remain a manufacturing powerhouse, thanks to the rise of new manufacturing bases in interior provinces, analysts say. Over time, China would lose its status as the world's factory, said Steve Lo, the chairman of the Chamber of Hong Kong Logistics Industry. "The reason is that labour costs and the value of the yuan are rising, so many manufacturing companies have moved to Myanmar and other Southeast Asian countries," Lo said. "The result is China will still be the world's biggest manufacturing country, but it will be less important as the world factory." But inland cities such as Chongqing would emerge as manufacturing hubs to replace the waning contribution of the delta because they were less expensive than coastal areas in the costs of production and land, he said. "Wuhan, Chongqing and Chengdu will be important manufacturing centres. They will ensure that China remains an important manufacturing centre." Stephen Green, the greater China research head of Standard Chartered, echoed these sentiments. "The low value-added labour-intensive stuff like toys, textiles and shoes are leaving China. But most of the rest of China's manufacturing is staying and moving inland where they get tax breaks, cheap land and labour. That is the dominant trend." In the first 11 months of last year, Chongqing's trade jumped 92.8 per cent to US$49 billion, according to the Chongqing government website. Exports sourced from the city reached US$35.78 billion in the period, ranking it in 10th place by value. Exports of electronic goods including notebook computers leapt 110 per cent to US$23.55 billion in the first 11 months. Over the first nine months, Chongqing's international air cargo exports soared 123.7 per cent to more than 40,000 tonnes, of which 92 per cent were notebook computers, according to the government website. In 2009, United States computer giant Hewlett-Packard and Taiwanese electronics manufacturer Foxconn Technology agreed to jointly invest US$3 billion in notebook computer manufacturing facilities in Chongqing, the South China Morning Post earlier reported. It takes about 30 hours to ship goods from Chongqing to Shanghai through the Yangtze River, which makes the export of goods from Chongqing viable, and it is economical to fly large amounts of electronic goods from inland cities such as Wuhan and Chongqing to Europe, Lo said. Stephen Cheng, the president of the Hong Kong Logistics Association, said airfreight was a practical solution for high-value products. "Time is of the essence for these products. Every three months, new products come to market," he said. Last month, Foxconn announced plans to invest US$1.1 billion to double capacity at its factory in Zhengzhou, the capital of Henan province, which will make it the world's largest iPhone factory, according to media reports. At the same time, Apple's chief executive Tim Cook said the company would begin manufacturing in the US next year. Geoffrey Crothall, a spokesman for China Labour Bulletin, a Hong Kong-based workers' rights group, said Cook's announcement might possibly be due to the bad publicity over strikes and suicides at the mainland factories of its contract manufacturer Foxconn. By 2015, some manufacturing in China would shift back to the US because China's cost advantage would have eroded, said a report by Boston Consulting. "While China will remain an important manufacturing platform for Asia and Europe, the US will become increasingly attractive for the production of many goods sold to consumers in North America," it said. Cheng said he did not foresee factories moving from China to the US. "US labour costs are even higher than in Hong Kong. China will remain an important manufacturing base for high-value products like iPads since it can meet high-quality requirements. Other Asian countries' costs are lower but may not meet the quality requirements." The loss of cost competitiveness in China would reduce the offshoring of US and European production to China, but the main countries that would take over the manufacturing would be developing nations such as Mexico and Vietnam, said Charles Dumas, the chairman of Lombard Street Research, a British think tank. For the next five years, only a small part of manufacturing in China would migrate to the US, Green said. "Domestic consumption will grow very strongly for the next 20 years, so manufacturing in China to supply domestic consumption will grow." Japanese carmaker Nissan is an example of a multinational expanding production in China to serve the mainland market. "All our production in China is for the domestic market," said Nissan general manager Paul Miles. "China is our largest market today, and will continue to be one of Nissan's most important engines of growth. For Nissan, China has been and will remain an important manufacturing base. In fact, we have been increasing the number of production plants and capacity in the country over the years." In June last year, Dongfeng Motor, a joint venture between Nissan and Dongfeng Group of China, announced the building of a 5 billion yuan (HK$6.2 billion) plant in of Dalian, Liaoning province. At present, the Japanese firm has plants in Guangzhou, the capital of Guangdong province, two in Zhengzhou, and one in Xiangyang, Hubei province. The Xiangyang plant, which is operated by Dongfeng Motor, received a 2 billion yuan upgrade in May, which would nearly double its annual production capacity from 130,000 units to 250,000 units in 2014, when the new lines start production, Miles said.

Pianist Lang Lang performs in 2013 Nanjing New Year Concert - Pianist Lang Lang holds his 2013 Nanjing New Year Concert in Nanjing, capital of east China's Jiangsu Province, Jan. 12, 2013.

 

Importers toast the future of South African wines (By Lu Chang) As the taste for foreign wines grows in China, the Cape producers look to the country to make up for falling demand in the European market, Alberto Fernandez, managing partner of Torres China . Despite a surging demand for wine in China, South African makers have been unable to make much headway in the market, due to stiff competition from European and other major wine producing countries. The Kleine Zalze vineyard in South Africa. The nation's wine makers are being forced to make greater inroads in China, after falling demand from Europe. Wines from France, Italy, Spain, Australia, Chile and the US - collectively known in the industry as "the big six" - account for 90 percent of the country's foreign wine consumption, the latest industry figures show, with South African wines accounting for just 3 percent of the Chinese market. But experts now say that could all be about to change. "Is it tough to sell South African wines? Yes," said Jim Boyce, a well-known wine writer, who runs the industry website Grape Wall of China. "Most people know little about them. They don't have easy access to them in some cities, and instead tend to buy from brands and countries they know. "But the situation is changing because there are distributors expanding throughout the country with South African wines in their portfolios, and there is a growing niche of consumers interested in trying new wines." There are around 20 companies importing South African wines to China, including Wineriver Trading Co, which imports wines from there, Chile and France. Wang Yuan, its vice-general manager, said that though South African wine is a latecomer to the Chinese market, it has been enjoying better growth rates than wines from the old world such as France and Italy in recent months, and he expects that momentum to be maintained. "Its wines have a very special fruity taste that is preferred by many Chinese. "And as most South African wines are priced reasonably, they have an excellent chance of making inroads into China," Wang said. South Africa exported about 360 million liters of wine during 2011, produced mainly in its Western Cape province, with Europe being its largest export market. That figure represents about 43 percent of its wine production, according to the South Africa Wine Industry Information and Systems. The recession in many economies across Europe, however, means that many are now looking to other markets, as orders from the continent fall, and China represents massive potential to make up for those lost orders. Chinese wine drinkers consume 300 million bottles of wine a year and the country is the fifth-largest market in the world in terms of consumption, ahead of the UK. A recent Vinexpo study has forecast a further 54 percent increase in consumption between 2011 and 2015. Hein Koegelenberg, CEO of La Motte and Leopard's Leap Wines in South Africa, told US news website GlobalPost recently that he believes the country's wines have a better chance of succeeding in China than many others because of the varieties available, which can be matched with all kinds of Chinese food and culture. Industry experts say they are especially favorable to wines made from the Chenin blanc, a grape originally from the Loire valley of France which is also widely grown in South Africa. It is viewed as ideal for a growing number of white wine drinkers in the coastal cities of southern and eastern China, such as Guangzhou, Xiamen and Shanghai, where seafood is popular. Also Pinotage, a red wine grape which is a cross between Pinot noir and Cinsaut, can match richer dishes in China's northern provinces, because it can produce complex and fruity aromas at the same time. "Most of the South African wines are food-friendly, although most Chinese consumers are yet to define their characteristics of taste," said Alberto Fernandez, managing partner of Torres China, one of the country's largest wine importers and distributors. "But the packaging of wines sold in China helps a lot, because they are mostly simple and easy to remember." The Spanish-based wine company imports just one brand from South Africa, Kleine Zalze red wine, but Fernandez said he plans to add more as the market matures and curiosity grows among the country's increasingly sophisticated consumers. Jim Boyce, Grape Wall of China founder, holds an annual survey on his website, and the evidence from that is pretty conclusive, that there is a rising tide of interest in South African wines. A dozen Chinese customers sampled 40 wines priced below 100 yuan ($16) and ranked them on different aspects. In each of the four years the survey has been held, South African wines have been in the top three slots. "This is a small sample and the wine is inexpensive, but it is still a good sign for South African products," Boyce added. And South Africa has another big selling point. As part of the BRICS club of emerging economies (that include Brazil, Russia, India, China and South Africa), it is pushing for better trade agreements which will involve fewer taxes and lower prices on wine exports to China. However, Li Deimei, a wine maker and professor at the Beijing University of Agriculture, said South African exporters to China - as small fish in a big pond - must move quickly to promote and market their products, as the country's appetite for wine continues to grow. "I don't think South African wines are doing enough right now, and there should be more joint efforts involving the government, he added. Since early 2000, the national wine associations of France, Italy and many other countries have set up offices in China. They have been involved in aggressive marketing campaigns and media initiatives to help consumers get to know their products better. But experts suggest that South African wine makers still lack the official industry support they need to make serious inroads into China. "South African wines do certainly have some great advantages over their competitors - the country has a 300-year-old wine-making history, a good climate and so on," said Li. "But in today's market, to win over Chinese consumers is not just about who has the most products, it's about who can do the best job of promoting themselves."

Foreign students stage Kung fu show for New Year reception (By Zhu Xingxin) International students from the Capital University of Physical Education and Sports perform kung fu during the Ministry of Education's 2013 New Year reception for international graduates, held at the University of International Business and Economics in Beijing.

Hong Kong*:  January 13 2013

Singer Kelly Chen turns up the heat for new single So Hot (By Vivian Chen) Singer Kelly Chen Wai-lam, who put her career on hold for two years to raise her children, is ready to launch her new album. Determined to launch the recording with a bang, the mother-of-two wore a bath robe for the music video, with her hair wrapped in towel, to promote her new single So Hot. Those working on the set joked she resembled the titular character in Ang Lee's Life of Pi. To emphasise the "hot" in her song, Chen is seen in the video chomping down on spicy food, such as chilli peppers and kimchi pickles. She even surprised the director by downing a handful of chillies without drinking a drop of water. "I'm a hot mum, so nothing spicy is too hot for me," she joked. Chen worked with noted composers and lyricists, including Ivana Wong Yuen-chi and Leung Pak-kin, on her new album, which will be released next month.

Government to survey subdivided flats, says Anthony Cheung (By Olga Wong) Institute will assess tenants living in poor conditions, to better inform housing policy - The government will conduct a comprehensive survey of subdivided flats and their tenants, to give advisers drawing up a long-term housing strategy more reliable data to work from. Secretary for Transport and Housing Anthony Cheung Bing-leung said a research institute would be commissioned to look at the number of such tenants and the conditions they live in. "I hope it will be useful to our discussion," he said. "It will be a challenging task." Cheung's announcement, after a meeting of the Long Term Housing Strategy Committee, followed revelations that some staff of the Census and Statistics Department had faked answers in household interviews, calling into question the reliability of census data on subdivided flats. The figures showed the number of such flats had decreased 40 per cent from 58,300 units in 2006 to 32,800 in 2011. Cheung said the survey would be difficult, because there was no consensus on the definition of subdivided flats. Current data also covers cage dwellers and those in cocklofts. Cheung said he supported enforcement against subdivided flats involving illegal structures and endangering public safety, and pledged the committee would come up with a long-term policy to help those living in substandard conditions. The committee has also endorsed the need to shorten the waiting time for single applicants over 35 who are in the queue for a public flat. As part of the new government's plan to build more public estates, the Planning Department will propose to the Town Planning Board today the re-zoning of two sites in the New Territories for housing. Under the proposal a public car park in Choi Yuen Road, Sheung Shui, and a vacated site to the south of Yung Shing Court, Fan Ling, would be used for 900 and 780 public flats, respectively. Committee member Michael Choi Ngai-min said he hoped the government would allow cubicle tenants living in bad conditions to move into public flats earlier. He also wants it to pledge a maximum three-year wait for single applicants aged over 35. "But it all depends on how many public flats the government can supply and how fast it can deliver them," he said. During the meeting, Choi also suggested providing housing subsidies to young people who are postponing their wedding plans because they cannot afford a flat. But many members are understood to think that priority should be given to older age groups, rather than the younger generation.

 China*:  January 13 2013

China continues to increase influence on global trade (By Bao Chang) Port of Qingdao in Shandong province. China is the world's biggest exporter and second-largest importer, and saw a year-on-year growth of 6.2 percent in foreign trade in 2012, according to the latest customs figure. As the largest trading partner of 124 economies, the country has brought huge economic benefits to markets around the world. The world's second-largest economy is well on its way to achieving "the Chinese Dream" when it comes to foreign trade and economic cooperation on the global stage, after developing itself into the biggest trading partner of a majority of countries and regions worldwide. According to the latest statistics, the country had become the largest trading partner of 124 economies by 2011, compared with 70 in 2006, meaning it had overtaken the United States as the biggest trading partner of most nations. The US, which was the largest trading partner of 127 economies five years ago, meanwhile, has seen a decrease in that number to 76, according to figures from the Associated Press, released last month. He Weiwen, co-director at the China-US-EU Study Center of the China Association of International Trade, said that despite a sharp slowdown in global activity, China's foreign trade has continued to grow. "China's positive economic influence has been surging in surrounding countries over the past five years," he added. Last month, Australia's Department of Foreign Affairs and Trade released statistics showing China remained its biggest trading partner with bilateral trade recorded at $A127.8 billion ($134 billion). "China has strong demand for Australia's mineral, natural gas and coal products on which the two sides have profound cooperation," said Kevin Rudd, Australia's former prime minister. The southern hemisphere nation is joined by Japan, South Korea, India, Russia, the Association of Southeast Asian Nations, Iran, Brazil and South Africa on the list of regions and countries whose biggest trading partner is China. China, for the first time, replaced the US as Japan's largest trading partner in 2007 with a record high of trade value between the two countries. China's purchase from Japan contributes a lot to the bilateral trade. Japan's exports to China surged by 10.1 percent from a year earlier to $194.59 billion in 2011.

Lenovo aims to capture high-end market (By Wang Jun in Las Vegas) Chen Xudong, senior vice-president and general manager of Lenovo China, and actress Li Bingbing show a Lenovo smartphone at the International Consumer Electronics Show in Las Vegas on Tuesday. Lenovo Group, the Chinese multinational maker of desktops, laptops, tablets and mobile phones, said it hopes its upcoming restructuring can gain more traction in the high-end market. Yang Yuanqing, chairman and CEO of Lenovo, said the company will split into two groups: the Idea Group and the Think Group. The first division will concentrate on mainstream products, while the latter will be the company's flagship brand to compete against Apple. At the International Consumer Electronics Show in Las Vegas, Yuan said the company needs to perform better in the high-end market of businessmen and enterprises. "Lenovo's revenue has grown from $1.3 billion to almost $30 billion over the past four years. Our growth needs a restructuring ... (that's why) we established the Think and Idea groups last week," he said. Lenovo has performed well since acquiring IBM's personal computer business in 2004. According to Gartner, a US tech consulting firm, Lenovo has stayed a step ahead of market growth and is set to surpass HP to become the top player in the computer market, although market research firm International Data Corp said HP was still leading in the third quarter last year. But Lenovo already has a large market share of the Chinese market, prompting the company to shift attention to the high-end market. Gerry Smith, president of Lenovo North America, said the company is the fastest growing PC company over the past 10 quarters in North America. According to its financial results for the fiscal quarter that ended on June 30, Lenovo's shipments to North America grew by 8.6 percent against an overall drop of 10.3 percent for the industry. It achieved $1.18 billion in sales in North America for the quarter, which amounted to 14.7 percent of its global sales and less than one-third of its sales revenue from China. Smith said Lenovo's next growth phase includes investments in sales channels. Over the past 15 months, it has increased the number of retail stores in the continent by 10 times to more than 4,000 stores. Sales of PCs priced over $799 accounted for approximately 50 percent of sales in North America. "We'll also keep investing in innovation and brand awareness," Smith said. At CES, the most important technology-related trade show in the US, Smith said the financial uncertainties in the US may pose challenges for the electronics company's ambitions. "The biggest challenge we face now are the financial uncertainties in the US. Big companies are waiting to see what happens before they decide to buy," he said. Yang also said the company's strategy is to grow locally in order to better serve customers and utilize local resources and create jobs. Lenovo announced in October that it would set up a plant in Whitsett, North Carolina, and hire 115 employees. Gianfranco Lanci, senior vice-president of Lenovo in charge of the company's Europe, Middle East and Africa regional markets, said Lenovo will rise to become the top company for the trio of markets next year. Currently, Lenovo ranks third, in terms of sales, in the expansive region after Acer and HP. The former Acer CEO stressed that the EMEA region is a combination of mature and emerging markets. It is Lenovo's largest geographical coverage, which includes 121 countries and 40 offices with more than 1,800 employees. Its sales from the EMEA region in the first fiscal quarter were $1.58 billion with a year-on-year growth rate of 62 percent.

China launches fighters amid Japan dispute (Agence France-Presse in Beijing) Beijing sent fighter jets to the East China Sea after Japanese aircraft followed a Chinese plane in a territorial dispute, the defence ministry said on Friday according to state media. A ministry official told a press conference that two J-10 fighters flew to the area on Thursday to monitor two Japanese F-15 fighters that had trailed a Chinese Y-8 aircraft, China’s official Xinhua news agency said. The comments came after Japanese media reported Tokyo had scrambled fighter jets to head off an unspecified number of Chinese military planes near islands at the centre of an increasingly tense maritime row. The two countries are at odds over the small, uninhabited islands controlled by Tokyo as the Senkakus but claimed by Beijing, which calls them Diaoyu. The Beijing defence ministry official said that Japanese military planes have been increasingly watching Chinese aircraft and have also extended the areas where they are active, Xinhua reported. China’s military will be on high alert and the country will protect its air defence force, the official said. Japan’s Fuji TV network quoted Tokyo officials as saying that Chinese planes were spotted on Thursday on Japanese military radar north of the islands. The aircraft did not violate territorial airspace over the islands but flew inside Japan’s so-called air defence identification zone, the report said. Tokyo’s defence ministry has said that F-15s were sent airborne to head off Chinese state-owned – but not military – planes four times in December, including an occasion when Japanese airspace was breached. They were also mobilised once last week, it said.

Heiress Zong Fuli says money can't buy her love (By Keith Zhai) Tycoon's daughter causes a stir on the internet by telling magazine she can't find a boyfriend - Zong Fuli, 30, with her dad, Zong Qinghou. Where have all the real men gone? That lament by the daughter of the mainland's richest man has caused an online frenzy, particularly among single people. Zong Fuli, 30, the only daughter and heiress of beverage tycoon Zong Qinghou, revealed her anxieties during an interview with the mainland edition of Marie Claire, saying she had never had a boyfriend. "I feel pessimistic about love. Quite often it is hard for girls like me to find a boyfriend. Everyone knows this," she said, adding that guys were always putting her on a pedestal. "I have simple requests in love. He could be someone who sends me text messages every day with simple greetings such as asking whether I've eaten yet, or when I am going to bed. Just a little love and caring would be enough for me. But it is very hard to find a man like this, really." The article says the men are not genuinely interested in Zong, or they want her for her wealth. The comments set the blogosphere abuzz, with countless people posting on microblogs that they would make a good candidate in Zong's search for Prince Charming. "Please marry me. Does anybody have her contact info?" said one well-liked post. "This a great change for poor guys like me; I can afford to send text messages." Zong's father is the founder and chairman of beverage producer Hangzhou Wahaha Group. He topped Forbes' China Rich List last year with a net worth of nearly US$10 billion. The heiress went to high school in the United States and did a degree in international business at Pepperdine University in California. She returned to China in 2004 and joined the management staff of her father's company the next year. Traditionally, sons in China inherit the family business, but some prominent businessmen have decided to leave their wealth to their daughters. Liu Yonghao, president of the Chengdu based conglomerate New Hope Group, named his daughter as his successor because of his son's youth. And Yang Huiyan, daughter of Country Garden Holdings' co-founder Yeung Kwok Keung, has attended her father's board meetings since the age of 13. She was chosen as successor after her older brother died prematurely.

China inflation hits 6-month high as food costs soar (By Associated Press in Beijing) A vegetable market in Beijing. Cold weather has pushed up produce prices, although inflation figures for December were relatively benign. China’s inflation spiked to a six-month high in December after a freezing winter pushed up vegetable prices, possibly complicating efforts to sustain a shaky economic recovery. Consumer prices rose 2.5 per cent over a year earlier, up from November’s 2 per cent and the fastest rise since June, the National Bureau of Statistics reported. That was driven by a 14.8 per cent jump in vegetable prices after the coldest winter in seven years led to smaller harvests. The statistics bureau said vegetable prices in some areas rose as much as 40.8 per cent. Higher inflation could hamper the government’s ability to support China’s recovery with interest rate cuts or other moves for fear of igniting a politically dangerous price spiral. Consumer prices are especially sensitive in a society where the poorest families spend up to half their monthly incomes on food. “Rebounding price pressures mean tighter monetary policy ahead,” said Credit Agricole CIB economist Dariusz Kowalczyk in a report. The World Bank and private sector analysts expect about 7.5 per cent growth this year after last year’s estimated 8 per cent expansion. But analysts warn China still could face a danger of a “hard landing” with much lower growth if trade slumps or the country suffers a financial shock from a decline in housing prices or weak investment. Bank lending rose 15 per cent in the second half of last year to 8.2 trillion yuan (US$1.3 trillion) but total credit grew by about 20 per cent to 16 trillion yuan (US$2.5 trillion), the government reported this week. Analysts expect bank lending to rise to about 9 trillion yuan (US$1.4 trillion) this year. China’s trade growth rebounded strongly in December in a positive sign for a recovery but analysts warn it will be hard to sustain that momentum due to weak demand in key US and European markets. That means China has to rely on domestic consumption that is growing but more slowly than authorities want and a flood of government-led investment. The World Bank and private sector forecasters expect growth of about 8 per cent last year and about 7.5 per cent this year. That would be stronger than the West and Japan but China’s weakest performance since the 1990s. The communist government spent 2010-11 tightening economic controls to crush inflation that was fueled by a flood of stimulus spending and bank lending following the 2008 crisis. Authorities eased some controls in late 2011 after exporters were battered by a plunge in global demand but have avoided a repeat of their huge stimulus.

Hong Kong*:  January 12 2013

Tai O: The Venice of Hong Kong is stilt standing (By Jennifer Ngo) Tai O has battled storms and seen its fishing trade collapse but its residents have picked themselves up without much outside help - Weathered by storms, hit by landslides and threatened by Hong Kong's rapid change and development, Tai O's locals rely on their own resources to survive. The 3,000 residents left out of a village population that once reached 30,000 have been using their history and culture to carve out a new way of life - without much help from the government. Sampans once filled with fishing nets and the day's fresh catch have given way to dinghies packed with photo-snapping visitors. Streets are lined with shops selling seafood and local handmade snacks. Some may see tourism as an erosion of local culture but not the residents of the old Tanka village, which sits on the west side of Lantau Island. "No, I don't regret leaving [the life of a fisherman]," said Chow Sing, who is descended from a line of Tai O fishermen. Together with his son Chow Siu-hang, he takes visitors by boat to see Tai O's houses on stilts. His is one of five tour boat companies that take tourists around the village which some people have called the Venice of Hong Kong. Its pink dolphins, sunsets and historical marine police station - now a hotel - have kept business steady. Most of the remaining villagers are elderly, whose grown-up children and grandchildren have left for better opportunities in the city. But they refuse to let the town decay. Stilt-house residents line their homes with potted plants and grow vegetables on their doorsteps, while others use bamboo sieves to dry the seafood and vegetables they use to garnish their dishes. Often, the tin houses are newly painted, and the streets are clean. "There's no time to look back," said 76-year-old Uncle Choi, who with his 73-year-old brother Uncle Hei still sells fresh handmade loh mai chee, glutinous rice balls stuffed with sweet sesame and peanut paste, and cha gwoh, steamed glutinous rice dumplings stuffed with a mixture of Chinese herbs. Uncle Hei, a cheerful man who tried his luck in the city in his younger years, slammed the government for leaving Tai O locals "hanging high and dry". "We rely on ourselves to make a living, keep the place alive. But what are they doing? What happened to the HK$620 million? I can't see any of it used on the village," he said, referring to a government project to revitalise the village, announced five years ago. "I have no idea where the money went, but definitely none trickled down to us." Most improvements have been performed by locals. But there is a limit to their powers. "There are things that [we] cannot do by ourselves," Uncle Hei said, referring to large-scale conservation work on Tai O's famous old salt fields. Despite laying out a plan in 2007 to restore the fields for education and tourism, the government has not provided a timetable for such work. One of the few projects completed was the Tai O Heritage Hotel, formerly the Marine Police Station, which was built in 1902. The hotel opened in February last year and is a joint venture between the government and the non-profit Hong Kong Heritage Conservation Foundation, which runs the site. The colonial structure, on a secluded spot at the edge of the sea, has nine rooms and a restaurant. It has attracted Hongkongers and Westerners alike. Uncle Hei said the hotel had lured people hungry for Hong Kong culture and history, and he welcomed more projects that "blend in with the local culture". He also hoped the government would build a community complex, which could act as a shelter during the bad storms and landslides to which Tai O is susceptible. Kneading pieces of dough and slapping on generous dollops of sweet sesame paste, Uncle Hei and Uncle Choi can make 1,000 of their rice balls each day. They rise at 4am to prepare the morsels - which sell for HK$4.50 each - and sit making them till 6pm. On weekends, they start at 2am. "We make the best, and we don't cheat our customers," Uncle Choi said proudly. Another Tai O native, Choi Sun-yau, hopes the government will heed pleas for more and better transport. We have more tourists coming now, so we need more buses, and also resident cards so locals can be given priority. "Transport in and out of Tai O is important for us - some of us work in the city. If we don't get that, some may have to move out," the 68-year-old said. Choi runs a store selling traditional sweets, such as boot jai go (rice flour cakes), and herbal Chinese drinks he makes daily using his home stove. "For us, this is always the place to come back to," Choi said, adding that many grown-up children living in the city still visit their elderly parents weekly. "It's so peaceful here, I won't move away."

Zhang Xiaoming pours cold water on idea Beijing may dump CY Leung (By Tony Cheung) At his first public function, new liaison chief says office will not shirk its duty to Beijing - Zhang Xiaoming, director of Beijing's liaison office, at a youth forum yesterday. Beijing's liaison office does not rule Hong Kong - despite suggestions it has too much influence in the city's affairs - but it has a job to do and must do it, the office's new chief said yesterday. Zhang Xiaoming also said speculation that Beijing might dump Chief Executive Leung Chun-ying was "unfounded talk and should be put to rest". He spoke at a youth forum in Wan Chai - his first public function since starting his job a month ago. The office has faced bipartisan calls to tone down its approach to local affairs, with pan-democrats repeating the criticism that "Western District", the location of the office, "is ruling Hong Kong". Zhang countered: "'Western District' doesn't rule Hong Kong, but 'Western District' must do its job and fulfil the tasks the central government has given us." This, he said, included informing Beijing accurately about Hong Kong's situation, supporting and providing help to the local government and communicating with various sectors. He flatly denied that Beijing had tightening its grip on Hong Kong, referring to incoming president Xi Jinping's statement that the government's policy on the city was unchanged. Zhang sparked alarm among democrats in November with an article in which he called on Hong Kong to pass the national security law under Article 23 of the Basic Law "in due course". This was seen as possibly indicating a harder line by Beijing towards dissent in the city. But Zhang said it would be wrong to conclude from the article he was a hardliner. "I'm a person of principle, but I'm also benevolent and willing to befriend others." He also seemed to soften his tone on security legislation, saying it should be passed when the local government believed appropriate, but it should not be regarded as taboo. In a departure from the low profile of his recent predecessors, Zhang revealed he had travelled on the MTR, and visited poor families in Sham Shui Po and in subdivided flats. Democratic Party leader Emily Lau Wai-hing said he must show self-restraint. "Whether you travel on the MTR or in a car, or whether you see subdivided flats or luxurious mansions on The Peak, don't come out and make irresponsible comments." New People's Party chairwoman Regina Ip Lau Suk-yee believed that Zhang was only restating the principle of "Hong Kong people ruling Hong Kong", and his traditional role as a liaison office chief.

Hong Kong risks losing its 'world's freest economy' title, says report (By Stuart Lau) Think tank says the small-government method that has served the city so well over the years is increasingly being undermined by bureaucrats - Chief executive Leung Chun-ying has proclaimed a need to adopt 'big government', a departure from his predecessors' attempts to stick to the small-government approach. Hong Kong risks losing its prestigious title as the world's freest economy if the government presses ahead with its populist policies, the Heritage Foundation warned, in the release of its annual index yesterday. The conservative American think tank wrote in its 2013 Index of Economic Freedom that Hong Kong, the winner of the title every year since the ranking started in 1995, scored the lowest for rule of law among the world's five freest economies. The city ranked 12th in "freedom from corruption" and 2nd in "property rights", the two measurements for rule of law. Describing the city's economic freedom as having been eroded in recent years, the report said: "Any further implementation of populist policies that empower the bureaucracy or undermine the principle of limited government could threaten its standing in future." It was the first such warning since Leung Chun-ying became chief executive in July last year. Leung has proclaimed a need to adopt "big government", partly to explore alternative economic opportunities, a departure from his predecessors' attempts to stick to the small-government approach. He already introduced measures to curb property and health care demands. Researcher Terry Miller said: "It's a very risky thing for governments to substitute their own judgments for the judgment of the market." Hong Kong's score in the index dropped 0.6 points from last year to 89.3, a seven-year low. The foundation attributed the fall to increases in government spending relative to gross domestic product, and inflation. This also drew the city closer to its key regional rival, Singapore, the world's second freest economy. Singapore scored 88, up from last year's 87.5. The gap between the two narrowed from 2.4 points to 1.3 points. The next three freest economies, based on the index, are Australia, New Zealand and Switzerland. The US is in 10th place and the UK is 14th. Taiwan made 20th place and the mainland 136th, of the 177 countries and regions surveyed. Chong Tai-leung, a Chinese University associate professor in economics, said: "Compared to the rest of the world, Hong Kong still looks pretty free. But internally, [it] has lost some freedom. "I expect Hong Kong's rating to drop in the coming five, six years." The acting financial secretary, Professor Chan Ka-keung, responding to the ranking, said: "The government will continue to provide a business-friendly environment while establishing an appropriate regulatory regime to ensure the integrity and smooth functioning of the free market." The global average score was 59.6 points, a tenth of a point higher than the average last year.

Good year for Hong Kong’s property billionaires (By Lai Ying-kit) Li Ka-shing remains Hong Kong’s richest man, according to the latest Forbes’ Hong Kong Rich List. Li Ka-shing remains Hong Kong’s richest man – with a US$8 billion increase in wealth over the past year, according to the latest Forbes’ list released on Thursday. The property tycoon and chairman of the Cheung Kong and Hutchison Whampoa conglomerates now has an estimated wealth of US$30 billion, up from US$22 billion in early last year, according to the latest Forbes’ Hong Kong Rich List. Li, 84, had the largest gain in wealth among 50 tycoons on the list, it said. “Besides property, Li’s diversified business empire also includes British gas supplier, Wales & West Utilities, which supplies gas to a quarter of all British citizens,” the report said. “His private technology investment company continues to buy assets in social media, including TV platform Stevie,” it added. Nearly two-thirds of tycoons on the list expanded their wealth due to property investment or development, the report said. Lee Shau-kee, the 84-year-old chairman of developer Henderson Land, remained in second place with an estimated US$20 billion in wealth, a US$3 billion gain over the previous year. “[Lee] bought shares in his own company last year, boosting his stake by 6.8 percentage points to 62.6 per cent, and watched the stock price climb by more than 40 per cent,” the Forbes’ report said. In third place were the Kwok family, which saw a year-on-year rise of almost US$4 billion in wealth to US$19.2 billion. Shares in the family’s flagship company, Sun Hung Kai Properties, rose 28 per cent last year. Big movers on the list included Lue Chi-wo, who owns Macau’s Galaxy casino, and who shot up to fifth place from eighth last year. Another was Peter Woo, who rose to seventh from 11th place. His wealth more than doubled to US$8 billion as rentals at his landmark shopping malls continued to be vibrant. These malls included Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, which attracts flocks of mainland visitors. Joseph Lau Luen-hung, who was fifth in the 2011 list, fell to eighth this year despite a US$0.8 billion rise in his wealth. Lau, 66, is facing a corruption trial in Macau on charges of offering a HK$20 million bribe to Macau’s former public works chief Ao Man-long in 2005. Full list of Hong Kong’s 50 richest people. http://www.forbes.com/hong-kong-billionaires/list/# 

HONG KONG RANKED FREEST ECONOMY FOR 19TH CONSECUTIVE YEAR (Xinhua) Hong Kong's acting Financial Secretary K C Chan on Thursday welcomed the ranking of Hong Kong as the freest economy in the world for the 19th consecutive year. According to the 2013 Index of Economic Freedom released by the US Heritage Foundation and the Wall Street Journal, Hong Kong scored 89.3, well above the global average of 59.6. Among the 10 economic freedom factors assessed, Hong Kong maintains its top position in trade and financial freedom, stays second in investment freedom and property rights, and rises from third to second in business freedom. The report said Hong Kong's highly competitive regulatory regime which, coupled with an efficient and transparent legal framework, sustains vibrant engagement in global trade and investment. In addition, the highly motivated and skilled workforce is a cornerstone of strength for the dynamic economy, and there is little tolerance of corruption in Hong Kong. Noting that Hong Kong's economic interaction with the Chinese mainland has become more intense and sophisticated, and trade and financial linkages with the mainland have grown significantly, the report said Hong Kong continues to demonstrate a high degree of economic resilience and remains one of the world's most competitive financial and business centers. Chan said the city government is determined to uphold economic freedom in Hong Kong, which is the cornerstone of sustained economic stability, growth and prosperity. "The government will continue to provide a business-friendly environment for firms to flourish, while establishing an appropriate regulatory regime to ensure the integrity and smooth functioning of the free market," he added. "We also strive to remove impediments to industries tapping into new markets." The report gauged the degree of economic freedom of more than 150 economies around the world. The 10 factors assessed are business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom. Singapore and Australia are ranked second and third in the 2013 Index of Economic Freedom.

Sites grabbed as developers remain bullish (By Karen Chiu) Two residential plots fetched nearly HK$3 billion, underscoring the confidence of developers ahead of next week's policy address, which is expected to be heavy with land-supply measures. Wing Tai Properties (0369) and Manhattan Properties outbid nine other contenders to buy a 92,463-square-foot site at Kau To Shan, Sha Tin, at a higher-than-expected HK$1.47 billion. With a gross floor area of 142,386 sq ft, the site costs HK$10,302 psf - higher than the HK$9,551 psf in the neighboring site that the consortium also won in August. A Wing Tai spokeswoman said low-rise residential properties will be built on both sites. Midland Surveyors director Alvin Lam Tsz-pun predicted that future apartments there could cost more than HK$20,000 psf. A rare Sai Kung offering - a 166,089 sq ft plot in Sha Kok Mei, attracting 14 tenders - went to Sino Land (0083) for HK$1.46 billion, in line with market estimates. The site, with a gross floor area of 249,133 sq ft, cost HK$5,840 psf. It carries a flat stipulation, in which 240 units have to be built. "The aggressive bids and competition for both plots reflect the optimism of unfazed property developers amid the cooling measures," Lam said. The results came as government sources said there is a wide range of short and long-term measures to be announced to boost the land supply. They said public or subsidized housing will be built in 18 districts, including a 30-story public housing project with 690 flats in Tuen Mun. More than 500 hectares will be provided through reclamation - including at Lung Kwu Tan in Tuen Mun and Siu Ho Wan on Lantau Island. And more plots meant for government, institution or community uses will be turned into home developments, while plot ratios of undeveloped land, especially in the Northeastern New Territories, will be raised, the sources added.

Ex-census worker says fabrication of data was common in 1990 (By Phila Siu) A former census taker says fabrication of data was widespread 20 years ago; government department launches investigation into claims - Commissioner for Census and Statistics Lily Ou-yang Fong. Frontline officers from the Census and Statistics Department were fabricating data as far back as 1990, a former employee said yesterday. The department this week announced it would launch an investigation into claims that fabrication had been common practice over the last decade. "I started at the department in 1990 and I worked there for more than a year. Everyone did that [make up answers] at that time," the former census officer told a radio phone-in yesterday. The accusation is not the first time the department's reliability has been called into question. In 1998, the Audit Commission investigated 155 cases and found that 25 census officers who were supposed to interview people face-to-face had carried out some interviews over the phone or had decided to skip them completely. A department spokesman replied at the time that no information had been fabricated, although he admitted some officers had made mistakes in how they conducted the interviews. The commission recommended census officers keep a log book - to record the times and places of the interviews, and when they took a lunch break, in addition to other information. But officers have reportedly said log books only added to the pressure they were under, arguing the rate of interviews they conducted affected their chances of promotion. An Audit Commission spokesman told the South China Morning Post this week it suggested log books should be used for planning and monitoring and not as a staff assessment tool. But when the Commissioner for Census and Statistics, Lily Ou-yang Fong, was asked on the same day whether the log books were linked to officers' promotion prospects, she declined to offer a definitive answer. "You think that the log sheet is linked to promotion, but actually it shows how they do their work," Fong said. She said officers were evaluated on the basis of 10 areas, including whether they worked well in a team. She did not directly say whether the department assessed officers through the log sheet record. "Actually there are more than 10 areas in the work evaluation, and work efficiency and quality are equally important." An associate professor in social work at Chinese University, Wong Hung, said the census department needed to find out when the officers began to fabricate the answers. "If it began 10 years ago, then look into figures dated 10 years ago," he said. Using inaccurate figures to draft social policies could lead to "aberrations". Professor Paul Yip Siu-fai, a specialist in statistics at the University of Hong Kong, said any inaccuracies in statistics were unacceptable. Fabricated answers may mean jobless statistics have been underreported for years. The census department has set up a taskforce to look into the claims but has not said how far back it would be investigating. A spokeswoman said yesterday it needed more time to prepare answers to questions filed by the Post.

 China*:  January 12 2013

Speed called for on maritime law (By ZHAO YINAN) Legislation expected to help China settle territorial disputes over islands. China will accelerate work on long-awaited legislation on maritime affairs this year amid rising sea disputes with neighboring countries, a top maritime official said. The State Oceanic Administration will speed up the drafting of maritime laws, including the long-awaited basic law on maritime affairs, which is widely expected to help China settle conflicts over sea disputes, Liu Cigui, chief of the national oceanic watchdog, said at a national conference on maritime work in Beijing on Thursday. Liu vowed to stand firm on territorial integrity. Liu's comments come as one of China's neighbors, Vietnam, enacted its own maritime law this month. The law describes China's Xisha Islands and Nansha Islands as being under Vietnam's sovereignty and within its jurisdiction. Last year, sea disputes increased between China and its neighbors, including the row over the Diaoyu Islands, which has become a major diplomatic irritant in China-Japan relations. Experts said a basic maritime law can help China compete with neighbors over territorial claims. China is connected to eight countries by sea. "Our oceanic rights are being challenged. It is of great urgency to protect our territory and settle boundary disputes with surrounding countries," Deng Zhonghua, director of the department of boundary and ocean affairs under the Ministry of Foreign Affairs, said last month. Deng said other issues, including a peaceful environment in international waters, Chinese rights in polar regions and disputes over Huangyan Island and the Diaoyu Islands, also pose serious challenges to China's territorial rights. Many lawmakers have proposed to the National People's Congress, the top legislature, to start the legislation of a basic law on maritime affairs as soon as possible. Deputies from the navy have collectively submitted motions for three consecutive years urging the legislature to speed up the legislation of a maritime law, Xinhua News Agency reported. The Foreign Affairs Committee of the National People's Congress said in response to lawmakers that it will do more research on the issue and start the legislation "when conditions are ripe".

'Year of Snake' commemorative coins issued (China Daily) A woman shows the commemorative coins that she purchased in Shaoxing, Zhejiang, on Jan 9, 2013. Residents line up in banks waiting to purchase the commemorative coins of the Year of Snake in Shaoxing, Zhejiang. The Central Bank issued 80 million coins with a face value of 1 yuan. Each resident is only allowed to purchase two. The commemorative coins can be circulated in the currency market with the same denomination as ordinary 1 yuan coins.

China's trade surplus surged 48.1 percent to US$231.1 billion in 2012 from the previous year, though total trade volume grew at a much slower pace, official data showed today. Exports from the world's second-largest economy gained 7.9 percent to US$2.05 trillion, while imports increased 4.3 percent to $1.82 trillion, the national customs bureau announced, AFP reports. Trade volume, or the total of exports and imports, grew 6.2 percent in 2012, well below the government target of about 10 percent. Customs spokesman Zheng Yuesheng said this was “despite a sharply slowing world economic recovery, weak international market demand and rather big downside pressure on the domestic economy.’’ Zheng said: “China's foreign trade continued to grow steadily and made further progress in improving quality, increasing profits and optimizing structure.''

China exports jump 14.1pc, trumping forecasts (Reuters in Beijing) China exports hit a seven-month peak in December, from a year earlier. China’s exports grew 14.1 per cent in December from a year ago to hit a seven-month peak, data showed on Thursday, rebounding from three-month lows and racing past market expectations for a 4 per cent rise. Imports grew 6 per cent on the year in December, also handily beating market forecasts for a 3 per cent rise and quickening from zero growth in November. That left the country with a trade surplus of US$31.6 billion in December, compared with a forecast of US$19.7 billion and November’s US$19.6 billion.

China finals of 37th Int'l Miss Bikini Competition held in Guangdong - Contestants attend the China finals of the 37th International Miss Bikini Competition in Zhaoqing City, south China's Guangdong Province, Jan. 9, 2013.

Apple CEO underlines importance of China during visit (By SHEN JINGTING) Apple Inc chief executive officer Tim Cook visited China for the second time in less than 10 months, attaching great importance to the world's biggest mobile phone market. Cook met with Miao Wei, head of the Ministry of Industry and Information Technology, on Tuesday, and discussed the development of China's information technology industry, global mobile communications and Apple's business in China, according to a statement on the ministry's website. Chinese media reported that Cook was seen smiling in front of China United Network Communications Group Co Ltd's building in Beijing on Wednesday morning. "Cook was very satisfied on China Unicom's iPhone 5 handset sales," said an official from China Unicom, who asked not to be named. China Unicom was the first telecom carrier on the Chinese mainland to offer Apple's iPhone handsets with a contract. The company began offering the iPhone 5 on Dec 14. A micro blog from China Unicom confirmed Cook's visit on Wednesday afternoon, saying Cook and his colleagues met high-level management at China Unicom. "The meeting went pretty well," the micro blog said. Some Beijing residents said on Sina Weibo that they saw Cook in Beijing's central business district and shared photos of him. Wearing a black coat, the gray-haired Cook seemed at ease and was very amiable. "Cook's visit to China Unicom is more or less a polite gesture," Sandy Shen, a telecom analyst at Gartner China, told China Daily. The two sides have a relatively long history of cooperation, Shen said. Rumors have circulated that the main reason for Cook's trip to China was to seek cooperation with China Mobile Ltd, the nation's biggest telecom operator, having a customer base of more than 700 million. "There is a small chance that Apple and China Mobile will reach an agreement within six months, since China Mobile is sticking to a homegrown telecommunications standard that Apple does not support," Shen said. She said she expects Apple to resolve the obstacle after China Mobile starts it commercial 4G TD-LTE rollout. Li Jun, a spokesman for China Mobile Ltd, said he dose not have any information about whether China Mobile executives will meet Cook. Apple's ranking in the Chinese smartphone market fell to No 6 in the third quarter, as the company faced tough competition from domestic rivals, according to the research firm International Data Corp. Apple's market share by shipments in China was under 10 percent in the third quarter, slipping two notches from its position in the previous quarter, IDC said. The Chinese smartphone market is growing rapidly, and some analysts say China has already replaced the United States as the world's biggest smartphone market by shipments. The third quarter saw 60 million smartphones shipped in China, a record number and three times more than personal computer shipments, an IDC report showed. Wang Ying, an analyst at Beijing-based Analysys International, said if Apple wants to expand further in China, it should extend its reach to third- and fourth-tier cities. "Currently, most Apple fans live in major Chinese cities, but people in smaller cities have also shown an interest in Apple products." Apple generated $5.7 billion in sales in China in the quarter ending in September and sold more than 2 million iPhone 5 handsets during the device's weekend debut in the country last month.

Hong Kong*:  January 11 2013

Chocoholic menu at Ritz-Carlton Hong Kong is bar none (By Vivian Chen) Foie gras with chocolate is on the menu at the Chef's Table. Chocoholics who see the starter and main dish as mere obstacles to dessert can now sit down to a dinner where every one of the six courses features dark chocolate. The special menu is being served until the end of next month at the Chef's Table, a private room on the 102nd floor of the Ritz-Carlton, Hong Kong. Dishes include Atlantic Sea scallop carpaccio on a bed of carrot and chervil purée, topped with green peppercorn, orange butter sauce and a dramatic dash of orange flash-frozen in liquid nitrogen. Thin discs of chocolate are melted into the dish. Then there is the roast venison with caramelised baby vegetables, cherry brandy and chocolate jus garnished with hazelnut foam. The dessert is extra special, of course - hot chocolate sauce melted over a gold-speckled chocolate sphere, revealing a passion-fruit sorbet. "I love chocolate," executive chef Peter Find said at a tasting event on Tuesday. He devised the menu with the help of Urs Liechti, maître chocolatier of the Swiss company Lindt. "We have been working very closely with Urs to come up with this distinctive chocolate menu for our guests. Guests will be able to experience how chocolates can complement and give special character to savoury dishes." All the dishes come with matched wines as well. But the dinner is strictly for those with rich tastes. Minimum spending is HK$14,000 per person.

Estee Lauder bash lifted by ex-diving diva (By Vivian Chen) Tuesday's plug for beauty brand Estee Lauder was former diving queen Guo Jingjing's first public appearance since her extravagant wedding with tycoon heir Kenneth Fok Kai-kong in November. The beauty flaunted her slender figure wearing a tangerine floor-length sequined evening gown at a product launch luncheon in the Four Seasons hotel. Guo talked fondly about the new eye serum and was joined by the beauty brand's Asia-Pacific president Fabrice Weber to present a HK$100,000 donation to blindness charity Orbis Hong Kong. For each serum sold from now to June, the brand will donate HK$5 to the charity in aid of people suffering from visual impairment and to raise awareness of eye care issues. A positively glowing Guo was asked about her plans to have children and the newlywed said she had been preparing for it. "We just want it to happen naturally. It takes time and patience," she said. "Before, we were busy preparing for the wedding and now we are preparing to have a healthy baby. You won't be able to do that if you are too stressed out." The luncheon was attended by a host of celebrities including Candy Law, Sharie Ross-Tse and Olivia Lee-Davies.

HKIS rejects interim school site at Hung Hom (By Dennis Chong) Elite school halts HK$1 billion redevelopment project indefinitely as a temporary Hung Hom site is deemed too polluted for pupils - Parents fear joss paper and incense burning at local temples would harm their children's health. The redevelopment of the Hong Kong International School's Repulse Bay campus has been put on hold after the management rejected a second temporary site offered by the Education Bureau. The school has decided to drop its plan to move its lower primary pupils to the Hung Hom site currently occupied by the English Schools Foundation's Kowloon Junior School. The school had earlier rejected an offer to relocate to Chai Wan, a 25-minute drive away, citing transport issues. The school confirmed yesterday that the redevelopment had been put on hold indefinitely until a suitable temporary site could be identified. "The HKIS board and administration remain committed to our lower primary redevelopment project at our Repulse Bay campu s," a spokeswoman said in response to an inquiry from the South China Morning Post. "We do not have an exact start date for the project, as we cannot begin construction until we find a place to relocate our students." The school had planned to start the three-year project in August last year after moving some 500 pupils to a temporary location. But following complaints from the Repulse Bay community, the school scaled down the development plan, which now includes a staff residence and school building of up to eight storeys, rather than 18, as originally planned. The new plans were approved by the Town Planning Board in June last year. Failing to start the HK$1 billion redevelopment would mean that the school will not be able to add 200 extra new international primary level places in the next few years, as previously planned. An Education Bureau spokeswoman said both the Chai Wan and Hung Hom sites were offered to the school after considering its preferences. However, parents complained in a letter to Head of School Kevin Dunning in November that the Hung Hom site on Gillies Avenue South would be harmful to pupils' health. The stated various reasons, including the proximity to emissions from traffic and car repair shops, as well as joss paper and incense burning at a nearby temple and funeral houses. "We have made this decision to live in a polluted city on behalf of our children as well, but we do our best to keep them away from ... heavy pollutants," said the letter, written by Richard and Kat Price, parents of a girl enrolled at the school. It is now unclear how the school can start the project as the Education Bureau says the Hung Hom site is the only one of four vacant school premises suitable for temporary use. The three others have been slated for other projects, the bureau said. HKIS is one of the most expensive international schools in Hong Kong, charging more than HK$160,000 per year - including an annual capital levy - for lower primary pupils for the current academic year. Hung Hom District Councillor Pius Yum Kwok-tung said that while he had received complaints about the funeral parlours in the district, the Kwun Yam temple had fitted in well with the community. He added that the Gillies Avenue South site had been used as a school for decades. Yum believed the school's rejection was more likely to be related to its distance from the Repulse Bay campus.

HONG KONG BEATS UK AND UNITED STATES ON "HUMAN FREEDOM" INDEX (By Stuart Lau) Hong Kong ranks third-best globally for "human freedom", topping such well-established democracies as the United States and United Kingdom, according to the research from the Fraser Institute, a Canadian think tank. The mainland stood at 100th. The city was the star performer for economic freedom - scoring 9.02 out of 10. But in terms of personal freedom, or civil liberties, it measured 7.8, worse than at least 49 countries. This gave it an overall score on the "human freedom index" of 8.39, below New Zealand and the Netherlands. The US was ranked 7th and the UK 18th. "No nation that has adopted economic freedom has ever failed to evolve towards civil and political freedoms, with only two possible exceptions: Singapore and Hong Kong," the report noted. "The great question for the future is whether ... market reforms ultimately lead to other freedoms in [mainland] China." The mainland was given 5.1 and 6.44 points for personal and economic freedom respectively. The personal freedom indicator included freedom of speech and religion, legal discrimination against homosexuals and women's freedom. The economic one focused on property protection and individuals' engagement in voluntary transactions. Civic Party lawmaker Dr Kenneth Chan Ka-lok, an international studies scholar at Baptist University, said the low personal freedom ranking "sounds a timely alarm over signs of compromising civil liberties and an increasingly authoritarian government" in Hong Kong. Dr Benedict Chan Shing-bun, at the Hang Seng Management College, agreed with the index's methodology. "I believe [mainland officials] are aware of the importance of keeping Hong Kong's economic edge." The index table, involving 123 countries and regions, was drawn from 2008 and was contained in a new book, Towards a Worldwide Index of Human Freedom, co-researched by Germany's Liberales Institut.

Legco votes down CY impeachment motion (By Tony Cheung, Gary Cheung and Lauren Ho) Trade-based lawmakers ensure pan-democrats’ unprecedented Legco motion ends in failure - Protestors from Neighbourhood Worker's Service Centre demand Chief Executive Leung Chun-ying to step down. Pan-democrats failed to initiate impeachment proceedings against Chief Executive Leung Chun-ying when an unprecedented motion was defeated in the Legislative Council last night. After an eight-hour debate, a majority of the directly elected lawmakers present voted for the motion, which accused Leung of dereliction of duty for his handling of unauthorised structures at his home. But as expected it failed to win support among trade-based lawmakers. It required majority support in both groups. The directly elected legislators voted 18 to 14 in favour, while in the functional constituencies, 23 voted against and nine in favour. Chief Secretary Carrie Lam Cheng Yuet-ngor had urged lawmakers to end "internal strife". She said: "There are voices in our society that say the precious time of the legislature should not be wasted on discussing this issue but concentrate on policies and livelihood issues instead." The vote came as Leung finalised his maiden policy address set for January 16. His speech is seen as the key to salvaging his flagging popularity and is expected to focus on livelihood issues and economic development. But a source said he was unlikely to roll out detailed relief measures in his policy blueprint. "He will let the financial secretary announce the details of relief measures in the budget next month," the source said. "The government also needs to assess public feedback to the policy address before making a final decision on relief measures." Leung, who did not attend the debate, declined to comment after attending a public function. The motion was tabled by League of Social Democrats' lawmaker "Long Hair" Leung Kwok-hung, representing the 27 pan-democrats. They believe that Leung gave a false statement before Legco in July when he said he "has never concealed any possible contraventions [of the law]". Four months later he admitted sealing off an unauthorised basement with a brick wall in 2011. The Democratic Party's Albert Ho Chun-yan described the first ever motion to initiate impeachment proceedings in Legco as a historic event. However, he was disappointed with the pro-government lawmakers' refusal to support the pan-democrats. Tam Yiu-chung, chairman of the pro-government Democratic Alliance for the Betterment and Progress of Hong Kong, said: "The pan-democrats were using the highest power of the legislature merely as a tool for their own political purposes." If the vote had been passed, an independent body would have been set up and an impeachment motion moved if it had found sufficient evidence. This would require the support of two-thirds of lawmakers, with the result reported to the central government for a decision.

Director Wong Kar-Wai (C) removes confetti from his sunglasses after beating a drum with cast members, actor Max Zhang (L), actress Zhang Ziyi (2nd R), actors Tony Leung (2nd L) and Chang Chen (R), during the premiere of the movie "The Grandmaster" in Hong Kong January 8, 2013.

Exclusive: deal for HSBC's Ping An stake to be rejected (By George Chen) Mainland regulators poised to reject offer for HSBC's holding in life insurance giant amid concerns about its funding and ownership - Mainland regulators are poised to reject a US$9.4 billion bid by a Thai conglomerate to purchase HSBC's entire stake in Ping An Insurance. The refusal by the China Insurance Regulatory Commission (CIRC) is expected because of concerns about the funding for the bid and the identity of the real buyer. If the deal collapses, it would be a huge disappointment for HSBC. Europe's biggest bank by assets is keen to raise cash to boost its capital base and to pay a US$1.92 billion settlement agreed upon last month to end a US money-laundering probe. Sources close to the CIRC told the South China Morning Post yesterday that senior officials were not convinced Thailand's Charoen Pokphand Group (CP) could afford to buy HSBC's 15.6 per cent holding in Ping An Insurance - China's No2 life insurer - mostly with its own money. HSBC and Ping An declined to comment and CP was not available for comment. The CIRC is also increasingly concerned about whether CP would be the real buyer and ultimate holder of the Ping An stake, said the sources, who declined to be identified owing to the sensitive nature of the matter. "If CP is serious about the deal, it should do more to explain where and how it will get the money and who else, if not China Development Bank (CDB), is helping it make the deal," one of the sources said. "Otherwise, just forget it." The Post reported yesterday that CDB, a major state-owned bank, was reconsidering its decision to back the deal, a signal CP's bid might be in trouble. When HSBC first said it planned to allow CP to buy its Ping An stake, CDB agreed to provide loans to help CP close the deal. Hong Kong-listed shares of Ping An tumbled 4 per cent to HK$68.15 yesterday. Its Shanghai-listed shares fell 3.7 per cent to 45.46 yuan (HK$56). HSBC fell 0.36 per cent to HK$82.75. The deal's turning point came last month when Xiao Jianhua , a secretive mainland businessman well connected to senior officials and their offspring, was caught in the media spotlight. Xiao, believed to be the buyer behind the scenes, quietly borrowed money from small local banks to fund CP's first-stage purchase of the Ping An stake, held by HSBC for over a decade. The deadline for the CIRC's approval is February 1 and CP must pay the rest of the money quickly in a second-stage transaction to close the deal. Political connections have long been a key factor in dealmaking in China, but new Communist Party leader Xi Jinping has pledged to root out corruption. The sources close to the CIRC said Chen Wenhui , a vice-chairman of the regulator and the key man reviewing the deal, recently told associates at a private occasion he was "not very happy with how the game is played", referring to suspicions arising from the stake sale. One source said: "I don't think [Chen] belongs to a specific political camp. This may be a good reason for him to stay neutral and fair so he can win trust from the new big bosses, like Xi."

District councillors and residents oppose housing plans (By Olga Wong, Tony Cheung and Ada Lee) A grave at Cha Kwo Ling, one area that may be developed. A government plan to rezone land for housing use yesterday ran into opposition from communities and a member of the Executive Council, despite the chief executive's calls for support. In recent weeks Chief Executive Leung Chun-ying has repeatedly urged members of the public and district councillors to sacrifice their own interests and support the construction of public flats in their neighbourhoods. But in Kwun Tong, residents raised objections at a district council meeting when officials outlined four plans for new housing, including one that calls for 2,200 private flats accommodating 6,000 residents at the site of the former Cha Kwo Ling kaolin mine, which adjoins Laguna City, a major private estate. The government also wants to rezone three other sites - in Ngau Tau Kok, Yau Tong and Lei Yue Mun - each less than a hectare. The first two could be designated for public flats and the third for private residential development. About 100 villagers from Cha Kwo Ling attended the district council meeting, fearing their ancestors' graves dating back 200 years would be removed. A fifth site, in Diamond Hill, covers about seven hectares and was once home to Tai Hom village. Two options are being considered, both calling for the relocation of the village's historical structures to a new park and the reserving of space for an exhibition facility to be used by artists and the film industry. The first calls for the construction of 1,130 private flats and hotel and office developments. The second provides 1,580 flats, of which 860 would be subsidised. But Wong Tai Sin district councillors want more subsidised housing, fearing the development of private housing will increase traffic congestion. District councillor Mandy Tam Heung-man said the planned six residential towers of 34 to 40 storeys could block views. "I can accept new buildings that are 30 storeys or fewer ... I don't mind new buildings being constructed, but everyone would be happy if more thought was put into the height and density." Among those objecting is Executive Councillor Starry Lee Wai-king, who is opposed to the housing plan in Yau Tong. Separately, the government said part of the former Lee Wai Lee vocational education campus site in Kowloon Tong would be returned to the college for uses other than tertiary educational development.

 China*:  January 11 2013

Mainland to open up telecoms market to local private sector (By Bien Perez) Government issues draft proposal for a two-year trial to let non-state players into cellular game, breaking national carriers' stranglehold - Beijing is fast-tracking stalled plans to let private firms on the mainland offer local mobile services. Beijing is fast-tracking the mainland's long-awaited telecommunications reforms under a plan that would let mainland private companies provide domestic mobile services. The initiative could bode well for the reform-minded premier-in-waiting, Li Keqiang, as he pushes forward a policy that has made little progress since it was initiated in 2010. Li, who will succeed Premier Wen Jiabao in March, has encouraged greater market competition in the country as a way to stimulate trade, boost consumption and create more jobs. The Ministry of Industry and Information Technology announced on Tuesday that it had drawn up a draft proposal to introduce so-called mobile virtual network operators (MVNOs) in the country through a two-year trial. Public feedback on this plan will be solicited until February 6. The regulator's proposal said private mainland companies, with management and technical staff of less than 50 people and more than eight years' experience in the communications and information technology industry, could apply to be an MVNO. Successful applicants will be able to lease bandwidth and repackage mobile services from any of the country's three nationwide telecommunications carriers: China Mobile, China Unicom and China Telecom. Market research firm Gartner defines an MVNO as a company that does not own a wireless spectrum licence, but sells services under its brand name using the network of a licensed operator. "The new measure is a moderate attempt to break the monopoly and bring opportunities to private companies, even small and medium-sized ones," telecommunications analyst Xiang Ligang told the Shanghai Daily. In 2010, the State Council issued guidelines to allow private investment in sectors that were open only to state-owned companies. These included telecommunications, transport, energy and public utilities. Key reforms, however, were not fully set in motion. MVNOs are known to be most prevalent in mature telecommunications markets where mobile-user penetration exceeds 100 per cent, such as in Hong Kong. Data from the Office of the Communications Authority show that 1.273 million mobile users in Hong Kong were served by MVNOs at the end of October. The city has 12 MVNO licensees, including the Hong Kong units of China Mobile and Unicom. China Telecom, which is the mainland's No 3 mobile network operator, launched MVNO services in Britain in May last year under the CTEcelbiz brand, targeting Chinese expatriates and visitors. That business runs on the network of British service provider Everything Everywhere. China Telecom said it planned to expand its MVNO presence to France, Germany, Italy and Spain from this year to 2014. Pyramid Research has forecast the total worldwide MVNO subscriber base to grow 10 per cent annually from this year to 2016, when these operators are projected to capture almost 214 million users. There were 812 MVNOs at the end of May last year, according to research firm Wireless Intelligence. Europe is home to about two-thirds of the world's MVNOs.

Beijing rejects protest by Tokyo (By CAI HONG in Tokyo and ZHANG YUNBI in Beijing) Patrols in sovereign waters 'are regular missions': Foreign Ministry - Cheng Yonghua, China's ambassador to Japan, rejected a protest by Tokyo over Chinese vessels patrolling waters off the Diaoyu Islands. Japanese Deputy Foreign Minister Saiki Akitaka summoned Cheng in Tokyo on Tuesday to lodge a protest against patrols conducted by four Chinese maritime surveillance ships. The four vessels entered waters off the islands before noon on Monday and remained there for more than 13 hours, the Japanese coast guard said. Relations between the two countries have sunk to their lowest level in years since the Japanese government illegally "purchased" part of the Diaoyu Islands in September. The islands belong to China and have been Chinese sovereign territory for centuries. Li Xiushi, a researcher on Japanese studies at the Shanghai Institutes for International Studies, said the lack of trust between Tokyo and Beijing may further damage economic ties. Beijing also blasted Japan on Tuesday for allowing fighter jets to violate the islands' airspace and letting its vessels enter China's territorial waters off the islands. Foreign Ministry spokesman Hong Lei said China's patrols are regular missions conducted for administrative purposes and Beijing has lodged protests to Tokyo on a number of occasions demanding a halt to illegal activities. Japanese Defense Minister Itsunori Onodera told his US counterpart Leon Panetta on Tuesday that countermeasures will "have to be taken'' in case of "provocations'' from China.Tokyo is eager to boost collaboration with Washington and enhance the "deterrence'' of Japan's military capability, Onodera said. Japan may face consequences, Li warned. "If Japanese Prime Minister Shinzo Abe fails to be pragmatic, Japan may face challenges both domestically and overseas." At a meeting of Japanese business leaders, the Chinese ambassador said that relations went through a deep freeze in 2012. Trade between the two countries from January to November fell to $302.8 billion, down 2.9 percent year-on-year. The possibility of further escalation "still cannot be ruled out'', but the situation remains "controllable'', said Yang Bojiang, a Japanese studies specialist at the Chinese Academy of Social Sciences. This year will witness the 35th anniversary of the Treaty of Peace and Friendship between China and Japan. Though there is no apparent mood to celebrate the event, Cheng was guardedly optimistic over the new Japanese government. Cheng urged the Japanese Cabinet to take a positive approach and abide by the four key political documents signed by the two countries. "We hope that Japan meets China halfway and finds appropriate ways to ease the tension over the Diaoyu Islands through dialogue and consultation," Cheng said. "We shouldn't let our spirit sag when facing difficulties." The Japan-China Economic Association is organizing a group of Japanese business people to visit China. There are more than 20,000 Japanese firms operating in China, according to Yohei Kono, former speaker of Japan's House of Representatives and currently president of the Association for the Promotion of the International Trade. "The current state of relations harms both countries. The Japanese government should improve ties with its neighboring nations, especially China," Kono said. "It is time for new wisdom to change the status quo." Yang believed that Beijing and Tokyo will continue to seek opportunities to improve ties.

Waft of Yunnan coffee draws Starbucks, Nestle (By LI WOKE in Puer, Yunnan) Coffee industry giants such as Nestle SA and Starbucks Corp have been increasing their purchases of Puer coffee, evidence of the rising popularity of the brew from Yunnan province. A worker picks coffee beans at a plantation in Puer, Yunnan province. Nestle SA announced plans on Tuesday to launch a new coffee product made completely with coffee beans from Puer. Nestle ― the world's largest food company by revenue ― announced plans on Tuesday to introduce a coffee product made completely from Chinese coffee beans. The new instant coffee was named after the place of its origin, Yunnan province's Puer, and will go into production later this year. "The Puer coffee product we will introduce is evidence of the success Nestle has had in working with local farmers to develop coffee in this region," said Adrian Ho, senior vice-president of coffee and beverages at Nestle Greater China Region. Nestle joined forces with the Yunnan provincial government and local coffee farmers to develop the local coffee industry in 1988, becoming the first foreign giant to provide technical assistance to cultivate the coffee industry in China. Nestle bought more than 1,000 tons of premium Arabica coffee beans from farmers in Puer in the 2011-12 season, a year-on-year increase of 25 percent. 

US economist: don't blame China for trade deficit (Xinhua) The so-called Chinese "currency manipulation" is some Americans' favorite scapegoat for the United States' large trade deficit and anemic job growth, but export growth is actually determined primarily by factors other than exchange rates, a renowned US economist pointed out on Tuesday. When things are not going well, it is common to seek scapegoats. In this vein, populists of various stripes allege that China manipulates the value of its currency to favor its exports and undercut American workers, particularly in manufacturing, noted Edward Lazear, former chairman of the US President's Council of Economic Advisers. "The reality is that the value of China's yuan in terms of dollars is not the major reason why China exports over three times as much to us as we do to them. Its exchange rate is a minor source of weak US job growth," Lazear wrote in an article published on Tuesday on The Wall Street Journal. From 2005 to 2008, the value of the yuan relative to the US dollar appreciated by about 21 percent, but China's exports to the United States continued to grow at averaging 18.2 percent per year, he noted. The only period during which exports from China to the United States fell to any significant extent was during the recent recession, dropping by about one-third from late 2008 to early 2010. The dollar-yuan exchange rate was unchanged throughout this entire period. So the obvious explanation for the decline in Chinese exports to the United States was the decline in demand for consumption goods in general, Lazear observed. The growth of trade between China and the rest of the world not only contributed to China's growing economic size, but the reverse is also true. Rapid economic growth made China a larger target for and source of traded goods, said Lazear, a professor at Stanford University. China's choice of exchange rate policy is not the source of China's export growth. Disappointing job and wage growth in the United States has "much more to do with our economic policy" than with the value of China's currency, he stressed.

HNA Group gets revenue of 120b yuan in 2012 (By BAO CHANG) HNA Group, the parent company of Hainan Airlines, generated revenue of more than 120 billion yuan ($19.28 billion) in 2012, Chen Feng, the company's chairman said. The total assets of the group reached 380 billion yuan at the end of 2012, an increase of 38,000 times within 20 years, Chen said. HNA's asset-liability ratio in 2012 was 79 percent, following three years of consecutive declines, the company said. "This year, the group will make greater efforts to reduce its asset-liability ratio by introducing strategic investors, promoting profits and realizing asset increments," Zhao Quan, CFO of the HNA Group said. HNA signed a strategic cooperation framework agreement with Bank of China on Tuesday, entering a collaboration program worth 50 billion yuan. Bank of China will provide comprehensive financial services, including commercial banking, investment banking and insurance services in cooperation with HNA over the next three years.

Hong Kong*:  January 10 2013

Hong Kong is smaller than the Island of Kauai with maximum tax rate of 17% - PricewaterhouseCoopers expects HONG KONG BUDGET SURPLUS of HK$28.7 billion (US$3.68 billion) rather than the HK$3.5 billion deficit the government forecast for 2012-13. (By Natalie Ngan) The projected fiscal reserve until March 31 is estimated to be HK$697.8 billion, equivalent to 21 months of total government expenditure. The estimate is based mainly on land sale revenue from the planned sale of eight plots. The firm expects HK$20 billion to be recorded in the first quarter of the year. But revenue from stamp duties will drop about 15 percent year on year to HK$37.8 billion, due to a decline in property transactions. The firm believes no further stamp duties will be suggested in the budget. "It is not urgent to implement further policies as the stamp duty measures have just been out about two months and they have had some effects [on the market] at the current initial stage," said the firm's Hong Kong tax partner So Kwok-kay. The firm made several recommendations targeted at alleviating the tax burden of the middle class, including widening the progressive tax bands from HK$40,000 to HK45,000, extending the period for home loan interest deductions from 15 to 20 years and raising the maximum deductible interest from HK$100,000 to HK$150,000. PwC suggests a reduction in profits tax rate from 16.5 percent to 10 percent for small and medium-sized enterprises with taxable profits below HK$500,000. The firm said the government should continue negotiations with different countries on new preferential trade agreements to avoid double taxation, which will attract innovation and technology investment to Hong Kong. "Hong Kong should embrace the development opportunities provided by the pilot financial zones in Qianhai and Hengqin, and the 12th Five-Year Plan, which proposes lifting the share of the value-added services sector in the mainland's GDP," said PwC's Southern China and Hong Kong tax leader Peter Yu Sai-hung. Regarding the environment, PwC's HK tax partner Jeremy Choi Heng-chio suggests providing a 200 percent tax deduction on environmentally friendly machines or installations, and increase subsidies for replacing diesel commercial vehicles. "Environmental protection has been weighing on Hong Kong's competitiveness to attract foreign investments," said Choi. PwC believes there will be no cash giveaways this year, while increasing land supply and providing small to medium-sized homes will be the major issues dealt with in the budget.

Ocean Park launches new tender for first hotel (By Amy Nip) Revised tender plans for Ocean Hotel drops minimum land premiums set by government to attract more bids from developers - Ocean Park chairman Allan Zeman hopes the new tender will secure a deal to build the 495-room Ocean Hotel by 2015. Ocean Park has launched a new tender for its first hotel, aiming to open it in 2016 - three years behind schedule. The Ocean Hotel at the park's main entrance should have opened this year and the Fishermen's Wharf Hotel at Tai Shue Wan in 2015. But the plans lapsed in November 2011 because of a lack of interest by developers. Now the park has put the 495-room Ocean Hotel back on the table with more favourable terms, including allowing bidders to set their own land premium for the 17,044 square-metre site. Tender submissions will be accepted until April 8, while the target date for completion will be the third quarter of 2016. No date has been set for the second hotel, which the park wants to develop in conjunction with a new Water World attraction planned at Tai Shue Wan. Under a build-operate-transfer model, bidders will build and operate the hotels and share the profits with Ocean Park, surrendering ownership to the park in 2047. Building costs and land premiums - for changing the zoning from entertainment to hotels - were to be paid by the developers. Since the government's high minimum land premiums discouraged bidders in the past, the new tender allows developers to decide what they can afford. The bid that passes technical requirements and offers the highest premium will win the tender. "Now, there's no minimum premium set by the government. That will be a big, big plus," chairman Allan Zeman said. Another change is that the successful developer will pay a flat 1.75 per cent of gross receipts to the park each year. In the former tender, the operators were expected to pay extra if they earned more. Zeman, who had expected the first hotel to be finished in 2015 under the new tendering arrangements, said the park had lost a year discussing land premium details with the government. He said Ocean Park was working out details for the new Water World - replacing one that closed in 1999 - before submitting a proposal to the government. "The MTR's South Island Line should be completed by 2015, and the hotel won't be far from the station. If there's a water park, it would make the hotel more attractive," he added, referring to the Fishermen's Wharf Hotel. More attractions will open before 2015. A new shark aquarium, created from the former Atoll Reef, will open in the third quarter of 2014. This will be followed by a koala exhibit by the end of that year.

Tycoon Chen Zhuolin appears on indecent assault charge (By Thomas Chan and Paggie Leung) Agile chairman enters no plea over alleged attack on female employee - Accompanied by aides, Agile chairman Chen Zhoulin leaves Eastern Court, where he has been charged with attacking a female employee. The chairman of Agile Property Holdings appeared in court yesterday charged with indecently assaulting a 28-year-old female employee at his luxury house in Happy Valley. Chen Zhuolin, represented by barrister Cheng Huan SC, entered no plea at Eastern Court in Sai Wan Ho, and was released on HK$5,000 bail by Magistrate Joseph To Ho-shing. The 50-year-old businessman allegedly assaulted the woman at his home on July 10 and July 11. He was arrested on August 30 when he went to Wan Chai police station to answer questions about the alleged assault. The case was adjourned to February 19, awaiting witness statements from the prosecution. Chen's appearance coincided with Agile Property Holdings' largest drop in almost a year on the Hong Kong Stock Exchange. Its shares tumbled nearly 6.47 per cent yesterday, from HK$12.68 to close at HK$11.86, its biggest drop since February 13. The mainland developer said in a statement to the exchange yesterday that "the charges are unrelated to the business of the group and will not affect the normal business and operations of the group". Chen and his wife co-founded the company 20 years ago. Agile Garden in Zhongshan, one of its early key projects, was a big hit and once made up 70 per cent of the city's total property sales. The property developer entered the Guangzhou market in 2002 and set a record by launching four property developments in one year. The company went public in Hong Kong in 2006. In 2011, Forbes, the US business magazine, ranked Chen and his family 75th on a list of China's 400 richest, with wealth of US$1.34 billion. In July, a local rich list published by Money Week magazine named Chen and his family as the ninth richest in China.

Birds in aviary of Hong Kong Park - Birds play on branches in aviary of Hong Kong Park in south China's Hong Kong, Jan. 8, 2013.

Fiona Sit shines at Shiseido White Lucent launch (By Vanessa Yung) Fiona Sit (left) and Sita Chan up the glamour at the Crowne Plaza. Around year end is probably one of the busiest times for singers as they have to go music awards hopping and rack their brains to come up with outfits that can make them stand out from the rest. But it is probably not the attention singer-actress Fiona Sit Hoi-kei was looking for when the supposedly edgy see-through dress she wore to Commercial Radio's Ultimate Song Chart awards ceremony was said to give away the "granny style panty" she was wearing underneath on New Year's Day. The always cheerful Sit did not seem troubled with the news that fans' fantasy was destroyed by such a vision and explained that it was a nude-coloured bathing suit designed especially to go with the dress. And no wonder; it was a fruitful year for Sit and the awards she received have no doubt boosted her confidence. Certainly she's showing no sign of slacking off. "Having signed with a new company recently, I'm working on my Cantonese and Mandarin albums simultaneously, which I'm really excited about," said Sit on Thursday. She attended the Shiseido White Lucent event at Crowne Plaza hotel in Causeway Bay to share her beauty tips. "I'm also launching my single this month, which will be released with my drawings, photographic work and jokes. The shooting of a new film will also start soon." However, model-turned-singer Shiga Lin was not as lucky. She was disappointed that her catchy Cantonese pop song which "many girls can relate to didn't do well in the awards," she said. "I felt sorry for Chau Pak-ho, who wrote such a good song for me. But I'll definitely try harder and won't despair." 

Where to find homes with five bedrooms for HK$16m (By Paggie Leung) Combined units an option for buyer looking for a 2,000 sq ft place to house big family - Flats in Hong Kong are expensive and are said to be as small as shoeboxes, which means not many large families with multiple generations can live under the same roof. One would-be homebuyer sought a solution through the internet. He told an online forum that he was looking for a five-bedroom unit with an area of about 2,000 square feet. He ruled out village houses because he prefers one-storey flats so that his aged parents do not have to climb any stairs. In addition, the living and dining rooms can be larger. With a budget of about HK$16 million, he wanted to know where he could find such a property. "Given that there is not much supply of flats on the secondary market, it's difficult to find two neighbouring flats and convert them into one unit," he said. "And there aren't many of these converted units, so sellers always ask a fortune for them." He also ruled out the possibility of buying a new flat, as such homes with five bedrooms are always labelled as luxury or "special" units, with prices starting from about HK$30 million. So what options are left? "At housing estates such as Laguna City in Lam Tin and Laguna Verde in Hung Hom, there are five-bedroom homes that were converted from a three-bedroom flat plus a two-bedroom flat," said Patrick Chow Moon-kit, the head of research at Ricacorp Properties. Chow said some owners had linked a 932 sq ft three-bedroom home with a 639 sq ft two-bedroom unit in Laguna City. As the selling prices at this estate range from more than HK$7,000 to HK$10,000 per square foot of gross floor area, such units would fit a HK$16 million budget. "Another option is flats at newer tenement buildings, constructed in the 1970s. They have lifts, which would suit his requirements," Chow said. "I have seen some large units with about 2,000 to 3,000 sq ft and numerous bedrooms in these buildings near Playing Field Road and the flower market in Mong Kok. Many Indians live in these units as they have large families." Many homes on the secondary market with five or more bedrooms listed with Centaline Property Agency are priced from HK$30 million to as much as HK$300 million. However, there are still a few options that match the forum poster's needs. At Sausalito in Ma On Shan, the owner of a five-bedroom flat with a gross floor area of 2,392 sq ft is asking for HK$14.9 million. At Metro Town in Tseung Kwan O, a seller is asking for HK$13.8 million for his 1,857 sq ft home, which has five bedrooms. But not many people fancy the idea of living together with many family members. The advice most people gave is: "Better buy two separate homes, as too many people living together can cause too much trouble."

Wong Kar-wai's latest film, The Grandmaster, opens (By Vivian Chen) Chang Chen, Zhang Ziyi and Tony Leung Chiu-wai in Beijing. After more than a decade in the making and three years in production, Wong Kar-wai's much-anticipated action film The Grandmaster will premiere in Hong Kong tonight and open in cinemas on Thursday. Wong, alongside actors Tony Leung Chiu-wai, Zhang Ziyi , Chang Chen and Zhang Jin, will attend the premiere of the film - which depicts the life story of wing chun grandmaster Yip Man - at UA Cinema in Tsim Sha Tsui's iSquare shopping mall. At a press preview in Beijing on Sunday, Leung and Zhang Ziyi bemoaned the difficulties three years of filming entailed. Zhang joked she would consider retiring from action films as she was getting old. Leung, 47, recounted suffering from multiple bone injuries and an inflamed trachea after a 30-day round-the-clock filming session. He said he could hardly believe it when Wong announced that the production was finally complete. But something positive came out of all the kung fu practice for Taiwanese actor Chang, who plays a master of baji quan, a form of martial art that originated in Hebei province during the Qing dynasty. He recently won a national martial arts competition on the mainland.

Singapore ups ante for casino firms with new rules, bigger fines (By Reuters in Singapore) Customers line up to have their identity cards scanned before entering the Resorts World casino in Singapore. In any casino, the odds favour the house. Using its house edge, Singapore is seeking to maximise economic profits and minimise social costs with tighter rules and tougher fines for two casino operators, along with new steps to curb problem gambling. The wealthy and regimented city-state has enjoyed a windfall of tourism, jobs and revenue since Las Vegas Sands and Genting Singapore opened casino complexes in 2010, in part by linking their licences to how well they develop attractions that are not related to gambling. Under that mandate, the two operators have added theme parks, museums, theatres and high-end hotels, boutiques and restaurants to Singapore’s landscape as the Asian business hub recasts itself as a global city and oasis for the rich. Amendments to the Casino Control Act cleared parliament late last year and now await formal passage into law, giving the operators of Marina Bay Sands and Resorts World Sentosa little choice but to adapt to the new rules - including fines of up to 10 per cent of gaming revenue - and the costs of compliance. “It is timely that the legislation be reviewed and further tweaks be made to ensure that the objectives of setting up the integrated resorts are achieved,” said Yap Wai Ming, a partner at Stamford Law Corp who tracks casino regulation. “They have already invested billions of dollars and the casinos are still generating very healthy profits despite the enforcement actions.” Marina Bay Sands declined to comment on Singapore’s new rules and a spokeswoman did not respond to another query about the prospects for its non-gaming business. Lim Kok Thay, chairman of Genting, said last month he expects tourists to play a big part in Resorts World Sentosa’s growth and its non-gambling business to continue to do better than the gaming side that brings in the bulk of revenues. Problem gambling and massive tax leakages and lack of visibility continue to pervade this sector. This is a space to watch YAP WAI MING, A PARTNER AT STAMFORD LAW CORP - Although casino takings have dipped as some of the novelty wears off on a small island of 5.3 million people, earnings at both resorts likely topped US$1 billion last year as visitors poured in from China, Indonesia, Malaysia and further afield. But there are rumblings about social ills. Some lawmakers question whether Singapore really needs casinos and counsellors say they see more people who cannot control their betting. For Jimmy, the opening of the two all-hours casinos pulled him back into a gambling addiction he had managed to keep in check for 14 years, sending his world crashing down with losses of S$250,000 (US$203,000) over 13 months at the Baccarat tables. “Casinos did bring more jobs, more visibility for Singapore, more economic benefits,” said the education professional, who is now free of debt and in counselling. “Yet it’s also undeniably true that the undercurrents behind these benefits are there too - broken families and ruined lives and the increased social costs that come with it.” Lee Kuan Yew, Singapore’s founding leader and influential elder statesman, resisted casinos for decades. He finally relented, he told National Geographic magazine in 2009, when younger colleagues said “we must have a casino, otherwise we are out of the circuit of this fast set that goes around the world.” The government, which makes citizens and permanent residents pay a casino entry levy of S$100 a day or S$2,000 for an annual pass as part of efforts to deter problem gambling, shows no sign of abandoning its support for the two resorts. But Las Vegas Sands and Genting Singapore could see fewer locals in their casinos under the new rules and risk much costlier punishments for breaking them. The operators, which have been fined for admitting minors and failing to collect the levy for the government, will face a maximum penalty of 10 per cent of annual gross gaming revenue. The current cap on fines is S$1 million but, if fully enforced, the new ceiling could be closer to S$200 million. A panel will also be set up by the trade ministry to help the Casino Regulatory Authority determine how attractive the resorts are as tourist destinations - an assessment that will apply to the renewal of their casino licences from January 2015. “Protecting vulnerable groups and the society at large from the harm of casino gambling is another priority,” S Iswaran, Singapore’s second minister for trade, said in October. For those deemed to be at risk, the new rules include a monthly limit on casino visits to bolster existing safeguards. The domestic market is the one that gives you the adrenaline rush when it first opens, but it will be sustained by inflow from the foreign players LIM KOK THAY, CHAIRMAN OF GENTING Under a programme now run by the National Council on Problem Gambling, more than 85,000 people have banned themselves from the casinos and nearly 1,300 more were excluded at the request of family members, the latest data shows. Another 43,000 people who are bankrupt or get state aid are automatically banned. Singapore’s “archaic and outdated” rules on Internet betting are a future target for changes, said Yap at Stamford Law. “Problem gambling and massive tax leakages and lack of visibility continue to pervade this sector,” he said. “This is a space to watch.” For Genting Singapore, gaming revenues at Resorts World Sentosa fell 15 per cent in the first nine months of last year from the same period of 2011. Analysts have cut earnings estimates and downgraded the stock. Third-quarter casino revenues at Marina Bay Sands fell nearly 30 per cent, Las Vegas Sands said. Still, the Singapore casino had a gross profit margin above 40 per cent - higher than any of the company’s US and Macau properties. Despite the tougher climate, the money rolls in. “The domestic market is the one that gives you the adrenaline rush when it first opens, but it will be sustained by inflow from the foreign players,” said Genting’s Lim. “As we open more facilities, that will give us an edge in marketing overseas and in telling the world we are not just a gaming resort, but we have other things for families to do. It does help us in our gaming revenue.”

Protests, petitions and praise greet 'Uncle CY' in run-up to policy address (By Jennifer Cheng) Activists and petitioners greet Chief Executive CY Leung as he enters Central Government Offices in Tamar ahead of an Exco meeting. “Uncle CY”, aka Hong Kong Chief Executive Leung Chun-ying, received a gesture of support on Tuesday amid cries from various groups calling for him to step down. A dozen members of Leung Chun-ying support group Take Action delivered a framed cartoon of an amiable-looking chief executive as he arrived for an executive council meeting. “The cartoon was drawn by an online supporter who said the chief executive is approachable like an uncle, and we think his view reflects what many of us think,” Take Action convenor Chan Wing-hong said. The group also gave the chief executive a petition of 15,000 signatures backing him and a DVD of 85 Hongkongers voicing their support. Take Action’s pro-Leung slogans were at times drowned out by four other groups delivering letters with their demands ahead of Leung’s maiden policy address and budget next Wednesday. As the supporters yelled, “All unite to support CY!”, anti-Leung group the Alliance of Universal Pension bellowed: “All unite to support CY – in stepping down!” Take Action said in a statement that its objective was to voice the “rational” views of silent citizens, so they were not muffled by those speaking with political motives. “It does no good for Hong Kong if we oppose everything,” the statement said. “[Democrats] should stop using the name of democracy to fool the people, because the people feel repulsed by their behaviour.” Asked by reporters if the supporters had been paid to show up, Take Action co-convenor Don Wong Yan-cheung said the group did not receive or give money for people to demonstrate. He said some members had worn facemasks in the demonstration because they were in professions where their involvement would be controversial but would not clarify which professions. The Alliance of Universal Pension demanded that the chief executive improve the livelihood of the elderly. Seventeen groups fighting for lesbian, gay, bisexual and transsexual (LGBT) rights delivered a letter to the chief executive and executive councillors, demanding that the policy address include a public consultation on a discrimination law protecting sexual minorities. They also urged the chief executive to allocate more money for services supporting sexual minorities, such as medical and surgical services for transsexuals. Joseph Cho Man-kit, spokesman for the alliance of LGBT groups, said the time was ripe for legislation. He pointed to a survey conducted by the University of Hong Kong Popular Opinion Programme in November 63.8 per cent of 1,022 respondents supported legislation to protect sexual minorities. Cho said the activists were optimistic, because three executive councillors – Anna Wu Hung-yuk, Lam Woon-kwong and Regina Ip Lau Suk-yee – had already voiced support for legislation. The Association for Democracy and People’s Livelihood also handed in a letter to Leung demanding that the government build at least 30,000 public housing units and at least 5,000 flats for sale each year.

 China*:  January 10 2013

Security tsar Meng Jianzhu criticises interference in court proceedings (By Keith Zhai) Meng Jianzhu hits out at party officials' practice of handing notes to judges during proceedings - Chinese State Councilor Meng Jianzhu. Security tsar Meng Jianzhu has criticised excessive interference by officials in court proceedings - a practice so rampant that judges frequently receive notes at the bench telling them how to rule. Meng, the newly appointed secretary of the Central Politics and Legal Affairs Committee, attacked the "passing of paper slips" at a video conference with top law-and-order officials on Monday, sources said. Such notes are usually passed by members of lower-level politics and legal affairs committees based in the courts. "Meng criticised the old system in which the party's committee always gives concrete instructions to the courts to tell them how to rule on individual cases," said one participant who declined to be named. The source had often witnessed committee members passing notes to judges. The remarks, in which Meng also announced an eventual end to the "re-education through forced labour" system, were not reported by state media. The committees have been condemned by legal experts as a source of obstruction of justice, especially in regard to political lawsuits. The committees, which have overriding authority in courts, exist in all jurisdictions. "The existence of the committees is a violation of the constitution by damaging judicial independence," said Hu Jinguang, a constitutional law professor at Renmin University. "Laws are only as good as the party authorities who allow them to be enforced." Professor Tong Zhiwei, of the East China University of Politics, said intervention by the committees increased in the last five years under Meng's predecessor, Zhou Yongkang . "Meng's comments show the new generation of leadership is willing to reflect on and reform the existence of the committee system, which goes against the legal system and undermines the law," said Tong, who advocates the abolition of lower-level committees. The status of the Central Politics and Legal Affairs Committee was diminished with Zhou's retirement last month. While Zhou was a member of the all-powerful Politburo Standing Committee, Meng sits on the lesser 25-member Politburo. Experts believe that ending the passing of slips and re-education through labour would accomplish little. Hu said it was almost impossible for the committee to give up its influence on court verdicts as it had become a well-established practice and was one of the easiest ways for party authorities to retain control. "To weaken the power of the committees doesn't mean to weaken the influence of the party on court and political decisions," he said.

China to surpass US by 2049: report (By Xinhua) Experts at a Chinese think tank said China is likely to surpass the United States in an all-around way by 2049, the year the People's Republic of China will celebrate its centennial anniversary. According to a report released Tuesday by the Chinese Academy of Sciences, the rejuvenation of the Chinese nation will be realized and the country will surpass the US as long as it nurtures sound "national health". The report defines "national health" as the overall operational condition of a country, using resource sufficiency and wealth distribution as the major criteria. National health is the greatest form of capital China can use to surpass the US, the report said. The report said China's national health has been better than that of the US since 2007, adding that its superior health will further expand in 2019, when China is expected to become the world's biggest economy. The report includes assessments of the national health of 100 countries, analyzing factors such as natural and economic immunity, national decision-making and enforcement capacity and national responsibilities. The countries were also classified into four categories in terms of their national health status. China was ranked 11 with a national health status of "up to standard", while the US, Japan and Britain were given a status of "health deficient" among 37 countries. Sweden, Finland and Australia were ranked among the top 10 countries with a status of "surplus health". Ethiopia, Sudan, Iraq and Afghanistan were ranked at the bottom due to their "weak health condition", according to the report. The report said that the US health status is deteriorating in tandem with its economic downturn, despite the fact that the US is still a nation of wealth and power. China's national health is ascending due to its advantageous economic immunity, capacity for regulation and credibility, the report said.

China sales fell more than expected: Yum (By Reuters in New York) A KFC restaurant in Wuhan. KFC’s parent, Yu Brands says negative publicity over a government review of China’s chicken supply combined with tough competition hurt December quarter sales more than expected. KFC parent Yum Brands has warned that sales in its top market of China shrank more than expected in the fourth quarter, citing bad publicity from a government review of that country’s chicken supply. Yum said in a regulatory filing on Monday that China sales fell 6 per cent in the quarter, compared to its earlier forecast of a 4 per cent decline. It said the media coverage associated with the government’s review had a “significant impact” on KFC sales in China in the last two weeks of December. Yum has more than 5,100 restaurants in China, which contribute more than half of its overall revenue and operating profits. In addition to the negative headlines around its chicken supply, KFC is also facing tougher competition and a pickier customer base in the country. The company, which also owns the Taco Bell and Pizza Hut fast-food chains, repeated a full-year earnings forecast that was below Wall Street’s expectations and its shares fell more than 5 per cent in after-hours trading. “It’s not overly surprising,” Morningstar analyst RJ Hottovy said of Yum’s China sales warning, which followed a December 21 securities filing alerting investors that “recent publicity (over the government’s review) has resulted in moderate sales impact the past few days.” At its analyst day in December, Yum forecast mid-single-digit percentage same-restaurant sales growth in China for 2013. Our food is perfectly safe to eat. We regularly audit our suppliers, and if we ever find a supplier in non-compliance, we take immediate corrective action to resolve the issue YUM SPOKESMAN JONATHAN BLUM - Chief executive David Novak told investors at that meeting that he was “very confident” that the company would turn in ”very solid” sales growth next year at established restaurants in China. Hottovy said he’s expecting Yum’s China same-restaurant sales to be “modestly” down in the first half of this year before recovering in the second half. “There’s usually a little bit of a lingering effect,” he said of food safety issues. Yum said it still expects 2012 earnings per share, excluding special items, of US$3.24. Analysts polled by Thomson Reuters I/B/E/S on average expected earnings of US$3.26 per share. Shares of Yum fell 5.4 per cent in after-hours trading to US$64.25. Yum said it would report quarterly results on February 4. Chinese food safety authorities said in late December that KFC was supplied with chicken that contained excess amounts of antibiotics, and the company said at the time that it had seen some impact on sales. The finding by the Shanghai Food and Drug Administration (SFDA) dealt a blow to KFC’s reputation in China, where it is facing fierce competition from the likes of Taiwanese-owned fried chicken chain Dico and Japanese-style noodle chain Ajisen (China) Holdings Ltd. Yum told Reuters it continues to cooperate with the SFDA’s review of two poultry suppliers who provided chicken with unapproved levels of antibiotics to KFC. The company said those suppliers represented a small per centage of the fried chicken chain’s product. According to media reports, Yum stopped buying chicken from one of those suppliers in August. The company did not say whether it was still sourcing from either firm. “Our food is perfectly safe to eat,” spokesman Jonathan Blum said in a statement. “We regularly audit our suppliers, and if we ever find a supplier in non-compliance, we take immediate corrective action to resolve the issue, including terminating the relationship if that is warranted,” Blum said. China has been trying to stamp out health violations that have dogged the country’s food sector amid reports of fake cooking oil and tainted milk. In 2008, milk laced with the industrial chemical melamine killed at least six children and sickened nearly 300,000. Yum Brands warns China sales fell more than expected

Deloitte opposes SEC move to restart China audit paper case (By Reuters in New York) Accounting giant Deloitte has asked a federal judge to reject a request from the U.S. securities regulator to resume a court case in which it is trying to force the auditor to hand over work papers from its audit of an allegedly fraudulent Chinese IT company. The move is the latest in a standoff between the Securities and Exchange Commission (SEC) and audit firms over access to accounting documents of US-listed Chinese companies suspected of fraud. The SEC wants Deloitte to supply documents relating to its audit of Longtop Financial Technologies but the auditor says it is barred from doing so by Chinese secrecy laws. The regulator asked for the case to be reopened last month following a six-month hiatus while it tried, but ultimately failed, to reach a diplomatic solution through negotiations with the China Securities Regulatory Commission (CSRC). The case began in May 2011. Deloitte filed papers late on Monday, arguing that the case should be postponed pending the outcome of new action taken by the SEC against it and four other audit firms for securities violations related to their refusal to provide Chinese audit documents. The auditor also argued that the SEC’s difficulties are partly of their own-making. “The SEC has long been aware that the CSRC forbids China-based audit firms to produce audit work papers directly to the SEC, and yet the SEC chose to allow China-based companies to sell securities in the United States despite those restrictions,” Deloitte wrote in the papers. US stock markets were rocked by a string of accounting scandals at China-based companies in 2010 and 2011, but the SEC has struggled to take any action because it is unable to access evidence, such as audit work papers, kept in China. When the regulator asked last month for the case against Deloitte to be resumed, it said that the CSRC “remains unwilling or unable to provide the SEC with meaningful assistance in its enforcement investigations”. Longtop was delisted from the New York Stock Exchange in 2011 for failing to meet listing standards, and the SEC opened a probe into the firm for alleged accounting irregularities.

Major steel companies see strong Nov profits (By Wang Ying in Shanghai) China's 80 largest steel makers generated a profit of 3.28 billion yuan ($526.42 million) in November. But oversupply and a string of unprofitable months caused their revenue for the year to remain in the red up to that month, analysts said. Statistics from the China Iron and Steel Association showed that major Chinese steel firms returned to reporting profits in November after bringing a four-month series of losses to an end a month earlier. A steel bar factory in Ganyu county, Jiangsu province. In the first 11 months of 2012, China's 80 major steel makers posted a loss of 1.97 billion yuan ($316 million), according to the China Iron and Steel Association. In the first 11 months of last year, the 80 major steel makers posted a loss of 1.97 billion yuan, Wang Qinghai, chairman of the association, said during a meeting on Saturday. Chinese steel makers made meager profits in March, April and May and reported losses in the following months, only improving their performance in the fourth quarter. Throughout 2012, Chinese steel makers' capital chain continued to worsen as financing costs increased, Wang said. From January to November, members of the China Iron and Steel Association saw their revenue fall by 5.37 percent year-on-year, while their loans increased by 6.58 percent and their financial costs by 24.38 percent, Wang said. "The asset-to-liability ratio of the member companies had increased by about 1.64 percentage points year-on-year to 68.67 percent by the end of November," Wang said. Analysts said they expected the steel industry to extend its good performance into December, but were pessimistic the industry would report a profit for the whole year. 

Hagel looks ready to work with China (By Chen Weihua in Washington) Chuck Hagel, who was likely to be nominated by President Barack Obama as defense secretary, speaks during an appearance at Bellevue University in Bellevue, Nebraska, in February, 2007. While US President Barack Obama's expected nomination on Monday of Chuck Hagel as defense secretary may start a tough confirmation fight in Congress, the former Republican senator from Nebraska appears willing to work with China. During the NATO summit in Chicago in May, Hagel said China is going to emerge and grow. "It should - we should welcome that. They're going to be competitors. They are now, as are India, Brazil and other nations. That's okay," he said. Recognizing the huge challenges China faces in areas such as poverty reduction, job creation, resources and transparency, Hagel praised the country's progress. "They are a great power today, and they are going to continue to be a great power, and that's okay. But we shouldn't cower in the wake of that, or we shouldn't be concerned that they're going to take our place in the world," said the two-term US senator. Obama will also announce the nomination of White House counterterrorism adviser John Brennan as the new CIA director, succeeding retired general David Petraeus, who resigned amid a scandal over an extramarital affair with his biographer. Bonnie Glaser, a China specialist at the Center for Strategic and International Studies, said Hagel will try to reduce misunderstanding, expand cooperation and promote the bilateral US-China military relationship. "However, at this juncture, I think factors other than individuals or personalities will be more important in shaping bilateral ties," she said. Shen Dingli, a professor of international relations at Fudan University in Shanghai, said, "I see Chuck Hagel is a good candidate. He had the honesty to oppose the Iraq War - a moderate and respectful Republican." Fan Jishe, a US studies expert at the Chinese Academy of Social Sciences, said Hagel is likely to maintain a consistent style with his predecessors, Leon Panetta and Robert Gates, in dealings with China. "The US military seeks more cooperation with China, especially in non-traditional security areas," Fan said. However, potential challenges remain for the China-US military relationship despite the goodwill shown at the official level, Fan said, adding that concerns over US intentions have been rising among think tanks and the public along with disputes over the Huangyan Island and Diaoyu Islands. Fan said the new minister will need to well manage differences and a possible crisis between the two countries, especially over maritime disputes. In a talk in 2010 with Zhang Yesui, Chinese ambassador to the United States, Hagel described the US-China relationship as "probably the most critical relationship for the 21st century". Both Hagel and Zhang admitted that friction, mistrust and competition sometimes divide the two nations, due to economic interest and political differences. Hagel believes that concentrating on the common interest is the key to developing a mutually beneficial relationship. "We are far more likely to live peacefully and influence China if we are bound by strong economic ties and mutual geopolitical interest," he said, adding that China has become a major player in the world alongside the US. In 2008, Hagel opposed a proposal in the US to boycott the Beijing Olympics. "There is no good track record on that (boycott). I think you have to work with the reality," he said. "We've got to find our relationships and alliances based on whether there is a common interest - the largest strategic context of that common interest. Then you can work through your differences," said Hagel. While no one seems to raise issues with Hagel's stance on China, the maverick Republican's track record on a host of issues has raised eyebrows from those in his own party as well as the Democratic Party. Hagel was a harsh critic of former US president George W. Bush's foreign policy. He got along well with Obama in the Senate when both opposed the Iraq War. The two even traveled together to Iraq in July 2008 during the presidential campaign.

Hong Kong*:  January 9 2013

Chungking Mansions a global business hub (By Anne-Sophie Briant) Landmark building is a hub of enterprise with global reach, writes Anne-Sophie Briant - Siby Ismael, director of Marena Corporation, at his office in Tsim Sha Tsui. Every day around 2pm, the first floor of Chungking Mansions is covered with boxes ready to be picked up for airfreight. Most are heading to Africa. They are filled with the latest models of mobile phones made by little-known brands such as Nasaki, Admet and jFone. The floor serves as a wholesale clearing centre for ultra-cheap, often used mobile phones made by brands with zero cachet. About HK$8 million of them are sold each week in Chungking Mansions, according to Siby Ismael, a trader, all destined for sale in Africa. Ismael estimates that about 85 per cent of phones made in China that are sold to central and West African countries go through Chungking Mansions. Chungking Mansions, a monolithic 17-storey building in Tsim Sha Tsui packed with hostels on the upper floors and a rabbit warren of small shops on the lower, means many things to many people. To expats who arrived in the city as backpackers, it may have been the first place they stayed in the city. To others it's an eyesore and a fire trap. But to many others the building is a place of enterprise, particularly for African traders looking to source goods in the mainland or Southeast Asia. Gordon Mathews, author of Ghetto at the Centre of the World: Chungking Mansions, Hong Kong describes the Chungking Mansions phenomenon as "low-end globalisation". International traders use the building as a base. They find a ready network of suppliers in the lower levels. They congregate in the buildings, restaurants and food kiosks, and swap information. For many of the first floor shops, business consists of sourcing products from mainland producers, and then exporting them to the rest of the world. Freight agencies operate within the premises to facilitate such trading. The complex also serves as an informal bartering ground, drawing in traders who fly into Hong Kong a few times a year and congregate at Chungking Mansions to meet business partners or renegotiate contracts. Alam Tadjul, chairman of Rass, which exports Bangladeshi garments to Europe and America, is this kind of businessman. He flies to Hong Kong twice a year from his native Bangladesh to meet distributors, who are present in Hong Kong, but who own networks of shops in France, Portugal and Italy. He does business at Chungking Mansions because it's a convenient place to network for cheap sources of garments from the mainland. Those who trade at Chungking Mansions cite a similar set of reasons. It's an established trading hub centrally located in Hong Kong. It appeals to traders from Africa and South Asia, who share a culture or language. It's also cheap - a typical commercial lease for about 100 sq ft in Chungking Mansions costs about HK$30,000 per month, a bargain in a city with among the world's most expensive retail rents. Emmanuel Owusu first came to Hong Kong from Ghana to work in construction. He decided to open a Ghanaian restaurant and chose Chungking Mansions for its location. He felt it was too daunting to negotiate a lease with a native Hongkonger in the city outside. But he knew people in Chungking Mansions and found a ready-made community of like-minded traders on the premises. His friends not only found him the spot in the building, but also brought along their relatives and friends to eat on a regular basis. But the restaurant's location on the 11th floor made it hard to find new customers. Two years ago, he shut his eatery to try another big activity in Chungking Mansions: garment trading. He opened a ground floor shop that sells clothes sourced in Vietnam and Thailand. He uses his Chungking Mansions shop to plug into a network of suppliers and to sell to the throng of tourists who come through the premises each day. "Business is up and down, and it is very difficult to predict what the next month will bring. It really depends on the flow of tourists, as they are the main buyers," says Owusu, who also supplies two clothing shops in Ghana, which are managed by his sisters. Chungking Mansions is known among Africans as a point for trading with the mainland. Along with mobile phones, the ground floor sees trade in computers, long-distance phone cards and other low-margin items, many destined for Africa. Ismael started a trading outfit called Marena Corporation in Chungking Mansions seven years ago. He deals in farming equipment, cooking oil and rice, and recently expanded into garments with traditional African designs. He says he has doubled his sales every year since his business began, in 2005. Ismael's father opened a trading office behind Chungking Mansions in 1976 that exported women's garments from Hong Kong to Africa. His father then opened an African restaurant in Chungking Mansions in 1992 so he could spend time with business partners, all of whom were based there, says Ismael. Over the years, watching his father and living among the building's crowds, he developed contacts in the mainland and Africa, which he puts to good use today. He focuses on West African countries. Five months ago he moved out to expand. His business has 50 employees, only five of whom are based in Hong Kong; the rest work from offices in the countries with which he trades. Ismael is fluent in Cantonese, English and French. His philosophy for living here is that no one should try to change anyone. "You adapt wherever you go to your host's culture, [but] you stay true to yourself and you will go a long way," he says.

Henderson Land considers building HK$1m flats (By Peggy Sito) Chairman says cheap New Territories flats are a possibility if government waives land charges - Henderson Land Development chairman Lee Shau-kee said his company will consider building low-priced homes in the New Territories costing HK$1 million each, as long as the government provides them with incentives. "[If the government] waives land premium charges on farmland modifications, [we] hopefully can build flats of 300 square feet at a price of HK$1 million," Lee said. Lee, who spoke on the sidelines of a public event at the Lee Shau Kee Lecture Centre at the University of Hong Kong, said the land premium wavier could apply to abandoned farmland. His remarks came as Henderson Land sells the first batch of 30 flats of its 76-unit single-block High Place development in Kowloon City for between HK$4.07 million and HK$6.28 million, or more than HK$22,000 per square foot of saleable area. The size of the flats on a gross floor area calculation range from 286 sq ft to 433 sq ft, but flats under the saleable area calculation range from just 182 sq ft to 282 sq ft. Agents said about 25 flats were sold over the weekend. Albert Ching Sheung-kit, sales director of Ricacorp Properties in the West Kowloon district, said buyers, including investors, were attracted by the project's urban location and the lump sum of around HK$4 million. "Many properties are being sold above this range," he said. Meanwhile, agents said Henderson Land over the weekend had sold about 20 flats at The Reach in Yuen Long, a joint venture between Henderson Land and New World Development. Last Friday, Sun Hung Kai Properties (SHKP ) priced the first 50 flats at its residential development in Tseung Kwan O, The Wings II, at HK$10,688 per square foot, about a third lower than it originally intended. This was also cheaper than the inaugural 50 flats sold at the project's first phase in 2011. SHKP had previously said its target price tag for Wings II flats was HK$15,000 per square foot on a gross floor area basis. The flats are expected to be sold early this week. The Wings II is the second large residential project to announce a price list after the government imposed tightening measures such as the special stamp duty of 15 per cent on non-local and corporate buyers in October. Lee said the new measures are aimed at slowing the growth pace of home prices but it would not deal a serious blow to the sector. "A healthy growth is between 5 and 10 per cent in prices," he said. In the secondary market, 36 flats at 15 selected housing estates monitored by Midland Realty were sold over the weekend, up 50 per cent from the sales of the previous weekend from December 29 to December 30.

Accounting chief supports reform (By Enoch Yiu) New head of industry body supports changes to oversight role but details still to be ironed out - Susanna Chiu, president of the Institute of Certified Public Accountants, will work with the government on oversight reform. The first female president of Hong Kong's peak accountancy body backs reform plans to expand oversight of auditors of listed companies, but believes the industry group will continue to play an important regulatory role. Susanna Chiu, who was elected last month to head the Hong Kong Institute of Certified Public Accountants, said she would work with the government and other parties on the reform plan. "The reform is needed to allow Hong Kong to keep pace with the international practice," she said. The institute set up in 1973, issues accounting licences, sets industry standards, and regulates the city's 34,000 accountants. It also conducts routine inspections of accounting firms, a role that in many advanced markets such as the United States and Britain is the province of independent bodies. Chiu said that in her 12-month term she would work with the government on the reform proposal. The plan is for the Financial Reporting Council to take over the institute's powers to review accounting firms that audit listed companies. The government established the council 2006 to investigate auditing failures of listed companies. "We will issue a consultation paper on this matter soon. We support the reform in principle but the devil is in the details so we need to work out more of the specifics," she said. "The reform does not mean the institute will give up its role as a regulator. "Even after the reform, the institute will remain as a regulator, overseeing the conduct of all members as well as setting standards, training and conducting the licensing examination." Chiu said she would also continue to lobby the government to cap the liability that a company would face in the event of an audit failure. She said the liability cap was necessary because auditors faced a higher responsibility for audit failures. In July, legislators passed a new law making accountants criminally liable for not reporting audit problems. The legislation brought Hong Kong into line with Britain. "In line with our professional ethics, all accountants need to act as gatekeepers of companies they work for. They need to report any malpractice or problems in the course of their work," she said. But unlike Britain, Hong Kong does not yet have a cap on the liability an auditor faces if they are sued by investors or creditors over audit failures. Separately, she said the accountancy sector would be cautious in recruiting this year in light of the drop in the number of initial public offerings. "Many accounting firms hired aggressively in previous years but they are likely to be more cautious this year as we have seen the number of IPOs decrease," she said. "Accounting firms are likely to diversify their business to cut down their reliance on the listing business. "They would hope to expand other business lines into areas including taxation, consultancy services and risk management."

Judge Bokhary confident of HK judiciary’s independence (By Austin Chiu) Mr Justice Kemal Bokhary said on Monday that without judicial independence, the rule of law in Hong Kong would die. Liberal judge Mr Justice Kemal Bokhary said on Monday he was confident that the courts would act independently when they dealt with the government’s recent controversial request to Beijing for a reinterpretation on the right of abode law. “Nobody can pick up the phone and tell the judges what to do,” the former permanent judge said in a speech at the Foreign Correspondents’ Club. “If you want to undo what you did, you have to do it openly. “That’s the way it was and I believe that’s the way it is,” he said. “Without [independence], the rule of law will die. If it continues, the rule of law will live.” He was referring to the government’s request that the Court of Final Appeal ask the National People’s Congress Standing Committee to clarify abode provisions in the Basic Law to resolve issues involving foreign maids and children born in Hong Kong to mainland parents. When he retired in October, Bokhary spoke of “storm clouds of unprecedented ferocity” gathering over the judiciary. Asked on Monday if he was referring to the reinterpretation, Bokhary said he would not answer that directly because the case was before the court now. But he said people could work it out themselves by remembering what he said about other judges standing up to the storm and his call for the courts to put their faith in the people of Hong Kong, the academy, the profession and the media. Bokhary earlier said that he believed he did not have his term as a permanent judge of the Court of Final Appeal extended because of his liberal judgments. He now serves as a non-permanent judge, sitting in court occasionally.

Rule OKs loans from Hong Kong to Qianhai (By Zheng Yangpeng) Cross-border renminbi loans from Hong Kong to Shenzhen's Qianhai district, a financial pilot zone, are now permissible, a new rule from the People's Bank of China in Shenzhen says. But the loans that Shenzhen get from Hong Kong may be used only for Qianhai's development, National Business Daily reported. According to the detailed rule, the borrowers must be companies registered in Qianhai, and information about the Hong Kong lenders must be given to the PBOC in Shenzhen. The loans must be invested in industries identified in Qianhai's industries directory. The loan cannot be invested in securities and other financial derivatives, entrustment loans, wealth-management products, and property that are not used by the borrowers themselves. The conditions are set up to prevent capital from Hong Kong flowing to regions other than Qianhai, analysts said. The interest rates of the loans will be decided by the borrowers and lenders themselves, according to a rule issued ahead of the detailed rules. The cross-border loan business will not be fully operational until the Qianhai banks carry out their own implementation rules.

 China*:  January 9 2013

Toyota, Nissan, Honda report slump in December China sales (By Reuters in Beijing) Toyota Motor’s sales in China fell 15.9 per cent last month from a year earlier, still dogged by a sales crisis Japanese carmakers are suffering following a territorial row between the two countries. Toyota and its two Chinese partners sold 90,800 vehicles in December, compared with 108,000 cars in December 2011, it said on Monday. In 2012, Toyota sold a total of 840,500 vehicles, down 4.9 per cent from 2011. The company had said at the outset of last year it would try to sell one million vehicles in China, but failed to meet the target. It had originally set that target for 2010. The pace of last month’s decline eased more than the Japanese company had expected, a senior company executive told Reuters on Sunday, noting that sales had proved “surprisingly resilient.” Toyota’s December sales fall followed declines of 22 per cent in November, 44 per cent in October and almost 50 per cent in September. The executive attributed the recovery in part to discounts and other sales incentives the company offered during the month, as well as what he said was receding fear among Chinese consumers over owning Japanese cars. The executive declined to be identified because he was not authorized to speak to media. Some Chinese consumers have avoided Japanese cars since violent anti-Japan protests last September after Japan nationalised two East China Sea islands. China claims the islands as its own territory. Separately, Nissan Motor and its China joint venture sold 90,400 vehicles in China in December, down 24 per cent from a year earlier, Nissan said. That shows an improvement from November when sales declined 29.8 per cent. Sales came to 1,181,500 for the full year, down 5.3 per cent, it said. Nissan makes vehicles in China in partnership with Dongfeng Automobile Group Co. In a separate statement from Honda Motor, the Japanese automaker said that along with its China joint ventures it sold 63,264 vehicles in the country in December, down 19.2 per cent from a year earlier. That compares with a 29.2 per cent decline in November. For the full year, sales were down 3.1 per cent to 598,577, Honda said. Honda makes vehicles in China in partnership with Dongfeng Motor Group and Guangzhou Automobile Group. Mazda Motor said on Friday that it sold 17,273 cars in China in December, down 26.4 per cent from a year earlier. That compared with a drop of nearly 30 per cent in November and 45 per cent in October. In 2012, Mazda sold 187,087 cars in China, down 12.9 from a year earlier.

China turns dark page of history, puts end to labour camps (By Keith Zhai) In a clear reversal of a decades-old practice of human rights abuse, China announced on Monday that it would put a stop to the system of “re-education through labour”, more commonly known as labour camps, in 2013. A senior Chinese legal official told the Post that Meng Jianzhu, head of the Communist Party’s Poltiical and Legal Affairs Committee, told a meeting of judicial and legal officials from all over the country on Monday that the Party had decided it would stop the practice of sending people to labour camps within the year. “The Central Committee has decided, after research, that after approval by the National People’s Congress, to stop using the system of re-educastion through labour this year,” said the official who attended the meeting. “I feel that Secretary Meng’s comments were filled with a new spirit, that they signal the progress our society has made. ”

China starts to sell train tickets for Spring Festival travel rush - The tickets for the upcoming Spring Festival rush period can be purchased via online and phone-call booking systems since Jan. 7. The travel rush will start on Jan. 26.

US urged to relax satellite export restrictions (By Xin Dingding) The Ministry of Commerce expressed concern after the United States kept a tight rein on the export of satellites and related items to China, and a senior China-US trade expert urged Washington to drop its Cold War mindset and lift the barriers to benefit both countries. The responses came after US President Barack Obama signed on Thursday the National Defense Authorization Act of the 2013 fiscal year. The authorization act includes provisions that relax export restrictions but continue to ban the export, re-export or transfer of satellites to China, as well as the launching of US satellites in Chinese territory. Shen Danyang, the ministry's spokesman, said on Saturday in a statement that China is "deeply disappointed and dissatisfied" with the US action. "The US has not fulfilled its promise to benefit China in its reform of the export control system and boost exports of high-tech equipment to China," he said. "In addition, the US rolled out measures to hinder satellite cooperation for civil purposes between the two countries," he said. China urged the US to meet its commitment, stop acting in a discriminatory manner and soften the restrictions in real terms, which will help bilateral trade and is in line with the two countries' common interests, he said. According to US media reports, the provisions permit the Obama administration to remove satellites and related equipment from the US State Department's munitions list, which restricts weapons exports to other countries. However, under the provisions, satellite exports would remain prohibited for launches from China, the Democratic People's Republic of Korea, Iran, Cuba, Syria and Sudan. "The provision puts China on a list with the DPRK and countries that the US deems as supporting terrorism. It's not in line with US foreign policy concerning China," Zhou Shijian, a senior trade expert and professor at Tsinghua University, said on Sunday. Currently, the US policy concerning China is to cooperate with China and try to contain it as well. But China is not an enemy of the US, he said. In addition, the satellite cooperation for civilian purposes is "commercial activity", and barring it is not in line with countries' interests, he said. Since the US International Traffic in Arms Regulations were expanded in 1999 to include satellites, US satellite manufacturers' share in the global market has fallen significantly, from 73 percent in 1995 to 25 percent in 2005, Zhou cited US media reports as saying. Before the ban, some countries in Africa, Asia and Latin America preferred using China's satellite launch service for its relatively low costs and high success rate, he said. But after the ban, as China can no longer launch satellites that use US satellite technologies, some of those countries opted to buy satellites that were manufactured in Europe or China without ITAR-controlled components. Since 2005, China has made and launched communications satellites for Nigeria, Pakistan and Venezuela, and launched a number of satellites made by European companies for international clients, according to previous media reports. "Just as Neil Armstrong has described his 'small step' on the moon as 'a big step for mankind', developing the space industry is for the good of the whole mankind," he said. "Cooperation is needed, not the opposite. The US should drop its Cold War mindset on this matter," he said. The US has sent signals in recent years that it intends to loosen restrictions on high-tech exports to China and resolve the trade imbalance. But the promises have not been met. In March 2011, US Ambassador to China Gary Locke said the US will allow 46 of the 141 high-tech items to enter the Chinese market, and some may not need a license. But Zhou said research showed all of the 46 items are comparatively low-end goods, and that the high-tech goods still cannot be exported to China.

Hong Kong*:  January 8 2013

Wong Kar-wai's Grandmaster premieres in Beijing (By Agence France-Presse in Beijing) Hong Kong director Wong Kar-wai’s long-awaited martial arts film The Grandmaster was shown in public for the first time in Beijing on Sunday, after more than six years in production. The film spans several decades of Chinese history to tell the story of legendary martial artist Yip Man, who went on to train Bruce Lee, and features lengthy battles between rival kung fu masters. Wong is best known for his 2000 slow-burn drama In the Mood for Love. His new film, packed with Chinese stars including Hong Kong actor Tony Leung Chiu-wai and Beijing-born starlet Zhang Ziyi, appears well placed to capture the local audience. In his first press appearance to promote the film, Wong was also confident that The Grandmaster, which runs for over two hours in its current edit and is steeped in traditional martial arts culture, would be well received abroad. “There is no such thing as a Western or Eastern audience... the elements of cinema are the same worldwide, although their expression is different,” said Wong, wearing his trademark dark glasses. The film, set to hit Chinese cinemas on Tuesday, follows its lead character through some of China’s most tumultuous recent history including the Japanese invasion in the 1930s. It has been delayed several times, amid rumours of extensive reshooting and injured actors, but Wong shrugged off claims that the filming had taken too long. “It felt like three years of university... we didn’t want filming to end,” he said. Wong made his international breakthrough in 1994 with Chungking Express and was the first Chinese director to sit on the jury at Cannes. In February he will lead the jury of the Berlin film festival, which traditionally highlights Asian cinema. http://www.youtube.com/watch?feature=player_embedded&v=7CfC_1_Wpmo 

 China*:  January 8 2013

Toyota's China sales slump recovers slightly in December (By Reuters in Beijing) Toyota shows of its latest at Auto China in Beijing in April. Toyota is expected to announce its China sales data for December on Monday. Toyota Motor is still dogged by a sales crisis Japanese carmakers are suffering in China as a result of a territorial row between the two countries but December sales proved “surprisingly resilient”, a senior Toyota executive said. The executive said customer traffic in Toyota’s showrooms was recovering to levels seen before the crisis over the disputed islands in the East China Sea broke out last September. Toyota sold “almost” 90,000 vehicles in China in December, compared with 108,000 cars the company and its two Chinese partners sold in December last year. Toyota is expected to announce its China sales data for December on Monday, according to a Beijing-based company spokesman. He did not respond to calls seeking comment on November sales. The pace of last month’s decline – roughly 17 per cent from a year earlier – eased from the previous three months. “Sales rebounded faster than we had expected,” said the Toyota executive, who declined to be identified because the sales information has not been made public yet. He attributed the recovery in part to discounts and other sales incentives the Japanese company provided during the month. Toyota’s December sales fall followed a decline of 22 per cent in November, 44 per cent in October, and almost 50 per cent in September. Signs in the marketplace across China – including a recovery in customer traffic in dealer showrooms – were “encouraging”, the Toyota executive said. Sales patterns showed consumers were no longer as spooked as they were before a surge of anti-Japan sentiment that affected sales at auto stores and other Japanese-branded companies such as electronics firms. Violent anti-Japan protests swept China from mid-September after Japan bought two East China Sea islands, known as the Diaoyu in Chinese and Senkaku in Japanese, from their private owner. China claims the islands as its own territory. Demand slumped in September and October, reducing the market share of Japanese firms in China’s passenger car market to about 17 per cent from 19 per cent at the end of August, according to the China Association of Automotive Manufacturers. Some Chinese consumers have since avoided Japanese cars. In a widely reported incident during the height of the anti-Japanese sentiment, a Chinese man was attacked by angry protesters for driving a Toyota Corolla. December sales showed Chinese consumers were “not as fearful of buying and driving Japanese cars as before”, the Toyota executive said.

Li gets Melbourne boost with Shenzhen title (China Daily) Top seed Li Na survived a mid-match meltdown to overcome Czech Klara Zakopalova 6-3 1-6 7-5 in the final of the inaugural Shenzhen Open on Saturday, earning the Chinese a seventh career title. Chinese player Li Na (right) holding her trophy poses with the runner-up Czech Klara Zakopalova after the final of inaugural Shenzhen Open on Jan 5, 2013. World number seven Li, who won the 2011 French Open, looked in danger of disappointing the home fans after surrendering her serve in the first game of the deciding set. Li, who beat fellow Chinese Peng Shuai 6-4 6-0 in Friday's semi-finals, hit back to win five of the next six games but from 5-2 up allowed fifth seed Zakopalova to draw level at 5-5. In a topsy-turvy finish encapsulating the match, Li collected herself to put together two solid games and give her a boost ahead of the Australian Open, which begins on Jan. 14. Li reached the final of the year's first grand slam in Melbourne in 2011 before going on to become China's first major singles champion in Paris. Saturday's victory was Li's second WTA title in China, following her breakthrough at Guangzhou in 2004 when she became the first Chinese winner on the women's tour. The $500,000 Shenzhen tournament became the third event in China on the WTA calendar for 2013 as tennis continues to expand in the country after Li's recent success.

Hong Kong*:  January 7 2013

Half of 170,000 babies of mainland mothers 'may return to live in Hong Kong' (By Amy Nip) As many as half of the 170,000 babies born in Hong Kong to mainland parents may aspire to live in the city, the government says. That was the estimate given to the Long-Term Housing Strategy Steering Committee yesterday, member Michael Choi Ngai-min said. "In preliminary contact [with mainland families], it was estimated that about half [of those born here] may be interested in coming to Hong Kong for education or would have housing needs," he said. "Further evaluation is necessary to determine if they think differently in later years." Many factors need to be considered in determining housing demand, Choi said. Among those are the needs of the transient population such as expatriates and non-local students, as well as the changing structure of local families. Speaking after the meeting, acting Secretary for Transport and Housing Yau Shing-mu said the committee would work on estimating long-term demand for housing over a period of at least 10 years. The government usually has a better grasp of demand for public housing, as it controls its supply and is aware of the length of the waiting list, he said. But private housing was more difficult to gauge since supply changed due to economic fluctuations. "Nevertheless, if you look from a long-term perspective, Hong Kong's economic growth is relatively stable. Over the past decade, the annual growth rate was about 4.5 per cent … Can it [the growth rate] serve as a basis for estimating housing demand? We have raised this question [in the briefing]," he said. The Planning Department earlier proposed converting a former kaolin mine at Cha Kwo Ling and three plots elsewhere in Kwun Tong into residential sites to boost housing supply.

Hong Kong's four pillars should be foundation for growth (By SCMP Editorial) Financial Secretary John Tsang Chun-wah says the city's four conventional pillar industries of finance, trade, tourism and professional services remain our economic backbone. Financial Secretary John Tsang Chun-wah has reminded us that the city's four conventional pillar industries of finance, trade, tourism and professional services remain our economic backbone. He warned against neglecting them while "blindly" pursuing diversification to drive growth. It is not clear why he should be worried, since there is little evidence of much effort to develop other industries. Perhaps he is shaping expectations of the new government ahead of the chief executive's policy address later this month and his own budget. In any case he has revealed a difference in thinking from that of his old boss, Donald Tsang Yam-kuen. The former chief executive devoted a large part of his 2009 policy address to the recommendation by the Task Force on Economic Challenges that six new pillar industries should form a broader base for growth and help weather economic headwinds. They were education, medical services, testing and certification, innovation and technology, environmental industries and cultural and creative industries. At that time, the global financial crisis was focusing minds on economic strategy. The financial secretary's remarks, on his official blog, are also at odds with his new boss Leung Chun-ying's line during his election campaign, in which he stressed diversification and developing technology-based industries to enhance the competitiveness and growth of Hong Kong's other industries. John Tsang said, rightly, that the four conventional pillars still had an edge, and that diversification should not obstruct efforts to consolidate that advantage. However, economists criticised him for displaying a lack of vision, with one saying we had to find new drivers for the economy in the long term. So far the city has risen to such challenges on its own, for example, when it took the loss of its manufacturing pillar in its stride. However, he and his critics both have a point. There is no question, as the financial secretary said, that a new industry takes a long time to nurture and develop. But we trust the government will provide a positive environment for it, in the spirit of the time-honoured philosophy that the market leads, the government facilitates. Our traditional strengths provide a sound basis for investment in a more services-oriented economy, as Donald Tsang envisaged with his six new pillars. The rule of law also gives us an edge - key to confidence in the city - that must be safeguarded if it is to broaden its base for growth by becoming a hub for innovation and technology.

Hong Kong thriving as Asia's hot spot for diplomacy (By Lana Lam) City boosts reputation as hub for international communication and as a gateway to mainland with opening of 12 consulates since handover - Growing diplomatic activity in Hong Kong has made it one of the most cosmopolitan centres in the world. Figures obtained by the Sunday Morning Post show that 12 fully fledged overseas consulates have opened in the city since China regained sovereignty from Britain in 1997. A further 29 countries have posted part-time or honorary consuls to the city over the same period in a bid to boost their profile in China and the region. Hong Kong - which proclaims itself as Asia's world city - now hosts 122 consular offices, up from 95 at the handover. Diplomatic sources say the rise reflects Beijing's willingness to embrace Hong Kong's historic role as an international meeting place and help cement the "one country, two systems'' principle. More countries are represented in New York, site of the United Nations headquarters, and Geneva, which hosts the UN's second-largest office and the World Trade Organisation headquarters, because of their roles as international centres. But Hong Kong's unique role as a non-state and a conduit for trade and foreign relations both internally and with the mainland mark it out as a diplomatic hot spot in Asia. The government's protocol division deals with the day-to-day business of diplomacy in the city, but it is the Ministry of Foreign Affairs which makes the key decisions about foreign representation in the city. A spokesman for the ministry did not respond to questions from the Post. Tam Yiu-chung, chairman of the Legislative Council's panel on constitutional affairs, said the city played a distinctive role in international diplomacy. "It is very useful for a country to have offices here because Hong Kong is a part of China and it is a bridge for other countries to have contact with China," he said yesterday. "It is also an international city and there are a lot of businesses here." Many Hong Kong consular staff may have links with offices in Beijing, Tam said. This allowed for smoother communication between mainland officials and foreign representatives based in the city. Tam said this model was very useful for export and trade matters and for improving business relations between China and other countries. Britain was one of the first to open a diplomatic post in the city after the handover, with North Korea and a raft of African nations also opening consular offices here. The newest consulates to open include Micronesia, which opened an office last year headed by an honorary consul, as well as Eritrea and Zimbabwe. Since 1997, 11 consulates have closed, including those of Liberia, Ukraine, the Democratic Republic of Congo and Bhutan. One of the most recent to shut was Denmark's, which closed in July. The reasons for the closures were not disclosed. Consular officials from several of the biggest consulates, such as those of Canada, Australia and the United States, said staff numbers had remained stable since 1997.

Hong Kong Airlines to end Tokyo service (By Agence France-Presse in Hong Kong) Hong Kong Airlines' passengers check in at Chek Lap Kok. Hong Kong Airlines announced on Friday it will end its services to Tokyo in January, after it suspended flights to Osaka last October, to “tighten” its focus on regional routes. The company will axe its route to the Japanese capital from January 10 allowing it “to better allocate resources in servicing more popular routes and strengthen its regional competitiveness”, a company spokeswoman told reporters by e-mail. “There is a need to continue to tighten focus on routes in line with the company’s regional strategy,” she said, adding the airline had carried 30 per cent more passengers this year than the previous year. The airline described the move as a “purely a commercial decision”. China and Japan have close economic ties but their political relationship has been particularly strained recently due to a dispute over islands in the East China Sea and Chinese resentment over past conflicts and atrocities. Tensions over the Japanese-controlled Senkaku islands, which China claims under the name Diaoyu, escalated dramatically after the Japanese government bought three of them from private owners last September. The number of Chinese tourists visiting Japan plunged 33 per cent in October this year compared to a year previously, to 71,000 visitors, according to the Japan National Tourism Organisation. The Hong Kong-based airline was established in 2006 and operates 21 aircraft flying to international locations including Bangkok and Brussels, and to various locations in mainland China. It ended flights to London, serviced by three Airbus 320-200 planes exclusively fitted with business-class seats, last September due to poor demand.

Google, Hong Kong Trade Development Council fashion online window to world (By Bien Perez) Search giant and trade body link up to help put the city's small businesses in touch with buyers - Google and the HKTDC team up online. The Trade Development Council and Google have teamed up on a social media initiative to help the city's small and medium-sized enterprises (SMEs) connect with buyers around the world. Under this collaboration, free social-networking service Google+ will serve as a new online platform for local companies to raise their profile, link with global buyers and generate sales leads, according to Sophia Chong, the director of the council's publications and e-commerce operations. The council will introduce this social media strategy as part of Hong Kong Fashion Week for Fall/Winter 2013 and World Boutique, Hong Kong, two annual international trade exhibitions to be held later his month in Wan Chai. Events at this year's fashion exhibitions will be broadcast online via the Google+ Hangouts On Air function, which allows participating companies to get instant feedback and response from internet users worldwide. "This is just the beginning. There will be more to come," Chong said, without identifying other international exhibitions by the council that will use the Google-based social media programme. Google+ has an estimated 135 million active users worldwide. Formed in 1966 as the international marketing arm for Hong Kong manufacturers, traders and service providers, the council staged 35 international trade exhibitions in the fiscal year ended March, many of which are among the largest of their kind in Asia. The number of exhibitors, most of which are SMEs, at the events last fiscal year totalled 32,774, while the number of buyers reached 675,300. Google vice-president John Liu, who heads the internet search giant's China operations, said the social media push at the fashion events this month was "just the tip of the iceberg". Liu described the partnership between Google and the council as a milestone "in using technology to enable new trade opportunities" for local SMEs. While there were other social media platforms, such as Facebook, in use, the council and Google "are aligned" in their goals of increasing adoption of online tools by SMEs to boost their competitiveness, Chong said. There were about 300,000 SMEs in Hong Kong at the end of September, according to the Trade and Industry Department.

Pressure grows on Leung to reduce poverty (By Jolie Ho) Pressure is mounting on Chief Executive Leung Chun-ying to make poverty alleviation the cornerstone of his maiden policy address this month as new research reveals the impact of poverty on one of the world’s richest cities. Hong Kong’s poor suffer a host of health problems and are the unhappiest people in the city. They also grapple with more family woes compared with affluent residents, a study conducted by the University of Hong Kong’s school of public health between March 2009 and March last year has found. It covered about 20,500 people in 8,400 households. The study showed a linear relationship between blood pressure and income earned. The poor were inclined to suffer from high blood pressure, the top chronic disease around the world. Workers who made less than HK$3,000 a month recorded blood pressure of between 81 and 140 mmHg, while those who earned more than HK$60,000 a month gave a range of 78 and 123 mmHg. This linear relationship is also shown in the self-assessed body health scores, happiness measures and the harmony index for the family. But the researchers noted that even if a person was poor, a harmonious family relationship could still alleviate negative emotions. Professor Gabriel Leung, head of community medicine at the school of public health, noted that the Inverse Care Law applied to Hong Kong. The law states that people with the least need for health care tend to use medical services more often. “The richest use medical services more frequently, but the chance of them contracting a chronic disease is lower,” he said, adding that private medical services are used mainly by high-income groups. “In regard of universal medical system, we hope that more inputs will be put [in this area],” Leung said. On January 16, the chief executive will deliver a policy address focused on housing, poverty and other livelihood issues, according to the Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung, who discussed the issue with him last week. The Commission on Poverty was revived in June last year and will soon define the city’s first official poverty line. The Office of the Chief Executive declined to say how significant a part of the policy address will tackle poverty.

 China*:  January 7 2013

Stamps issued to welcome Year of the Snake (China Daily) Chinese-French artist Li Zhongyao shows "Year of the Snake" stamps in Paris, France on Jan 4, 2013. France's post department on Friday released "Year of the Snake" stamps designed by Li and French artists to embrace 2013, the "Year of the Snake" on Chinese lunar calendar. Chinese-French artist Li Zhongyao signs an autography for a buyer of "Year of the Snake" stamps in Paris, France on Jan 4, 2013.

Stamps issued to welcome Year of the Snake (China Daily) Photo taken on Jan 4, 2013 shows a "year of snake" stamp, which is to be formally released on Jan. 5, at Handan Post Office in Handan, North China's Hebei province. The lunar year 2013 is the "Year of the Snake" in the Chinese zodiac. The stamp of "year of snake" will be released by China Post on Saturday. 

Start the new year with a trip to the US (By CHEN JIA in San Francisco and WANG WEN in Beijing) With the most important Chinese holiday approaching in February, many Chinese have begun signing up for travel to the United States, adding to a major source of US tourism. Chinese and US travel agents are monitoring the burgeoning market of middle-class Chinese families making trips during an otherwise slow winter season for US tourism. The California Travel and Tourism Commission, the state's official travel promoter, and four Chinese tourism companies have launched a project to attract Spring Festival vacationers from China. The bigger objective is to make California the top destination for Chinese travelers during Spring Festival, said commission president Caroline Beteta. The Chinese Lunar New Year, or Spring Festival, begins on Feb 10 this year and lasts a week — though it can be stretched beyond two weeks when combined with the Lantern Festival, which begins on Feb 24. Helen Tsui, director of Asia-Pacific tourism for the San Francisco Travel Association, said China is an important and growing market for the city. "We are one of the first destinations that established representation offices in Shanghai and Beijing more than 15 years ago," she said. "Since last year, our Shanghai office has also been working with five leading outbound tour operators in Shanghai to launch the Western America tour package targeting the Chinese New Year holiday," she said. Preliminary figures show that Chinese citizens made more than 80 million trips to other countries in 2012, Dai Bin, president of the China Tourism Academy, said on Thursday. Li Zhi, a 31-year-old engineer from Beijing, got tired of the huge crowds lining up at this time of the year in Chinese cities to buy train tickets to their hometowns. He found he could beat the February travel rush and stay within his travel budget by taking a 12-day trip to the US. "I'll pay for my parents' travel expenses and have a special Spring Festival with them in the United States this year," Li said. Generous holiday spending indicates to friends and family that one is on good financial footing. "Not to mention spending the holiday in the US is very cool and worth showing off!" he exclaimed. Meanwhile, Chinese consumers also prefer more high-end tourism products in the US, some business insiders said. "The middle and high-end tourism routes to the US are our main products in the festival this year," said Zhang Qingzhu, marketing manager of China Comfort Travel Group. Zhang said the agency launches products like golf and island tours in the US according to consumer demands. "The number of our customers going to the US during the festival increased by about 15 percent over the last festival," she added. Zhang Huiling, deputy manager of the American travel department at China CYTS Tours, said her company designed two itineraries for Chinese visitors — a 12-day West Coast trip or a 15-day tour across the US. Prices range between 24,800 yuan ($4,000) and 31,800 yuan depending on departure times and airline, Zhang Huiling said. This year's West Coast route includes three national parks: The Grand Canyon in Arizona, and Bryce Canyon and Zion in Utah. Two days' accommodation for Disneyland in Anaheim, California, is another selling point. Wang Qian, head of American travel at CITS Ltd, said a trip to the US during Spring Festival is cheaper than in the peak July-September season. Sarah Roach, tourism manager at Bloomingdale's department store in San Francisco, said she expects Chinese travelers will do plenty of shopping during their holiday sojourn. She said Bloomingdale's will have a number of special promotions for Spring Festival, with events throughout the store including traditional lion dancers, musicians, art exhibits, tea and dim sum tasting, and celebrity chefs. The San Francisco store has more than 40 sales clerks who speak Mandarin and Cantonese, she said. In New York, Mayor Michael Bloomberg announced recently that the city welcomed an estimated 41 million US visitors and 11 million international visitors in 2012. Helping drive the upward trend are tourists from China, whose numbers have increased more than fivefold since 2006, according to NYC & Co, the city's official tourism promotion arm.

Hong Kong*:  January 6 2013

Couples across China flock to marry on auspicious day for lifelong love (By Raymond Li) William Chen and Jessica wed at the Cotton Tree Drive Marriage Registry. Tens of thousands of couples flocked to marriage registries across the mainland and in Hong Kong yesterday to marry on what was seen as an auspicious day, offering blessings for lifelong love. A numerical form of yesterday's date - 2013/1/4 - roughly sounds like "I love you for my whole life" in Putonghua. Liu Dongmei , a 25-year-old office worker who registered her marriage at the Chaoyang district marriage registry in Beijing, said that when she and her fiancé first went to the office to get acquainted with its location at lunchtime on Thursday, there were already more than 200 couples queuing outside. They returned there with a friend and took turns to queue from around 10pm on Thursday. The registry opened at midnight and they were issued with their marriage certificates just before 1am. "It was very cold but it was worth all the effort because we could get married on such an auspicious day," Liu said. They plan to hold their wedding banquet early next year. The official marriage registration statistics will take days to emerge, but the Beijing Morning Post, citing the Beijing Civil Affairs Bureau, which administers marriage registries in the capital, reported on Thursday that the bureau had received 7,000 online reservations. It had estimated that at least 10,000 couples would get married yesterday. That would fall short of the Beijing record of 19,000 registrations on September 9, 2009 - a day "for long-lasting love" - and the 15,000 on August 8, 2008, which had three auspicious number eights for prosperity. Similar rushes were seen across the mainland yesterday. Qiao Xuefeng , a 25-year-old who works for a state-owned enterprise in the Liaoning city of Lingyuan , said that by the time he and his fiancée arrived at the marriage registry at 8am yesterday, there was already a long queue. "We know it takes more than an auspicious day to have a long-lasting relationship," Qiao said. "But I can't see any downside to having it registered on such an auspicious day." In Hong Kong, the registrar of marriages said there had been 558 applications for marriages to be registered yesterday but the actual number of registrations could be smaller.

Ombudsman to review Hong Kong freedom of information laws (By Lai Ying-kit) The Ombudsman's office will immediately begin a study of the Hong Kong public’s right and ability to access government information, in response to citizens concerns on the issue over the years, it announced on Friday. A companion issue was whether the government’s records management system need updating, Ombudsman Alan Lai Nin said. “In recent years, many jurisdictions have introduced major reforms to their FOI [freedom of information] regimes to increase the public’s access to information, expand the coverage of the FOI stipulations, and update the laws to keep up with the advance of information technology,” Lai said. The public had called for better access to government information, Lai said. But officials have insisted the city’s Code on Access to Information is good enough. The new inquiry will look into the standards and practices surrounding that code, which lacks the force of law in setting out what information must be made available to the public. The code has remained unchanged since its introduction in 1995. More than 88 jurisdictions around the world have passed laws on freedom of information to protect people’s right to access information. “The office considers it necessary to look into the standards and practices of the code, vis-à-vis the FOI regimes in other jurisdictions, so as to determine whether the public’s right to access information in Hong Kong is adequately provided for,” Lai said. The review will also look into the government’s records management system. One focus will be the archiving of public records, currently done by the Government Records Service. The office noted there is no statutory protection for archival records in Hong Kong. But many jurisdictions in the world have introduced, as early as in the 1940s and 1950s, specific laws to protect their archives. Some of this legislation requires the proper creation and management of records, with penalties to enforce compliance. “We will compare the government’s records management system with those in other jurisdictions, so as to find out whether there are systemic inadequacies in Hong Kong and how these inadequacies affect the public’s access to information,” Lai said. The office has asked the public to send in comments and suggestions on the issues by February 4, 2013.

Yuan loans from HK could hit 50b (By WANG XIAOTIAN) The quota of allowable yuan loans flowing from Hong Kong to Qianhai could reach up to 50 billion yuan, Caijing magazine reported on Dec 31, citing an anonymous source. Qianhai is a financial pilot zone near Hong Kong. On Dec 27 China formally allowed companies in the area to borrow yuan from Hong Kong lenders, as it tries to further open up its capital account and promote the use of the national currency around the world. First batch of pilot loans would range from 30 to 40 billion yuan, despite an upper limit of 50 billion yuan, it reported. "Like Qualified Foreign Institutional Investors and the renminbi QFII, the quota might be further expanded in accordance with the market demand." As of Dec 21, yuan deposits in Hong Kong reached 550 billion yuan. The source, close to regulators, said the quota for such yuan loans would be maintained below 10 percent of those deposits. The Shenzhen branch of the People's Bank of China said in a statement that the conditions and interest rates for the loans could be decided independently. It emphasized the move would enhance the scale of Hong Kong’s yuan assets and improve liquidity in the offshore yuan market.

Shark fins on factory roof fan outrage (By Beh Lih Yi in Hong Kong) Hong Kong conservationists expressed outrage Thursday after images emerged of a factory rooftop covered in thousands of freshly sliced shark fins, as they called for curbs on the "barbaric" trade. The southern Chinese city is one of the world's biggest markets for shark fins, which are used to make soup that is an expensive staple at Chinese banquets and viewed by many Asians as a rare delicacy. Activist Gary Stokes, who has visited the site, estimated there are 15,000 to 20,000 fins laid out to dry on the rooftop on Hong Kong island ahead of an anticipated surge in demand over Lunar New Year in February this year. "This is shocking," the Hong Kong coordinator for conservation group Sea Shepherd told AFP, saying it was the first time he has seen such a massive hoarding of shark fins in one place in the Asian financial hub. "This is the most graphic, brutal and barbaric part of the industry - the element of chopping a shark's fin off and throwing it back into the water is horrific and inhumane," he added. Stokes believed that traders moved to dry the shark fins on secluded rooftops instead of sidewalks - as they have done in the past - to avoid public anger. Campaigns against consuming shark fins have gained ground in Hong Kong in recent years, after major hotel chains decided to drop the soup from the menus, and home carrier Cathay Pacific said in September it would stop carrying unsustainable sourced shark products on its cargo flights. Stokes urged Hong Kong authorities to ban the trade: "As long as there is no protection for the sharks, the (demand) will just keep going on and on." About 73 million sharks are killed every year, with Hong Kong importing about 9,070 metric tons annually for the past decade, according to environmental group WWF. Shark fins drying in the sun cover the roof of a building in Hong Kong on Wednesday. Environmentalists have raised concerns that the overharvesting of fins is causing an environmental calamity. Hong Kong is one of the world's biggest markets for shark fins, which are used to make expensive soup at Chinese banquets. The number of threatened shark species has soared from 15 in 1996 to more than 180 in 2010. It was not immediately clear who owns the thousands of unprocessed fins on the rooftop, which was unguarded when visited by an AFP journalist on Thursday. A spokeswoman from the government's conservation department told AFP that authorities could not act because the fins were on private property. Silvy Pun, the Hong Kong director for US-based Shark Savers, criticized the Hong Kong government for not acting to protect the dwindling shark population, after neighboring Taiwan banned shark finning this year while the Chinese mainland plans to stop serving the soup at official banquets. "The government must do something. The government is being very laid back and trying to avoid confrontation with the shark fin traders," Pun said. Trade in shark fins is not regulated in Hong Kong except for three species - basking shark, great white shark and whale shark - where the trade is restricted under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, to which Hong Kong is a signatory.

 China*:  January 6 2013

Lining up for a lifetime of love (By Sun Ye in Beijing and Zhang Kun in Shanghai) Romantic date sees couples across the country flock to tie the knot. Let Jan 4 go down in history as the sweetest day of all. In Chinese, the date 2013-1-4 has a similar pronunciation to "love you for a lifetime", making it one of the most auspicious and romantic days to tie the knot. Waiting to tie the knot on Friday, Jan 4, 2013, a date that has a similar pronunciation to "love you for a lifetime", is tiring for couples at the Haidian District Marriage Registration Office in Beijing. Below: Ecstasy overwhelms newlyweds the moment they get the certificate, as seen at Dongjiang District Marriage Registration Office in Neijiang, Sichuan province. The day saw more than 12,000 weddings in Beijing, 7,300 in Shanghai, 3,000 marriage reservations in Chongqing, and Wuhan in Hubei province had 3,500 couples booking slots to get married, an all-time high in the city of 10 million residents. Auspicious dates are almost always popular with Chinese, who prefer days with special meanings or that sound similar to "perfect happiness" and "everlasting love", according to Lin Kewu, a spokesman for the marriage registration office under Shanghai Civil Affairs Bureau. On Sept 9, 2009, more than 15,000 couples got married in Beijing. The triple 12 date, Dec 12, 2012, also saw a surge in marriage registration in Beijing and Shanghai. Determined to be one of the lucky ones, Beijing-based video maker Zhang Ying had applied to marry on the day weeks ago and stood in line on the eve of Jan 4 to guarantee his entry. Before the midnight clock chimed, there were more than 600 standing in line at Beijing's Haidian Marriage Registration Office, all in cold-defying outfits. The couple was able to marry at 5:30 in the morning. "To see the stamp on the date, all the efforts to come out in this freezing weather were worthwhile!" Zhang said. Hao Shide, a staff member with the Haidian District Marriage Registration Office in Beijing, made more than 200 stamps and said more than 200 "Congratulations to you two!" on Jan 4. He began his shift at 5 am with 14 colleagues, four hours before the usual office time, and skipped all breaks. On an average day, the whole office would manage 200 registrations. Hao's hard work was rewarded by a crate of wedding candies by his desk, sweet gifts from the happy couples who just tied the knot. Pan Juanjuan, 28, and Chen Wei, 29, who have been together for five years, said they specially chose the date and waited months for it. "It's our solemn commitment. It's a matter of a lifetime." In Shanghai, many young couples waited in front of the marriage registration offices from as early as 2 am on one of the coldest days in the city this winter. Some couples hugged to keep warm, and joked that "cold and slow" sounded the same as "romantic" in Shanghai dialect. At the marriage registration office of Changning district, quite a few parents were found standing in line for their children who failed to make online reservations ahead of time, as the quota was quickly filled. "I'm lining up for my daughter," an elderly man with a nose made red from the cold told Xinmin Evening News. "I rise early for exercise anyway. We are growing old, and ready to do whatever possible for the happiness of our children," he said. Tian'ai Road in Hongkou district of Shanghai attracted many lovers on this special day too, as the street name literally means "sweet love". Many waited in front of the post office there for postcards marked with "20131400". On such special days, roses are more expensive, lovebirds are photogenic, sugar is scattered everywhere. But the first message between lovebirds after they officially tie the knots is the always romantic words "I love you".

China fines LG, Samsung in flat panel price case (By Associated Press in Beijing) China on Friday joined a global crackdown on price-fixing by manufacturers of LCD screens used in computers and TVs, imposing multimillion-dollar fines on South Korea’s Samsung and LG and four Taiwanese companies. Suppliers already have been hit by US and European regulators with penalties totaling more than US$3 billion for colluding to push up slumping prices of display screens in 2001-06, which raised costs for electronics manufacturers. US courts have sentenced 12 executives to prison. In China, LG and Samsung and four Taiwanese companies were ordered to pay 353 million yuan (US$56 million), according to the Cabinet’s planning agency, the National Development and Reform Commission. It said that includes 144 million yuan (US$22.8 million) in fines plus repayment to Chinese companies that were overcharged. LG, Samsung and Taiwanese suppliers met every quarter in 2001-06 to set prices of screens at a time when supply outstripped demand, pushing down market prices, according to Western and Chinese regulators. Nearly all the world’s mobile phones and personal computers are assembled in China, making its factories major consumers of display screens and other components supplied by South Korea, Taiwan and other Asian economies. The display screen suppliers “manipulated market prices and damaged the lawful interests of other companies and consumers,” said an NDRC statement. US prosecutors say some US$74 billion in global sales of display screens were affected by the conspiracy. Customers included Apple Inc., Dell Inc. and other producers of TVs, notebook computers and other electronics. The Chinese penalties totaled 100 million yuan (US$15.9 million) for Samsung and 118 million yuan (US$18.7 million) for LG. The Taiwanese companies and their fines were Chi Mei , 94 million yuan (US$14.9 million); AU Optronics, 21.9 million yuan (US$3.5 million); Chunghwa Picture Tubes, 16.2 million yuan (US$2.6 million); and HannStar Display 240,000 yuan (US$38,000). The US Department of Justice says it has been awarded US$1.4 billion in fines by courts while EU officials have imposed a total of 1.3 billion euros (US$1.7 billion) in penalties. China’s fines were smaller because Beijing acted under its pricing law, which bases penalties on the improper income from individual sales, according to an NDRC statement. It said Western regulators used anti-monopoly laws that base penalties on the much larger amount of a company’s total revenue but China could not do that because its first anti-monopoly law was not enacted until 2008 and cannot be applied retroactively. After the EU fined companies in 2010, a major Chi Mei shareholder, Terry Gou, said the price-fixing was led by Samsung and LG, the biggest and second-biggest display panel manufacturers, respectively. Gou is chairman of Hon Hai Precision Industry, which assembles electronics for Apple and other companies but does not make display screens. Samsung Display, the Samsung unit that makes flat panels, doesn’t dispute the Chinese government’s statement, said a company official contacted by phone Friday in Seoul. He refused to be identified by name, citing company rules, but said his comments reflected Samsung’s official position. The company will “strengthen training” so employees do not engage in price-fixing in the future, the official said. In a written statement, LG Display said it “remains committed to operating with full transparency in providing the best quality products and services to its global customers.” Chi Mei, which has been renamed Innolux Corporation, said in a written statement it has set aside money to pay the fines, indicating it would not appeal. A spokeswoman for AU Optronics, Yawen Hsiao, said the company was co-operating with Chinese authorities but declined to comment further. Employees who answered the phone at Chunghwa and at Hannstar said company officials who could comment were not available. In the United States, a former president and executive vice president of AU Optronics were sentenced by a federal court in September to three years in prison in what prosecutors said was the most severe penalty imposed in an antitrust case. The company was fined US$500 million. In July, AU Optronics, along with Toshiba and LG, agreed to pay a combined US$571 million to settle a lawsuit by customers. Other manufacturers, including Hitachi, Sharp and Samsung, agreed in December to pay US$538 million to settle. Seven other Asian manufacturers and 22 other executives have pleaded guilty in US courts and agreed to pay a combined US$890 million in fines.

Mainland, Taiwan airlines sign co-op contract (Xinhua) Guests start the "great China, fly together" program during the press conference in Taipei, Taiwan, Jan 3, 2013. China Southern Airlines, China Eastern Airlines, Xiamen Airlines from Mainland and China Airlines from Taiwan on Thursday signed an cooperation contract and launched the "great China, fly together" program, aiming at providing better services by sharing resources together. 

Coming up with your Chinese name (By Sam Kestenbaum) A girl reads a book on names and luck. Some people use the Chinese concept of the Five Elements in giving themselves a name. Choosing a new moniker gives you the chance to remake yourself, but there are pitfalls. When I first arrive in Beijing, I feel like I am drowning in the language. The written characters are utterly foreign to me and I strain my ear to distinguish between the spoken tones. My head spins. I can barely pronounce the name of the neighborhood where I live. I make new Chinese friends, shake their hands and listen as they introduce themselves. I mouth out their names, trying to voice the foreign-sounding syllables. Their surname (姓 xìng) comes first, and then their personal name (名字 míngzì) (the opposite from English), and I meet dozens of Wang (王 wáng), Li (李 lǐ)and Zhang (张 zhāng), the three most popular surnames in China. I am confused. So they smile and mercifully offer me their English names. They are not surprised that my Chinese is terrible, or that I have trouble pronouncing their native names, so, like good hosts, they accommodate me. Since reform and opening up, more and more Chinese workers have been taking on English monikers, because their new, foreign, unilingual business partners could not remember their names. But I do not want to be one of those privileged, loud Americans, who bark their way through all cultures other than their own. Instead of waiting for Chinese people's English name, I will offer them my Chinese name. Two American friends of mine came to China to seek their fortunes. They recommended that I choose a good business name, and suggested the company Good Characters, Inc - self-professed masters in "the art and science of Chinese naming" (起名大师 qímǐng dàshī ). This company guarantees to make the naming process easy for me. Choosing my name, it seems, could be approached like a marketing campaign. But I am interested in more than doing business in China; I also want to know about the culture, the history and the tradition. I want to find my new name, and I want there to be some magic involved. I go looking for a fortuneteller (算命的 suànmìng de). The main strip outside the Lama temple, north of Beijing's city center, is packed with both foreign tourists and Chinese worshipers, the hutong neighborhoods surrounding the temple are eerily quiet. This is where I will find my fortuneteller. Two Chinese friends, Echo Zhao and Ginger Huang, are with me as we explore the narrow alleys, looking for signs that will say "Choose names", or "qi ming (起名)". The Chinese concept of the Five Elements (五行 wǔxíng) - wood, fire, earth, metal and water - have been a part of Chinese thought since ancient times, and are used in many fields: martial arts, feng shui, medicine, music and military planning to name a few. If properly studied, the five elements provide a structure, a metaphysical framework; following this guide can lead to a balanced life. In the naming process, the characters that make up your hour, day, month and year of birth all represent different elements. If you have too much of the water element in your birth date, you should add a fire element to your name; if you have too many metal elements, you should add a character that represents a wood element. The price for a new name can be expensive. Today we have been given prices that range from 100 yuan ($16; 12 euros) to 1,000 yuan. Different naming processes with more complex analyses, presumably resulting in a better name, cost more. We meet a Taoist fortuneteller who sits behind a desk, a diagram of the "I Ching" on the wall behind him. He looks wise and old - a capable name-giver, I think. Taking a pen out from his desk, he asks my birth date. He nods and begins writing furiously. Pausing, he asks for my surname. "Kestenbaum," I say. This is a hard one to pronounce, even for Americans. I repeat my name and he scratches his chin, bewildered. "Isn't there a shortened version?" Oftentimes, foreigners create Chinese homonyms of their English names. Andrew becomes Anzhu (安竹). Nick becomes Nike (尼克). He writes 克 (kè, conquer), half of the first syllable of my name, "Ke", which means "conquering". Then for my first name, he writes 城堡 (chéngbǎo, castle), making my name something like "Conquering Castles". A very powerful name (名字很有气势 míngzì hěn yǒu qìshì). Ginger and Echo shake their heads. It is silly, they tell me, it sounds funny. He comes up with two alternatives: "Conquering Horses", or "Running Horse". He scribbles a few more notes on a sheet of paper, but shakes his head. We thank our fortuneteller. As we leave the shop, Echo and Ginger walk ahead of me, whispering to each other. "We can give you a better name," Echo says. As much as I wanted my name to come from a wizened mystic, I also like the idea of a Chinese friend naming me, someone who has got to know me. Echo and Ginger may be better fit for the task. Ginger suggests a variation on "Uncle Sam" - "Big Brother Sam" (山姆大哥, Shānmǔ dàgē). This could also be shortened to 山哥 (Shāngē). It is funny, I like it. It is a play on my status as a foreigner here, as an ambassador of sorts, a reluctant representative of my country. Echo suggests I become Ke Haoquan (柯皓泉). Ke, for the first syllable of my surname, and Quan, "spring", because according to my horoscope, I could use some water element in my name. This is also good, because I do want to lead a balanced life. "That one sounds nice," she says. "But I am still thinking of new ones." When Ginger, whose Chinese name is Huang Yuanjing, was a young girl, her parents called her Jingjing. Similarly, when Echo, or Zhao Lei, was young, she was called Leilei. This is often the case with Chinese kids. When they are born, they take their family surname, but use an affectionate, shortened name until later in their lives, when they take on an adult name. Many Chinese people choose their English names themselves - picking any name they would like, and they do not have to be necessarily conventional. I have met people named Transformer, Juicy, Spirit, Sunny, Justice and Jade. Their names can be inspired by movies, TV shows, favorite authors or singers. Anything goes. It is their chance to remake themselves. Though I set out to definitively remake myself, I realize I might not have to choose just one name. Like my Chinese friends, I can have a handful of names in a lifetime; it is a fluid process. I can be called one name by my friends, one by those I work with, and another by my parents or girlfriend. As I grow, I can choose new names for myself. And if I need to feel really courageous, I can go by Conquering Castle. I can be light-hearted or mystic, my name can be serious or have humor. I could be Brother Sam, Running Horse or Tidal Wave. Each name is like a revision, an update, the latest version of who I am and who I am becoming.

China Daily launches North America edition (China Daily) China Daily launched its North America edition on Dec 28 as the first step by China's national English-language newspaper in reaching readers in Canada. More than 10,000 copies were printed at Torstar Printing Group. The North America and US editions of China Daily are printed in 10 cities in the US and Canada. Steve Renaud (right), account manager of Torstar Printing Group, spends C$1 (US$1.01) to buy the first copy of China Daily's new North America edition from Larry Lee (center), president and editor-inchief of China Daily USA, becoming the paper's first honorary reader. 

Hong Kong*:  January 5 2013

The first 3 quarters of 2012, 3,744 (translate to around 4,992 for the entire 2012) families from mainland China invested HK$10 million (US$1.3 million) to obtain permanent status in Hong Kong to deliver babies there so the babies get the same status as parents. Hong Kong is especially appealing to the super rich as a free port, NO tax on worldwide income, NO estate tax, NO tax on company dividends, maximum tax rate of 17% and VISA FREE to more than 120 countries worldwide. It is rather interesting compared to only $500,000 to obtain the same status through the EB-5 VISA program in the United States. Many super riches found out from their friends (or smart enough to consult with a qualified tax advisor) in the United States the "tax mouse trap" and avoid it with a 10 foot pole.

TVB in court drama (By Eddie Luk) Hong Kong's dominant broadcaster TVB has applied to the High Court for a judicial review that could further delay or stop the issue of new free-to-air TV licenses. In the writ submitted yesterday, TVB said the former Broadcasting Authority's recommendation for granting more such licenses is tainted by "errors of fact." The authority failed to undertake "a lawful economic and/or competition analysis informed by correct findings of fact" and is said to "breach procedural legitimate expectations." The broadcaster said in a statement that the former Broadcasting Authority - now the Communications Authority - along with other authorities, "made some serious mistakes in their deliberations on the license applications," and have failed "to rectify the mistakes so far." TVB reiterated that "it is not blindly objecting to the issuance of new free- TV licenses and that it is not afraid of competition." It challenged the government to clarify the optimal number of free-TV licenses, the criteria for the deliberations and when new licenses will be issued. Analysts believe TVB's dramatic legal challenge will delay or stop issuance of licenses, putting further pressure on Hong Kong Television Network chairman Ricky Wong Wai-kay, who has been battling for a license. The Executive Council has yet to act on the recommendations. "In the light of the Communications Authority/Broadcasting Authority's said unlawful recommendation, the Chief Executive in Council has no power to make a decision to grant a license," the writ said. "Any decision reached by the Chief Executive in Council to grant such a license would be unlawful." It was erroneous that the advertising spending in the free-to-air television market in 2009 reached HK$7.4 billion, as estimated in the experts' reports, TVB said, insisting the figure should only be HK$2.56 billion. "The volume of advertising revenue available is a crucial issue because this is the sole means by which free-to-air TV operators generate funds to meet broadcasting costs, produce or purchase content and meet all other operational costs," TVB said in the writ. TVB group general manager Mark Lee Po-on said: "TVB has no alternative but to lodge the judicial review application to ensure that justice is done." A spokesman for ATV said it understands and supports TVB's call for a judicial review, saying it opposes the issuance of more free-TV licenses. Ricky Wong said yesterday: "I strongly hope that the government can, based on prescribed policies and procedures, issue free-TV licenses as early as possible in the best interests of citizens and the TV industry." Chinese University political analyst Ma Ngok said it is apparent that TVB has resorted to legal means to pressure the government not to issue free-TV licenses. Alice Lee Yuet-lin, associate professor of Baptist University's department of journalism, said she hopes the government can issue free-TV licenses as soon as possible because surveys show this is what the public want. City Telecom - now called Hong Kong Television Network - i-Cable's Fantastic Television and PCCW's Hong Kong Television Entertainment have applied for free-TV licenses.

Residential use a better option for ex-army camp site (The Standard Hong Kong) Extra conditions are apparently being shaped for those wishing to tender for a Fan Ling site intended for private university development. Yet a report of additional terms for the former Queen's Hill military camp comes amid claims that some government officials have actually changed their overall thinking on the 16.4-hectare site. They now want to reserve it for residential use in light of the soaring demands for homes, according to word received by Sing Tao Daily, sister newspaper of The Standard. Yet another source claimed that the private university plan will proceed in tandem with the extra conditions, and only if they cannot be met will there be second thoughts on the use of the site. One of the conditions, this person said, is that the university to be set up must shoulder the costs of roads, electricity and water rather than the government facing the overheads. The costs must be weighed along with a demand that the university's fees are reasonable for high quality courses that match the needs of Hong Kong. Officials are said to be awaiting the full list of conditions before they turn to a final drafting of the tender. As the source pointed out, "if universities applying for the site fail to meet the conditions, there is no guarantee that the scheme will be approved." Plans to develop higher education include six sites being reserved for developing private universities. The site at Queen's Hill was revealed in the 2010 budget and is the biggest plot of land among the six, with space for a campus good for 8,000 students. The government invited expressions of interest for development and received nine applications in 2011. Among them were the Society of Jesus and Edinburgh Napier University.

Victoria Harbour water to improve after sewage works upgrade (By Johnny Tam) Marine eco-system to prosper as world's largest underground waste pumping station is built - A new pumping station is built under the Harbour Area Treatment Scheme on Stonecutters Island. Victoria Harbour's water quality is set to improve when the second stage of the Harbour Area Treatment Scheme reaches its halfway mark next year. Hong Kong's famous landmark should see 90 per cent of the current Ecoli eliminated from discharged sewage. During this stage of the project, the Drainage Services Department will upgrade the 10-hectare sewage treatment works on Stonecutters Island in West Kowloon by building the world's largest underground pumping station. There will be eight pumps and each pump can process sewage equal to one standard swimming pool in 10 minutes. A tunnel will connect it to the existing works to allow the diversion of the waste. A new conveyance system will take the waste from eight preliminary treatment works on the north and south of Hong Kong Island to the upgraded Stonecutters Island works for sedimentation and disinfection via an underwater tunnel. "We will see a cleaner Victoria Harbour, which will provide a better living environment for the marine ecosystem," said Henry Chau Kwok-ming, the department's chief engineer for the scheme. Chau added that the level of oxygen in the sea water in the harbour would increase by 5 per cent, as more organic waste from the sewage was removed. This gain is on top of the 10 per cent increase already achieved by the first stage of the scheme. "The water quality [of the Victoria Harbour] is expected to improve, as 90 per cent of the Ecoli will be eliminated from the point of sewage discharged, after the expansion of the disinfection facility [on Stonecutters Island]," said a spokesman for the department. The first half of the second stage of the scheme is expected to be completed in late 2014, and has cost HK$17 billion. When finished, the Stonecutters Island sewage works will treat up to 2,450,000 square metres of sewage per day. The scheme, which was commissioned in 2001, has already treated 75 per cent of the sewage generated from the harbour area using a chemically enhanced primary treatment process to remove solids and organic matter. There are also plans for new biological treatment facilities on the island.

Rosy outlook for local economy this year: HKU economists (By Amy Nip) Expect rise in real GDP growth in 2013 as overseas economies improve: HKU experts - Economists from the University of Hong Kong have painted a rosy picture for the local economy this year, just days after the US Congress reached a fragile truce to pull America back from the brink of the fiscal cliff. The HKU economists say the city's real gross domestic product is expected to grow by 2.9 per cent this quarter and by between 3.5 and 4.3 per cent for the whole of the year. This would be an improvement from the estimated 2.2 per cent and 1.3 per cent real GDP growth for the last quarter of 2012 and the whole of last year respectively, according to the quarterly macroeconomic forecast that the APEC Studies Programme of HKU's Hong Kong Institute of Economics and Business Strategy announced yesterday. Dr Richard Wong Yue-chim, a professor of economics at the university, said this year's forecast reflects "a slight improvement in the external environment". Domestic demand was still driving economic growth this quarter, said Dr Wong Ka-fu, an assistant professor of economics at HKU. But private consumption expenditure growth this quarter is expected to slow to 2.5 per cent from last quarter's 2.6 per cent, while retail sales growth is also forecast to slow from 5.4 per cent to 4.4 per cent in the same period, he said. Dr Wong Ka-fu attributed the optimistic forecast for this year to improvement in economies overseas. "The worst [of the European debt crisis] seems to be over, the US seems to be growing at a slightly higher rate, and China's economy is expected to make a slight rebound," he said. US President Barack Obama's signing of a bill on Wednesday to avert the fiscal cliff helped ward off a recession, but major spending cuts have merely been postponed, not cancelled. Still, Wong believes that a rise in interest rates would put Hong Kong's economy at greater risk in the long run than the problem of the fiscal cliff. Federal Reserve chairman Ben Bernanke promised to keep interest rates constant only until 2015, and if the rates double after that, the value of local property could be halved, he warned.

Asia Art Archive founder is community ambassador for hotel (By Vivian Chen) - Claire Hsu-Vuchot will bring culture to the Ritz. While most big hotels invite rockers and movie stars to be their ambassadors, The Ritz-Carlton Hong Kong has announced a collaboration with Claire Hsu-Vuchot, founder of the Asia Art Archive. "A compelling reason for us to work with a cultural personality like Claire is that she personifies the exact same values as ours," Pierre Perusset, the hotel's general manager, said on Wednesday. "Charity, art and culture are arenas that strongly define Claire." He said her role as ambassador would be to help the hotel's community initiatives, through greater understanding and integration with local culture. Since its founding in 2000, the independent non-profit archive has been collecting and documenting information on the recent history of contemporary art in the region through research and by organising events, such as artist talks, educational workshops and community projects. Under the collaboration, more Asia Art Archive events will be hosted at the Ritz-Carlton, which neighbours the West Kowloon Cultural District.

Macau Legend to roll the dice on Hong Kong IPO (By Ray Chan and Sophie Yu) But lack of its own gaming licence likely to dampen price of casino operator's new shares - Macau Legend runs a casino at its Macau Fisherman's Wharf complex and is planning a Hong Kong initial public offering in the second quarter. Macau Legend Development, a casino operator owned by former Macau lawmaker David Chow Kam-fai, aims to raise up to US$800 million in a Hong Kong initial public offering in the second quarter, according to people familiar with the situation. Two sources with knowledge of the deal said the new shares were likely to be priced at a discount to market valuation because the company did not have its own gaming licence and ran casinos on several premises through a so-called service agreement with SJM Holdings. "Under a service agreement, casino operators such as Macau Legend have to pay about 4 per cent of their revenue to gaming licence holder SJM," a person familiar with the deal said. Rosita Lao, a spokeswoman for Macau Legend, refused to comment. SJM, the pioneer casino operator in Macau founded by gambling mogul Stanley Ho Hung-sun, held the only casino licence in Macau until 2002, when the government opened up the industry for competition. Of the six casino licence holders in the world's largest gaming destination, the Ho family controls three: SJM, Melco Crown and MGM China, a joint venture between his daughter Pansy Ho Chiu-king and MGM International. SJM also runs casinos in partnership with companies that do not have a licence to operate the business. It bought 4 per cent of Macau Legend for HK$480 million in August. SJM has 26.5 per cent of the market in Macau, according to Lusa news agency of Portugal. It is the only gaming operator with more than 20 per cent of the market, but that is still down from the 29 per cent in 2011. Chow, who was a legislator in Macau from 2005 to 2009, holds 33.6 per cent of Macau Legend while his mother, Lam Fong Ngo, is the second-biggest shareholder, with a 24.7 per cent stake. The company was formed by merging The Landmark Macau hotel, Pharaohs Palace Casino and theme park Macau Fisherman's Wharf. Macau Legend runs casinos on these premises. Coming in the wake of a three-year dream run for Macau's gaming industry, the planned US$800 million shares offer is likely to take place as early as the second quarter after Macau Legend announces its 2012 results. CLSA Asia-Pacific Markets is the sole book runner for the deal. Macau casino revenue surged 19.6 per cent last month to a record 28.2 billion patacas, according to official data. Shares of Sands China rose 2 per cent yesterday to a record HK$36.45. SJM went up 1.4 per cent, closing at HK$18.54, outpacing the benchmark Hang Seng Index that edged up 0.37 per cent.

TVB seeks High Court review of recommendation for new TV licences (By Austin Chiu and Vivienne Chow) High Court writ seeks a review of Communications Authority's July recommendation that additional terrestrial television stations be allowed - Media wait at TVB City in Tseung Kwan O. TVB yesterday applied for a judicial review of a government agency's decision to recommend the granting of new free-to-air television licences, in an apparent effort to avoid increased competition in the terrestrial television market. The broadcaster said in court filings that the Communications Authority made an "unlawful" recommendation in July, when it supported the granting of new licences, saying the judgment was replete with both factual and legal errors. It asked the High Court to stop the Chief Executive in Council, made up of the chief executive and Executive Council, from giving licences to City Telecom-owned Hong Kong Television Network, i-Cable Communications subsidiary Fantastic Television, and HK Television Entertainment Company, a unit of PCCW. The court move came after ATV, the other free-to-air broadcaster, failed in March to obtain court permission to lodge a judicial challenge. TVB claimed in court documents that four expert reports commissioned by the authority before it made the recommendation were riddled with "glaring errors of fact". It also said the authority failed to take into account the important fact that the quality and originality of television programmes would be degraded if the pool of available content producers and artists was spread among five companies. TVB was also unhappy at not being consulted before the authority made the recommendation. According to the court papers, the four allegedly substandard reports, produced by consultancy Spectrum Value Partners, assessed the potential effects on market sustainability and competition if extra licences were issued. TVB said the reports inflated advertising revenue generated in the free-television market between 2005 and 2009 threefold. The figure was reported to be HK$36.2 billion but in fact it was HK$12 billion, the broadcaster said. It pointed out that even with the inflated numbers, the consultants had concluded that the market might not be able to sustain five players. Therefore, it was "irrational" for the authority to make the recommendation with the assertion that market sustainability was not a primary consideration. The consultants predicted that ATV would be forced out of business if the three applicants were granted licences, TVB added. TVB was unhappy that it was told of the reports only after the recommendation was made to the Chief Executive in Council. Moreover, the station was supplied with only heavily redacted versions of the reports and was therefore asking for the full versions, it said. In a separate statement, the station said: "TVB reiterates that it is not blindly objecting to the issuance of new free-to-air TV licences and that it is not afraid of competition." ATV said it "understands and supports TVB seeking a legitimate judicial review", adding that its position has always been clear - that it opposes the granting of additional licences. HKTV, which applied for a licence three years ago, questioned TVB's action, saying the application had been made too late. City Telecom chairman Ricky Wong Wai-kay urged the government to issue new licences as quickly as possible for the sake of the public interest.

Testing urged for carcinogen found in batches of cooking oil (By Lo Wei) A Legco panel on Thursday passed a motion urging the government to amend the current law to allow for the monitoring of a cancer-causing chemical recently found in certain batches of oil imported from the mainland. The non-binding motion, by the Legislative Council’s food safety and environmental hygiene panel, was put forward by lawmaker Wong Kwok-hing during a meeting at which the panel discussed the production, sale and use of substandard cooking oil. The motion was supported by all lawmakers who attended the meeting. Secretary for Food and Health Dr Ko Wing-man said at the meeting that he would ask the Food Safety Centre to regularly test for the chemical, Benzo[a]pyrene. The meeting was held in response to recent media reports about an unlicensed establishment supplying suspected substandard cooking oil to local restaurants. The reports caused widespread public concern over the safety of cooking oil used by local restaurants. “Each time, the government responds only after problems are revealed,” Wong said. “It is not doing its part and has not addressed the public’s concerns.” said Wong. Catering sector lawmaker Tommy Cheung Yu-yan said the catering industry supported the monitoring of Benzo[a]pyrene in imported cooking oil.

Hong Kong economic growth set to accelerate (By Lai Ying-kit) Hong Kong’s economy is forecast to grow by 3.5 to 4.3 per cent in real terms this year, according to estimates by researchers from the University of Hong Kong on Thursday. The estimates were made by the university’s Hong Kong Institute of Economics and Business Strategy in its macroeconomic forecast. The researchers said Hong Kong’s growth was expected to accelerate from the fourth quarter of this year as the United States economy gradually recovered, the worst time of the euro debt crisis was over and China’s economy was expected to rebound. For the first quarter of next year, the city’s gross domestic product was forecast to expand by 2.9 per cent year-on-year. Headline inflation is expected to ease to 3.2 per cent in the quarter, from 3.7 per cent in the fourth quarter, as food prices eased and asset prices became stable. However, the researchers said uncertainties in the global economy might still overshadow the job market. They forecast the unemployment rate would increase to 3.5 per cent in the first quarter, from 3.4 per cent.

CY attack on illegal structures 'unfair', Henry Tang says - Henry Tang Ying-yen speaks on Commercial Radio One. Henry Tang Ying-yen, who was defeated last year’s chief executive poll, has broken his long public silence on the illegal structures row, saying it was “unfair” of rival Leung Chun-ying to attack him for infractions that Leung himself had committed. Tang, a former chief secretary, was initially the frontrunner in the chief executive race in March, but lost popularity and Beijing’s support after an illegal basement was found in his house in Kowloon Tong. In a radio interview on Thursday morning, Tang recalled how he reacted upon learning Leung had illegal structures at his own home on The Peak. He exclaimed, “Wow, is that possible?” Leung’s structures were revealed in late June, shortly before he took office as chief executive. ”When I was criticised for having unauthorised structures, of course I and other citizens would believe that [Leung] didn’t [have unauthorised structures at his home],” Tang said. Tang recalled how Leung tore into him during a televised election debate, criticising Tang for “hiding the truth” about his unauthorised structures. “Moreover, one of his aides distributed leaflets outside my house during the election period, claiming I should withdraw the chief executive race because of the illegal structures scandal,” Tang said. “Looking back, I find that pretty hilarious,” he said. “It was unfair [of Leung] to attack me over my illegal structures while he himself had the same problem.” Tang recalled Leung’s statement that he had merely shown negligence in his mishandling the unauthorised structures at his home on The Peak, rather than deliberately hiding the truth. “If this is called negligence,” Tang said, “I really hope there won’t be any negligence in his governance in the future.” Almost a year after the unauthorised structures were exposed under his York Road home, Tang said he was still unable to “remove a brick” from it because the Buildings Department was continuing its investigations. He doubted the government was dealing with the matter fairly, because his lawyers and architects told him they have never seen such a lengthy probe into an unauthorised structure. He will file a submission to the government on Friday, seeking approval for his plan to seal off the unauthorised basement with a brick wall. As for Leung’s maiden policy address, which is due in about two weeks, Tang said he hoped Leung would use it to set out a blueprint for his governance over the next five years. Tang declined to say whether he will run again, saying that he will consider the matter after he has finished dealing with the unauthorised structures at his home.

HK's total deposits up 0.8% in Nov (Xinhua) Hong Kong's total deposits with authorized institutions increased 0.8 percent in November from the previous month, reflecting increases in savings and time deposits, the city's Monetary Authority said Monday. In the latest statistics, overall foreign-currency deposits grew 0.4 percent during the month, and renminbi deposits in Hong Kong increased 2.9 percent to 571 billion yuan. Hong Kong-dollar deposits also expanded 1.2 percent. The total renminbi remittance for cross-border trade settlement amounted to 243 billion yuan, compared with 195.4 billion yuan in the previous month. According to the figures, total loans and advances rose 0.9 percent in November. As Hong Kong-dollar loans increased at a faster rate than deposits, the Hong Kong-dollar loan-to-deposit ratio edged up to 80.7 percent at the end of November from 80.4 percent a month earlier. Seasonally adjusted Hong Kong-dollar M1 rose 2.9 percent in November, and expanded 15.4 percent year-on-year. Unadjusted Hong Kong-dollar M3 increased 1.3 percent during the month and expanded 10.9 percent from a year earlier.

 China*:  January 5 2013

Y-20 heavy transport aircraft to boost military capabilities (By Minnie Chan) The Y-20 aircraft is part of the PLA's plans to modernise its hardware, but engine problems continue to hinder its successful development. The development of the Y-20 heavy transport aircraft will benefit the military and civilian aviation industries if engine problems can be overcome, military experts said. Defence Ministry spokesman Yang Yujun confirmed last week it is developing the Y-20 military transport aircraft as part of the People's Liberation Army's modernisation drive and for service in humanitarian and disaster-relief efforts. Three days earlier, on December 24, several photographs believed to be showing China's first domestically produced heavy-lift military transport plane were posted on a mainland website by military enthusiasts. The aircraft bears a striking resemblance to the US Air Force's C-17 transporter, built by Boeing, but appears to be of a size that might fit somewhere between the C-17 and the Airbus A400M. As such, it appears that the Y-20 will be wide enough to accommodate most large PLA combat and support vehicles, including its Type 99 series tanks, which weigh close to 55 tonnes. Yang did not say when the Y-20 would be ready for service, only saying that "the research and development of the large transport aircraft is going forward as planned". The photographs on the Chaoda Story Land website, a forum for military enthusiasts, were purportedly taken from long range at Xian Aircraft's Yanliang airfield in Shaanxi .Xian Aircraft Industry is a subsidiary of Aviation Industry Corporation of China (AVIC), the leading military aircraft maker. Some features of the new transporter can be identified despite the poor quality of the images. It is powered by four jet engines that appear to be Russian Soloviev D-30KU engines, used on Russian Ilyushin Il-62M and Tupolev TU-154M airliners and the Ilyushin Il-76MD, a multi-purpose, four-engine strategic airlifter. The PLA Air Force operates a small fleet of Russian-made Il-76 transporters powered by the D-30KU engine. But Andrei Chang, editor-in-chief of the Canadian-based Kanwa Defence Review, said the Y-20 would not use D-30KU engines when development and research was completed. He said the D-30KU was a noisy fuel-guzzler and even the Russians were abandoning it. China was likely to use a homegrown aircraft engine such as the CJ-1000A displayed at the Zhuhai air show in November, he said. "I have no idea about the Chinese engines that will be used by the Y-20 as it is still being developed," Chang said. "But it will be a significant jump for China's aviation industry if it successfully develops the Y-20, especially for its larger aircraft projects which can be used for both military and civilian purposes." Beijing-based military expert Li Jie said the Y-20 project was still in its early days. "Like other aircraft projects, the Y-20 project is still facing the same problem - engines," he said. "But if we overcome such a knotty problem, the PLA's ability to project military force on the battlefield or send relief materials to disaster-hit areas would definitely be strengthened."

As China's navy grows, end of Deng's dictum of keeping a low profile? (By Cary Huang) Beijing's strategists, in responding to US domination of the oceans, are taking on board the ideas of a 19th century American historian - When American historian Alfred Thayer Mahan wrote his 1890 tome The Influence of Sea Power on History, 1660-1783, he could hardly have imagined that it would be influencing the leaders of distant China some 120 years later. Yet President's Hu Jintao seems to be following in the footsteps of world leaders like Theodore Roosevelt and Kaiser Wilhelm by taking on board the key message of Mahan's weighty work - that sea power is the means to ensuring commercial, political and military access to vital regions. Delivering his keynote policy speech at the 18th party congress held in Beijing in November, Hu for the first time declared China's ambition to "build itself into a maritime power". The comments were seen by some in the region and in the West as a manifesto for maritime expansion and an indirect response to a raft of escalating disputes between China and its neighbours in the South China Sea and the East China Sea. It also came against the backdrop of US President Barack Obama's "pivot to Asia". In fact, Mahan's ideas have been discussed among Chinese think tank scholars and military strategists for years, as many of them believe the doctrine is the key to the "Chinese renaissance", a catchphrase uttered frequently by incoming president Xi Jinping . The establishment believes that becoming a "maritime power" is the "Chinese dream" - the way to end what has been called a "century of humiliation" at the hands of foreign powers. An acclaimed documentary series well illustrated the changing perception of maritime affairs. A 2006 China Central Television production later shown by The History Channel, The Rise of Great Powers explained how the Portuguese, Spanish, Dutch, French, British, German, Japanese, Russian and American empires rose, prospered and fell. The documentary broke with decades of Communist Party historical ideology and revealed China's current pragmatism as a rising power intent on avoiding the arrogant blindness that left it weak for a long period starting in the 19th century. It brings to an end a great historical trend that dates back six centuries, in which China withdrew inwards as European naval expansion spread Western influence worldwide. David Shambaugh, director of the China policy programme at George Washington University, said that in his first month as Communist Party general secretary, Xi had apparently directed China's maritime policy with respect to the East and South China Seas - clearly allying his position with staunch nationalists. Analysts point out that the idea of China as a naval power has precedent - China was the obvious contender for dominance of the world's oceans in the 15th century as its imperial exploration fleet, led by Admiral Zheng He, was technologically far ahead of its rivals. Zheng commanded the largest wooden ships in history on far-ranging voyages for the glory of the Ming emperors, decades before Columbus' explorations. Many historians blame the the later withdrawal of the ocean fleets for the Qing dynasty's maritime defeats following the first Opium War and China's weakness in the century that followed - in sharp contrast to its regional rival Japan. Now, the overwhelming belief among the establishment and academics is that China, which has growing influence over many of its smaller Asian neighbours, should be more than just a continental power, as its land-based strategic culture constrained its ability to become a global power. "China needs to enhance its capacity to exploit maritime resources, develop a marine economy, protect the marine environment, as well as ensure navigational safety, as all these touch upon its core national interests," said Jin Canrong, vice-dean of the school of international studies at Renmin University. Professor Zhang Wenmu, of the centre for strategic studies at the Beijing University of Aeronautics and Astronautics, has made the case for a globally-deployed, assertive naval capability in several essays. "Wherever China's interests lead, there too must follow China's capabilities to protect those interests," he wrote in an essay entitled "Protecting Border Security and Security Boundary". For years, Zhang and others called for a powerful navy, citing the facts that China imports more than half of the oil it consumes and 90 per cent of the nation's imports and exports are transported across the oceans. China has 18,000 kilometres of coastline and more than three million square kilometres of maritime territory. Tapping the vast resources under the water is a necessity for China's economic growth as it faces increased resource constraints inland and rising material costs overseas. Some economists see the maritime industry as a new engine for economic growth. The marine economy totalled 4.55 trillion yuan (HK$5.7 trillion) in 2011 and is expected to account for 10 per cent of the nation's gross domestic product by 2015. Mahan's argument was that sea power is what assures commercial, political, and military access to key parts of the world. Having such power would set in motion a virtuous cycle in which commerce generated wealth, wealth provided revenue to fund a navy, and the navy protected trade and commerce. How the theory will influence China's naval policy remains to be seen, but records of academic research and internal discussion reveal the continued reverence that is paid to Mahan's work. "The popularity of Mahan's work in China seems to emanate from similarities in the geostrategic situation between the United States of 1890 and modern day China," said Professor Robert Rubel, dean of the centre for naval warfare studies at the US Naval War College. In 1890 the key policy of the United States was the Monroe Doctrine, a continental strategy of hemispheric defence. Similarly, China had until recently adopted a strategy of taoguang yanghui, literally "keeping a low profile and hiding brightness", a path set by late paramount leader Deng Xiaoping . Analysts see Hu's statement as tantamount to the end of Deng's diplomatic dictum. Since 2008, the Chinese navy has conducted escort missions in the Gulf of Aden to protect cargo ships from pirates. China has been embroiled in territorial disputes of varying severity with most of its neighbours - with Vietnam, the Philippines, Brunei and Taiwan over maritime territory in the South China Sea, and with Japan over five uninhabited islands in the East China Sea. In recent years, China has spent much of the double-digit defence spending increases to modernise its weak navy. Non-military departments such as fisheries and maritime surveillance have also seen their fleets expanded and modernised. China is developing a wide range of new weapons, expanding its blue-water fleets capable of operating in deep oceans, and putting its first aircraft carrier - a retrofitted hull purchased from the Ukraine more than a decade ago - into active service in September. Kerry Brown, executive director of the China Studies Centre at the University of Sydney, said China's ambition to become a maritime power is "very significant, and natural enough in view of its very deep resource needs, its strategic desire to be less hedged in by the US and others, and its trade networks". "What is significant is how the world accommodates a China that is going to figure more as a sea power … trying to project its power and influence way beyond its borders in ways which in recent history have never happened," Brown said. Analysts said China's maritime ambitions would alarm neighbours and trigger competition for arms. "China has been a continental power for several centuries. The shift from continental to maritime power and in military doctrine is inherently unsettling for all Asian states, especially given the increased assertiveness of Beijing over territorial disputes," said Professor John Lee of the University of Sydney's centre for international security studies. Lee said stability in the post-second world war order had depended on two factors: firstly, uncontested American maritime power and access; secondly, a stable balance of power between the maritime muscle of Asian countries. "China's desire to become a regional maritime superpower, legitimate as it is, threatens this arrangement. Moreover, China's geography, in which it shares maritime borders with almost all major Asian powers, means that any significant increase in its naval capacity fundamentally affects the interests of all other states," Lee said. James Holmes, a professor of strategy at the US Naval War College, said arguing that China is "Mahanian" doesn't mean Beijing plans to build a fleet of armoured dreadnoughts to fulfil its maritime destiny. What it does mean is that China has imported some of Mahan's ideas that fit with its unique needs and circumstances, and fused them into its strategy. Chinese maritime strategy is a combination of Eastern and Western ideas from the past and present. "By depicting China as Mahanian, we don't mean to say China's navy must be a blue-water force comparable to the US Navy. It may confine its energies to maritime Asia for the foreseeable future. I believe it will," Holmes wrote in an essay. But some analysts said that China's ambitions will collide, at least to some extent, with the US military's dominant role at sea. Masao Okonogi, a law professor at Keio University and a former security adviser to two Japanese prime ministers, said China's view of security would conflict with that of the US. "As with the relationship between the US and the Soviet Union during the cold war, China's expanding, 'sphere of influence'-based security perspective is bound to clash with the more ideological and rights-based security perspective of the US," Okonogi wrote in an essay. Lee agreed, saying: "The fact that Chinese maritime capability is largely aimed at negating or blunting American naval capacities means that strategic competition between the US is all but inevitable, even if there is strong economic interdependence between the two countries." Perhaps English geographer Halford Mackinder's famous 1904 article, "The Geographical Pivot of History," best reflects the pervasive fear in the West about Chinese influence. After explaining why Eurasia was the geostrategic fulcrum of world power, he posited that the Chinese, should they expand their power well beyond their borders, "might constitute the yellow peril to the world's freedom just because they would add an oceanic frontage to the resources of the great continent." In reaction to China's increasing strength, many nations have welcomed the US presence in the region. The US is also building its network of alliances to contain the rising power - with Europe in the form of the Nato; with the second greatest Asian power, Japan; and with South Korea, Australia, Thailand, Singapore and the Philippines. Obama's re-election means he can continue the strategic shift towards the Asia-Pacific region that started during his first term, which will see 60 per cent of US warships move to the region by the end of the decade. That's a plan Beijing believes is intended to contain a rising China. It's a plan that will lead to two maritime giants congesting a shrinking ocean.

China services growth adds to economic revival hopes (By Reuters in Beijing) Honqiao International airport in Shanghai. China’s fast-growing services industry has so far weathered the global slowdown much better than the factory sector. Growth in China’s increasingly important services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world’s second-largest economy. China’s official purchasing managers’ index (PMI) for the non-manufacturing sector rose to 56.1 in December from 55.6 in November, the National Bureau of Statistics (NBS) said on Thursday. Two PMIs on the manufacturing sector earlier this week also suggested China’s economic growth was picking up late this year, although signs persist it depends primarily on state-led investment. Data so far suggests only a muted revival in economic growth, rather than a return to the double-digit pace seen in China over the past three decades, Hong Kong-based economist Dariusz Kowalczyk said. “Absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity,” Kowalczyk, Credit Agricole’s senior economist for Asia except Japan, said. He said economic growth picked up in the fourth quarter of this year after sliding for seven straight quarters, but in sharp contrast to China’s previous, more pronounced bull runs, it could fade after the first quarter of next year. The greatest driver in the pick up in the non-manufacturing sector in December was a jump in construction services to 61.9 from 61.3 in November. Industries including transport slumped, the NBS said in an accompanying statement. A reading above 50 indicates growth is accelerating, while one below 50 indicates it is slowing. The strength in construction services is consistent with other indicators, including rising land prices, that point to a revival in China’s property markets, which support about 40 other industries. Signs of a pick up come despite central government protestations that it will not relax credit and purchasing curbs that have stifled the sector in the past two years. The transport slowdown is also consistent with weak demand for China’s exports in the face of euro area and Japan recessions and an uncertain fiscal outlook in the United States. The official manufacturing PMI survey in December matched November’s seven-month high of 50.6, the NBS said on Tuesday, while a complementary survey with a greater focus on the private sector reached 51.5, its highest since May last year. 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. That’s partly due to a maturing economy as well as a historic shift in the last decade leading a majority of Chinese to live and work in cities rather than the countryside. China’s services sector generated 43 per cent of China’s GDP in 2010 and by last year provided nearly 36 per cent of new jobs, exceeding the agricultural sector for the first time. Beijing has acknowledged that greater consumer activity is needed to reduce the economy’s reliance on the exports sector and investment-led growth. “Expanding domestic demand will be a major stimulus for China’s economic growth, and the greatest potential will come from the service sector,” Xia Nong, deputy director-general of the Department of Industry under the National Development and Reform Commission, said on Friday, according to the China Daily. Xia pledged to open the services sector to more foreign competition as well as encouraging Chinese service firms to go overseas. Foreign investment into the service sector of US$47.57 billion in the first 11 months of this year surpassed that directed to the manufacturing industry, which slumped by 7.1 per cent, the China Daily said over the weekend, citing Ministry of Commerce data. The growing services sector has taken up some of the slack from the property sector, which has struggled with investment and purchasing restrictions as well as a credit crunch. Overseas company investment into China’s urban transportation surged 24-fold in the first 11 months from a year ago, followed by a 12-fold rise in telecommunications and other information services, and a sevenfold increase in pipeline transportation industries, at sevenfold, the China Daily said, again citing Ministry of Commerce figures. The sector, formerly the bastion of smaller private businesses, is now important enough to have its own five-year plan, issued in September.

The wall calendar's days are numbered (By Jin Haixing) Traditional wall calendars are disappearing from the market, as more personalized calendars and calendar smartphone apps have been growing in popularity. Personalized calendars are gaining popularity and are replacing traditional wall calendars. Traditional calendars' limited functionality and consumption behavior shifts are responsible for the change, a Chongqing Economic Times report says. The industry will take an additional hit next year, as 2013 is the Year of the Snake — a Chinese zodiac animal that's much less beloved than many others, such as the dragon, the report says. Some retailers have decided to stop selling wall calendars next year. Entrepreneurs are cashing in on the shift. A growing number of online and print shops have been offering calendar customization services in recent years. The online print shop Kachayu, for instance, provides 12 backgrounds. Clients can upload their own photos and decide the layout. The shop then prints them and delivers them for free. More than 19,000 customized calendars are offered on Taobao.com, China's largest online retailer. The website's records show it sells more than 10,000 DIY calendars a month at an average price of 25 yuan ($4) apiece. A print shop in Beijing's Chaoyang district offers an increasingly typical service in which customers receive personalized calendars within two hours of placing their orders. Traditional calendars' waning popularity is partly caused by the advances of the Internet and proliferation of smartphones, the Chongqing Economic Times report says. Web and smartphone users can easily find useful calendar software and applications. The Apple Store alone offers more than 500 Chinese calendar apps for the iPhone. Some apps integrate schedule reminders, calendars, weather forecasts and other services, providing more options for customers.

36 hours in Lijiang (By Jeannie Ralston) Clockwise from top: A twilight scene along one of Lijiang Old Town's canals. At 90, Dr Ho Shixiu still runs the Jade Dragon Snow Mountain Chinese Medicine Clinic. An Old Town market offers visitors a glimpse into the local people's life. Culture, history, beauty converge in an old city of Yunnan province. The word "breathtaking" when applied to a Chinese city sometimes refers to respiratory-attack-inducing smog. But in the case of Lijiang, population 1.2 million, in Southwest China's Yunnan province, the word takes on its slack-jaw-in-awe meaning. The horizon here is Himalayan, and the blue sky above the city's stone streets, willow-lined canals and black-tiled roofs is reliably visible. This unusual troika of culture, history and natural beauty is why Lijiang's Old Town - a UNESCO World Heritage Site and a center of the Naxi people - is a top destination for Chinese tourists and a new favorite of the passport-carrying crowd.

Hong Kong*:  January 4 2013

Film review: The Last Tycoon (By Yvonne Teh) Before he appeared in A Better Tomorrow (1986), The Killer (1989) and Crouching Tiger, Hidden Dragon (2000), Chow Yun-fat (above) achieved fame and popularity with The Bund, a 1980 TVB series about two gangsters who rose to prominence in Republican-era Shanghai. And in the 2007 mainland remake, Huang Xiaoming played the character Chow had portrayed in the original series. So it's quite the coup for director Wong Jing to have secured the services of not only Chow to star in The Last Tycoon as a top boss of the Shanghai underworld with traits and a story arc similar to The Bund's Hui Man-keung but, also, Huang to play the character's younger self! The period drama-actioner opens with a shot of an immaculate looking Chow majestically perched atop a throne-like seat and coolly fanning himself. But its story properly begins in 1913, with Huang playing Cheng Daqi as a young man with a humble background but high ambitions - and a lady love (Joyce Feng Wenjuan) who similarly wishes to leave their village to seek her fortunes elsewhere. An innocently romantic interlude is soon interrupted by acts of violence though. And whereas his paramour heads to Beijing to pursue her dream of becoming a Peking opera performer, a twist of fate sends Cheng on the road to that "playground for the adventurous" that was early 20th century Shanghai. Flash forward to 1937, and Cheng (now portrayed by Chow) is shown to have prospered tremendously - together with his boss turned partner, Hong Shouting (Sammo Hung Kam-bo), and Mao Zai (Francis Ng Chun-yu), the military man who taught Cheng to kill. Now married to a loving wife (Monica Mok Xiaqi), Cheng chances upon his old flame (Ye Zhiqiu is now played by Yolanda Yuan Quan) on a visit to Shanghai with her husband, an underground resistance leader (Xie Baoqing). Although his heart leaps upon seeing her again, no happy reconciliation is possible - not least because of larger events occurring in their world, including the Japanese attack, capture and occupation of the city. Early on during the hostilities, Cheng escapes to Hong Kong, but it's only a matter of time before he returns to do his patriotic duty and help resist Japanese rule - with consequences that smack of revisionist fantasy. In its general treatment as well as in terms of its subject matter, the film is one of its director's more serious efforts. It also undoubtedly benefits from Andrew Lau Wai-keung being one of its main cinematographers as well as producers: there are several shots of Chow Yun-fat looking very stylish indeed, and a rooftop scene with Huang and Feng that borders on the artistic. However, Wong Jing just can't seem to resist inserting action scenes that echo and effectively parody the films of John Woo Yu-sum and Wong Kar-wai. They may look good and elicit knowing laughs but such moves only cheapen the viewing experience. Worse, the movie's many flashbacks and flash-forwards can be read as signs that The Last Tycoon's story may have been too expansive for its helmer to comfortably handle.

Gloria Tang does not find inspiration at the Ultimate Song Chart Awards (By Vivian Chen) Gloria Tang Chi-kei, aka G.E.M., has been making headlines recently for her outspoken comments on Hong Kong's Canto-pop music awards. The young singer-songwriter uploaded a video interview and an open letter on her weibo account early this week, giving the reasons she will not be going to the Ultimate Song Chart Awards presentation ceremony organised by Commercial Radio. Tang launched her career just four years ago and has already held a solo concert at the prestigious Coliseum. She suggested that local awards failed to honour talented artists. "Every time I watch the Grammys or Taiwan's Golden Melody Awards, I feel really moved and inspired by the winners. I wish Hong Kong could also have music awards that are more representative. "It's a pity to compromise the notion of music awards by using them for commercial purposes." Her comments stirred heated discussion in cyberspace. Some internet users supported her but others accused her of being naïve and arrogant. This year's Ultimate Song Chart Awards presentation took place on Tuesday at Wan Chai's Convention and Exhibition Centre. Joey Yung Cho-yee was named best female singer for the eighth time, while Eason Chan Yik-shun won his ninth best male singer award.

Colonial history won't be waived at Tai Da Flags (by Johnny Tam) "But I always tell them: this is part of our history, a history that all CHINESE SHOULD BE ASHAMED OF, as we were once so weak and conquered by foreign countries." - Wong Ying-kui, 72, reminds youngsters buying colonial flags from his Yau Ma Tei shop of Hong Kong's subjection to colonial powers. A flag maker whose business has benefited from recent rallies in Hong Kong always reminds his young buyers of the history behind their purchases - especially when it comes to a certain British colonial banner. "Customers come to buy flags for different reasons. I talk with them about the stories behind the flags," said Wong Ying-kui, 72, owner of Tai Da Flags Company in Yau Ma Tei, a retailer and wholesaler specialising in flags, souvenirs and trophies. As Wong shows some flags to a visitor, his storyteller's enthusiasm for their history becomes obvious. First, he points to the Qing dynasty's ferocious dragon flag, with a yellow background, and then the five-coloured flag of Dr Sun Yat-sen's Republic of China. But Wong paused before nodding at the British colonial flag of Hong Kong in his shop's front window - which, he said, has been selling well. "Ever since the campaign against parallel trading at the Sheung Shui MTR station in September [when the colonial flag was waved], more and more young people have dropped by and asked how much that flag is," said Wong, pointing at the relatively large - 64cm by 96cm - emblem of colonial times. "But I always tell them: this is part of our history, a history that all Chinese should be ashamed of, as we were once so weak and conquered by foreign countries." In recent months, sales of smaller versions of the flag - which cost between HK$20 and HK$25 - have increased by between 10 and 20 per cent, says Wong. His shop no longer has a machine that can make the large version, which Hongkongers have seen being waved at rallies. Some former Beijing officials have lamented the sight of colonial flags in street protests, most recently during Tuesday's mass demonstration. But many commentators say the flags are less about an independence movement - as some mainlanders fear - and more indicative of an anti-Beijing sentiment. "Some people buy the flags for their personal collection, and some buy a bulk purchase of 10 at once. I don't know why, exactly, they buy [so many]," he said. Wong has been selling flags for over 40 years, to tourists, companies and, recently, to increasing numbers of young people.

World's richest got a lot richer in 2012 (By Bloomberg in New York) US$241b added to billionaires' collective net worth; Carlos Slim again wealthiest on planet - Mexican billionaire Carlos Slim. The richest people on the planet got even richer in 2012, adding US$241 billion to their collective net worth. According to the Bloomberg Billionaires Index, a daily ranking of the world's 100 wealthiest individuals, the aggregate net worth of the world's top moguls stood at US$1.9 trillion at the market close on December 31. Retail and telecommunications fortunes surged about 20 per cent on average during the year. Of the 100 people who appeared on the final ranking of 2012, only 16 registered a net loss for the year. Amancio Ortega, the Spaniard who founded retailer Inditex, was the year's biggest gainer. The 76-year-old tycoon's fortune increased US$22.2 billion to US$57.5 billion, according to the index, as shares of Inditex, operator of the Zara clothing chain, rose 66.7 per cent. Global stocks soared in 2012. The MSCI World Index gained 13.2 per cent during the year to close at 1338.50 on December 31. The Standard and Poor's 500 Index rose 13.4 per cent to close at 1426.19. Carlos Slim, the telecommunications magnate who controls Mexico's America Movil, maintained his title as the richest person on earth for the year. The 72-year-old's net worth rose US$13.4 billion - or 21.6 per cent - last year, making him the second-biggest gainer by dollars. US software mogul Bill Gates, 57, ranks second on the list, trailing Slim by US$12.5 billion. The Microsoft co-founder added US$7 billion to his net worth as Microsoft shares rose 2.9 per cent. Microsoft stock accounts for less than 20 per cent of the billionaire's fortune. Warren Buffett, 82, lost his title as the world's third-richest man to Ortega on August 6. The Berkshire Hathaway chairman gained US$5.1 billion during the year. The billionaire spent much of the year pressing for higher taxes on the wealthy. Ikea founder Ingvar Kamprad, 86, is the world's fifth-richest person with a US$42.9 billion fortune. His net worth rose 16.6 per cent in 2012. Brazil's Eike Batista, 56, was the year's biggest loser by dollars, falling US$10.1 billion. The commodities maven, who vowed a year ago that he would become the world's wealthiest man by 2015, sold a 5.63 per cent stake in his EBX Group in March to Abu Dhabi's Mubadala Development. Oracle founder Larry Ellison rose US$6.4 billion in 2012 as shares of the world's largest database company jumped 31.7 per cent. Ellison, 68, agreed to buy 98 per cent of Hawaii's Lanai island last year. Asia's richest man, Li Ka-shing, rose US$6.4 billion. The 84-year-old chairman of Hong Kong property developer Cheung Kong (Holdings) ranks 11th on the list with a net worth of US$28.6 billion.

HK$400m bill fails to derail university bidder (By Olga Wong and Dennis Chong) Government reveals private college bidders face infrastructure costs of HK$400 million amid claims it would now rather use land for housing - A Catholic group insisted it would press ahead with its bid to build a private university in Fanling as the government warned that basic infrastructure alone could cost HK$400 million. The potential costs were revealed amid suggestions the government would prefer to ditch its plan to allocate land at Queen's Hill for a private university and build more housing instead. A spokeswoman for the preparation task force of the Jesuit University Hong Kong said: "We will not withdraw and we are willing to pay for the infrastructure." Reports that the government would rather reserve the 16-hectare former military camp for building flats began to emerge last month. The threat of a U-turn in the middle of an expression of interest exercise that began in 2011 led some lawmakers to warn it would hurt the city's image as a centre of excellence for education. A source familiar with the situation said yesterday that the government was now unlikely to scrap the tendering process after nine proposals for universities had already been examined by the Education Bureau. However, the source added, the government had expected that the universities would withdraw their bids after it revealed the high cost of infrastructure, covering roads and utilities. "The government would consider giving the site a new use if the tenders fail, including reallocating it for housing development," the source said. The HK$400 million figure, as estimated by the government, came to light yesterday following an apparent request by one potential bidder for public funds to subsidise development by providing the infrastructure. The request was declined. The Jesuits announced last year that it wanted to open a liberal arts college - which generally covers subjects such as literature, philosophy and science - with an annual tuition fee of HK$250,000. Britain's Aberdeen University, led by former Hong Kong governor Lord David Wilson, had also been regarded as a top bidder. But the university informed the Post that it would not be bidding, without specifying a reason. An Education Bureau spokeswoman said they were still considering the development specifications based on the proposals received. "The government remains committed to promoting quality post-secondary and higher education," she added. She did not say when the tender, originally scheduled for 2010, would be finalised. New People's Party lawmaker Regina Ip Lau Suk-yee said it would be hard for private universities to make a success of the site without financial assistance. She urged the government to improve infrastructure at public universities, including adding more residency halls, instead of giving out land to private universities. "The government owes us a lot of answers. What is the objective of encouraging the setting up of private universities? What would be the business model? Where is the demand? I think it has not thought this through." The total area on Queen's Hill covers 25 hectares, which some surveyors estimate could provide over 2,600 private flats or over 10,000 public flats. Former chief executive Donald Tsang Yam-kuen designated 16 hectares for a university, and reserved five other sites for similar developments.

Hackett London unveils tailor-made HK$10 million LED screen (By Vivian Chen) Moses Chan (left) and Daniel Chan - Annie Liu Xin-you - British tailor Hackett London celebrated the opening of its flagship Hong Kong store in October, but held another party last Friday to unveil its huge LED screen. The screen, on the façade of its store in Causeway Bay's Hysan Avenue, measures 20 metres tall and spans a whopping four floors of the building. It cost a cool HK$10 million and took more than six months to make. A bevy of socialites and celebrities attended the unveiling ceremony amid the festivities last week. TVB actor Moses Chan Ho paired up with actress Annie Liu Xin-you to cut the ribbon alongside Hackett London executives. Many guests brought their better halves, with socialite couples including Davis and Melody Chan, Otto and Tisha Chan, and Stephen and Deborah Hung. Fortune-tellers entertained guests with their predictions for the new year. Moses Chan said he spent Christmas with his actress-girlfriend Aimee Chan Yan-mei and gave her a "very heart-warming" gift. Actor Andy On Chi-kit revealed he might surprise his girlfriend Jennifer Tse Ting-ting with a marriage proposal this year. Guess it won't be so much of a surprise now.

Macau gambling revenue hits record US$38b in December (By Reuters in Hong Kong) Macau, the world’s largest casino market, raked in US$38 billion in annual gambling revenues this year after monthly revenues for December hit a record, a signal of sustained strength in the only place in China where visitors are able to legally gamble in casinos. December’s revenue growth of 19.6 per cent, which came in ahead of forecasts of 16-18 per cent, was boosted by stronger visitation numbers during the holiday season. The monthly figure of 28.25 billion patacas (US$3.54 billion) was the strongest ever, according to data from the Macau government released on Wednesday. Located on China’s southern coast, Macau, a special administrative region like neighbouring Hong Kong, had seen gambling revenue growth fall sharply this year due to lower spending by VIP customers who account for 70 per cent of total revenues. Annual gambling revenue for this year rose 13.5 per cent versus last year when revenues rose 42.2 per cent. Slower economic growth in China, tighter scrutiny of money transfers and moves to combat the country’s entrenched corruption had dampened sentiment last year. As a result, casino operators, including Las Vegas tycoons Sheldon Adelson and Steve Wynn, who own properties in Macau, saw earnings growth topple from last year due to subdued appetite from VIP Chinese gamblers and growing competition from Asian operators such as Galaxy Entertainment Group. The stronger-than-expected monthly figure is positive for the market said analysts, but with no new supply set to open in Macau for the next two years, a new anti-smoking regulation that comes into effect next year and tighter scrutiny over the VIP junket market, casino operators are in a more challenging position to boost revenues. “For next year we are still not expecting it to be a fantastic year because the casino properties are already running at full capacity,” said Aaron Fischer, head of Asia consumer and gaming research at brokerage CLSA in Hong Kong. Higher spending by China’s burgeoning middle class has been a key factor in propelling revenue gains this year, offsetting a slowdown in VIP growth. Whether volumes in the high end VIP market will stabilise and accelerate further on the back of stronger economic growth is an issue over which analysts remain cautious. Estimates for next year gambling revenue growth range from 5-10 per cent with the central government keen to maintain Macau’s growth rate at a similar pace to the country’s GDP rate, say industry executives. Authorities are pushing to diversify the gambling-dependent hub with more leisure offerings in the hope of attracting a wider visitor base, including a wedding incentive scheme the Macau government launched in November that grants 300 patacas per local guest for their activities in Macau. Analysts remain upbeat for Macau’s outlook, citing an improving economy in China and infrastructure developments that will shorten the journey from the mainland to macau.

Hang Seng soars 2.9pc as US passes fiscal-cliff deal (By Reuters) The Hang Seng Index rose 655 points to close 2.9pc higher after the US Congress approved a deal to avert the fiscal cliff. Hong Kong shares kicked off the new year by closing at a 19-month high on Wednesday, as investors cheered the passage of a bill in the United States Congress that averted a fiscal crisis and eased worry of a recession in the world’s largest economy. Investors chased gains in China growth-sensitive counters that were laggards this year and thematic plays such as non-bank financials and property that are expected to outperform this year. Bourse turnover was at its highest since December 18. The Hang Seng Index climbed 2.9 per cent to 23,312 points, its highest since June last year and decisively breaking above chart resistance at around 22,800 that has stymied gains for much of the previous two weeks. The China Enterprises Index of the top Chinese listings jumped 4 per cent in its best daily gain in a year, closing at its highest since August last year. Gains on Wednesday accelerated after the United States averted economic calamity when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the country into recession. “In the short term, this may trigger some reversal of flows back to the US, but the effects of that will probably be offset by flows from Japan as the yen continues to weaken,” said Hong Hao, chief equity strategist at Bank of Communications International Securities. “There’s also an element of catch up today as people begin to return from their holidays and realise they have missed out on the December rally in the China market,” Hong added. An 18 per cent gain in December, its best monthly showing since July 2009, helped the CSI300 of the top Shanghai and Shenzhen listings to its first annual gain in three. Mainland markets were shut on Wednesday and will resume trade on Friday. On Wednesday, Chinese steel producer Citic Pacific surged 11.4 per cent to its highest since April this year. It had finished this year down 17.4 per cent and underperformed the Hang Seng Index’s 23 per cent jump. Chinese sportswear brands Li Ning and Anta Sports, which fell 18.3 and 25.7 per cent this year respectively, each soared 11.9 and 8 per cent on Wednesday. The annual declines this year were Citic Pacific’s and Li Ning’s third-straight annual loss, and the second year of loss for Anta Sports. Aluminum Corporation of China (Chalco) jumped 6.2 per cent to return to levels not seen since May this year. It had finished this year up 5 per cent, failing to retain much of its gains from early last year. Metallurgical Corporation of China gained 6.6 per cent after the company said it would transfer its 51.06 per cent equity interest in loss-making Huludao Nonferrous Group to its controlling shareholder. Chinese financials were strong after China’s official manufacturing purchasing managers’ index held steady in December at 50.6, matching November’s seven-month high, that pointed to steadying growth recovery in the world’s second-largest economy. But non-banking financial counters outperformed, with China Life Insurance rising 6.7 per cent, extending strong this year gains on hopes that financial sector reforms in the mainland will benefit insurers and brokerages. New China Life Insurance spiked 12.6 per cent in its best daily gain since it made its Hong Kong listing debut in December last year. The mainland’s securities regulator had said over the weekend that it plans to allow eligible securities houses and insurers’ asset management units to develop and manage mutual funds in a bid to reinvigorate an industry struggling to produce returns for investors. This follows an announcement last week allowing brokerages to sell subordinated debt and the Chinese central bank pledging to quicken the pace of reform in the financial sector that sent shares of Chinese brokerages soaring last Friday. Citic Securities, China’s largest listed brokerage, jumped 6.1 per cent to close at a record high after posting a 53 per cent gain this year. Financial sector reforms in China are expected to stay a dominant theme next year, analysts say, as would Chinese urbanisation-related counters such as property developers, which were also stronger on Wednesday. But in a sign that such hopes may not extend sector-wide, Country Gardens ended up 2 per cent, paring gains after its nine-month net profit showed the property developer posting a 34.4 per cent rise in profit from a year earlier. The Macau gaming sector extended gains after data showed monthly Macau gaming revenue hitting a record high in December. Sands China jumped 5.3 per cent.

 China*:  January 4 2013

Survey finds Shenzhen hotpot laced with preservatives (By Choi Chi-yuk) Enjoying a spicy hotpot may be a popular way to keep the winter chill away, but the excessive preservatives found in the dish's ingredients by Shenzhen's market supervision authorities could give some diners pause. A report by the Market Supervision Administration found unacceptable levels of benzoic acid and sorbic acid in 38 of 200 samples collected from hotpot restaurants and supermarkets across the city, a popular dining destination for Hongkongers. The survey found the preservatives in beef tendon balls, pork balls, beef balls and mushroom balls, which the restaurants had bought from various supermarkets in Shenzhen, according to a Xinhua report yesterday. Excessive levels of benzoic acid can affect the liver and kidneys. Mainland authorities have zero tolerance for its use in fresh foods, like the meat balls. Two of 27 hotpot soups sampled were also found to contain either excessive preservatives or the dye rhodamine B, a possible carcinogen that is banned in food production. The report, which was released over the weekend, provided no details about the level of preservatives found in the food samples. Also unknown was the source of the ingredients - and whether any of them had been exported to Hong Kong. Market supervision officials in Shenzhen could not be reached for comment yesterday. Apart from the hotpot ingredients, excessive amounts of sulphur dioxide were found in five batches of mushrooms and dried white fungi that were collected from a company in the outlying Baoan district during the same survey, Xinhua said. Mushroom and white fungi, as well as dried seafood such as abalone and sea cucumbers, are considered must-buy delicacies for consumption around the Lunar New Year holiday, which starts on February 10 this year. A spokesperson for Hong Kong's Centre for Food Safety said the centre would seek further information from Shenzhen authorities about the findings contained in their report. "Over the past four months, the centre has received altogether four counts of complaints about the quality of meat balls in the city," the spokesperson said. Wu Limin , a municipal legislator in Shenzhen, called on the authority to attack the cause of the problem by punishing violators "just as hard as measures targeting on drunk drivers".

How the Chinese middle classes are becoming foodies and culture junkies (By SCMP) New report outlines consumer trends for 2013 - A report on consumer trends in China for the coming year suggests the country's growing middles classes will be spending their money on leisure activities, travelling and gourmet food. Nostalgia will also influence their purchases, along with increased spending on the old and very young, according to the report by business consultancies MEC and CIC. The data relies on consumer research along with online trends. More than 50 trend scouts collated the data into 25 trends that were then ranked by 1,200 consumers in 12 Chinese cities. Desk research further validated the top 10 trends, which were run through databases on consumption and media habits. The results are largely unsurprising considering they represent consumers in a growing economy. However, some make for more interesting reading. For example, the report found that the Chinese are more concerned with food safety so are buying more organic food. They are also willing to spend money on insurance. A breakdown of the top 10 trends are: Paying for safety - According to the report, consumers have had enough of repeated food safety scares and fake products and many are paying more for organic food. Road safety is also an issue, supported by an increase in the number of Chinese motorists buying car insurance. A surge in the number of posts on both issues on blogging sites shows there is an overall higher concern for safety. Everyone's going micro-mad - Whether it's buying clothes or watching movies, the Chinese want convenient and trouble-free purchases. They want to consume their films in shorter soundbites, and instead of buying a jacket for 2,000 yuan that will last 10 years, they want 10 jackets at 200 yuan. By the end of June 2012, netizens paying via mobile phone had already reached 44.4 million, representing a 46% increase over the end of 2011. A hunger for culture - China's middle classes are developing an appetite for the arts, gourmet food and travel. They are spending more on threatre, concerts and leisure activities. Their tastes in food are changing too, consuming more high-brow cuisine than ever before. And most tellingly, they want to share their new tastes with everyone else on social media platforms by posting photos of where they are travelling to and what they're eating when they get there. An increase in SLR camera sales supports this data. More spending on the young - The future is bright if you're the young child of a Chinese middle class couple. The report states that spending on education and expenses now dominates the household budget. More young people are using adult gadgets and products such as those produced by Apple. Parents are also investing more time in their offspring, with an increase in takings at the Chinese Box Office for children's films. Singles turn to retail therapy - With not a care in the world, the increasing number of singles in China is boosting the leisure and retail industries. Record numbers of shoppers took advantage of Singles’ Day in November 2012, and particularly an offer of 50 per cent off at online merchants at Tmall.com. The report also claims that single people go to the cinema more often than anyone else. Smart phone apps that help singles meet others are also doing well, such as WeChat which has over 100 million users. It's fashionable to be charitable - “Donate while you forward (your microblog)” and “donate by buying”: these are the ways in which the Chinese demonstrate their socially responsible activities. "More and more consumers are prepared to spend their free time serving others rather than working for money. Social responsibility is becoming more important to consumers." A yearning for nostalgia - Consumers want their emotional needs met in the process of consumption. Retro products and posting blogs about them have become increasingly popular. Older films like Titanic 3D did huge business at the box office, bringing back memories for those who saw it the first time around. Retro Warrior Shoes took the fashion world by storm and tweets on “retro” in particular grew from 2,784,040 to 22,588,671 – a tenfold increase. Old is the new young - China's middle class older generation are getting out of their seats travelling the world - and spending their money with it. Gone are the days when they had to save very penny. The current trend sees over 60s buying more mobile phones than ever, and more than 1.3 million senior netizens aged over 50 shopping online as the average income for the 55-64 cohort rises. The “go-between” economy - Purchasing agent websites that enable users to track down luxury items at a cheaper price are growing in popularity with Chinese consumers. The market turnover of overseas purchasing agencies reached 25 billion RMB in 2011, a 140 per cent increase from 2010. Consumers are also car pooling, with websites such as www.pinker365.com becoming hugely popular. Crossover Economy - Celebrities joining forces with stars from other disciplines, the integration of online and offline and the integration of 2D and 3D... This, according to the report, is what makes consumers happy.

Happy, healthy and herbal (China Daily) The Chinese have been using herbs in cuisine for as long as they can remember. Food as medicine or medicine in food is nothing new to a civilization that started cooking more than 5,000 years ago. Lin Jing looks at how the tradition is kept alive to this day. Farmers reap yam at Zouping county, Shandong province, on Oct 26. Yam is a major ingredients used in Chinese herbal cuisine. Freezing weather blows in together with the New Year, and it is at this time that Huang Mingjin is busiest in the kitchen preparing Chinese herbal cuisine for her family. "Chinese herbal cuisine is good for your health, especially in the cold winter," says Huang, 53. "After a whole year of hard work and heat in the spring and summer, people are tired. Winter is the best season to boost nutrition, and prepare for the coming spring." Chinese herbal cuisine has been a tradition in her family for more than 20 years. At first, she had learned the recipe from local doctors. Later, she consulted other professionals about the effects of some of the herbs. During the season, Huang will spend hours every fortnight stewing mutton and carrot soup, into which she adds wolfberry and Chinese angelica root or danggui (radix angelica sinensis). She says these traditional herbs will warm up the body and help give energy to resist the cold in winter. Huang is typical of the average Chinese who believes herbal cuisine can build up strength and ward off diseases. She comes from a very long line of believers. The word yaoshan (herbal cuisine) first appeared in ancient books in the Han Dynasty (206 BC-AD 220), but the actual use of herbs in cookery can be traced back to the Xia Dynasty (21st-16th century BC), when people first discovered that certain wild plants could be used as medicine or as food, or both. As the Chinese enjoy better standards of life, they are paying closer attention to healthcare and herbal cuisine is enjoying resurgence for both its efficiency as medicine and its palate-pleasing properties. Compared to conventional medical treatment, herbal cuisine is certainly milder and easier to stomach. Long Yongquan, the executive Chinese chef with Traders Hotel in Beijing, says herbs used in soup are different from herbs used for medicinal brews. "Medicines given by doctor are for curing diseases, while herbs we put in the soup are supplements," says Long. "Strictly speaking, we choose herbs that can be used both as Chinese traditional medicine and food for herbal cuisine, such as Chinese yam and longan," he says. Long has been a Chinese chef for more than 20 years and he specializes in Chinese herbal cuisine. He says that for the weak and old, food therapy provides a good choice to speed up recovery or recuperation. The types of herbal cuisines vary in different seasons as well. In the cooler seasons of autumn and winter, people may need warmth inside to help resist the cold. But in summer, people like to drink herbal tea made of chrysanthemum and licorice to eliminate the heat inside, or treat sore throats. Some more frequently used herbs include ginseng, Chinese angelica, and Chinese yam, all of which have mild medicinal effects. These herbs would be cooked with other ingredients such as vegetables or chicken, simmered for at least five hours to better help the nutritious elements fuse into the soup. Long says chefs have to consult medical professionals about the right nutrition and functions before cooking herbal cuisines. "We have to be careful," he says. "Some herbs and food are not supposed to be together, otherwise it may induce discomfort." For example, he says, if sweet potatoes and persimmons are cooked or eaten together, it may induce gastrolithiasis, the presence of calcified stones in the stomach. At Traders Hotel, which has been serving Chinese herbal cuisine since 2009, the chef says the most popular dish is "double boiled abalone with Chinese yam". "Chinese yam is a typical herbal ingredient. It is good for the kidney and helps to warm you up in the winter. It can also aid digestion, and lower blood sugar." He also recommends this soup to Westerners, who are used to taking cold sandwiches and chilled drinks during winter. Not only the elderly, but young people these days are showing an increased interest in herbal cuisine. Zhang Yuan, 26, an engineer in Beijing, likes to cook chicken soup every week. She uses typical herbs such as ginseng, wolfberry and sweet milk vetch (huangqi or astragalus) in the soup. She learnt how to cook it from her parents. "I used to be quite skinny a few years ago, but I am fit now, thanks to the chicken soup," says Zhang. "Besides, I also enjoy the cooking." For novices, it is still better to consult a doctor before cooking herbs at home. Li Zhong, a TCM doctor with Beijing Dongzhimen Hospital, says: "When cooking at home, the amount of herbs used every time should be less than 15 grams and ingredients should also vary according to who you are cooking for." For some, like teenagers, even ginseng may be too strong. "They should understand their own physical conditions and the effects of each herb first. When cooking, they can start by putting in small amounts of the herbs, in case there are any side effects." Li emphasizes that herbs in cooking can never replace medical treatment or necessary exercise, and people should choose herbs that are best for them, not just expensive ones such as the extravagantly expensive Chinese cordyceps.

E-commerce finds markets overseas (By China Daily) While e-commerce companies have plunged into ever-increasing competition in the Chinese domestic market, some are trying their luck outside China to find other ways to fuel growth. A number of Chinese e-commerce players, including Jingdong Mall, dubbed China's amazon.com, and online clothing retailer Vancl (Beijing) Technology Co, have already stretched their reach globally with different approaches. The warehouse of online clothing retailer Vancl (Beijing) Technology Co in Beijing’s Daxing county. Jingdong Mall's English-language website, offering nearly 400,000 products, went online in October. Supporting delivery to 35 countries, it attracts most of its overseas customers from North America, Western Europe and Australia. Vancl started even earlier. It began its overseas expansion in 2010 by providing an English version of its website, and in September, it teamed up with Vietnamese online payment company ECPay to provide a Vietnamese-language website and set up local operations. "Vietnam is quite representative of Asian markets: Fast-growing with a considerable market size and similar in culture," Luan Yilai, Vancl's associate president, said. "We think we can grow quickly if we start in Vietnam." Luan said Vancl is considering expanding its global footprint to more markets, and Russia, where it is looking for possible cooperation, will probably be next. Jingdong Mall also has a Russian-language website and sells products to the country through cooperation with a local partner, said a report by Nanfang Metropolis Daily that cited unnamed sources. Jingdong Mall didn't comment on this. E-commerce companies are the latest batch of Chinese Internet companies to spread their global reach. The earliest ones to go global were online game providers, which started overseas adventures in 2003. Chinese e-commerce companies tend to provide an English website targeting US and European customers when they start to go global, said Chen Dong, the China head of large merchant sales at PayPal, the online payment arm of online marketplace Ebay. However, emerging markets represent a bigger opportunity for e-commerce businesses that expand overseas, as is evident in the huge growth in exports by e-commerce businesses to Latin America, Eastern Europe and the Asia-Pacific region, Chen added. From July 2011 to June 2012, exports by Chinese e-commerce companies to Argentina increased by 96 percent, to Israel by 72 percent and to Ukraine by 71 percent, according to PayPal figures.

Hong Kong*:  January 3 2013

Rival protests turn up the heat on Leung Chun-ying (By SCMP) As opposing protests reflect widening political divisions over chief executive, analysts say the next months will be crucial for his survival - Hong Kong's political divisions intensified yesterday as tens of thousands of protesters called on Leung Chun-ying to step down while pro-government groups mobilised supporters to back the embattled chief executive. The various rallies held yesterday were marked by polarised stances towards Leung. And last night, six arrests were made as traffic was disrupted by anti-government protesters. The march led by the Civil Human Rights Front - calling for Leung to resign and universal suffrage - drew most attention. Organisers estimated 130,000 joined the four-hour protest. Police said 17,000 people started the march in Victoria Park. The Public Opinion Programme of the University of Hong Kong said more than 30,000 took part in the rally in Wan Chai, while police said it peaked at 26,000. The anti-Leung rallies and their calls for him to quit were reported last night by the state-run Xinhua news agency, which rarely covers anti-government protests in Hong Kong. Pro-government groups including the Hong Kong Celebrations Association and the Voice of Loving Hong Kong put their rallies' turnouts at 60,000 and 2,500. Police said the figures were closer to 8,000 and 500. The rally held by the radical wing of the pan-democrats such as People Power, which formed the Anti-CY Alliance, also reported thousands of protesters in and around Central district. People Power said its rally drew 12,000 people, while HKU put the figure at up to 4,700. After 10pm, police made six arrests including lawmaker "Long Hair" Leung Kwok-hung and activist Tsang Kin-shing. Around 400 protesters had attempted to block the junction of Queen's Road Central and Ice House Street, and later Cotton Tree Drive, leading to long traffic jams. The arrests were made after clashes and a stand-off between protesters and police on Queen's Road Central. As well as the major theme, protesters also demanded universal pensions, the protection of gay rights and a halt to the northeastern New Territories development plan. Jackie Hung Ling-yu, the Front's convenor, said they were satisfied with the turnout. "It should be loud enough for the central government to hear the voice of Hong Kong people," she said. Executive Councillor Cheng Yiu-tong, who organised the first pro-government rally, said they hoped to achieve a "stable environment" for Leung to focus his attention on policymaking. Minor clashes between supporters of opposing camps were reported. Only one man was arrested earlier for damaging the Hong Kong and national flags. Political analysts said Leung's government had become a "lame duck" and the coming months would be crucial for him to rescue his tenure. Professor Lui Tai-lok, a sociologist with HKU, said: "Leung is facing mounting pressure as he missed the opportunity to give a full account to the public on his illegal structures." Joseph Wong Wing-ping, the former Secretary for the Civil Service, said the coming two months would be crucial to Leung's administration. "The policy address and the budget announced in the coming weeks will be decisive, and he will likely deliver handouts as tactic to divert public attention," he said. "If he cannot address the public concerns, July 1 could become the tipping point." A government spokesman last night said the protesters' views would be listened to "in a humble manner". He added that Leung was concentrating on preparing his policy address, which will work on areas including livelihood issues and the economy. Chief Secretary Carrie Lam Cheng Yuet-ngor had said she hoped the rallies would be held "in a peaceful, rational and tolerant manner". Members of the Independent Police Complaints Council were present to observe the policing of the rallies yesterday.

Full of bright ideas (By Elaine Yau) Against the odds, three young Hong Kong researchers have made groundbreaking medical discoveries, says Elaine Yau - Roberta Pang was part of a team that conducted landmark research into cancer stem cells. She hopes the findings will revolutionise treatment for cancer patients. Vincent Wong is developing new tests to predict liver cancer. Hong Kong has long been maligned for its meagre investment in research and development. Less than 1 per cent of the territory's gross domestic product is spent on research, compared to 2.5 to 2.8 per cent in the US, South Korea, Japan and Singapore. When University of Hong Kong (HKU) chemistry professor Vivian Yam Wing-wah won a 2011 L'Oréal-Unesco Award for Women in Science, she lamented that doing research in this city is a lonely journey, with writing proposals to compete for funding taking up precious time. Medical researchers in the city run into the same obstacles in their quest to find cures for diseases and develop vaccines. But in spite of the unfavourable environment, many beat the odds to deliver groundbreaking findings published in prestigious medical journals. Here are three young researchers whose passion and determination in seeking medical breakthroughs have helped put Hong Kong on the medical research map. The pandemic expert - Leo Poon Lit-man was thrust into the front line of the city's war against severe acute respiratory syndrome (Sars) in 2003, when he became one of the first researchers in the world to decode the genome of the Sars-associated coronavirus, which was previously unrecognised. Instead of resting on the laurels of this crowning achievement, Poon, an associate professor with HKU's Li Ka Shing Faculty of Medicine, dived into more studies on bird flu, swine flu, coronaviruses and astroviruses. He is using the smallpox vaccine to develop a universal vaccine that can fend off both human and animal flu viruses. Vaccines presently can protect against seasonal flus (H1N1 and H3N2) affecting humans. But the vaccines are not effective for preventing infections caused by animal flu viruses, due to the differences in surface proteins between the viruses. "We hope that people can get only one shot that can protect against different forms of flu," says Poon. He is also working with researchers worldwide to hunt for new viruses in animals. Scientists now know there at least 50 different astroviruses circulating in animals, compared to just a few known in the past. The Sars outbreak also prompted the search for new coronaviruses in animals. "We need to know more viruses, their origins and evolution. The quantity of virus species is way beyond our imagination," says Poon. "Most viruses are not harmful to humans. But some are and we need to identify them." Poon, who graduated from Oxford University's Sir William Dunn School of Pathology in 1999 and joined HKU in 2001, says the search for the viruses' origins, given their propensity to mutate and evolve, is taxing. The exact origin of Sars, for example, is still not known. Poon says the masked palm civet is the main carrier of the coronavirus, but not the origin, and it possibly got the virus from other animals. He had discovered the first coronavirus in bats, and says it's possible that bats are the natural reservoir of the virus. However, he and other researchers are still doing studies to confirm this. Poon says identifying viruses is critical to the protection of public health: "It can prompt the government to put relevant pre-emptive measures in place." This was seen during the bird flu outbreak in 1997, which prompted the implementation of various measures over the years, including banning the sale of live aquatic livestock in wet markets. The stem cell specialist - A landmark 2010 HKU study found the cancer stem cell that causes gastrointestinal cancer patients to suffer a relapse, raising hopes for developing better treatments to reduce death rates of the second-biggest cancer killer. Roberta Pang Wen-chi, assistant professor of the HKU medicine faculty's department of surgery, was part of the research team. Pang, 33, says the study, which was carried out on mice, proved that the cancer stem cell (CD26+) is the culprit for metastasis (the spread of cancer from one organ to another) after surgery and chemotherapy in gastrointestinal cancer patients. The study was featured on the cover of Cell Stem Cell, the highest-ranked journal for stem cell research according to the Association of American Publishers. There are about 4,000 new cases of gastrointestinal cancer every year. Over half of the patients suffer from a relapse or metastasis after treatment. The cancer spreads from the intestine to the liver because the two organs are connected by a portal vein. When this happens, there's only a 10 per cent chance the person will live for five more years. While the 2010 study was groundbreaking, Pang says a big obstacle remains. That study was done using a patient's tumour sample, but this is not always available to researchers. "We need to develop a method to find CD26+ non-invasively to further our research," she says. Pang and her colleagues came up with an idea: look for the marker in blood, since cancer stem cells were found in the portal vein. A study was started to look for circulating cancer stem cells, involving more than 200 patients whose cancer had not yet metastasised. "The results were promising," she says. "Over 60 patients later suffered from metastasis and all of them were found to have high levels of the marker." Pang is compiling the results and will submit a paper to a medical journal. She hopes the findings can revolutionise the treatment given to gastrointestinal cancer patients. "If the concept is embraced by the medical community, we will hold discussions with the pharmaceutical companies to do a pilot study," she says. " If patients can know from day one whether they will suffer from metastasis, [more effective treatment can be devised]." Pang says researchers around the world are racing to explore cancer stem cells in their quest to find cures for the disease. Solving the stem cell mystery, she says, can revolutionise cancer treatment." Though chemotherapy can eradicate a lot of tumour burden and shrink the tumour greatly, it can't target the cancer stem cells," she says. She says cancer stem cells are similar to human stem cells, in that they can detoxify themselves. Both forms of stem cells can therefore keep growing despite absorbing a lot of toxins. Pang, who completed her PhD study in HKU's department of medicine in 2006, has won industrial and international study grants such as that awarded by the US National Foundation of Cancer Research. Her petite stature belies a fierce determination to unlock the secrets of cancer - even if it takes up most of her life. "Usually, a surgery on liver cancer finishes late in the afternoon and when the tumour issue is brought to us, it's already 6pm," she says. "The process of taking apart the tumour for single cells take three to four hours, which means working late into the night alone in the lab. But all the effort is worth it as my research can hold great promise for cancer patients." The liver guru - With more than a quarter of the local adult population afflicted with fatty liver, helping people beat the disease is a mission of Vincent Wong Wai-sun, a professor with Chinese University's department of medicine and therapeutics. One of his studies was on the use of Fibroscan, a non-invasive imaging method that uses sound waves to evaluate the degree of liver stiffness, or scaring, known as fibrosis. The study, the largest of its kind in the world, scanned 246 patients with fatty liver. It found that the Fibroscan had more than 90 per cent accuracy in the measurement of cirrhosis. Results were published in the Journal of Hepatology in 2010. "Doctors do not need to use the conventional and invasive method of extracting tissue for tests to see whether a patient suffers from severe liver disease," he says. Wong, 36, has had around 140 papers published in medical journals so far. Another of his studies that gained widespread recognition was published in the Journal of Clinical Oncology in 2010 that spanned a decade tracking patients suffering from hepatitis B. The study was prompted by the need to differentiate severe and less severe hepatitis B sufferers. He says: "Hepatitis B is a common disease in Hong Kong that affects 10 per cent of adults, a quarter of whom will die from cirrhosis or liver cancer. We don't have enough resources to provide antiviral therapy to all hepatitis B sufferers." Starting in the late 1990s, 1,400 hepatitis B patients were studied; 10 per cent of them developed liver cancer during the period. Five factors were found to be critical - age, whether the patient has cirrhosis, and levels for albumin, bilirubin and hepatitis B viral DNA. "We made a formula using the five factors. Doctors can use the formula to assess whether the patient is likely to develop liver cancer and receive specialised treatment," he says. Wong was awarded the Outstanding Young Person award last year by the Junior Chamber International Hong Kong for his research.

Power Assets veteran steps down as chief (By Eric Ng) Tso Kai-sum to take on advisory roles with group after first joining the company in 1966 - Tso Kai-sum, who has served at least four decades in Li Ka-shing's Cheung Kong group of companies, will step down as the group managing director of the utilities unit Power Assets Holdings from January 1. He will be succeeded by Wan Chi-tin, Power Assets' executive director and director of engineering (planning and development). Wan, 62, has worked for Power Assets since 1978. He was chief executive of Power Assets' Australian units Powercor and CitiPower between 2000 and 2003. Tso will become a non-executive director, deputy chairman and senior adviser to the board. He will also become a non-executive director of Cheung Kong Infrastructure, a substantial shareholder of Power Assets. Tso, 81, is a rarity among top-level executives of major listed companies for his long-service record. "I have not seen a managing director who is so dedicated to a listed company. He deserves a lot of respect," Alice Hui Suk-fong, a former top-ranking utilities sector brokerage analyst, said. "He is very effective in pulling employees together to work toward their objectives." Tso, a civil engineer by training, first joined Power Assets, formerly known as Hongkong Electric - the sole electricity supplier to Hong Kong Island and Lamma Island - in 1966. He spent 15 years there in roles that included chief project engineer. After a decade from 1987 as group managing director at the property unit of Li's conglomerate, Hutchison Whampoa, Tso rejoined Power Assets in 1997 as group managing director. Tso, who took home HK$17.94 million last year - HK$7.9 million in salary and fringe benefits and HK$10 million in bonuses - will be entitled to an annual fee of HK$3.7 million as a senior adviser. He will also keep certain benefits such as housing. His non-executive director appointment will expire at the end of next year, and will be automatically renewed for successive 12-month periods, subject to re-election once every three years. Wan, who earned HK$4.45 million in salary and benefits and HK$4 million in bonuses last year, will be entitled to annual salary and benefits of HK$5.1 million and a discretionary bonus in his new role.

Departing antiquities chief Bernard Chan calls for heritage review (By Joyce Ng) Ad hoc approach to buildings in private hands is undesirable, Bernard Chan says - Bernard Chan is leaving the board after six years. Sitting in his office the day after chairing his final meeting with the Antiquities Advisory Board, Bernard Chan appeared relieved to have put the heritage hot seat behind him. Chan, known as "the king of public duty" for the many public posts he has held, stepped down as chairman yesterday after six years with the advisory body. He declined to have his term renewed after a prolonged controversy about the future of the west wing of the government's former headquarters. "It's a bit ironic," Chan said in an interview with the South China Morning Post. "Six years ago when I joined the board as a member, people challenged our vote on Queen's Pier [now demolished]. Six years on, people are still quarrelling about the way we vote. That's the reason I left," he said. Under his leadership, the board has largely completed grading 1,444 historic sites across the city, with vigorous discussions about their historic value. "I thought I had improved the transparency and openness of the proceedings, but somehow the voting part remained contentious," Chan said. Chan first resigned in June after being criticised for casting a tie-breaking vote to give the 52-year-old west wing a grade two listing - meaning it is not especially safe from demolition. He later did a U-turn, agreeing to remain on the board for a while, after fellow members asked him to stay. He acknowledged a key difficulty in the board's relationship with the government. "Despite our advisory role, the public has an expectation we are the heritage watchdog," Chan said. "But our gradings are only an internal assessment, and the government may not always follow [our advice]. Our ad hoc approach of dealing with heritage owners case by case is undesirable." In one case, officials backtracked on a plan to declare Ho Tung Gardens - a private property on The Peak - a monument, despite the antiquities board's unanimous support for that status. The officials were deterred by the owner's demand for HK$7 billion in return for preserving the building. "If officials had insisted on making Ho Tung Gardens a monument, I am sure a public debate would have begun on what kind of heritage do we want to preserve at all costs," he said. "We could have set a benchmark - say, paying to preserve only those structures people have a collective memory of. But now they have dodged the question, which is a failure." He said he hoped the government could establish what the benchmark was soon. In last summer's controversy over the west wing of the old government headquarters, officials said their scheme to redevelop the block would go ahead no matter what grading the antiquities board gave the 52-year-old building. The dispute ended when the board gave the structure a grade one rating in mid-December, making it a potential monument. That happened after officials, under public pressure, decided to scrap the redevelopment plan. Chan hopes to see a review of heritage policy in the second half of 2013, and a public debate about how much people are willing to pay for heritage.

CY Leung's defiant New Year message as protesters take to Hong Kong's streets (SCMP) Chief executive appeared determined to put 2012 behind him - Embattled Hong Kong Chief Executive Leung Chun-ying vowed to 'face up to the difficulties' of leadership on the day tens of thousands of demonstrators took to the streets in an anti-government rally. In a defiant message posted only in Chinese on his blog, CY appeared determined to put the past year behind him, saying: "People may have different memories of the year past, but 2012 is over and I, just as every Hong Kong citizen, have new hopes for the new year." The message was posted as both pro and anti-establishment protesters marched through Hong Kong Island on Tuesday in what police described as the city's "most complicated security situation" in two years. Pro-Leung marchers waved giant Chinese flags while anti-government protesters carried posters depicting the chief executive with fangs, and asking the question: "Can Hong Kong trust this man?" Other key points in his message were: 1) Hopes that Hong Kong’s economy "can grow at a higher speed, allowing the society to respond better to housing, poverty, ageing and environmental problems" as well as hopes that Hong Kong citizens "can reach a consensus, support and coordinate with the government’s policies, allowing the government to alleviate and resolve problems more speedily". 2) Hopes that "the world’s political and economic situations can return to normal soon, so that both the nation and Hong Kong can shake off the gloom of the European and American economies". 3) A belief that "my team and I can continue to face up to the difficulties, and continue to push forward policies aimed at improving livelihood, on top of the new policies unveiled in the past six months" with a pledge that the coming policies "will include expansion of land and housing supply in short, medium and long terms, and better management of demand". 4) A promise to "prioritise the housing needs of permanent Hong Kong residents and let the housing market develop steadily". 5) He added: "I also believe that the Commission on Poverty will continue to assist the government in setting a scientific poverty line, taking an important step in poverty relief." 6) CY Leung made reference to his meeting last month with new Communist Party leader Xi Jinping, which took place in Beijing amid mounting calls in Hong Kong for him to step down, with pan-democratic lawmakers agreeing to jointly table an impeachment motion. 7) He said: "During my meeting with General Secretary Xi Jinping in Beijing last month, he praised the new SAR government as 'progressive, striving, pragmatic and promising.' My team and I will continue to work for the benefits and happiness of Hong Kong citizens in 2013."

 China*:  January 3 2013

Investment in US hits record level for Chinese (By Chen Weihua in New York) Chinese foreign direct investment in the United States hit record levels in 2012 and shows little sign of slowing, despite lingering worries among some that the inflow of Chinese money presents a growing security risk to the country. Chinese companies concluded deals worth $6.5 billion in 2012, an increase of 12 percent from the record $5.8 billion in 2010, according to a new report by New York-based Rhodium Group, which tracks Chinese FDI. Thilo Hanemann, Rhodium's research director, said he believes the result reflected both the growing determination of Chinese firms to expand overseas, and the attractiveness of US markets and assets to investors. The most appealing US sectors to Chinese investors were oil and gas exploration, advanced manufacturing that helps Chinese firms move up the value chain, and assets that allow investors to gain solid returns such as utilities, real estate and hospitality, according to the report. Headlining the year's activities were Dalian Wanda Group's $2.6 billion acquisition of AMC Entertainment, the second largest US theater operator, Sinopec Corp's $2.5 billion investment in a third of Devon Energy's five shale gas assets in the US, and auto parts maker Wanxiang Group's $420 million investment in GreatPoint Energy, a company based in Cambridge, Massachusetts, that converts coal into cleaner-burning natural gas. Meanwhile, a number of major Chinese FDI deals are still awaiting regulatory approval in the US, signaling that the growth is expected to continue into 2013. For example, a group of Chinese investors has agreed to buy an 80.1 percent stake in American International Group's aircraft leasing unit for $4.2 billion, and Wanxiang has already been announced as the winner of a bid for battery producer A123 Systems, in a bankruptcy auction. The Rhodium report highlights that the fast-growing Chinese FDI was in fact one of the few bright spots in a gloomy year for the US economy, which has seen overall global FDI decline sharply since 2009 and the outbreak of global financial crisis. The United Nations Conference on Trade and Development said in October that China edged out the US to become the world's top FDI destination in the first half of 2012, but added the US may return to the top spot during the second half of the year. While FDI in the US from Europe and Canada declined by more 50 percent in the first three quarters of 2012, China was among the few countries that has now increased investment in the US for five years running, according to figures from the US Bureau of Economic Analysis — a figure representing a rise of more than 300 percent in that time. Hanemann believes the bureau's figures are lower than they should be because they do not include flows through offshore financial centers, and Rhodium's China Investment Monitor suggests the increase would be nearer to 1,300 percent if those were included over the five years. Chinese majority-owned businesses in the US now employ 29,000 people, up from fewer than 10,000 five years ago, and that figure could run into many more thousands if jobs created by firms with minority Chinese investment, and other indirect jobs created by Chinese FDI, were taken into account. Former US Trade Representative Carla Hills said that she believes Chinese investment in the US is good for both countries. "China's entrepreneurs benefit from the world's largest consumer market, creative and diverse workforce, management skills, strong global brands, and the attractive business and investment climate found in the US. "The US benefits from an increase in much-needed tax revenues and jobs generated by Chinese investment," she said. "As important as these economic benefits are in advancing prosperity in both countries, the most important benefit flowing from increased economic interactions may well be the increase in mutual understanding that will surely occur. "That helps provide the ballast for overall Sino-US relations," added Hills, who is also chairwoman of the National Committee on US-China Relations.

Hong Kong*:  January 2 2013

Hongkongers hope for more peaceful 2013 after year of scandal (By Christy Choi, Stuart Lau and Jennifer Ngo) Common ground between people and government near top of wish lists - Fireworks light up the sky over the harbour last night, part of a HK$12 million, eight-minute extravaganza that was held in Wan Chai for the first time rather than Central. Times Square in Causeway Bay is a riot of fun for the biggest party in town. Spirits were also high in Lan Kwai Fong. People gather outside the Cultural Centre in a chilly Tsim Sha Tsui in anticipation of the New Year's Eve celebrations. Many hope for a quieter year. Common ground, peace and freedom of speech and assembly are what many Hongkongers are wishing for in 2013 after a tumultuous year of scandals, controversy and political rhetoric. "We need to find common ground between the people and the government," said Rockson Chan Lok-sang, a 21-year-old architecture student who was counting down at Times Square with over 100,000 people. Police estimated that more than 320,000 celebrated around the city. "Everyone can express their opinion but in a more gentle way," said Gloria Chung Yin-nga, a 30-year-old working in logistics. "I think nowadays people seldom listen to each other. Not just the political parties, but the public. "I don't want to see us lose our freedom of speech or assembly, and I hope we can express our opinions freely." In Tsim Sha Tsui, people gathering to watch the fireworks had similar views. "I want Hong Kong to keep its edge, free from mainland interference," said Shirley Lee Yin-yee, who was with her photographer boyfriend. The economy, property prices, Chief Executive Leung Chun-ying's integrity, the environment and government responsiveness to public opinion were all on the public's list for improvement in 2013. Gustov Lau said problems with housing and welfare were too obvious to be missed. Dozens of amateur photographers braved the chilly winds from early evening to get a good spot as the Observatory recorded a minimum of 7.1 degrees Celsius yesterday, trumped only by the 6.8 degrees in 1983 and equalling the 7.1 degrees in 1887. "It's my third New Year's [eve] taking pictures here," said university student Ivan Chan, who waited in Tsim Sha Tsui from 4.30pm. He said the new location - moved from Central to Wan Chai - provided more of a challenge to photograph. "In the past I needed only to focus on one building [IFC 2]; this year I need to take care of the Convention Centre as well as nearby buildings." The display was moved after IFC developer Sun Hung Kai Properties withdrew funding. This year the government and the Jockey Club added HK$1.5 million each to the Tourism Board's HK$5.5 million while New World Development covered the balance of the HK$12 million cost. http://www.scmp.com/news/hong-kong/article/1116983/hongkongers-hope-more-peaceful-2013-after-year-scandal?movideo_m=258158 

Police in show of force for Leung Chun-ying rallies (By Colleen Lee and Joshua But) A law-and-order nightmare looms with tens of thousands expected to demonstrate for and against the chief executive on the same day - One-third of the police force on Hong Kong Island will be deployed today to keep rival protest groups in good order for what a police source described as the city's "most complicated security situation" in two years. Tens of thousands of protesters from eight groups - five against Chief Executive Leung Chun-ying and three in favour - will gather in Causeway Bay, Wan Chai, Central and Western district to express different, sometimes conflicting political views. Some protests will share the same route or be close to each other, raising fears of scuffles. A senior police source said it was rare for so many groups with opposing goals to hold rallies on the same day and described it as "the most complicated situation" of the past two years. Protest organisers said they would arrange for "hundreds of marshals" to help keep order. On Sunday, two TV journalists were attacked by demonstrators at a pro-government rally in Victoria Park, raising concerns about more trouble today. But the police source said the force was "fully prepared", with up to 1,000 officers on duty, or about one-third of the officers stationed on Hong Kong Island. "Police will not be siding with either camp," said the source, adding that police would "take a flexible approach" to roadside political stalls along march routes despite the ban announced last week. "We do not allow the stalls because they could obstruct other protests along the same route," the source said. "We will give warnings to those who set up stalls, and the last thing we want is to arrest the stallholders." Chief Superintendent Eddie Wong Kwok-wai said: "We want the rallies to take place peacefully but we will take action if the laws are broken." Icarus Wong Ho-yin, a vice-convenor of the Civil Human Rights Front - organisers of an anti-Leung march from Victoria Park to the government headquarters in Admiralty - said the group would call up around 200 marshals to keep order. The organisers have notified police of a turnout of 50,000 but expect more people will join. "We were not so worried about order before, but we were shocked to see what happened on Sunday and fear it may be repeated" today, he said. "We will ask marshals to look out for anyone sneaking into the crowd and creating chaos. If an argument arises, we hope our marshals will move in as quickly as possible and appeal to everyone to stay apart and keep calm." A pro-Leung rally is scheduled for 3pm to 8pm at the Tamar Park Amphitheatre, organised by the Voice of Loving Hong Kong. Anti-Leung protesters will gather nearby from 7pm. Patrick Ko Tat-pun, convenor of the pro-Leung rally, said they would have 20 to 30 marshals to maintain order, and would film any violence.

Finance chief John Tsang warns against ignoring Hong Kong's pillar industries (By Ng Kang-chung) Finance chief warns against 'blind' pursuit of new sectors to boost growth and says failure to balance the books could lead to tax increases - Financial Secretary John Tsang Chun-wah warned yesterday against "blindly" pursuing new industries to drive growth, suggesting "conventional economic pillars have their edge". On his official blog, Tsang also said taxes may rise or more government bonds could be issued if the administration fails to keep its budget in the black. He said while people always paid attention to public spending, they should not forget about government income. He rejected criticism that Hong Kong had relied too much on the so-called pillar industries - finance, logistics and trade, tourism, and professional services. His comments - ahead of Chief Executive Leung Chun-ying's maiden policy address - were challenged by economists for lacking long-term vision. Tsang said: "We must understand that a new industry takes a long time to nurture and develop, and its success is not guaranteed. "Therefore, we should not blindly pursue the development of new sectors and overlook the established pillar industries. "The four conventional pillars have become our major economic backbone because they have the edge … While developing new sectors, we should make more effort to expand the edge of the pillar industries." Tsang referred to the final shootout in the latest James Bond film Skyfall, in which a companion hands Bond a knife to fight the villains, telling him: "Sometimes the old ways are best." Tsang said: "I believe 007 would agree that, whether it is a knife or a laser gun, it is a good weapon so long as it can be used to kill the enemy." Tsang stressed the importance of the economy growing "sustainably" to support rising government spending. And he emphasised the importance of prudential management of public finances. "With an ageing population, it is unavoidable that we will have to pump in more resources in welfare and medical areas. "If our economy cannot develop sustainably, it is likely the government will fall into deficits in the long run. And it will leave us with only two choices - either increase taxes or issue bonds." Tsang denied the economy was too reliant on the pillar industries. He said the finance sector accounted for only 16 per cent of gross domestic product in 2010 and the four pillar industries combined accounted for about 58 per cent. Professor Raymond So Wai-man, dean of Hang Seng Management College's school of business, said: "I agree it is easiest to follow the old ways. But for the long-term, we have to find new drivers for the economy." Dr Li Kui-wai, an economist at City University, was surprised Tsang seemed to have departed from what Leung said during his election campaign. Leung stressed the importance of diversification and developing "technology-based industries" to "enhance the competitiveness and growth of Hong Kong's other industries".

Hong Kong writer's debut as film director of 'Lust and Found' (By Stephen Quinn) A Hong Kong screenwriter who won the Asia Film Finance Forum award for best Hong Kong screenplay has just finished directing his first feature. 'Lust and Found' will appear in cinemas in 2013 - Screenwriter Lawrence Gray is excited. He has just finished filming his first feature film, Lust and Found, which will screen in 2013. He directed as well as wrote the script. The film is a comedy set in Hong Kong, about a mis-matched couple who find a bag of money, and their misadventures afterwards. The photo shows Vivienne Tseng, one of the couple. Gray's previous script, Fat Englishmen, won the Hong Kong Asia Film Finance Forum award for best Hong Kong screenplay. That script is scheduled for production in Hollywood in co-production with Catfish Productions, whose movie Walk the Line won the 2006 Oscar for best actress for Reese Witherspoon, and received four Oscar nominations. Gray has lived in Hong Kong since 1991. He founded the Screenwriters’ Workshop in Britain and the Hong Kong Writers’ Circle, and lectures on the art of screenwriting. Gray has written extensively for British television, contributing episodes of The Bill, Medics, Yellowthread Street and the Paradise Club. He spoke with video reporter Stephen Quinn about the highlights of the film and his experiences of directing sex scenes. http://www.youtube.com/watch?v=B3stdTRVw7s 

Hong Kong shares jump 23pc in 2012, China set for 1st gain in 3 years (By Reuters) Hong Kong shares hovered near their highest close in almost 18 months on Monday, with Chinese insurers and brokerages helping the benchmark indexes close out their best year since 2009. The Hang Seng Index closed flat on the day at 22,656.9 points, near its highest close since early July 2011, while the China Enterprises Index of the top Chinese listings in Hong Kong rose 0.5 per cent. Trading ended at midday ahead of the New Year holiday. The indexes rose 22.9 per cent and 15.1 per cent, respectively in 2012. Mainland Chinese markets looked set for their first annual gain in three years, as investors cheered a plan allowing eligible securities houses, insurers’ asset management units and private equity funds to develop and manage mutual funds. The CSI300 of the top Shanghai and Shenzhen listings was up 1.2 per cent by the midday trading break, while the Shanghai Composite Index rose 1.1 per cent. They are now each up 7 per cent and 2.7 percent on the year, respectively, which could be their best monthly performance since July 2009. The gains were largely on the back of a surge in December that came in elevated volumes. Hong Kong markets cut early losses, while mainland Chinese shares extended gains after a survey of private factory managers showed activity in China’s manufacturing sector hit its fastest pace in December since May 2011. “I am quite surprised to see Hong Kong markets follow A-share strength, seemingly shrugging off stalled US fiscal cliff talks,” said Jackson Wong, Tanrich Securities’ vice-president for equity sales. US lawmakers pushed the country to the edge of the “fiscal cliff” on Sunday as they struggled to reach a last-minute deal that could protect the world’s largest economy from a politically induced recession. On Monday, shares of China Life Insurance , the country’s largest insurer, were the leading boosts to benchmark indexes in Hong Kong and China, rising 3.1 percent to its highest since April 2011 in Shanghai. New China Life Insurance rose 6 per cent in Shanghai and 2.6 per cent in Hong Kong. The announcement by the China Securities Regulatory Commission was its latest bid to reinvigorate an industry struggling to produce returns for investors and introduce more competition in an already-crowded mutual funds sector. This follows an announcement last week allowing brokerages to sell subordinated debt and the Chinese central bank pledging to quicken the pace of reforming the financial sector that sent shares of Chinese brokerages soaring last Friday. Citic Securities , China’s largest listed brokerage, rose 2.2 per cent in Hong Kong 0.9 per cent in Shanghai, adding to strong 2012 gains. It is now up 52.9 per cent in 2012 in Hong Kong and 36.8 per cent in Shanghai.

 China*:  January 2 2013

Graceful Zhang Jingchu poses for Bazaar Jewelry - Chinese actress Zhang Jingchu covered the December issue of Bazaar Jewelry magazine.

Lang Lang holds new year concert with HK singer Karen Mok - Pianist Lang Lang performs with singer Karen Mok during a new year concert in Tianjin, north China, Dec. 30, 2012

Chinese demand keeps watchmakers ticking in Lucerne (By Bloomberg News in Geneva) A Longines booth at a recent watch and jewelry show in Switzerland. Switzerland's watchmakers sold fewer watches to foreign customers this year as lower demand in Asia led to the first decline after 32 months of growth, the Federation of the Swiss Watch Industry said in October. Swiss watch exports to China plummeted almost 28 percent in September, while sales in the major re-selling hub in Hong Kong dropped nearly 20 percent. Chinese symbols marking the start of the lunar new year on Feb 10 will greet the busloads of Asian shoppers who visit Lucerne every day and invite them inside to see watches from TAG Heuer, Rolex and more than 20 other brands. Fewer than half of the timepieces bought at the Lucerne store in December might be for Christmas, according to Joerg Baumann, Bucherer's marketing director. That's a welcome boon as banks cut jobs and Swiss unemployment hovers at its highest level in 20 months. "Other parts of the year have caught up" with Christmas, Baumann said, "which is good news for retailers because everyone wants a stable business and not an extremely seasonal one". Asian consumers are easing the Swiss watch industry's reliance on Christmas and offsetting Europe's slowing economy. While December is still the most important sales period, it's diminishing in importance and may be surpassed by the Chinese New Year within seven years, said Jean-Claude Biver, chairman of LVMH Moet Hennessy Louis Vuitton SA's Hublot watch brand. "When I started 38 years ago, December and Christmas were 30 percent of the business, but that has weakened as sales have become more and more constant during the 12 months," Biver said in his office overlooking Lake Geneva and the French Alps. Christmas now accounts for 15 percent to 20 percent of watch industry revenue, he said. Triple taxation - The Chinese mainland and Hong Kong make up the biggest market for Swiss timepieces, accounting for 30 percent of exports of the country's roughly 200 brands in 2011, according to the Federation of the Swiss Watch Industry. Exports to those two destinations rose 10 percent in the first 10 months of 2012. Chinese interest in high-end watches remains strong despite concerns about an easing of economic growth, according to Digital Luxury Group. The number of online searches for luxury watch brands in China increased about 40 percent during the first half of the year, the researcher said. Purchasing watches abroad allows Chinese consumers to sidestep three layers of taxes imposed on watches in China: an 11 percent import duty, a 20 percent tax on high-end watches and a 17.5 percent value-added tax, according to HSBC. Cie Financiere Richemont SA, the maker of Vacheron Constantin and Cartier watches, said last month that the weakness of the euro was luring more Asians to take vacations in Europe, helping boost revenue in the region. "Local consumption in Switzerland is not bad and there's probably even some growth, but the main driver is tourism," said Patrik Schwendimann, an analyst at Zuercher Kantonalbank. Bucherer's six-story flagship in Lucerne gives visitors from China greeting cards in red envelopes called hongbao that are supposed to bring luck. A sign at the entrance lists some of the 20-plus languages spoken by sales staff, while display cabinets describe watch features in Chinese.

Hong Kong*:  January 1 2013

Pro-government rally draws thousands in support of CY (By Stuart Lau) Pro-Leung Chun-ying marchers start their rally in Victoria Park on Sunday. Chinese national flags are no longer synonymous with anti-Japanese protests on the mainland after hundreds of Hongkongers marched with the banners and expressed support for the embattled chief executive on Sunday. The national emblem was accompanied by Hong Kong flags and nonstop chanting as backers of Leung Chun-ying braved cold weather for the rally. The afternoon march, organised by Caring Hong Kong Power, took place ahead of a Civil Human Rights Front protest scheduled for Tuesday to demand that Leung step down. That march is expected to have 50,000 participants. On Sunday, police said 2,400 participants showed up at the starting point; organisers said as many as 40,000 attended. Marchers were predominantly elderly and middle-aged people. Two journalists were reportedly assaulted by a Leung supporter. Organisers said the rally served as a counterbalance against the pan-democrats’ repeated attempts to overthrow the chief executive. Leung’s opponents accused the group of shifting attention away from what they call a major issue – the chief executive’s credibility. Leung has been embroiled in a scandal over illegal structures at his house on the Peak after admitting mistakes in handling the issue. Critics have cast doubt on his integrity, and his popularity has remained low. A Leung supporter, retiree Liu Shing, called on pan-democrats to stop magnifying trivialities, saying on Sunday: “The government should focus on solving social issues.” Another marcher, Jenny Lam, said: “I want a harmonious society, but politicians did everything to stop the government from functioning properly out of their own interest. This is intolerable.” Before the march began at Victoria Park, Now TV cameraman Lau Ka-wo was hit in the head and his equipment was damaged; his colleague, reporter Chau Chi-wing, was injured in his right eye after his glasses had been pulled off, the television station said in a statement, which also condemned the violent acts. The group marched from Victoria Park to government headquarters in Admiralty. Some heckled bystanders. “You’re a traitor, a stooge,” some were heard shouting. 

Taiwan holds first Chinese music concert amid anti-Beijing protests (By Agence France-Presse in Taipei) Singer Wang Leehom, pictured in November, was one of about 60 performers who was a part of the Chinese Music Chart concert on Saturday. Thousands of music fans packed a Taipei stadium to watch the island’s first concert staged by Chinese singers and rock bands, reports said on Sunday, in the latest sign of warming cross-strait relations. The concert organised by the Chinese Music Chart, dubbed China’s Grammy Awards, saw some 60 bands and singers from the mainland, Hong Kong and Taiwan perform before screaming fans on Saturday, but also drew dozens of anti-China protesters. They chanted pro-independence slogans and waved anti-Beijing banners outside the stadium, television reports showed, but were unable to interrupt the concert which included performances by Chinese singer Han Geng and actress Zhang Ziyi. Without the prior approval of Taiwanese authorities, organisers of the Chinese Music Chart unilaterally announced in November that an award ceremony would be held in Taipei for the first time after it was set up in 1993. The plan drew fire from the opposition, prompting the Chinese award organisers to change the award presentation ceremony to a concert at the demand of Taiwanese authorities. The concert “is part of Chinese communist... tactics against Taiwan people and we’re here to voice our desire that we don’t want to be ruled by [Beijing],” said protester Tsai Ting-kui, according to the Liberty Times. Beijing still insists Taiwan is part of China even though the island has ruled itself for more than 60 years after their split in 1949 at the end of a civil war. But ties with China have improved markedly since Ma Ying-jeou of the China-friendly Kuomintang came to power in 2008 on a Beijing-friendly platform. He was re-elected in January for a second and final four-year term.

200,000 village houses face warnings on illegal structures (By Olga Wong) Claim by rural leader as deadline for declaring unauthorised building works approaches and officials prepare to launch enforcement action - Illegal structures at Ho Chung New Village in Sai Kung. Buildings Department officers will this week begin handing out as many as 200,000 warnings and demolition orders to the owners of village houses with illegal structures. It marks the start of a crackdown on unauthorised additions to homes that could take as long as 10 years. Most villagers appear to have spurned the government's offer to register illegal structures in return for a temporary reprieve from enforcement measures. By the middle of this month just 11,000 had signed up to a scheme under which they can keep their homes unchanged, subject to five-yearly checks. It's not known how many village homes have illegal additions. The Heung Yee Kuk, the lobby group for indigenous New Territories villagers, estimates that 35,000 homes have unauthorised structures. But rising rural leader Junius Ho Kwan-yiu believes the figure could be as high as 200,000. A specially formed "village house section" in the Buildings Department, with a director, 40 staff and an annual budget of HK$36 million will tackle the illegal works. The department has made it clear enforcement action will be taken once the deadline for registration passes on Tuesday. In most cases, warning notices telling owners to demolish illegal structures will be handed out first. If the owners fail to comply, demolition orders will be issued. Democratic Party legislator James To Kun-sun said the tremendous manpower and public money involved underscored the fact that the growing number of illegal structures in the New Territories had become a major social issue. To said there were questions the public needed to discuss. "Does our society want to spend hundreds of millions of dollars on clearing the structures or on health care services by adding a few more beds in hospital?" he asked. "The enforcement takes time, but it isn't insoluble." Choy Kin-kuen, president of the Hong Kong Institute of Engineers and a retired senior Buildings Department official, said the enforcement action must go ahead. "It is unhealthy to see those structures surrounding our living space," he said. "They should be cleared, especially when urbanites are questioning if preferential treatment is given to villagers. The dilemma is that it involves a huge cost." The Buildings Department declined to say whether it would outsource the job of identifying and inspecting illegal structures, as has happened in the past. Since 2001, the government has undertaken to clear 800,000 unauthorised structures identified as dangerous in urban areas, but it has so far cleared only half of them. As the spotlight fell on illegal structures beyond urban areas, rural leaders put up a fight to try to stop a similar crackdown, even calling for a blanket amnesty in New Territories villages. The issue has led to an urban-rural divide and has even split the rural authority itself. While the kuk's leader, Lau Wong-fat, urged villagers to report their structures, Ho, chairman of its Tuen Mun rural committee, advised the opposite. Ho, a lawyer, said the register would become a record of villagers' violation of building rules. Sources close to the three professional institutes - for architects, surveyors and engineers - say they are unlikely to back Ho's proposal to legalise some of the structures.

 China*:  January 1 2013

Chengdu aims to be world’s next Silicon Valley (By Agence France-Presse in Chengdu) Workers at a new Apple store in Chengdu, in southwest China's Sichuan province. Between one-third to one-half of the iPads sold worldwide are assembled in Chengdu. Entrepreneurs in China’s southwest are dreaming of turning the city of Chengdu into the world’s next Silicon Valley as the government encourages more investment outside the booming coastal regions. Small start-ups as well as big-name western companies have flocked to the metropolis of 14 million people, attracted by cheap labour costs and favourable government investment policies and hoping to tap into China’s rapidly expanding consumer market. And the Silicon Valley dream is becoming reality as the city, already a hi-tech manufacturing hub, seeks increasingly to become a magnet for software development and innovation. Between one-third to one-half of the iPads sold worldwide are assembled in Chengdu, while computer giant Intel makes up to half of its chips in the city. Far from the booming coastal regions, Chengdu can offer perks through the government’s “Go West” development programme, with incentives for start-ups such as one-year interest-free loans. So far it has attracted about 29,000 companies to its 130-square-kilometre “hi-tech development zone”, including about 1,000 foreign enterprises. Chengdu is also developing a nearby “Software Park” as the city aims to go beyond manufacturing and become a centre of innovation. At Chinese start-up GoodTeam, a software engineer shows off his latest creation: a game in which players try to place a bottle into the mouth of a baby. The application is being developed for pre-schoolers between one and three years old, the age at which children in Chengdu begin to toy with computer technology. Founded in 2009, the start-up employs 32 people and has seen strong growth in the gaming market, with most of its applications used on mobile telephones. “In July 2009 we had about five downloads a day, today we have more than 100,000 a day for each game. We are confident in the market,” said Liu Jia, a GoodTeam manager. “Since we started we have survived three crises but it has been the hi-tech zone that has sustained us by allowing us to borrow money.” With five nearby universities focusing on science and technology, cafes and restaurants around the development zone have become networking hotspots for software programmers. “The best reason [to come to Chengdu] is the education environment. The region has great universities,” said Xiong Jie, the director of Thoughtworks, which runs an internet site for a group of Australian insurance companies. “Only China and India have this talent pool. We have grown very fast, we started with zero people in April and now we have 50.” The company plans to add at least 30 more workers next year and all will likely be aged under 30, he said. The zone boasts Chinese technology companies like Lenovo, Huawei, ZTE and the Taiwan electronics giant Foxconn, as well as internet portals Tencent and Alibaba. Foreign companies include Texas Instruments, Intel, Fujitsu, IBM, Hewlett Packard, Microsoft, Sun, SAP, Ubisoft, Siemens, Motorola, Nokia, Ericsson, Alcatel and Dell. Chengdu highlights the changing nature of the technology scene in China, where Beijing, Shanghai and the metropolis of Shenzhen have long been the centre for the country’s IT industry. Multinationals have traditionally set up in those areas, initially making products for export but increasingly tapping into the country’s lucrative domestic markets. Sales revenue for Chengdu’s information technology sector neared 36 billion euros (HK$369 billion) last year, with 20 million computers produced and production capacity four times that. In 2012, production capacity was set to surpass 100 million, with more than 50 million computers delivered, while by 2015 capacity is expected to reach 150 million tablets and 80 million laptop computers. “Although the speed of growth has slowed everywhere, for us the loss has been minimal,” said Tang Jiqiang, the Chengdu hi-tech’s zone’s director of strategy. “We have seen growth slip from 25 per cent to 23 per cent.” Overall, Chengdu expects economic growth of 13 per cent this year, down from around 15 per cent in recent years, but still well above the expected national average of about eight per cent. Gao Wenshu, an expert on labour economics at the Chinese Academy of Social Sciences in Beijing, said Chengdu’s skilled labour force could help it emulate Silicon Valley. But the city offers relatively low wages compared to Beijing, Shanghai and Guangzhou, and the challenge will be attracting and keeping an innovative workforce. “I don’t think the local salary level can meet the high-salary demands technology specialists seek,” Gao said.

Monitoring to force China to come clean on air pollution (By Li Jing) Intensive monitoring in mainland cities will curb the manipulation of data on air quality - More data will be available on air quality in cities. Environmental experts say real-time air quality updates mandated to start in 74 mainland cities on New Year's Day will leave local officials less room to manipulate data and hide the country's worsening pollution problem. They said hourly readings - already provided as a trial in a dozen cities, including Guangzhou, where they began on Friday - were a first step towards improving transparency and holding the government accountable for promises to clean up the air. Data will not only be released more frequently but will cover three more pollutants than at present, including ozone and smog-causing fine particles, and set tougher standards for the existing three pollutants - sulphur dioxide, nitrogen oxides and large particulate matter. Experts, however, warned that much more action would be necessary to reduce pollution. The reporting changes were announced on Friday by the Ministry of Environmental Protection, which said data collected from 496 monitoring sites would be available online and through smartphone apps. Experts cautioned that the tougher standards would lead to a sudden decline in the air quality ratings of many cities, as it would be harder for officials to achieve a "blue-sky day", when air is designated as good. Zhao Hualin, the ministry's director of pollution prevention, said recently that about 70 per cent of mainland cities would fail to meet the new standard for PM2.5 - microscopic airborne particles less than 2.5 microns in diameter, which can pose serious health risks because they can enter the bloodstream and lodge deep in the lungs. The Nanjing Municipal Environmental Bureau said on its official Weibo account on Friday that the city would see only about 220 blue-sky days a year under the new system, as opposed to 314 days under current standards. Greenpeace campaigner Zhou Rong said the existing air quality appraisal system requires only 12 hourly readings when calculating the daily average. The new system would require at least 20 hourly readings to get a more accurate average and prevent manipulation. "The monitoring results at any given site could vary greatly at different hours within a day, so there was a loophole for modifying readings," she said. Zhu Jianping, the ministry's deputy director of monitoring, told the Southern Weekly that some city governments had distorted readings to make their air quality appear worse so they could get pollution treatment funding from Beijing.

Sina reshuffle focuses on Weibo (By CHEN LIMIN and GAO YUAN) Sina Corp, the Chinese Web portal operator, has announced a major restructuring of its business, attaching greater importance to its micro-blogging service as competition from rivals heats up. The company has now made Weibo one of two major business divisions, consolidating functions that used to be scattered across different departments. Charles Chao, chairman and CEO, told employees by email on Friday that Sina's organizational structure needed to change "to respond to competition in a mobile era". "We need to have a strong sense of crisis and change quickly," he added, emphasizing that its strategy in 2013 would put "mobile first", while improving overall efficiency. Within the reshuffle, Wang Gaofei, who used to head Sina's wireless business, will take charge of micro-blogging operations, reporting directly to Chao, which analysts viewed as highly significant. Sina has been feeling pressure, particularly from WeChat, a mobile messaging service developed by Tencent Holdings Ltd, China's largest Internet company by sales. Hong Bo, a Beijing-based IT analyst and founder of consultancy company IT5G, said: "Wang's appointment as head of the Sina Weibo means the company can improve communication." Previously, Weibo was operated by two departments. Applications running on mobile devices were controlled by its wireless business department, while services on personal computers were provided by the micro-blogging unit. Sina launched Weibo in August 2009, and by the third quarter of this year, the company claimed it had more than 400 million users, with about half of its traffic generated by mobile users. Its advertising revenues doubled in the quarter, compared to the second quarter, said Chao, without disclosing the exact number. But while Sina's stock rose to a high of $142 in the US market April 2011, driven by huge investor confidence, its current price of around $47 reflects growing investor concern that the service hasn't generated revenues as quickly as expected. Chao admitted earlier that Sina had been aware of WeChat's growing mobile users, and that it would accelerate moves to deliver a profit. On Dec 11, it joined hands with AutoNavi Holdings Ltd, China's biggest navigation provider by market share, to bring more location-based services to mobile users. Then on Dec 20 it announced Weibo would be selling smartphones made by local cellphone maker Xiaomi Corp, using a self-developed online payment platform.

Beijing puts four subway lines into operation (By Xinhua) People wait on a platform at the Dongsi Station of the newly-opened subway line 6 in Beijing, capital of China, on Dec 30, 2012. Beijing put four subway lines into operation on Sunday, part of the city's efforts to expand rail transit to ease severe traffic congestion. The new lines bring the number of subway lines in Beijing to 16, with a total length of 442 kilometers, according to authorities.

Hong Kong*:  Dec 31 2012

Rush for subsidised flats in Tsing Yi, but repayments are a worry (By Olga Wong and Lo Wei) A showflat of Greenview Villa in Cheung Sha Wan which is a subsidised Housing Society project in Tsing Yi. Eligible buyers rushed to join a ballot for new subsidised flats in Tsing Yi yesterday even though the mortgage payments could eat up at least half their monthly income. They were seeking homes in the Housing Authority's Greenview Villa Estate, in which flats are being offered at a 30 per cent discount. They range in size from 420 sq ft flats costing as little as HK$2.4 million to 700 sq ft flats for HK$5.1 million. The society received 600 applications yesterday for the project, the first opened for sale under the government's My Home Purchase Plan, of which 350 were from single people. Many applicants were young couples; some parents returned forms for their children. Monetary Authority guidelines for properties priced under HK$7 million say banks should not make a loan for which repayments exceed half the buyer's monthly income, or more than 60 per cent of income if interest rates were to rise two percentage points after purchase. The plan was conceived as a rent-to-buy scheme but was turned into a direct- sales scheme after Leung Chun-ying was elected chief executive. The rent-to-buy element is under review. The sales became more attractive when the society said it would provide guarantees for buyers to obtain mortgages of up to 90 per cent of the price from banks. Individuals with a monthly income of HK$25,000 or less and households with a monthly income of no more than HK$40,000 are eligible. Applicant Fred Yeung Tsz-yin, a clerk in his early 30s who rents a private flat in an old building, said he and his wife, with an income of HK$20,000 a month, hoped to buy in Greenview Villa even though it meant they could no longer afford to have a baby. "The rent keeps rising and we cannot continue to rent a flat in the long run," he said. The rent takes half their monthly income and he expects their expenses to rise by a third if they buy. Prices at Greenview Villa, a three-block estate with 988 flats expected to be completed by 2015, work out to HK$5,841 to HK$7,402 per square foot of saleable area, which excludes shared space and facilities. Yeung said the prices were similar to those for private second-hand flats. "This estate is new and the location is good, accessible by MTR." He said buying the flat would pose a heavy financial burden. "I hope the chief executive will reconsider the rent-to-buy scheme. I don't have much cash in hand and this requires a large sum of capital to start off." Another applicant, Joey Lam, plans to move in with her husband and two children, aged one and three. She said the family had income of about HK$30,000 a month and might have to cut extra-curricular activities for their children to save money. University student Roger Sung, 23, came with his father. "It's about time to purchase a property," he said. Applications are open until January 18 and ballot results will be announced in February. Greenview Villa is the first residential property development in the city at which flats are being sold by saleable area only rather than by gross floor area.

Macau-Hong Kong ferry collision injures 27 (By Johnny Tam and Jolie Ho) The TurboJet ferry involved in the collision with a marker buoy on Saturday parked at the Hong Kong-Macau pier in Macau after the incident. Rescuers remove an injured person from the ferry involved in a collision with a bouy in Macau waters. After the incident, the ferry was towed back to a Hong Kong-Macau pier Macau Harbour. Twenty-seven people were injured, four seriously, when a TurboJet jetfoil ferry leaving Macau for Hong Kong collided with a marker buoy on Saturday. The seriously injured are a 6-year-old boy, a pregnant woman and two males, one of whom has a fractured pelvis. The Macau authorities said on Saturay that 27 injured people - aged between aged between four and 60 - were admitted to the Centro Hospitalar Conde de São Januário for treatment. Those with non-serious injuries were mostly treated for mostly for minor abrasions and bruises. Lam Son, senior technical officer of the Maritime Administration in Macau, said the ferry was not speeding at the time of the collision, but that visibility was low - only 0.8 nautical mile. The ferry, which left Macau at 12.15pm, hit the No 5 marker bouy after deviating from its normal course at approvimately 12.30pm. At 1pm, the vessel was towed back to the Macau Maritime Ferry Terminal with minor surface damage, reaching the pier at 1.30pm, at which time rescue workers boarded the vessel to treat the injured. Ferry service, which was suspended for 45 minutes because of the collision, resumed at 1.30pm. Shun Tak Holdings, operator of 24-hour ferry service between Hong Kong and Macau under the brand name TurboJet, said on Saturday that a total of 177passengers and 8 crew members were on board the ferry involved in the incident.

Ban on protest stalls remains (By Dennis Chong) Police claim that Tuesday's march against the chief executive poses a higher risk to public safety than the annual July 1 demonstration - Police yesterday said a surprise ban on roadside political stalls along the route of a protest against Chief Executive Leung Chun-ying on New Year's Day was the result of an assessment which found the rally posed a higher risk to public safety than the annual July 1 march. And they insisted the ban would remain - despite the pan-democrats earlier calling the ruling detrimental to democracy and vowing to defy it. They were only told of the unusual ban earlier this month. Cheng Yiu-mo, Senior Superintendent of Hong Kong Island, said in a press conference yesterday: "On this occasion, the circumstances are very special … after a professional risk assessment, we consider it is necessary to impose the conditions." The force cited an ongoing product fair - the Hong Kong Brands and Products Expo - at Victoria Park, where the protest will start, as well as "special circumstances" of a public holiday where tourists are expected to pack the city's streets. "Certainly if we find street stations causing obstruction, we will first advise that they be removed. If the persons concerned do not listen to the advice, then we will take appropriate action," Cheng said. "Of course, arrests [would be] one action but only under exceptional circumstances." At least six other rallies will be held on New Year's Day, including one organised by Falun Gong and another by democracy activists. Supporters of Leung also plan to gather at Tamar, where the anti-Leung protest is scheduled to end. Cheng said he was confident that no clashes would erupt between protesters although he refused to say how many police officers would be deployed. He said that during this year's July 1 protest "the risk was certainly not as big". "There was no Hong Kong expo and it was not New Year's Day. Also there were no back-to-back protests." The Independent Police Complaints Council said last night it would be observing police conduct on Tuesday. The developments came as the chief executive's approval rating dropped below the 50-point pass mark for the third time since he took office in July. Leung scored 48.9 out of a 100-point scale in a Chinese University survey conducted from December 18 to December 22 in which 758 adults were interviewed by telephone. The rating was down 1.1 point from a similar survey in November and slightly higher than the record-low 48.8 points recorded in September. Researchers at the university's Hong Kong Institute of Asia-Pacific Studies said Leung lacked public trust after the scandal over unauthorised works at his Peak home. Leung has apologised and promised to rectify the problems by the end of January.

Star-studded drugs and assault scandal grows (By Vivienne Chow and Joyce Man) Kenny Wee Ho: his restaurant has a notice about the CCTV cameras. The fallout over the alleged existence of a video showing celebrities taking drugs at a restaurant has just escalated - with the boss of the restaurant Kenny Wee Ho suing TV actor Oscar Leung Lit-wai for making defamatory statements. It follows earlier demands from celebrities said to be present at the scandal-hit dinner for Wee to stop making defamatory statements. Now, Wee, the husband of 2006 Miss Hong Kong contestant Suki Chui Suk-man, is accusing Leung of making offending statements some time around December 6. The statements that Wee alleges are defamatory cannot be published for legal reasons. They were made after allegations that comedian Eric Tsang Chi-wai had slapped Wee in a row at a wedding reception at the Marriott Hotel on December 5. Tsang was arrested last week for common assault and criminal intimidation. He was released on bail and ordered to report back to police in mid-January. Wee had demanded an apology from Leung regarding his comments by noon on Monday. This apparently failed to materialise, and Wee then filed his claim for unspecified damages at the High Court on Thursday. "The defendant published the statements maliciously which were false and defamatory," Wee's lawyers wrote in the court filing. Wee is also seeking an injunction to stop Leung making any more defamatory statements about him. A TVB spokeswoman said that the TV station had no comment as the issue was under investigation. Born in 1979, Leung is the nephew of Shaw Brothers kung fu star Bryan Leung Ka-yan. He joined TVB in 2004 playing mostly supporting roles. Just this month, he won the TVB Most Vastly Improved Actor Award for performances including the portrayal of a man caught in Hong Kong's housing crisis in the drama series L'Escargot. The legal action is the latest development of an ongoing scandal involving a string of celebrities who were allegedly captured on CCTV consuming what was suspected to be illegal drugs at a dinner party in Wee's Taiwan Yiping Huadiao Chicken restaurant in Causeway Bay. It came to light last month when Wee commented on the alleged footage. On December 5, Canto-pop star Eason Chan Yik-shun and his actress-turned-fashion guru wife Hilary Tsui Ho-ying - who was allegedly at the dinner party - held a press conference to deny Tsui was a drug abuser. That same night, Wee reported to the police that he was slapped by Tsang at a wedding party. A week later, Tsui, together with actress Josie Ho Chiu-yee and other stars who allegedly attended the dinner, demanded Wee refrain from making further defamatory claims. Wee obliged. Tsang was arrested on December 19. On the same day, the board of Wee's restaurant, which is headquartered in Taiwan, said in a statement that CCTV cameras have been installed in the restaurant since it opened to protect customers' safety and any footage was the restaurant's property. The statement did not elaborate on the video rumours. A notice to the same effect was placed in a prominent spot at the restaurant's reception.

Trawling ban threatens local fish balls and shrimp paste (By Cheung Chi-fai) Lam Law-ping is reluctant to import fish-ball ingredients from the mainland. The ban on trawling in Hong Kong waters could result in the loss of two local delicacies - fish balls and shrimp paste - those in the industry warned. The owner of a popular shop that sells quality home-made fish balls, using local supplies, said his business would close if he cannot find affordable substitutes. And a veteran fisherman said locally made shrimp paste had already vanished. The trawling ban, intended to save remaining fish stocks in Hong Kong waters, comes into effect on Tuesday. Lam Law-ping, who has owned the Tak Hing fish ball shop in Kowloon City for 20 years, said he relied on local trawlers to supply him with enough lizardfish and conger-pike eels to produce about 70 catties (42,000 grams) of hand-made fish balls a day. He also produces a larger amount using machinery. "It is going to affect us greatly. In the worst case, we might have to close down our business," said Lam, who nonetheless supports the trawler ban because it will make fishing sustainable. Lam is one of the few fish ball makers who still insist on producing the popular fare locally instead of buying cheaper versions from the mainland. "We are making a meagre profit now but still we don't want to import mainland fish balls because it is against our conscience. We only sell fish balls that we know what they are made of." The right mixture of meat from lizardfish and eels produces the best taste and texture, said Lam. Without a local supply, he would consider buying frozen fish or fresh supplies from the mainland. But the former option means the loss of freshness, while the latter will mean higher prices as demand increases. Equally vulnerable is Tai O village's famous shrimp paste industry. The five remaining shrimp trawlers based at the 300-year-old Lantau village will cease operating under the ban. Industry insiders say the locally made red-brick-coloured paste has already gone for good. The shrimp fishing season ended in the summer and the stock of paste has sold out. It is made from a particular shrimp species, collected just above the seabed. But many such pastes - produced elsewhere and branded as Tai O's - are still being sold. Ng Kwun-yau, a 69-year-old fisherman born in Taishan and raised in Tai O, said: "Many places in Guangdong name their shrimp pastes after Tai O, and some of them are available in the village. But the authentic paste has already disappeared." Ng said the Tai O shrimp paste tasted better and had finer texture than the mainland product. The heritage foods have been in a long decline because of never-ending infrastructure projects, Ng said. "We used to trawl where the airport sits today. Now we have moved to places like the Brothers Islands and Yam O, but these places are now also heavily polluted and the number of shrimps has shrunk drastically." Dr So Ping-man, assistant director of the Agriculture, Fisheries and Conservation Department, said the ban would have only a minimal, temporary impact on local food production.

13pc of ocean-going ships registered with low-sulphur scheme (By Keith Wallis) Proportion of container vessels signing up to cleaner fuel programme higher, at almost 1 in 4 - An average of 13 per cent of ocean-going ships calling at Hong Kong each day have registered with the government's low-sulphur fuel incentive scheme, which aims to cut pollution from vessels, a South China Morning Post investigation found. The percentage is higher for massive container ships using Kwai Chung container port. The survey showed almost one in four container ships using Kwai Chung registered with the Environmental Protection Department (EPD) programme, launched at the end of October. Former Marine Department director Roger Tupper was surprised the figures were so high. The Post investigation, which tracked vessel arrivals and departures over a week, found around 70 large container ships, tankers, general cargo vessels and cruise liners visited Hong Kong each day. Of these about eight or nine are signed up to the scheme, which will cost the government HK$260 million over three years. Around 550 ships were registered with the EPD scheme up to mid-December, of which 192 had made a total of 460 calls at Hong Kong by the end of November. Some HK$2.45 million in port dues had been waived, according to a department spokeswoman. Operators of ships registered under the scheme receive a 50 per cent cut in port-related fees if the vessels burn low-sulphur fuel while berthed in Hong Kong. But the scheme has been criticised, as the rebate only offsets between 30 and 45 per cent of the increased cost of using the more expensive low-sulphur diesel. The scheme also sidesteps a key demand from environmentally aware shipping lines for government regulations mandating the use of low-sulphur diesel. Civic Exchange, the public policy think tank, said marine sources of sulphur dioxide emissions accounted for 519 premature deaths a year in the Pearl River Delta, including 385 in Hong Kong. Some 75 to 80 per cent of all emissions come from container vessels, it said. The Post found that some shipping lines are enthusiastic supporters of the EPD scheme, registering massive fleets even though they face higher costs. These include Orient Overseas Container Line, Maersk Line, CMA CGM and Hapag-Lloyd. But other container lines, like Singapore's APL, have either yet to register any ships or have registered just a handful, even though they were signatories to the Fair Winds Charter, a voluntary industry initiative to use low-sulphur fuel in Hong Kong. While the EPD has introduced its incentive scheme, regulations have yet to materialise. Veronica Booth, Civic Exchange senior project manager, said: "It's government's job to regulate. [The maritime sector has] put its money where its mouth is through participating in the Fair Winds Charter. It's government's turn now."

 China*:  Dec 31 2012

China firm to acquire major African iron ore mine (By Associated Press in Beijing) Chinese state media say a Chinese company is finalising the acquisition of an Australian mining firm that controls a major iron ore mine in west Africa, a move that would give China a stronger role in setting global iron ore prices. The official Xinhua News Agency, citing officials from Hanlong Group, says Hanlong will complete the acquisition of Sundance Resources Ltd. for 45 Australian cents (50 cents) per share by March 1. Sundance controls the Mbalam iron ore mine, which straddles Cameroon and the Republic of Congo. Xinhua said Saturday that Hanlong is investing US$5 billion to develop the Mbalam project — most likely in partnership with Chinese state-owned companies — and build a 550-kilometre railway and a shipping port. China is eager to acquire overseas resources to feed its growth.

China sets first-half rare earth export quota for next year (By Agence France Presse in Beijing) Samples of rare earth elements are converted to glass discs at the Molycorp Minerals Mountain Pass Mine in California. China on Friday announced its export quota for rare earth resources for the first half of next year amid declining prices and weak demand in the global market. China produces more than 95 per cent of the world’s rare earths, 17 elements critical to manufacturing everything from iPads to low-emission cars. The country has set production caps and export quotas on rare earths, saying it aims to protect resources and the environment in an effort to promote sustainable development. But China’s control over the sought-after resources has sparked a dispute with major trading partners. The government will initially allow exports of 15,501 tonnes of the resources in the first six months of next year, the Ministry of Commerce said in a statement. The quota accounts for roughly half of the full-year limit of 30,966 tonnes for this year and will be split among 24 domestic producers, the ministry said. The announcement came after China’s largest rare earths producer, Baotou Steel Rare-Earth, on Tuesday said it would suspend some of its production for a third month in an effort to stem falling prices. The price of praseodymium-neodymium oxide, a rare earths compound used for ceramics and magnetic materials, has slid to around 300,000 yuan (HK$373,058) per tonne, less than one fourth the level at the highest point last year, China’s official Xinhua news agency said on Tuesday. China grants two batches of export quotas on rare earth resources each year but the quota has not always been met due to flagging global demand. The country only exported 13,014 tonnes of rare earth ores, metals and compounds in the first 11 months of this year, less than half of the full-year quota of this year, according to customs data.

China sets date for 12th National People’s Congress (By Agence France Presse in Beijing) Visitors with the national flags in hands pose for photos on the Tian'anmen Square. China has fixed March 5, next year, as the date it will convene a key legislative session, state media reported on Friday, with new Communist Party chief Xi Jingping set to become president during the two-week meeting. The date for the start of the first annual session of the 12th National People’s Congress (NPC) was approved at an NPC Standing Committee meeting on Friday, the official Xinhua news agency reported. The announcement comes after the Communist Party in November chose current Vice President Xi to take over the reins of the ruling party from current President Hu Jintao. That was the first step in China’s highly choreographed once-a-decade leadership transition that sees the party change leaders first, with state positions, including president, premier and other key posts, filled at the NPC several months later. Xi is set to be formally selected as president during the NPC session, while Li Keqiang, another top party official, is slated to become premier, replacing Wen Jiabao, the positions’s current occupant. Xinhua said the legislative session would last about two weeks and would also deal with other important matters including approving a draft plan on national economic and social development for next year. The announcement of the start of the next NPC comes after November’s party congress, which had been expected some time in October, was delayed amid an internal party scandal involving disgraced politician Bo Xilai. Bo, the former party boss in the central mega-city of Chongqing, was once seen as a candidate for promotion to the party’s top echelons but was brought down by murder allegations against his wife that came to light after his police chief sought refuge in a US consulate. Gu Kailai, Bo’s wife, was later given a suspended death sentence -- a judgment commonly commuted to a life sentence -- for fatally poisoning British businessman Neil Heywood. Bo has been formally expelled from the party and is in custody awaiting trial for alleged corruption and abuse of power. The months-long controversy exposed deep divisions in the party’s top leadership ahead of the sensitive power transition, as Bo had influential patrons and a following among left-leaning members.

Chen Deming: China trade may show slowest growth - 6pc - since 2009 (By Victoria Ruan) Commerce minister's prediction of 6 per cent growth this year would be the mainland's slowest since 2009, when trade slumped by 13.9 per cent - Chinese Minister of Commerce Chen Deming. Mainland imports and exports will likely rise about 6 per cent this year, the slowest annual increase since the global financial crisis and far below the official target of 10 per cent growth. Commerce minister Chen Deming has repeatedly warned the country may miss its trade target this year amid a faltering recovery in the West and a domestic economic downturn. The forecast 6 per cent growth would be the worst since 2009 when trade slumped 13.9 per cent. According to a report posted on news portal Sina, Chen told an annual commerce work conference held yesterday that imports and exports grew 5.7 per cent in the first 10 days of December, compared with the same period last year. Mainland trade climbed 5.8 per cent in the first 11 months from a year earlier. The year-on-year trade growth accelerated to 6.4 per cent in the second 10-day period this month, partly because companies boosted activities in anticipation that some favourable trade policies would expire by the end of this year, Chen said. However, he noted "abnormal factors" behind the acceleration, such as an unusual surge in mid-December trade between the mainland and Hong Kong. In Hong Kong, where 90 per cent of trade is for transit, discrepancies between export data and its imports from the mainland amounted to more than US$54 billion, Chen said. "Therefore, we can't rule out that some local governments may have inflated their data," he was cited as saying, without elaborating. An official statement posted on the ministry's website later made no mention of Chen's forecast about 2012 trade growth or the comment about trade with Hong Kong. Instead, the statement said mainland trade would exceed US$3.8 trillion this year, while exports would account for 11 per cent of the world's total. Huo Jianguo, president of the Chinese Academy of International Trade and Economic Co-operation, believed the mainland trade situation may improve next year but that the "general environment would remain difficult". The State Information Centre, a think tank under the National Development and Reform Commission, recently forecast mainland exports may climb 8 per cent next year while imports may grow 7.8 per cent. The euro-zone economy will stay "on the edge of recession" in 2013, the institution said. The US economy may recover, boosting demand for Chinese exports, but trade frictions with China may intensify, it forecast. Chen estimated mainland foreign direct investment would reach US$110 billion this year, against US$116 billion last year. Outbound investment from non-financial companies will likely exceed US$70 billion this year, he said. Next year, Chen said the ministry will study policies to boost consumption focusing on durable goods like electric appliances and cars. It will also develop online shopping and support sales of environmentally friendly products. The ministry plans to stabilise exports and increase imports of goods such as energy, resources products and key components. Beijing will also slowly open up education, health care, finance, and telecommunications to foreign investors.

Vice-FM says US must be 'objective' (By Zhao Shengnan) A senior diplomat on Friday urged the United States to take "an objective and impartial position" in Asia-Pacific affairs amid the increased engagement between Beijing and Washington in the region. Addressing the Lanting Forum in Beijing, Zhang Zhijun, vice-foreign minister, said China and the US need to work to ensure that dialogue and cooperation outweigh frictions and differences in Asia-Pacific. Zhang made the remarks against the backdrop of the US' Asia "pivot" policy. While the US said it remains neutral on the territorial disputes in the region, it has become increasingly involved in disputes between China and some of its Asian neighbors. For instance, Washington has said that China's Diaoyu Islands fall under the US-Japan security treaty. According to Zhang, China respects the legitimate interests of the US in the region and welcomes its constructive role, but the US also needs to respect China's interests and concerns in the region. The two sides need to increase candid discussions on issues concerning the region and their respective Asia-Pacific policies so as to boost mutual understanding, expand common ground, steadily promote cooperation and appropriately approach and manage differences, Zhang said. "As far as the differences and frictions between countries in the region are concerned, we hope the US will take an objective and impartial position instead of siding with one party or doing things that are of disservice to settling the issue," he said. The Asia-Pacific region should not be an arena for China-US competition. Instead, it should be a grand stage for China-US cooperation, Zhang said. China-US ties aren't stable enough because sensitive issues keep surfacing, said Wu Xinbo, a scholar on China-US studies and associate dean of the School of International Relations and Public Affairs at Fudan University. China and the US should have more dialogue on profound topics, including whether the world should have one epicenter or several, whether the world should follow only one development model or several models, and whether all countries should strive to maximize their own interests or work to balance the interests of all stakeholders, Wu said. Wu proposed that the two countries enhance economic and global cooperation and reduce differences on ideology. At the Lanting Forum, Zhang also urged the new Japanese government to overcome difficulties in its relations with China and to "face up to history and reality" and strive to get bilateral ties back to normal. China-Japan relations hit their lowest point in years in September after Tokyo's illegal "purchase" of China's Diaoyu Islands. New Japanese Prime Minister Shinzo Abe took over on Wednesday. The Cabinet he has unveiled, which includes ultra-conservative politicians, has raised concern in China and South Korea. Zhang said China is "highly concerned" about "certain political movements" inside Japan and hopes Japan can follow a peaceful path. According to Zhang, since there are prolonged disputes over issues of territorial sovereignty and maritime rights in Asia, those involved should refrain from taking action that may expand or complicate the disputes. Instead, China will act to ensure that its development brings more benefits to neighboring countries and contributes even more to common development and cooperation in Asia, Zhang said. Liu Jianfei, deputy-director of the international strategy studies institute under the Party School of Central Committee of Communist Party of China, said that China wants the rest of the world to benefit from its development, but not at the cost of sacrificing its own interests. "Other countries should not misinterpret China's friendly wishes or infringe the country's interests," Liu said. It is also unfair to shield the real troublemakers and to criticize China for upholding its legitimate interests, said Liu, calling on all Asian countries to take the responsibility for the continent's stability and prosperity.

Hong Kong*:  Dec 30 2012

Kam Kee Café, Peking Restaurant pushed out by soaring rents (By Jennifer Cheng) Last orders after more than 40 years for two local eateries pushed out by skyrocketing rents - Chan Gui-chou, 91, owner of the Kam Kee Café in Shau Kei Wan, clears up after closing the doors for the last time. The restaurant has served locals for four decades but is the latest victim of skyrocketing rents. Kam Kee Café in Shau Kei Wan was swiftly emptied of furniture and appliances yesterday after selling its final milk tea on Wednesday. Two old-style Hong Kong restaurants that have served diners for more than 40 years closed this week due to soaring rents. The 45-year-old Kam Kee Café, a Cantonese-style eatery in Shau Kei Wan, served the last cup of its famous milk tea on Wednesday after the rent was increased by 150 per cent. Over in Jordan, the 42-year-old Peking Restaurant will serve the last of its popular Peking duck and Shandong roast chicken tomorrow. While the entrance sign said the restaurant was closing because the lease had expired and staff would not divulge details, a long-term customer said the closure was due to soaring rent. At Kam Kee Café, 91-year-old owner Chan Gui-chou and his wife, in her 80s, were philosophical as their restaurant was taken apart piece by piece. "There is no banquet under heaven that never ends," said Chan's wife, using a Chinese saying. "We heard that the new owner bought the property for HK$30 million so it's not a surprise that they've pushed up the rent." They do not plan to reopen in a new location. The Post earlier reported that the property owner wants to increase the rent for the 650 sq ft premises from HK$20,000 to HK$50,000 from January. It left a lasting impression on 25-year-old Wei Kai-cheng, a civil servant from Taipei, when he tried Kam Kee's condensed milk and peanut butter toast with cold milk tea for the first time a few years ago during a vacation. When Wei heard Kam Kee was closing, he made a trip to Hong Kong to savour this local fare one last time. But he was disappointed to learn the eatery had already stopped serving yesterday. "The flavour of the tea is much stronger at Kam Kee compared to other places," Wei said. "When you walk in, the interior makes you feel like you are travelling back in time." It does seem that time has been standing still at Kam Kee. The menu bears a six-digit telephone number of a type not used since the 1980s. At Peking Restaurant, Carmen Lau So-man, who works at garment maker TAL Group, ate with her colleagues and took photographs inside the restaurant. "My company has had a close relationship with the restaurant, having hosted New Year staff dinners here for the last 30 years," she said.

Bangladesh consulate 'close to a deal' on domestic helpers (By Phila Siu) Bangladesh's envoy says his office is 'very serious' about an agreement with local agencies to recruit domestic workers in his country - Ashud Ahmed, Bangladesh's consul general. Bangladesh's diplomatic representative in Hong Kong says his consulate is close to reaching an agreement with local employment agencies on recruiting domestic workers in the South Asian country to work in the city. The proposed agreement anticipates plans by both Philippine and Indonesian authorities to discourage their citizens from working as domestic helpers abroad, including Hong Kong, which employs more than 300,000 helpers from the two Southeast Asian countries. Ashud Ahmed, Bangladesh's consul general, confirmed yesterday that he and his officials had been in talks with the employment agencies and that he was confident an agreement was near. "I think it will be very soon, maybe around two to three months," Ahmed said. "We are thinking about it seriously … and we think that Hong Kong has a strong rule of law [to protect Bangladeshis]." He said that training was essential to ensure that Bangladeshis could work competently in Hong Kong, given the differences between the two places in way of life and language. However, Joe Chow Kui-kuen, the head of Asosiasi PPTKI Hong Kong, an organisation which represents 200 employment agencies in the city, said the talks had snagged on the issue of who would train the workers. The Bangladeshi government wanted the agencies to help co-ordinate official training programmes in Bangladesh, but the agencies had reservations about doing so, Chow said. "If we have to co-run the programmes with the [Bangladeshi] government, it will be hard to guarantee the quality," Chow said. "That's because if we think the programmes are not good enough, it will be hard for us to negotiate with the government." The agencies have instead proposed managing the programmes jointly with private training companies in Bangladesh, but they had yet to reach an agreement on this point, he said. In August, Chow said that the Hong Kong government had been involved in the talks with the Bangladeshis on the matter, and that "as far as I know, success is near". Yesterday he said that talks with the consulate began about six months ago. Bangladesh's labour department was involved but not Hong Kong's, he added. The Immigration Department does not ban Bangladeshis from working as domestic helpers in Hong Kong, as it does in the case of Vietnam, Nepal and Cambodia, as well as the mainland. Chow believes that an arrangement with Bangladesh will help to avoid a shortage of domestic workers that will occur once the Philippine and Indonesian plans, scheduled for 2017, take effect. He predicts that, with a population of about 160 million, Bangladesh could send up to 5,000 helpers to Hong Kong in the first year, rising to 10,000 by the third year. They would be attracted by the city's minimum wage of HK$3,920 a month, he added. As of July, there were 149,009 Filipino and 152,557 Indonesian helpers in Hong Kong, accounting for almost 98 per cent of the domestic workers in the city.

Asia Weekly names Diaoyu voyagers 'people of the year' (By Peony Lui) Eight Diaoyu activists from Hong Kong, Macau and mainland are featured on cover of Asia Weekly as 'persons of the year' for 2012. Hong Kong fishing vessel Kai Fung No 2 docks at a public pier at Hong Kong's Victoria Harbour. Vessel owner Lo Chau. Yeung Hong speaks to the media after the expedition. Eight activists from Hong Kong, Macau and the mainland who sailed to the Diaoyu Islands to claim them for China appeared on the cover of Asia Weekly as “people of the year”. Lauded as national heroes in the Chinese-language magazine are captain Yeung Hong, vessel owner Lo Chau, Tsang Kin-shing, Koo Sze-yiu, Wong Fah-man, Lo Chung-cheong, Ng Shek-yiu from Macau and Fang Xiaosong from the mainland. The activists have “changed the course of history in China, as well as the power structure in Asia” by their “fearless determination, passion, wisdom and action", said the report. A total of 14 people embarked on a voyage aboard fishing vessel Kai Fung No 2 on August 12 to assert Chinese sovereignty over the disputed islands. They made a triumphant return to Tsim Sha Tsui 11 days later after encountering drama with Japanese authorities near the islands. Seven members of the group managed to land on the main island and pitch China's national flag - the first time since 1996. All seven were profiled by Asia Weekly; Wong, who stayed on the boat, was commended for carrying the national flag. Asia Weekly's first 2013 edition commended their efforts and briefly profiled each of the eight activists. The 4,500-word report took Kai Fung No 2 as a point of departure and touched on issues such as patriotism, the wave of anti-Japan mass protests in mainland cities in September, cross-strait relations and Sino-Japan relations. “The voyagers presented a pure patriotic emotion,” said the report. “Although the activists are from the grass roots, they were able to sail across the waves of political diplomatic storms.” They “overturned Japan’s practice of nationalising the Diaoyu Islands”. The report also made comments about China’s patriotism. “More and more internet users are starting to question the level of corruption hidden beneath the surface of China’s ‘patriotism’.” “How can we talk of China’s patriotism when the sons and daughters of high officials are all shunning their obligations and enjoying their lives overseas?" In September, tensions over China and Japan's competing territorial claims on the Diaoyus spilled over into rowdy anti-Japanese protests in mainland cities. Beijing clamped down on the rallies soon after. The Asia Weekly report coined the term “rational patriotism” and rendered the violent protests in September to have “polluted the purity of patriotism”. It concluded that the voyage embodied “new hopes for China’s national sovereignty, dignity and political reform”, and that “Kai Fung No 2 unquestionably remains in everyone’s heart”.

The Hang Seng Index crept to its highest close in 18 months on Friday, as investors rotated into Chinese non-financial counters after Beijing raised hopes of quicker sector reforms. Hang Seng tests fresh 17-month high.

Hong Kong's exports of goods rise 10.5 pct in November (Xinhua) The value of Hong Kong's total exports of goods rose 10.5 percent from a year ago to 307.8 billion HK dollars (about 39.7 billion U.S. dollars) in November, the city's statistics department said here on Thursday. The value of re-exports increased 10.7 percent to 302.6 billion HK dollars, and the value of domestic exports fell to 5.1 billion HK dollars. The value of imports of goods rose 9.0 percent to 351.8 billion HK dollars in November, bringing the trade deficit to 4.1 billion HK dollars. A government spokesman said that merchandise exports rebounded notably in value terms in November over a year earlier, after a modest fall-back in October, and the fluctuating reflected a continued unsteady external trading environment. The spokesman said the fragile fundamentals of the advanced economies will continue to weigh on their final demand in the near term, and Hong Kong's export outlook remains challenging. For the first 11 months of 2012, the value of total exports of goods in Hong Kong rose 1.9 percent from a year ago, with the value of re-exports climbing 2.2 percent and the value of domestic exports falling 11.7 percent. Concurrently, the value of imports of goods rose 3.2 percent, bringing the trade deficit to 429.9 billion HK dollars in the first 11 months.

 China*:  Dec 30 2012

Beidou launches navigation data for Asia-Pacific region (By Minnie Chan) Satellite navigation network launches tracking data for Asia-Pacific region in warning to GPS - Ran Chengqi, the spokesman for the Beidou Navigation Satellite System. The Beidou satellite navigation network began offering positioning data yesterday for the Asia-Pacific region - a milestone in Beijing's bid to challenge the US-controlled Global Positioning System (GPS). The move comes exactly a year after authorities provided the first satellite location information to civilian users on the mainland using the second-generation Beidou Navigation System (BDS). Expanding into the Asia-Pacific region - from Afghanistan to the Western Pacific and Mongolia to northern Australia - puts the system on track to claim 15 to 20 per cent of the GPS-dominated domestic market by 2015, said Ran Chengqi , a BDS spokesman and director of the China Satellite Navigation Office. Beijing aims to have BDS serve 70 to 80 per cent of the domestic market by 2020, when it is expected to become China's first global navigation system. An early version has been used by traffic control systems in more than 100,000 vehicles in nine provinces and cities. "We are stepping up efforts to turn BDS into an international system, which will be commonly used by civil aviation, maritime and mobile communication organisations," Ran said. The central government has spent billions on the system and in the coming decade plans to invest over 40 billion yuan (HK$49 billion) more, Ran said. By 2020, Beidou is expected to comprise a network with 35 satellites, providing Chinese military and civilian users around the world with positioning, navigation and timing services. An estimated 95 per cent of global-positioning equipment on the mainland still relies on GPS data, Xinhua said. Meanwhile, the output of the country's navigation service sector is expected to top 120 billion yuan this year. "We are encouraging our potential clients to use both BDS and the GPS system, as Beidou is compatible with other networks," Ran said. He acknowledged that the relatively high price of Beidou receiver chips would remain a barrier to commercialising the system, even though he said its technology was more advanced than that used by GPS, Russia's Glonass and Europe's Galileo. "Since Beidou is a budding business, there is a gap between our system and GPS as well as other overseas peers, with prices being the biggest difference," Ran said. Increasing the number of BDS users would help bring down the price. Satellite expert Wang Xudong , an adviser to the central government, said Beidou would eventually be cheaper than GPS if it becomes commonly used in mainland mobile phones, cars and public transport.

China launches rival GPS satellite system (By Agence France-Presse in Beijing) China has launched commercial and public services across the Asia-Pacific region on its domestic satellite navigation network built to rival the US global positioning system. The Beidou, or compass, system started providing services to civilians in the region on Thursday and is expected to provide global coverage by 2020, state media reported. Ran Chengqi, spokesman for the China Satellite Navigation Office said the system’s performance was “comparable” to GPS, the China Daily said. “Signals from Beidou can be received in countries such as Australia,” he said. It is the latest accomplishment in space technology for China, which aims to build a space station by the end of the decade and eventually send a manned mission to the moon. China sees the multi-billion-dollar programme as a symbol of its rising global stature, growing technical expertise, and the Communist Party’s success in turning around the fortunes of the once poverty-stricken nation. The Beidou system comprises 16 navigation satellites and four experimental satellites, the paper said. Ran added that the system would ultimately provide global navigation, positioning and timing services. The start of commercial services comes a year after Beidou began a limited positioning service for China and adjacent areas. China began building the network in 2000 to avoid relying on GPS. “Having a satellite navigation system is of great strategic significance,” the Global Times newspaper, which has links to the Communist Party, said in an editorial. “China has a large market, where the Beidou system can benefit both the military and civilians,” the paper said. “With increases in profit, the Beidou system will be able to eventually develop into a global navigation satellite system which can compete with GPS.” In a separate report, the paper said satellite navigation was seen as one of China’s “strategic emerging industries”. Sun Jiadong, the system’s chief engineer, told the 21st century Business Herald newspaper that as Beidou matures it will erode GPS’s current 95 per cent market share in China, the Global Times said. Morris Jones, an independent space analyst based in Sydney, Australia, said that making significant inroads into that dominance anywhere outside China is unlikely. “GPS is freely available, highly accessed and is well-known and trusted by the world at large,” he told reporters. “It has brand recognition and has successfully fought off other challenges.” Morris described any commercial benefits China gains as “icing on the cake” and that the main reason for developing Beidou is to protect its own national security given the possibility US-controlled GPS could be cut off. “It’s that possibility, that they could be denied access to GPS, that inspires other nations to develop their own system that would be free of control by the United States,” he said. “At a time of war you do not want to be denied” access, he said. The Global Times editorial, while trumpeting Beidou as “not a second-class product or a carbon-copy of GPS” still appeared to recognise its limitations, at least in the early stages. “Some problems may be found in its operation because Beidou is a new system. Chinese consumers should ... show tolerance toward the Beidou system,” it said.

Shanghai set for new visa plan (By WANG YING and SHI YINGYING in Shanghai) Tourists from 45 countries will be able to enjoy a 72-hour visa-free stay in Shanghai with all-round customized traveler services, sources said on Thursday. Starting on Jan 1, tourists from 45 countries who have third-country visas and plane tickets can apply for a transit without a visa application in Shanghai. The city is the second on the mainland after Beijing to launch the new visa plan to boost tourism. Shanghai-based China Eastern Airlines has planned a full package of services to make the three-day stay enjoyable for foreign passengers, sources from the company said. "We have packaged our tickets with services including hotel reservations, car rentals, and one- to three-day tours. International travelers will be able to book all these services from our service hotline or our overseas sales offices," said Zhang Qing, deputy senior manager in the marketing development department of China Eastern Airlines' marketing and sales committee. Booking services will be offered in several different languages, Zhang said. The visa-free policy is expected to enhance the development of Shanghai as an international city, and stimulate the city's tourism industry, analysts said. Shanghai already has a program that allows passengers from 32 countries to have 48-hour visa-free stays in the city. "The prolonged stay period will enable travelers to have leisure time in Shanghai and other cities in the Yangtze River Delta region," said Gao Jianrong, deputy general manager of Pudong passenger services center from China Eastern Airlines' ground service department. Nearly 500,000 international passengers traveling by China Eastern Airlines have made transits in Shanghai this year, and the amount of transit passengers is expected to grow in 2013, Zhang said. "I think it's a good improvement because our visa policy couldn't keep up with the needs," said Jiang Yiyi from the China Tourism Academy. "Our neighbors in Southeast Asia, such as Malaysia and Thailand, have been loosening their visa policies to attract more tourists in recent years." "Even Japan started to do it after the earthquake," she said. Jiang also called for new measures including a more relaxed duty-free policy. "I often find myself stuck at the airport with boring delays when I transit in Beijing or Shanghai," said Matt Hodges, a British national who works in Seoul. "I was thrilled when I heard that I can now leave the airport, or even extend my layover for a few days, without having to pay for an expensive visa." Hodges said that many of his foreign colleagues have taken two-day trips to Chinese cities, and they're excited about the new policy. "It'll definitely give local tourism a boost," Hodges said. Veronika Karausova, a financial analyst at KPMG in Yekaterinburg, Russia, said the new visa policy is a step forward for China to further develop international relations. "This policy will be well received by all travelers to China, especially businessmen. I am certainly looking forward to making the most of it in 2013," Karausova said. James Macdonald, head of UK-based real estate adviser Savills Research China, predicted that lots of tourists, especially ones from the US and Europe, will want to stay longer than three days. "I believe the biggest impact will be on the meetings, incentives, conferences, exhibitions industry, as it will make it easier to organize events in China while inviting attendees from overseas. This should boost the hotel industry as well as demand for conference facilities in Beijing and Shanghai," Macdonald said. Shanghai's visa-free policy was first introduced in 2000. The 24-hour visa-free stay is available to all transferring international passengers passing through the city while the 48-hour policy applies to visitors from 32 countries including the United Kingdom, the United States, Japan, Singapore, Germany, France, Hungary and Switzerland.

Lang Lang's performance marks theatre anniversary (China Daily) Renowned pianist Lang Lang performs at the National Centre for the Performing Arts (NCPA) in Beijing on December 27. The performance is part of NCPA Fifth Anniversary Piano Concert. Lang was the first Chinese pianist to perform for president of the United States. 

China "not fear troubles" regarding Diaoyu Islands: official (Xinhua) Vice Foreign Minister Zhang Zhijun said Friday that China will neither create nor fear any troubles concerning the Diaoyu Islands. He made the remarks in response to a question concerning China-Japan relations at the eighth Lanting Forum. Zhang said the Diaoyu Island and its affiliated islets are inherent parts of China's territory, and Chinese government and its people's determination to safeguard the country's territorial sovereignty is firm. "We hope for a stable and peaceful surrounding environment, we will not create troubles, but we definitely not fear any trouble," Zhang said. China believes the two sides should manage the issue through talks and consultations to avoid escalation, he said. "We hope the Japanese side can face history and reality and make correct decisions in order to properly handle the issue," he said, adding that stable and healthy bilateral relations are in the interests of the two countries and the region. Zhang added that China has recognized that some officials in Japan's newly established cabinet have shown willingness to boost bilateral ties, adding that China hopes Japan's new government can improve ties and properly handle differences. Zhang said China has paid great attention to the development of Japan's domestic politics and hopes Japan will follow a path of peaceful development, which he described as the premise of Japan's constructive role in maintaining regional peace and stability.

 *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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