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*:  Mar 1 2013

Hong Kong posts budget surplus as economy set for stronger growth (By Reuters in Hong Kong) Financial Secretary John Tsang Chun-wah expects economic growth to be 1.5 to 3.5 per cent this year. Hong Kong expects economic growth to come in 1.5 to 3.5 per cent this year, Financial Secretary John Tsang Chun-wah said in his annual budget speech on Wednesday, while offering a raft of relief measures, tax concessions and sweeteners. “The intricate external environment will remain unstable in the year ahead,” said Tsang, warning of potential instability from currency wars and a trade slowdown to the financial hub’s small and open economy. A poll of eight banks estimated that Hong Kong’s gross domestic product this year would grow 3.1 per cent, accelerating from GDP growth of 1.4 per cent last year, its slowest rate since 2009. In a budget short on bold steps, Tsang offered a mixed bag of policies, including various relief measures for the poor and elderly, a marginal corporate tax and salary rebate and moves to bolster the city’s financial sector and private equity industry. The intricate external environment will remain unstable in the year ahead. Soaring land revenues and profits taxes swelled public coffers to a bumper HK$64.9 billion fiscal surplus, bucking previous government expectations for a deficit. While Tsang unveiled no major property moves in his address, he pledged to continue bolstering land supply, and earmarked HK$4.5 billion in the coming five years to seek out potential new areas for land reclamation outside of Victoria Harbour “on an appropriate scale” in the densely populated city. Tsang said 46 sites, including 28 new sites, would be offered for sale in the new fiscal year, which begins on April 1. Last week, the government announced a new round of property cooling measures including higher stamp duties and home loan curbs to ease some of the world’s most expensive home prices. Asian economies are battling against rising inflation partly caused by hot money flows from loose monetary policies at home and abroad, with governments raising stamp duties and tightening lending in response to the threat of a property bubble. To lure more private equity funds amid competition with Singapore – that has signed a raft of tax treaties granting exemptions to the industry there – Hong Kong said it would extend profits tax exemption for offshore funds to include transactions in private companies which are incorporated or registered outside Hong Kong. “This will allow private equity funds to enjoy the same tax exemption as offshore funds,” Tsang said. Hong Kong is also considering laws to allow the Open-ended Investment Company (OEIC) structure for funds popular in mature markets such as Britain. Investment funds established in Hong Kong can only take the form of trusts presently. The OEIC structure, allowing managers to create and redeem shares when money is invested or pulled out, scores over trusts by being cost effective as well as faster to launch products. “The OEIC proposal is a direct response to Singapore moving ahead as a choice of fund domicile but is more problematic as alternative managers probably want other structures as well,” said Philippa Allen, head of ComplianceAsia Consulting. The government also said it would expand the size of its government bond programme from HK$100 billion to HK$200 billion in the next five years, while proposing a new inflation-linked retail “iBond” issue worth HK$10 billion. Authorities granted a relatively modest corporate tax rebate of 75 per cent for the 2012/13 financial year with a ceiling of HK$10,000 per business. Individuals, meanwhile, would also enjoy a salaries tax reduction of up to HK$10,000 for the same period. In terms of relief measures, with Hong Kong facing one of Asia’s worst income gaps, Tsang pledged an extra HK$8.3 billion for elderly allowances, while an extra HK$15 billion would be injected into a community poverty alleviation fund. Public housing rents would also be waived for two months and electricity subsidies of HK$1,800 to every household. The relief measures, involving a total of HK$33 billion, will help to ease the pressure on the middle class, grass-roots and small and medium-sized businesses, Tsang said.

The profit before taxation of Hong Kong Exchanges and Clearing Limited (HKEx) in 2012 is about 4. 85 billion HK dollars (around 625 million U.S. dollars), a significant decline of 20 percent from 2011, according to the annual result unveiled Wednesday. According to the result, the average daily turnover value on the Stock Exchange suffered great loss from 69.7 billion HK dollars in 2011 down to 53.9 billion HK dollars in 2012. New listings and Initial Public Offerings (IPO) fundraising also dropped last year. Chairman of HKEx Chow Chung Kong believed the performance was mainly due to the sector's post-financial crisis slowdown in advanced economies and slower growth in the mainland of China. However, HKEx's acquisition of London Metal Exchange (LME) last year was a significant milestone for the company, giving the company new capabilities and positioned it to broaden its ties with the mainland of China, said the chairman's statement. "We will work closely with our LME colleagues to expand LME's current business, move into new areas, and develop its untapped potential," said the statement. The range of RMB products in the markets of HKEx expanded in 2012 as more issuers used the company's listing facilities for RMB products, said the statement. In the securities market, there were more RMB bond listings, including the first by the Central Government's Ministry of Finance, as well as the first RMB Exchange Traded Funds (ETF) and RMB equity security listings. In our derivatives market, RMB Currency Futures, the world's first exchange-traded deliverable RMB futures, was introduced. "RMB products constitute an important part of our strategy to take advantage of opportunities from the internationalization of the RMB and outward investment from the mainland of China," said the statement. Looking into the future, Chow believed the quantitative easing policies implemented in the key financial markets including Europe, Japan and the United States, would help improve market sentiment. Nonetheless, the low interest rates and expansion of money supply could cause higher inflation than desired. The effectiveness of these easing policies on improving the performance of the global economies is yet to be proven. Hong Kong would however continue to benefit from the progress of the mainland China's economy in 2013. "Our markets experienced increased turnover at the end of last year and the beginning of this year, and we saw renewed investor interest in IPOs. While the global economic outlook remains challenging, we believe we are well positioned to weather any storms that might come our way," Chow said in the statement. (1 U. S. dollar equals 7.756 HK dollars)

 China*:  Mar 1 2013

China's first lady gives marching orders to military perk (By SCMP) Peng Liyuan performs in Luoyang. China’s de facto first lady, famed military singer Peng Liyuan, seems to have gone out of her way to keep a low profile since her husband Xi Jinping was anointed as the Communist Party’s top leader at its 18th National Congress last November. But as Xi pushes forward a high-profile campaign to rid the Party and military ranks of corruption and waste, Peng found herself in the news again as a model Party member more than ready to answer her husband’s marching orders. Cai Xiaoxin, a military researcher who has a verified real-name account on China’s social media platform Weibo, wrote on Wednesday that Peng had voluntarily given a flat she owned back to her military unit. According to Cai, the flat was in a military compound in west Beijing, that had been awarded to Peng many years ago. Free or heavily-subsidised housing is among the most coveted perks Party, government and military officials can receive, especially amid soaring property prices across the country in recent years. “She sets a good example in answering Chairman Xi’s orders to tighten up military discipline and fight against corrupt practices,” Cai wrote, referring to Xi’s position as the head of the Central Military Commission. Cai’s post did not give more details about Peng’s generous gesture. She sets a good example in answering Chairman Xi’s orders to tighten up military discipline and fight against corrupt practices Peng, 51, has been a household name in China since the early 1980s, a soprano well loved for her lusty rendering of Chinese folk songs. She married Xi in 1987, and is now the president of the People’s Liberation Army Academy of Arts, with a rank equivalent to a major general. http://www.youtube.com/watch?v=XeWkXnjDAXo 

US denies petition for Lunar New Year (By Caroline Berg in New York) Growing Asian population says students should get the day off - China's 1.3 billion people celebrated the two-week Lunar New Year holiday this month, and now 39,780 people want it to be a national holiday in the United States. "The Asian population represents a large percentage of the US population and is growing ever more," the petition sent to the White House with close to 40,000 signatures said. "Please make this important holiday widely recognized and make it an official day off for students too." The petitioners got a response from the White House office that handles such petitions -the Office of Digital Strategy - but they are not going to get a holiday. "Even though it would take an act of Congress to make Lunar New Year a federal holiday, we're happy to speak out to ensure that this important celebration is widely recognized and treated with respect," read the response. The office compared Lunar New Year to Rosh Hashanah, Easter or Eid al-Adha, the Islamic Feast of the Sacrifice. "It's an occasion that makes us richer as a culture and stronger as a people - even without being a federal holiday," the office said. The White House established the "We the People" online petitioning system on Sept 22, 2011, and since then has received almost 9.2 million signatures on more than 141,000 petitions, according to the office.

Hong Kong*:  Feb 28 2013

19 tourists including 9 from Hong Kong killed in balloon explosion in Egypt's Luxor - Nineteen tourists were killed in a balloon explosion Tuesday morning in Egypt's Luxor governorate, state-run al-Ahram online reported. (By Lai Ying-kit and Agence France-Presse in Cairo) A hot air balloon exploded as it was flying over Egypt’s ancient temple city of Luxor on Tuesday, killing 19 people including nine tourists from Hong Kong. Nationals from Japan, France and Britain were also reportedly among the dead, according to an Egyptian security official. On Tuesday in Hong Kong, Raymond Ng, general manager of the travel agency Kuoni, which organised the Hong Kong tourists’ trip to Egypt, held a press conference. Ng said that nine of the 19 tourists involved in the accident were Kuoni’s clients and they “very probably” died in it, according to internet news reports and a report from the agency’s tour guide in Egypt. However, he said that he had received no official confirmation from Egyptian officials about the conditions of the nine Hongkongers people yet. “Our tour guide did not board the balloon but managed to report back to us that nine of our tour members were on board the balloon when the accident happened,” he said. “We are very sorry about the accident and we send our deepest sympathy to their families.” The nine were part of a 15-member tour group that was on the fifth day of their 10-day visit to the North African country. The group left for Egypt on February 22. The nine dead included four men and five women, aged 33 to 62. They came from three families. The accident took place around 7am in Egypt. Ng said the 40-minute balloon flight was an optional activity for which the nine tourists had to pay US$190 in addition to their package tour fee. The remaining six members and the tour guide did not take part. Ng said that according to local employees, the balloon caught fire about an hour after it had set off, plummeting to the ground two minutes later. An employee at the company operating the balloon, Sky Cruise, said the pilot and one tourist survived by jumping out of the basket before it hit the ground. Both were taken to hospital. “This is terrible, just terrible,” the local employee said, declining to give her name. “We don’t yet know what happened exactly or what went wrong,” she said. Ng said Kuoni had a good working relationship with the balloon operator and had done business with it for several years. He also said the company’s staff members would head for Egypt later on Tuesday to arrange assistance to the tour group and the families of the affected tourists. Meanwhile, three officers from the Immigration Department will also fly to Egypt to help. Chief Executive Leung Chun-ying said he was saddened by the fatal accident in Egypt. He said the Hong Kong government would liaise with the Foreign Ministry’s Hong Kong office and the Chinese embassy in Egypt to help the tour group and the families. Television footage on Hong Kong’s Cable TV news channel showed emergency service vehicles rushing to the scene of what appeared to be scorched earth where the balloon had landed. The balloon, which was carrying 21 people, was flying at 300 metres over Qurna, in Luxor’s West Bank, when it caught fire and crashed, an Egyptian security official said. Luxor is one of Egypt’s most renowned archaeological sites and home to the famous Valley of the Kings and the grand Temple of Hatshepsut. The two survivors of the accident, including the balloon’s pilot, had been taken to hospital, he said. Security services cordoned off the scene of the crash in Luxor’s dense sugar cane fields, as police and residents inspected the charred remains of the balloon. Luxor Governor Ezzat Saad imposed an immediate ban on all hot air balloon flights in the province as Prime Minister Hesham Qandeel ordered an investigation into the accident. In Japan, tour company JTB said four Japanese tourists were involved in the accident, and two were confirmed dead. A spokesman at Japan’s foreign ministry said the government was still seeking further information. Two French tourists were confirmed dead, the French foreign ministry said. "I can confirm that sadly two of our citizens died in this accident," French foreign ministry spokesman Philippe Lalliot said in Paris. "We are in contact with their families." A British tour company said that two of its guests had also died in the crash. "We can confirm that two of our guests are in local hospitals, but tragically two of our guests have died in the hot air balloon incident in Luxor, Egypt this morning," the company said in a statement. The British Foreign Office would not confirm the death toll, saying only that "we believe a small number of British nationals are involved in an incident in Luxor this morning", and that consular staff were offering assistance. In 2009, 13 foreign tourists were injured when their hot air balloon hit a phone mast and crashed at Luxor. Sources at the time said the balloon was overcrowded. http://www.youtube.com/watch?v=mqsP374vdY8 

The big picture (By Raymond Zhou) Films attain universal appeal through many means, and one of them is a plot with multinational elements. It could be a cheap shot, but when it works, it transcends national boundaries just like the emotions and aspirations it embodies. There are two general directions for either art or entertainment: One is to go for the specific, and the other for the broad-spectrum. There are movies that are so personal that they resonate with only a few viewers who are among its target audience. On the other end of the scale, some movies can be understood and enjoyed by virtually everyone in the world. By no means does this denote quality per se as both have their champions and masters - auteurs like Terrence Malick on one hand and Charlie Chaplin and James Cameron on the other. Manly matters Hollywood produces all kinds of movies, and many reach a global market. But little do we realize that many American films are limited in their appeal to domestic audiences, just like releases in most other countries. But, people outside the US equate Hollywood with pictures of global reach because those are the ones that they are exposed to and that speak to them. China's film industry wants to be the next Hollywood. We want to create screen stories that can sell across the world. But we do not possess the secret formula. We invite Hollywood insiders to our forums and they politely dispense cliches that massage Chinese egos yet rarely shed light on practicalities. Well, you cannot blame them. Sometimes even Hollywood cannot predict if what they have on hand is a hit or a dud. Before Life of Pi opened, I came upon a story in The Los Angeles Times, in which Fox executives displayed a mix of sacrifice for art's sake and a resignation to the worst possible fate to come. It turned out the movie grossed $109.3 million in its domestic box-office, but garnered $461.6 million elsewhere, including $90.8 million in China, turning it into a surprise hit. There are many reasons why it made it big in overseas markets, and I would like to highlight one of them: The story and the way it is told is very international. Yann Martel, the author of the novel from which the movie was adapted, is a Canadian who grew up in a diversity of cultures. Ang Lee, the director, is immersed simultaneously in Chinese and Western backgrounds. The story is mostly Indian, with a nod to the French. (Knowing the French word for "swimming pool" will give you much of the fun for the first 30 minutes.) In other words, this film is not quintessentially American, which may account for its less-than-perfect critical reception in the US. Another movie that got downright hostile feedback on its home turf is Cloud Atlas, directed by the Wachowski siblings and Tom Tykwer, a German. The original is by an English novelist, who set one of the six tales in Asia. The South Korea-related plot is not as location specific as San Francisco because it is set in the future and the use of "yellow face" for the male character drew criticism from Asian Americans. But the movie gives the impression it is not about one country, but about the future of mankind. Like Life of Pi, Cloud Atlas was better embraced in China - mostly because the concept of reincarnation, which is embedded in the structure of the mammoth saga, went down smoothly with the Chinese. Even though most Chinese filmgoers, who tend to be young, may not believe in Buddhism, the idea that a Caucasian man can be reborn as a black woman is not shocking at all. As a matter of fact, the central character in Mo Yan's novel Life and Death Are Wearing Me Out repeatedly finds another life as an animal, not even as a human. For a film, going global can take many roads, and one of them is a global story. Of course, a geographically specific tale, say, set in a remote village where people speak a dialect nobody outside understands and customs are so esoteric as to clash with everything we know as acceptable, may also find wide resonance as basic emotions are universal. Most Chinese movies that have so far gained a global, albeit limited, audience are sold on the strength of specificity and audiences outside China take to them because they are so different and, shall I say, exotic. In an era of growing globalization, stories that involve more than one country are a natural outcome. If Pi's family did not travel outside India but ran into a boat accident on the Ganges, there would be no French chef, Chinese sailor or Mexican fishermen. It would be a purely Indian tale, at least on the surface, with a narrower appeal. Now, global stories on screen are nothing new. Both Hollywood and European cinema actually excel in this. Gladiator, the 2000 Oscar winner, is about ancient Rome, but it stars an Australian actor and everyone in the movie speaks English. The 1974 version of Zorro, which was imported into China and screened to great acclaim, is a French-Italian co-production, starring French heartthrob Alain Delon who speaks English in the version I saw. (It could have been dubbed into multiple languages, as was the norm with European co-productions of that time.) Unbeknownst to us, the story was set in California before it was part of the US. So, if you're a purist, you would agonize over such racially blind casting and myriad inaccurate details.

 China*:  Feb 28 2013

China’s future success depends on rule of law, says Locke (By SCMP) China’s future success will depend on the fair application of its laws, says United States ambassador to China Gary Locke. “China has a bright future, but this success depends on the implementation of rule of law,” Locke stressed in Beijing on Monday, Huanqiu.com reported. Locke made the remarks while opening the Philip Jessup International Law Moot Court Competition at the Renmin University of China. The student debating competition was a simulation of a dispute between countries before the international court of justice. Locke said that for any modern government to rule effectively, it has to do so in accordance with the rule of law. It also has to continuously update its laws – as society changes. In his speech, Locke discussed the development of laws and legal ideas in the United States. But he noted that China had a much longer history of this than America. Citing an old Chinese proverb: “A prince who commits a crime will endure the same penalty as a plebeian,” Locke credited China for introducing the idea of “equality before the law” more than 2,000 years ago. He also acknowledged China’s recent progress in modernising its legal system and training its lawyers. “Thirty years ago, China had six law schools and about 2,000 lawyers. Today, China has over 600 law schools and more than 230,000 law practitioners,” Locke noted. Other speakers opening the competition were German ambassador Michael Schaefer and his Canadian counterpart Guy Saint-Jacques. Teams from 39 schools in China participated in the competition. The winning teams will take part in an international competition in Washington in the end of March.

Classic concoction (By Shi Yingying) Kathleen's Waitan has a rooftop bar, which offers diners an excellent view of Shanghai's famous Bund. The owner of Kathleen's Waitan wants her new restaurant to be known for cocktails from the prohibition era during the 1920s and 30s. Shi Yingying takes a sip. Think you can stump the bartender from Kathleen's Waitan (meaning Bund in Chinese) by ordering a drink that not many had heard of? Go ahead and try. The restaurant and bar is trying to make a name by serving cocktails that have not been popular since the 1920s - the ones that Americans sneaked to make in their backyards during the prohibition era. When asked why she chose the concept of cocktails rather than wine, Kathleen Lau, the restaurant's owner, says she loves the whole culture of classic mixed drinks. "When I was planning this restaurant and I looked at all the restaurants in Shanghai, each one talked about their wine collections, and I thought, you know what? "In Shanghai, private collectors have better selections than restaurants. What am I doing trying to compete with them?" And there's no skill to picking wines, the only thing about wine is you pick the country, the grape and the year, you read the magazine and somebody tells you this is great wine, she says. Once you step into Kathleen's Waitan, a dark wooden bar counter immediately grabs your attention. In Lau's words, "It's a stage and our bartender isn't hiding. She is inviting you to watch her performance with every careful motion." The stage has its own audience with a big square table, which could easily sit 12 people. Christoffer Backman, the restaurant's beverage operation manager, refers to it as the "communal table" because it offers the space where people can interact more with bartenders. "I want to launch a revolution, where customers not only sit back and watch our mixologists perform, but also join us and learn how to make cocktails, like Americans during the 20s and 30s," Lau says. According to her, Americans could only make their own drinks at home, as alcohol was considered illegal during the prohibition era. "And it tasted awful, people had to figure out how to make it taste better - they added juices, they added fruit, they added bitters - and they created a piece of art and legacy," says Lau. Kathleen's Waitan's menu features four cocktails they label as "prohibition", four from "pre-prohibition", few "post-war" cocktails and some original signature drinks - variations on the classics invented by Giancarlo Mancino, world renowned Italian bartender who is also the bar consultant. Dark 'n' Stormy, for example, has a special ginger beer flavor. Fresh ginger and lime and a hands-on style makes it glamorous, sought after and the pinnacle of social drinking, as well as a spicy ginger accent for Shanghai's cold winter. The drink gained popularity among the maritime community and was brought home by sailors who frequented Bermuda. Some may think cocktails are too feminine, such as the breakfast martini, made for those who wished to have something sweet in the morning. But cocktails like the Negroni were originally concocted for men. As Backman' puts it, "that's the one putting hair on your chest". If those old-fashioned cocktails can't satisfy your modern stomach, you can head to the rooftop bar, which gives a bird's eye view of the Bund. Wait a second, is there a private dock? Lau smiles and nods. "If you're the boat owner and you can take care of your own permit for sailing it on the (Huangpu) river, we'll take care of your permit for mooring on the dock," says Lau, adding that it might be the city's first restaurant with access to a private dock.

Hong Kong*:  Feb 27 2013

Running clinics in Shenzhen difficult for Hong Kong doctors (By Ernest Kao) Private clinics charge about 500 yuan for a single consultation in Shenzhen, about three to five times more than hospital outpatient departments. Hong Kong general practitioners operating clinics across the border have been have been facing many difficult challenges despite a huge market for quality medical services in China.. Complex bureaucracy, arcane regulations and operating costs even higher than Hong Kong's have been weighing heavily on private medical practices in Shenzhen - like the one belonging to Wu Wei. The Hong Kong doctor set up his clinic there three years ago. But Shenzhen’s Health, Population and Family Planning Commission has suspended Wu’s practice for “poor business management” and ordered the clinic to "rectify its problems by March 31", the Southern Metropolis Daily reported on Tuesday. Wu’s practice provided a range of services including traditional Chinese medicine, gynaecology, dentistry - even cosmetic surgery. Wu was contacted by reporters at the Daily, but staff at his clinic said the doctor had been away since the beginning of the Spring Festival. They did not know where he was. Wu opened his Luohu clinic in 2010 and was one of the first Hong Kong GPs to capitalise on new Closer Economic Partnership Arrangement (Cepa) rules. These allow medical service providers from Hong Kong to tap the mainland market and enjoy "national treatment” in setting up wholly-owned or joint medical institutions. The aim was to develop a market in Guangdong for quality Hong Kong-based medical services for China's rich. Hong Kong-based Dr Wong Chi-ho told the South China Morning Post that although there was still a large market for Western and Chinese medical services on the mainland, operating and start-up costs were still too high. “Moving up to the mainland will still be the trend, but doctors must be prepared to spend a lot of money for new equipment and meeting the regulations of local authorities,” he said. Wong says he is one of the few Hong Kong GPs left in Shenzhen and alternates from his Shenzhen and Tuen Mun clinic throughout the week. He was the first Hong Kong doctor to obtain a licence to practice western medicine in China and opened up his clinic last May. “Some of the current medical practice regulations for hospitals may not be suitable for private clinics,” he added. Private clinics charge about 500 yuan (HK$620) for a single consultation in Shenzhen, about three to five times more than hospital outpatient departments.

Top court rejects abode bid by Hong Kong-born girl (By Austin Chiu) The Court of Final Appeal on Tuesday refused an application by an eight-year-old girl born locally to mainlanders to join the right of abode challenge mounted by foreign domestic helpers. Liang Wing-ki and her mother, Li Yinxian, worried that her right of abode would be affected after the government said it would request the top court to ask Beijing to clarify an interpretation relating to the right of abode of different categories of people including Chinese nationals born in Hong Kong. She filed documents with the top court last week, applying to intervene in the appeal. Making the application to join the case, Philip Dykes SC, for Liang, said: “The right and obligation of this type of persons are engaged but their voices will not be heard in court.” But Chief Justice Geoffrey Ma Tao-li said: “We do not accede to your application. We feel that the points you seem to argue are adequately covered and will be adequately covered.” Ma said the lawyers for the government and the domestic helpers filed “hundreds and hundreds of pages” of documents to the court that cover the arguments advanced by the girl’s lawyer. It also became clear for the first time what, exactly, the government wanted the top court to refer to Beijing for an interpretation. This came after Ma said he was not clear about the content of the request and asked government lawyers to clarify. David Pannick QC, for the government, said it was Article 158 of the Basic Law that the government wanted the court to ask Beijing for an interpretation on, and not Article 24, which deals with the permanent residence. Article 158 stipulates the duty and situation where the top court must seek an interpretation of the Basic Law from Beijing. Pannick said the government would ask the court to refer to Beijing a question of whether a statement included in a 1999 Beijing interpretation, which did not constitute the main issue of that interpretation, was part of the interpretation and therefore binding on the court. In that interpretation, the Standing Committee of the National People’s Congress said that the legislative intent of the Basic Law article relating to permanent residency was “reflected” in the opinions made by the Preparatory Committee of the Hong Kong Special Administrative Region in 1996. That committee gave the opinion that children born in Hong Kong to Chinese nationals would have right of abode only if at the time of their birth, at least one of their parents was living lawfully in Hong Kong. It also said foreigners allowed to stay in Hong Kong under a government policy would not be regarded as “ordinarily residing” in Hong Kong – one of the requirements that non-Chinese must satisfy to acquire permanent residency. In a 2001 case, the top court ruled that the statement in question was not part of the interpretation, a ruling that was then agreed to by the government. As a result, the top court ruled that all children born in Hong Kong to Chinese nationals have the right of abode, regardless of their parents' status. Pannick said the government would submit a draft question of the interpretation to court on Wednesday.

PayPal's mobile commerce push benefits Hong Kong merchants (By Bien Perez) Online traders expect more business as payment service increases coverage - Online merchants may be poised to increase shipments into new markets on the back of PayPal's expanding coverage for mobile e-commerce payments service. PayPal, a unit of internet shopping and auction giant eBay, said the Philippines, Argentina, South Korea, Sweden and Russia were the fastest-growing markets for Hong Kong's online vendors. Kerry Wong, the managing director of PayPal's operations in Hong Kong, Korea and Taiwan, said "more people are choosing to do their transactions, or start their search and price comparison, on their mobile devices". The top categories in cross-border trade last year for Hong Kong online merchants included electronics and telecommunications; toys and hobbies; clothing, accessories and shoes; and computers, accessories and services. "Cross-border trade accounted for the majority of PayPal's total payment volume in the past 12 months," Wong said. She said Hong Kong online merchants on PayPal grew their business more than the industry average. While the city's exports rose 2 per cent last year, online traders using PayPal boosted sales to new markets, including the Philippines, which grew 55 per cent. PayPal, the world's leading online payment firm with about 123 million active accounts, estimated it would process US$20 billion in mobile payments worldwide this year, up from US$14 billion last year. "We have been investing heavily in mobile commerce and PayPal enables us to offer a 24/7 multi-channel shopping experience to buyers around the world," said Alan Lim, the chief executive of E-Services Group. "Using PayPal, we can confidently provide customers with a reliable and secure online checkout experience."

Hong Kong keeps top spot as most globalize economy (By Charlotte So) High internet penetration helped Hong Kong remain as the most globalised economy for the third consecutive year. Widespread accessibility to broadband connections and a high usage of personal computers had made international trade more viable in the city, said Agnes Chan, regional managing partner Hong Kong and Macau at consultancy Ernst & Young. In its globalisation index, E&Y polled 730 senior business executives worldwide last year to gauge the degree of globalization relative to the gross domestic product of the economy. Hong Kong led with a score of 7.81 points, followed by Singapore (6.31) and Ireland (5.63). Hong Kong led in three of the five categories: exchange of technology and ideas, capital flow, and cultural exchange. The survey found that computer penetration was 100 per cent in Hong Kong's big companies and 90 per cent among medium-sized enterprises. "The clear lead that Hong Kong posted in the three categories could secure its top place till 2015," Chan said. Hong Kong ranked second in 2009. But expensive housing, poor air quality and inadequate space in international schools had hindered foreign labor migrating to Hong Kong, said Chan. Foreigner workers must now pay even more for a home in the city after the government began levying a 15 per cent buyer's stamp duty for the purchase of residential property by non-permanent residents. In terms of trade, Singapore led Hong Kong due to its robust sea trade. Hong Kong fell to third place in container terminal throughput, after Shanghai and Singapore, as sea cargo diverted to terminals in Shenzhen.

Argo wins best picture Oscar, Ang Lee takes best director (Reuters in Los Angeles) Ben Affleck's Iran hostage drama Argo wins best film Oscar - Ang Lee poses with his Oscar for best director. Iran hostage thriller Argo won the best picture Oscar on Sunday, the highest honour in the movie industry, while Ang Lee was a surprise choice for best director for Life of Pi. “There are eight great films that have as much right to be up here as we do,” said Argo producer and director Ben Affleck. The not-so-unexpected win for Argo was announced in one of the biggest surprises in the history of Oscar telecasts as first lady Michelle Obama made an unprecedented appearance from the White House to declare the film the top winner of the evening. It was the first time since Driving Miss Daisy in 1990 that a film won the top prize at the Oscars without its director also being nominated. Daniel Day-Lewis made Oscar history and won a long standing ovation on becoming the first man to win three best actor Oscars. He collected the golden statuette for his intense performance as former US president Abraham Lincoln in Lincoln. “I really don’t know how any of this happened,” said Day-Lewis, who has dual Anglo-Irish citizenship. Jennifer Lawrence was named best actress for playing a feisty young widow in comedy Silver Linings Playbook, tripping up on her dress while approaching the stage. She beat Jessica Chastain and France’s Emmanuelle Riva, 86, in one of the closest Oscar contests this year. Taiwanese director Lee beat front-runner Steven Spielberg in the directing race, in a controversial year that saw four of Hollywood’s leading names omitted from the Academy Award directing shortlist. Spielberg’s account of Lincoln’s battle to abolish slavery and end the US civil war went into Sunday’s three-hour plus ceremony with a leading 12 nominations. But it ended up winning just two. Argo also won best film editing and best adapted screenplay for its gripping and often comedic tale of the CIA mission to rescue six US diplomats from Tehran shortly after the Islamic Revolution. In other contests, Anne Hathaway won her first Oscar, and harrowing Austrian film Amour was voted best foreign language film. Hathaway, who starved herself and chopped off her long brown locks to play tragic heroine Fantine in Les Miserables, was considered the overwhelming favourite for supporting role in the screen version of the popular stage musical. “It came true,” she said, looking at the golden statuette. “Here’s hoping that some day in the not too distant future the misfortunes of Fantine will only be found in stories and not in real life,” Hathaway added. nne Hathaway, best supporting actress nominee, arrives at the Oscars. Photo: Reuters Amour, the heart-wrenching tale of an elderly couple coping with the wife’s debilitating stroke, gave Austria the best foreign language film after it had dominated awards shows in Europe and the United States for months. Another Austrian, Christoph Waltz, was the surprise winner of the closest contest going into the ceremony. He took best supporting actor honours for his turn as an eccentric dentist turned bounty hunter in Quentin Tarantino’s slavery revenge fantasy Django Unchained. It was Waltz’s second Oscar, after winning for the Tarantino movie Inglourious Basterds in 2010. A jubilant Tarantino also won the Oscar for best original screenplay, and credited the actors who brought the characters in all his films to life. “And boy this time, did I do it!” he said. Brave, the Pixar movie about a feisty Scottish princess, took home the golden statuette for best animated feature. The Oscar winners were chosen in secret ballots by some 5,800 members of the Academy of Motion Picture Arts and Sciences.

Dollar dilemma as greenback value falls (By By Chen Jia) A billboard advertising foreign currencies in Shanghai. US Treasury bonds accounted for 36.4 percent of China's $3.31 trillion foreign exchange reserves on Dec 31, according to the People's Bank of China. The State Administration of Foreign Exchange announced last month that a new office called SAFE Co-Financing had been launched to handle trusted loans based on the country's foreign exchange reserves. Economists ponder how to ensure safe returns from foreign reserves - A burden or a benefit? That is the question economists were asking over the Spring Festival about China's current high level of US government debt. The Treasury International Capital report released by the US Department of the Treasury on Feb 15, a week after Chinese New Year's Eve, showed that China remains the largest foreign creditor of the world's largest economy. Despite the continuous depreciation of the US dollar against the yuan, China bought $19.7 billion of US Treasury bonds in December. In November it bought $200 million. Its total holdings of United State's government debt are now $1.2 trillion, according to the US Treasury Department. The People's Bank of China, the nation's central bank, said $1 was equal to 6.28 yuan on Feb 18. The exchange rate against the dollar was 6.29 yuan at the end of last year. In other words, fewer yuan are needed to buy a dollar. In 2012, the yuan rose 0.25 percent against the dollar. US Treasury bonds accounted for 36.4 percent of China's $3.31 trillion foreign exchange reserves on Dec 31, $130 billion up from a year earlier, according to data from the central bank on Jan 10. China's investment amount in US government debt was $1.15 trillion at the end of 2011, 36.2 percent of the total foreign exchange reserves of $3.18 trillion, the PBOC reported. Together with other dollar-denominated investment products, such as certain corporate bonds, the proportion of US dollar debt is almost 70 percent of China's entire foreign exchange reserves. A heated discussion developed among senior economists and scholars on Sina Weibo, a Twitter-like Chinese Internet platform, while most Chinese people were busy sharing family photos and feasting during the year's most important festival. How to make better use of the world's largest biggest foreign exchange reserves became the core issue. Is it still best to continue to expand holdings in US government bonds? "The huge amount of reserves in US dollars could be transferred into residents' pockets or used to launch special investment funds to help Chinese enterprises expand overseas," wrote Qiu Xiaohua, the chief economist of Minsheng Securities Co, in a posting on Sina Weibo on Feb 14. "A third approach would be to use a part of it as an international development fund to support economic growth in undeveloped regions, such as some African countries," Qiu added. Xi Junyang, deputy director of the Shanghai University of Finance and Economics Center for Financial Research, disagreed with distributing the reserves to individual residents or spending it in China, which would lead to serious inflation. "The foreign exchange reserves come from overseas. They can only be used for external payments," Xi said. "The most important thing is to improve the international balance of payment, rather than finding the ideal way to use the foreign exchange reserves," said Chen Yuyu, an associate professor with the Guanghua School of Management at Peking University. The central bank may need to set up new institutions for foreign investments based on the reserves, he added. The central bank could launch a special account overseas in which it could invest the foreign exchange reserves. Any returns could be added to China's social security fund, said Guan Qingyou, deputy head of the Research Institute at Minsheng Securities. An official from the State Administration of Foreign Exchange announced on Jan 14 that a new office called SAFE Co-Financing had been launched to handle trusted loans based on the country's foreign exchange reserves. The main duty of the office is to seek out new channels in which to invest the reserved capital. "It will be an important element in innovating the use of the foreign exchange reserves to avoid their value falling," a SAFE statement said. The "innovation" will be guided by market-oriented rules and be controlled under a strict risk-management system, the official pledged. Xinhua News Agency reported the new office had already started pilot work before the announcement. SAFE provided the capital and entrusted the China Development Bank to lend money to Chinese enterprises aiming to expand their business overseas. "China Development Bank can decide the loan's interest rate, length of maturity and total amount, while SAFE will take all the risk," the official said. The investment return of the entrusted capital from foreign exchange reserves is expected to be higher than the return on US Treasury bonds, especially under the US quantitative easing policies in which the US effectively prints more money, thereby reducing its value, analysts said. However, it would come with higher risks. Previous failures of Chinese enterprises' overseas investment projects are a warning to the central bank to ensure it maintains the safety of the foreign exchange reserves as its foremost task. "Many disputes remain about how to use the reserves. However, their most important function is to stabilize the yuan, strengthen external payment capacity and ensure the country's anti-risk capability," said Xu Hongcai, a senior economist with the China Center for International Economic Exchanges, a government think tank. "Safety is always the priority," Xu said. However, it may now be a good time for China to reduce its holdings of US Treasuries because the devaluation of the dollar has further eroded the value of the foreign exchange reserves, said Xu. "The increasing money supply in the US is leading to depreciation of the dollar and helping to dilute its debt as the US tries to solve its fiscal problems. As a result foreign creditors will suffer huge losses." The yuan appreciated by 0.25 percent against the US dollar during the past year to 6.2855 at the close on Dec 31. It hit a 19-year high of 6.2216 on Jan 9, according to the China Foreign Exchange Trade System. The relatively low interest rates globally currently provide opportunities to shrink China's investment in US government bonds. "A modest reduction will not hit the US bond market," Xu said. He suggested China's central bank should readjust the asset structure of the foreign exchange reserves and encourage commercial banks to apply for foreign exchange loans to support the direct investment of businesses in European countries and the US, or import high-tech products. Total foreign exchange reserves expanded by about $130 billion last year over the figure for 2011. It was the slowest annual growth since 2004, the PBOC said. In 2007, the foreign exchange reserves rose by $460 billion, its fastest ever growth. Lian Ping, chief economist with the Bank of Communications, said a decrease in the international payment surplus and a more freely fluctuating exchange rate for the currency would have resulted in a slower increase in China's foreign exchange reserves. "The current account surplus was less than 3 percent of the gross domestic product in 2011. It was 10 percent in 2007," said Lian. A report from the Bank of Communications predicted that in 2013 the amount of China's foreign exchange reserves may remain between $3.3 trillion and $3.4 trillion. "The fast growth trend may have ended, replaced by a modest and stable increase, which can help to reduce the pressure for currency appreciation and stabilize the exchange rate," the report said. Investment in US treasury bonds was "unavoidable", said Qu Hongbin, the chief China economist with Hong Kong-based bank HSBC. "Compared with investment products that are denominated under other main currencies, the dollar-dominated assets still generate higher and more stable returns," Qu said. "I am confident with SAFE's pilot work to seek better ways to diversify investment of the reserves," he added. The top manager of China's sovereign wealth fund, Chairman and Chief Executive Officer of China Investment Corp Lou Jiwei, said US government bonds are still safe assets right now, but the continued low interest rates in the US had decreased expected returns on the investment. China will continue to buy US Treasury bonds, although the future gains from the investment don't look promising, according to Lou, who is a former vice-minister of finance. According to the US Treasury Department, by the end of December, foreign creditors held $5.56 trillion in US debt, an increase from $5.54 trillion in November. It was the 12th consecutive monthly growth. Japan invested an additional $2.5 billion in US government bonds in the last month of 2012, $1.6 billion more than it invested in November. The December injection raised the total amount of US debt for Japan to $1.12 trillion, maintaining its position as the second largest foreign net US creditor, the US report said. It seems overseas sovereign investors have not yet been scared by the warning signals of US fiscal problems. They continue to show confidence in US future economic development through adopting more long-term credit. The rush by China and Japan in adding to their US debt came just before an agreement achieved by the Democrats and Republicans in January aimed at sharply cutting the budget deficit, known as the "fiscal cliff". The two US parties agreed to cut about $85 billion of spending starting on March 1, which is expected to hit various US governmental departments this year. The US Congressional Budget Office said on Feb 5 the US budget deficit will drop below $1 trillion this year. The office predicted that the fiscal tightening may slow economic growth to 1.4 percent by the end of this year, causing the unemployment rate to edge higher to 8 percent by then, compared with the current 7.9 percent. As deficit reduction is seen as the prescription to curb crisis spreading from fiscal dilemma, it may push the US government to make more efforts to sell US-made goods abroad and expand its domestic manufacturing industries, as well as create private sector jobs for economic recovery, other than tolerating the unconstrained growth of debt, analysts said. 

85th Academy Awards in Hollywood, California February 24, 2013. 

 China*:  Feb 27 2013

Lunar New Year won't be US holiday - San Francisco is the only US city that recognizes the Lunar New Year for all public schools. (By By Caroline Berg in New York) China's 1.3 billion people celebrated the two-week long Lunar New Year holiday this month, and now 39,780 people want it to be a national holiday in the United States. "The Asian population represents a large percentage of the US population and is growing ever more," the petition sent to the White House with close to 40,000 signatures says. "Please make this important holiday widely recognized and make it an official day off for students too." The petitioners got a response from the White House office that handles such petitions - known as the Office of Digital Strategy - but they are not going to get a holiday. "Even though it would take an act of Congress to make the Lunar New Year a federal holiday, we're happy to speak out to ensure that this important celebration is widely recognized and treated with respect," read the response. The office compared the Lunar New Year to Rosh Hashanah, Easter or Eid al-Adha, the Islamic holiday of the Feast of the Sacrifice. "It's an occasion that makes us richer as a culture and stronger as a people - even without being a federal holiday," the office wrote. The White House established the "We the People" online-petitioning system on Sept 22, 2011, and since then has received almost 9.2 million signatures on more than 141,000 petitions, according to the office. As of Jan 16, to get a response from the White House petitions must have 100,000 signatures gathered within 30 days. The proposed Lunar holiday petition was created on Jan 15 and needed to meet the previous requirement of 25,000 signatures. The US recognizes 11 national holidays: New Year's Day, the birthday of Martin Luther King, Jr, Washington's birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day and Inauguration Day. Congress has declared national holidays after a significant number of states created the day as a state holiday, or in some cases, Congress initiated the holiday, according to Jacob R. Straus, an analyst on Congress for the Congressional Research Service. In general, holidays were designed to emphasize a particular aspect of American heritage or to celebrate an event in American history, according to Straus. "I don't think the Lunar New Year necessarily needs to be a national holiday," said Lily Woo, principal of PS 130 in Manhattan's Chinatown and Little Italy neighborhood. But she said it should be a holiday for New York City public schools, including PS 130, which reported an absence rate of approximately 80 percent during the Lunar New Year last year. Students who celebrate the holiday currently receive an "excused" absence and it's put on their attendance record. "Students have to make a decision about whether or not to take the day off to spend the holiday with their family and perhaps miss important exams or projects," Woo said. "It's not fair to these students," she said about those who feel obliged to go to school and skip their celebrations. "It's like having to take exams on Christmas." The New York State Legislature is considering a bill introduced in January 2012 to designate the Asian Lunar New Year as a holiday for all city school districts with a population of at least 1 million and with an Asian population of 7.5 percent or more. Most of the Asian population in the US resides in the western part of the country, according to the 2010 US Census. San Francisco is the only US city that recognizes the Lunar New Year for all public schools. The 2010 Census reported 14.7 million Asians live in the US and make up 4.8 percent of the total population, and an additional 2.6 million people, or 0.9 percent of the population, are Asian in combination with one or more other races.

Xi vows to push for 'peaceful reunification' with Taiwan (By Lawrence Chung in Taipei) Party leader marks high-level Beijing meeting by assuring honorary Kuomintang chairman of his desire to develop relations with Taiwan - Communist Party leader Xi Jinping told the visiting honorary chairman of Taiwan's Kuomintang, Lien Chan, yesterday that his team would continue to build cross-strait ties and strive for "peaceful reunification" with the island. "The new Communist Party leadership will continue to push forward the peaceful development of relations between the two sides and advance the cause of peaceful reunification," Xinhua quoted Xi as saying at the meeting in the Great Hall of the People in Beijing. The meeting marked the highest-level cross-strait meeting since the party's leadership change in November, and was closely watched in Taiwan and abroad because Xi's remarks were expected to shed some light on future policy towards Taiwan. The new Communist Party leadership will continue to push forward the peaceful development of relations between the two sides and advance the cause of peaceful reunification - It also roughly indicated the line-up of the mainland's new Taiwan policy team, with the presence of Yu Zhengsheng , expected to be appointed chairman of the Chinese People's Political Consultative Conference next month, Politburo member Wang Huning and Li Zhanshu , chief of the party's General Office. Outgoing State Councillor Dai Bingguo and Taiwan Affairs Office director Wang Yi were also present. Xi, who will succeed Hu Jintao as president next month, told Lien that his team would "pragmatically forge ahead" with achievements in relations that would enrich residents on both sides of the Taiwan Strait. During the meeting, Xi, who spent 17 years working in Fujian province , across the strait from Taiwan, said he had been "continuously paying close attention to the cross-strait situation". He asked Lien to convey greetings to Taiwanese President Ma Ying-jeou, whose policy of engaging Beijing since taking office in 2008 has sharply reduced hostility between Taiwan and the mainland. Analysts said Monday's talks indicated that the party's new leadership would maintain the momentum between Beijing and Taiwan. More importantly, given Xi's considerable work experience in handling cross-strait affairs, he might venture into "deeper water" - political talks. Professor Wang Kung-yi, a political expert fromTamkang University in Taipei, said the talks provided a glimpse of "the baseline of Xi's cross-strait policy". "But we must also note what Xi said about 'new achievements' in cross-strait ties, as this shows the new mainland leadership will not just be satisfied with what Hu has achieved," Wang said. He said that before pressing for political dialogue, Xi was expected to push for "more social integration", putting more emphasis on reaching out to people in southern Taiwan - a pro-independence stronghold. Lien told a news conference later that political contacts "should be given a proper level of attention" to come to grips with the thorny issue of "one-China".

China central bank takes lead in economic reform push (Reuters in Beijing) China’s readiness to bend retirement rules to keep arch-reformer Zhou Xiaochuan at the helm of the central bank signals clearly that new Communist Party chiefs want to speed economic reform in the country’s most critical development phase in three decades. Central bank insiders say the People’s Bank of China (PBOC) is the country’s most potent force for reform in the face of powerful vested interests, echoing sources with leadership ties who last week said Zhou would keep his job despite reaching the mandatory retirement age of 65. Keeping Zhou ensures that the PBOC will remain a trusted instrument through which China’s leaders can enact financial reforms designed to boost free markets and private enterprise, rebalance the economy, reinvigorate growth and ultimately heal a socially divisive rift between the country’s rich and poor. “Governor Zhou has been rather bold in spearheading market reforms and sometimes does not care about the possible repercussions,” said a PBOC official who requested anonymity due to the sensitivity of the matter. “They really need someone who can sustain the reform momentum.” The reform agenda espoused by party leaders Xi Jinping and Li Keqiang is not always popular with the local government officials, state-backed business and cosseted national lenders who would find their power bases fundamentally weakened. Liberalising interest rates, for example, would hit fat lending margins at state banks. Expanding capital markets would end subsidised access to funds for state-owned enterprises and cut private sector finance costs while creating investment options beyond real estate – cooling the property speculation that lays at the heart of local government corruption and debt risks. The PBOC has a track record of getting the job done in the face of entrenched opposition. It has modernised domestic bond and money markets, laid the groundwork for short-term market instruments to manage bank liquidity and credit, while simultaneously creating mechanisms that allow the PBOC to resist pressure from growth-obsessed local officials to constantly tweak interest rates. Indeed, the last 12 months have produced the most important package of interest rate, currency and capital market reforms since the landmark July 2005 break of the yuan’s peg to the dollar – and all in a year when political change at the top of the party was supposed to stall change elsewhere. That’s despite a clear clash with the China Banking Regulatory Commission on the liberalisation of interest rates. “Big banks were definitely against interest rate reform, but they could not openly oppose it,” Zhao Qingming, senior economist at China Construction Bank, one of the so-called “Big Four” state banks. When the PBOC proposed doubling the yuan’s trading band to 1 per cent last year, it worked hard to soothe fears of the Commerce Ministry that it would not harm the export sector, according to sources familiar with the situation. “We were persuaded that further sharp appreciation was very unlikely,” said a senior researcher with the ministry. Arguably it was Zhou’s 2005 success in engineering a break of the yuan’s dollar peg in the face of staunch opposition from the Commerce Ministry that most clearly states his credentials. Pragmatic reformer - Yu Yongding, a respected economist and leading advocate of major currency reform, recalls the wrangling required to make the decision on a PBOC monetary policy committee stacked with senior officials from a variety of government departments. Yu, an economist at the top government think-tank, Chinese Academy of Social Sciences (CASS), sat on the policy panel from 2004 to 2006, as the PBOC went head-to-head with critics of revaluation who complained that exporters could not withstand any rise in the value of the yuan. “Their views had to reflect the stance of their respective departments,” Yu said, recalling the logjam as pro-export officials railed against the suggestion of some other committee members of a revaluation of as much as 10 per cent. Yu says Zhou’s pragmatic approach defused the row, agreeing to a small initial rise of 2.1 per cent in the yuan’s value against the dollar, while forging a top-level consensus on the incremental annual pace of currency strengthening that has seen it gain around 33 per cent in nominal terms since. Despite the stronger yuan, China has become the world’s single biggest exporting economy while its companies have been forced to make productivity and quality improvements to stay competitive. Xi and Li, due to take over in March as president and premier, respectively, need to engineer an even more widespread move up the value chain to deliver enough growth to support China’s next stage of economic development – and the transfer of about 400 million people into cities from the countryside. That’s no mean feat given the general conclusion that China’s export-oriented, state-driven economic model that delivered three decades of breakneck double-digit expansion, has reached the outer limits of its effectiveness. Growth in the world’s second-biggest economy slowed last year to a 13-year low, albeit at a 7.8 per cent rate that is the envy of other major economies. Many analysts believe China’s growth will be nearer 5 per cent than 10 by the end of this decade without far-reaching economic reform – a worry for a government that has pledged to double household income over the coming decade in a bid to close a wealth gap so wide it threatens social stability. About 13 per cent of China’s 1.3 billion people still live on less than US$1.25 per day according to the United Nations Development Programme and average urban disposable income is just 21,810 yuan (US$3,500) a year. Meanwhile China has 2.7 million dollar millionaires and 251 billionaires, according to the Hurun Report. Stalking horse - Using the PBOC as a catalyst for reforms is a smart move, provided the anticipated domino-effect works as expected and relatively straightforward liberalisation efforts trigger more fundamental evolution in China’s economic structure. The PBOC must make bank borrowing costs more market-driven to improve resource allocation and wean the economy off its reliance on state-led investment, analysts say. But the financial system is dominated by big state-owned banks that channel the bulk of loans to state projects and state-owned enterprises, starving private enterprise of cash. All of which conspires against the creation of additional investment options for Chinese households, lumbered mainly with low-yielding bank deposits that constrain consumption. Optimists say that even if it doesn’t deliver entirely as anticipated, the PBOC is likely to be more effective in the short-term than trying more politically-charged reforms, such as China’s strict system of household registration, or hukou. A further advantage of using the PBOC as the instrument for change is that the most important decisions it disseminates are essentially edicts approved by the State Council – China’s cabinet – or by the Communist Party’s ruling Politburo. Keeping a reform-oriented Zhou in the top PBOC job ensures the leadership is dealing with a like-mind. “If we get someone who is tepid and does everything on an even keel, the reform process could be slowed,” said Xu Hongcai, a former PBOC staffer and now a senior economist at China Centre for International Economic Exchanges (CCIEE), a Beijing-based think-tank. “We must ensure policy continuity while injecting a new air into reforms.”

China manufacturing grows at slowest pace for months (By Kwong Man-ki in Beijing) Output at factories slows sharply this month after reaching a two-year high in January - The mainland's manufacturing activity grew this month at the slowest pace in four months, hitting optimism about a recovery in the world's second-largest economy, a private survey has shown. The HSBC flash purchasing managers' index (PMI) for China retreated from a two-year high of 52.3 in January to 50.4 in February, according to a preliminary survey issued by HSBC and Markit Economics yesterday. The figure also lagged behind the median estimate of 52.2 of 11 analysts surveyed by Bloomberg. Qu Hongbin, chief China economist at HSBC, said the flash PMI was above the threshold of 50, which indicates an expansion, for the fourth consecutive month. "The Chinese economy is still on track for a gradual recovery," Qu said. He added that the underlying strength of the economic recovery remained intact as indicated by expanding employment and credit growth, despite the moderation of February's figure. Mainland banks extended 1.07 trillion yuan (HK$1.32 trillion) in new loans in January, more than double December's figure, the People's Bank of China announced earlier this month. However, the new export orders sub-index fell to 49.8 from January's 53.7, indicating weak export demand. The PMI readings were partly distorted by the timing of the Lunar New Year holiday this month, but some economists said that the figures still hinted at headwinds in the economic recovery. "The readings indicate that the momentum of the mainland's economic recovery in the first quarter remains weak," said Chen Wei, an analyst with China Minzu Securities, adding that the distortion due to the holiday was only part of the reason. Chen said the figures did not mean that the manufacturing activity was turning bearish, but more observations were needed after the Lunar New Year holiday. "I still expect the manufacturing sector to recover, but it will be at a gradual and slow pace," he said. Yang Weixiao, an analyst at Lianxun Securities, said the decline in the HSBC PMI revealed that the mainland's economic recovery was not quite resilient enough. The flash China manufacturing output index also fell to a four-month low of 50.9 from January's 53.1, which indicated that the demand was not sustainable, Yang said. If the output sub-index dropped for a second consecutive month and the new orders also did not pick up, it would be obvious that the mainland's manufacturing sector was unable to help foster economic growth, he said.

Hong Kong*:  Feb 26 2013

Hong Kong to get mega court to pack in the masses (By Patsy Moy and Austin Chiu) New facility in Sham Shui Po will be double the normal size to cater for the most high-profile cases, but its location is criticised as inconvenient - Hong Kong is to get a mega court with space for 100 members of the public and dozens of litigants and lawyers, to be used for high-profile cases that are subject to intense media attention. It will be inside the HK$2.7 billion West Kowloon Law Courts Building, which is under construction at the junction of Tung Chau Street and Tonkin Street West in Sham Shui Po. The site faces the Vegetable Marketing Organisation packaging centre. But Law Society vice-president Stephen Hung Wan-shun said he worried that the building would become a white elephant if higher court judges were unwilling to travel from the prime court sites of Central and Admiralty to Sham Shui Po to hear cases which could take weeks to finish. The construction floor area of the West Kowloon development is about 60,000 square metres. It will have 32 courts - including a magistrates' court, small claims tribunal, coroner's court, obscene articles tribunal and other facilities. They will be located on the middle to upper floors of the development's two towers, according to the Architectural Services Department. Construction began in April last year and it is due to be completed by the end of 2015. Piling work is now under way, the department said. Hung said that the Law Society was told by the government that the mega court would be used for any cases at any court level that were expected to attract dozens of journalists or more, and that would require teams of lawyers in attendance. It is expected to be at least double the size of a standard court. "The Law Society supports the building of a mega court as we don't want to see journalists and members of the public unable to get seats in the public gallery during an open court hearing," Hung said. He added that having people standing in doorways to hear trials - instead of being seated in the public gallery - would disturb lawyers and judges. But he was concerned that there could be a reluctance on the part of higher court judges to travel to the location in Sham Shui Po to preside over cases that could take weeks to finish. Hung said he hoped that the mega court would not be underused, or worse, become a white elephant, if judges or senior lawyers refused to use it. In response, the judiciary's administration department said in a statement that it aimed to put the court building on a site that was "strategically located at a convenient and accessible location … and that is of appropriate size to fully accommodate the judiciary's space requirement in a stand-alone law court building, and that is located in spacious and pleasant surroundings with sufficient open space." It said: "The site [in Sham Shui Po] is easily accessible via existing means of public transport within 10 minutes' walking distance from either the Nam Cheong or Cheung Sha Wan MTR station." Over the years there have been a number of high-profile cases in Hong Kong which have resulted in jam-packed courts with more than 100 journalists and members of the public all eager to hear the trials. The most recent such case was the inquest into the 2010 Manila hostage tragedy, which took place a year after seven Hong Kong tourists and their guide were shot and killed by sacked policeman Roland Mendoza in a bus siege in Manila. The hearing was moved from the Coroner's Court in the Eastern Court building to the larger High Court in Admiralty. The case drew dozens of reporters, law students and the public, and seats in the defendants' dock had to be made available for journalists. Other hearings which have drawn more than 100 journalists were the bribery case against former TVB general manager Stephen Chan Chi-wan and his former assistant in the District Court in 2011, and the long legal wrangle between the Chinachem Charitable Foundation and fung shui master Tony Chan Chung-chuen over Nina Wang Kung Yu-sum's billion-dollar estate.

Nervous investors in Apex Horizon hotel suites seek police help (By Stuart Lau) Apex Horizon buyers want developer to clear their doubts and defer contract deadline - Four buyers who "trusted Li Ka-shing" and paid deposits for suites in Cheung Kong's controversial hotel project appear to have had second thoughts and turned to the police for help. Between them they bought three units at the Apex Horizon in Kwai Chung in a provisional agreement reached last Wednesday, but it emerged yesterday that they were given what a lawmaker called a "surprisingly short" six days to conclude formal agreements - by tomorrow. With the government examining sales of the 360 units - the result of a legal loophole allowing hotels to be sold in parts - the buyers demanded a postponement in the contract deadline and asked the developer to clear their doubts as to their "equivocal" ownership rights. The project is controversial because it is the first time in Hong Kong that a developer has sold hotel suites, classified as commercial property, so buyers do not have to pay stamp duty. A middle-aged woman investor said: "I trusted Li Ka-shing that this would be OK. But now, the lawyers' advice differed from what Cheung Kong has said. "I was told I could live there before signing the provisional agreement," she said outside Kwai Chung police station. "But the lawyers have told us afterwards that we couldn't decide [the lessee]." They were told the suites could be rented out for "short-term leases". "So how long can I lease out? A year?" she asked. The complainants also said that the lawyers they usually used refused to handle the Apex Horizon transaction "for fear of risks", and they finally approached one of three firms suggested by Cheung Kong. The woman investor added: "We are so uncertain about what we'll finally get. Cheung Kong must give us a full account of our entitlements before asking us to sign the final agreement." She and another woman paid HK$200,000 as deposit for a suite costing almost HK$3 million last Wednesday - two days before the government unveiled new cooling measures. Another unit involved was about 900 sq ft and cost more than HK$4 million. "This is such a new project," one of the women said. "I'm not sure if I've been cheated." She also blamed Chief Executive Leung Chun-ying for inaction. "All he did was merely say they were risky. But he didn't press [Cheung Kong] to do anything to postpone the transactions," she said. Civic Party lawmaker and barrister Ronny Tong Ka-wah said six days between provisional and formal agreements was "much shorter than the usual 14 days". "The time is needed to check the deeds and seek lawyers' advice," he said. "But a buyer can always disagree with the condition and ask the vendor to amend it." In response to the complaints, Cheung Kong asked the buyers to "contact it directly". It said: "The process of contract conclusion has been very smooth."

Hong Kong marathon can be among world's best, says bank chief (By Alvin Sallay) After record 65,000 runners take to the city's streets for spectacular event, bank chief urges government to open roads longer next year - Hong Kong's "marathon with a heart" can become one of the best in the world, Standard Chartered Bank chief executive Benjamin Hung Pi-cheng said yesterday, as a record 65,043 runners hit the streets. "We can be among the biggest and best in the world, but that will depend to a large extent on continued support from the government," Hung said, adding his voice to calls from organisers for roads to be kept open for longer. The Hong Kong Amateur Athletic Association said the annual showpiece had reached bursting point with room only for 2,000 more runners this year. The total entry was a record 72,000, with nearly 7,000 failing to show. Last year, 62,300 started. "I think more time is essential for the continued success of this race. This is a reflection of the demand we are facing, forcing us to put a cap of 72,000 entries this year," Hung said. "This year the quota for the 10-kilometre event [38,000] was filled in seven hours, while the quota for the marathon and half-marathon was filled in one day. More and more people want to take part, but we need more time and I hope the government will help us next year." Organisers said two people remained in serious condition out of 37 taken to hospital. On the course, 647 participants received medical help, compared to 951 last year. Last year a 26-year-old man died in hospital after completing the half marathon - the first fatality since 2006. In total, 34,508 runners started the 10km, 18,102 the half marathon and 12,433 in the marathon. Hung said the event was a rallying point for charity, too, with over HK$5 million raised last year. "This is a marathon with a heart, simply because it raises money for so many good causes. I hope we can better the sum we raised last year and this aspect is what makes it so special," he said. Among the most celebrated participants was 101-year-old Indian Fauja Singh. The London-based Sikh, who yesterday ran for the last time in Hong Kong in the 10km event, was said to have helped raise over HK$160,000. Singh ran the 10km in one hour 25 minutes, five minutes faster than on his debut last year. Kenyan Julius Maisei won the men's marathon at his third attempt, while Ethiopian Misiker Demissie retained her title.

Disneyland's California first theme park started in 1955 had a rocky start like Hong Kong branch (By John Carney) Hong Kong Disneyland had as rough a start as the original theme park, but after billions in investment it's finally made a profit - On July 17, 1955, when moviemaker Walt Disney turned more than 64 hectares of farmland into a theme park based on his animated characters, many people thought it was a fantasy that wouldn't look out of place in one of his films. Nearly 58 years later, the southern California cultural landmark in Anaheim has spawned offspring in Florida, Paris, Tokyo and Hong Kong, and is due to open in Shanghai in 2015. Disney came up with the idea after taking his daughters to amusement parks. Construction began in 1954 and the first Disneyland was unveiled the next year in a live telecast on the ABC Television Network. But it couldn't have got off to a worse start. Only an appropriate number of guests were invited to the opening, but many others forged invitations or gatecrashed it. Disneyland.com tells how 28,000 people packed themselves into a space that was not built for so many people, causing pandemonium. The large crowds made the visitors hot and frustrated. And someone forgot to lock Sleeping Beauty's Castle, so people went rummaging through it. "Rides broke down after their first few runs. Disneyland restaurants and snack carts ran out of food and drink," the website said. "To add to all this, a gas leak in Fantasyland made the entire area closed to the public. The Mark Twain steamboat's deck was nearly level with the water of the Rivers of America; there were so many people on board." It was an inauspicious beginning, but since then Disneyland has gone from strength to strength. More people have walked through its turnstiles than any other of its kind. It has the largest growing attendance for a theme park in the world, with close to 600 million guests since it opened. The fortunes of its Hong Kong branch, however, have been muted since its opening in September 2005. Despite being touted by the government as the key to making the territory "Asia's most popular city tourist destination", Hong Kong Disneyland - the world's smallest Disneyland theme park - generally let visitors down. Management glitches, involving everything from ticketing to employee relations and allegedly refusing food hygiene officers entry to the park, made headlines. Perhaps the most embarrassing moment came during the 2006 Lunar New Year, when hundreds of visitors were turned away after the park filled up. Angry tourists screamed at workers, while television news crews filmed one family trying to pass a child over the fence. But seven years after opening, the park announced last week that it had made a profit, of HK$109 million, for the first time, thanks to rising visitor numbers. "Expansion is the No 1 factor of success," Andrew Kam Min-ho, managing director of the park, said. He'll be wishing upon a star that it continues.

CRIME: Bogus monks' nightly pub crawl with begging bowls (Jennifer Cheng and John Carney) A bogus Buddhist monk, an all-too-familiar sight in Hong Kong these days, holds out his begging bowl to a drinker in Lan Kwai Fong. An influx of 'monks' from the mainland on tourist visas has led to calls for tighter immigration rules. Working in pairs, bogus Buddhist monks do the rounds of Hong Kong's pubs and clubs, night after night. In Lan Kwai Fong on Friday, a monk dressed in an orange robe was seen begging for alms by tapping men on the shoulder. He avoided women, the man, who gave his name as Tan, told the Sunday Morning Post. Another monk, dressed in grey, approached two women but they shrugged him off and walked away. Speaking in Mandarin, Tan said he was 53 years old and came from Jingzhou in the central province of Hubei. He carried a wooden bowl with a 20-dollar bill inside, and wore several wooden beaded bracelets on each wrist. He claimed to have been the manager of a food company on the mainland that went bust. His wife ran off with a rich man, he said, and to get over this trauma and help him survive, he became a monk. When asked if that was why he had to beg, he responded: "Life in China is tough. If I wasn't a monk, I would have to get a job." Tan said it was his first time out of the mainland. He was stopping over in Hong Kong for three days, he said - although he had been observed begging for money and selling bracelets in Lan Kwai Fong for the last three weeks - before continuing on his journey to Malaysia, where he planned to visit his "master". At the end of the conversation, Tan took out an embroidered file from his satchel and opened it to show a certificate, bearing his name and photograph, that purportedly proved he was a monk. The certificate seemed to be of bad quality and did not look professionally printed. Martin Cheung, chief executive of the Buddhist Association, said he hoped the public would not be fooled by bogus monks. Cheung explained that in Buddhism, lay believers gave alms to show respect to a monk or nun. "However, the opportunity to accumulate merit by [obtaining] money should not be accepted," he said. "In Mahayana Buddhism [popular in China and North Asia], almsgiving is seldom practised."

World's oldest marathon runner,101, shines at last race in Hong Kong (Agence France-Presse) Fauja Singh ran with a community group called Sikhs in the City. A 101-year-old Sikh believed to be the world’s oldest distance runner retired after ending his last race in Hong Kong on a high, describing it as one of the “happiest days” of his long life. I will remember this day and I will miss it, but I will not stop running for charity Fauja Singh, nicknamed the “Turbaned Tornado”, finished the 10-kilometre run at the Hong Kong Marathon in one hour, 32 minutes and 28 seconds – half a minute faster than at the same event last year. “Today is one of my happiest days,” the Indian-born British national, who only speaks Punjabi, said through his interpreter after he crossed the finishing line with a broad smile and waving the Hong Kong flag. I felt so fresh and so good. I felt I’m full of power today. “I will remember this day and I will miss it, but I will not stop running for charity,” added Singh, who was mobbed by supporters when he completed his final competitive event, weeks before he turns 102 on April 1. The centenarian, a farmer in his home state of Punjab before settling in England, became an international sensation and made headlines worldwide after he took up the sport at the ripe age of 89. He has since completed nine 42-kilometre marathons in London, Toronto and New York. His best time was in Toronto, where he clocked five hours, 40 minutes and four seconds. The great-great-grandfather has said that although he is quitting competitive events, he will not stop running for personal fitness. In Hong Kong on Sunday, he ran with 100 supporters from a community group “Sikhs in the City”, forming a group of 101 to mark his age. Group member Karamjit Singh said the runner was in top form throughout on a breezy and slightly overcast morning. “Apart from a toilet break at about six kilometres into the run and at one point he nearly slipped due to wet ground, he did not stop, he just kept on going,” said Karamjit, a nurse who lives in Hong Kong. “It’s amazing. We’re always proud of him.” The 101-year-old, who has attributed his longevity to a positive attitude and simple lifestyle, was in high spirits and cracked jokes with journalists several times after finishing the race. “Actually I was expecting a much faster [finishing time],” he laughed. “When I reached mid-point, people reminded me that it was halfway already, though I thought it was only one-third of it,” said Singh, whose name Fauja means “soldier”. He was one of the top fundraisers at the event, after raising HK$160,000 for a charity to help disabled athletes in Hong Kong. Singh was inspired to take up marathons after he saw television coverage of one 12 years ago. It was not long after the death of his wife and a son, at a time when he said he needed a new focus in life. Although widely regarded as the world’s oldest marathon runner, Guinness World Records has not certified him since Singh cannot prove his birth date. He has said there were no birth certificates available when he was born under British colonial rule. But Singh has won widespread accolades. He was a torchbearer for the 2004 Athens games and last year’s London Olympics, and appeared in advertisement for a major sports brand several years ago alongside the likes of David Beckham and Muhammad Ali. His trainer has said Singh will continue his routine of running 16 kilometres a day even after retirement from competitive events.

Unscathed Bank of East Asia to kick off earnings season (By Jeanny Yu) Bank of East Asia (BEA) launches the reporting season for banks in Hong Kong on Tuesday, and the city’s biggest locally-owned bank has arguably had a better year than some of its bigger peers. Analysts say the bank is likely to report a solid profit rise of about 20 per cent, which compares favourably to the results of some big US and European names, who are still paying the price for missteps during the subprime and euro zone crises. BEA has also avoided falling foul of regulators, and only hit the headlines recently because of renewed speculation that Guoco Group, its second largest shareholder might be planning to increase its stake. In the past year, some of the world’s best known names have come under scrutiny over the setting of Libor, a key benchmark, with Barclays fined US$453 million in June for manipulating Libor, and UBS hit with a US$1.5 billion bill in December. Earlier this month, RBS was fined US$612 million to settle US and UK regulatory charges of misconduct, manipulation, attempted manipulation and false reporting of yen, Swiss franc and dollar-denominated Libor. Even HSBC Holdings and Standard Chartered had to take their medicine, although not for Libor tampering. In December, HSBC agreed to pay US$1.92 billion to settle US probes of money laundering in the largest such accord ever, while Standard Chartered Bank agreed to pay US$327 million in fines after regulators alleged it violated US sanctions with Iran. In contrast, BEA, controlled by the family of BEA’s chairman and chief executive, David Li Kwok-po has sailed through the past year, largely unscathed, although it did raise HK$3.3 billion in extra capital by issuing 111.6 million new shares to Sumitomo Mitsui Banking. That issue diluted some existing shareholders’ holdings, and protected the Li family’s control of BEA, an investment banker in Hong Kong said at the time. It also had the effect of keeping Guoco Group at arms length. Guoco is BEA’s second largest shareholder after the Li family. Louis Tse Ming-kwong, a director of VC Brokerage, said BEA would remain on Guoco’s radar, but Guoco was “a very shrewd investor”, and would not pay too high a price for any acquisition. “They’ve always been interested in Bank of East Asia because of its network and its potential in China,” Tse told South China Morning Post, noting that the bank’s early move into China gave it an edge. “David Li is very, very smart. He brought the bank into China long before the others and the bank is now benefiting,” Tse said In terms of its effect on earnings, the share issue diluted earnings by five per cent, but raised capital ratios by 75 basis points (0.75 percentage point), and probably eroded the bank’s return on equity (ROE) going forward by 40 basis points, according to Adam Chan, a banking analyst with CCB International Securities. Steven Chan, who follows the bank for Citic Securities International, said BEA’s mainland operations have benefited from interest rate cuts in China, but its overall net interest margin (NIM) will only improve “minimally”. Chan also expected its non-performing loans in China to rise slightly, although it would still be relatively low. Last year’s share placement should lift its core tier-one ratio to more than 10 per cent.While BEA had benefited from blazing a trail into China, “by the same token, they’ve got quite a bit of non-performing loans in China,” Tse said. “Will they suffer like the other China banks? That’s the big question. That also determines their profit,” Tse said. BEA’s net interest margin would remain stable at 1.63 per cent for 2012, the same as first half last year, Chan said.

 China*:  Feb 26 2013

Japan coastguard says more China ships in disputed waters (By Agence France-Presse in Tokyo) A China Marine Surveillance officer photographs a Japan Coast Guard vessel near the disputed Diayou Islands last week. Japan said three Chinese surveillance ships entered its territorial waters off disputed East China Sea islands on Sunday, hours after one of Beijing’s fisheries patrol boats sailed into the zone. The three marine surveillance ships entered the 12-nautical-mile territorial zone off Uotsuri, one of the Senkaku islands, shortly before 1pm, the Japan Coast Guard said in a statement. The incident came hours after Japan said a Chinese fisheries patrol boat briefly entered the territorial waters off another disputed island on Sunday morning. Beijing claims the Japanese-controlled islands in the East China Sea, which it calls the Diaoyus. The incidents were the latest in a series since Tokyo nationalised three islands in the chain in September, in what it said was just an administrative change of ownership. The same Chinese fisheries patrol ship briefly entered the territorial zone on Saturday, as Japan’s leader vowed he would not tolerate Beijing’s incursions into the area. Prime Minister Shinzo Abe, who was on his first visit to the United States since he took office in late December, said Japan “simply cannot tolerate any challenge now and in the future” to its control of the islands. “No nation should make any miscalculation or underestimate the firmness of our resolve,” Abe said Friday in Washington. But speaking after White House talks with President Barack Obama, Abe also cautioned that “I have absolutely no intention to climb up the escalation ladder”.

Analysis: the near impossible battle against hackers everywhere - blaming China by USA just to score political point by American Anti-China Political Establishments (Reuters in San Francisco) Dire warnings from Washington about a “cyber Pearl Harbour” envision a single surprise strike from a formidable enemy that could destroy power plants nationwide, disable the financial system or cripple the US government. But those on the front lines say it isn’t all about protecting US government and corporate networks from a single sudden attack. They report fending off many intrusions at once from perhaps dozens of countries, plus well-funded electronic guerrillas and skilled criminals. Security officers and their consultants say they are overwhelmed. The attacks are not only from China, which Washington has long accused of spying on US companies, many emanate from Russia, Eastern Europe, the Middle East, and Western countries. Perpetrators range from elite military units to organised criminal rings to activist teenagers. “They outspend us and they outman us in almost every way,” said Dell’s chief security officer, John McClurg. “I don’t recall, in my adult life, a more challenging time.” They outspend us and they outman us in almost every way. I don’t recall, in my adult life, a more challenging time. The big fear is that one day a major company or government agency will face a severe and very costly disruption to their business when hackers steal or damage critical data, sabotage infrastructure or destroy consumers’ confidence in the safety of their information. Elite security firm Mandiant last week published a 74-page report that accused a unit of the Chinese army of stealing data from more than 100 companies. While China immediately denied the allegations, Mandiant and other security experts say the hacker group is just one of more than 20 with origins in China. Chinese hackers tend to take aim at the largest corporations and most innovative technology companies, using trick e-mails that appear to come from trusted colleagues but bear attachments tainted with viruses, spyware and other malicious software, according to Western cyber investigators. Eastern European criminal rings, meanwhile, use “drive-by downloads” to corrupt popular websites, such as NBC.com last week, to infect visitors. Though the malicious programmes vary, they often include software for recording keystrokes as computer users enter financial account passwords. Others getting into the game include activists in the style of the loosely associated group known as Anonymous, who favour denial-of-service attacks that temporarily block websites from view and automated searches for common vulnerabilities that give them a way in to access corporate information. An increasing number of countries are sponsoring cyber weapons and electronic spying programmes, law enforcement officials said. The reported involvement of the United States in the production of electronic worms including Stuxnet, which hurt Iran’s uranium enrichment programme, is viewed as among the most successful. Iran has also been blamed for a series of unusually effective denial-of-service attacks against major US banks in the past six months that blocked their online banking sites. Iran is suspected of penetrating at least one US oil company, two people familiar with the ongoing investigation said. “There is a battle looming in any direction you look,” said Jeff Moss, the chief information security officer of Icann, a group that manages some of the internet’s key infrastructure. “Everybody’s personal objectives go by the wayside when there is just fire after fire,” said Moss, who also advises the US Department of Homeland Security. Industry veterans say the growth in the number of hackers, the software tools available to them, and the thriving economic underground serving them have made any computer network connected to the internet impossible to defend flawlessly. “Your average operational security engineer feels somewhat under siege,” said Bruce Murphy, a Deloitte & Touche principal who studies the security workforce. “It feels like Sisyphus rolling a rock up the hill, and the hill keeps getting steeper.” In the same month that US President Barack Obama decried enemies “seeking the ability to sabotage our power grids, our financial institutions, our air traffic control systems”, cyber attacks on some prominent US companies were reported. Three leading US newspapers, Apple, Facebook, Twitter and Microsoft all admitted in February they had been hacked. The malicious software inserted on employee computers at the technology companies has been detected at hundreds of other firms that have chosen to keep silent about the incidents, two people familiar with the case said. “I don’t remember a time when so many companies have been so visibly ‘owned’ and were so ill-equipped,” said Adam O’Donnell, an executive at security firm Sourcefire, using the hacker slang for unauthorised control. Far from being hyped, cyber intrusions remain so under-disclosed – for fear leaks about the attacks will spook investors – that the new head of the FBI’s cyber crime effort, executive assistant director Richard McFeely, said the secrecy has become a major challenge. “Our biggest issue right now is getting the private sector to a comfort level where they can report anomalies, malware, incidences within their networks,” McFeely said. “It has been very difficult with a lot of major companies to get them to co-operate fully.” McFeely said the FBI plans to open a repository of malicious software to encourage information sharing among companies in the same industry. Obama also recently issued an executive order on cyber security that encourages co-operation. The former head of the National Security Agency, Michael Hayden, supports the use of trade and diplomatic channels to pressure hacking nations, as called for under a new White House strategy that was announced on Wednesday. “The Chinese, with some legitimacy, will say ‘You spy on us’. And as former director of the NSA I’ll say, ‘Yeah, and we’re better at it than you are’,” said Hayden, now a principal at security consultant Chertoff Group. He said what worries him the most is Chinese presence on networks that have no espionage value, such as systems that run infrastructure like energy and water plants. “There’s no intellectual property to be pilfered there, no trade secrets, no negotiating positions. So that makes you frightened because it seems to be attack preparation,” Hayden said. Amid the rising angst, many of the top professionals in the field will convene in San Francisco on Monday for the best-known US security industry conference, named after host company and EMC unit RSA. Several experts said they were convinced that companies are spending money on the wrong stuff, such as antivirus subscriptions that cannot recognise new or targeted attacks. RSA executive chairman Art Coviello and Francis deSouza, head of products at top vendor Symantec, both said they would give keynote speeches calling for a focus on more sophisticated analytical tools that look for unusual behaviour on the network – which sounds expensive. Others urge a more basic approach of limiting users’ computer privileges, rapidly installing software updates, and allowing only trusted programs to function. Some security companies are starting over with new designs, such as forcing all of their customers’ programs to run on walled-off virtual machines. With such divergent views, so much money at stake, and so many problems, there are perhaps just two areas of agreement. Most people in the industry and government believe things will get worse. Coviello, for his part, predicted that a first-of-its kind – but relatively simple – virus that deleted all data on tens of thousands of PCs at Saudi Arabia’s national oil company last year is a harbinger of what will come. And most say that the increased mainstream attention on cyber security, even if it fixes uncomfortably on the industry’s failings and tenacious adversaries, will help drive a desperately needed debate about what do to internationally and at home.

People across China celebrate Lantern Festival - People have started to celebrate the Lantern Festival, which is observed on the 15th day of the Lunar New Year and officially marks the end of the Spring Festival.

Hong Kong*:  Feb 25 2013

Home prices expected to fall 5pc next month as stamp duty doubled (By Sandy Li) Flat sales also expected to fall 50pc due to doubling of the stamp duty - An estate agent revises the price of a Tai Koo property listing downward after new measures to curb home prices were announced yesterday. Home prices are expected to fall 5 per cent and sales volume plunge by half next month in response to the government's doubling of the stamp duty for those who buy second homes worth more than HK$2 million. Centaline Property managing director Louis Chan Wing-kit said owners of flats worth more than HK$5 million would be hit hardest by the sharp increase in the stamp duty. "Flat prices are heading for a 5 per cent correction. Transaction volumes will drop by half," he said. Flat prices are heading for a 5 per cent correction. Transaction volumes will drop by half - The new stamp duty will also discourage many homeowners from upgrading to bigger flats, he said. That's because, under the new rules, homeowners are exempt from the new stamp duty only if they can sell their original home and buy a new flat within six months. But that may be too short a time to complete both transactions. From today, the stamp duty on all properties - homes, offices, industrial units and shops - priced at HK$2 million or less will increase to 1.5 per cent of the transaction value, up from the previous fixed rate of HK$100. For properties above HK$2 million, the stamp duty rate has doubled from 4.25 per cent to 8.5 per cent of the purchase price. But the revised stamp duty will not apply to local first-time homebuyers. In addition, non-residential property buyers have to pay the stamp duty when the contract is signed. The rise in stamp duties comes just four months after the government imposed a 15 per cent additional stamp duty on corporate and non-permanent-resident homebuyers. Despite those measures, prices have continued to rise. The Centa-City Leading Index, which monitors prices at 100 major housing estates in the city, stood at 121.58 in the week ended February 17, up 6 per cent from October. It hit a record 121.73 the previous week. "A dramatic decline in property transactions will adversely affect the operation of estate agents who are struggling to survive after the previous cooling measures to deter non-local buyers from the market," said Ricacorp chief executive Willy Liu Wai-keung. Midland Realty predicted the property market would come to a standstill in the short term. It said the number of property transactions could drop to a 10-year low of below 100,000 this year. Alfred Lau, a property analyst at investment bank Bocom International, said he expected the rise in stamp duties would scare long-term investors away from the market. "Those sellers who are desperate to unload their properties now need to lower prices by an amount equal to the size of the increase in stamp duty, or 4.25 per cent, in order to entice buyers," he said. Given the low holding costs, since interest rates are close to zero, Lau said he believed most owners with a strong financial position would prefer to hold back from selling. "In this scenario, we may see a 2 to 3 per cent price correction," he said.

New stamp duties trigger last minute push for flat sales (By Olga Wong, Peggy Sito, Enoch Yiu and Paggie Leung) Agents rush to offload properties after financial authorities announce the latest attempt to cool the city's red-hot market - Monetary Authority chief Norman Chan Tak-lam briefs the press on new stamp duties. inancial Secretary John Tsang, flanked by ministers Chan Ka-keung and Anthony Cheung, at the briefing. Real estate agents staged a last-minute flat sales push to beat a midnight deadline for the introduction of a new set of measures aimed at cooling down Hong Kong's red-hot property market. In the five hours after Financial Secretary John Tsang Chun-wah and Hong Kong Monetary Aurthority chief Norman Chan Tak-lam announced new measures to head off a property bubble yesterday evening, asking prices dropped by as much as 3 per cent in some cases. Among those seeking last-minute sales were Sun Hung Kai Properties, which brought forward the sale of 92 flats at The Wings II development in Tseung Kwan O which were supposed to go on sale today. Tsang announced a doubling of stamp duties for homes and non-residential properties valued at more than HK$2 million and it was announced that buyers of non-residential properties would be required to pay stamp duty earlier. Instead of paying upon conveyance, the payment should be made once the sales agreement is signed to reduce the incentive for speculation. For flats valued at HK$2 million or less, stamp duty will increase to 1.5 per cent of the transaction value - up to 300 times the current flat rate of HK$100. The measures aim to tackle speculation on small to medium-sized flats, parking spaces, shops and hotels. They come just four months after the government announced additional stamp duties to cool demand from non-locals and companies. Tsang admitted he did not have a "silver bullet'' to deal with the housing problem "in one shot". "We are doing it in an incremental manner," he said. "We have done a number of management measures while we are increasing the supply of flats in the market. "We'll just continue to do that, and if we were required to do more I will not hesitate to add more measures to make it effective.'' If we were required to do more I will not hesitate to add more measures to make it effective - Permanent residents who are first-time buyers or who sell their only flat and buy another within six months will be exempt from the increased duties. Increasing the stamp duty on flats is likely to affect half the local buyers on the market, who already have more than one flat. Tsang said: "The market's exuberance has regained momentum in January this year. The property price increased by 2 per cent in January, and the momentum is continuing this month." Tsang, who introduced the last set of cooling measures in October, also warned that the city's average debt-to-income ratio could shoot up to 68 per cent, from the 52 per cent in the fourth quarter last year, if interest rates were to go up by just 3 percentage points. To reduce risks resulting from a possible interest rate rise, the Hong Kong Monetary Authority also further tightened mortgage arrangements yesterday for non-residential properties such as parking spaces. Banks must assess borrowers' ability to repay with an assumption that interest rates will go up by 3 percentage points instead of the current 2 percentage points. The new measures came four days after 360 hotel units owned by developer Cheung Kong were snapped up by hundreds of buyers, many intending to convert them into flats. Government statistics show that the price of large flats - those over 160 square metres - decreased by 0.7 per cent in January compared with December, but prices of small to medium-sized flats - smaller than 100 square metres - increased by 2 per cent. Ringo Lam Chun-chiu, valuation director at the surveyors AG Wilkinson & Associates, expects the latest measures to reduce transaction volumes and prices for all types of property in the short term. Paul Fan, branch manager of Centaline Property Agency, expects a drastic drop in sales transactions. "It will deal a serious blow to our business. We [property agents] may need to apply for Comprehensive Social Security Assistance soon," he said. Measures to curb overheating of Hong Kong property market - Signs of overheating - Overall, housing prices have rallied by 120 per cent from 2008 and %34 per cent from their peak in 1997. Prices for retail, office and factory space surged year on year by 39 per cent, 23 per cent and 44 per cent respectively in 2012. Compared with 2009, sale prices for these properties have soared between 148 per cent and 202 per cent. New measures - Doubling stamp duties across the board for both housing and non-residential properties. The highest rate of stamp duty will be doubled from the current 4.25 per cent to 8.5 per cent. Stamp duty for properties valued below HK$2 million will rise from HK$100 to 1.5 per cent of the transaction value. Permanent residents who are first-time buyers and who do not own any other residential property at the time of purchase will be exempt. Stamp duty for transactions of non-residential properties, including offices, retails and car parks will have to be paid after sales agreements are signed. In stress-testing applicants' repayment ability, banks must assume a mortgage rate rise of 3 percentage points, instead of 2 points.

Cheung Kong and government clash over sale of Apex Horizon hotel units (By SCMP) Property agents and buyers gather at the sales office of Apex Horizon hotel in Hung Hom as Cheung Kong Holdings sells more unit of the hotel. A Lands Department letter leaked by the Civic Party has sparked a heated exchange between the administration and property giant Cheung Kong over its controversial sale of hotel suites. The letter suggested that the government knew of Cheung Kong's plan to sell hotel units at Apex Horizon in Kwai Chung as early as May 2011. In the letter, the department approved a sub-deed of the hotel, and reminded the developer to alert buyers that the units could be used only for hotel purposes. A spokeswoman for the Lands Department emphasised yesterday that the approval was in accordance with the land lease. "The key issue is whether the units will still be used as hotel suites after the sale," the spokeswoman added. This is the first time in Hong Kong that a developer has sold hotel suites built on commercial land to individual buyers who may treat them as residential units. The spokeswoman also revealed the Lands Department made inquiries last month when a suite in Apex Horizon was sold, "yet Cheung Kong ignored the department's queries a few days ago and launched the sale on a large scale … which made it necessary for us to clarify publicly". Cheung Kong countered, saying it never ignored the Lands Department, and "deeply regrets such [an] accusation".The key issue is whether the units will still be used as hotel suites after the sale - A spokesman for the property giant stressed it responded to the government's query. When asked if the steps announced yesterday to cool the property market were partly a response to the suite sale controversy, Financial Secretary John Tsang Chun-wah said: "It has absolutely nothing to do with Cheung Kong." A government source said because the new measures involved various initiatives on stamp duty and rates, "they took a long time to prepare, and it is impossible for them to be ready in a matter of days". There were signs last night that the measures have hit buyer-speculators who were considering reselling the hotel units. According to Ricacorp Properties manager Andy Jim, there are about 50 flats at the 360-flat Apex Horizon hotel for sale in the secondary market after buyers acquired units on Monday and Tuesday. "About 20 per cent of them worried it would be difficult to find new buyers for their flats and decided to cut their asking prices by 3 to 4 per cent. But their asking prices are still about 10 per cent higher than their acquisition costs," Jim said. He estimated about 90 per cent of the buyers are investors and a significant number of these are speculators. With new tax rates applying to all types of property, buyers of units at Apex Horizon will be charged a higher stamp duty if they plan to resell from today. Ip Chiu-fai, who bought a unit at the Apex Horizon on Tuesday, said the new measures would not affect him. "It's not a big problem for me because I am planning to keep the property for rental return," Ip said. Cheung Kong has said the sale raised HK$1.4 billion, almost seven times the land premium it paid to the government when it applied to change the site from industrial to non-industrial use.

 China*:  Feb 25 2013

Japan's PM Shinzo Abe fails to win Obama's support in Diaoyus row (By Teddy Ng) US President Barack Obama and Japanese Prime Minister Shinzo Abe in the Oval Office after a meeting. Abe had hoped to secure his support in the row with China. Japanese Prime Minister Shinzo Abe failed to get US President Barack Obama to take a tough stand against Beijing during their meeting in Washington, to the relief of Chinese observers. While Abe kept up his hardline comments about Japan's territorial dispute with China, he avoided disagreement with Obama during their talks on Friday. The Japanese leader declared that both nations would exert pressure on North Korea over its nuclear tests and continue talks about Japan's "possible interest" in joining a trade pact initiated by Washington. While Obama told Abe, "You can rest assured that you will have a strong partner in the United States through your tenure", the president did not address the territorial dispute. Jin Canrong , a professor of international relations at Renmin University, said the US backing of Abe was less enthusiastic than Tokyo had hoped. "The outcome of the talks between Abe and Obama was vague without any concrete promises from Washington," Jin said. US Secretary of State John Kerry, in a separate meeting with Japanese Foreign Minister Fumio Kishida, "complimented" Japan on its restraint amid the dispute over the Diaoyu Islands, known as the Senkakus in Japan. Beijing was concerned Washington would support Abe's tough stance towards China, and his plan to boost Japan's defence capability, especially after the then secretary of state, Hillary Rodham Clinton, warned China not to challenge Japan's control of the islands a month ago. But a commentary by Xinhua described Washington's response to Abe as "cold", and said that had prompted Abe to take a step back from his hawkish approach by stressing Japan would handle the dispute calmly. "The Obama administration will not easily confront China just because of the dispute, which is not the core interest of the US," it said, adding Abe's administration would only "court a rebuff" if it relied on the US. Ties between China and Japan have deteriorated since September, when the Japanese government announced it would buy three of the five uninhabited islands to thwart their purchase by the Tokyo municipal government of ultranationalist Shintaro Ishihara. Tensions continued yesterday, with Tokyo saying a Chinese government ship briefly entered its territorial waters around the islands. Abe vowed he would not tolerate China's incursions. "We simply cannot tolerate any challenge now and in the future," he said at the Centre for Strategic and International Studies after his meeting with Obama. Professor Su Hao , of China Foreign Affairs University, said Abe wanted Obama's open support for Tokyo's stance in the dispute. "But Washington is concerned Tokyo would feel less restrained in such confrontations if it felt it had a strong backup," he said. "It is in the US interest that China and Tokyo are embroiled to some degree, but that tension has to be kept under control if the US is to exert its influence." In their talks, Obama said he and Abe were united in their "determination to take strong action" after Pyongyang's third nuclear test this month, vowing to push for tougher sanctions. Jin Canrong, of Renmin University, said co-operation on North Korea was the less "risky" pledge, as Washington would be seen as confronting Beijing, and other Asian countries, if it backed Tokyo in its territorial disputes. "The US is in the lead position in the US-Japan alliance," he said. "If the Japanese military is strengthened, then Tokyo will rely less on Washington." Professor Lian Degui , from the Shanghai Institutes for International Studies, expected Abe's tough rhetoric against Beijing to continue.

A railway that links southwest China's Yunnan Province with the Association of Southeast Asian Nations (ASEAN) countries became operational on Saturday after seven years of construction, local railway authorities said. The railway between Yuxi and Mengzi is part of the eastern line of the planned Pan-Asia Railway network. The 141-km railway has a designed maximum speed of 120 km per hour. It passes through 35 tunnels and crosses 61 bridges, which together account for 54.95 percent of the eastern line's total length. The eastern line also consists of Kunming-Yuxi Railway, which had been in operation, and the Mengzi-Hekou Railway that is under construction and scheduled to be operational end of next year. Upon the full completion of the eastern line, it will further open up China's southwest, improve transportation and boost economic development along the line, experts said. The Pan-Asia Railway network also consists of central and western lines and is an international railway project that will bring China closer with southeast Asia.

The Western Cape Provincial Government, anticipating significant job losses following the recent farm worker strikes and unrest, is trying to promote the province's wine and fruit in new markets such as China and Africa, Premier Helen Zille said on Friday in her State of the Province address. South African wine exports to China have been growing by 50 percent annually for the past three years, Zille told MPs. Although South Africa only supplies 3 percent of the Chinese wine market, China has now become one of South Africa's top 10 export destinations, she said. Shandong Province in China and the Western Cape are sister provinces, both belonging to the Regional Leader Forum grouping. The Western Cape also has bilateral agreements with Shandong on agriculture, trade and investment, economic co-operation, as well as governmental co-operation. In order to explore the Chinese and African markets, efforts must be made to protect farming as one of the few remaining sectors in the South African economy able to absorb unskilled labor, Zille said. Western Cape farmers have traditionally been paid above the minimum wage set by the Ministry of Labor. For example, in the farming town of De Doorns before the recent strike, the average cost-to-company remuneration for seasonal workers was 100 rand (about 11 U.S. dollars) per worker per day, according to Zille. "That is one of the reasons that so many seasonal workers have traditionally sought work in the Western Cape from countries such as Zimbabwe and Lesotho, and other Provinces, particularly the Eastern Cape," Zille said. Referring to the lack of statistics on the movement of mainly seasonal farm workers, Zille said she welcomed the national Department of Home Affairs' recently initiated survey into the migration of farm labor, which will reveal many of the underlying challenges that gave rise to the tragic conflicts that unfolded in December and January. "There is a particularly tragic irony in the fact that farm workers leave the most fertile agricultural regions in the sub- continent, from our Eastern Seaboard to our northern neighbors, to seek work on the stony mountain slopes of De Doorns. As the National Development Plan notes, the key target of land reform must be to address the legacy that has left 30 percent of South Africa's most fertile land unproductive, under tribal tenure," said Zille. The number of commercial farmers in South Africa has decreased from 120,000 in 1994 to 37,000 today. Those that remain viable without the subsidies accorded to their international competitors, are a precious resource that must be sustained for food security. She warned that increasing mechanization will change farming as a major source to absorb unskilled labor.

Economic growth is expected to pick up 0.43 percentage points from last year to reach 8.23 percent in 2013, according to a report released Saturday. Export growth will accelerate to 12.22 percent this year, up from 7.9 percent in 2012. Import growth will hit 17.83 percent, in comparison to 4.3 percent last year, said a report compiled by Xiamen University and the Economic Information Daily, a subsidiary of the Xinhua News Agency. Although global monetary easing has to some extent piled up inflationary pressure for China, the economy will not see serious price hikes this year, the report said. It projected the rate of inflation at 3.11 percent for 2013, up from 2.6 percent last year. The report suggested restructuring income distribution as a fundamental government measure to correct the imbalance of the country's economic structure, which is featured by declining ratios of final consumption, especially residential consumption, in gross domestic product. The report, the 14th of its kind so far, employs a macroeconomic model to calculate and demonstrate economic trends in the country. 

 

Chinese firms in US upbeat (By Chen Weihua in Washington and Li Jiabao in Beijing) Despite unfamiliar regulations, cultural barriers and high operating costs, most Chinese companies doing business in the United States describe their experiences as successful and are optimistic about the future, according to a survey by China Daily and APCO Worldwide. One-third of polled company executives said their operations in the US market had been "very successful", while 61 percent described the experience as "somewhat successful". Only 6 percent of respondents answered "unsuccessful" or "very unsuccessful", according to the survey conducted in November and December. The logos of Chinese electronics companies TCL and Huawei Technologies are shown at the Consumer Electronics Show in Las Vegas. Chinese companies have shown an increasing interest in investing in the US. "The US market, on the whole, is quite open and limitations to foreign direct investment are not the most severe in the world, nor are there special limitations for Chinese investments," said Lu Jinyong, director of the China research center for FDI at the University of International Business and Economics. "Investment can enter the US rather freely except for prohibitions or limitations in industries with the military, natural resources and other key sectors like banking, ports and aviation." The survey's sample consisted of 51 top executives - CEOs, presidents, vice-presidents and managing directors - from 46 China-based enterprises with at least 10 employees in the US. The respondents represent various locations and years of US operations, and multiple industries, including sales, manufacturing, professional services, banking and real estate. "As more Chinese companies go global and come to the United States, they add a dimension to the close economic and trade relationship between the world's two largest economies," said Larry Lee, China Daily USA president and editor-in-chief. Despite generally "successful" entries into the US market, 71 percent of respondents still said the experience had been "hard". Of this group, 18 percent described the experience as "very difficult" while 53 percent said "somewhat difficult". For 10 percent of the executives polled, bringing their companies to the US was "very easy". Another 18 percent answered "somewhat easy". Nearly three-quarters, or 73 percent, said their companies had ventured into the US primarily to expand their share of an industry market. For 14 percent, the top goal was increasing brand recognition, while 8 percent said they had been seeking access to new technologies. "Chinese investment in the US will keep fast growth, especially in sectors of manufacturing and infrastructure, as the US welcomes FDI to lift its economy amid the initiative of re-industralization," said Ge Shunqi, deputy head of the Institute of International Economics at the Nankai University in Tianjin. "The blocking of Chinese investment is accidental and investment investigations are not the mainstream idea in the US." China's non-financial direct investment in the US surged 66.4 percent year-on-year in 2012, much higher than China's non-financial outbound direct investment which rose 28.6 percent to $77.22 billion, according to the Ministry of Commerce.

Hong Kong*:  Feb 24 2013

Hong Kong feels tremors from earthquake in China (By Lai Ying-kit) Earthquake wave monitors at the Hong Kong Observatory. Hong Kong felt tremors on Friday after a minor earthquake occurred in the mainland. The Hong Kong Observatory said the 4.8-magnitude quake’s epicentre was in the Guangdong city of Heyuan, about 190 kilometres from Hong Kong. The quake occurred at 11.34am on Friday and last a few seconds, the observatory said, adding that more than 100 reports were from residents feeling tremors. No injuries have been reported so far. The observatory said the intensity felt in Hong Kong was like vibration caused by passing of light trucks. This was Heyuan’s second quake in a week. On Saturday another 4.8-magnitude quake jolted the city, with tremors felt in Hong Kong. A resident in northwest New Territories, said she felt Friday’s shocks. “I was sitting on a sofa at the time. I felt some vibrations. My glass windows clattered for a brief moment. It last about 2 seconds.” the woman, surnamed Lee, said. Another resident, who was in his home on the 17th floor of a Kowloon Tong block at the time, said: “I was shaken for a sudden and felt like the whole flat swung a bit. I thought nothing else could have swung it like this.”

Sarah Lee strikes gold at world cycling championships (By Chan Kin-wa) Olympic bronze medallist in keirin shows her prowess in 500m time trial - Sarah Lee Wai-sze is all smiles after winning the world 500m time trial in Minsk. Sarah Lee Wai-sze became the third cyclist from Hong Kong to clinch a world title after her victory in the women’s 500-metre time trial at the Track Cycling World Championships in Minsk, Belarus. The 25-year-old was the fastest among 12 riders over the two lap-race, clocking 33.973 seconds to edge out favourite Miriam Welte from Germany, who had won gold the previous day in the team sprint, and Britain’s Rebecca James. “I must admit, I was very nervous before the start but I knew I could win,” said Lee, who won a bronze medal in the keirin at last year’s Olympics in London. “I hope I will do even better next year because I know that many better riders have not come here.” Wong Kam-po, now retired and a coach, was the first rider from Hong Kong to capture the “rainbow jersey” as the world champion when he won the scratch race in 2007, followed by Kwok Ho-ting in the same event at the 2011 World Track Championships in the Netherlands. Kwok came ninth in the scratch race against 23 riders in Minsk. Welte, the last rider to start the race, was just two-hundredths of a second behind Lee with a time of 33.996 seconds, while James, at 21 the youngest among the three, clocked 34.133 seconds. Lee’s winning time was still some way off the world record of 33.10 seconds set by Australia’s Anna Meares, who won the world title in Melbourne last year.

Chinachem foundation is not 'absolute' beneficiary of Nina Wang's estate, says court (By Austin Chiu) The late Nina Wang Kung Yu-sum in 2005. The Chinachem Charitable Foundation only holds the huge estate of Nina Wang Kung Yu-sum on trust and was not its "absolute" beneficiary, the High Court ruled on Friday. Mr Justice Jeremy Poon Shiu-chor, of the Court of First Instance, wrote in his judgement: “Upon a proper construction of the will, I find that all… requirements of a charitable trust are satisfied.” “Admittedly, Nina [Wang] did not use the word ‘trust’. But nothing turns on that. For one thing, the absence of such a technical term in the will, a home-made will drafted by Nina…is understandable.” The judge delivered his judgment on the proper reading of the will after the secretary of justice requested it following a disagreement over the foundation’s obligations under the will. The foundation has argued it was the absolute beneficiary and had the discretion on how to use the HK$83 billion fortune left by Nina Wang. Wang, once the richest woman in Asia, died in 2007 from cancer. Outside the court, Chinachem solicitor Keith Ho said: “The legal team will have to discuss the judgment. But it’s highly likely we will file an appeal.” An appeal can be filed within 28 days. “The foundation wants to carry out charitable projects soon. Filing an appeal is just a part of the procedure that the foundation has to go through,” Ho said. Secretary of Justice Rimsky Yuen Kwok-keung acts as a protector of charities in Hong Kong. Under the Trustee Ordinance, he has the power to intervene if there is a breach of a charitable trust or a need for better administration of it. Friday’s ruling, which is the latest chapter in a long legal dispute over the estate, began after the Court of Final Appeal last year recognised a 2002 will leaving it to the foundation. It ruled that a 2006 document purportedly leaving the estate to self-styled fung shui adviser Tony Chan Chun-chuen was a forgery.

Hong Kong unveils more property cooling measures (Reuters and SCMP) Hong Kong introduced two new measures on Friday to stop speculative buying of homes from spreading to shops, offices, car parks and non-housing property after property prices recorded another increase recently. “The property market stabilised for a while after October’s measures, but it has become upbeat again lately, with prices rising by 2 per cent in January,” Financial Secretary John Tsang Chun-wah said at a press conference, referring to last autumn’s raft of price-cooling measures. The new provisions, which come into effect on Saturday, were a direct response to the renewed price increases, he said. One measure is raising the stamp duty for purchases of all properties, including residential and non-residential. The rate for property worth up to HK$2 million will increase from HK$100 to 1.5 per cent of the property’s value. The duty rates will be doubled for more expensive properties, going as high as 8.5 per cent of a property’s value, up from 4.25 per cent. But buyers with a genuine need for housing – permanent Hong Kong residents who own no property – will be exempt from the duty increase. The second measure requires the stamp duty for non-residential property to be paid at an earlier stage – when the purchase agreement is signed. This is aimed at curbing speculation in non-residential property such as shops, car parks, commercial offices and industrial premises, after their prices also rose recently. In October, the government introduced a new buyer’s stamp duty on foreign and corporate buyers to cool the market. Tsang said further new cooling measures would be introduced if the property market continued to rise. Also on Friday, the Hong Kong Monetary Authority, the city’s de-facto central bank, announced tightening mortgage loans to contain risks facing by banks and lenders. A person applying for a mortgage loan now has to pass a stress test showing his or her ability to meet payments if interest rates rise 3 per cent. This was raised from 2 per cent. The mortgage-to-income ratio for loans to investors in commercial and industrial premises will also be lowered from 50 per cent to 40 per cent. HKMA chief executive Norman Chan Tak-lam said the risks involved in the property market were now even higher than in 1997. That year property prices fall sharply from record highs, leaving many borrowers finding it hard to pay their mortgage.

HK jobless rate climbs up to 3.4% (Xinhua) Hong Kong's jobless rate increased to 3.4 percent in November 2012 to January 2013, from 3.3 percent in October to December 2012, the city's Census and Statistics Department announced on Thursday. Total employment increased by around 16,400 from 3,689,600 in October to December 2012 to 3,706,000 in November 2012 to January 2013. In the same period, the labor force also increased by around 19,900 from 3,806,600 to 3,826,500. The rise in the unemployment rate were mainly observed in the postal and courier activities sector, wholesale sector, and foundation and superstructure works of the construction sector. Commenting on the figures, Secretary for Labor and Welfare Matthew Cheung said that total employment expanded notably to another record high of 3,706,000, partly reflecting a seasonal upsurge in labor demand during the recent festive period. "On a seasonally adjusted basis, the unemployment rate edged up by 0.1 percentage point to 3.4 percent," he added. He noted that youth employment has continued to improve as the jobless rate for youths aged 15 to 24 went down by 0.8 percentage point to 6.9 percent during the same period. On the short-term outlook, Cheung said the latest business tendency survey results indicated that overall business sentiment remains rather cautious amid the uncertainties in the external environment.

 China*:  Feb 24 2013

KMT envoy Lien set for talks with Xi in Beijing (By Lawrence Chung in Taipei) Trusted veteran Lien Chan will also meet Hu Jintao in a trip that could give an idea of future direction of Beijing's policy towards Taiwan - The honorary chairman of Taiwan's Kuomintang, Lien Chan, will meet Communist Party chief Xi Jinping in Beijing on Monday in the highest-level cross-strait meeting since Xi took office in November. Taiwanese politicians and pundits see the meeting, to be followed by another on Tuesday with outgoing President Hu Jintao, as highly significant given that Xi succeeds Hu as state leader next month. Lien, a former vice-president, will lead a delegation of 30 politicians and business leaders to Beijing on Sunday night, KMT officials said yesterday. "He is scheduled to meet general secretary Xi on Monday," a spokeswoman for Lien's office said, adding that Lien would meet Hu the next day and also Jia Qinglin , who steps down as chairman of the Chinese People's Political Consultative Conference next month, before returning to Taipei on Wednesday. The director of the KMT's mainland affairs department, Kao Hui, said Xi had invited Lien to visit Beijing. What Xi will discuss on cross-strait relations should give clues to the future direction of the mainland's policy towards Taiwan - Kao said Lien, who has visited the mainland frequently, had met Xi before and that regular meetings between senior officials from the two sides of the strait were representative of warming and amiable relations. Lien's historic mainland visit in 2005, during which he met Hu in Beijing, marked a significant step in relations between Taipei and Beijing - political rivals since the end of a civil war in 1949. It also led to an improvement in cross-strait relations when the KMT's Ma Ying-jeou became Taiwan's president in 2008 and adopted a policy of engaging Beijing. The friendships Lien has built with mainland leaders over the years have made him one of the few politicians from Taiwan trusted by Beijing, a fact reflected in the mainland's tacit agreement for Lien to represent Ma at summit meetings of the Asia-Pacific Economic Co-operation forum for the past five years. Beijing used to object to any senior politician from Taiwan attending international events. Taiwanese pundits said the Lien-Xi meeting should shed some light on Xi's intentions with regard to cross-strait policy. "Being the incoming mainland leader, it will be a good opportunity for Xi to express goodwill to Taiwan through his meeting with Lien," said cross-strait affairs expert George Tsai Wei, a professor at Chinese Culture University in Taipei. "What Xi will discuss on cross-strait relations should give clues to the future direction of the mainland's policy towards Taiwan." Other pundits said they expected Xi would continue Hu's warming cross-strait policy for least his first two years in office, but would also push for political dialogue with the island to pave the way for eventual reunification.

Water lanterns a prayer for happiness (China Daily) People lay candle lanterns on the water to pray for peace and happiness in Sun Park in Rizhao, East China's Shandong province, on Feb 21, 2013. 

I Sing Beijing's debut hits a high note in NEW YORK (By Derek Bosko in New York) Thomas Glenn, center left, sings the Chinese opera Siege of Tiger Mountain at the Lincoln Center in New York on Feb 16 as part of the I Sing Beijing program. There's no doubt that I Sing Beijing, a redolent blend of musicians, Western traditions and modern Chinese opera, is an important catalyst in the evolving relationship between the United States and China. But the company, which made its US debut on Feb 16 at Lincoln Center's Alice Tully Hall, is also providing an unforgettable experience for a couple of dozen Western artists by introducing them to Mandarin as an idiom for classical singing. Prior to last week's performance, the singers participated in intensive Mandarin lessons, vocal coaching and stagecraft workshops with top coaches from New York's Metropolitan Opera, Seiji Ozawa Music Academy, Beijing's Central Conservancy and the Shanghai Conservatory. The fruits of those labors were much in evidence. The Western singers joined forces with rising stars from China in an eclectic program that included scenes and arias from the Western repertoire coupled with a historical tour of contemporary Chinese vocal works. Xiaoli Meng-Lumpkin, a New York based therapist in the audience, said she was markedly impressed with both the singers' skill and their relative youth. The company's performance of Happy Spring Awakening from the Chinese opera Siege of Tiger Mountain resonated loudly with her because "I grew up with that Beijing opera, during the cultural revolution (1966-76)" and "that's the only opera we had during those times". One of only eight 'model plays' sanctioned for performance then, Siege of Tiger Mountain tells the tale of Yang Zirong, who successfully infiltrated the bandit-controlled mountain of the title. Borrowing a page from the ancient Greeks' book, Yang employs a Trojan-horse-style ruse to fool the bandits and help soldiers retake the mountain. Now in its third year as a program, I Sing Beijing reflects the growing migration of modern Chinese music into Western classical music. But another spectator, Patty Kopec, a professor and multi-instrumentalist at the Manhattan School of Music, dismissed typical American definitions of opera as narrow. "Music is an international language and it speaks to the heart", Kopec said. Despite stark differences in the linguistic and musical conventions of Chinese and Western opera, the key to a successful performance, she said, is "not just to sing but to understand the content because then you sing from within and from your heart". Kopec noted one-third of her students at the Manhattan music school are Chinese nationals, an example of China's growing embrace of Western culture. I Sing Beijing is just one example of growing Chinese cultural influence around the world. The program, co-founded by Hanban, which administers Confucius Institutes, and the Asian Performing Arts Council, promotes Chinese culture, particularly operatic styles, internationally. While the program was created with the idea of reviving and spreading Chinese songs, it also aims to fuse Chinese and Western elements together. I Sing Beijing holds annual auditions for Western opera singers. Those who are selected receive scholarships for intensive Chinese language study coupled with musical coaching in Beijing during the summer. Of the 20 to 30 Western opera singers who are selected for the program, none have prior knowledge of Mandarin Chinese. The music that captivated the audience is the brainchild of the program's Artistic Director Hao Jiang Tian. Tian grew up in China and came to the US in 1980s. A professional opera singer in the West for over 27 years, he says he always dreamed of bringing not only singers, but also conductors and instrumentalists, to China to help them get a sense of the texture of Chinese culture. Many of the songs popular during Tian's youth were adapted for the I Sing Beijing program. Above all, I Sing Beijing is about promoting cross-cultural understanding and the burgeoning Chinese contemporary operatic scene, Tian told China Daily earlier. Haidan Hu contributed to this story.

Hong Kong*:  Feb 23 2013

Wan Chai could get three more stations as part of MTR shake-up (By Ada Lee and Jennifer Ngo) District could get three new stations and trains might no longer run the length of Island Line - Three stations would be built in or close to Wan Chai if a proposal to construct a new rail line is adopted to ease congestion. Under one of two options, trains would cease running the full length of the MTR's Island Line. Passengers boarding in the eastern part of Hong Kong Island would have to change trains to reach Wan Chai and Central. The plan is one of seven proposals put forward in the second stage of a public consultation about long-term railway development. The consultation will last three months. It puts forward two options for creating a North Island line. Under one of these options, stations on the existing Island Line would be divided between the Tseung Kwan O Line, on which trains would run between Tseung Kwan O and Kennedy Town, and the Tung Chung Line, on which trains would run from Tung Chung to Chai Wan. Three new stations - Tamar, Exhibition (for the Convention and Exhibition Centre), and Causeway Bay North - would be on the Tung Ching Line. Passengers boarding in Eastern District for travel to Fortress Hill and beyond on what is now the Island Line would have to change to a Tung Chung Line train at North Point; if the current service frequency on the latter were maintained, they could face a wait of several minutes for a connecting train. The other proposal for a North Island line would see Tseung Kwan O Line trains running to and from Tamar along the new route, with an interchange at Tamar to the Tung Chung Line. Island Line trains would run between Chai Wan and Kennedy Town. A consultants' report said this option would do less to ease congestion. As for the western part of the South Island Line, the government hopes to gauge opinion on the merits of splitting its construction into two phases - linking Wong Chuk Hang and Wah Fu Estate first, and then Wah Fu to the University of Hong Kong. Transport analyst Dr Hung Wing-tat, of Polytechnic University, said the new railways would cut the percentage of commuters taking buses but the actual number of bus users might not drop because of population growth. Southern district councillors from the Democratic Party said the proposed South Island Line was shorter and had fewer stations than when it was first proposed in 2004. They said building its western section in phases was ridiculous. Construction would take more than 20 years and create long-lasting inconvenience. Eastern District councillor Patrick Leung Siu-sun was worried more people would take the Island Line to cross the harbour if an extra line was built, making Tai Koo station even more crowded because more people would be using the MTR. Lawmaker Gary Fan Kwok-wai said the priority should be on building the South Island Line section linking Wah Fu and Wong Chuk Hang, as there were many low-income families in the district who relied on public transport. Undersecretary for Transport and Housing Yau Shing-mu said that after the second-stage consultation ended, the government would ask its consultant to collate public opinion and make recommendations. The process should be completed this year.

HKUST probes US firm's claims of hacking - Washington had a "habit of accusing other nations based on phoney evidence" (Dennis Chong and Agence France-Presse) School's network may have been hacked even before the attacks were launched, experts say - The university campus in Clear Water Bay. The University of Science and Technology has expressed "serious concerns" about a US company's claims that it is a source of cyberattacks against the United States and launched an investigation into the matter. HKUST was named in a report this week by American internet security firm Mandiant, which claimed that a Chinese military cyberspy unit was targeting the US and other foreign companies with cyberattacks in which the school's network was involved. Beijing has denied its army is involved in any cyberattacks. The report said some of the attacks came from a group of IP addresses owned by the university. In a brief statement yesterday, HKUST said: "The university has opposed any hijacking activities and is very concerned that its network has been attacked and used by hackers. The university has opposed any hijacking activities and is very concerned that its network has been attacked and used by hackers - "A report has been lodged with the police while a [school] investigation has been launched. We are serious about network safety." A police spokesman said officers at the force's Cyber Security Centre met the university's officials to discuss the claims. HKUST is known for its business programmes and is popular with mainland Chinese students. Security experts whom the South China Morning Post spoke to said it was difficult to quickly determine how the university's network became involved in the series of cyberattacks, as it could have been hacked before outbound attacks were launched by people who might or might not have been related to the school. Hong Kong-based independent security consultant Young Sang said it was difficult at the moment to determine the exact source of the cyberattacks even though the university's IP addresses had been used. Further investigation was needed to find out how the school's network was picked as a platform for outbound attacks, he said. Young said HKUST must plug loopholes immediately to avoid any further network intrusion. Meanwhile, the Chinese state media stepped up its war of words with the US over the hacking claims. A strongly worded commentary by official news agency Xinhua branded the accusations in the Mandiant report as a "commercial stunt" and accused Washington of ulterior motives. "[The Mandiant report] reeks of a commercial stunt," it said. "Next time, the firm's chief executive can simply say, 'See the Chinese hackers? Hurry up, come and buy our cybersecurity services'." Xinhua reported the US had "matchless superiority and ability to stage cyberattacks across the globe" and that the American military had "established a significant cyberforce, including the 780th Military Intelligence Brigade, which is a regular military unit tasked with carrying out cyber missions".

PCCW in court bid to end Apple phone locking (By Austin Chiu) Company seeks judicial review after regulator refused to act on its complaint that network restrictions on iPhone broke competition rules - Hong Kong Telecommunications is seeking a judicial review of the regulator's handling of Apple's phone locking policy. The operator of PCCW says the iPhone 5 cannot connect to its fourth-generation wireless network, but can connect to those of its rivals in the city. Users are restricted to PCCW's slower 3G network. HKT complained that the Communications Authority refused to investigate its complaint that this breached competition rules. If the judicial review is granted, it would be the first legal challenge relating to Apple's locking practices in Hong Kong. HKT says it has lost "hundreds of millions of Hong Kong dollars" as a result of Apple's SIM-locking practice over sales of its iPhone5, iPad and iPad mini, High Court filings show. Apple has locked its products in many countries - restricting subscribers by programming phones so SIM cards only work with certain networks - since the release of the first iPhone in 2007. Initially the iPhone 5, which hit the market last September, could only be connected to SmarTone's 4G network. This was later extended to Hutchison and CSL's 4G networks, still to the exclusion of HKT. But the once-locked iPads can now connect to PCCW's 4G network. "The SIM-locking is causing significant harm to customers, to the competitive process and PCCW," HKT states in the papers. "Customers are confused … and they are, quite wrongly, blaming HKT for the inability to access its 4G/LTE network on the iPhone 5 when this is entirely because of anti-competitive conduct engaged in by Apple." It says the lock restricts customers' choice. HKT says the SIM-locking practice violates the competition provision under the Telecommunications Ordinance. Court documents showed that HKT filed a complaint with the predecessor of the authority on September 28 last year - about a week after the launch of iPhone5 - after Apple and SmarTone ignored its complaints. At one stage, the authority said it doubted whether it had jurisdiction over Apple. In January, the authority concluded it did not have enough information to assess whether HKT's complaint raised genuine competition issues and an inquiry into the matter was not justified, according to court papers. HKT is asking the court to quash the authority's decision and order the authority to consider its complaint within 21 days and give a direction requiring Apple to remove the lock. It says such an order would do no harm to Apple and sales would rise. HKT says it understood that the Consumer Council and the authority had received "some hundreds" of complaints from consumers on the issue. The Communications Authority would not comment. Apple Hong Kong could not be reached.

World’s largest sailing ship makes a stop in Hong Kong (By Jennifer Cheng) The world’s largest sailing ship in operation paid a visit to Hong Kong for the first time on Thursday. The Sedov, a 92-year-old Russian windjammer, sailed into the harbour and to its berth at the Ocean Terminal in Tsim Sha Tsui, where the public will be able to see and board it. The 117.5-metre-long ship, which celebrated its birthday on Valentine’s Day in the South China Sea, is making a pit stop here as it makes its way around the world on a 13-month journey as part of the celebrations for 1,150th anniversary of Russian statehood. Along the way, it will visit 20 countries and 32 ports. The public will have free access to the Sedov’s deck from Friday to Sunday. Those who have more time and are willing to pay can even travel on the ship and experience life as a crew member as it circumnavigates the globe. The ship was christened the Magdalene Vinnen II in 1921 in Germany, when it was the world’s largest three-mast auxiliary barque. On its maiden voyage, the ship transported coal from Bremen, Germany, to Buenos Aires, Argentina – a journey that took 30 days, overcoming bad weather along the way. It also carried timber from Finland, wheat from Australia, pyrite from Italy and various cargoes from Belgium. In 1936, the ship was sold to another German company where she was renamed Kommodore Johnsen and became a cargo-carrying training ship. During the second world war, it was used as an auxiliary fleet supply ship. At the end of the war in 1945, the ship was ceded to the Russian victors and renamed the Sedov, after the Arctic explorer Georgy Sedov. The Russian navy used it as a training ship from 1952 to 1957, after which it was used an oceanographic research vessel in the North Atlantic from 1957 to 1966. Today, the Sedov is again a training ship used to teach naval skills.

Travel agency suspended for stranding mainland tourists (By Lai Ying-kit and Amy Nip) The tourism watchdog on Thursday suspended operations of the travel agency that left mainland tourists stranded, without hotel rooms, during last week’s Lunar New Year holiday. 3A Holidays had its membership in the Travel Industry Council (TIC) suspended after the agency’s boss three times failed to appear at council meetings to explain at least four recent scandals involving mainland tourists. The TIC issued an ultimatum to the agency to attend Thursday morning’s meeting, but the firm’s proprietor, Wong Wing-kin, did not appear. A letter from the agency attempting to explain the incidents failed to answer crucial questions, the TIC said. Wong Wing-kin's daughter said on Thursday that her father was not feeling well and could not take the pressure of appearing in public at this time. A lawyer was appointed to represent the company, but he too could not make it to the TIC this morning. The government will have to decide whether it should suspend 3A's licence following the suspension of the agency's membership. This is the first time the TIC has suspended an agency’s membership – which prevents 3A Holidays from organising any tours. Council chief Joseph Tung Yao-chung said on Thursday the TIC would decide whether to terminate 3A Holidays’ membership after an investigation. In one incident involving the agency, tourists slept on a tour bus after their promised hotel rooms did not materialise. In another, seven tourists were told they had to spend the night in a room intended for four people. Two other cases involved tour members being sent back to the mainland prematurely. Tung said 3A Holidays had failed to provide documents that could help explain its responsibility in the incidents. The documents include its agreements with tour guides and a mainland tour agency. A senior manager of 3A Holidays earlier told the council that others were to blame for the fiascos, but his explanations were rejected as unsatisfactory. He said a mainland agency was supposed to arrange the rooms but that phoney tour leaders, pretending to be from his agency, had led the tours that generated complaints.

China, Hong Kong shares post hefty losses on tightening worries (Reuters) Hong Kong and China stocks fell on Thursday, with a key mainland index suffering the biggest intraday drop in over a year, on worries about monetary tightening by the Chinese central bank in the months ahead and further curbs on the property sector. China’s CSI300 index, which tracks the largest listed firms in Shanghai and Shenzhen, slid 3.4 per cent, its biggest intraday decline since late 2011. The blue chip Hang Seng lost 1.7 per cent to end at 22,906.67, its lowest closing since the year began. Moves by China’s central bank to aggressively drain funds from the interbank market startled mainland investors, said Chen Shaodan, analyst at New Times Securities, and led to a selloff on fears that a sustained drain on liquidity is in the offing, which could depress stock prices. The China Enterprises Index of the top Chinese listings in Hong Kong fell 2.2 per cent and the Shanghai Composite Index ended down 3 percent at 2,378.8, its lowest close since late January. The property sector took a hit after China’s cabinet on Wednesday restated its intention to extend a pilot property tax programme to more cities and urged local authorities to impose price control targets on new homes. In Hong Kong, the blue chip property sub-index fell 1.5 per cent to its lowest close so far in 2013 with Cheung Kong losing 2.4 per cent, Sun Hung Kai Properties falling 1.5 per cent, and New World Development sliding 2.5 per cent. “The selling pressure was a bit overdone and investors trimmed their holdings in whichever stock they think is overvalued,” said Alex Wong, a director at Ample Finance Group. ”But players were also cautiously doing bottom-fishing, and that suggest that their risk appetites are still there.” China Overseas Land, which has dropped 5 per cent so far this year, gained 0.9 per cent on Thursday, while China Resources Land climbed 1.4 per cent. Shares of Belle International Holdings dived as much as 18 per cent after China’s top footwear retailer said its 2012 profit would come in at the lower end of estimates, just marginally higher than in 2011. “The reason for the drop was due to overestimation of sales results by analysts,” said Patrick Yiu, a director at CASH Asset Management. “Most of the analysts were still quite bullish on the China retail sector.” Belle shares, which closed at a record high on Wednesday, ended down 16.8 per cent at their lowest close since November 2012. Smaller rival Daphne International also fell 6.4 per cent. However, investors were keen to bet on fundamentally strong companies. Shares of Italian fashion house Prada SpA rose 5.2 per cent, in the second straight day of gain, to end at their record close, as consumer confidence in the world’s second largest economy improves. Goldman Sachs reiterated a “buy” rating on the stock after the luxury bags maker posted strong revenues growth. Macau gambling stocks remained weak for the third consecutive day as analysts said short-term consolidation may last one to two months as the sector pulls back from recent gains. The People’s Bank of China let a net 910 billion yuan (HK$1.12 trillion) drain from the interbank market this week. In addition, the central bank this week returned to using longer-term forward repos to drain funds, instead of reverse repos which inject funds, for the first time since June. But money market dealers in China’s interbank market said that the PBOC operations were mostly intended to offset the record-high injection the central bank made prior to the Chinese Spring Festival holiday, which saw markets close for a week. Money rates increased slightly but liquidity remained ample, dealers said, thanks to the influx of funds flowing into the market as a result of foreign exchange purchases by the central bank.

Press conference of 37th Hong Kong Int'l Film Festival held - The press conference of the 37th Hong Kong International Film Festival was held in Hong Kong on Thursday.

 China*:  Feb 23 2013

 

Motives behind charges queried - The Chinese and Russian defense ministries rejected these "groundless" accusations (By Qin Zhongwei and Zhao Shengnan) The recent spate of false allegations made by the United States against China and Russia bolsters interest groups that aim to maintain Washington's military dominance and block the Obama administration's planned defense cuts, said observers. Washington recently talked up threats from cyberspace and singled out China as its target. A report released by Internet security company Mandiant on Tuesday claimed that the Chinese military controls some of the most prolific hackers in the world and linked it to sophisticated cyberattacks on US companies. Earlier, the US air force said two F-15 fighter jets, from Andersen Air Force Base in Guam, intercepted Russian TU-95 bombers, which circled the US island territory. The Chinese and Russian defense ministries rejected these "groundless" accusations. The Russian Defense Ministry said the Russian air force had no bombers on missions in the Pacific Ocean, and added that its bomber pilot training is carried out in Russia's Far East, not in the Pacific Ocean. The Chinese Ministry of National Defense said on Tuesday and Wednesday that Chinese military has never supported hackings and the report is false as it only relies on the IP addresses that shows they originated in China. Cyberattacks are global, anonymous and deceptive, and their true sources are not easy to identify, he said. IP addresses alone do not provide proof of hackers' origins, or whether the government is behind them, according to Chinese information specialists. Rather than attacking other countries, China, as official statistics show, is one of the major victims of cyberattacks. And hackings traced to the US ranked the first. Zhai Dequan, deputy secretary-general of the China Arms Control and Disarmament Association, said that the US, in order to continue to impose its containment strategy worldwide, has singled out China, as the rising economic power, and Russia, a strong military power, as its targets. Such moves will not help the US build good bilateral ties with other countries, said Jia Xiudong, a senior researcher at the China Institutes of International Studies. This case once again reflected the poor mutual strategic trust between the Chinese and US militaries, as the US side always links the rumor with China every time it appears, he said. According to documents obtained by USA Today, the US Army estimates that automatic budget cuts, scheduled to take effect on March 1, will force $15 billion in wage and spending reductions and prompt layoffs for 300,000 people nationwide. The cuts will affect every army installation, and US states with large bases and military contractors are taking the biggest hits, according to the documents. US President Barack Obama urged Congress on Tuesday to pass a measure to delay the automatic cuts to the defense budget for the rest of the year, which he said would do great damage to the economy. By playing up "security threats", interest groups can make political and economic gains, said Niu Jun, a professor of US studies at Peking University. It is unlikely that the Obama administration will maintain such a high defense budget due to the domestic economic situation, Zhai said. "But playing up the threat is good for those weapon manufacturers in the short term, and also for the country to maintain its military presence around the world in the long run," he said. To deal with these cyberattack allegations, there should be more dialogue, cooperation and regulation, rather than focusing on an imaginary enemy and demonizing it, said Yuan Peng, an expert on US studies at the China Institutes of Contemporary International Relations. "But the question is whether there will be a worldwide framework and an Internet regulation that is recognized by all parties, which will be an important subject for future US-China ties," he said.

China steps up defence on hacking allegations (By Agence France-Presse in Beijing) A strategy document released by the White House warns that efforts of foreign governments and firms to obtain trade secrets are threatening US economic and national security. Chinese state media stepped up the war of words on Thursday over allegations of sophisticated cyberattacks on US firms, branding the accusations a “commercial stunt” and accusing Washington of ulterior motives. American internet security firm Mandiant earlier this week said that a Chinese military cyber-spy unit is targeting US and other foreign firms and organisations with hacking attacks. But an editorial in the state-run China Daily said: “One cannot help but ask the real purpose of such a hullabaloo.” “With the US economic recovery dragging its feet, it is reasonable to think that some in Washington may want to make China a scapegoat so that public attention is diverted away from the country’s economic woes,” it added. The newspaper quoted defence ministry spokesman Geng Yansheng as saying the People’s Liberation Army had itself been the target of a “significant number” of cyberattacks. “A considerable number” of them originated in the United States, judging from the IP addresses involved, he said, but added that he did not accuse the US government of being involved. In its report, Mandiant alleged the hacking group “APT1” – from the initials “Advanced Persistent Threat” – was part of the Chinese military’s Unit 61398 and had stolen hundreds of terabytes of data from at least 141 organisations across 20 industries. Targeted companies included some involved with significant sections of the American domestic infrastructure. A strongly worded commentary by the official news agency Xinhua said the Mandiant document “reeks of a commercial stunt”. “Next time, the CEO could simply say: ‘See the Chinese hackers? Hurry up, come and buy our cyber security services’,” it went on. It said the US had a “matchless superiority and ability to stage cyberattacks across the globe”, and that the US military had “established a significant cyber force, including the 780th Military Intelligence Brigade, which is a regular military unit tasked with carrying out cyber missions”. Washington, it added, had a “habit of accusing other nations based on phony evidence”. “Facts will eventually prove that the cyberattacks accusations are groundless and will only tarnish the image and reputation of the company making them, as well as that of the United States,” it said. The commentary came after the US government on Wednesday vowed to aggressively combat a rise in the foreign theft of trade secrets. A new strategy document released by the White House did not explicitly name China, but warned that foreign governments and firms had stepped up efforts to obtain such material, threatening US economic and national security.

China's Terracotta Warriors to be exhibited in San Francisco - Exhibition "China's Terracotta Warriors: The First Emperor's Legacy", featuring more than 120 artifacts, will open to the public in San Francisco from Feb. 22 to May 27.

China's 14th escort fleet sails for Somali (China Daily) Missile destroyer Harbin (R) sails close to the supply ship Weishanhu at South China Sea, Feb 20, 2013. The supply ship Weishanhu reinforced the missile destroyer Harbin and the frigate Mianyang on Wednesday with fuel, fresh water and other materials. The 14th naval squad, sent by the Chinese People's Liberation Army (PLA) Navy, departed Saturday from China to the Gulf of Aden and Somali waters for escort missions. The fleet comprises three ships - the missile destroyer Harbin, the frigate Mianyang and the supply ship Weishanhu - carrying two helicopters and a 730-strong troop. 

Dragons dance firestorm festival (China Daily) People perform a dragon dance among the fireworks in downtown Bingyang county in South China’s Guangxi Zhuang autonomous region on Feb 20, 2013. The county celebrates its annual traditional dragon dance and firework festival on Jan 11 of the Chinese lunar calendar. 

Hong Kong*:  Feb 22 2013

Anti-mainlander hate demeans Hongkongers (By Kelly Yang) Kelly Yang says whatever the daily frustration of living with more visitors from the mainland, it demeans us to take it out on them - We may have legitimate reasons to want to keep mainland visitors out, but it does not excuse hateful behaviours. It saddens me that we have become a city filled with hate. Everywhere I went this past week, there it was. I saw it in the people standing next to me in the taxi queue. A mainland Chinese woman with a small child strolled down the street and walked right up to an approaching taxi. Eight people in line lunged towards her. "Hey!" they screamed, grabbing her by the arm, "You can't come here and jump our queue! This isn't China!" They proceeded to bark insults at her, one after another, so much so that she started shaking and could barely utter the words, "My husband … he's in the queue … at the front of the line …" We all turned to look at the husband, who waved at us. Did anybody apologise? No. I saw it in the words people wrote on Facebook forums all week, complaining about the "swarms of locusts infesting Ocean Park" or beautiful sunny days at Disneyland ruined by the "hordes of dreadful mainlanders". These are not anonymous forums, either. People are happy - proud, even - to put their names next to such hate. And, of course, I saw it on the faces of shoppers - countless shoppers who looked like someone had died because they had to share their mall with "those people". The hate is stomach-turning, especially as the Lunar New Year is a time for us to celebrate and come together as a community of Chinese people. Growing up in the United States, I longed to see another Chinese person whenever the Lunar New Year came round. It didn't matter if they were Taiwanese, mainlanders or Hongkongers. In my mind, they were all my fellow people. Hate is a cheap and dirty trick. When California was in a recession in the early 1990s, then governor Pete Wilson pushed for the passage of legislation to make illegal Mexican immigrants scapegoats for all California's problems. Proposition 187 aimed to deny illegal immigrants health care, education and many other public benefits. Voters passed the proposition by a wide margin. Years later, studies showed that illegal immigrants contributed far more to the economy than they cost in social services. If you went to school in California in the 1990s like I did, you would have heard the nasty comments children at the playground made to anyone who looked remotely Mexican. Or the terrified looks on the faces of Hispanic children, not because they were illegals but because Proposition 187 encouraged us all to distrust, disassociate and despise. Does the influx of mainland Chinese affect our everyday lives? Absolutely. School places are harder to get and apartments are more expensive to buy. Even milk powder is getting scarce. But does that make it right to narrow our eyes, point our fingers, and call them names whenever we see one of them walking down Queen's Road? For our children to laugh at them? To automatically presume that every mainland tourist who comes to Hong Kong is going to jump queues, urinate in public and hoard milk? I don't think it does. We may have legitimate reasons to want to keep them out, and every right to address our concerns through legal and legislative channels. But when we vent our anger on perfect strangers, people whose only "wrong" is booking a holiday here, what we're doing is hating. And hate, no matter how you sugarcoat it, is toxic. Kelly Yang is the founder of The Kelly Yang Project, an after-school programme for children in Hong Kong. She is a graduate of the University of California, Berkeley, and Harvard Law School. kelly@kellyyang.com 

Loophole could spark rush to buy Hong Kong hotel rooms (SCMP) As hundreds of buyers snap up hotel units in Kwai Chung for flats, development secretary says they could be seized if laws are broken - Property agents and buyers cram into the sales office for Cheung Kong's Apex Horizon hotel in Kwai Chung yesterday. More hotel rooms could go on sale after the development chief admitted there was a legal loophole allowing such transactions. But Secretary for Development Paul Chan Mo-po warned buyers on Tuesday that they risked having their units seized if land lease regulations were violated. Hundreds of buyers have rushed to buy four-year-old hotel units in Kwai Chung that Cheung Kong put on the market on Monday. Late last night the company said all 360 rooms in the Apex Horizon had been snapped up, with the last 65 selling for 5 per cent more than the first batch of 65. The units, as commercial properties, are not covered by stamp duties the government introduced last year to cool the red-hot residential market. Chan said the government would take over the Kwai Chung site if the designated hotel space of 21,190 square metres specified in the land lease was not maintained. "I hope the public understands that the sales involved are not residential units … I have urged the Lands Department to look at how many hotels are eligible for partial sales," he said. I hope the public understands that the sales involved are not residential units … I have urged the Lands Department to look at how many hotels are eligible for partial sales - The developer and agents have stirred controversy by telling buyers they can live in the properties as long as they sign an operational agreement with the hotel operator. Details of the agreement were not given. Chan said it was not until July 2003 that the government specified in land leases that hotels could only be sold as a whole. Hotel sites auctioned and rezoned before then do not have such a clause. The Kwai Chung hotel was approved before July 2003. In 2002 there were 98 hotels and 397 tourist guest houses providing 43,624 rooms. The vice-president of the Hong Kong Institute of Surveyors, Vincent Ho Kui-yip, said turning hotel rooms into flats violated the Buildings Ordinance as the plot ratio - or development density - set for the hotel is 9.5, far higher than residential ratio of 5 in the same district. But Cheung Kong executive director Justin Chiu Kwok-hung insisted that no residential property was involved in the sale. "We know we can sell it after a detailed study," he said. Buyers were enthusiastic despite Chiu's reminder that the hotel may not allow cooking and that changing the furniture might need management approval. One investor said he would buy a 600 sq ft unit for HK$3 million for his own use and was not worried about it being confiscated. "It should be fine as it is a big company and they would have consulted lots of lawyers." The units sold at HK$5,200 per sq ft were cheaper than flats nearby, which cost in excess of HK$8,000 per sq ft. Another buyer, Ip Chiu-sai, said he paid HK$3 million for a 600 sq ft unit. Democratic Party legislator James To Kun-sun feared more developers would follow suit. But he said the government could not stop them by backdating the clause as this would violate the spirit of contracts. "The government can only sell more hotel sites if the supply of hotel rooms is affected," he said. Civic Party lawmaker Alan Leong Kah-kit believed most hotels would not be sold as they were lucrative businesses.

From Hawaii to Hainan, hotel rooms are investments (By Yvonne Liu) Hotels are popular investment vehicles overseas, and some do use a time-share model, property agents confirmed onTuesday, in the wake of the Apex Horizon hotel controversy. Antonio Wu, executive director of Asia investment services at agency Colliers International, said hotel investments were common in the United States, Europe and Canada. "Hawaii is one of the most popular places and [there] hotel rooms are sold for time-sharing purposes," said Wu. "For example, those who buy shares in a hotel room from a hotel operator can stay in the operator's hotels across the country for a short period. But the buyers would not own the title of the property." Hawaii is one of the most popular places and [there] hotel rooms are sold for time-sharing purposes - Denis Ma On-ping, local director of the Greater Pearl River Delta Research at agency Jones Lang LaSalle, said investments in hotels were usually for the long term, but could also vary. "We have seen examples where the contract period is for up to 99 years, in places like Thailand," he added. Some hotels offer guaranteed rental yield in the initial years. "Rental yields also vary but are usually guaranteed for the first two years and then depend on the performance of the hotel. We have seen guaranteed yields of up to 8 to 10 per cent," Ma said. He said investors could usually use the property for up to one month per year. "Though time-sharing is the most common investment method, we have also seen some hotels 'sold' on an individual room basis in countries such as the United Kingdom, Canada and Australia. In these instances, the investor usually acquires an interest in the property - usually over a very long period, up to 999 years in some instances - and then leases the property to a hotel operator," Ma added. "In these cases, we have seen rental yields of up to 6 per cent guaranteed over the first five years. Investors may also have the option for guaranteed use of the property, typically up to one month per year, or receive compensation of a slightly higher yield." On the mainland, Andy Lee Yiu-chi, chief executive for southern China at property agency Centaline China, said hotel investments were common on Hainan Island three years ago, as the investment market was very active at that time. But the market had turned quiet after the mainland government released cooling measures in the property market during the last two years. He said hotels on Hainan Island were developed by local companies and targeted the mid-end market. "The developers would offer a 5 to 8 per cent guaranteed yield in the first five years. But they would mark up the price to cover their costs. The sales were strong when the project was released in the market. But it is uncertain whether the buyers could continue to enjoy a high rental yield after the guaranteed period ended," he added.

Hong Kong prepared for any future Sars-like threat, experts say (By Lo Wei) WHO head Margaret Chan was the city's health chief. Hong Kong is well equipped to face an epidemic after the experience of Sars 10 years ago, when health workers "fought in the dark" for weeks, experts in infectious diseases say. The outbreak of severe acute respiratory syndrome led to new health practices and new techniques in combating diseases. But Dr Margaret Chan Fung Fu-chun, who led the city's battle and is now chief of the World Health Organisation, sees it as a 21st century disease defeated using 19th century tools. "Sars taught the importance of meeting an emergency with whatever tools are at hand," Chan writes in an article for the South China Morning Post on her thoughts from those unforgettable days, telling of the helplessness in facing the mysterious enemy. Sars taught the importance of meeting an emergency with whatever tools are at hand - Approaching the 10th anniversary of the Sars outbreak, health professionals and policymakers are looking back at their experience in fighting the worldwide health threat, the lessons learned, and sharing its implications for the present and future. It was around this time of the year, in 2003, that the coronavirus which caused Sars - the identity of which was a mystery at the time - was carried into Hong Kong, where it went on to infect 1,755 people, killing 299 of them. Worldwide, 8,096 were infected, of whom 744 died. The rate of infection was alarming - a physician's one-night stay in the Metropole Hotel, Mong Kok, resulted in 16 other hotel guests being infected. One of them went to Prince of Wales Hospital for treatment, leading to 138 infections in the hospital within two weeks, including many health-care workers. "To me, it was a shock in the beginning that we were dealing with such a dangerous infection and were totally unprepared," said Chinese University vice chancellor Joseph Sung Jao-yiu, dubbed one of the "Sars heroes" for his frontline work in treating the first batch of patients. Professor David Hui Shu-cheong, director of the emerging infectious disease centre at the university, said: "In those first few weeks we were fighting in the dark, not knowing who and where the enemy was." Today, the situation would be far different in the event of another Sars-like epidemic, the experts say. Hospital wards have implemented strict measures to control infectious diseases, doctors can uncover the travel history of patients and they have more established practices for the wearing of protective gear. But problems like crowded wards in public hospitals still need resolving, given the small distance between beds increases the risk of infections, said Professor Nelson Lee Lai-shun, head of the infectious diseases division at Chinese University. The emergence of the powerful virus led to various clinical studies on new treatment methods, but Lee said: "It's been 10 years and the passion has died down. Now there are fewer people doing studies on infectious diseases. I hope there will be more in the future." Margaret Chan sees Sars as a disease of wealthy urban centres, showing that developed countries could also be threatened by new diseases. Sung, speaking of his biggest lesson learned from Sars, agreed. "Infectious diseases do not belong only to developing countries but to cosmopolitan cities like Hong Kong. We are actually more exposed to various types of infections because of international travel. Therefore education, training and research are of the utmost importance." http://www.youtube.com/watch?v=oywuCf9r5DY 

Tourism Board boss tells CY 'mainland tourists welcome in HK' (By Amy Nip and Jolie Ho) A mainland visitor who spent HK$10,000 in three days in HK. And he slams CY for suggesting city is too full to handle more shopping-crazy mainland tourists - The Tourism Board boss directly challenged the chief executive yesterday, questioning his suggestion that the city could be harmed by "blindly" welcoming more visitors. James Tien Pei-chun, the city's top promoter of tourism, made the comments at a press conference, where he estimated there would be 51.9 million visitors to the city this year - a 6.8 per cent increase on last year. Earlier in the day, Chief Executive Leung Chun-ying said he noticed that many tourist hotspots had been saturated with visitors during last week's Lunar New Year holiday. "We should not blindly go for an increase in the number of visitors," Leung said. "While we are pursuing economic benefits from the tourism industry, the daily lives of Hongkongers should not be affected." But his comments did not convince Tien, who had earlier branded Leung "incapable" and not trusted by business leaders. Tien said: "Except for the supply of hotel rooms, I do not think Hong Kong is running short of infrastructure. If CY and lawmaker Regina Ip [Lau Suk-yee] say the city is overwhelmed [by tourists], they should point out what exactly the city is lacking." This year's 48.6 million visitors to Hong Kong included 34.9 million from the mainland, Tien said. Shopping was their top expenditure, accounting for 70 per cent of overall spending. The city is not running short of shops or goods, Tien said. He disagreed that Hong Kong was "blindly" pursuing tourists, and said the board was focused on attracting overnight visitors with higher spending power. In the coming year, the Tourism Board will reduce its budget for promotion in southern China, as most people in the region make same-day trips to the city rather than staying overnight. It is also co-operating with inbound tour agencies to develop new itineraries that promote different attractions to tourists - encouraging them to stay longer than the average 3.5 days. Since the scheme began last year, seven out of 15 applications to organise creatively themed tours have been approved. One such tour brings people to Sham Shui Po for night snacks, while another takes visitors to the Tai O fishing village for handicraft and cooking classes. Tien said the recent outcry against excessive tourism came from a series of problems related to mainlanders burdening the city's resources, creating a lack of hospital beds for pregnant local mothers, and school places for children in North District. If the government can restrict the entry of parallel-goods traders, genuine tourists will not be a problem for the city, he said.

Beijing official says Leung administration popular despite media reports (Colleen Lee) Liaison office chief says public are happy with administration, and urges help to make it better - Chief Executive Leung Chun-ying's government is more popular with the public than the picture that is painted in certain sections of the media, a top Beijing representative says. Zhang Xiaoming , who succeeded Peng Qinghua as head of the central government's liaison office in December, also called on people not to criticise but to help the government solve Hong Kong's problems. "I have been working in Hong Kong for two months. From the people of different sectors whom I have met, I have to say something that some media organisations don't want to hear," he told a spring reception on Tuesday. "My impression is that different sectors of the community in Hong Kong including the general public are far more satisfied with the work of the new Leung Chun-ying-led SAR government than the comments made by some of our media outlets [suggest]." My impression is that different sectors of the community in Hong Kong including the general public are far more satisfied with the work of the new Leung Chun-ying-led SAR government than the comments made by some of our media outlets e did not name the media organisations. Zhang said he believed the government was leading Hong Kong to a brighter future. "I think the new SAR government is realising its pledge of seeking changes whilst maintaining stability, leading Hong Kong into a better future and working in a proactive and constructive manner in accordance with this target." He added: "The central government's fundamental principle of supporting Hong Kong is firm and unshakable, as is its determination to support the new SAR government." Zhang has reportedly met heavyweights such as former Executive Council convenor Chung Sze-yuen and Dr Tsang Hin-chi, a former member of the National People's Congress Standing Committee. Leung's popularity fell to a five-month low of 46.3 points out of 100 in a poll conducted early this month by the University of Hong Kong's public opinion programme (HKUPOP). At another spring reception, Zhang said it would take time to solve some of the city's longstanding problems, and expressed the hope that people would be accommodating and "actively participate", not just "look on, or even criticise". Meanwhile, findings released yesterday of an HKUPOP poll of 1,023 people showed ratings for five core social indicators - stability, freedom, the rule of law, prosperity and democracy - had all dropped since a similar poll six months ago. The indices for stability and freedom fell to their lowest levels since October 2004 - to 6.74 points and 7.33 points out of 10 respectively. The survey was conducted from February 4 to 14. Dr Robert Chung Ting-yiu, the programme's director, said the drops probably reflected "people's dissatisfaction with the current social environment".

 China*:  Feb 22 2013

'Cyberattacks using US IPs' target military (By By Zhao Shengnan in Beijing and Chen Weihua in Washington) Internet security a new way for Washington to 'pressure Beijing' The military has been the target of a "considerable number'' of cyberattacks, the Defense Ministry said on Wednesday. Military computers suffered "a large number" of overseas attacks, with "a considerable number" of them originating from the US judging from the IP addresses, said ministry spokesman Geng Yansheng. Every country should handle cybersecurity in a "professional and responsible way", Geng stressed. But he did not directly accuse the US government of being behind the attacks as IP addresses can be disguised, he said. The remarks came in response to a report on Tuesday by US computer security firm Mandiant that accused China's military of hacking US websites. Cybersecurity is a new way for Washington to levy pressure on the Chinese military, observers said. The report alleged that a military unit in Shanghai was behind a series of cyberattacks against US companies. The White House said that the Obama administration has repeatedly expressed its concerns about cybertheft to the highest levels of the Chinese government, and military. Richard Bejtlich, the chief security officer at Mandiant, said the company decided to make its report public in part to help send a message to both the Chinese and US governments to communicate with each other "without having to worry about sensitivities around disclosing classified information", according to media reports. "China and the United States have maintained communication over the (hacking) issue," Foreign Ministry spokesman Hong Lei said at a news conference on Wednesday. The Defense Ministry said Mandiant's report is groundless both factually and legally, and "releasing irresponsible information will not help solve problems". "The report lacks technical proof as it only relies on linking IP address to reach a conclusion the hacking attacks originated from China," said Geng. Cyberattacks are global, anonymous and deceptive and their true sources can often be difficult to identify, he added. Ye Zheng, an information specialist from the People's Liberation Army, said IP addresses do not provide proof of hackers' origins, and it is hard to verify government support behind them. Reaction among netizens raised the possibility of a disguised IP address. "If I were to attack a foreign agency it would be undercover with a disguised IP address,'' said "Beijing Gentlemen of The Wind", a Chinese netizen. Su Hao, a professor of security affairs at China Foreign Affairs University, raised the possibility that competition could be a reason for the US allegations, especially as Chinese information technology has made strides recently. Experts said recent allegations could be part of an effort by lobbying groups and private companies to push Congress to pass legislation and increase funding for cybersecurity. Pointing out a "threat'' is a convenient way for Washington to seek an increase in its defense budget and enlarge cybersecurity forces, Hu Xiaofeng, a military commentator, said. Zhu Zhiqun, a professor of political science and international relations at Bucknell University in Pennsylvania, said that the allegation that China's military is somehow involved in cyberattacks is not entirely new. But "the motives of Mandiant's report are unclear, and the timing is questionable".

Remember how President George Bush started the Iraq war by manufacturing nuclear weapon claims? Mandiant has an obvious commercial interest in releasing the information. The company said its existing customers were already warned about and protected against the techniques it discovered, and it offered a free software tool to companies and organisations to detect suspicious activity. It puts Mandiant front-and-centre at a critical time on a national debate about cybersecurity. Its founder testified earlier this month to the House Intelligence Committee on hacking threats. Last week, US President Barack Obama signed an executive order aimed at improving government cooperation with industry, and Congress is weighing various legislative proposals on the matter (Associated Press in Washington)  China says US hacking accusations lack proof (Reuters in Beijing) The security company, Mandiant, identified the People’s Liberation Army’s Shanghai-based Unit 61398 as the most likely driving force behind the hacking. Accusations by a US computer security company that a secretive Chinese military unit is likely behind a series of hacking attacks are scientifically flawed and hence unreliable, China’s Defence Ministry said on Wednesday. The statement came after the White House said overnight that the Obama administration has repeatedly taken up its concerns about cyber-theft at the highest levels of the Chinese government, including with Chinese military officials. The security company, Mandiant, identified the People’s Liberation Army’s Shanghai-based Unit 61398 as the most likely driving force behind the hacking. Mandiant said it believed the unit had carried out “sustained” attacks on a wide range of industries. The Chinese Defence Ministry, which has already denied the charges, went further in a new statement, slamming Mandiant for relying on spurious data. “The report, in only relying on linking IP addresses to reach a conclusion the hacking attacks originated from China, lacks technical proof,” the ministry said in a statement on its website (www.mod.gov.cn). “Everyone knows that the use of usurped IP addresses to carry out hacking attacks happens on an almost daily basis,” it added. “Second, there is still no internationally clear, unified definition of what consists of a ‘hacking attack’. There is no legal evidence behind the report subjectively inducing that the everyday gathering of online (information) is online spying.” As hacking is a cross-border, anonymous and deceptive phenomenon, by its very nature it is hard to work out exactly where hacks originated, the statement said. Unit 61398 is located in Shanghai’s Pudong district, China’s financial and banking hub, and is staffed by perhaps thousands of people proficient in English as well as computer programming and network operations, Mandiant said in its report. The unit had stolen “hundreds of terabytes of data from at least 141 organisations across a diverse set of industries beginning as early as 2006”, it said. Most of the victims were located in the United States, with smaller numbers in Canada and Britain. The information stolen ranged from details on mergers and acquisitions to the emails of senior employees, the company said. But the Chinese Defence Ministry said China’s own figures show that a “considerable” number of hacking attacks it is subjected to come from the United States. “But we don’t use this as a reason to criticise the United States,” the ministry said. China has worked with the international community to fight hacking and was determined to continue doing so, it added. “Public criticism in the media from one side not only does not help matters but will also damage the atmosphere for cooperation.”

Inside Northeast China's first nuclear plant (China Daily) The interior part of the No.1 power generation unit at Hongyanhe nuclear power station near Wafangdian in Northeast China's Liaoning province, Feb 19, 2013.. The Hongyanhe nuclear power station, the first nuclear power plant and largest energy project in Northeast China, began operation on Feb 17 and opened it's doors to China Daily website readers to take a closer view through our series of images. The Hongyanhe nuclear power station near Wafangdian in Northeast China's Liaoning province, Feb 19, 2013. It is the first nuclear power plant and largest energy project in Northeast China. Construction of the first phase of the project, which features four power generation units to be built at a cost of 50 billion yuan ($7.96b), began in 2007 and is expected to be completed by the end of 2015. The four units will generate 30 billion kilowatt-hours (kwh) of electricity annually.. Construction of the second phase of the project, which features two power generation units to be built with an investment of 25 billion yuan, started in May 2010 and is expected to be completed by the end of 2016. The power plant will generate 45 billion kwh of electricity after it is fully completed in 2016. 

China seeks extra testing of US pork for feed additive (China Daily) China wants a third party to verify beginning March 1 that US pork shipped to the country is free of a feed additive used to promote lean muscle growth, a US Meat Export Federation spokesman told Reuters. The step comes on the heels of Russia barring imports of US meat worth $550 million a year due to the same feed additive. Officials from the China's quarantine bureau, which oversees the safety of food imports, declined to make immediate comment, while a spokesman said the country's commerce ministry was unaware of the move. There was concern that China's requirement for third-party testing could hurt US pork exports to the Chinese mainland and Hong Kong, valued at $886 million last year. "We have just been notified (by US suppliers) and are checking details with the quarantine authorities," said a trader with a large State-owned pork importer in China. Beijing maintains that there are serious concerns about ractopamine, despite scientific evidence that it is safe. The United Nations has agreed on acceptable levels. The quarantine bureau in May rejected a consignment of US pork after tests found traces of the drug.

China's Navigation system set to soar (By Cheng Yingqi) Beidou, when fully operational, will 'challenge major world rivals' The fledgling Beidou satellite navigation system will soon benefit hundreds of millions of users, and provide a cheaper and in some cases better alternative than the Global Positioning System, industry specialists said. The Beidou network has 16 navigation satellites hovering over the Asia-Pacific region. But global coverage will be achieved when the network has more than 30 satellites. "By 2020, China will introduce a world-leading navigation system to more than 100 cities and 200 million users across the country," Vice-Minister of Science and Technology Cao Jianlin told China Daily. Beidou has advantages, Cao said, over the three other global navigation systems - the GPS of the United States, Europe's Galileo and Russia's Glonass - such as short-message communication. The market for transportation, weather, and telecom spinoff services from Beidou could be worth 225 billion yuan ($36 billion) by 2015. The military is already reaping the benefits even though the system has not reached full capacity. A naval fleet conducting patrols and training exercises recently used Beidou, according to a China National Radio report on Feb 4. The fleet, with missile destroyer Qingdao and missile frigates Yantai and Yancheng, entered the South China Sea at 11:40 am on Feb 1, after passing through the Bashi Channel. Beidou provided positioning, security and protection for the fleet, Lei Xiwei, information chief at the headquarters of the North Sea Fleet, said. Li Changjiang, chief commander of the Beidou Navigation Satellite System, said the system can provide valuable intelligence. The network's success is due in part to the technology behind the atomic clock, Li said. Atomic timepieces are a crucial tool in navigation systems as their accuracy and stability are key requisites. Only the US and a few countries in Europe have mastered the technology and Washington banned its export to China. "It is the most complex technology in the system," he said. After Chinese scientists made the breakthrough in the past decade, the Beidou satellites have achieved the ability to locate a user to within 10 meters. In terms of performance, Beidou is "comparable" to the GPS, Ran Chengqi, a spokesman for the China Satellite Navigation Office, said in December. Li said that another important application of the Beidou system is to provide precision for any transactions that require speed and accuracy, such as bank settlements. Cao Hongjie, vice-president of UniStrong, a company involved in global navigation services, said Beidou will have broader applications than the GPS. "Compared with the GPS, Beidou will make it easier for users to locate other people," Cao said. This function is particularly suitable for those looking after the elderly or children, he said. Transportation companies will also benefit by being able to keep track of vehicles and can use the short message function to dispatch drivers more efficiently, he said. However, Li Yi, a science observer, warns that excessive government support could make Beidou less competitive and the market will have the final say. "Beidou's success should be proved by the market," Li Yi told China National Radio. China also opens Beidou for foreign users. On Dec 27, China published the Beidou interface control document. The document describes how to access the functions and services provided by Beidou, and allows foreign companies to use the service. Beidou, unlike other systems, is open and allows interoperation with other systems, Vice-Minister Cao said. "We welcome international companies to develop client-side devices and services based on Beidou. We welcome the competition," he said.

Philippines' request for UN tribunal on South China Sea issue rejected (By Zhou Wa and Zhang Yunbi) China has turned down a request by the Philippines to take a South China Sea territorial dispute to a United Nations arbitral tribunal. Foreign Ministry spokesman Hong Lei said on Tuesday that Beijing has urged Manila not to complicate the issue. Observers said Beijing's rejection did not mean it has changed its attitude toward resolving the issue through dialogue. Manila's request is a political gesture, as taking the issue to an international arbitral tribunal will not help settle the dispute, they said. "Chinese Ambassador to the Philippines Ma Keqing had an appointment with officials from the Philippine Foreign Ministry on Tuesday and returned a note and related notice after expressing China's rejection," Hong said. Hong added that Manila's action violates the consensus in the Declaration on the Conduct of Parties in the South China Sea, adding that there are factual and legal mistakes and baseless accusations against China in the note and related notice. China signed the declaration in 2002 with members of the Association of Southeast Asian Nations, including the Philippines. The declaration states that disputes should be solved through friendly talks and negotiations by sovereign states directly concerned. Philippine Foreign Secretary Albert del Rosario said Manila took the South China Sea dispute to an arbitration tribunal under the United Nations Convention on the Law of the Sea on Jan 22. Hong said China is committed to addressing the dispute through bilateral talks, noting that the consensus in the declaration states that disputes should be solved through talks between the nations directly involved. "China hopes the Philippines will honor its commitment by not taking any action that could complicate the issue, positively respond to China's proposal to establish a bilateral dialogue mechanism on maritime issues and work to solve the issue through bilateral negotiations," Hong said. Wu Hui, a professor on the International Law of the Sea at the University of International Relations, said although Manila does not mention Huangyan Island in its statement on Jan 22, the island, which belongs to China, is its target. Wu added that international arbitration is not legally appropriate to resolve the dispute. "According to United Nations Convention on the Law of the Sea, countries with maritime disputes should resolve the issue through negotiation before delivering a case for international arbitration," Wu said. She added that the maritime dispute between Beijing and Manila is still in negotiation. Gao Jianjun, a professor at the School of International Law at the China University of Political Science and Law, said, "Beijing has shown consistency in its pursuit of a peaceful resolution of international disputes." He said "political considerations" are behind Manila's latest proposal.

Taking fabulous shoes to new heights (China Daily) A pair of 1.8-meter-tall high-heel shoes with 318,000 diamonds is displayed at a shopping mall in Guangzhou, South China’s Guangdong province, on Feb 19, 2013. The auction price for each of the shoes starts at 168,000 yuan ($26,882). 

Chinese firms bid for struggling automaker in US (By Li Fangfang) Workers check cars on an assembly line at a Geely production base in Ningbo, Zhejiang province. Struggling US automaker Fisker Automotive, which makes electric vehicles, is weighing bids for a majority stake in the company from two Chinese firms. The move comes after the company's founder and chairman Henrik Fisker said in December it was looking for potential strategic partners. The Anaheim-based hybrid-vehicle maker is looking at bids from Zhejiang Geely Holding Group Co Ltd and Dongfeng Motor Group Co, with Geely appearing to be the preferred suitor, Reuters reported on Tuesday, citing two sources familiar with the deal. The sources said Geely has sent a team of engineers to Fisker's headquarters to evaluate the company and its technology to make battery-powered electric car's with a small gasoline engine used to extend the car's driving range. The sources added that both offers, which Fisker received in the past three weeks, were worth between $200 million and $300 million, which would give the suitors a majority stake in the automaker, Reuters reported. Dongfeng could not be reached on Tuesday, while Yang Xueliang, a spokesman for Geely, declined to comment on the report. However, Yang said that Geely - whose Hong Kong-listed subsidiary has just signed a 1 billion yuan ($158.94 million) deal for a 50-50 joint venture with Kandi Vehicles to make low-speed electric vehicles - will announce the group's new-energy vehicle plan in about a month. Fisker had a difficult year in 2012, as it suffered from a series of recalls due to battery, software and cooling issues. "The new-energy vehicle industry in the US is entering a period of uncertainty as the government will probably block more aid to finance the sector," said Zhong Shi, a Beijing-based expert in the new-energy vehicle sector, who is familiar with Fisker. "That will make investors in the sector, mostly venture capital firms, retreat from those troubled automotive players as soon as possibly." "Chinese companies' strong interest in Fisker is a result of the Chinese government's encouragement to develop alternative-fuel vehicles in a bid to ease the country's strong reliance on imported oil and reduce emissions." "The purchase or control of mature new-energy companies in the United States can provide ambitious Chinese companies with a shortcut in the sector," Zhong added. According to Reuters' report, Fisker's leaders and their advisers believe that Geely is "more serious" and "passionate" about the company and its technology. Also in Geely's favor is the fact that the company acquired Swedish luxury car brand Volvo in 2010 and that it probably can move faster in its decision-making process than State-owned Dongfeng. However, Zhong said that he believed that the Wanxiang Group, which bought Fisker's bankrupt primary battery supplier A123 Systems last year, could also be a suitor for Fisker. "A Wanxiang executive previously indicated its intent to help support Fisker, which it sees as its most important customer. If Wanxiang were to win the deal, it would stand in the frontline of the extended electric-vehicle sector in China, with complete control of core technologies for both battery and vehicles," said Zhong. As European and Japanese automakers are not familiar or interested in extended plug-in hybrid technologies, Chinese bidders have more chances to win the Fisker deal, Zhong added.

China refutes accusations of launching cyberattacks on US (By Zhao Shengnan) Beijing on Tuesday denied allegations that the Chinese government and military are behind cyberattacks against US websites. "The Chinese army has never supported any hackings," the Ministry of National Defense said in a statement. Such accusations are unprofessional and false, it added. The ministry's remarks came in response to a report released by Internet security firm Mandiant on Monday that claimed that China's army controls some of the most prolific hackers in the world, and that a host of cyberattacks was traced to a building in Shanghai. Observers said verifying the firm's so-called evidence is difficult, as hackers' origins are transnational and anonymous, and the report is likely to be politically motivated to raise the specter of a China threat. The Shanghai building trace, if true, also showed the firm hacked the building in Shanghai, they added. China bans all cybersabotage activities, including hackings, and the Chinese government always strongly fights them, the ministry said. China, like other countries, also faces a severe threat of cyberattacks and is one of the major victims of cyberattacks, it added. In 2012, about 73,000 overseas IP addresses controlled more than 14 million computers in China and 32,000 IP addresses remotely controlled 38,000 Chinese websites, Foreign Ministry spokesman Hong Lei said at a regular news conference on Tuesday. Attacks originating from the United States rank the first among these hackings, Hong added. The Chinese army is also one of the top victims. From January to March 2012, the websites of China's Ministry of National Defense and China Military Online suffered 240,000 cyberattacks, according to the Ministry of National Defense. Wen Weiping, a professor at the School of Software and Microelectronics at Peking University, said cybersabotage targeting China is rising rapidly, but Beijing has seldom accused other countries of launching the attacks. People's Daily said earlier this month that allegations from the US serve as an excuse for Washington to expand its cybersecurity forces and levy more technology restrictions on China as a containing measure. International rules could regulate the hackings but cannot eradicate them and hacking accusations, said Cui Baojiang, an expert on information studies at Beijing University of Posts and Telecommunications. To fundamentally address the problem, every country has to keep strengthening its own cyberdefense system, said Cui, adding that China's cyber security capacity has been improved but still heavily relies on imported technologies.

Hong Kong*:  Feb 21 2013

Probe launched on sales in Apex hotel over stamp duty (By Peggy Sito and Jeanny Yu) Cheung Kong insists sales of units at hotel in Kwai Chung are not a way to avoid stamp duty - The Apex Horizon development at Kwai Chung. The Lands Departments is investigating whether property giant Cheung Kong has violated land lease regulations by selling units at a suite hotel. Buyers do not have to pay stamp duties when buying commercial property. The probe comes as the first 65 of the 360 units in the Apex Horizon hotel in Kwai Chung, which opened in 2009, were offered for sale last night, attracting more than 100 potential buyers. More will be available today. On offer were 660-square-foot, two-bedroom units and 909-sq-ft three-bedroom units. The average selling price was HK$5,200 per square foot. It is the latest attempt by a developer to offer options to investors wishing to avoid the growing policy risks of residential property. Buyers of Apex Horizon do not need to pay buyer's stamp duty or special stamp duty, as this is a commercial property - "Buyers of Apex Horizon do not need to pay buyer's stamp duty or special stamp duty, as this is a commercial property," executive director Justin Chiu Kwok-hung said. Chiu insisted the sale was not aimed at circumventing the special 15 per cent duty on non-locals and businesses and up to 20 per cent duty if the properties were resold within three years - measures introduced last October to cool the market. "It's never been our intention to sell units to home seekers," he said. "Living in a hotel unit is totally different from living in a residential flat. You have to comply with Hong Kong hotel rules." The units are a new investment product for investors seeking an investment yield of more than 4 per cent a year. Chiu said most potential buyers in the sales office last night were investors. They might buy units for family members to live in but they would have to sign a separate hotel lease agreement with the operator. Apex Hotel Management, a unit of Cheung Kong, manages the hotel. The Inland Revenue Department said it would handle the sales in line with the Stamp Duty Ordinance. It said whether a property was residential was not related to how it was being used, how it was marketed or whether it was a home-style hotel. A spokesman for the Lands Department would not comment as it had launched a probe into the scheme. He said the hotel site was for non-industrial use, but the lease also specified that the site should provide no less than 21,190 square metres for hotel use. A property consultant said buyers would not purchase units for their own use because the management costs of running a hotel were higher than those for ordinary residential properties. According to Cheung Kong, owners must pay a monthly management fee of about HK$2.90 per sq ft, but this may change next year. Since the government introduced the special stamp duty on residential purchases for companies and non-permanent residents at the end of October, investors have been putting their money into non-residential properties such as offices, shops, and car-parking spaces. Apex Horizon is one of the four extended-stay hotel projects in a portfolio that Cheung Kong planned to list last year to raise up to US$800 million. The company targeted local investors but few showed interest, according to a Hong Kong-based fund manager. Selling the hotel business now would be better than waiting endlessly in the IPO queue, he said. The upbeat sentiment and ample liquidity in the market could help ensure a good price.

Stop politicising ICAC, top officer says (SCAMP) Graft-buster’s job hard enough without people being tipped off by high-profile informers - Filing corruption complaints in a high-profile way only serves to tip-off any potential subject of the inquiry so they can destroy the evidence, a senior officer with the graft-buster said yesterday. The officer said such complaints politicised the commission and he doubted their sincerity. "If a person knows that he is the subject of an investigation, he will surely destroy any incriminating evidence before the [Independent Commission Against Corruption officers] arrive," the officer said. "It is difficult enough to investigate corruption complaints. Letting the subjects of a complaint know in advance they are going to be investigated will make it even more difficult [for us] to investigate … What I don't know is how sincere they are in making the complaint," he said. Speaking at a media reception, Commissioner Simon Peh Yun-lu said it was increasingly common for reporters to find out about the content of a complaint before the ICAC did. "There have been times when reporters have gathered outside the ICAC headquarters before a complainant arrived and that person was interviewed. We didn't know what the complaint was about until the complainant eventually filed it," he said. Another senior officer said some high-profile informants were getting around a law barring people from disclosing details of ICAC probes once a complaint has been made by talking to the media before they filed it. He said: "It's easy to damage a person's reputation by telling the media he is going to be the subject of an investigation. But the spirit of the ordinance is to protect people's reputation until the complaint against them is substantiated. It's difficult to undo the harm done to a reputation." Under the Prevention of Bribery Ordinance it is an offence for a person to disclose, without lawful authority or reasonable excuse, details of an ICAC investigation, including the identity of the person under investigation. This does not include complaints filed under the Elections (Corrupt and Illegal Conduct) Ordinance. Meanwhile, a complaint has been lodged with ICAC after fresh evidence emerged that former chief executive Donald Tsang Yam-kuen did not pay for a luxury yacht trip to Macau with tycoons while in office, revealed last year. A Marine Department probe concluded last week that there was no evidence Tsang had paid for the yacht trip, despite Tsang's claim that he did.

The Myanmar authorities have extended granting of visa-on-arrival at Mandalay International Airport for visitors from 22 more countries mostly from Europe starting this month, local media reported Monday. The move has brought the total number of countries that are eligible for visa-on-arrival in Myanmar to 48. "This will help travelers who do not have time to apply for a visa from Myanmar embassy," said the Myanmar Times. Business visa is allowed for 70 days by paying 50 U.S. dollars while tourist visa for 28 days with 40 U.S. dollars and transit visa for 24 hours with 20 U.S. dollars. Since June 1, 2012, visa-on-arrival at Yangon International Airport had been issued to visitors from 27 countries including Asian, ASEAN and Europe countries as well as some regions such as China's Hong Kong, Macao and Taiwan. Such travel documents have also been introduced at Mandalay International Airport since Nov. 1 2012. Myanmar is estimated to have attracted over 1 million world tourists to the country in 2012, an increase of 200,000 compared with 2011, due to the significant changes in Myanmar in the year.

Travel agent boss defiant (By Kelly Ip) A war of words broke out between the general manager of 3A Holidays and acting tourism commissioner Rosanna Law Shuk-pu. Law earlier said it was "ridiculous" that a 30-member mainland tour group handled by 3A Holidays was forced to stay overnight aboard a coach last Tuesday. But Rocky Wong Kit countered yesterday: "She [Law] is the one who is ridiculous. She didn't know the full picture of the incident, nor did she know we have reported to the police that some agencies have used our name to receive tour groups." However, 3A Holidays is alleged to have "rented" out its license to 11 "smaller agents" in Shenzhen, giving them the rights to organize tour groups to Hong Kong, a source told Sing Tao Daily, sister publication of The Standard. According to the source, the tour group stuck on the coach involved one of the 11 agencies, Tian Ya International. The tourists were dissatisfied over having to stay at an unlicensed guesthouse and threatened to call the police. Although some guesthouses still had rooms during the Lunar New Year holidays, Tian Ya did not arrange rooms for the group as the firm was reluctant to pay HK$800 per room. A Tourism Commission spokesman said the government is very disappointed the "person responsible" for 3A Holidays is still unable to explain the case in person. "According to the records of the Travel Agents Registry, he [Wong] is not a shareholder, director or the person responsible for 3A Holidays ... [Law] will not comment on his remarks." Meanwhile, Wong and the Travel Industry Council were at loggerheads over the hotel accommodation. Wong, who went to the council yesterday afternoon, said the mainland travel agent was responsible for making the accommodation arrangement. He told reporters: "The mainland travel agent had told the mainland travelers that hotel accommodation was full in Hong Kong and suggested they spend a night in a Shenzhen hotel. But the members of the tour group refused and stayed on the coach overnight instead." He said the hotel accommodation was arranged by the mainland travel agent. When asked for the name of the mainland agency, Wong said he forgot. The council's executive director, Joseph Tung Yiu-chung, said he had never heard of the practice of renting a license, but believed it is possible. "If the tour has breached any law in Hong Kong, the local agency which rents out its license is still responsible," Tung said, adding that it is difficult to monitor the practice as it involves mainland agencies. The Tourism Administration of Guangdong has suspended 3A Holidays from receiving tour groups from the province's travel agencies. 

Kowloon Motor Bus (KMB) has won the approval to raise bus fares from the Executive Council. Starting March 17, bus fares will go up by an average of 4.9 percent. The increase is less than the 8.5 percent hike KMB asked for in the application submitted last year, RTHK reports. Transport Secretary Anthony Cheung Bing-leung said average bus fare will go up to HK$6.6 from the current level of HK$6.3. More than 70 percent of passengers need to pay as much as 40 HK cents more. Cheung said the Exco has put the affordability and acceptability into consideration. He noted that the operations remain difficult for KMB.

CY urges cautious growth for tourism industry amid scandals (By Jolie Ho) Chief Executive Leung Chun-ying urged the council to be rigorous in handling the recent tourism fiascos. The chief executive cautioned the tourism industry against blindly pursuing growth in visitor numbers, as a travel agency boss at the centre of recent scandals failed yet again to appear at the Travel Industry Council, as ordered, on Tuesday morning. Chief Executive Leung Chun-ying urged the council to be rigorous in handling the recent tourism fiascos, some involving the 3A Holidays agency. While we are pursuing economic benefits from the tourism industry, the daily lives of Hongkongers should not be affected - “We should not blindly go for an increase in the number of visitors,” Leung said. “While we are pursuing economic benefits from the tourism industry, the daily lives of Hongkongers should not be affected.” Leung said he noticed that many tourist attractions in Hong Kong were saturated with visitors during the Lunar New Year holiday, amid the growing number of tourists to the city. But he warned that a recent string of tourism-related scandals had affected Hong Kong’s reputation in the industry. Last week, tourists travelling with 3A Holidays had to sleep on a coach after their promised hotel rooms were not provided. In another incident, seven tourists were told they had to spend the night in a room intended for four people. The chief executive called for an explanation from the proprietor of 3A Holidays, Wong Wing-kin. Leung also urged the Tourism Industry Council to handle the matter seriously. However, Wong failed to appear at the council again on Tuesday morning, as he did last week, despite a warning that the council’s executive committee planned to discuss the renewal of his agency’s licence on Tuesday afternoon. On Monday, the general manager of 3A Holidays, Rocky Wong, did appear at the council, but his explanations failed to satisfy council executive director Joseph Tung Yao-chung. On Tuesday morning, Tung said Wong Wing-kin had informed the council that he was not in Hong Kong, so could not appear as requested. He also failed to appear at the council on Friday, after being summoned. Two other tourism scandals were also reported by the media during last week’s Lunar New Year holiday, but 3A Holidays denied any involvement. In one, the tour ended sooner than promised while in another, tourists expecting to sleep in a hotel were asked to sleep on a cruise ship. Leung said the government had nearly completed the latest study of the Hong Kong tourism industry, including its rate of growth and which places the tourists are coming from.

Hong Kong Disneyland reports first profit - Hong Kong Disneyland Managing Director Andrew Kam (C) attends a news conference in Hong Kong Feb 18, 2013. Hong Kong Disneyland on Monday reported a net profit of HK$109 million ($13.97 million) for the financial year that ended on September 29, 2012, the first annual profit since the resort opened in September 2005. 

 China*:  Feb 21 2013

China considered drone strike on foreign soil in hunt for drug lord (By Ernest Kao) - A 'Wing Loong' unmanned aircraft developed by Chengdu Aircraft Design Institute on display at a Zhuhai airshow. Mekong drug lord Naw Kham is restrained by two Chinese police officers. The hunt for a Myanmese drug lord convicted of massacring 13 Chinese sailors more than a year ago could have ended with a “drone strike” launched on foreign soil, China’s top drug tsar told the Global Times newspaper in a story published on Monday. Liu Yuejin, director of the public security ministry’s anti-drug bureau, said one of the plans to end the months-long manhunt for drug lord Naw Kham was to strafe a mountain hideout in north-eastern Myanmar using unmanned aircraft. Naw Kham was the ring leader of a large drug trafficking outfit based in the Golden Triangle – a mountainous drug-producing region in Southeast Asia covering areas of Myanmar, Laos, Thailand and Vietnam. “One plan was to use an unmanned aerial vehicle (UAV) to carry 20kg of TNT to bomb the area, but the plan was rejected because we were ordered to catch him alive,” Liu told the Global Times. It is a noteworthy revelation as senior Chinese officials rarely acknowledge in public, the country's ability to project power overseas. The disclosure also highlights the level of technological sophistication in terms of China’s ability to surveil targets in Southeast Asia, a move which may draw concern from Asean neighbours wary of China’s military capabilities. According to the report, if the plan had been carried out, China’s Beidou navigation satellite system (BDS) would have been able to guide the drones into Myanmar – a move that could have sparked international controversy as with American covert drone strikes in Pakistan. China recently announced plans to step up what is believed to be nascent drone technology, which it claims would be used for peaceful surveillance purposes. The country unveiled eight new unmanned aircraft models last November at a Zhuhai air show. Chinese police engaged in one of their first overseas police operations in late 2011 after the hijacking of two cargo ships on the Mekong River in Thailand left 13 sailors dead in October that year. Joint investigations by police from China, Thailand, Laos and Myanmar eventually linked the attack to Naw Kham and triggered a region-wide manhunt. China dispatched its own taskforce to the Mekong River and called for joint river patrols with neighbouring countries. According to Liu, who headed the taskforce, Naw Kham had escaped capture at least three times because his team was “limited in what they could do overseas”. Naw Kham was eventually arrested in April 2012 during a night ambush in Laos and extradited to China. Naw Kham and four other accomplices are awaiting the death penalty after being sentenced by a Yunnan court in November.

Plum blossom festival opens at Xixi Wetland Park in China's Hangzhou - A tourist takes pictures of the plum blossoms at Xixi Wetland Park during a plum blossom festival in Hangzhou, capital of east China's Zhejiang Province, Feb. 17, 2013. The festival opened here Sunday.

Geely leading China bids for US' Fisker (China Daily) China's Zhejiang Geely Holding Group is favoured to secure a majority stake in US electric car maker Fisker Automotive, Reuters reported, citing two sources familiar with Fisker's search for a strategic investor or partner. Fisker, the Anaheim-based plug-in hybrid maker, is currently weighing bids from two Chinese auto makers: Geely, the owner of Sweden's Volvo, and State-owned Dongfeng Motor Group Co. The two sources said both offers, which Fisker received in the last three weeks, were worth between $200 million to $300 million. A deal would give the suitors a majority stake in the southern Californian company, they said. The sources, who are close to Fisker, said Geely appeared to be the preferred suitor. Fisker's corporate leaders and their advisers believe Geely is "more serious" and "passionate" about Fisker and its technology, one of the individuals said. In 2010, Geely acquired all of Volvo from its previous owner Ford Motor Co. The sources noted that Geely had already sent a team of engineers to Anaheim to evaluate Fisker and its technology for battery-powered electric cars with a small gasoline engine used to extend the car's driving range. Victor Yang, a Geely spokesman in Hangzhou, did not make any comment. Dongfeng also declined to comment. "Dongfeng pays attention to all potential opportunities of international cooperation to cope with future market development both at home and abroad," said spokesman Zhou Mi in an email to Reuters on Monday.

Ma Ying-jeou says to expand cross-Straits exchange (Xinhua) Taiwan's leader Ma Ying-jeou on Monday pledged to further expand and deepen economic ties with the Chinese mainland. Ma made the remarks while addressing representatives of Taiwan business people investing in the mainland at a gathering held to mark the Chinese Lunar New Year. Ma shared his observations on the dramatic changes that have taken place in the environment of cross-Straits relations and stressed that reconciliation across the Taiwan Straits has brought peace and prosperity. A total of 7.17 million people from the mainland visited Taiwan in the past more than four years, including 2.58 million in 2012, creating 150,000 jobs for the island, according to Ma. Ma also pledged to actively negotiate follow-up issues regarding the 2010 Economic Cooperation Framework Agreement, in an aim to bring more benefits to Taiwan's business arena. In terms of mainland students' applications to schools on the island, Ma noted that existing restrictions would be "gradually removed." The island's education authority currently only recognizes diplomas granted by 41 mainland universities. The number of involved mainland universities will be expanded to 111, Ma added.

Labor shortage worsens as migrant workers stay home (By CHEN XIN) Inland provinces are holding job fairs to attract migrant workers home to work, leading enterprises in coastal manufacturing hubs to fear increasingly serious labor shortages. Zhang Hongbo returned to his hometown Nanchong in Sichuan province for Spring Festival and decided not to return to his job in Guangzhou, Guangdong province. Zhang, 35, had worked in Guangzhou as a mechanic for more than 10 years. A job fair in Huaibei, Anhui province, proves a popular attraction on Monday and may mark a turning point in the economy. The city used to supply large numbers of migrant workers, but many are opting to stay after Spring Festival, creating a labor shortage in big cities such as Beijing and Shanghai. "I believe I can find a perfect job in Nanchong due to my experience," he said. "The main reason for my decision to work at home is that I want to take care of my child and parents." Zhang said he had contacted several local enterprises about their employee needs. Zhang also plans to attend a job fair, which will be held on Thursday at a local industrial park, to see if they can provide a position that matches his skills. Luo Deguo, who is in charge of employment at Jialing Industrial Park, said nearly 60 enterprises will offer some 2,000 positions at the job fair. "More than 3,000 people are expected to attend the job fair," he said. Luo said more than 100 workers have visited or called his office asking about job opportunities every day since Feb 14, the fifth day of the Lunar New Year. In Yichang, Hubei province, labor authorities hope to retain returned migrants by holding 57 job fairs from Spring Festival until the end of March, providing nearly 40,000 jobs. In southwestern Chong-qing municipality, more than 30 job fairs will be held this week to help migrant workers find a job at home. Shopping malls, restaurants and enterprises in fields such as electronic device manufacturing and real estate are major job providers. There are more than 250 million migrant workers in the country, and many of them leave home for other provinces to earn a living. In Chongqing, among 9 million farmers-turned-workers, 4.1 million worked outside the municipality in the first nine months of 2012, according to local labor authority. As inland provinces' efforts to lure migrants are paying off, many enterprises in coastal regions are feeling the pinch to retain employees. Zeng Hongwu, general manager of Guangzhou-based shoes and leather goods manufacturer Apples Industrial Corp, said his company has some 500 employees but is short by about 40 percent. "More than 10 percent of workers have not returned after the Spring Festival each year since 2009. We've asked employees this year about their willingness to stay or not and 15 percent of them said they would not come back," he said. Zeng said orders are expected to rise this year from 2012 and that would exacerbate the labor shortage. "It is felt by almost all factories in Guangdong," he said. Zeng said garment factories have already begun to relocate from Guangdong's Shenzhen and Dongguan to inland provinces such as Jiangxi and Henan due to lower costs, and he predicts that shoes and leather goods factories will gradually move to inland locations in the next three to five years. "Till then, a larger number of migrants will go back to inland areas," he said. Zeng said it's an opportunity for enterprises in coastal regions to shift from manufacturing bases to being more research and development oriented and more innovative so they can outsource orders to inland factories. To offset the labor shortage, some enterprises in Wuxi, eastern Jiangsu province, are holding job fairs in Anhui province to vie for migrant workers.

Hong Kong*:  Feb 20 2013

Budget promises bounty, but relief measures likely smaller (By Tony Cheung and Gary Cheung) Rates and rent waivers, and tax rebate, among measures likely to be announced by John Tsang - Financial Secretary John Tsang Chun-wah. Relief measures worth billions of dollars, including the waiver of property rates and public housing rents, as well as a tax rebate, are expected to be unveiled by Financial Secretary John Tsang Chun-wah in the current administration's first - and his sixth - budget next Wednesday. But the scale of the relief is likely to be smaller than last year, with Tsang's economic forecast for the next financial year relatively optimistic and people less likely to face hardship. A government source said the finance chief had decided on his options for relief measures but was still finalising the details. "The government is likely to opt for a basket of relief measures that have been implemented before as this will not stir any controversy," the source said. The government is likely to opt for a basket of relief measures that have been implemented before as this will not stir any controversy. A year ago, with an estimated HK$67 billion fiscal surplus to hand, Tsang presented an HK$80 billion basket of measures. That included a salaries tax rebate of up to HK$12,000, an increase in the basic allowance from HK$108,000 to HK$120,000, and a HK$1,800 electricity subsidy for 2.5 million households. For those living in public housing, the government paid two months' rent, while all recipients of Comprehensive Social Security, Old Age and Disability allowance got an extra allowance, equal to one month's payment. "Given the huge fiscal surplus expected ... it would be politically unrealistic not to introduce measures such as the waiver of public housing rents and property rates in the upcoming budget," the source said. In his chief executive election platform early last year, Leung Chun-ying pledged to raise the ceiling for mortgage relief for homeowners from HK$100,000 to HK$150,000, and extend the entitlement to 20 years. The entitlement period was extended to 15 years in last year's budget. But the source said the financial secretary was unlikely to further extend the entitlement period or raise the tax-deduction ceiling in the forthcoming budget. "There is still some time to go before Leung's tenure expires [in 2017]. Besides, raising the ceiling would not make much difference in the light of current low interest rates," the source said. Revelations last month that the government has already pocketed a surplus of HK$40 billion, for the nine months to December 31, prompted political parties to review their proposals to the government's new budget. New People's Party, led by executive councillor Regina Ip Lau Suk-yee, proposed that the government should reduce 90 per cent of the salaries tax, subject to a ceiling of HK$15,000. Federation of Trade Unions' lawmaker Chan Yuen-han said most residents of public housing estates should have their rent waived for one or two months. In a report last month, Brian Fong Chi-hang, vice-chairman of think-tank SynergyNet said HK$180 billion worth of "sweeteners" were dished out from government coffers in the last six years, but there were also more protests over budget measures. "HK$180 billion could be used for building 100,000 public homes … instead of wasting public resources on one-off measures, money could be better utilised," Fong wrote.

New high-life houses slated for Discovery Bay (By Sandy Li) Six 'super-deluxe' hilltop homes to be built in the coastal development, with the rich and famous expected to pay HK$150 million for each one - HKR International's Chan Chi-ming says the new houses will have sea views and be next to the Discovery Bay Golf Club. Property developer HKR International plans to build six "super-deluxe" houses ranging in size from 6,000 to 8,000 square feet on the highest point of Discovery Bay. "Each house will enjoy spectacular sea views and the project will be located next to the Discovery Bay Golf Club," said Chan Chi-ming, the head of the Hong Kong business unit at HKR, the developer of Discovery Bay. Chan said site preparation was under way but he could not give an estimated date for the project's completion. Simon Lee, an associate director at Centaline Property Agency's Discovery Bay branch, said the houses planned by HKR could fetch more than HK$150 million each. "Due to their scarcity, they will be sought-after by the rich and famous," Lee said. There are 17 houses on Discovery Bay, each of them 5,168 sq ft, with gardens ranging from 6,000 to 9,000 sq ft. One of the houses on Seabee Lane was on the market for HK$120 million, Lee said. But no transaction has been recorded for any of these large houses since one with a 6,000 sq ft garden sold for HK$54.88 million in 2008. Chan said negotiations with the government over the land premium payable for the proposed project, which will be the 16th phase of its developments at Discovery Bay, were at an "advanced stage". The development calls for a total built area of 185,000 sq ft. "We hope to reach an agreement with the government on the land premium deal shortly," he said. HKR has a land bank of 1.3 million square feet in Yi Pak Bay, in the northern part of Discovery Bay, and has also been in talks with the government over premiums on this land. Chan also said the group's resort hotel, Auberge Discovery Bay, would have a soft launch next month. The hotel would target the MICE business - meetings, incentives, conventions and exhibitions - as well as wedding receptions and leisure travellers. "Lots of multinational corporates send their senior executives abroad, including to Hong Kong, for one or two-day training meetings every year. Our hotel will provide a venue for them." Initial responses from all target markets, both in Hong Kong and overseas, had been very positive, said the company in an e-mailed reply. Discovery Bay is a mixed, primarily residential, development comprising a residential component as well as private and public recreational facilities. It is located on the northeast coast of Lantau Island and the multistage development covers 650 hectares. It includes two bays, Tai Pak and Yi Pak bays. In October last year, HKR launched a luxury apartment development called Amalfi on a hilltop overlooking Yi Pak Bay, attracting a strong response. The development comprises three mid-rise blocks that provide 164 flats, ranging from one to four bedrooms, and sized between 661 and 3,264 sq ft in terms of gross floor area.

Hong Kong Disneyland turns a profit for first time (By Agence France-Presse) A woman walks past an advert for Hong Kong Disneyland in Hong Kong on Monday. The park made a profit last year for the first time since opening eight years ago. Hong Kong’s struggling Disneyland in 2012 made a profit for the first time since opening eight years ago, thanks to a surge in revenue as it welcomed a record number of visitors. The park made HK$109 million in the fiscal year ending September 29, 2012, compared with a net loss of HK$237 million the year before. The result was fuelled by a 13 per cent jump in attendance to a record 6.73 million people, providing relief for the resort, which has been battling lower-than-expected numbers since opening in 2005. Visits by Hong Kong residents posted a record growth of 21 per cent while visits by mainland visitors expanded by 13 per cent. Revenue meanwhile grew 18 per cent to HK$4.27 billion. Hong Kong Disneyland Resort’s managing director Andrew Kam said it was ”very encouraging” to see the “significant improvement”. He added: “Attendance, hotel occupancy and guest spending levels continued to reach all-time highs.” Hong Kong Disneyland, which is majority owned by the city’s government, has been desperate to ramp up the number and quality of its attractions as it seeks to lure more visitors while facing stiff competition from local rival Ocean Park. Critics have attributed many of its problems to its size – it is the smallest of all the Disney’s theme parks – and a lack of attractions catered to the key mainland China market, which accounts for nearly half of its visitors. Doubts about the park’s future have further been stoked since China gave approval for a park to be built in Shanghai. A deal to open Hong Kong Disneyland was signed in 1999 as part of a plan to boost the city’s economy as it reeled from the Asian financial crisis.

 China*:  Feb 20 2013

Chinese folk diva serenades the Big Apple (By Yu Wei in New York) New York's 6,000-seat Radio City Music Hall was full on Saturday night for the first concert of Chinese soprano and folk singer Song Zuying's US tour. During the two-hour show, Song performed 20 traditional Chinese folk songs including Jasmine Flower, Spice Sister and Good Days. She finished her set with the rousing Dragon Boat Song and encored with the audience singing along to Our Love for China. "I hope the audience can feel the endless beauty of music as well as the greetings and good wishes from China through my songs," Song said at a news conference before the concert. Song, one of the most renowned sopranos in China and widely known as the "Queen of Chinese folksong", has been busy on the international stage in recent years. Born to a Miao ethnic family in a remote mountain village in Hunan province, Central China, Song has given recitals at the Sydney Opera House, Vienna Musikverein Golden Concert Hall, the John F. Kennedy Center and London's Royal Albert Hall. All her songs are performed in Chinese, but that does not lessen foreign audiences' appreciation of the traditional art form, said Lisa Robb, executive director of New York State Council on the Arts. "In general, with traditional art forms, they are not presented to a new audience in a language the audience is familiar with," said Robb, who delivered a letter from New York State Governor Andrew Cuomo congratulating Song on the launch of her US tour. "I like her music and she is just a beautiful performer," said Robb. "Her art history and her technical ability are incredible." The concert also attracted new listeners to Chinese folk music. "This is the first time I've attended a Chinese concert and I think it is magnificent," said Steve Oesterle, CEO of Sabre Companies LLC, an oil and services company in New York. "She has such an amazing voice. You don't have to understand every word to appreciate the beauty of the music." Appearing as Song's guests on the show were tenor Tsewang Dorjei and Sha Baoliang, a well-known Chinese singer. They were backed by the Collegiate Chorale Singers and the American Symphony Orchestra, under the baton of Xia Xiaotang, one of China's prominent young conductors. "It is amazing to see how a US chorus performs Chinese songs," said Mu Ge, a Chinese student from New York University who attended the concert. The orchestra presented music from China and the West, including the Spring Festival Overture as the opening piece and the overture from The Marriage of Figaro. "The cultural communication between US and China was the essential feature of the concert and I hope the US audience will have a better understanding of China's long musical history after Song Zuying's performance," said Tan Tianxing, deputy director at the Overseas Chinese Affairs Office of the State Council who is in charge of Song's US tour. "I believe the audience can feel the charm of Song, and the striking features of Chinese national vocal music through her confident, peaceful, friendly and sweet voice," Tan said. Song's US concert tour is part of the "Cultures of China, Festival of Spring", an annual event organized by the Overseas Chinese Affairs Office of the State Council since 2009 to help promote Chinese culture and celebrate Lunar New Year. Previous artists on the tour have included Yan Weiwen, Tan Jing and Wang Hongwei, New York is the first stop of Song's tour. She will perform three shows in Washington from Tuesday, and will be in Los Angeles on March 1 and San Francisco on March 3.

Hongbao places financial burden on New Year celebrations (By Yang Yao) Parents are under pressure to give more lucky money to their children during Spring Festival, and face the challenge of teaching them about fi nancial management. Pu, 27, who works in Beijing earning a monthly income of 4,500 yuan ($720), has drained his savings by returning to his home in Penglai, a county in Shandong province, for Chinese Lunar New Year. "Instead of racking my brain for gift ideas, I choose to give money. It's much easier," said Pu, who refused to give his full name. At Spring Festival, it is a tradition for families and friends to get together and give younger generations cash sealed in a red envelope, known as hongbao. However, this custom, which is supposed to add happiness and festive flavor to the holiday, has placed a heavy burden on Pu and his peers. Pu's family members all reside in rural areas. As the only college diploma holder and only person who works in a big city, he is the pride of his family and is assumed to be richer than many of his family members. "I gave my parents 4,000 yuan in total and my cousin's kids 600 yuan each," said Pu. "A few years ago 200 yuan would suffice, but now giving 200 yuan is kind of losing face and my relatives would think I am mean." Pu attributed the rise in hongbao to high inflation. "Two hundred yuan cannot buy nice clothes," he said. "Everything is rising except my salary." Unhappiness in the happy season is also rising. Having spent the whole year working at an accounting firm in Shanghai earning 6,000 yuan a month, Sun Xiaofei gave away almost half of her annual income during Spring Festival. "This is the first time I give out hongbao since I was married and started to work last year," said the 26-year-old. "I gave my husband's parents and my parents 6,000 yuan in total, bought two cashmere sweaters, one for my mother and the other for my mother-in-law, and gave five kids 800 yuan each." To make things worse, social activities at Spring Festival piled up, all requiring money. "There were five to six parties organized by friends, colleagues or bosses. Each meal requires around 300 yuan. I can't decline those invitations; it is kind of a public relations. "Now the thought of coming back for Chinese New Year will be a headache." Chinese micro-bloggers have come up with several suggestions of ways to dodge the obligation of giving cash and save money. Traveling is listed as No 1. Sun said that she and her husband are planning to travel to a warm place with sunshine and a beach to spend the holiday next year, to avoid the "new year robbery". Other solutions include giving gifts instead or adopting the Hong Kong style of giving hongbao, which only contains HK$10 to HK$20. Wang Zuoyi, a folklore expert in Beijing, said hongbao pressure is losing its traditional meaning of good will. "In this sense, Hong Kong preserves the hongbao culture better than the Chinese mainland," said Wang. "What matters is the wishes you send to others, not the value of money you put in an envelope." While giving money has been a burden to grownups, younger generations are becoming spoiled by receiving money. Zhu Tianyu, 20, a sophomore at a university in Nanjing in Jiangsu province, said New Year is an opportunity for him to earn money. This year, he has collected almost 10,000 yuan. The phenomenon of children becoming rich during the holiday by receiving hongbao has also triggered business. Banks such as China Merchants Bank and Bank of Communications have started new financial products specially targeted at this new rich group. "Parents should also guide their kids in spending the money," said Wang. "It is a good idea to start saving at a young age. "Giving children large amounts of money should not be encouraged."

US 'must act to ease peninsula tension' (By ZHOU WA) Washington must shoulder its responsibility to solve the Korean Peninsula issue and review its policies, observers said. Their call came as Washington and Tokyo meet this week to discuss Pyongyang's latest nuclear test. The United States should take the major share of blame for rising tensions on the peninsula, and it is time for Washington to adjust its policies toward the Democratic People's Republic of Korea, said Wang Junsheng, a researcher on East Asian studies with the Chinese Academy of Social Sciences. Washington's DPRK policy has never been clear since the Cold War ended, Wang said, adding this fuelled Pyongyang's sense of insecurity. The DPRK conducted a nuclear test on Feb 12 — the third since 2006. However, Wang added that the test was inappropriate, and given the uncertainty of US policy, Pyongyang should remain calm and observe UN Security Council resolutions rather than increase tension. Six-Party Talks are the best way to solve the issue and all parties should do their bit, said Liu Jiangyong, a professor of international relations at Tsinghua University. The House of Rep resentatives passed a resolution on Friday, calling for the US to work with other countries to impose additional sanctions on the DPRK, urging Beijing to pressure Pyongyang to curtail its nuclear programs. Beijing has said it was "firmly opposed to" and "strongly dissatisfied with" Pyongyang's nuclear test. It has called for negotiations to solve the issue. Shi Yinhong, a professor of international relations at Renmin University of China, told Xinhua News Agency that the DPRK decided to conduct the nuclear test on the basis of its own interests. The DPRK is an independent country that decides its own affairs, he said. The US did not respect the security concerns of the DPRK and that is the reason why the nuclear issue on the Korean Peninsula has not been solved, said Chen Qi, a professor of international affairs at Tsinghua University. "The core of the nuclear issue is that Pyongyang's security concerns have long been ignored by Washington," Chen said. The US deployed nuclear weapons in the Republic of Korea during the Cold War. It was not until 1991 that Washington removed them. Despite the withdrawal, Washington said Seoul is still under the protection of its nuclear umbrella, a policy which US President Barack Obama reiterated after Pyongyang's latest nuclear test. According to the White House, Obama will meet Japanese Prime Minister Shinzo Abe on Friday, and Pyongyang's nuclear test will feature prominently in the talks. Obama called the test a "provocation" and said he and Abe agreed to cooperate on measures aimed at impeding the DPRK's nuclear program. He said that the US remains committed to defending Japan, including by nuclear means. "The current situation in Northeast Asia is imbalanced, with the ROK and Japan sheltered under the US nuclear umbrella," Ruan Zongze, deputy director of the China Institute of International Studies, was quoted by Xinhua as saying. Meanwhile, US Republicans are calling on the Obama administration to take a tougher stance against Pyongyang. Sanctions were the main tool of the US, said Wang. But sanctions alone offer no help in solving the issue but deepen hostility between the US and the DPRK, he said. Tsinghua University's Chen said Washington may not want Pyongyang's nuclear issue to be solved, because it offers an excuse for the US to deploy antimissile systems and hold military drills in the region, which are in line with its military rebalance to East Asia.

Hong Kong*:  Feb 19 2013

FedEx hub gains on Hong Kong as US strengthens (By Bloomberg in New York) Shipments at firm's Memphis base grow faster than tonnage in world's busiest cargo airport - FedEx's home hub in Memphis, Tennessee, is poised to build on shipment growth last year that topped Hong Kong's for the first time since the US facility lost the title of world's busiest cargo airport in 2010. Volume rose 2.5 per cent in Memphis, outpacing Hong Kong's 2.3 per cent, Bloomberg data show. That helped shrink Hong Kong's lead in tonnage to 0.2 per cent from 5.3 per cent in 2010. Memphis, the biggest US airport by cargo volume, stands to benefit further with air shipments industrywide forecast to rise after two years of decline. The growth signals that slowing expansion in Asia and a slump in Europe have not derailed a recovery in the US, where FedEx is an economic barometer because of deliveries from medical supplies to electronics. FedEx draws 70 per cent of sales from the US. Kevin Sterling, an analyst at BB&T, said: "Memphis has kind of held steady versus Hong Kong, which has been on more of a roller-coaster ride." In the US, "while it's weak, it's technically still a recovery", he said. The International Air Transport Association forecast that air cargo demand worldwide would increase 1.4 per cent this year, resuming growth after declines of 1.5 per cent last year and 0.6 per cent in 2011. "Improved business confidence should help cargo markets to recover the lost ground from 2012," the IATA said. The US will be the top cargo market in 2016, with 7.7 million tonnes of international freight that year, against 3.49 million for mainland China and 3.23 million for Hong Kong, it predicted. Hong Kong faced more challenges, grappling with a triple whammy of slower mainland Chinese expansion, declining shipments to Europe and fiercer competition from other area airports, Wells Fargo senior economist Mark Vitner said. Lower European volumes would probably remain a challenge in the next four years, the IATA predicted. Shipments between the Asia-Pacific region and Europe would drop to 17 per cent of global freight traffic by 2016 from about 18 per cent in 2011, the group said. At the same time, Hong Kong's regional competitors are vying for larger market share. Terminals in China, such as Shenzhen Baoan International Airport and Guangzhou Baiyun International Airport, where FedEx opened a hub in 2009, were getting more traffic because of infrastructure improvements, said Chris McNally, a political economist at the East-West Centre. "Before, a lot of companies who relied on on-time deliveries used Hong Kong because it just had perfect logistics," McNally said. "You have a lot of new airports that are getting into the game. Hong Kong is just plain losing competitiveness."

Harbour protection pioneer warns of reclamation threat (By Keith Wallis) Protection pioneer warns that government could be tempted to carry out more infill projects unless New Territories land laws are repealed - Winston Chu at the Maritime Museum in Central. Harbour protection pioneer Winston Chu Ka-sun says the iconic waterway will remain under threat from further reclamation until the government opens up the New Territories for development. Chu said while the current ordinance banning reclamation except in special circumstances offered some protection, the government would always be tempted to carry out further infill projects as it was the easy option. "In future years there is no assurance the government won't change its policy. There will always be a great temptation to reclaim land in the harbour," he said, adding that preventing further reclamation demanded "constant vigilance". Chu was speaking yesterday after presenting documents related to the Protection of the Harbour Ordinance and the Save Our Harbour campaign to the Hong Kong Maritime Museum. The documents include the original assent certificate signed on June 27, 1997, by the last attorney general, Jeremy Matthews, by which the Protection of the Harbour Bill was enacted. Chu said he believed one of the factors that could see the government trying to overturn the harbour protection law would be the need for extra land to accommodate Hong Kong's growing population. "We're looking at a population in Hong Kong of 10 million," Chu said. "That's an extra 2.5 million people." He said it didn't matter whether this number was reached in "2030, 2050 or 2070", the question remained: "Where do you put them all?" The answer was to develop the New Territories instead of further harbour reclamation, Chu said. But because infilling the sea was easier than tackling land development issues, the harbour would remain under threat until the New Territories Ordinance was "officially repealed", he said. If this law was repealed, it would make land ownership in the New Territories "exactly the same as every other part of Hong Kong and Kowloon". He pointed out that land administration in the New Territories dates from the original 1899 ordinance, which provides legal support to Chinese landowning customs and gives rights to traditional landholding institutions. Paul Zimmerman, chief executive of Designing Hong Kong, agreed the government could change its current policy of limiting reclamation in the longer term. "The temptation will always be there," he said. "The only protection [against such a change] is the hearts and minds of the community," Zimmerman said, pointing out that public polls have been against further reclamation. Despite such public opposition, government officials recently snubbed moves to put Victoria Harbour forward as a potential Unesco World Heritage site. "Reclamation is easy - just dump a whole bunch of rocks," Zimmerman said. Developing land-based sites was, he said, a "lengthy process. It's harder work. People complain."

Rural chief urges 'generous approach' to tackling issues in New Territories (By Joshua But) Rural strongman says government should respect history when tackling thorny issues, including illegal structures, in New Territories - At a Heung Yee Kuk reception are (front, from left) Financial Secretary John Tsang Chun-wah, Carrie Lam, Lau Wong-fat, Zhang Xiaoming and Executive Council convenor Lam Woon-kwong. Days after drawing one of the unluckiest fortune sticks for the city, Heung Yee Kuk chairman Lau Wong-fat urged the government to take a "generous approach" to solving long-standing rural issues. Lau was speaking yesterday at a spring reception of the kuk, the powerful rural body that represents New Territories villagers. It was the first one to be attended by new central government liaison office director Zhang Xiaoming. Chief Secretary Carrie Lam Cheng Yuet-ngor, regarded by many rural residents as a hardliner, was also there as acting chief executive. Relations have been strained between some kuk factions and the government over its handling of illegal structures in New Territories villages over the past two years. Calls to end the small-house policy have also been met with fury by indigenous villagers. The colonial-era policy gives any indigenous male aged over 18 the right, once in his lifetime, to build a three-storey home in his village. Lau said he appreciated efforts made by Chief Executive Leung Chun-ying's administration, but he hoped a "generous approach" would be taken to tackling some of the thorny issues affecting rural residents. "Some problems are implicative of others," he said. "We hope the government can seek truth from the facts, respect the history and consider the reasons behind it, so that the problems can be settled properly." Lau also put out a wider call to the public to strive for harmony, not confrontation, in an effort to avert the "bad luck" of the unlucky stick he picked on Monday. He drew a stick bearing No95 in the annual ritual at Sha Tin's Che Kung Temple. Fortune-tellers said the stick's message was a reminder to Hongkongers to "beware of wicked people", and that "nothing is going well" in the Year of the Snake. Rita Fan Hsu Lai-tai, a member of the Standing Committee of the National People's Congress, who also attended the reception, said: "Hong Kong people do not need to get annoyed by who the wicked people are. "The wicked people are those who harm Hong Kong, but we might not be able to tell who that is at the moment." Fan also said that Leung's sending of a lawyer's letter to the Hong Kong Economic Journal and columnist Joseph Lian Yi-zheng had backfired. The letter claimed that an opinion piece by Lian in the journal suggesting that Leung had triad links was defamatory. "The article is actually quite long and quite hard to read. But the lawyer's letter, in effect, has boosted its readership," she said. "You have to ask Leung why he made such a decision."

Leah Li (front) poses for photos with others as she wins the Miss Chinatown U.S.A. Pageant 2013 in San Francisco, the United States, Feb. 16, 2013. The Miss Chinatown U.S.A. Pageant 2013 closed on Feb. 16.

G20 vows to support financial stability, sustainable growth (Xinhua) Finance ministers and central bank governors pose for a family photo during a meeting of G20 finance ministers and central bank governors at the Manezh Exhibition Center in Moscow, Feb 16, 2013. They recognized the "adverse implications" of volatile financial flows and exchange rates for economic stability, reaffirmed their commitment to refrain from competitive devaluation. "We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open," said the communique. The Japanese Yen has plunged against other major currencies recently following moves by Japan's new leaders to ease monetary policy and stimulate the economy, sparking fears of a new round of "currency war." But several high-ranking officials form major international financial institutions called the hypothetical conflicts over currencies as "rootless" and "pointless." Angel Gurria, Secretary General of the Organization for Economic Cooperation and Development (OECD) said on the first day of the meeting that the term "currency war" was out-of-date and should not be discussed at the G20 level. Instead of being distracted by the old jargon, today's policy makers should focus more on productivity and competitiveness, Gurria said. International Monetary Fund (IMF) chief Christine Lagarde said that though the imbalance of economic recovery has posed pressures on various countries, the IMF review showed relevant currencies have been fairly valuated. European Central Bank chief Mario Draghi also rebuffed the currency war rhetoric, saying exchange rates were not policy goals, but played important roles in promoting growth and stabilizing prices. Meanwhile, the ultra-loose monetary policies adopted by major developed countries also caused concerns from their developing partners in the meeting, since currency devaluation negatively affected the export and foreign reserves of emerging economies.

 China*:  Feb 19 2013

Actors Tony Leung Chiu Wai (L) and Zhang Ziyi arrive on red carpet for the screening of the movie Yi Dai Zong Shi, "The Grandmaster" at the 63rd Berlinale International Film Festival in Berlin February 7, 2013. The 2013 Berlin film festival kicks off on Thursday with "The Grandmaster", a martial arts epic from Hong Kong director Wong Kar Wai who is also presiding over this year's jury. 

Having a ball - China style (By Chen Xiangfeng) Chinese children perform kung fu in celebration of Chinese New Year before a game between the Washington Wizards and the Brooklyn Nets on Feb 8 in Washington. The pragmatic NBA has its sights firmly set on its top overseas market and recognizing Chinese New Year is shaping up as a masterful move, Chen Xiangfeng reports. China boasts one of the world's richest cultures, and the ultra-pragmatic NBA is looking to move in on the great basketball market. The world's leading basketball league staged a Chinese New Year Celebration campaign during the annual break which featured a series of events and broadcasts in China as well as Chinese New Year-themed celebrations in the United States. They were designed to pay tribute to not only the fans in China but also Chinese communities around the globe. Along with those events, the league also launched robust player-fan engagement across other platforms including sweepstakes, Chinese New Year greetings from players and fan messages on NBA media platforms. Dancers from the Jin Ling Dance School perform in celebration of Chinese New Year before an NBA game between the Washington Wizards and the Brooklyn Nets. "Chinese New Year is a special time for us. Fans come home and stay with their family and friends. We think it's the great time to share basketball with them," said NBA China CEO David Shoemaker. "NBA is global and Chinese New Year is also not just about China. We have fans around the world and Chinese people around the world celebrating the festival. It could not be a better time to spread the NBA during this period." During this "China Week" in the NBA, American fans saw their favorite players wearing specially-designed Chinese New Year shirts sending Year of the Snake greetings. The festival was also celebrated in NBA arenas with kung fu shows and lion dance performances during halftime of games. Those were held at the home arenas of the Washington Wizards, Toronto Raptors, Chicago Bulls and Golden State Warriors. Two additional venues had signage recognizing the holiday. Additionally, a video of Chinese New Year celebrations will be displayed on the jumbotron during Monday's (Beijing time) All-Star Game. "Twenty-three NBA games were broadcast live during the New Year. It's a tremendous celebration of the New Year as well as basketball," said Shoemaker. The campaign certainly had an impact during Chinese New Year as fans flocked to a NBA viewing party in Beijing and gathered around their TVs to watch games on CCTV 5. "You have never seen Chinese fans celebrate Spring Festival this way, have you?" said Wang Meng, a 20-year-old university student, who participated in the NBA Chinese New Year viewing party in Beijing. "We traditionally stay at home and spend time with family, but having this cool basketball element makes the family reunion even better. The Chinese New Year program has given us the opportunity to enjoy the game of basketball with our families and friends it is just awesome." The differences between Chinese and US fans have traditionally been stark, but after years of sharing common sporting bonds, the only difference now is the language in which they cheer for their favorite teams. "We are approaching a unique sporting moment. People in the US and China are paying close attention to this Chinese New Year. They are tuning in to see what the two nations have in common - and that is a shared passion for basketball," Wang said. To further get a taste of Chinese culture, Shoemaker and former NBA star Peja Stojakovic, who was born in the Year of Snake, visited a Chinese fan's home and cooked a traditional dinner. "It's a great and interesting experience for me to be in China and spend the New Year. Chinese people are so nice and they made us feel comfortable," said Stojakovic. Stojakovic and Shoemaker made Chinese paper cuttings and even dumplings. The sharp shooter also celebrated his zodiac animal year with 500 fans at the NBA viewing party in Beijing with WNBA player and WCBA championship winner Maya Moore, who was also born in the Year of the Snake.

Hong Kong*:  Feb 18 2013

Retirees on mainland will get allowance (By Jennifer Ngo) Benefit will be extended to Hongkongers in Guangdong - Matthew Cheung Kin-chung. The old-age living allowance to be introduced in April is expected to cover Hongkongers in Guangdong by the end of next year. Welfare secretary Matthew Cheung Kin-chung said the government would extend the means-tested HK$2,200-a-month allowance to Hongkongers who retired across the border after the scheme had been in place for more than a year. The HK$1,090-a- month "fruit money" - means-tested for those aged 65 to 70 - is due to be extended to people living in Guangdong in September. But welfare groups have warned that extending the allowance to those living outside the government's jurisdiction would be complicated. "A lot of issues will need to be thought out first," said Chua Hoi-wai, business director of the Hong Kong Council of Social Service and a member of the Commission on Poverty. "The government must think carefully about the details, feasibility and effectiveness of such a move," Chua said, questioning whether the move was the best solution or best use of resources. "It's worth exploring, but no one should make hasty decisions. Guangdong is outside Hong Kong's jurisdiction, so it would be hard to apply the means test and track assets effectively. The elderly who choose to retire in Guangdong may also be in different situations to those in Hong Kong. The cash would help, but a more desperate need is for medical services." Bella Luk Po-chu, executive director of elderly services group Helping Hand, which operates a care home in Zhaoqing , said the extra money would solve immediate needs. She said providing the elderly with enough for a decent living on the mainland would take a burden off Hong Kong. "The elderly would be able to spend their healthy years on the mainland," Luk said, admitting many would return when they needed medical attention. Zero Kwok Wai-sang, senior manager of St James' Settlement elderly service centre, said he supported the idea of paying the allowance across the border but there should be a reassessment of asset limits and clearer rules and details for it to work. St James' has seven centres for the elderly in Hong Kong, serving up to 7,000 people. "The extra money could definitely raise elderly people's living standards," Kwok said. "But the government needs to clarify things. Do assets on the mainland count? With a lower living standard on the mainland, should the means test be readjusted? There are many kinks that need to be ironed out." While the government had tried to simplify the allowance scheme, Luk said it was still quite complicated for many, especially with the means test. The first group of 290,000 elderly already on record as passing the means tests will receive the HK$2,200 allowance on April 5, back-dated to December.

Government may collect HK$4.86b from North Point and Kau To tenders (By Paggie Leung) Surveyors upbeat on North Point harbour front hotel plot and luxury residential land in Kau To following strong response to previous sales - The harbourfront hotel site in North Point. The government is expected to collect up to HK$4.86 billion from selling a hotel site and a residential plot, which should attract keen interest from buyers, according to surveyors. The harbourfront hotel site in North Point and the luxury residential site in Kau To, Sha Tin, were opened for tender yesterday. The tender period will close on March 22. "The North Point site is in the limelight because it's next to the harbour on Hong Kong Island, and the response from buyers to the government's previous sales of hotel sites was good," said Centaline Surveyors' director James Cheung King-tat. The site is also located close to an MTR station, which was another advantage, Cheung said. The 57,792 square foot site could yield a maximum gross floor area of 387,504 square feet, and Centaline estimates that it should sell for about HK$3.49 billion, or HK$9,000 per buildable square foot. In August 2011, Cheung Kong won a land parcel on Oil Street in North Point for hotel and residential development with a bid of HK$6.27 billion, which equated to a price of HK$8,294 per buildable square foot. Other surveying firms such as Cushman & Wakefield and Midland Surveyors estimated that the North Point site should have a price tag of HK$2.71 billion, or HK$7,000 per square foot on the basis of gross floor area. "Since the total lump-sum price of this site is high, I think it will woo about three or four bids … from large developers, or consortiums of developers, such as Cheung Kong, Emperor International and Chinachem, which all have a history of running hotels," Cheung said. The residential site open for tender in Kau To covers 86,972 sq ft and could provide a gross floor area of 130,459 sq ft. It is adjacent to a site bought last month by Wing Tai Properties and Manhattan Realty for HK$1.47 billion or HK$10,302 per square foot. That transaction was slightly higher than market expectations. The consortium outbid nine other bidders to win the luxury residential site. "The keen interest in previous land sales shows developers are upbeat about the outlook for the property market," Midland Surveyors director Alvin Lam Tsz-pun said. "Since this Kau To site is in a prime location, I think it will attract many bidders." The site was ideal for low-density development, Lam said, adding that it would be sold for about HK$1.3 billion, or HK$10,000 per square foot. Cheung put a similar price on the site, and said he expected seven or more developers to bid for it. Vincent Cheung Kiu-cho, a national director for greater China at Cushman & Wakefield, revised up his estimate of HK$9,500 per square foot to HK$10,500 for the site due to the keen competition for the neighbouring site. This means the site should be worth about HK$1.37 billion. Meanwhile, the Hong Kong Association of Banks said in a submission to the Legislative Council the government should protect banks against liability for buyer's stamp duty, which was imposed in October last year to cool soaring home prices.

Taiwan to tackle resentment caused by influx of mainland tourists (By Lawrence Chung in Taipei) Taiwan is working out a plan to prevent the flood of tourists from across the Strait causing the kind of resentment felt by Hongkongers - Mainland tourists watch the guards during a visit to the Sun Yat-sen Memorial Hall in Taipei. Taiwan's government says it will formulate comprehensive measures to ensure that the increasing number of mainland visitors does not become a source of public grievance - as it has in Hong Kong. With the mainland now replacing Japan as the biggest source of visitors to Taiwan, the Mainland Affairs Council, the island's top mainland policy planning body, said it had worked with relevant agencies to draft measures to address the issue. "A set of comprehensive measures is necessary to avoid problems like those in Hong Kong," council spokeswoman Wu Mei-hung said yesterday. Taiwan will soon increase its quota for mainland tourists travelling in groups to 5,000 from 4,000 a day, while the quota for individual tourists will double to 2,000 a day. Mainland tourists made some 2.6 million trips to Taiwan last year, up 45 per cent from 2011, says the Taipei-based Taiwan Strait Tourism Association. While they have stimulated the development of hotels, tour bus companies, restaurants, shops and night markets, they have also started creating problems similar to those experienced in Hong Kong. "Give me back the National Palace Museum," said Taipei resident Yang Wen-chung, angry about the huge number of mainland tourists swarming all over the attraction - a must-see for mainland visitors. There have been complaints from the locals about having to queue "forever" in order to enter the museum because of the thousands of mainlanders visiting each day. These visitors have been criticised for chatting loudly and eating snacks inside. There have also been complaints from locals over crowded conditions at the landmark Taipei 101 building and many other scenic spots, including Sun Moon Lake in central Taiwan, with residents saying it is causing a major inconvenience. The increases in visitor quotas are part of Taiwanese President Ma Ying-jeou's policy of engaging Beijing, for long a bitter rival of Taipei following the end of the civil war in 1949. After becoming the island's leader in 2008, Ma sought to improve ties with the mainland and it is now the island's largest source of trade and tourism revenue. Since July 2008, more than 4.83 million mainland tourists have visited Taiwan, spending more than NT$243.3 billion (HK$63.5 billion), the council said. Wu said that on top of existing measures to regulate the flow of tourists, the council was discussing with agencies, including the transport ministry and tourism bureau, other ways to reduce disorder and inconveniences caused by the influx. She said relevant agencies would also work to head off cut-throat competition by local or mainland tour operators in order to ensure the quality of tours. Wu said the Taiwan Strait Tourism Association and its mainland counterpart, which deal with cross-strait tourism issues, held discussions from time to time on how to improve tour quality.

Valentine's Wedding Service and Banquet Expo opens in HK - Models present creations at a wedding dress show during the 70th Valentine's Wedding Service and Banquet Expo in south China's Hong Kong, Feb. 16, 2013.

HK exchange fund's foreign assets up HK$82.9b (Xinhua) The Exchange Fund's foreign assets increased HK$82.9 billion (US$10.68 billion) to HK$2.51 trillion at the end of January, Hong Kong's Monetary Authority announced Friday. The Monetary Base at the end of January amounted to HK$1.23 trillion. Claims on the private sector in Hong Kong amounted to HK$179.4 billion. Foreign liabilities, representing fees payable to the fund's external managers, amounted to HK$600 million.

HK credit card receivables up 10.4% in Q4 (Xinhua) Total credit-card receivables in Hong Kong rose 10.4 percent to HK$ 111.3 billion ($14.34 billion) in the fourth quarter last year, after increasing 2.1 percent in the previous quarter, the Monetary Authority announced Friday. The total number of credit-card accounts rose 0.9 percent to 16.3 million. The rollover amount, which reflects the amount of borrowing by customers using their credit cards, fell 0.8 percent during the quarter. The charge-off amount rose from 456 million HK dollars in the third quarter to HK$ 482 million in the fourth quarter. The amount of rescheduled receivables transferred outside the surveyed institutions' credit-card portfolios fell to HK$ 116 million from HK$ 125 million in the previous quarter. The delinquent amount rose to HK$ 221 million at the end of December 2012 from HK$ 212 million at the end of September. The delinquency ratio fell slightly to 0.2 percent. The combined delinquent and rescheduled ratio, after taking into account the transfer of rescheduled receivables, fell to 0.26 percent.

The rich seek luxury - away from home (By Lu Chang, Gao Changxin, Lin Jing and Chen Yingqun) Shoppers from the mainland line up to buy Chanel products in Hong Kong. Many Chinese are increasingly buying luxury goods overseas. Wealthy Chinese look outside the mainland for high-end brands - As prices of luxury items remain prohibitive in China, wealthy consumers are going on sprees abroad. Wang Zhikuan, a 45-year-old from Jilin province, is one of them. At Paris' Galeries Lafayette, an upper crust department store known in China as the "land of luxury goods", He is showing a shop assistant his laptop where he saved a photo of a Chanel bag that his friend wants him to buy. "The price is good here," said Wang, who works for a media company in Beijing. "My friend made it clear about what she wants because it is an exclusive product that she can't find in China." This is one of several trips he'll take to Europe, specifically Paris, this year for both work and leisure. Each time, he spends tens of thousands of yuan on shopping. In what is close to sounding like a broken record, Wang and other wealthy Chinese tourists, flaunting bags adorned with oversized logos from high-end brands such as Prada, Hermes and Louis Vuitton, are scouring the global havens for shopping such as Hong Kong, London, New York City and Paris, for the latest and hottest luxury goods. During one recent afternoon in Paris, bystanders at Galeries Lafayette looked on apparently in shock at the number of Chinese tourists running from one luxury store to the next. This is quickly becoming a common occurrence for wealthy Chinese shoppers, especially during Chinese New Year early in the year or National Day in October. Both holidays last for at least a week in China, turning shopping sprees into multi-day affairs. But as the number of outbound Chinese shoppers increases, more are forgoing the domestic market for their purchases of luxury items. A recent Bain report said a weaker euro coupled with an increasing number of Chinese tourists traveling abroad have pushed Chinese shoppers to make 60 percent of their total luxury purchases outside the Chinese mainland. According to an annual KPMG report on Jan 22, overseas travel among Chinese rose 71 percent in 2012, compared to a 53 percent increase in 2008. Seventy-two percent of them said they bought luxury items during their overseas trips, with cosmetics, watches and bags the most popular. Zhou Mi, a Chinese-speaking assistant for Chloe, a French fashion brand, said 80 percent of her customers are Chinese, who, like the wind, arrive fast and leave fast with a handful of bags. "Most of them don't really have a budget," she said. "They have no problem with buying three to four pieces at a time." Sales to Chinese tourists shopping overseas have grown 31 percent, according to the KPMG report, which accounts for nearly a quarter of luxury purchases around the world. One of the main reasons is the high price of luxury goods on the Chinese mainland - many sell for prices 30 percent higher on the mainland than in Europe because of high tariffs on imported luxury goods. For example, a Hermes Birkin bag can be bought at a 25 percent discount if it's purchased overseas. The rise of individual tourism among wealthy Chinese is another key trend. Nick Debnam, KPMG's Asia Pacific chairman in consumer markets, said global brands need to pay attention to China's luxury consumers now more than ever. "What we are now seeing is that the brands which are well positioned in China are receiving a boost in overseas markets from the emergence of a surging new class of traveling and well-off Chinese consumers," he said. Besides avoiding the high prices for luxury items in China, many affluent Chinese, said analysts, are attracted to the experience of a shopping spree. According to a report by CLSA, a Hong Kong-based brokerage, there is a wider selection in the luxury item's country of origin. There also may be limited editions overseas for special occasions such as Valentine's Day or Christmas. Hermes in China, for example, does not have a central buyer, so its product offerings vary from store to store. As many affluent Chinese change their shopping behavior, they are also expecting more in terms of customer service in stores. Both Bain and CLSA pointed to the fact that global luxury brands need to adjust their marketing approach in China or face the prospect of not being able to keep up with the demands of the Chinese consumer. Debnam from KPMG said brands need a global strategy for Chinese consumers both internationally and locally. "This means you will need a strong market position within China," Debnam said. "They also need the right product offering available in international stores." Sage Brennan, co-founder of China Luxury Network, a forum for China's luxury sector, said: "Reaching the Chinese consumer is not just about launching retail locations in China. "Chinese consumers have gone global and they expect brands to recognize their preferences and treat them appropriately," he said. To give consumers in China the same experience as in France and Italy, some luxury brands are tapping into in-store impulses for China's biggest spenders, offering them exclusive perks, such as custom-made products or once-in-a-lifetime experiences. According to The Wall Street Journal, Louis Vuitton recently took 10 of its most valued Chinese clients to Mongolia for a helicopter tour, landing at various luxury resorts to watch private camel-polo tournaments. The French luxury giant is planning more similar events to "provide an experience to customers that they wouldn't necessarily think of", a company spokesman said. In July, it opened a four-story Shanghai outlet equipped with an apartment for private client events and a parlor where VIPs can custom-design their own bags and leather shoes. Wang Qifei, a 28-year-old fashion lover who said she flies to Hong Kong for some shopping whenever she gets bored, said she receives special gifts and greeting cards from Chanel on her birthdays. Wang, who works as the general manager of her father's insurance company in Beijing, is among the capital's wealthy second generation, who spend extravagantly on luxuries such as cars and cosmetics. Many wealthy Chinese said that it's not enough to be rich and that they want VIP services, such as having the owner of the most expensive restaurant in town personally serving them. Zhou Ting, executive director at the luxury goods and services research center at the University of International Business and Economics in Beijing, said for luxury companies, marketing efforts such as sending handwritten cards, arranging invitation-only events and recognizing who the big spenders are in their stores are required to win these customers' loyalty. "Chinese customers like to receive gifts and text messages from luxury boutiques," she said. "It is not about the gift, but about how important and special you are, even to luxury companies that are already serving the most elite." Chinese consumers said they also like to associate themselves with a specific luxury brand. The CLSA report finds that approximately 24 percent of its respondents earn around 41,976 yuan ($6,700) a year but would be willing to spend more than 50,000 yuan on a watch. "It is a lot more important to dress well and enjoy a luxurious life when you are out in public," the report concludes. But the rise of Chinese outbound travelers also reflects a profound shift in the taste of Chinese luxury consumers. As they have become more sophisticated through traveling, some are starting to avoid logo-heavy products such as Louis Vuitton and Gucci. "Many consumers are now preferring to keep a low profile and shy away from flashy displays of wealth," Zhou said. "It is not about the logo any more. They want something unique and designed for them to express themselves." But to give customers what they want, a global consistency in pricing is needed. Pascal Armoudom, an expert with A.T. Kearney Management Consulting Co Ltd in Shanghai, said it is important to maintain a global price consistency to avoid having Chinese shoppers feel too frustrated when they see varying prices in different locations. "But this need for consistency can also affect profit if there is a need for change today," he said.

 China*:  Feb 18 2013

Retailers ring up record $86b (By Li Jiabao) Shoppers make purchases at a food store in Shanghai during Spring Festival. On the first four days of the holiday, retail sales in Shanghai reached 1.93 billion yuan, a year-on-year increase of 10.7 percent. Experts view numbers as evidence of higher consumer confidence - China's retail sales surged to record highs over the week-long Spring Festival, as tourist attractions also reported strong visitor numbers. According to the latest data from the Ministry of Commerce, total retail sales were 14.7 percent ahead of last year, hitting 539 billion yuan ($86 billion) from last Saturday to Friday. On Monday alone, duty-free purchases in Sanya, the popular tourist destination in the southern province of Hainan, were worth 20.73 million yuan, the figures showed. Sellers on the island extended opening hours and expanded store sizes, reporting that sales of cosmetics and watches priced between 5,000 yuan and 8,000 yuan were especially brisk. "Spending during the break remained robust this year, despite the government's recent edict curbing bureaucratic spending on luxury," said Ding Ningning, a researcher at the State Council's Development Research Center. "Other government moves, including an emphasis on higher incomes, greater social security payments and efforts aimed at bringing migrant workers' salaries level with others, have added to consumer confidence." Data released on Friday by the commerce department in the central province of Henan showed that retail sales there rose 17.9 percent year-on-year to 29.7 billion yuan. Jewelry sales rose 31.9 percent, boosted by Valentine's Day promotions, but catering businesses reported only a 5.3 percent rise in business, a reflection of more frugal spending on dining. Bloomberg said in a poll of nine economists that China's retail sales were likely to grow 15.4 percent during January and February, the fastest pace in 13 months, boosted by promotional events and the improving economic outlook. Meanwhile, some other robust numbers also suggested growing consumer confidence since the start of 2013. Data from the China National Tourism Administration released on Friday show that 76 million tourists visited 39 key tourism cities during the Spring Festival holiday, up 15 percent from a year earlier. Beijing alone pocketed 3.88 billion yuan in tourism revenue, up 15 percent year-on-year, local officials said, as 8.68 million tourists visited the capital, an increase of 7.5 percent year-on-year. Toll-free expressways during the holiday also boosted numbers from other cities by 18.3 percent against last year. The national tourism administration said 4 million Chinese traveled overseas on holiday during the break, 90 percent of them headed to Asian destinations, the most popular being Thailand, South Korea and Hong Kong. According to local travel agents, their international counterparts have been making huge efforts this year to attract more high-spending Chinese tourists, hiring interpreters, for instance, and printing bilingual brochures. South Korea had expected 630,000 Chinese tourists during the holiday, while United States officials had said that Chinese tourists now represented the fastest-growing group with numbers expected to double in the next three years. "The robust overseas shopping, mostly seen among the middle class, reflects China's fast economic growth and opening up in the past decades," Ding added.

Beijing sees 7.48m tourists (Xinhua) A total of 7.48 million local residents and tourists have visited parks and scenic spots in Beijing during this year's Spring Festival holiday, which began on February 10. Folk artists perform at a temple fair in Beijing on Feb 13. The fourth day of the lunar new year, or Wednesday, saw the peak with 1.46 million toursits, a Beijing Municipal Landscape and Forestry Bureau official said Friday. Some 33 festive activities, including temple fairs, winter sports, flower viewing and blessing activities, are attracting tourists at Beijing's 26 government-run parks and scenic spots. The Chinese New Year is an important occasion for family dinners, fireworks, and a trip to temple fairs.

Strong China sales spur automakers' global success (By MICHAEL BARRIS in New York and LI FANGFANG in Beijing) As the world's biggest market for automobiles, China has been the most important contributor to automakers' global success. The country helped propel General Motors in the fourth quarter, though the US company posted a weaker-than-expected profit on Thursday due to wider losses in Europe and rising costs in North America. The results contributed to a third consecutive money-making year for GM, which is battling Germany's Volkswagen to retain its status as the best-selling foreign automaker in China. The company said adjusted earnings before interest and taxes for international operations — mainly in China but also Russia, India and a few other countries — jumped 25 percent to $500 million in the quarter ended Dec 31. For all of 2012, GM outsold Volkswagen in China, with record sales of its Wuling minivans. Deliveries at GM and its Chinese joint ventures rose 11 percent to a record 2.84 million vehicles. At Volkswagen, deliveries were up 24.5 percent to 2.81 million. In the fourth quarter, GM deliveries in China increased 15 percent to 754,000. Although China's passenger vehicle sales growth slowed to 6.8 percent in 2012 from more than 30 percent two years before, the increasing demand for automobiles made the country the largest single market for both GM and Volkswagen. Moreover, in 2012, GM and Volkswagen increased market share as Toyota, Honda and Nissan dealt with anti-Japanese sentiment tied to a territorial row with China. In 2013, with 95 auto brands continuing to fight for their share of China's market, vehicles sales in the country are expected to top 20 million for the first time. GM and its Chinese partners captured 14.3 percent of the market in the latest quarter. "China's been very critical for GM," said David Zoia, editorial director of WardsAuto, an industry information website. "During the 2009 downturn and bankruptcy, when things were at their worst in North America, China was carrying the ball for GM. The potential that is still there makes it even more critical to them." Zoia pointed out that GM achieved its status as the top-selling foreign automaker in China despite entering the market after Volkswagen. He credited the US company's Chinese joint ventures, which accounted for 9.1 percent of international revenue in the fourth quarter, up from 8.4 percent, according to GM. China sold 19.1 million passenger vehicles in 2012, for the first time overtaking Europe in total vehicle sales and now in pole position after passing the United States in 2009. Last year, European passenger vehicle sales reached 12.5 million units, 1.1 million fewer than a year earlier, and the US registered 13 percent year-on-year sales growth, the best since 2008, but it still lagged just behind the Chinese market after selling 14.5 million units. Analysts said China's vehicle market will continue to grow. By 2020, the number is expected to rise to 33 million. The market could be as big as Europe and the US combined, Ferdinand Dudenhoeffer, head of vehicle research at the University of Duisburg-Essen, predicted earlier in January. "It's a huge market, and one nobody can ignore," Zoia said of China. "All companies have their eyes on it." While GM has racked up Chinese sales with its Chevrolet and Buick nameplates, it is making a deeper push into the luxury market there. Last year, it introduced China to the Cadillac XTS luxury cruiser, which targets a more upscale buyer. GM has said it will produce some of the vehicles locally through its joint venture partner, Shanghai Automotive Industry Corp. Tim Dunne, director of Asia-Pacific market intelligence at consumer-research firm JD Power and Associates, said China has been "very important" to GM ever since the company began investing heavily there in the late 1990s. "At the time, Chairman John Smith said GM needed to do anything necessary to get into China," Dunne said. While US automakers are technically capable of creating significant sales in China, he said, uncontrollable factors such as economic upheaval, political issues or an earthquake can affect performance. "Nobody wants to lose China," he said. "Once you get out of that market, then things become even more difficult." Global research and consulting firm KPMG said in a survey released in January that China is the top investment destination for global automakers due to its robust domestic demand. "China remains a highly attractive market due to its long-term growth potential. It's no surprise that automakers are placing more big bets in China, and doing so ahead of the other markets," said Andrew Thomson, Asia-Pacific head of automotive and a partner of KPMG China. The global listing of luxury vehicle brands is another perfect illustration of China's importance to foreign players. German luxury car brand Audi's global success is greatly attributed to its prosperous sales in China — its largest market in the world — as it has almost exclusively controlled the nation's high-end official car market since it locally produced its flagship model, the A6, in 1999. Its image as an official car boosted its sales and helped Audi for years beat its rivals, BMW and Mercedes-Benz, to top China's luxury car market. The dominant leadership in China even helped Audi maintain the world's No 2 position in the sector for two years, behind BMW and followed by Mercedes-Benz.

Chinese flotilla sets sail on escort missions (Xinhua) A missile destroyer "Harbin" sets sail at a port in Qingdao city, East China's Shandong province, Feb 16, 2013, to depart for the Gulf of Aden and the sea off Somalia on escort missions. The flotilla, as the 14th batch of its kind to engage in escort missions, consists of a missile destroyer and a frigate as well as a supply ship which are all from the North Sea Fleet of the People's Liberation Army.

Hong Kong*:  Feb 17 2013

Hong Kong Jockey Club - Year of the Snake festivities charm Sha Tin race-goers (By Vanessa Yung) The Lunar New Year race meeting at the Sha Tin Racecourse on Tuesday was not short of festive elements. Actors Liza Wang Ming-chuen and Wayne Lai Yiu-cheung - who said they had spent most of the Lunar New Year working - entertained guests with their singing. Food show host and DJ So Sze-wong played games and handed out lai see packets, while fung shui master Mak Ling-ling talked about what the various signs of the Chinese zodiac could expect in the Year of the Snake. To top it all off - probably to appeal to the Chinese love of everything gold - actress Samantha Ko Hoi-ning modelled pure gold accessories made especially for the occasion by jeweller Just Gold. Dressed in - surprise, surprise - a red tube dress, Ko said her New Year's resolution was to buy her own flat. She could have just walked off in the flamboyant gold neckpiece she was wearing.

Gold price continues to slide despite rising demand (By Charlotte So) Weakening US dollar expected to send price of precious metal higher in second half of year - Gold bars on display at the Chinese Gold & Silver Exchange Society yesterday, the first day of trading after the closure for the Lunar New Year. The price of gold fell yesterday, the first trading day after the Lunar New Year holiday, continuing the losing streak that started at the beginning of this year. Gold opened at HK$15,238 per tael, down 2.1 per cent from HK$15,560 on the previous trading day. In London, spot gold traded at US$1,644.60 an ounce on Wednesday, down nearly 2 per cent this year. Haywood Cheung Tak-hay, the president of the Chinese Gold & Silver Exchange Society, said he expected gold to trade in a narrow range between US$1,600 and US$1,700 an ounce in the first half. But the weakening US dollar was likely to send the gold price to as high as US$1,900 an ounce in the second half, Cheung said. "In light of the quantitative easing policies by governments across the globe, gold and other precious metals would become a more preferable asset class than currencies," he said. The trading of yuan gold bars, launched by the exchange in October 2011, was in need of a stimulus in Hong Kong, Cheung said. The yuan gold bar trade in the city is worth 5 billion yuan (HK$6.2 billion) to 6 billion yuan a day, dwarfed by London's trade of 60 billion yuan to 70 billion yuan. "If Beijing could widen the daily trading band of the yuan, the trading of yuan gold bars will be stimulated," Cheung said. Gold demand rose 3.8 per cent in the fourth quarter of last year to 1,196 tonnes - a record high for the quarter - from 1,152 tonnes a year earlier, the London-based World Gold Council said yesterday. Demand was bolstered by Indian consumption during the quarter, which surged 41 per cent year on year and helped reduce the first drop in annual usage in three years. China, which the council said was poised to overtake India as the largest buyer of gold, saw its gold purchases fall 0.5 per cent to 776 tonnes. The mainland saw a fall in the consumption of gold and jewellery products towards the year-end because of the anti-corruption campaign launched by Vice-President Xi Jinping, analysts said. Analysts in general are bullish about gold prices. Schroders' commodities and currencies product manager Matthew Michael said gold might test a new record of US$2,000 an ounce this year, after hitting US$1,700 last year. Investment, including gold bars, coins and exchange-traded products, dropped 8.3 per cent year on year to 424.7 tonnes in the three months ended December, the gold council said. Investment for the full year fell 10 per cent to 1,534.6 tonnes.

Tourism industry warns about unscrupulous operators (By Dennis Chong and Johnny Tam) Acting Tourism Commissioner Rosanna Law Shuk-pu. Unscrupulous tour operators may have broken laws, used improper documents and even impersonated legitimate companies to rake in cash from the boom in tourism from the mainland, players in the sector said on Friday morning. The comments were made in reaction to Tuesday’s incident in which a group of mainland tourists chose to sleep on a tour coach, after tour company 3A Holidays failed to secure proper accommodation for them. Other groups have faced similar glitches. On Friday morning, the proprietor of 3A Holidays, Wong Wing-kin, told police he suspected phoney tour leaders had pretended to be from his agency and falsely led some of the recent tours that have generated complaints. Wong admitted that three of the bungled tours - two that returned to Shenzhen for lack of hotel rooms and one that slept on the coach on Tuesday night - were the responsibility of his agency, but other recent mismanaged tours had nothing to do with 3A Holidays. In one of those tours, tourists had to sleep on a cruise ship for lack of the hotel rooms they were expecting. Meanwhile, the Travel Industry Council has asked 3A Holidays to give an account of the incident at the TIC office on Friday afternoon, council executive director Joseph Tung Yao-chung said on Friday morning. That is sooner than required under the watchdog’s rules, which allow tour companies seven days report on an incident like Tuesday’s botched hotel arrangements. Ricky Tse, chairman of the Hong Kong Inbound Tours Association, said questions remained to be answered about the incidents involving 3A Holidays. They include which agent is registered for the tour in the official contract. Varying accounts are circulating about illicit practices that may be linked to Tuesday’s incident. One theory is that a state-owned company was responsible for putting the group tours together on the mainland, although the company has denied having any record of the tourists involved. Another account says an illegal mainland tour operator may have used the licence of a Hong Kong tour guide to organise the tour while bypassing travel agents in Hong Kong. Tung said on Thursday said some of the details in the tour registration may have been fabricated. For his part, Tse said the high demand from mainland tourists and the costs involved have prompted some tour operators from both the mainland and Hong Kong to conduct tours without proper procedures. “Normally, a tour must be registered through a local travel agency, but there have been reports where some tour guides will take tours themselves without going through an agency,” Tse told local radio. He called for such bad practices to be stopped, to avoid damage to Hong Kong’s reputation as a tourist hub. There are more than 1,600 travel agencies in the city, and tens of millions of mainland tourists visit every year. Acting Tourism Commissioner Rosanna Law Shuk-pui condemned “bad blood” in the sector and apologised to tourists who have been affected. A government study to assess the capacity of the city’s tourism sector will be made available to the public once it is completed, she said, giving no time frame for when that will happen.

 China*:  Feb 17 2013

Trips to mainland China eye-opening experiences for many Taiwanese (By Lawrence Chung in Taipei) Many Taiwanese still consider the mainland to be backward but more frequent travel has proved to be an eye-opener for the visitors - Trips to mainland China eye-opening experiences for many Taiwanese. Rapid cross-strait exchanges have helped dispel some urban myths and misunderstanding about the mainland and its people in the eyes of some Taiwanese residents. James Wang, a Taiwanese engineer who was recently stationed to work at his company's mainland office, said it had been an eye-opening experience since moving to Suzhou , Jiangsu. "I thought that while it might be scenic, it would be a relatively backward place, without even a gym where I could exercise after work," he said. "But before I even reported to work, some of my mainland colleagues there had already helped me find a list of local fitness centres after learning from my boss that I go to the gym often after work." Wang, who returned home to Taipei for the Lunar New Year holiday, was one of the many Taiwanese with deep-seated stereotypes about the mainland and its people. It's only after a visit to the mainland that they realise how ignorant they have been. Some Taiwanese who lived in Beijing more than a decade ago are under the impression that it's important to dress humbly, so as to avoid becoming the target of robbers and pickpockets. Taiwanese friends and relatives are sometimes advised to never wear nice clothes if they visit the mainland. Jasmine Fang, a Zhejiang native now studying journalism at Shih Hsin University in Taipei, said she was shocked when some of her classmates asked her whether there were high-rise buildings in Shanghai. "For God's sake, it's Shanghai," she said, lamenting that so many Taiwanese have backward views of the mainland, despite it becoming one of the world's top economic powers. Cross-strait exchanges have increased rapidly since 2008 when Taiwanese President Ma Ying-jeou adopted a policy of engaging the mainland and permitting mainlanders to visit the island. As a result, myths and misunderstandings have gradually declined, but have not been eradicated. Wang, who will return to Suzhou after the holiday, said he was surprised to discover that mainlanders "enjoy having a relaxing meal, like many of their Taiwanese counterparts". "At first, I thought that eating out on the mainland must be like going into battle, as I thought that mainlanders tend to finish their meals in a rush, like in 10 to 15 minutes," he said. Patricia Cheng, who works for a US-invested company in Taiwan, recently went on a trip to Shanghai. "I was dumbfounded because I never thought there would be so many upscale department stores and fashion boutiques in Shanghai," she said, adding that she ended up having a great time, shopping almost non-stop. According to the Taiwan Affairs Office, close to eight million people from Taiwan and the mainland visited the two sides of the Taiwan Strait in 2012, with 5.35 million coming from the island. The disparity is largely because of some restrictions still placed on mainlanders visiting the island.

Chinese slow to develop a taste for chocolate (By Agence France-Presse in Beijing) Taste develops slowly as mainlanders eat the equivalent of just two Snickers bars each year - A model's chocolate crown at a Shanghai expo. Michelangelo's David stands proud next to the Eiffel Tower in a Beijing display, flanked by the Great Wall and the terracotta army and all made of chocolate. The edible exhibit reflects not only how eager confectionery sellers are to reach the world's biggest market, but also what tremendous effort it takes. Increasingly wealthy shoppers have embraced global trends enthusiastically, from coffee to Hollywood films and smartphones, and have become the world's largest market for goods from beer to cars. Yet when it comes to chocolate the average Chinese, having little sweet tooth or familiarity with it, consumes only 100 grams a year, the equivalent of two Snickers bars. By comparison, the Japanese eat 11 times more chocolate, Americans 44 times, and Germans 82 times as much, market research firm Euromonitor said in a report in November. "The chocolate market is in its infancy and it's still there even 30 years" after the country opened up to the world, industry expert Lawrence Allen said, adding that "it was totally foreign to the palate of the people at the time". Retail sales in China have risen an average of 17 per cent annually for the past five years and the country's luxury market is projected to grow by 20 per cent a year for the next decade. That makes the expansion in chocolate sales, projected at 10 per cent through to 2015, look torpid by comparison. Many companies are trying to capitalise on the preferences for luxuries and gift-giving by rebranding chocolate as a premium indulgence, a classy present and a mark of taste and international flair. The Italian brand Ferrero Rocher is set to have enjoyed the fastest jump in market share for the second successive year in 2012, Euromonitor said. It had 8.4 per cent of the mainland market, up by almost a third in just two years. The Belgian brand Godiva said its lavish gift sets, which have been created for specific holidays, had tapped into the tradition of exchanging presents. For the Lunar New Year, Godiva's best-selling 18-piece gift box, which features tea flavours and snake designs, has been selling for 488 yuan (HK$601).

Home kit to test food for toxins could be on sale soon in China (By SCMP) Food safety kit can yield results in a matter of minutes - A Chinese man carrying two boxes of tainted milk formula for refunds in 2008 when more than 6,000 babies were affected. A home testing kit to help consumers identify toxins in food has been developed in China. Scientists at Tianjin University of Science and Technology in northern China have created a food safety testing system that can yield results in a matter of minutes. The food testing indicator paper is expected to hit the Chinese market soon and will help consumers identify food products contaminated with pathogenic bacteria and excessive drug residues, according to Xinhua. During tests, the paper was found to change colour to suggest over 60 varieties of chemical factors in food samples during lab research conducted at university. Professor Wang Shuo, deputy principal of the university, said food safety testing usually requires complex testing machines and procedures in labouratories. With this test paper, however, certain harmful substances can be identified in a few minutes. From contaminated milk to chickens fed with excessive amounts of antibiotics and hormones, a spate of food scandals has sparked fear in China. Wang said the research team has obtained 13 national patents for the test paper, and is working on further research to lower the production cost of the paper to make it more affordable for ordinary consumers. He did not disclose the possible price of the paper.

Chinese ships continue patrolling Diaoyu Islands waters (Xinhua) Chinese marine surveillance ships continued regular patrols in the territorial waters surrounding the Diaoyu Islands on Friday, the State Oceanic Administration said. The ships included Haijian 50, Haijian 66, and Haijian 137, the administration said in a statement on its website. (Haijian is the Chinese equivalent of "marine surveillance.") Chinese marine surveillance ship Haijian 137 carries out a regular patrol in waters surrounding the Diaoyu Islands on Feb 14, 2013. The fleet of Chinese marine surveillance ships continued regular patrol surrounding the Diaoyu Islands during the Spring Festival holiday. 

Strong China sales undergird GM's earnings (By Michael Barris in New York) China, the world's biggest market for automobiles, helped propel General Motors Co in the fourth quarter, although the US company posted a weaker-than-expected profit for the period, due to wider losses in Europe and rising costs on its home turf in North America. The results, however, contributed to a third consecutive money-making year for GM, which is battling Germany's Volkwagen AG to retain its status as the best-selling foreign auto maker in China. The company said adjusted earnings before interest and taxes for international operations - mainly in China but also Russia, India and a few other countries - jumped 25 percent to $500 million in the quarter ended Dec 31. GM said net income attributable to common stockholders for the quarter was $900 million, or 54 cents a share, up from $500 million, or 28 cents a share, in the fourth quarter of 2011. Excluding charges in the year-earlier period, GM earned 48 cents per share, up from 39 cents. Analysts had projected fourth-quarter earnings, excluding items, of 51 cents a share. Revenue in the quarter rose to a higher-than-expected $39.3 billion from $38 billion. For all of 2012, GM outsold Volkswagen in China, with record sales of its Wuling minivans. Deliveries at GM and its Chinese joint ventures rose 11 percent to a record 2.84 million vehicles. At Volkswagen, deliveries were up 24.5 percent to 2.81 million. In the fourth quarter, GM deliveries in China increased 15 percent to 754,000. GM and Volkswagen have increased market share as Toyota Motor Corp, Honda Motor Co and Nissan Motor Co deal with anti-Japanese sentiment tied to a territorial dispute with China. As some 95 auto brands fight for a bigger slice of the pie, the total number of vehicles sold in China in 2013 is expected to top 20 million for the first time. GM and its partners in China captured 14.3 percent of the market in the latest quarter. "China's been very critical for GM," said David Zoia, editorial director of Detroit-based WardsAuto, an industry information website. "During the 2009 downturn and bankruptcy, when things were at their worst in North America, China was carrying the ball for GM. The potential that is still there makes it even more critical to them. "It's a huge market, and one nobody can ignore," Zoia said of China. "All companies have their eyes on it." China sold 19.1 million passenger vehicles in 2012. By 2020, the number is expected to rise to 33 million, analysts say. Zoia pointed out that GM achieved its status as the top-selling foreign auto maker in China despite entering the market well after VW. He credited the US company's Chinese joint ventures, which accounted for 9.1 percent of international revenue in the fourth quarter, up from 8.4 percent, according to GM. Analysts also see GM's performance benefiting from its recent $4.2 billion purchase of Ally Financial Inc operations in China, Europe and South America, doubling the size of the auto maker's unit for customer financing. The purchase allows GM to tailor lending options to reach more customers in markets that account for about 80 percent of its global sales. While GM has racked up Chinese sales with its Chevrolet and Buick nameplates, it is making a deeper push into the luxury market there. Last year, it introduced China to the Cadillac XTS luxury cruiser, which targets a more upscale buyer. GM has said it will produce some of the vehicles locally through its joint venture partner, Shanghai Automotive Industry Corp, or SAIC. On Thursday, GM Chief Financial Officer Dan Ammann confirmed for reporters that the company had agreed to reacquire from SAIC a 1 percent stake in their joint venture, returning it to a 50-50 partnership. Terms weren't disclosed. GM had agreed to give SAIC control of the venture in 2009, at the height of the financial crisis, in exchange for a loan and cash. Tim Dunne, director of Asia-Pacific market intelligence at consumer-research firm JD Power and Associates, said China has been "very important" to GM ever since the company began investing heavily there in the late 1990s. "At the time, Chairman John Smith said GM needed to do anything necessary to get into China," Dunne recalled. The company is benefiting, he said, from its design and engineering venture with SAIC, the Pan-Asia Technical Automotive Center, which engineers parts for the Chinese market as well as other parts of the world. "GM is doing well, but you can't let up in the market," Dunne said. While US auto makers are technically capable of creating significant sales in China, he said, other, uncontrollable factors can affect performance, such as economic upheaval, political issues or an earthquake. "Nobody wants to lose China," he said. "Once you get out of that market, then things become even more difficult."

Hong Kong*:  Feb 16 2013

Amid reports of stranded tourists, hotel boss finds plenty of vacancies (By Dennis Chong and Joshua But) Plenty of rooms in HK, industry boss says, but mainlanders may find mid-priced ones scarce - A mainland tourist waits in an Aberdeen hotel lobby to leave for home after her tour was disbanded early. The hotel occupancy rate is not at bursting point, a trade association said said on Thursday in reaction to this week's headlines about stranded mainland tourists. Michael Li Hon-shing, executive director of the Federation of Hotel Owners, said mainland tourists preferred to stay in affordable, three-star hotels, which led to a bottleneck in that market bracket. "Some people say they can't find a room. But it doesn't mean hotels are full across the whole of Hong Kong. And the occupancy rate can change in a matter of days," Li said. Hong Kong has fewer than 20 hotels in the three-star range - where rooms cost about HK$1,200 per night, he said. These hotels are the most popular for group tours, creating a mismatch between supply and demand in peak seasons. But overall, the hotel occupancy rate was below 90 per cent, Li said. "If you walk in at the last minute [in peak season], you are going to see very high rates. But in the next few days [after the holiday], the situation will be very different." If you walk in at the last minute, you are going to see very high rates. But in the next few days, the situation will be very different - On Tuesday, mainland tourists had to sleep in their coach after the three-star hotel they were expecting to stay in turned out to be a guest house in Sham Shui Po. Many of them left the city, but some stayed until last night at an Aberdeen hotel after tourism authorities intervened. Li refused to directly comment on the incident, but said some unscrupulous operators capitalised on the strong demand from mainlanders. Some operators sold poorly organised tours that used a network of illegal guesthouses and flats, he said. The best approach would be to crack down on crooked operators, not substantially increase the number of hotel rooms, he said. "Why should hotels always bear the brunt [of criticism]?" Meanwhile, two legislators yesterday said the flood of tourism from the mainland has created a "bottleneck" in Hong Kong, calling on the government to look at expanding tourism facilities and consider capping visitor numbers from the mainland. Starry Lee Wai-king, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the number of mainland tourists has exceeded what the city could handle. "It has created a bottleneck," Lee said. "It is time to review the individual travellers' scheme." The scheme allows mainlanders to visit Hong Kong without being part of a tour. Lawmaker James To Kun-sun of the Democratic Party said: "We should focus on attracting mainland tourists who have a high level of consumption."

Fury as corrupt ex-Hong Kong prosecutor Warwick Reid sets up new legal firm (By Niall Fraser) Anger and disgust in HK as disgraced lawyer Warwick Reid, jailed for taking bribes in 1990, sets up as a legal specialist in New Zealand - Warwick Reid flanked by police after a court hearing in 1990. A top Hong Kong prosecutor jailed for corruption has caused outrage in the city by reinventing himself as a legal services expert. Warwick Reid, a former acting deputy director of public prosecutions, was sentenced to eight years in 1990 for taking HK$12.4 million in bribes. He was deported to his native New Zealand after serving four years. But Reid, the most senior legal figure to be jailed for corruption in Hong Kong history, has now set up a company in his hometown of Tauranga. ReidLegal - run by Reid, 65, and daughter Cassie - says on its website it provides "legal experts, specialising in employment law and legal services". The pair are careful to point out they do not act as lawyers. Because of Reid's criminal past, he cannot practise law here or in New Zealand. Also, Reid's career biography on the site fails to mention his fall from grace here and a later term behind bars in New Zealand for perverting the course of justice in another Hong Kong case. His new venture has brought an angry and astonished outcry from the city's legal community. Director of Public Prosecutions Kevin Zervos said: "Reid committed very serious crimes in Hong Kong as a lawyer and it is a matter of grave concern that he can provide legal services in another jurisdiction." Zervos said he found it astonishing that someone whose offences struck at the very heart of the justice system should be allowed to offer legal advice of any kind. "He's obviously hoping that people have forgotten. But in matters this serious, it is everyone's job to make sure no one forgets," he added. He's obviously hoping that people have forgotten. But in matters this serious, it is everyone's job to make sure no one forgets - A former colleague of Reid, Clive Grossman SC, said: "There was a palpable air of disbelief when Reid was suspended pending investigation, a disbelief that turned to outrage when he … later pleaded guilty to carefully manufactured corruption. "In order to win himself time off what was obviously going to be a long sentence, he tried to incriminate as many people as he could - old friends too. I find it difficult even today to convey the degree of not only utter outrage, but also contempt, which the mention of his name evokes." Barrister Kevin Egan, one of the many Reid tried - unsuccessfully - to incriminate, said: "The arrogance of the man knows no bounds. There is no mention [on the website] of his conviction for selling justice as the acting top prosecutor in Hong Kong. [There is] no mention of the years he was sent to jail for these crimes. "Also, there's no mention of the fact that he did time in New Zealand after he was deported from Hong Kong for perverting the course of justice. What an extraordinary brass neck this boy has got." Reid did not return phone calls and e-mails asking him to comment by press time.

Legislators urge cap on mainland tourists (By Lai Ying-kit and Joshua But) Ocean Park suspends ticket sales while visitors queue outside the entrance to get in. Legislators are calling for a cap on the number of individual mainland visitors coming to Hong Kong, saying a surge in their arrivals has stretched the city’s facilities to the limit. The Democratic Party’s James To Kun-sun told local radio on Thursday an influx of mainland visitors triggered by the individual travellers scheme was having a negative impact on Hongkongers’ daily lives. The scheme was established in 2003 and allows mainlanders from certain cities and places to visit Hong Kong without joining a group. It has been expanded a number of times, extending the scheme to more mainland cities. According to Tourism Board data, the scheme brought more than 100 million mainland visitors to the city in December alone. To said the city should stop extending the scheme to more cities and turn to capitalising on high spending visitors from the top one-tenth wealthiest tier of mainland cities. The best tourists are those who can benefit our economy, job market the most and help us earn the most money - “The best tourists are those who can benefit our economy, job market the most and help us earn the most money,” he said. Also on the radio show, lawmaker Starry Lee Wai-king, from the pro-Beijing the Democratic Alliance for the Betterment and Progress of Hong Kong, agreed the individual travellers’ scheme should not be expanded for now. Lee urged the government to take a leading role in reviewing the scheme with mainland authorities and to seek a stronger voice in determining the number of permits granted daily, a power now held by the mainland. She also suggested setting up special shopping zones for mainland visitors near the border. “Most of the mainland visitors do one-day shopping here and do not stay overnight,” Lee said. “We can build large shopping zones for them and this can help lessen the pressure on our downtown shopping areas.” The number of mainland tourists has exceeded the city’s expectation and its limit - The city saw an increase of mainland tourists over this week’s Lunar New Year holiday, one of the peak seasons in the year. Their arrivals filled many hotels and theme parks. “The number of mainland tourists has exceeded the city’s expectation and its limit. It has reached the bottleneck,” said Lee. For the second day in a row, Ocean Park on Wednesday suspended ticket sales for part of the day because the theme park neared its legal maximum of 36,000 visitors. In the first three days of the Year of the Snake, more than 380,000 mainlanders entered Hong Kong, a 33 per cent increase from 286,000 in the same period last year, according to Immigration Department figures.

 China*:  Feb 16 2013

An orange grower picks mandarin oranges at an orchard in Longcheng Village, Rong'an County of Liuzhou City, south China's Guangxi Zhuang Autonomous Region, Feb. 13, 2013. The mandarin oranges in Rong'an County appeared on the market recently, avoiding the peak season of fruits sale. 

Tranquil moment as sun sets over Sanya skyline - Photo shows the sunset scene on the sea near Sanya City in south China's Hainan  (The Hawaii of China) Province.

Chinese ships continue regular patrol surrounding Diaoyu Islands - The fleet of Chinese marine surveillance ships continued regular patrol surrounding the Diaoyu Islands during the Spring Festival holiday.

Hong Kong*:  Feb 15 2013

Dragon dance at Harbour City mall was spectacle not to be missed (By Charley Lanyon) Dozens of performers gave tenants and shoppers at Harbour City mall one of the standout dragon and lion dances of the holiday period yesterday. Valentine's Day this year comes hot on the heels of the Lunar New Year, and amid the candlelit dinners and champagne brunches are traditional festivities and family reunions. For many, one of the best parts of the Lunar New Year is the dragon and lion dances. There are many to see, but the one yesterday at the Harbour City mall in Tsim Sha Tsui was not to be missed. The activities started with a traditional lion and dragon eye-dotting ceremony, and an especially wild dance in which performers visited the many tenants of Harbour City to deliver good New Year's tidings to all. Then, 10 dancers dressed as Da Tou Fo, or the laughing big-headed Buddha, performed an updated and funky take on the traditional New Year's performance. Next, for a dose of cute, children dressed in traditional Chinese garb joined similarly attired models to pass out gifts of candles, calligraphy scrolls and lai see packets to the crowd. All of this took place under the watchful eye of Canis Lee Lai-yi, the assistant director and general manager of Harbour City Estates, and her special guest, the beloved local actress and Canto-pop singer Miriam Yeung Chin-wah.

Cross-border limit on baby milk may breach trade rules (By Eric Ng and Amy Nip) Legal expert warns that planned two-can limit on cross-border business could breach the World Trade Organisation's rules - People queue up for milk powder at a branch of Watson in Choi Yuen Estate, Sheung Shui. Bryan Mercurio - A cap on the amount of milk formula travellers can take out of Hong Kong could breach World Trade Organisation rules. The government announced this month it planned to limit the number of cans people can take across the border to two. The move was aimed at preventing parallel traders from buying formula in the city and reselling it in Shenzhen at higher prices, creating a shortage. They can escape mainland tax by claiming the formula is for their own use and costs less than 5,000 yuan (HK$6,159) in total. Eugene Lim, a Hong Kong tax partner of international law firm Baker & McKenzie, said the two-can quota could contravene the General Agreement on Tariffs and Trade (GATT). The agreement prohibits any quantitative import or export restrictions between WTO members. But Lim, co-head of the firm's Asia Pacific Regional Customs and International Trade Steering Committee, said: "The quota appears to be aimed at preventing hand-carried exports for parallel trading and the limitation to two [cans] is to ensure it is limited to personal use." He said that in practical terms, there was little chance the measure would be challenged as China was unlikely to invoke WTO dispute proceedings against Hong Kong. Other countries were unlikely to have sufficient interest to do so, Lim added. Chinese University law professor Bryan Mercurio said the GATT legislation was not expressly limited solely to commercial shipments, but that was implicit in the entire agreement. He said: "Despite the fact the individuals crossing the border with the goods are doing so for the purposes of trading, they are not engaging in the export or import of goods within the meaning of the GATT - they are merely individuals crossing a border." His first impression was that the proposed change - being a limit on a specific item that individuals could take across the border for personal use - would not violate WTO rules. But he said a grey area that could emerge was what would happen if the parallel traders offered to pay import tax to the mainland authorities. If they made known their "commercial" intent, setting a limit on the number of cans that could be taken out of the city could be problematic. The WTO said it could act to determine whether legislation passed by a member complied with its rules only after another member complained. The Food and Health Bureau is working out details of the proposed amendment to the Import and Export Ordinance in consultation with the Trade and Industry Department. A department spokesman said: "The government will ensure the compliance of the proposal with World Trade Organisation requirements." Meanwhile, free-market opponents of the proposal say a limit on milk formula is wrong for another reason - that people are being criminalised for the simple act of trading that made Hong Kong great. http://www.youtube.com/watch?v=WeAvRwsmPp8 

Never too early for Chinese lessons, eager parents find (By Beatrice Siu) The demand for Chinese tutorial classes has increased sharply as anxious parents are eager that their children, some of preschool age, learn Putonghua and the culture of the country. One such center is Senate House Education, which last month launched "Learning Mandarin and Understanding China" for students from K1 to Primary Six. The two-part course is divided between the kindergarten and primary stages, and comprises learning Putonghua with Pinyin and Chinese culture, geography and customs of China, literature classics, poems, table manners, writing and debating skills. Tutors from the mainland have been recruited by the center. Karen Ng enrolled her 4-year-old daughter in the Chinese course in the hope of enhancing her ability in Putonghua and broadening her knowledge of Chinese culture. Ng said her daughter learned Putonghua when she was in a playgroup, but just simple words and numbers as she was still unfamiliar with the alphabet. "Her ability in Chinese is important. What I worry about is her competitiveness when she begins work in the real world ... so the earlier she starts learning, the easier it will be for her to pick up," she said. "I want my daughter to know more about the Chinese culture because she is Chinese." Director Samuel Lun said there is an increasing demand for Chinese courses from parents whose children are studying in local and international schools. "There is a demand for students at international schools to learn better Chinese because there are more Chinese students in their classes; while local students need to prepare themselves to become more competitive." Lun said the kindergarten Putonghua class helps to prepare children for further learning of the language in primary school. "The tragedy is that the starting line for education has been put at the kindergarten stage," Hong Kong Education Policy Concern Organization chairman Mervyn Cheung Man-ping said. "For children aged three to five, it is inappropriate to cram too many things into their minds as they are not ready and they will lose interest in learning. It is better to educate them on life skills and how to get along with each other." Cheung advised parents to be cautious when choosing extra classes and avoid having their children learn too much, adding kindergarten kids need to learn simple words.

Record crowds throng to parks (By Beatrice Siu) Thousands of residents and tourists had their holidays ruined when Ocean Park suspended the sale of tickets for the second successive day because of excessive crowds. The two-day shutout at the popular theme park sparked renewed calls yesterday for more tourism attractions and infrastructure to meet an increasing number of visitors. Crowd management measures were implemented to control admissions to the park, though those celebrating their birthdays, senior citizens aged 65 and over who enjoy free entry, and annual pass holders were not affected. A spokeswoman said the number of visitors on Tuesday surpassed the 2011 daily record of 48,000. She added that when guests reach 28,000 to 32,000, the park usually makes an announcement persuading visitors to return another day. "Our regulation is that not more than 36,600 can appear in the park at the same time,'' she said. Visitors to Disneyland also complained that they spent a long time in queues to get rides. A spokeswoman said Disneyland recorded its highest number of visitors for a single day on Tuesday, while yesterday's crowd was the second highest. She did not mention the figures. The tourism sector has called for an increase in the number of attractions and has opposed limiting the number of visitors through administrative measures. Tourism sector lawmaker Yiu Si-wing said it is time to review Hong Kong's ability to receive visitors and agreed on suggestions to develop more attractions in districts such as the islands. Yiu also suggested reviewing the maximum attendance at Ocean Park and Disneyland. "In the short term we can improve the notifi dhcation system by making announcements at border crossings so that visitors can adjust their itineraries,'' he said. "In the long term, there should be more attractions in order to disperse the visitors. For example, we can improve facilities in the islands to attract visitors. "Building a Shaolin monastery in Sai Kung, which has been reported, is also a good idea.'' Yiu opposed limiting the number of visitors with administrative measures, saying this will have a prolonged impact on the economy. "Once you stop visitors from coming, it will be hard to get them back.'' Travel Industry Council executive director Joseph Tung Yao-chung welcomed the construction of more attractions but said this will take time. A spokeswoman for the Hong Kong Tourism Board said it has not received complaints about overcrowding at attractions.

Florists count the cost as Valentine's Day is so close to Lunar New Year (By Joyce Man) Florists counting the cost as day for lovers' this year comes hot on the heels of Lunar New Year - Mong Kok flower market is blooming in preparation for Valentine's Day tomorrow. What retailers are lamenting is a shortage of ardent suitors. Valentine's Day isn't looking so enchanting this year for florists, who expect orders to be down by one-third because February 14 is so close to the Lunar New Year holiday. Last year the lovers' day came more than two weeks after Lunar New Year. Flower wholesalers and retailers in Flower Market Road near Prince Edward MTR station and on Lyndhurst Terrace in SoHo say that means many couples are still abroad as tomorrow rolls around. What's more, many offices will not be open, depriving some customers of the chance to send their beloved bouquets at their place of work. Maybe times have changed ... Men and women are equal now. It's no big deal if a girl pursues a guy - "We expect there will be less business this year," said Leung Lai-ming, manager of Wayfoong Florist in Prince Edward Road West. "Many offices will be closed. It's best when there's enough time between the two holidays, say a week or 10 days." Cindy Yiu Pik-yuk, assistant manager at Sakura in Flower Market Road, said there were fewer orders than last year, noting that many people would not be back at work. The level of activity in Flower Market Road confirmed their expectations. "By this time last year the street was packed," said May Cheng Shui-mui, manager at Chun Fat Trading Company, surveying the pedestrian traffic outside her store. "It wasn't like this." Cheng said that by the same date last year, she had received several times the number of orders she had received this year. Lyndhurst Terrace remained quiet yesterday, with most of the stalls closed. Still, some clients were willing to splurge. Three flower shops reported having orders for 99 roses. One store was charging HK$6,880 for 99 roses, excluding delivery. Sellers said prices were similar to last year, with some quoting retail prices of HK$680 to HK$1,100 for a bouquet of 11 roses from Kunming without delivery. Some florists said they had noted a small but growing number of women buying flowers for their boyfriends. "Maybe times have changed," Cheng said. "Men and women are equal now. It's no big deal if a girl pursues a guy."

 China*:  Feb 15 2013

Numerous travelers cram in tourism sites across China - People visit a temple fair at the Temple of Earth in Beijing, Feb. 12. People in China are enjoying the week-long holiday of Spring Festival, or Chinese Lunar New Year.

A stylish touch of snake (By Gan Tian) Four stamps for the Year of the Snake designed by Wu Guanying. Anything with a snake theme is in vogue this year - from sportswear to gadgets and accessories, to fashion, footwear and even stamps - as the country edges nearer the Year of the Snake on the traditional Chinese calendar. Sporting giant Adidas is kicking off its year right, with various products, including two specially designed "reptile-skinned" versions of the classic Superstar 80's silhouette sneaker. Both models are crafted out of faux snakeskin material with leather and suede contrasts, in addition to a jade lace-lock with a Chinese character of "she", or "snake", on it. The tag also takes the shape of jade, delivering a strong overall sense of Chinese tradition. A new reversible jacket in Adidas' collection has also been designed to appeal to those looking to celebrate this favorite Chinese time of year. One side uses red silk material with snakeskin patterning, while the other is black, with serpent embroidery on the back. Elsewhere, there's a tracksuit with the brand's classic three stripes in snakeskin, and T-shirts printed with snakes in an "88" shape. Simon Millar, Adidas' vice-president of marketing in China, said: "The Spring Festival and shengxiao, or the Chinese zodiac, is special in Chinese culture. "These snake-inspired designs represent the real spirit of Chinese New Year." Snakeskin design also features strongly elsewhere in the footwear world. UGG Australia, for instance, best known for its comfy sheepskin boots, has produced some serpent skin patterned products. Its latest high-heeled sandals are decorated with wild brown serpent skin, and are being billed by the company as the highlight of its upcoming 2013 spring summer collection. To match, consumers can choose a same-pattern clutch, with camel tassels. Though the label avoids claiming the products have been specially designed for the Year of the Snake, it launched them in Chinese markets in Beijing this January, clearly with some hope that local consumers will see the significance. Meanwhile, at the other end of many people's budgets, the luxury watch brand Piaget has produced the Altiplano Chinese Zodiac Snake watch, which features an enamel dial with a snake motif. Coming in two styles, the exclusive timepieces are housed in a round case, crafted from 18-karat white gold and set with 78 brilliant-cut diamonds arranged around the narrow bezel. Only 38 pieces of each design are going on sale. But if you're neither a sports fan nor fashionista, you can stick to something a little more traditional. The People's Bank of China has issued 15 commemorative coins - eight in gold and seven in silver - each designed with snake patterns. China Post, too, has just issued stamps for the Year of the Snake within its shengxiao, or Chinese zodiac, collection. The stamps are designed by Wu Guanying, a professor in Academy of Arts and Design at Tsinghua University. He created an image of a snake with a tail in the shape of lingzhi, or Ganoderma lucidum, a mushroom representing good luck and fortune in Chinese culture. A whole set of snake-themed stamps cost just 24 yuan ($3.86), and are on sale now - some experts are already reporting that prices have soared to 540 yuan a set among stamp collectors.

Great snakes! (By Raymond Zhou) Some people have an irrational fear of the snake, yet the legends involving this zodiac animal includes a bittersweet tale of vows and hearts broken and love transcending disaster, Raymond Zhou tells us. Let's face it: The snake has an image problem. In preparation for the Year of the Snake, a mammoth decoration in the form of the elongate, legless, carnivorous reptile was erected at a highway toll plaza in Sichuan province. Somehow, they gave the snake the countenance of a chicken. Onlookers joked that whoever sculpted it must have been born in the Year of the Rooster, and others chimed in that they would no longer be afraid of the snake now that it had taken the shape of a friendlier animal. On these occasions, Chinese people have traditionally resorted to euphemisms to represent the snake in an auspicious light. The dragon, a symbol of power and majesty, is often used to stand in for its earthbound peer, which is certainly one of the reasons for envisioning the mythical animal; hence the term "the little dragon". Still, efforts to distinguish the two have been unceasing, as is evident in such catchphrases as "an assortment of dragons and snakes", meaning people of different qualities and status sharing one space, and "dragons withdrawing and snakes expanding", meaning good guys lying low and bad elements strutting their stuff. Obviously, it is futile to pass off snakes as dragons. In China, snakes are predominantly associated with venom - even though only 65 species out of some 600 in the country are poisonous. Worldwide, there are 725 species of venomous snakes, of which about 250 can kill a human with one bite. Legend has it that the venom from the bite of a particular viper can cause a human victim to drop dead before he or she could walk more than seven steps. The Chinese name for it is "Seven-Pacer", or Russell's Viper in English.

CNOOC-Nexen deal approved by US regulators (Xinhua) US regulators have approved China National Offshore Oil Corporation's $15.1-billion bid to buy Nexen Inc, a deal that will be the biggest overseas takeover made by a Chinese company. The approval from the Committee on Foreign Investment in the United States means the last major hurdle was cleared, CNOOC, China's largest offshore oil producer, said in a statement issued on Tuesday. Before this, the deal has won approvals from Nexen shareholders, local courts in Canada, the Canadian government, and the National Development and Reform Commission, China's economic planner. Progresses of the deal with be publicized at a proper time, the statement said. CNOOC said on Jan 28 that the closing date for the takeover would be postponed from January 31 to March 2, 2013. The deal needed US approvals because Nexen, based in Calgary, Alberta, controlled assets in the Gulf of Mexico.

  Hong Kong*:  Feb 14 2013

HK$200m annual windfall for Hong Kong government in betting change (By Alan Aitken) Jockey Club gets approval for new revenue source after 6 years of lobbying - Hong Kong Jockey Club gets approval for the two-way combining of betting pools with foreign jurisdictions. After more than six years of Jockey Club lobbying, the Home Affairs Bureau yesterday backed the two-way combining of betting pools with foreign jurisdictions, allowing overseas punters access to the larger and more attractive pools here. The system, known as commingling, would mean a boost of HK$200 million a year in revenue for the government on top of more than HK$10 billion it currently receives in duty from the Jockey Club. At the moment, racing fans in Australia, for example, can watch and bet on Hong Kong's races, but their money goes into a small Australian pool. Under a commingling agreement, Australian betting operators would send those bets to the much larger and more attractive pools in Hong Kong. The same would apply to jurisdictions around the globe. The Betting Duty (Amendment) Bill will be put to the Legislative Council in the second quarter of this year, with the new set-up to start in time for the 2013-14 season in September. The countries that now wager on Hong Kong races pay the Jockey Club a 3 per cent fee on holdings. According to Jockey Club officials, these small, localised holdings total HK$3 billion to HK$4 billion a year globally. This figure would at least double if the same bets were commingled into the larger pools here. Permanent Secretary for Home Affairs Raymond Young Lap-moon said the amendments would help in the fight against illegal bookmakers. "Any local bettors who used to patronise illegal bookmakers would have legal means to bet on races in overseas territories [or vice versa]," he said. He believed the new rules would not attract new gamblers on overseas racing due to language barriers and other issues. "These are for people who are already betting on these races. They may be betting more but there should not be more people doing so." To facilitate outbound commingling, the government has accepted the Jockey Club's proposal to apply a flat betting rate at 72.5 per cent on receipts of local bets on non-local races. "Commingling has become an internationally adopted industry practice that enables regulated operators to work together to counter the threats posed by illegal bookmakers and junket operators," said Carmen Lok Wai-man, the Jockey Club's executive manager for public affairs. The main sticking point in negotiations previously was the concept, accepted elsewhere, that bets are taxed only in the country of origin. Without a government concession to exclude bets from other countries placed into Hong Kong pools from the usual duty, commingling was unviable for foreign operators.

New year wishes don't come cheaply (By Thomas Chan) Couple share common dream at Wishing Square this year - an affordable roof over their heads - People burn incense to pay their respects at Che Kung Temple in Sha Tin to a heroic ancient army general who overcame the odds. Joss sticks smoulder at Lam Tsuen, where people came to offer their wishes to the deities for good fortune in the Year of the Snake. Among the thousands of people who flocked to Fong Ma Po village in Tai Po on Tuesday to make their new year wishes were William Ko and his girlfriend. The couple, who are getting married next month, lament the fact they cannot afford a flat. "The prices are staggering," Ko said. The couple wrote down "buying a flat soon" - one of the most common inscriptions on cards hanging from the village's famous tree in Lam Tsuen Wishing Square during the two-week festival. The couple wrote down "buying a flat soon" - one of the most common inscriptions on cards hanging from the village's famous tree - Ko, whose girlfriend did not want to be named, said he would love to see the government roll out more reasonably priced properties under its My Home Purchase Plan. He said they would continue to rent in Tsuen Wan while hoping the market dropped to an affordable level. A real Chinese banyan tree stands at the centre of the square but it has been cordoned off since one of its branches, laden with papers and fruit, collapsed in 2005. A fake version is filling in until it revives. The light weight of the orange plastic balls that replicate real fruit make it harder to get wishes up on to the tree. Jason Leung, seven, succeeded at his fourth attempt to have his "wish" - doing well in his studies - lodge in a branch. The Hong Kong Well-Wishing Festival runs until February 23. Meanwhile, thousands of worshippers crammed into Che Kung Temple in Sha Tin yesterday to pray for good luck. The worshippers celebrated Che Kung - an ancient army general who was victorious against overwhelming odds. Worshippers held up paper windmills - symbolising changing fortunes from bad to good. Lily Wang, from Shenzhen, said her family went to the temple to pray for an auspicious start in the Year of the Snake. She said she hoped the bad feelings that had been dividing Hongkongers and mainlanders could be ironed out in the year ahead.

Retiring Paul Hung 'comfortable' about police protest headcounts (By Simpson Cheung) Retiring senior policeman reveals that officers take overhead crowd photos to verify figures - After policing public protests for seven years, a senior police officer is retiring with a "comfortable" feeling about the force's sometimes controversial headcounts of protesters at rallies. Police Director of Operations Paul Hung Hak-wai revealed for the first time that the force took overhead crowd photos to verify crowd counts at some public demonstrations. Hung, who will turn 57 on Tuesday, is about to take pre-retirement leave. Over the years, he told the South China Morning Post, he has sometimes had moments of doubt about the accuracy of police headcounts. Protest organisers have often accused the force of suppressing the true number of demonstrators. After the annual July 1 rally last year, the police said 63,000 took part while organisers put it at 400,000. "[When] they put the figure so high, sometimes I wondered if there was something wrong with my count," Hung said. [When] they put the figure so high, sometimes I wondered if there was something wrong with my count - To verify their headcount at one massive rally a few years ago, Hung asked officers to take continuous photos of the marchers as they passed below a high vantage point in Wan Chai. "If you had connected all those photos together, the image would probably have stretched from the front of Caine House [at police headquarters] out the back door," Hung said. "I asked my colleagues to count the crowd, head by head, two times over." He was relieved when their counts varied by only 1,200 from the final estimate of 72,000 marchers. "I feel comfortable about that result now," he said. The normal approach, he said, is to station officers at vantage points to count the passing crowd, section by section, and to release the highest figure they calculate as the peak turnout. But photography did not always provide a satisfactory count. During one June 4 candlelight vigil a few years ago, Hung deployed about 30 officers to count people, using magnified photos, while the vigil was still going on. But pictures from the evening event were too dark for a satisfactory count, he said. Police count crowds to ensure they have deployed enough officers at an event, and release their counts only when asked by the media, Hung said. "People always say we have political motives for suppressing the accurate figure," Hung said. "But that is really irrelevant [as there is no truth to it]." University of Hong Kong social work expert Professor Paul Yip Siu-fai, who makes his own counts of crowd numbers, said aerial pictures do not tell the whole story: they simply depict the situation at a certain time and place along a route - which Hung acknowledges. Yip and the university's Public Opinion Programme try to calculate the number of people who join and leave a rally while it's in progress, using telephone surveys, and adjust their figures afterwards. Yip said the police figures were quite reliable when adjusted in this way - while organisers always exaggerated their counts. Hung acknowledged the police counters do not make such adjustments. Icarus Wong Ho-yin, vice-convenor of the Civil Human Rights Front, which organises the annual July 1 rally, said the group worked out its crowd estimates by counting people at different stages of a march. Hung, who holds the rank of senior assistant commissioner, worked briefly at the post office after leaving secondary school, then joined the police force as a constable in 1975. He was the first junior ranking officer to attain such a high position - just two ranks away from commissioner. He obtained a master's degree in business management in 2005 and a doctorate in 2011. After 38 years on the force, he said he would relax with his wife on a trip to Bhutan next month. He will be succeeded by his deputy, Tony Wong Chi-hung.

Taoist omen warns Hongkongers to beware of 'wicked people' (By Ada Lee) Fortune-tellers interpret unlucky 95 as meaning CY's policies may fail and he may face turmoil - Heung Yee Kuk chairman Lau Wong-fat. Hongkongers were warned they faced "wicked people" and obstacles in the Year of the Snake, after one of the unluckiest possible omens was drawn in a Taoist ceremony yesterday. A stick bearing the number 95 was drawn by Heung Yee Kuk chairman Lau Wong-fat at Sha Tin's Che Kung Temple in the annual ritual. The prediction for stick 95 says: "In a splendid carriage you embarked on your journey. Today, you came home barefoot. Is it that you failed the imperial exam? Or did you lose all your gold in business?" It reminds Hongkongers to "beware of wicked people", and says "nothing is going well". Mak Ling-ling, one of the most famous fung shui masters in the city, said the stick could be saying the policies put forward by the government could fail although they sounded glamorous in the beginning. "It could mean the government's strategy was not right. It might be confident, but there are obstacles," she said. She did not think "wicked people" was a specific reference. This is the third bad-luck stick to be selected in a decade; following one in 2003, when Hong Kong was hit by the severe acute respiratory syndrome outbreak, and another in 2009, when it was hit by the global financial turmoil. Chu Ling-ling, a fortune-teller at the temple, said the stick meant uncertainties would trouble the economy. The horse carriage in the verse was a reference to Chief Executive Leung Chun-ying, who was born in the Year of the Horse, she said. There would be political turmoil, and although Leung would not fare too badly in the first half of the year, he could face trouble towards its end. "Leung needs to change his way of doing things. He should refrain from being too tough, and he needs to rebuild his credibility, so people will trust him again," she said. Lau tried to put a positive spin on it, saying: "Hong Kong will continue to be prosperous and stable ... An unlucky stick could be good, too." Meanwhile, Hong Kong's first Year of the Snake baby, a girl, arrived at Union Hospital in Sha Tin at 0.17am on Sunday.

Exco chief Lam Woon-kwong's grand ambition: a call for grown-up policymaking (By Tony Cheung and Gary Cheung) Leung Chun-ying can lay the foundations for solving some of the city's key problems if critics give him a chance, says Exco chief Lam Woon-kwong - Lam Woon-kwong says the current administration can make significant progress in social problems, but it needs the co-operation of lawmakers who are willing to put aside obstructionist tactics. After 30 years in government service, Lam Woon-kwong still has one unfulfilled dream for Hong Kong - to help lay the foundations for the city to overcome its many social problems, from housing woes to the challenges of an ageing population. Seven months on from his appointment as convenor of the Executive Council, Lam remains confident Chief Executive Leung Chun-ying can pave the way for a more prosperous Hong Kong. But it's the politicians, rather than Leung, who must make changes, Lam says - they need to be rational in their criticism and the civil service handed a clear, feasible agenda. When I decided to join the Executive Council, one of my biggest wishes was, really, that this administration set the foundations for solving large, long-established social problems. "When I decided to join the Executive Council, one of my biggest wishes was, really, that this administration set the foundations for solving large, long-established social problems," Lam says. "How could these many things be solved in five years? But if Leung can set the foundations for future governments, the administration would deserve a lot of credit." Lam, 62, headed several government departments before and after the handover, led the organisation of the 2008 Olympic equestrian events in Hong Kong, and most recently won acclaim for his leadership of the Equal Opportunities Commission. Now, he's hoping his role as convenor will allow him to help tackle burning issues such as poverty and care for the elderly. It's believed that Lam's popularity with the public and experience as a civil servant led Leung, himself a former Exco chief, to appoint Lam to his present position. But Lam stresses his role is about more than sticking to the government line. He has warned Leung he must deliver concrete achievements off the back of his first policy address last month, or face a crisis of governance by the time he delivers his second policy speech. But Lam is not shy when it comes to hitting back at the chief executive's detractors. Citing Leung's decision to set up a committee to examine the feasibility of free kindergarten education, Lam says it was "mad and irresponsible" for politicians to question why Leung could not deliver on the pledge right away. "I am not defending C.Y. Leung, I am defending Hong Kong's core values," Lam says, raising his voice. "It's impossible to tackle such a highly complex problem without a wide and thorough consultation - that's not the way Hong Kong operates. It is useless to criticise us for being slow, for not being like Singapore or the mainland - since it is our core value to be open to public opinion." Lam argues that by setting up advisory committees, Leung ensures people's voices are heard, and measures taken with care. It was wrong to accuse Leung of employing delaying tactics given he had promised to "take practical steps to provide" free kindergarten education, Lam says. On the housing shortage, Lam says Leung deserves credit for mapping out a long-term strategy. "As a political leader, one must balance the voters' short-term interests and the nation's long-term needs, and history will judge how you balance those interests and deliver," Lam says. "A good politician must comment from this perspective too … and not ask 'oh, why did you promise to build 20,000 public homes a year but now you say [we have to wait until] 2018?' What you asked is a stupid question!" Lam says former chief executive Donald Tsang Yam-kuen lacked the courage to boost the housing and land supply after years of economic turbulence. It is unfair to expect the current administration to turn the situation around in just a few months. "It takes time to go through town planning, environmental impact assessments and consultation with district councils, and if you screw up any one of these steps, the process can be prolonged indefinitely," Lam says. "So when politicians in the Legislative Council ask 'why are you building [houses] so slowly?' were they speaking against their conscience? Who doesn't know about the raft of obstacles that district councils pose to every consultation? And where are those councillors mainly from? Aren't they from major political parties?" This is our common business, so we can do it together or sink together - Lam says district bodies had blocked "countless" public works in the past, including plans to build public housing and homes for the elderly, as well as facilities for those with mental health problems and disabilities. Lawmakers and district councillors must drop their short-sightedness and the "not-in-my-backyard" mentality, Lam says, because poverty alleviation, care for the elderly, environmental protection and housing will affect the city for decades to come. "This is our common business, so we can do it together or sink together," Lam said. When asked about policy addresses that shaped the city, Lam mentions late governor Murray MacLehose's 1972 speech and former governor Chris Patten's address in 1992 as the two most memorable. They set out long-term visions for the city and delivered on them. Leung's policy address has the potential to join their ranks - if the chief executive's plans are carried out, Lam says. And that is where lawmakers must drop their politicking, step up to the plate and work for the common good of the city. "Everyone is free to criticise and disagree with his vision, but no major political party should deny the fact that there are many social agendas and policies that they themselves have been advocating for years. After they were repeatedly ignored by Tung Chee-hwa and Tsang's governments, Leung finally paid attention to them for the first time," Lam says, pointing to studies on drawing a poverty line and retirement protection as two examples. Yet, as a former secretary for the civil service, Lam is aware of the danger of tiring out government officials and public servants. "It is easy to overload the government when the administration makes too many issues a priority. Manpower and time are limited … it is possible to deal with two difficult issues at a time, but to handle three or four problems would present a huge challenge to the administration … I dare not say it is impossible, but to my understanding, you must give fellow colleagues enormous support in co-ordination and decision-making."

Baby formula supply stable, says health secretary (By Ada Lee) Hotline for baby formula receives over 5,000 calls - Secretary for Food and Health Dr Ko Wing-man. Secretary for Food and Health Dr Ko Wing-man said on Tuesday morning that the baby formula supply was stable over the first days of the New Year holiday, but demand would probably pick up after the holiday ends. Local mothers had complained recently that they could not find baby formula in Hong Kong stores, after parallel traders bought up supplies in bulk for resale on the mainland. In response, the government recently introduced restrictions on the amount of formula that parallel traders were allowed to take to the mainland and it created a hotline to ensure that local mothers were supplied with the formula. The hotline had received more than 5,000 calls since the beginning of the month when it was set up, Ko said, but it was no longer available 24 hours a day since it received “very few calls” in the middle of the night. The government would monitor the situation closely and be vigilant against parallel traders, he said. In response to reports that two people had been infected with bird flu in Guiyang, Guizhou province, Ko said the Centre for Health Protection was communicating with the mainland’s health ministry on the matter. The two flu patients were last reported to be in critical condition. They apparently did not pass the virus between them or have contact with birds before developing the symptoms. The Guiyang area did not supply Hong Kong’s chicken farms, Ko said, and there was no need at the moment to raise the bird flu alert level.

 China*:  Feb 14 2013

Movie Posters: "Journey to the West: Conquering the Demons" - Posters of the new movie: "Journey to the West: Conquering the Demons".

Accounting risks cloud US business bets in China (By Reuters) Caterpillar disclosure raises questions about multinationals' exposure to bookkeeping woes - Caterpillar disclosed 'deliberate, multi-year, co-ordinated accounting misconduct' at the Siwei unit of ERA Mining Machinery. Tales of shady business practices abound in China - fake revenues, phony invoices, sham factories - but until recently, the problem seemed confined mostly to Chinese companies. No longer. Concern is growing about risks to US-based multinationals in a country where American audit regulators are locked out by the Chinese government and bribery and fraud are routine. Questions about transparency and integrity weigh heavily on China, the world's second-largest economy, as it assumes greater economic leadership and responsibility. These doubts test its ability to adhere to international standards. Stories of business deception - confirmed by corporate sleuths, former business executives, court filings and experts on accounting in China - are commonplace. There was the Chinese company that billed itself as a hi-tech television screen manufacturer, but had a factory that turned out to be a man selling fireworks. Or there was the Chinese biodiesel plant that sat idle for months only to spring to life for an investor tour and then fall silent again. Last month, there was the scandal at a Chinese unit of Caterpillar, the world's largest construction equipment manufacturer, based in Peoria, Illinois. On January 18, Caterpillar disclosed "deliberate, multi-year, coordinated accounting misconduct" at the Siwei unit of ERA Mining Machinery. Caterpillar said it would write off most of the US$654 million it had paid to acquire ERA only months earlier. Caterpillar's Siwei stumble was not the first for a US multinational in China, but the scope of the problem stood out. Caterpillar has provided few details, but it has disclosed inventory discrepancies, inflated profits and improperly recorded costs and revenue at Siwei. Part of Caterpillar's problem may have been inadequate due diligence work prior to the ERA acquisition. Companies often try to keep fees down for this type of work, but in China that may be asking for trouble, says Dr Paul Gillis, an accounting professor at Peking University in Beijing. Acquiring firms typically do some of their own due diligence while also relying on deal advisers, legal experts and auditors. Due to the risks in China, efforts should be beefed up to uncover fraud, Gillis said. "When you start cutting corners on audits ... you're enabling those who commit fraud," he said. Of course, it is not as if the United States has not had its own share of egregious accounting frauds over the years. In 2001-02, a series of major scandals involving Enron, WorldCom and Tyco shook the US economy. Legislation followed that strengthened oversight of auditing and accountability of companies' top officers. That has not stopped US accounting fraud, but it has made it easier to identify and deter some of the most egregious behaviour. US companies have directly invested US$54 billion in Chinese businesses, factories and property, most of it in the past decade, according to US Department of Commerce data.

Pollution fears dampen Beijing's Lunar New Year firework displays (By Associated Press in Beijing) Beijing displays start later and end earlier than usual, with pyrotechnic sales down 37pc, as government responds to choking January air - Another kind of haze at Longhua Temple in Shanghai. The annual Lunar New Year firework displays in Beijing were notably muted following government appeals to reduce the smoky celebrations after air pollution rose to near catastrophic levels over recent weeks. Elsewhere on the mainland, air pollution worsened during the first few days of the holiday due to smoke from fireworks. Provincial capitals including Hangzhou, Xian and Nanjing all reported high readings of PM2.5, fine particles that are extremely dangerous to human health. Beijing saw almost twice the number of smoggy days as usual last month, with levels of small-particle air pollution going off the charts at times. That prompted calls for restraint, along with a reduction in the number of licensed firework sellers and the amount of pyrotechnics on sale. The fusillades that began on Lunar New Year's eve on Saturday night started later than usual, but still grew to furious intensity at midnight. They also died out earlier than usual on Sunday morning, and few explosions were heard during the day. Setting off fireworks to celebrate renewal and ward off evil spirits forms a traditional part of the country's most important family holiday. Sales of fireworks from Tuesday to Saturday fell 37 per cent over the same period last year, from 410,000 cartons to just 260,000, Xinhua reported, citing figures from the city government. The capital authorised 1,337 firework stands this year, down from 1,429 last year, and allowed 750,000 cartons of fireworks to go on sale, down from 810,000. The Beijing Daily, the city government's official newspaper, carried appeals last week for residents to hold off on firework celebrations, saying not doing so would significantly worsen levels of PM2.5 pollution forecast to be in the hazardous zone. City environmental bureau readings showed levels well above 200 in most parts of the city on Sunday, dangerous but still well below readings of more than 700 seen last month, when Beijing experienced 23 days of smog, up from 10 the previous January. Last year's firework displays created a thick haze that sent PM2.5 pollution levels as high as 1,500. Beijing was largely helpless in the face of the January smog, with schools cancelling outdoor activities, some factories closing and government cars ordered off the streets. Scores of people, especially the young and elderly, were treated in hospital for respiratory problems, elevated blood pressure and heart complaints. Beijing saw just 25 injuries and 83 fire emergencies related to pyrotechnics on Saturday night, down 29 per cent and 45 per cent, respectively, from last year. The capital permits firework displays over a 16-day period surrounding the Lunar New Year holiday, but largely restricts them to suburban areas outside the densely populated city centre. The holiday will continue through the week, with government offices and businesses shut down and millions of people using the time off work to take trips to their hometowns.

Chinese investors defrauded of US$150m in US visa scam (By Chris Luo) A security officer stands outside the U.S. Securities and Exchange Commission headquarters. More than 200 mainland Chinese have had their dreams of living in American dashed after an immigration investment programme they put money into turned out to be fake. Anshoo Sethi, a 29-year-old Illinois resident, is alleged to have conned 250 investors, most of them Chinese, out of more than US$156 million by convincing them they were participating in an immigration investment programme to acquire US residency. Sethi convinced each of the victims to purchase US$500,000 worth of securities from two companies he created. He also persuaded them to wire an additional US$41,500 “administrative fee” in order to apply for an EB-5 visa. The EB-5 Immigrant Investor Pilot Programme offers foreign nationals the opportunity to obtain permanent US residency by investing US$500000 in job-creation projects. Successful applicants also have a good chance of obtaining US citizenship after five years. But the Securities and Exchange Commission alleges Sethi did not acquire the necessary permits and provided falsified documents to US Immigration Services. “Sethi orchestrated an elaborate scheme and exploited these investors’ dream of earning legal US residence,” said Stephen Cohen, associate director of the SEC’s enforcement division. Sethi’s scheme has been brought to a halt, but the SEC said 90 per cent of the US$11 million in administrative fees collected from investors had already been spent. Sethi transfered US$2.5 million of the funds into his personal bank account in Hong Kong. The SEC said it had obtained an emergency court order to protect the remaining US$145 million in investor assets. The number of EB-5 visas issued has surged in the past two years, reaching an historical high of 7,641 in the 2012 fiscal year, a fourfold increase since 2010. Mainland-born Chinese account for 80 per cent of successful applicants, according to the Association to Invest in USA.

Hong Kong*:  Feb 13 2013

Fireworks safety measures ramped up (By Joanna Chiu) Safety measures have been ramped up for tonight’s Lunar New Year fireworks display as a result of the Lamma ferry disaster that claimed the lives of 39 people at last year’s National Day fireworks. The Marine Department and Marine Police are collaborating to increase patrols and vessel inspections and improve marine traffic control. At 3.30pm, 22 Marine Department patrol ships and 109 officers started inspecting vessels in the harbour, which represents an additional seven ships and 27 officers than were available at the National Day fireworks. “We will especially check to ensure that all children are wearing life jackets, and that crews maintain passenger lists. If a vessel doesn’t meet the department’s safety requirements, they won’t be permitted to proceed into Victoria Harbour,” said Senior Marine Officer Ivan Shuen Chi-keung. In addition to inspection, marine traffic was also tightly controlled, with a closed area established in waters off the Hong Kong Convention and Exhibition Centre in Wan Chai where no vessels were allowed to enter as of 2pm. Only an estimated 150 spectator vessels, including ferries and cruise ships, will be allowed to enter a restricted area in the Central Harbour between 7pm to 9.15pm. The restrictions on the area will be progressively lifted after the fireworks display, according to the instructions of the Marine Department and police at the scene. Police will assist the Marine Department to monitor marine traffic and to control crowds watching the fireworks on both sides of the harbour. A police spokeswoman declined to say how many officers will be present. Roads in Tsim Sha Tsui, Hung Hom, Central and Wan Chai were closed and traffic re-routed to accommodate the crowds, said the spokeswoman. Previous government investigations into serious or fatal marine accidents in Hong Kong have mostly attributed blame to inadequate safety preparations or contingency measures. A commission of inquiry into the causes of the Lamma IV incident is currently underway.

Jackie Chan-backed tiger charity faces uncertain future after bitter marriage split (By Chris Luo) Portrait of Save China's Tigers founder Quan Li. Pictures taken in Causeway Bay Hong Kong. A tiger conservation charity backed by actor Jackie Chan was left in turmoil after its founder filed for divorce from an American banker who is the foundation’s financial backer. No one is more proactive than Quan Li when it comes to saving the South China tiger. The former fashion executive for Gucci founded Save China’s Tigers in 2000. Hong Kong star Chan was invited to be its ambassador. In 2006, the charity launched the Jackie Chan Tiger Face Awareness campaign in Hong Kong. But challenges lie ahead for Save China’s Tigers, which is registered in Hong Kong, Britain and the US, after Quan’s recent divorce with American banker Stuart Bray, also a financial backer of the charity. Since the divorce, Quan has said she was ousted from the organisation by her ex-husband. Bray said her position became untenable because of an alleged conflict of interest, Britain's Daily Mail reported. “It is a confidential matter and I can’t get into it – but she was in an untenable position,” said Bray, who refused to disclose Quan’s conflict interest. Bray insisted the charity would keep operating. Quan’s charity has set up more than 300 sq km of conservation zone in South Africa, providing space for South China tigers that cannot survive in badly deforested China. Her relentless efforts to save the endangered species have been made into several documentaries in China. For his part, Bray has set up an environmental investment fund to bring back the South China tiger, according to Reuters. He has reportedly poured nearly US$25 million into the effort. The South China tiger is classified as critically endangered by the International Union for Conservation of Nature. About 100 exist in captivity around the world, and the animal appears to be extinct in the wild.

 China*:  Feb 13 2013

China overtakes US to become biggest trading nation (By Agencies in Beijing) For many economies, China will soon be most important trade partner, analysts say, showing need for it to play bigger role in global bodies. China has become the world's biggest trading nation in goods, ending the post-war dominance of the United States, according to official figures. China's customs administration said the combined total for imports and exports in Chinese goods reached US$3.87 trillion in 2012, edging past the US$3.82 trillion trade in goods registered by the US Commerce Department. The landmark total for Chinese trade indicates the extent of Beijing's dependence on the rest of the world to generate jobs and income compared with a US economy that remains twice the size, and more self-contained. The US economy is worth US$15 trillion compared with the US$7.3 trillion Chinese economy. The US not only has a large internal market for goods, but also dominates the trade in services. US total trade amounted to US$4.93 trillion in 2012, according to the US Bureau of Economic Analysis (BEA), with a surplus of US$195.3billion. But like most Western nations, the US deficit in the trade of goods weighs heavily and is expected to get only larger. The deficit in goods was more than US$700 billion compared with China's 2012 trade surplus, measured in goods, which totalled US$231.1 billion. It is remarkable that an economy that is only a fraction of the size of the US economy has a larger trading volume - Jim O'Neill, head of asset management at Goldman Sachs, said the huge market for Western goods would disrupt regional trading blocs as China becomes the most important commercial partner for some countries. Germany may export twice as much to China by the end of the decade as it does to France. "For so many countries around the world, China is becoming rapidly the most important bilateral trade partner," he said. "At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe." "It is remarkable that an economy that is only a fraction of the size of the US economy has a larger trading volume," Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said. The increase isn't all the result of an undervalued yuan fuelling an export boom, as Chinese imports have grown more rapidly than exports since 2007, he said. The US emerged as the preeminent trading power following the second world war as it spearheaded the creation of the global trade and financial architecture. China began focusing on trade and foreign investment to boost its economy after decades of isolation under Mao Zedong , who died in 1976. Economic growth has averaged 9.9 per cent a year from 1978. China became the world's biggest exporter in 2009, while the US remains the biggest importer, taking in US$2.28 trillion in goods last year compared with China's US$1.82 trillion of imports. HSBC forecast last year that China would overtake the US as the top trading nation by 2016. According to O'Neill, the trade figures underscore the need to draw China further into the global financial and trading architecture that the US helped create.

Record 34,977 posts seen on Sina Weibo in first second of lunar new year (By Chris Luo) Within the first second of the Lunar New Year, China’s largest micro-blogging site Sina Weibo said it saw a record 34,977 posts published. A record 731,102 posts went out in the first minute. The Twitter-like service surpassed 309 million registered users as of the end of last year, according to the China Internet Network Information Centre. Apparently, a campaign by Sina Weibo calling users to send out New Year wishes in the first second paid off. Weibo had 32,312 posts in the first second of the Year of the Dragon. Sina also reported 19.58 million posts related to CCTV’s seven-hour-long Spring Festival Evening Gala, 60 per cent more posts than last year. The annual gala is China’s most viewed television programme, with about 770 million viewers in 2012. It is part of Chinese tradition to stay up on New Year’s eve until morning and send out greetings on the first day of the year.

China demands US lift sanctions on firm (Xinhua) The Chinese government has expressed strong opposition to US sanctions on a Chinese military defense firm and urged they be lifted immediately. The United States imposed the sanctions according to its domestic laws, an act that has seriously violated norms governing international relations and harmed China's interests, the Ministry of Foreign Affairs said on Monday. China is strongly dissatisfied with and firmly opposed to the act, and it has lodged a solemn representation to the US side, spokesperson Hua Chunying said in a statement. "We urge the United States to immediately correct the wrongdoing, lift the groundless sanctions on this company and its individuals, and stop actions that will hurt China's interests and Sino-US relations," the spokesperson said. China is committed to upholding the international non-proliferation regime, according to Hua, who added that the country has in place a set of export control laws and measures that fit in with international standards and with strict and effective law enforcement. Instead of sanction threats, the two sides should base their relationship on equality and mutual benefit, and meet each other halfway when making efforts to advance pragmatic cooperation on non-proliferation, Hua urged. Poly Technologies Inc., a leading defense company in China, on Monday voiced strong objection to US sanctions on the firm and urged immediate corrections. In a statement released right after the sanctions were announced on Monday, the firm said that it is absolutely groundless and unreasonable that the United States imposed the sanctions according to its own laws or regulations. "We have never helped any countries or regions develop any banned weapons, nor have we exported or promised to export weapons or technologies to any countries or regions that are under United Nations Security Council Resolutions Sanctions," the firm said. The Beijing-based firm, a subsidiary of state-owned giant China Poly Group Corporation, said that it has strictly observed China's laws and regulations as well as relative international laws and treaties. "We hereby demands the US side to respect the fact and immediately lift the sanctions," the firm said.

Hong Kong*:  Feb 12 2013

Baptist University president threatens to quit over land use (by SCMP) The president of Baptist University said he would step down if he was unable to stop the government from building housing on neighbouring land previously reserved for education. Albert Chan Sun-chi said he would resign if a vacated site in Kowloon Tong was turned over to luxury developers, RTHK reported on Sunday. The land, once the site of the Hong Kong Institute of Vocational Education, is currently under a two-month public consultation. The university has proposed establishing a traditional Chinese medicine teaching hospital on the site, as well as more residence halls. The government has said it was not necessary to have a teaching hospital close to the campus. Students and academic staff are united in opposing the government’s plan to rezone the southern site for flats. Last month, more than 500 Baptist University students protested outside a meeting of the Town Planning Board to oppose residential use of the land. “If the government does not want to give us the site, then the site should be opened to all universities to compete for,” said the university’s student union president, Wong Hok-kan.

 China*:  Feb 12 2013

China ships in disputed Diaoyu waters as tension runs high (By Four Chinese ships were spotted on Sunday in disputed East China Sea waters, Japanese officials said, as Tokyo considered disclosing video footage and pictures as evidence of a Chinese frigate’s alleged radar-lock incident. For the first time after Tokyo made the allegation last week, China sent maritime surveillance vessels near Japanese-controlled islands in the East China Sea, known as Senkaku in Tokyo and Diaoyu by Beijing, which also claims them. They were seen sailing in the contiguous waters near one of the outcrops as of 9am, the Japan Coast Guard said. Tokyo accused a Chinese frigate of locking its weapons-tracking radar on a Japanese destroyer – the first time the two nations’ navies have locked horns in the territorial dispute that has provoked fears of armed conflict breaking out between the two. Japan’s Prime Minister Shinzo Abe on Friday demanded Beijing apologise and admit to the incident, which occurred late January, after Chinese authorities flatly denied Tokyo’s accusation. Japan’s Defence Minister Itsunori Onodera said on Fuji TV on Sunday that Tokyo was carefully studying whether or how to disclose military data as evidence. However he also said he did not think China would “admit to it even if Japan discloses a variety of evidence, because it is trying to protect its national interest”. Onodera on Saturday told the Yomiuri Shimbun newspaper that Tokyo had “evidence to show the fire-control radar chased after the ship [of Japan’s Self-Defence Forces] for some time. The visual evidence would convince many of those who watch it”. The long-running row over the islands intensified in September when Tokyo nationalised part of the chain, triggering fury in Beijing and huge anti-Japan demonstrations across China. Beijing has repeatedly sent ships and aircraft near the islands and both sides have scrambled fighter jets, though there have been no clashes.

Hong Kong*:  Feb 11 2013

Hopewell to spin off Hong Kong property arm (By Sandy Li) Hopewell is building a hotel project in Wan Chai. Property and infrastructure group Hopewell Holdings announced yesterday it would spin off its property and hospitality business in a separately listed vehicle in Hong Kong after its proposed HK$9 billion hotel project in Wan Chai finally got off the ground. "We studied the possibility of a spin-off several years ago, but the land premium settlement for Hopewell Centre II two or three months ago was the trigger point for the initial public offering," managing director Thomas Wu said yesterday. He did not disclose the amount it hoped to raise from the listing. In June, Hopewell agreed to pay a land premium of HK$3.73 billion for the site on which it is building Hopewell Centre II. The proposed spin-off company, in which Hopewell will retain a 51 per cent interest after its listing, will be called Hopewell HK Properties. It will be involved in Hong Kong property development and investment, property-related services, and hospitality. The plan comes as Hopewell has two major development projects under construction that will need about HK$13 billion over the next five years. Wu said in August that Hopewell would inject HK$4.55 billion into Hopewell Centre II's construction from 2013 to 2015. Factoring in the HK$3.73 billion land premium, the total investment cost of Hopewell Centre II will be about HK$9 billion. The 55-floor tower, due to be completed in 2018, will have a total gross floor area of 1.1 million square feet, and is expected to include a conference hotel with 1,024 guest rooms. Hopewell also has to spend HK$4.5 billion for its 50 per cent share in a luxury residential-commercial project in Lee Tung Street, Wan Chai. Due to be completed in 2015, it will have 835,000 sq ft of gross floor area. Its 3.03 million sq ft investment property portfolio, including its flagship Hopewell Centre, QRE Plaza and Wu Chung House, was valued at about HK$18.59 billion as of June 2012. In a statement filed with the stock exchange, Hopewell said a proposal to separately list Hopewell HK Properties was submitted yesterday. "It is expected that the proceeds from the global offering will mainly be used for capital expenditures of projects under development (including Hopewell Centre II) and other future opportunities of the spin-off firm," the statement said. For the year to June 2012, rental, property development, and hotel, restaurant and catering operations contributed HK$2.43 billion, or 37 per cent, of its total HK$6.56 billion turnover. During the period, gross rental rose 8 per cent to HK$707 million from a year earlier, while property development revenues declined 33.9 per cent to HK$1.26 billion. After the spin-off, toll road investment will become the largest contributor to Hopewell's revenues, accounting for 36 per cent, or HK$2.38 billion, last year.

Doubts rise over Li & Fung future (Anita Lam) Loss of another US deal sends jitters through market over sourcing role - Shares in Li & Fung plunged to a new low of HK$9.93 yesterday after the company lost another contract from a US client, renewing fears that the biggest distribution and trading company in Hong Kong is losing its middleman role in global trade. But the stock later rebounded to close 1.38 per cent higher at HK$10.26 after the firm said Fifth & Pacific did not renew the contract because of domestic warehousing and the financial implications would be small. A spokeswoman stressed that its sourcing contract with the New York-listed company, which owns brands such as Kate Spade and Juicy Couture, would remain. Analysts are concerned about the company's short-term prospects though, as some expect it to lose more sourcing business while its budding designing and distribution operations have yet to become profitable. One analyst said Li & Fung, which hit HK$52 in 2011, could fall further to HK$8.15. "Li & Fung's operating margin is likely to remain squeezed as costs and prices continue to climb on the mainland, which makes up more than half of the company's supply," said Gabriel Chan from Credit Suisse. "While the company is still a solid business, they will do more for less." Two major Li & Fung clients, US children's clothing retailer Carter's and Wal-Mart, reduced their reliance on the firm last year as they started to develop their own sourcing divisions. But Charles Yan, an analyst at Standard Chartered Bank, said this year might mark the turnaround for Li & Fung. "We believe most of the negatives have already been priced in, given the significant share price pull-back since the profit warning," he wrote in a report, adding that the market had oversimplified the negatives. The stock has slumped 27 per cent since the firm warned shareholders of a 40 per cent drop in core operating profit on January 11. But Yan said most of the losses came from the expenses to restructure its brands and business model, which he said was a good decision as many of the brands offered low profit margins and made little contribution to revenue. Standard Chartered expects the company's net profit to more than double to US$781 million this year. But Yan was among the few optimistic analysts. Only four of the 18 brokerage firms that tracked the company recommended buying the stock, and even if they did, they all slashed the target price. Li & Fung has acquired a number of brands such as TVMania and Crimzon Rose in the past two years to bolster distribution, but many of these brands were considered by the market as trivial.

The snake beneath Hong Kong's skin (By Oliver Chou) Many know the expression "Return of the Dragon", which was adopted as the title of Bruce Lee's 1972 film. But few are aware of its literary sequel, loosely translated, "Strike of the Snake". Placed fifth in the Chinese zodiac of a 12-year cycle, the Year of the Snake gives the least propitious impression of the zodiacal animals. With its "creepy" look and noxious nature, the serpent conveys poisonous, deceitful, deadly qualities. A parallel impression is found in Western culture - for example, the Garden of Eden, Medusa, and Cleopatra. But on the positive side, the Chinese would probably be the first to come forward to defend the reptile. A bowl of snake soup is said to warm the body in the chill of winter. And a snake gall bladder, swallowed fresh or dipped in wine, is believed to be a great source of energy. After all, Nüwa, a mythological Chinese goddess who created man and repaired Heaven, was halfhuman and half-snake. But to local cultural critics, the snake could mean much more. "With its versatility and adaptability, Hong Kong is like a snake," said critic Perry Lam Pui-li. "If the snake in the Garden of Eden tempted Eve to eat the forbidden fruit, which gave knowledge to differentiate between right and wrong, then Hong Kong is the snake," the radio host said. Since 1997, he said, Hong Kong has acted like a snake by tempting mainland visitors to "sin" by tasting the forbidden fruit of knowledge. "As a snake sheds its skin every year, Hong Kong needs to re-invent itself to remain competitive," he said. Leung Man-tao, TV host and critic, said there was no need to "tempt" mainlanders, who were ably informed about the world. He pointed to the snake's neighbour in the zodiac - the dragon - as a more meaningful reference. "Chinese call themselves the dragon's descendants but deem the snake to be a vicious creature. But to me those are two faces of a coin," he said, adding that the dragon was mythological while the snake was real. Shum Yat-fei, a veteran cultural critic, said the snake enjoyed higher esteem in the past than it did now. "It is an embodiment of quick wit and even made it to be the main character of the classic A Tale of White Snake, so it's not all that bad," he said. Although the snake in the fairy tale does play a key part on the plot, it isn't given the most flattering portrayal. "But there are different kinds of snakes - some poisonous and some not. The late Mao Zedong, born in 1893, a snake year, belongs to the poisonous kind." Chu Hai College professor Ma Kwai-min said the movement of the snake, which has inspired Chinese military strategy for centuries, can act as an inspiration for Hong Kong. "A snake moves with its head and tail in perfect co-ordination in accordance with the situation it faces. That is the way we Hongkongers need to perform in challenging times to come," he said.

Psy and CY flip-flops among Lunar New Year fair's hot items (By Joanna Chiu) Stalls operators at Victoria Park say sales have been strong this year - Visitors indulge the festive colour at Victoria Park's Lunar New Year fair. Visitors indulge the festive colour at Victoria Park's Lunar New Year fair. Hello Kitty helium balloons, stuffed toys and silky dog outfits. These are some of the more popular items still up for grabs at the Lunar New Year fair, which ends tomorrow morning. "It's really easy to make money off kids," said one vendor, who claimed to make a 60 per cent profit on each balloon he sells for HK$35. His takings are maximised as he does not need to rent a booth, which this year cost as much as HK$135,000. Trendy items, such as singing Psy dolls and plastic glasses with no lenses, popularised by Korean sitcoms, are also selling well, as some vendors slash their prices to clear their stock. "It's hard to find these [glasses] in the UK, and they're only HK$20," said tourist Stacy Chan, 26. As for the pan-Democrats with a presence at the fair in Victoria Park, they have found fair-goers are supporting their cause by snapping up satirical "Filibuster" towels and "Step on CY" flip-flops from their booths. Civic Party leader Audrey Eu Yuet-mee has been coming to the fair every day to write auspicious couplets on red paper banners, which sell for HK$20 each. Meanwhile, on the other side of the fair, food vendors are drawing crowds with creative snacks, such as fried quail eggs on a stick and seafood crêpes, as well as more traditional fare, such as smelly tofu, dragon floss candy and red bean pudding. Flower booths are also doing brisk business, with fragrant narcissus, miniature orchids and citrus plants among the most popular selections. But for some sellers, the annual Lunar New Year fair is neither about profits nor politics. Pupils from local secondary schools make up nearly 10 per cent of the booth operators and many are donating their proceeds to charity. "We are raising money for Orbis, a charity that works to prevent childhood blindness," said Kenneth Fung Kin-kwan, a Form Five pupil at Diocesan Boys' School. "Volunteering at the fair has helped me and my classmates learn a lot about how to run a business and interact with customers in a chaotic setting. "We're proud of the products that we've designed ourselves. Even if we don't make any profit, we'll donate HK$2,000 to the charity," he said.

 China*:  Feb 11 2013

Chinese ship continues patrolling Diaoyu Islands waters (Xinhua) ABOARD HAIJIAN 137 - Chinese marine surveillance ship Haijian 137 continued its regular patrol in the territorial waters surrounding the Diaoyu Islands on the eve of the Spring Festival. The Spring Festival, or the Chinese Lunar New Year, is the most important festival in traditional Chinese culture that falls on Sunday this year. The move marks the first of such patrols during the Chinese Lunar New Year holiday.

Mainland restaurant takings plummet as party order cadres to tighten belts (By Daniel Ren in Shanghai) Restaurants fear party austerity drive could put many out of business - Shanghai Xiao Nan Guo Cuisine, Kowloon Bay. High-end restaurants in the mainland are feeling the pinch as the Communist Party calls for less spending on extravagant meals before Lunar New Year. The catering sector, one of the bright spots amid a slowing mainland economy in the past two years, has been hit recently by dwindling sales and squeezed profit margins, with pessimistic owners mulling whether to close their businesses. According to a survey by the China Cuisine Association (CCA), 60 per cent of nearly 100 restaurants saw bookings cancelled recently, with one Beijing-based outlet reporting an 80-per-cent drop in sales. "The survey found that business owners felt pessimistic about the outlook of the industry," the association said in a report. "They think it's necessary to readjust their business models to adapt to the new market conditions." Communist Party chief Xi Jinping, in an apparent effort to fight corruption and stop the waste of public money, told government agencies, state-owned companies and non-profit organisations to put an end to extravagance. His order has been seen by many government officials and company executives as a political directive, with millions of business dinners cancelled. The weeks before the Lunar New Year used to be high season for restaurants, with nearly all companies and organisations rewarding their employees with celebratory dinners. "Our corporate customers are seriously complying with the party's order to cut spending on meals," said Ken Xia, a restaurant owner in Shanghai. "It's not going to be a temporary business decline, and we are foreseeing further losses in the coming months if not years." Hong Kong-listed restaurant chain operator Xiao Nan Guo Restaurants Holdings said in November that new trends were shaping up in the catering sector as firms and government units tightened their purse strings. But residents were spending more on personal dining. "People are increasingly dining out while the expensive business dinners will decline amid the deepening anti-corruption drive," said Xiao Nan Guo chief executive Kang Jie. "Those who can promptly fine-tune their business models will outgrow the overall market." Normally, per-capita spending by individuals on personal dining is much lower than business dinners. Kang's prediction was echoed by the CCA's findings. The survey showed that business at low-end restaurants remained flat. "But it's difficult to change our tactics to target individual customers," said Xia. "Unlike chain operators like Xiao Nan Guo, we don't have the financial strength and economies of scale for an adjustment." Rising labour and food costs have already dented restaurants' profit margins. In Shanghai, restaurants, whose waiters and waitresses are mainly migrant workers, were forced to shell out an additional 600 yuan for each employee following the government's reform of pension schemes. Before the reform, a restaurant was required to spend around 200 yuan on the so-called comprehensive insurance for each migrant employee. They are now subject to a new pension scheme under which an employer should contribute about 800 yuan to each migrant worker's pension account. If business remains dull in the coming months, restaurant owners like Xia may have to brace for the worst - closure. The non-manufacturing purchasing managers' index, compiled by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, showed that business activity in the catering sector dropped 17.3 per cent year on year in January.

Highways go toll-free for passenger cars during holiday - The highways in China will be toll-free for passenger cars from 0:00 on Feb. 9 to 24:00 on Feb. 15 when most Chinese will go home for the Spring Festival and return to work.

Spring Festival celebrated across China - The Spring Festival, the most important occasion for the family reunion for the Chinese people, falls on Feb. 10 this year. 

Company chiefs from Shanghai Disney Resort visit the resort construction site on Tuesday to offer greetings to workers ahead of Spring Festival. Most of the workers come from other parts of the country and will return home to visit their families during Chinese New Year. The company presented workers with gifts to thank them for their hard work over the past year.

Obama sends Lunar New Year message (Xinhua) US President Barack Obama on Friday sent a new year's message to those who celebrate the Lunar New Year around the world. According to a statement from the White House, Obama and First Lady Michelle sent their "warmest wishes to all those who will be celebrating the Lunar New Year this Sunday, February 10th." Obama said in Chinese tradition, the snake represents wisdom, and a thoughtful approach to "tackling the challenges before us." "Our challenges may be great, but our diversity and the traditions that thrive here give us the strength to meet them," said Obama. "To everyone celebrating the Lunar New Year, I wish you peace, prosperity and good health and fortune."

Hong Kong*:  Feb 10 2013

$1 message in a bottle (By Winnie Chong) Drink importers will be charged a new green levy for glass bottles under a HK$100 million polluter-pays scheme aimed at recycling at least 70 percent of the waste. That's the message for importers and distributors of bottled wine, juice and other drinks who will have to pay HK$1 for a one-liter glass bottle and 75 cents for a 750ml bottle. Secretary for the Environment Wong Kam-sing launched a three-month public consultation yesterday. A contractor will be selected after tendering to collect and recycle glass drink bottles. Glass bottles account for 3 percent of the waste dumped in landfills but only a small percentage are recycled. Of 291 tonnes of glass waste collected each day, 153 tonnes are drink bottles. More than 85 percent, or 131 tonnes, are alcohol bottles. Exempted from the scheme are food or sauce bottles and those used for cosmetics. Food bottles might be covered in the next phases of the scheme, Wong said. The levy will be charged on importers or distributors, not on retailers or consumers. About 30 to 50 percent of alcoholic drinks are consumed in restaurants or bars. "The responsibility will be evenly distributed in the market," Wong said. "Eventually the fee will be somehow shared through market forces. But we have to find an effective and simple way to collect the fee. "We think that the wholesalers or suppliers would be a concentrated group of about 1,700." Wong said he is confident that the levy can help to get 70 percent or even more of used bottles recycled. "I think currently the biggest problem is that glass, compared with others, is heavier. So the transportation cost is higher than other waste," Wong said. An Environmental Protection Department spokesman said the government is confident of reaching the 70 percent goal within three years. A government-appointed contractor will collect bottles in recycling bins and take them to be recycled. Drink makers like Coca Cola which recycle glass bottles may be exempted, as well as manufacturers which have re- use or recycle schemes. Between HK$50 million and HK$100 million is expected to be collected when the levy is imposed - enough to pay for collection and transportation of dumped bottles to recyclers. Wine traders said it would be unfair to slap the levy on wholesalers. Hong Kong Wine Merchants Chamber of Commerce vice president Raymond Luk Yiu-man said the government should instead consider providing incentives to consumers. Friends of the Earth said the government should have also covered plastic and aluminum drink cans. Green Sense president Roy Tam Hoi-pong welcomed the scheme.

Festive colors - A man exits a shop selling Chinese New Year decorations in Hong Kong ahead of the Chinese New Year festival, which starts on Sunday. 

Immigration Department to end visitor passport stamps (By Simpson Cheung) Visitors to Hong Kong will no longer have their passports stamped by border control officers from next month, the Immigration Department said on Friday. Instead, they will be issued a small slip of paper explaining the conditions of their stay in the city. The switch from a half-a-century-long tradition of stamping to a system of computer-generated slips at all border points is to improve efficiency and prevent mistakes, the department said. The new HK$30 million system will save each visitor, on average, three seconds at the border when entering the city, Assistant Immigration Director (Information Systems) Corrado Chow said. “Three seconds may seem very short. But considering there were 47 million visitors last year … [much] time will be saved,” he said. The slip of computer-generated paper will carry the visitor’s name, travel document number, arrival date and the date the visitor permitted to remain until. Printed out after officers scan the passport at the border, it will be stapled to the visitor’s passport. Even if visitors lose the slip they will still be able to leave Hong Kong when they present their travel documents, because their information has been stored in the computer. Each slip will carry its own serial number and security features that use ultraviolet technology. Under the current system, Immigration Director Eric Chan Kwok-ki said, officers need to stamp two to three chops on average in each visitor’s passport, creating the chance of making mistakes. “Now our chops have come to the seventh generation,” Chan said. “They have undergone many changes and have witnessed the development of Hong Kong. These stamps will remain in our history.” The department has yet to decide what to do with the old chops after the scheme is implemented.

Cross-harbour tunnel traffic reduction plans unveiled (By Lai Ying-kit) The government unveiled three plans to cut congestion at the Hung Hom Cross-Harbour Tunnel on Friday. The government on Friday unveiled three plans to cut congestion at the Hung Hom Cross-Harbour Tunnel, aiming to reduce through traffic by 30 to 40 per cent. The plans all involve diverting traffic by raising the toll at the Cross-Harbour Tunnel and cutting it at the Eastern Harbour Crossing. Under the first plan, the private car toll in Hung Hom will increase by HK$5 to HK$25, from HK$20, while at the Eastern Harbour Crossing it will be cut by HK$5 to HK$20, from HK$25, in doing so reversing the price difference. This option will include an overhaul of the tolling structure for other vehicle types in Hung Hom, such as increasing the toll for larger and heavier vehicles like trucks and buses. The second option will include the same price difference reversal between Hung Hom and the Eastern Harbour Crossing for private cars as option one, and, in addition, tolls for other heavier vehicles will be increased but by a smaller margin than in the first option. The third option will increase the private car toll in Hung Hom by HK$10 to HK$30, and cut the same toll at Eastern Harbour Crossing by HK$5, to HK$20. It will also freeze the tolls of public transport vehicles in the two tunnels. Secretary for Transport and Housing Anthony Cheung Bing-leung said raising the toll at the Hung Hom tunnel was the only effective way of easing congestion there, where the government aims to reduce traffic by 30,000 to 40,000 vehicles per day. “We hope a price adjustment will change drivers’ habits of using particular harbour crossings,” he said. Cheung said the government had no preference on any of the three options at this stage. The proposals will now be part of a three-month public consultation starting on Friday.

 China*:  Feb 10 2013

Director Wong Kar Wai(C), actor Tony Leung (L) and actress Zhang Ziyi attend the photocall to promote the film "The Grandmaster" at the 63rd Berlinale film festival in Berlin, Germany, Feb 7, 2013. The 63rd Berlinale film festival opens Thursday with a martial arts epic "The grandmaster" of director Wong Kar Wai who will also lead the jury of this Berlinale. 

Retailers prepare for holiday shoppers from China (By Chen Jia in San Francisco) Relaxed visa rules, more flights are main reasons to influx of consumers - US merchants are ready with special products, snake-themed displays and Mandarin-speaking staff to greet the shopping sprees of Chinese travelers celebrating the Chinese New Year during an otherwise slow winter for US tourism. The Chinese Lunar New Year, or Spring Festival, begins on Feb 10 and can stretch into two weeks when combined with the Lantern Festival, which begins Feb 24. On Fifth Avenue in New York, the No 1 US destination city for Chinese tourists according to latest data, decorations at luxury emporium Bulgari include a giant illuminated snake on the store's exterior in celebration of this year's Chinese Zodiac animal. Across the street from Bulgari, the upscale Bergdorf Goodman women's department store has added Mandarin-speaking staff and a Lunar New Year-themed window display. Saks Fifth Avenue, the high-end department store renowned for its American and international designer collections, has installed PIN pads at registers so Chinese travelers without American debit cards can use China UnionPay credit cards. "As a major source of US tourism, Chinese travelers can use their domestic bankcards more conveniently in the US during this Spring Festival," Fang Hou, the market representative of China UnionPay (USA) LLC, told China Daily in San Francisco. China UnionPay is the only domestic bankcard organization in the Chinese mainland. Since its inception in 2002, China UnionPay has grown and is now accepted in 135 countries. US retailers began accepting China UnionPay credit cards in December 2005, but have been slow to accept the debit cards. "Some merchants in the US think PIN pads for China UnionPay debit cards make their store less decent," Hou said. "But it's quite different for Chinese, and PIN pads mean security for Chinese travelers." From Feb 1 through Feb 28, a China UnionPay cardholder who spends at least $250 in one day at San Francisco Saks stores will get to select a mystery red envelope (red is considered a lucky color in China) that contains a Saks gift card valued at $20 to$250. Disney has prepared a special "Year of the Snake" collectible pin available for purchase at Disney stores, Paul Garcia, the public relations manager of Los Angeles-based Disneyland, told China Daily. "Our stores are well-stocked and we know that Disney logo merchandise is popular among our visiting Chinese tourists, so we look forward to them enjoying the many shops inside our theme parks and in our Downtown Disney shopping zone," Garcia said. "The Disneyland Resort has benefitted from becoming more accessible to Chinese travelers, thanks to China's Authorized Destinations Status of the US, and the increased speed of granting US tourist visas." For American sales staff, mastering simple Chinese phrases like "nihao" (hello) and "xiexie" (thanks) is now common. "I never schedule my holidays during February, because my commission usually doubles in this month due to generous travelers from the Chinese mainland," said a saleswoman at Macy's in San Francisco, who declined to provide her name. She has worked at Macy's for six years and speaks basic Mandarin. US hotels and travel agents also expect increased business during Spring Festival. "We've launched a special discount for Chinese groups during Spring Festival in 2013," Joey Liu, the account executive of San Francisco-based Haiyi Hotels Worldwide, told China Daily. "We've seen more and more tourists' reservations from China recently." "Our travel agency has designed tour schedules due to the special requests of some Chinese parents, who want their children to visit Stanford or Berkley on the trip," Jenny Guo, the office manager of Dollar Travel & Charter Inc in Burlingame, California, told China Daily. The California Travel and Tourism Commission, the state's official travel promoter, and four Chinese tourism companies, have started a project aimed at making the Golden State the top destination for Chinese travelers during Spring Festival. "We have seen double-digit growth from China year after year, and the number of Chinese visitors to California is expected to increase 57 percent between 2011 and 2015," Antonette Eckert, director of Asia marketing at CA Travel & Tourism Commission, told China Daily. "The increase is largely due to highly improved visa processing as well as increased airlift. China's growing middle class, strong interest and pent-up demand for California experiences and geographic proximity also play a role," Eckert said. "China specifically presents tremendous opportunity for California. Given the spending of 65 visitors supports one tourism-related job, the impact of such significant growth from China would create more jobs for Californians." In 2011, China was California's fourth-largest overseas market, with only the United Kingdom, Australia and Japan having higher numbers. China is California's fastest-growing inbound market, and California is the No 1 US destination for visitors from China. They spent a record $1.5 billion in the state in 2011, the equivalent of $274 per day during the average 10.6-night stay, or approximately $2,900 per visitor. Chinese visitors stay longer and spend more than the average overseas visitor to the state. As of October 2012, there were 469 non-stop flights per month from China to California, accounting for 152,169 available seats per month. More flights that are expected to be announced this year will increase the capacity. In 2012, California started the China Ready Program to optimize Chinese visitors' California experiences by sharing educational resources with the state's tourism industry, as well as training Chinese travel industry employees and companies on the state's travel product through seminars, online tools and familiarization tours. "We recently led a sales mission to China surrounding China International Travel Mart in November, and brought 18 California delegates with us to meet with travel trade in Beijing and Shanghai," Eckert said. "CA Travel & Tourism Commission is planning to invest an additional $1 million in new direct-to-consumer advertising, bringing our total China marketing budget to $1.6 million for this fiscal year, ending June 2013."

Chinese leaders send greetings for Lunar New Year (Xinhua) Chinese leaders Hu Jintao (C), Xi Jinping (5th R), Wu Bangguo (5th L), Wen Jiabao (4th R), Jia Qinglin (4th L), Li Keqiang (3rd R), Zhang Dejiang (3rd L), Yu Zhengsheng (2nd R), Liu Yunshan (2nd L), Wang Qishan (1st R) and Zhang Gaoli (1st L) attend a Spring Festival reception held by the Central Committee of the Communist Party of China and the State Council at the Great Hall of the People in Beijing, capital of China, Feb. 8, 2013. Chinese leaders on Friday extended Lunar New Year greetings to Chinese people both at home and abroad ahead of the traditional Spring Festival, which falls on Sunday. A festival gathering was held Friday morning at the Great Hall of People in central Beijing. Top leaders, including President Hu Jintao and General Secretary of the Communist Party of China (CPC) Central Committee Xi Jinping, as well as Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli, joined over 2,000 representatives in Beijing to celebrate the upcoming festival. The gathering was presided over by Xi. Xi extended greetings to Chinese from all walks of life, both in China and overseas, and expressed thanks to foreigners who have been involved in China's development. "I wish you a joyful festival, good health and happiness for you and your families," Xi said. Premier Wen gave a speech at the celebration. He hailed the efforts of Chinese from all ethnic groups in conquering difficulties and making numerous achievements last year. Targets for economic and social development have been met and prospects are brilliant for China, Wen said. He also stressed vigorous measures to advance reform and opening up, enhance vitality for economic and social development and improve people's livelihoods in 2013. He underlined efforts to ensure the sustainable and healthy development of the country's economy, as well as social harmony and stability. Wen urged officials to improve their work styles, maintain close ties with the people and be frugal, especially during the holiday. The CPC and state leaders shook hands and exchanged greetings with other participants. The gathering was jointly held by the CPC Central Committee and the State Council.

China's foreign trade continued to rebound strongly in January due to more working days last month and a stabilized economic situation, customs data showed Friday. China's foreign trade surged 26.7 percent year on year to 2.17 trillion yuan (345.59 billion U.S. dollars) in January, according to data from the General Administration of Customs (GAC). The rise was bigger than the 10.2-percent growth seen in December. Exports increased 25 percent from one year earlier in January, the fastest pace since April 2011 and up from December's 14.1-percent rise. Imports rose 28.8 percent, a jump from the 6-percent pace from December. In January, the foreign trade surplus widened 7.7 percent to 183.21 billion yuan, data showed. "A lower comparative base last year caused by fewer working days has helped push up the growth rate this year," said Li Jian, a foreign trade expert from a research institute at the Ministry of Commerce (MOC). There were 22 working days in January, 5 days more than last year when the seven-day Spring Festival holiday fell in the first month. After adjustments to seasonal factors, January data remained bullish, with foreign trade up 8.1 percent year on year, exports up 12.4 percent and imports up 3.4 percent. Imports continued a recovering trend due to a warming domestic market. Imports of iron ores, coal and steel, which are mainly consumed by domestic infrastructure projects, increased sharply last month, said Chen Hufei, a researcher at the Bank of Communications. Meanwhile, external demand has improved, Chen said, citing that exports to Europe and the United States has stabilized, and that to emerging markets remained strong. Friday's data showed that China's foreign trade with the European Union rose 10.5 percent year on year last month to stand at 47.14 billion U.S. dollars. Trade with the United States increased 23.4 percent to 43.72 billion U.S. dollars. Trade with the Association of Southeast Asian Nations grew 42.9 percent to reach 36.99 billion U.S. dollars. Trade between China's mainland and Hong Kong surged 83 percent to 33.4 billion U.S. dollars. The data for trade, a key growth driver, may point to a stronger economic rebound in China this year. However, analysts remain cautious over changes in trade in the following months because of a still grim external outlook. As overseas demand can not be fundamentally improved in the short run and domestic costs keep rising, Chinese exporters need to quickly change their profit models and market choices, said Zhao Xijun, a finance professor at Renmin University, who warned of trade difficulties for 2013. The government aims to boost foreign trade in tandem with the country's economic expansion in 2013, as external demand is expected to remain slack despite positive domestic factors, MOC spokesman Sheng Laiyun said last month. Last year, China's annual foreign trade growth slowed to 6.2 percent missing the government's 10-percent target set for 2012. Many economists have projected higher economic growth for the country this year. The Chinese Academy of Sciences, a government think-tank, forecast 8.4-percent growth for 2013, higher than 7.8 percent realized in 2012. 

China on Friday refuted Japan's allegations that Chinese warships targeted fire-control radars at Japanese vessels in the East China Sea. "Recently, Japan has repeatedly spread false accusations that have distorted facts and defamed Chinese military's normal combat readiness training," according to a statement issued by the information office of the Chinese Ministry of National Defense. The statement was issued responding to Japanese media reports that Japan's defense ministry said Tuesday that a frigate of the Chinese navy directed its fire-control radar at a destroyer of the Maritime Self-Defense Force (MSDF) in the East China Sea at around 10 a.m. on Jan. 30. The Japanese side also said that a Chinese frigate was suspected of locking a similar radar on a MSDF helicopter on Jan. 19 in the East China Sea. The defense ministry's statement pointed out that Japanese warships and airplanes have often conducted long and close-in monitoring and surveillance over China's naval ships and airplanes in recent years. It said this "is the root cause to air and maritime safety issues between China and Japan." "At around 4 p.m. on Jan. 19, a Chinese naval frigate, while conducting routine training in relevant waters in the East China Sea, spotted an approaching ship-borne helicopter of the Japanese Self Defense Force (JSDF)," said the statement. It added that the ship-borne radars of the frigate kept normal observation and were on alert but the fire-control radar was not used. "At around 9 a.m. on Jan. 30, a Chinese naval ship found itself closely followed and monitored by JSDF destroyer Yudachi while conducting routine training in relevant waters in the East China Sea; ship-borne radars of the Chinese naval ship kept normal observation and were on alert, and fire-control radar was not used," said the statement. "The Japanese side's remarks are against the facts," it said. During a daily news briefing on Friday, Foreign Ministry spokeswoman Hua Chunying called Japan's allegations "a sheer fabrication out of nothing." Hua said the Chinese side has always been restrained, taken a responsible attitude and is committed to addressing the relevant issue through dialogue and consultation, while taking necessary measures to safeguard the country's territory and sovereignty, since the Japanese side triggered the disputes over the Diaoyu Islands last year. "Rather than rectify their wrongdoings, the Japanese side has dispatched many warships and airplanes to infringe on China's sovereignty,which has further escalated the tensions," Hua said. She urged Japan to "stop playing petty tricks" and go back on the right track of addressing the issue through dialogue." According to the defense ministry's statement, China has lodged representations to the Japanese side many times. In the statement, the Chinese defense ministry accused Japan of unilaterally releasing untrue information to the media. It also accused senior Japanese government officials of making irresponsible remarks that hyped up the "China threat", without verifying related facts with the Chinese side. The statement said Japan's allegations this time "recklessly" created tensions and misled public opinion in the world. "We must be vigilant against and ponder such moves by Japan," said the statement. "China hopes that Japan will take effective measures and stop stirring up tensions in the East China Sea, and stop making irresponsible remarks," added the statement.

Hong Kong*:  Feb 9 2013

Banks may be required to submit HIBOR data (By Natallie Cai) Local banks may be required to submit the pricing scheme data of their Hong Kong interbank offered rate in a bid to boost transparency and lower risks. "The Hong Kong Monetary Authority included the code of conduct on the pricing scheme as statutory guidelines. If reference banks decline to comply with the guidelines, we do not rule out the possibility of requiring them to do so," HKMA deputy chief executive Arthur Yuen Kwok-hang said yesterday. The top management of reference banks must bear serious responsibility if the lenders fail to follow the rules. The Treasury Markets Association will administer the HIBOR fixing process. The panel composition of reference banks will be reviewed every 12 months rather than every two years. The steps are expected to take effect within the next six months, Yuen said. Twenty lenders, including HSBC (0005), Standard Chartered (2888) and Bank of China (Hong Kong) Holdings (2388), are reference banks for HIBOR pricing. Concerns over pricing arose in the global markets after the London Interbank Offered Rate appeared to have been manipulated by several British banks last year. The UK's Royal Bank of Scotland yesterday said it will pay US and British authorities US$615 million and plead guilty to wire fraud in Japan to settle allegations it manipulated global benchmark interest rates. Meanwhile in Tokyo a former derivatives trader accused Japanese banks of operating a cartel in loan pricing. Hideto Eddy Takata spoke to the Financial Times. The HKMA yesterday said net profit growth of the local banking sector eased to 12.7 percent last year - from 18.3 percent in 2011 - as lending growth slowed to 9.6 percent from 20.2 percent. Net interest margin of local banks widened to 1.36 percent from 1.24 percent. This is the first rebound in the past 10 years, but Yuen said it is difficult to predict whether the improvement will be sustainable. He expects lenders in the SAR to meet the planned Basel III requirements before the deadline. He said there is no need for funds right now for this purpose.

Tables go a-begging for New Year feasts (By Candy Chan) Restaurant owners have got a feeling in the pit of their stomach this year and it is borne out by less than filling bookings for traditional family spring dinners. That nervous wait flies in the face of expectations that business would be roaring with economic conditions improving. As if to corroborate the fall in bookings, poll findings by the Hong Kong Research Association found that 54 percent of households prefer to have their family reunion dinners at home instead of at a restaurant, in part due to the better atmosphere but also because dining out was becoming too expensive. Also, the atmosphere of festive frenzy is missing this time round in streets and shopping malls unlike in the past, with fewer shoppers thronging malls and New Year markets. The annual rush for New Year goodies at wet markets is not there too and, according to observers, there seems to be fewer people taking in the festival lights at night. Top restaurant chain Super Star Group, with 34 outlets, said only 80percent of tables in most branches were booked for Saturday night though some in busier districts, like Tsim Sha Shui, are full. "The Chinese tradition of having family reunion dinners on the eve of the Lunar New Year usually means packed restaurants for us, but this year, there are some tables still available at this late hour," the manager of the Tsim Sha Shui branch said. He was quick to add, however, that some families reserved their tables more than a year ago. "Some of our customers booked tables for this year's celebration soon after finishing their Lunar New Year's meal last year." To accommodate as many diners as possible, many restaurants will be serving food in two shifts - from 6pm to 8pm and from 8.30pm to 11pm. But the reunion dinners do not come cheap. While a meal for four costs around HK$1,138, that for 12 persons will set you back HK$3,488. Popular items on the menu include braised abalone with mushroom and sea cucumber, beancurd sheets stuffed with scallops and dried oysters, stewed seafood and bamboo pith roll and stewed garden greens with crab meat. To avoid the crowds and as a cheaper alternative, some families have decided on reunion lunches instead of dinners. "This is especially popular with employers who wish to share a meal with their staff," said a spokeswoman for the Super Star Group. The survey, which took in 1,250 people, also found 49percent saying they felt more at home having their reunion dinners in a family environment, with cost weighing on their decision. But about one in five, 19percent, said they could not afford to eat out anyway.

NY celebrity chef Michael White brings some Italian love to HK (By Charley Lanyon) Scallop with braised potato, porcini and balsamic vinegar. Hong Kong has more than its fair share of visiting celebrity chefs, but people still take notice when Michael White comes to town. White is a titan of Italian cooking and owner of three of the most buzzed about restaurants in New York: Osteria Morini, Ai Fiori and Marea. Even a mention of Marea gets foodies' mouths watering, with images of lardo-wrapped sea urchin dancing in their heads. White is no stranger to Hong Kong. He opened his Al Molo restaurant at Harbour City in 2011 and lovers of Italian cuisine eagerly await his annual visits. This year White has hosted a series of dinners for VIPs, the media and friends, culminating in a final dinner on Tuesday evening. He designed a four-course menu of new dishes that highlight his take on Italian home-style cuisine. As diners ate their way through seared scallops, eggplant gnocchi and roasted veal, White mingled and shared powerful stories of the struggle to persevere after Hurricane Sandy, when two of his restaurants closed. White is also developing a new type of pizza. Similar to a method used to make sourdough bread, each batch of pizza dough includes a bit of the last batch, all coming from a "mother" dough. This gives the pizza an increasingly fermented flavour. In the words of the chef: "This crust has action!"

Wong Kar-wai's Grandmaster kicks off Berlin film festival (By Reuters in Berlin) The Berlin film festival kicks off on Thursday with The Grandmaster, a martial arts epic from Hong Kong director Wong Kar-wai who is also presiding over this year’s jury. The 11-day stretch of screenings, photocalls, interviews and parties will showcase hundreds of movies, with much of the focus on 19 entries in the main competition and a handful of star-studded US titles. Matt Damon, Anne Hathaway and Nicolas Cage are expected on the red carpet in Berlin, as are European heavyweights Catherine Deneuve and Jude Law as well as Asian stars including Tony Leung Chiu-wai and Zhang Ziyi. The annual Berlinale, now in its 63rd year, is one of Europe’s most important film festivals, and alongside it runs a large-scale market where new features and documentaries are bought, sold and financed. While unable to match the glamour of Cannes or star power of Toronto, Berlin is an early introduction each year to what global cinema has to offer and enjoys a reputation for tough films tackling hot topic issues. This year Damon stars in Promised Land, about the controversial drilling technique for extracting gas known as “fracking” directed by his Good Will Hunting collabourator Gus Van Sant. Steven Soderbergh’s Side Effects is in part a critique of the pharmaceutical industry and boasts Law, Channing Tatum and Catherine Zeta-Jones in the cast. Soderbergh, an Oscar winner for his 2000 narcotics drama Traffic, has announced it will be his final big-screen feature film, at least for the foreseeable future. One of the most eagerly awaited pictures at the festival promises to be Closed Curtain, co-directed by acclaimed Iranian director Jafar Panahi who made it in defiance of a 20-year ban on film making imposed by authorities at home. Convicted of making anti-government propaganda, Panahi has nevertheless managed to make two movies since being placed under house arrest in 2010. In 2011 This Is Not a Film, about a day in his life, was transported out of Iran on a USB stick hidden inside a cake, and has since been shown to the world. Eastern Europe is well represented, with six of 19 competition entries either made or based behind the old Iron Curtain including Child’s Pose from Romania and Bosnian entry An Episode in the Life of an Iron Picker. Out of competition is 3-D prehistoric animation comedy The Croods, featuring the voices of Nicolas Cage and Ryan Reynolds, and Dark Blood, which River Phoenix was filming when he died aged 23 in 1993. Nearly 20 years later, after saving the footage from being destroyed, director George Sluizer decided to finish the film by reading aloud off-screen the missing scenes from the screenplay.

Hong Kong, city of trade, must not crack down on infant formula traders (By Andrew Work) Andrew Work says by trying to stop parallel traders making an honest living, Hong Kong is trampling on the work ethic that makes it great - A woman carries milk powders outside Sheung Shui train station. The government announced a series of measures to crack down on parallel trading of milk powders last week. Hong Kong became a great city after millions of mainland refugees came here to trade. Entrepreneurship brought goods to billions of people. First, goods made here and, later, goods made in mainland China; Hong Kong's tradition as a centre of exchange made the world a better place. The tradition continues, as can be seen in the volume of trade through our airports, ports and cross-border trucking industry. We count the benefits in dollar trade volumes and jobs created. Less often tallied are benefits to the global population who get the goods they want at prices they can afford, thanks to our link in the trade chain. With no natural resources of our own, everything Hong Kong has comes from elsewhere: food and water from the mainland; wheat from Canada; soya beans from Brazil and baby milk powder from the Netherlands and New Zealand, among other sources. The owner-producers of these products send them to Hong Kong on the basis of our willingness to pay for them. And some people buy the goods to resell them - at a profit. In the case of infant formula, people have forgotten every part of this virtuous chain. They waylay honourable traders making an honest living. Our government is creating a bureaucracy and ramping up spending to criminalise the simple act of trading that made this city great. Bernard Lee Kwan-kit, vice-chairman of the Association of Customs and Excise Service Officers, said extra manpower, space and facilities such as X-ray machines would be needed to enforce proposed restrictions on buying infant formula. What next? Full body searches? The presence of parallel traders in Hong Kong has drawn complaints of overcrowding, including at MTR stations and on trains. But there are solutions. Innovative thinking suggests the MTR could impose a small charge for extra luggage, set up dedicated repacking zones (with their own surcharge) and dedicated lanes in stations and sections of trains for those carrying luggage for whatever reason. Those using the service would appreciate being able to move themselves and their goods from point to point, free of hassle, and other customers could travel easy, with the encumbered passengers channelled elsewhere. The shortage of infant formula seems to be a problem of preference. Producers are encouraging pharmacies to take less popular brands that are languishing on store shelves. It seems parents are infuriated at being unable to get their preferred brands as readily as they like. Ridiculous hysteria has even led to a petition to the US government to intervene. The people harassing these honest traders didn't make the milk powder, didn't bring it here and have no natural right to it. Given Hong Kong's heritage as a city built by poor immigrants from China working hard as traders, the antipathy for these people is a betrayal of who we are. Our government should not be complicit with these self-appointed victims and agitators, but should instead enforce the laws of the land and promote the economic principles that illuminated the working spirit of Hongkongers past, and will hopefully not be extinguished in the future. Andrew Work is director and co-founder of The Lion Rock Institute.

Cross-border warmth as CY sees Guangdong chief (By Eddie Luk) Guangdong Communist Party secretary Hu Chunhua pledged continued support for Hong Kong at a meeting with Chief Executive Leung Chun-ying in Guangzhou. Leung in turn thanked the provincial government for its support in cracking down on parallel traders and on mainlanders wishing to give birth in the SAR. He also voiced hopes for expanded cross-border cooperation in the future. Leung also met with Shenzhen party chief Wang Rong yesterday. He was accompanied by Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung, Secretary for Commerce and Economic Development Gregory So Kam-leung and Secretary for Security Lai Tung-kwok. It was the first time for Hu to meet Leung since assuming the provincial leadership post in December. Hu told Leung that cooperation with Hong Kong has entered a new phase. "The greatest competitive edge enjoyed by Guangdong is its close proximity to Hong Kong," Hu said. "As Guangdong and Hong Kong step up cooperation, it will benefit the development of Guangdong and be conducive to Hong Kong to maintain its prosperity and stability." Meeting with Wang in Shenzhen, Leung noted the strong support shown to the SAR by the local authorities in cracking down on parallel goods traders and pregnant mainlanders crowding Hong Kong hospitals. Parallel goods trading has affected livelihoods in both Hong Kong and Shenzhen, Leung noted, but added that the SAR has made significant achievements in clamping down on the gray market. 

 China*:  Feb 9 2013

A local Chinese looks at the traditional decorations for the upcoming Chinese Lunar New Year in China Town, New York, the United States, Feb. 6, 2013. The Chinese Lunar New Year, or Spring Festival, starts on Feb. 10 this year. 

China world's top gold producer for 6th year - China produced the most gold in the world in2012, making it the largest producer for the sixth straight year, latest industry association data showed. China's gold output increased 11.66 percent from a year earlier to hit a record high of 403.05 tonnes in 2012, the China Gold Association said Wednesday. The output was almost 100 times that of 1949, when the country produced just 4.07 tonnes, the association said. It attributed the increase to favorable government polices, which have put the industry on a fast track and made it a pillar industry in many of the country's gold producing areas. The country's top 10 gold producers, including provinces of Shandong, Henan, Jiangxi, accounted for 82.71 percent of the total national output last year. China surpassed South Africa to become the largest gold producer in 2007. The country is currently the world's second-largest gold consumer after India, with total gold consumption at 761.05 tonnes in 2011, the association said in a report released in December.

China to cancel tax exemptions for foreign investors (By Peony Lui) Under new taxation changes, foreigners in China will no longer enjoy exemptions from various investment taxes. The State Council unveiled sweeping tax reform plans on Tuesday, in which three ministries, including the State Development and Reform Commission, proposed 35 measures to make the rich pay more and to narrow the income gap between the urban elites and the rural poor. Included in the plans is a measure to cancel tax exemptions for foreign individuals who obtain dividends and bonuses from foreign-invested enterprises, according to a report in Caixin. A tax rate of 20 per cent currently applies to dividends and bonuses, according to China’s existing personal income tax law. The Ministry of Finance and State Administration of Taxation will begin making changes and modifications to relevant tax laws and regulations. Liu Tianyong, a Chinese tax lawyer, told Caixin that the abolition of tax benefits would be beneficial for anti-avoidance investigations and the fight against international tax avoidance. “It was an outdated policy conceived during the period of planned economy. It should have been abolished a long time ago,” said Liu. "Tax breaks are especially unwise given that many foreign investors in China shift profits overseas. The new plan is more fair, as it ensures equal treatment of national and foreign investors,” he said. During its period of economic reform and liberalisation, China adopted offered tax incentives and special treatment to foreign enterprises and individuals to attract overseas investment. Since 2003, the government began to standardise taxation laws, especially in regard to foreign investors.

People visit the lights festival along Qinhuai River in Nanjing, capital of East China's Jiangsu province, Feb 6, 2013. 

Tokyo hyped 'radar lock-on': experts (By Zhang Yunb) Japan's campaign to accuse Chinese radars of "locking onto" a Japanese warship is more like a "political drama" to hype the "China threat" and will risk greater tension over the Diaoyu Islands dispute, experts said. Observers warned that the hyped "lock-on incident" serves as part of Tokyo's excuse for military expansion and lifting legislative limitations on the country's armed forces. Japanese Prime Minister Shinzo Abe condemned China on Wednesday after his defense minister Itsunori Onodera claimed on Tuesday that a Chinese navy vessel locked its fire-control radar on a Japanese destroyer in the East China Sea in late January. Abe called the incident a "dangerous" act that could have led to a "contingency", Japan's Kyodo News Agency reported. Beijing has not officially confirmed the incident. Ties were strained after the Japanese government in September illegally "purchased" part of the Diaoyu Islands, which have belonged to China for centuries. Jiang Xinfeng, an expert on Japanese studies at the PLA Academy of Military Sciences, said a radar's "locking on" is a common and constant reconnaissance practice in regular missions, and the other side usually reciprocates. "However, Japan in recent years has ramped up reconnaissance on Chinese vessels and aircraft, and Japanese media prefer playing up regular operations by the Chinese side," Jiang said. A further deterioration of China-Japan ties is actually unfavorable for Japan, and is also not expected by Washington, Jiang said. The hawkish elite within Japan have been trying to shape public opinion and utilize public fears by hyping the "worsening security circumstances", said Yang Bojiang, a researcher on Japanese studies at Chinese Academy of Social Sciences. This year has witnessed Japan's first hike in its defense budget in 11 years with more arms purchase orders and the expansion of Self-Defense Forces staff. Japan will not cut its defense budget in the upcoming years, Yang said. A media frenzy on topics like territorial disputes and missile launches prevails in Japan. Yang said the right-wing tendency should be given "due alert" and the country's policies are moving to the right. Reports of the incident have arrived in the wake of Japan's ruling coalition New Komeito party's leader Natsuo Yamaguchi's late January visit to China to warm up ties, said Hu Lingyuan, a professor on Japanese studies at Fudan University in Shanghai. "Although the Shinzo Abe cabinet chose a temporary friendly posture for thawing ties, it is still hyping the 'China threat'," Hu said. Tokyo has repeatedly resorted to so-called "emergencies in the neighborhood" as excuses for military expansion, and hyping the "China threat" is part of its plan, observers said. The Abe cabinet on Jan 25 decided to review the current National Defense Program Guidelines before the year-end. Tokyo cited Pyongyang's recent rocket launch and China's patrols in the waters off the Diaoyu Islands as factors requiring the review of the current guidelines, which were compiled by the ousted Democratic Party of Japan in 2010, Japan's NHK Television said. "With the aid of such 'incidents', Tokyo is seeking to bluff the international community by depicting China as a 'troublemaker in the region'," Hu added. Japan has ramped up measures to monitor and track Chinese vessels around the Diaoyu Islands, and scrambled F-15 fighter jets to follow patrolling China Marine Surveillance aircraft above the East China Sea. Chinese Ambassador to Japan Cheng Yonghua on Tuesday rejected Tokyo's protests of Chinese patrol ships sailing in the waters off the Diaoyu Islands, and Cheng required Japan not to interfere with regular patrols by Chinese vessels. Washington is "concerned about" the reported lock-on incident, said Victoria Nuland, spokeswoman of the US Department of State on Tuesday. "I will say that with regard to the reports of this particular lock-on incident, actions such as this escalate tensions and increase the risk of an incident or a miscalculation, and they could undermine peace, stability and economic growth in this vital region," Nuland said.

Hong Kong*:  Feb 8 2013

Action soon on plan to cut congestion at Cross-Harbour Tunnel (By Ada Lee) Central-Wan Chai Bypass Tunnel at Wan Chai East. Plans for a one-year trial aimed at cutting congestion in the Cross-Harbour Tunnel will be published for public consultation "very soon", a source said. It is intended to raise tolls in the tunnel, from Hung Hom to Causeway Bay, and reduce the cost of using the Eastern Harbour Crossing, from Quarry Bay to Cha Kwo Ling. A consultant's report in 2010 said such an arrangement could divert 4,300 of the 120,000 vehicles passing through the government-owned Cross-Harbour Tunnel each day to the eastern crossing, which is used by 69,000 vehicles per day. The study suggested raising the Cross-Harbour Tunnel toll for private cars from HK$20 to HK$25 and cutting the cost at the eastern tunnel from HK$25 to HK$20. But the source said the government would present "a few plans" for the public to discuss, with the fare adjustment and the types of vehicles targeted yet to be finalised. If tolls remain the same, it will stay as congested as it is now. The government would review the effectiveness of the measures after a year, he said. Chief Executive Leung Chun-ying said in his policy address he would consult the public on a plan to adjust tunnel tolls in the first half of the year. He said the government may compensate the owner of the eastern crossing, the New Hong Kong Tunnel Company, for any loss in revenue. But the source said there were no plans for the trial to include the third harbour tunnel - the privately run Western Harbour Crossing that runs from West Kowloon to Sai Ying Pun - which charges cars a toll of HK$55 per crossing and has far less traffic. He said the connecting roads would struggle to accommodate more traffic before the Central-Wan Chai bypass opens in 2017. While some lawmakers are opposed to raising the cost of using the Cross-Harbour Tunnel, the source said this was not an option if traffic was to be reduced. "If tolls remain the same, it will stay as congested as it is now," he said.

Dominant infant formula suppliers Mead Johnson and Friso have denied they have been bundling their products. A senior government official, meanwhile, expressed deep concern about the bundled sales issue. The denial came a day after Hong Kong General Chamber of Pharmacy chairman Lau Oi-kwok told a Legislative Council panel meeting on Monday that the two companies were bundling popular and unpopular baby formula when selling to small pharmacies. But Lau yesterday said only Friso is involved in the bundling and that it has been happening for at least six months. This was denied by Friso in a statement, adding that retailers have the right to choose which products they want. Lau insisted however that "Friso requires pharmacies to make purchases in a five-carton set for its baby formula number one to four." From last week, when the government announced measures limiting exports to two cans per user, Lau added that Friso has replaced the plan with a nine-carton set costing HK$20,000. But Lau said formula number two and four are the least popular and pharmacies worry they will be left with unsold stock on their shelves. "So they prefer buying less or to stop buying from Friso, leading to the shortage of supply," he said. He said pharmacies had been wrongly accused of hoarding baby formula or engaging in price manipulation. Mead Johnson marketing director Regina Tam said: "We have not been involved in any bundling sales and have requested consumers to purchase certain designated models of milk powder so we will provide them the infant formula." She added: "After the Lunar New Year normally there will be a quiet period, but we will make sure that our frontline staff will monitor the situation and our hotline service is operating through the New Year." Secretary for Food and Health Ko Wing-man said he is "highly concerned" about bundling. His bureau is contacting distributors and retailers for a meeting to discuss matters. "If [bundled sales] are happening, we urge the sector not to do so," Ko said, adding he has not heard about the sales during the meeting with suppliers. People Power lawmaker Albert Chan Wai-yip estimated that about 80 percent of baby formula is exported from Hong Kong to the mainland. "But given that Hong Kong babies only consume 500,000 to 600,000 cans of formula, it is quite sure that the shortage is not caused by internal consumption. Having around 15 million newborns in the mainland each year, Hong Kong suppliers can never meet their demand ... even though they continue to increase supply to the market."

Hong Kong-to-China gold flow hits record high in 2012 - Hong Kong’s net gold flow to mainland China jumped 47 per cent last year to a record high of 557.478 tonnes, indicating robust demand in China, which vies with India to be the world’s top gold consumer. Hong Kong shipped 114.372 tonnes of gold to China in December, also a record high for monthly exports. The city received 19.644 tonnes of gold from the mainland in that month. Its total gold shipments to China last year jumped 94 per cent from the 2011 total to over 832 tonnes, but imports also were six times higher at 274.684 tonnes, data from the Hong Kong Census and Statistics Department showed on Tuesday. “It is not a surprise,” said Dan Smith, head of metals research at Standard Chartered. “Consumer and investment appetite was quite strong, and no one knows how much the central bank is buying.” Investors are waiting for a research report from the World Gold Council due next week, which will show whether China overtook India last year as the world’s top gold consumer. “This is a very strong number,” said Nick Trevethan, senior commodity strategist at ANZ in Singapore. “China’s implied gold demand looks set to approach or exceed 1,000 tonnes based on Hong Kong trade data and the annualised gold production number.” The implied demand could reach 1,050 tonnes if gold inflow from other channels is factored in, he added. China produced 322.8 tonnes of gold in the first 10 months of last year, up 11 per cent from a year earlier, the Ministry of Industry and Information Technology said. Physical buying at the start of this year was strong as seasonal demand picked up before the Lunar New Year, which falls on February 10. But buying has since ebbed as prices moved higher and settled in a rangebound mode. Traders have said the pre-holiday demand is not as strong as in the past few years as improving global and domestic economies sap some investors’ interest in gold.

Open access to directors' names, but not their home addresses (By John Bacon-Shone) John Bacon-Shone welcomes the government review of company data - A good case for limiting access to home addresses. The recent debate about the government proposals to restrict access to the personal information of company directors has been one-sided, so it is useful to re-examine the arguments carefully to see which elements, if any, of the proposals are justified, taking into account press freedom, access to information and privacy. Firstly, I do not believe press freedom is directly relevant here as there is no proposed restriction on the press that does not apply to the public. Public access to information, however, is important for an open society, including journalistic investigations, and should be restricted only with good justification. Many years ago, the Law Reform Commission reports on privacy highlighted the need for the government to revisit public access to government registries, such as the Transport Department registry of vehicle ownership and the Land Registry, to ensure that public access is consistent with the purpose of each registry and balances public access to information with privacy concerns. In this light, a government review of public access to the Companies Registry should be welcomed. The key information under discussion is director names, and their identity card numbers and residential addresses. There is general agreement that director names must remain public to ensure that the public can identify who is responsible for a company. We allow company directors to obtain the benefits of reduced tax and liability through using a company, so identifying directors is essential to hold them accountable. But names are not reliable personal identifiers, given that English names here can be written multiple ways and Chinese names are often not unique. Hence, ID card numbers play an important role in identification. This suggests that the government proposal to show incomplete identity card numbers may not meet the requirement for accurate identification. The privacy argument here relates to identity theft, of which they are now many cases each year. But an identity card number, while useful for identification, is not a reliable means of authentication. So, it seems that the public benefit of access to full identity card numbers arguably outweighs the privacy protection argument of restricting access. But the picture looks different when we consider residential addresses. In surveys I did on privacy attitudes, residential addresses were considered sensitive personal data by most Hong Kong people, so public access needs clear justification. The registered address of a company is already public information. The argument for access to residential addresses hinges on dysfunctional companies that cannot be contacted through the registered company address. In such a case, having a residential address means, for instance, an employee who has not been paid could get in touch to negotiate payment through, say, the Labour Department. Or potential fraud could be reported to the police, who would retain access. In other words, public access to addresses should be restricted to those with a clearly justified need. It is fully justified for the government to introduce restrictions on access to company director information. However, it should modify the proposals to retain public access to full ID card numbers while restricting access to residential addresses. Professor John Bacon-Shone is a former chairman of the Law Reform Commission sub-committee on privacy

Exclusive clubs may lose land to housing projects (By Olga Wong) The government is looking at taking back underused sports facilities, yacht clubs and camp sites to find land for public housing - The Post Office and Cable & Wireless Recreation Club at 108 Caroline Hill Road. The government may take back underused sports facilities, yacht clubs and camp sites occupied by 13 private organisations and use the land to build much-needed homes, a source familiar with the situation said. The leases of 18 sites occupied by these private clubs and organisations, including a PCCW staff club in Causeway Bay, a yacht club in Sai Kung and a Hong Kong Girl Guides camp site in Sheung Shui, will expire this year. The lease for the PCCW staff club in Caroline Hill Road ends next month, making it the first site to be reviewed. The renewal of these leases was previously a formality. Now, faced with an acute shortage of land and rising public concern at the lack of access to private clubs, the government is considering releasing sites for residential use. A Home Affairs Bureau spokeswoman said it would "review the policy on private recreational leases". The source said the government would scrutinise leases when they expired in the next two years. Some underused sites - ranging from 100 square metres to over 100 hectares - would be returned to the Lands Department and assigned for a new use. The move is bound to cause controversy. Some worry that it will compromise Hong Kong's precious open space and recreational facilities, while others support it as the sites were often leased to the private clubs at very low cost and sometimes free. Many private clubs have failed over the years to honour their obligation to allow public access to their facilities. Details on these facilities and their opening hours were only released last year after strong criticism from the public. Democratic Party lawmaker James To Kun-sun said private clubs that were underused should be taken back for other uses. However, Peter Cookson Smith, president of the Hong Kong Institute of Planners, opposed the idea. "The clubs are an important part of Hong Kong and are social networks," he said. "However, they can be much better used, like allowing more people to use them." To said organisations that have more than one club should consider asking their members to share fewer club houses and releasing the "spare ones" for other developments. "I think the government should consider it [returning land of private clubs] as an option as long as it won't undermine the city's image as a business hub." He also proposed that Fanling Lodge, reserved for the chief executive, together with the vast golf course surrounding the lodge be used for flats. "The lodge was meant to be a compensation for the governors who came all the way from Britain. I don't think our chief executives need it any more," he said. PCCW acquired the British-based telecom firm Cable & Wireless in 2000 and got its staff club as part of the deal. It pays an annual land rent of just HK$100 for the 7,865 square metre private club situated at one of the most prime locations in Hong Kong. If the government decides to take over that site, it only needs to give three months' notice. Other sites under scrutiny include a yacht club in Sai Kung, a youth hostel in Tai Mei Tuk owned by Hong Kong Youth Hostels Association, a golf course of the Hong Kong Golf Club, a camp site in Sheung Shui of the Hong Kong Girl Guides Association and Lim Por Yen Centre in Mong Kok. Not all of the sites are suitable for cheap housing as many are far from urban areas. There are 73 such leases held by private clubs and organisations in Hong Kong. The government previously renewed 55 for 15 years, before the issue caught public attention and triggered widespread debates. The remaining 18 sites will now face greater scrutiny, since the government has exhausted many traditional channels to find land for affordable housing. "If leases of some club houses are up for renewal, then the clubs have to justify why their leases should be renewed," Executive Councillor Barry Cheung Chun-yuen said.

Hong Kong Border officials gear up for Lunar New Year holiday (By Lai Ying-kit) The Lo Wu checkpoint (above) at the border with Shenzhen is expected to be the busiest crossing point over the coming Lunar New Year holiday. Hong Kong’s immigration officials expect to handle 8.18 million travellers during the Lunar New Year, up by 11 per cent over the same period last year. Most of the travellers' journeys – about 70 per cent – would be via land crossings, the immigration department said on Tuesday. About about 2.76 million travellers, or 276,000 per day, are expected to pass through the Lo Wu checkpoint during the busy holiday period between this Friday and Sunday, February 17, making it the busiest gateway. This year, the official four-day Lunar New Year holdiay in Hong Kong begins on Sunday and ends on Wednesday; but, on the mainland, the holiday continues throughout the week with the normal workday resuming on Monday, February 18. The peak period for arrivals to Hong Kong should be on Friday when 327,000 people are expected. Departures are expected to reach their peak levels next Wednesday, when 371,000 people leave the city. Immigration division commander Wong Yin-sang said the department would put 100 more officers on duty at border checkpoints to handle the increased traffic. He also said officers would step up their efforts to stop suspected parallel traders and pregnant women from entering Hong Kong during the busy season. Wong said more than 2,000 names had been added to a list of suspicious travellers for officers to watch. “So when these people come to Hong Kong, our officers will intercept and ask them in detail about the purpose of their visit,” he said. “We will not allow them in if they cannot give satisfactory reasons.”

 China*:  Feb 8 2013

State firms downsizing dinners (By Zhao Lei) Leftover dishes at an annual party for employees held at a restaurant in Beijing last month. Many State-owned enterprises have started to adopt modest dinners and smaller awards at their annual employee parties amid a nationwide campaign to honor frugality and reduce extravagance. "Our annual party has been canceled," a staff member of China Datang Corp, a State-owned power company, said on condition of anonymity. "In the past all employees would enjoy a party and banquet at a nearby five-star hotel, but this year we don't have them. "More bad news is that the lucky draw that usually took place along with our annual party was also called off," she said, adding that although the company allows each department to decide whether they will hold a year-end dinner, her department has canceled its banquet. "The biggest prize in last year's lucky draw was a 3D television worth nearly 5,000 yuan ($800) and no employee returned home empty-handed — they usually received a fancy set of bedclothes or a pressure cooker as a gift. "However we were told no year-end gift will be given this year and all these measures are because State-owned enterprises like ours 'must play an exemplary role in reducing extravagant activities'." Some other State-owned enterprises maintained their year-end parties but cut costs. "The company held its annual party for employees at the ceremony hall in the office building this year," said a marketing manager surnamed He at China Great Wall Industry Corp, a subsidiary of a defense technology company. "We used to enjoy a nice year-end party in famous tourist sites in Beijing's suburbs such as the Jiuhua Mountain Villa or other thermal spring resorts." After this year-end party, all company executives and employees came to the company's dining hall to attend a buffet instead of satisfying their appetite with expensive dishes like in the past, he said. The lucky draw was also simplified — the value of prizes and the number of winners was reduced. In addition, the company has curtailed expenses on banquets for VIPs, He said, citing a recent occasion where company executives treated a senior official from Belarus in the dining hall rather than holding an extravagant feast in a luxury hotel like before. "Though we still served him some expensive dishes and alcohol, the cost was much lower." Meetings and ceremonies have also been simplified to reduce costs. "The meeting of executives and heads of local divisions, which usually lasted three days, has been shortened to two days starting this year," said a female employee of the Aviation Industry Corp of China, the country's leading manufacturer of military aircraft, who also requested to remain anonymous. "The number of attendees and organizers was decreased. We also canceled the reception banquet and welcome party for the attendees," she said, noting as far as she knows most attendees support the reduction of ceremonies and cost. However, the staff member at Datang said despite supporting the government's efforts to eliminate extravagance, she hopes employers do not overcorrect the situation. "To promote frugality and put away extravagance doesn't necessarily mean we have to get rid of year-end parties," she said. Though being placed under tighter scrutiny from the public and media, a handful of State-owned enterprises still paid high prices for lavish dinners. China Minzu Securities spent nearly 2,000 yuan ($320) for each employee at its Spring Festival party with the total cost of the party totalling 300,000 yuan, the People's Daily reported. There are State-owned companies that even gave gold bars to employees as year-end gifts, the report said, adding Kweichow Moutai, one of the most expensive liquors in China, still remains the most popular alcohol at the banquets of State-owned enterprises this year. 

CRE brewing buy leaves Kingway in property game (By Karen Chiu) China Resources Enterprise (0291) plans to spend 5.38 billion yuan (HK$6.7 billion) to acquire the beer business of Kingway Brewery Holdings (0124), which will become a property developer. China Resources Snow Breweries - a 51 percent owned subsidiary of CRE - has bought seven breweries from Kingway, which had a combined annual production capacity of 1.45 million tonnes. The deal includes Kingway's Plant 2 in Shenzhen and beer businesses in Chengdu, Dongguan and Foshan. But Plant 1, also in Shenzhen, is not part of the deal. Kingway plans to develop that into commercial property. CRE chairman Chen Lang said Kingway's production capacity and brand name will help CRE gain more market share in Guangdong. In 2012, China Resources Snow Breweries produced 10.8 million tonnes of beer, accounting for about 22 percent of the market in the province. Kingway, which held about a 2 percent market share in Guangdong, produced 820,000 tonnes. "We could turn it around in three to five years," Chen said as Kingway reported an interim loss last year of around HK$101.6 million. Kingway chairman Huang Xiaofeng said upon completion of the deal the company will name itself Guangdong Land Holdings. It plans to invest around HK$3.67 billion in developing its Shenzhen plant. The site measures 87,705 square meters. Also, a special cash dividend of HK$1 per share - worth a total of HK$1.71 billion - will be declared for Kingway shareholders. Huang said the dividend payout was relatively modest as the company needed cash to pay for land premiums, settle with departing employees and make further acquisitions. Shares of Kingway jumped 26 percent after rumors of the sale first emerged last November. They fell 1.5 percent to HK$3.28 yesterday, while CRE lost 1.1 percent at HK$26.90.

A farmer picks spring tea at a plantation in Sanjiang Dong autonomous county, Guangxi Zhuang autonomous region, on Monday. Sanjiang tea is one of the most famous early spring teas. Tea-planting areas in Sanjiang cover about 9,500 hectares, and more than 200,000 people work in the tea industry.

Chinese experts slam US hacking accusations (Xinhua) Chinese experts on Tuesday refuted latest accusations from the US side linking Chinese authorities to alleged hacking activities. The New York Times and Wall Street Journal last week claimed that they had detected cyber attacks from China-based hackers, while China had been regularly labeled a major origin for cyber threats to the United States. This was promptly rejected by the Ministry of Foreign Affairs. "The accusations are unreasonable and irresponsible," said prof. Zhou Shijian, a senior researcher with the Center for US-China Relations of Tsinghua University in Beijing. Zhou noted that it is still hard to locate the ultimate source of hacking activities due to the transnational and the anonymous nature of cyber-attacks. In addition, Zhou stressed that he found no reason for the Chinese government to support such activities, citing an official report that the country has become the biggest victim of Internet hacking. A total of 12,513 Chinese websites including 1,167 governmental ones detected cyber attacks from April to December in 2011, according to a 2012 report issued by the National Computer Network Emergency Response Coordination Center of China (CNCERT/CC), the country's primary computer security monitoring network, The report noted that 11,851 overseas IPs were involved in the attacks, while 28.1 percent of the overseas hacking attackers were from the United States. Prof. Liu Deliang, director of the Beijing-based Asia-Pacific Institute for Cyber-Law Studies, also found the accusations groundless "both in legal basis and logics." Even if the attacking origins were in China, it could be results of individual behaviors, said Liu. "In the end, the accusation is nothing more than an excuse for the United States to wage wars on network security, and also for its trade protectionism, economic and foreign sanctions purposes." The accusation also demonstrated the intent of the United States to seek "hegemony" in cyber space, said Liu.

Hong Kong*:  Feb 7 2013

Wallowing in debt (By Victor Cheung) Household debt is nearing a historic high, making any sudden economic downturn or property market crash likely to bring devastating consequences. That stark warning was given to lawmakers yesterday by Hong Kong Monetary Authority chief executive Norman Chan Tak-lam. He revealed that in the fourth quarter of last year, Hong Kong's total household debt - an aggregate of mortgage and personal obligations such as credit card bills - reached 59 percent of the SAR's gross domestic product. That was just shy of the record high of 60 percent in 2002, when the economy suffered the worst recession in decades as home prices plummeted. "Mortgage debt has piled up as home prices have gone up," Chan said. "During an economic downturn, household incomes would shrink and people would have more difficulty meeting and repaying their debts." He reminded homebuyers to carefully consider their ability to meet their obligations, especially as interest rates could rise in the future. "As the US interest rates are now tied to unemployment and inflation, it remains a big uncertainty as to when it will raise interest rates," he said. The amount of home loans - which accounted for three quarters of household debt as at the end of last year - rose almost 40 percent over the past decade to HK$889 billion, according to HKMA data. Total credit card debts and home loans jumped 1.4 times to HK$340 billion. Chan warned that the overheated property market remains the greatest risk to the financial stability of Hong Kong, particularly as home prices are out of reach of many people. He reiterated that the HKMA may roll out further curbs on mortgages when necessary, but he refused to be specific as to what measures will be imposed or when. Economist Kwan Cheuk-chiu said: "Due to the super low interest rate environment, people are encouraged to take out loans to pay mortgages and tax." Kwan added that mortgage affordability - average household repayment as a percentage of its income - and banks' mortgage lending as a percentage of total loans are two better indicators of banking stability. But he believes the HKMA has done "a good job" of containing risks in the banking system. But Terence Chong Tai-leung, an economics professor at Chinese University, said the current debt level cannot be compared with that of a decade ago because of the difference in interest rates. "Even if it goes above 60 percent it doesn't mean there will be a huge problem," he said. "Loans are more affordable than in 1997." He estimates it could take at least two years for US jobless rates to decline to the 6.5 percent target. Meanwhile, Chan said he is satisfied with the 8.8 percent return of the Exchange Fund, but he stressed that it is not a sovereign wealth fund but one that protects the linked exchange system. He rejected calls for the fund to be used to help the government buy back MTR Corp (0066) and the Link Reit (0823).

US envoy says China can learn from Hong Kong (By Agence France-Presse in Hong Kong) US Ambassador to China Gary Locke. The US ambassador to China expressed caution on Tuesday over hopes for reform under Beijing’s new leadership and said the mainland should turn to Hong Kong for inspiration. Gary Locke told an economic conference in Hong Kong that the US-China relationship remains “fundamentally very, very strong” but said the world’s second-largest economy could only benefit from further liberalisation. “Hong Kong is an excellent example of what can be done and how important it is to lead in the economic realm with the principles of openness, freedom and transparency,” he told the conference, organised by US bank Goldman Sachs. “It is also an example that China can learn from and in doing so, optimise China’s own progress and development,” he said. Locke, a former US commerce secretary and the first Chinese American to hold the post, remained cautious when asked about the prospects of reform under China’s newly elected Communist Party leader Xi Jinping, who is set to take over as president in March. “I believe everyone inside and outside of China is very hopeful but time will only tell, so we’re going to have to wait for several months or even a year to really see what the priorities are (for the new leadership),” he said. Xi was seen to be signalling a push for economic reforms when he chose to visit the southern boomtown of Shenzhen in his first official trip as the ruling party leader in December, where he vowed to continue “reform and opening”. But Locke said that many industries had expressed concerns over restrictions on investment in China, which they felt were “very troublesome”. Foreign direct investment in China declined for the first time in three years last year, official data showed, and some US businesses have linked it to investment barriers. Ownership restrictions are imposed in a large number of sectors, although Beijing has moved to ease these limitations. “I think we really need to try to push for even further opening because it’s in the economic self-interest of the Chinese people and the Chinese government,” Locke said. A third-generation Chinese American whose grandfather emigrated to the US, Locke created a buzz in Beijing when he took the US envoy role in 2011 and was nicknamed “the backpacker” for his frugal travelling habits. He arrived in Beijing carrying his own luggage and in a regular car, with little of the ceremony that usually surrounds Chinese dignitaries abroad.

Bamboo Theatre draws crowds (By Mary Ann Benitez) About 30,000 people have visited the Bamboo Theatre at the West Kowloon cultural hub in the six days since its opening. And the West Kowloon Cultural Authority's chief executive, Michael Lynch, said yesterday there are plans to stage the popular Bamboo Theatre each year in the future "Great Park" while the Xiqu Centre for Chinese opera is being built. The 800-seater temporary Bamboo Theatre opened on Wednesday and will remain until February 16 on the site of the Xiqu Centre. "We've already sold 98 percent of tickets for performances," Lynch said in a webcast of an authority board meeting. "It will almost be a sell-out." He said many of the visitors wanted to see the Xiqu Centre exhibition and the Bamboo Theatre and to visit 35 art stalls. The temporary structure - designed like a traditional Chinese opera theater - presents a diversified program to draw both young and old. "Almost 30,000 people visited in the first six days - it's been taken to the hearts of the community," said Lynch, adding it will be the last time for it to be held on the site of the Xiqu Centre, to be commissioned in 2016. Last Sunday, 6,000 visitors went to the site, many of them tourists. The board chairwoman, Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor, said the HK$150 million pledged by Chief Executive Leung Chun-ying in his policy address to strengthen the training of arts administrators in the next five years is a one-off funding. But funding is expected to be expanded.

Auction time for some of Henry Tang's wine (By Lai Ying-kit) Henry Tang YIng-yen at a food and hospitality tradeshow in Wan Chai in 2011. Defeated chief executive candidate Henry Tang Ying-yen will sell thousands of bottles of wine at an upcoming auction as he culls his vast collection, according to a media report on Tuesday. Tang, also well known as a wine collector, was quoted by The Wall Street Journal on Tuesday as saying the sale was part of a much-needed culling that he could not find time to do until recently. The former chief secretary, Hong Kong’s second highest official, has largely moved away from politics after losing the chief executive election last March. The thousands of bottles of Burgundy to be sold were “only a very small portion of my vast collection of wine”, Tang was quoted as saying. The whole of it, housed in cellars around the world, could not be consumed over “multiple lifetimes”, he said. According to information posted by Christie’s on its website, the auction, entitled The Henry Tang Collection, has been scheduled to be held for two-days, on March 15 and 16. Tang lost the chief executive election last year after media reported that Tang’s luxury house in Kowloon Tong contained an unauthorised 2,400 square foot basement, which housed a wine cellar and a wine tasting room. In 2007, as financial secretary, Tang halved the excise duty on wine to 40 per cent. The next year when he became chief secretary, his successor as financial secretary John Tsang Chun-wah went even further and abolished the duty. At the time, the government was hoping to turn the city into an international wine hub, alongside New York and London, on the back of a growing market in the mainland. In fact, according to wine writer Philippe Espinasse, Hong Kong was the top wine auction centre in the world in 2011 and, as of early December of last year, was set to retain the title again in 2012 thanks to the reduction of the excise duty to zero in 2008.

Relief is sweet with another college year (B Beatrice Siu) The troubled Sacred Heart Canossian College of Commerce has decided to remain open for an extra year to enable existing students to complete their studies. College authorities had said they would close in August for lack of students, offering to transfer its 110 undergraduates to other institutions. The closure was going to affect some 400 girls. But many parents and students objected at a meeting last month to proposed transfers to Hong Kong College of Technology, Caritas Institute of Higher Education, Caritas Bianchi College of Careers or the Open University. Unhappy parents then opened a group on Facebook to express anger, demanding the school postpone its closure so children could finish their studies. Then, last week, the college called off a briefing session for parents and students. But yesterday's meeting, attended by about 100 parents, students and college authorities ended on a cheerful note. The closure is postponed to August 2014 so students may complete their studies. School fees remain unchanged. An insider said the college authorities also promised not to admit new students for the academic year starting in September. Additionally, applications for transfers to the four other institutions remain open. "We're so happy with the result as this is what we were asking for," the source told The Standard. That was reflected at the college in Mid-Levels, with students making V for victory signs. The college was established more than a century ago and was hailed as the cradle of secretaries. But admissions have slumped in recent years amid fierce competition from self-funded institutions and universities. Officials at the Education Bureau, noting that the college would not accept new applications for the next academic year, welcomed the decision to postpone the closure. The bureau will continue to communicate with the institutions set to take students on transfer, and it will update information on iPASS and E-APP - platforms for students applying for self- subsidized courses offered by institutions and universities that are out of the Joint University Programmes Admissions System.

 China*:  Feb 7 2013

Japan protests over China ship's radar pointed at vessel (By Reuters in Tokyo) Japan's Defence Minister Itsunori Onodera speaks to reporters at the Defence Ministry in Tokyo on Tuesday. A Chinese marine surveillance ship (left) passes alongside a Japan Coast Guard ship near the disputed islets known as the Senkaku islands in Japan and Diaoyu islands in China, in the East China Sea. A Chinese navy vessel aimed a type of radar normally used to aim weapons at a target at a Japanese navy ship in the East China Sea, prompting Japan to protest, Japan’s defence minister said on Tuesday, an action that could complicate efforts to cool tension in a territorial row between the rivals. “Projecting fire control radar is very unusual,” Japanese Defence Minister Itsunori Onodera told reporters of the incident, which he said occurred on January 30 but took time to confirm. “One mistake, and the situation would become very dangerous.” Prime Minister Shinzo Abe, however, told Onodera it was important to respond calmly and not meet provocation with provocation, Kyodo news agency reported. Hopes have been rising for a thaw in ties between Asia’s two biggest economies since a chill began in September when Tokyo nationalised a chain of rocky, uninhabited isles in the East China Sea. In particular, there are hopes for a leaders’ summit to help ease the strains that a junior Japanese coalition partner said on Tuesday could take place as early as April. But deep mistrust, simmering nationalism in both countries and bitter Chinese memories of Japan’s wartime aggression mean the road to a summit will be rocky and any rapprochement fragile. Onodera said a similar incident may have occurred on January 19, when a Chinese naval ship may have directed so-called fire control radar at a Japanese navy helicopter. The long-running row over the islands, known as the Senkaku in Japan and the Diaoyu in China, has in recent months escalated to the point where both sides have scrambled fighter jets while patrol ships shadow each other. We believe that what is most urgent is for Japan to stop provocative actions - Chinese officials were not available for comment on Japan’s complaint about the radar, but a Chinese spokeswoman earlier urged Japan to stop what she called provocation. “We believe that what is most urgent is for Japan to stop provocative actions like regularly sending in ships and aircraft into the waters around the Diaoyu Islands and seek, via talks with China, an effective way to appropriately control and resolve this issue,” Foreign Ministry spokeswoman Hua Chunying told a news conference when asked about Chinese ships operating in waters near the disputed islands. In search of a summit - Fears the cat-and-mouse encounters between aircraft or ships will cause an accidental clash have given impetus to efforts to reduce the tension, including the possible summit between Japanese Prime Minister Shinzo Abe and Chinese leader Xi Jinping, who formally takes over as head of state in March. Abe’s junior coalition partner, Natsuo Yamaguchi, who heads the small New Komeito party, said a summit could take place as early as April if both sides tried hard to smooth the path. Yamaguchi met Xi last month to deliver a letter from Abe, who took office in December after his party won an election. Abe, a security hawk who has vowed to stand firm in the islands row, earned a track record of fixing frayed ties with China during his previous 2006-2007 term as prime minister. “There are two big opportunities,” Yamaguchi told reporters in an interview, referring to chances for a summit. “One would be when the passage of the budget is assured in Japan.” Abe’s government aims to enact the budget for the year from April 1 in May, but its passage would be assured once it is approved by parliament’s lower house, which could be in April. Of course, there are different opinions about the Senkaku and it is not easy to reach agreement. Both sides understand that “The other chance is after the (July) upper house election, around the 35th anniversary of the Sino-Japan friendship treaty on August 12,” Yamaguchi said. “Both sides need to make efforts.” Yamaguchi said the rise of tension over the isles had convinced both sides of the need for dialogue, although he acknowledged that finding a solution was tough. “Of course, there are different opinions about the Senkaku and it is not easy to reach agreement. Both sides understand that,” he said. “But if we cannot control things on site, it will be difficult to prevent an accidental incident. The role of politicians is to ease tensions, prevent things from escalating and ... move ahead with aspects of mutual and common interest from a broad perspective.” Japan’s purchase of the islands from a private citizen was aimed at easing the row but triggered violent protests in China.

Gorgeous Asian models with perfect figures (Xinhua) Check out those gorgeous Asian models with perfect figures.

Kerry urged to spell positive change on Diaoyu (Xinhua) As new US Secretary of State John Kerry started his first week of foreign policy objectives, Chinese officials were optimistic a change in Washington will spell a positive change toward resolving the Diaoyu Islands issue. "We hope that (Kerry) will be more moderate on the (Diaoyu) issue," said Major-General Zhu Chenghu, Dean of the Defense Affairs Institute for China's National Defense University of the People's Liberation Army. US Secretary of State John Kerry departs after greeting members of the Young Afghan Traditional Ensemble before a performance at the State Department in Washington, Feb 4, 2013. Kerry, a seasoned, political heavyweight, former Massachusetts senator and 2004 presidential candidate, represents an opportunity to redirect Washington's course, Gen. Zhu told Xinhua. Gen. Zhu flew to Atlanta's Emory University on Tuesday, concluding a two-city US university tour over seven days, to address audiences of scholars, businessmen, students and media on the state of China' s foreign policy and the Diaoyu issue. As Kerry was sworn in Friday, replacing Hillary Clinton as America's 68th Secretary of State, Gen. Zhu was concluding talks at the University of Denver' s Josef Korbel School of International Studies, where Dean Christopher R. Hill reiterated US desires to see the Diaoyu conflict resolved peacefully. "Traditionally in these maritime disputes it's advisable to wait until people's tempers cool," said Hill, who served as US Ambassador to South Korea, Iraq, Poland and Macedonia. "Nationalism in both China and Japan has developed to a peak," cautioned Gen. Zhu. Outgoing Secretary Clinton, while garnering considerable praise from the US media for her four-year tenure, raised eyebrows across the Pacific two weeks ago by saying America opposed "any unilateral actions that would seek to undermine Japanese administration" of the Diaoyou Islands, a remark Japan jumped on as vindication of its claim to the islands. Gen. Zhu said the US government is sending the wrong signals to Japan. Japan "bought" the archipelago in September 2012 from a Japanese family to solidify its claim, a move that triggered a rebuke from China. "They had no right to sell something that didn't belong to them," said retired 92-year-old John Yee, an American historian and member of the Flying Tigers in WWII. "It was purely political." Yee, who immigrated to America after the war, agrees with China's historic claim to the islands. Newly elected Japanese Prime Minister Shinzo Abe told Japanese Coast Guard members in Okinawa that Japan would defend the disputed islands at all costs, Japan's Kyodo news agency said Saturday. "Both sides need to turn down the heat," said Hill, who was President Barack Obama' s Assistant Secretary of State for East Asian and Pacific Affairs in 2009-2010. Gen. Zhu noted, "America has the responsibility not to escalate tensions there," and said he is concerned as Japan increases tension.

People buy spring couplets and other ornaments at the Licun Country Fair in Qingdao, Shandong province, ahead of Spring Festival. The 100-year-old fair attracts tens of thousands of people each day.

Hong Kong*:  Feb 6 2013

New round of mortgage tightening likely amid fears of property bubble (By Enoch Yiu) Fears of property bubble set to lead to sixth round of tightening measures since 2009 - HKMA chief executive Norman Chan Tak-lam. The Hong Kong Monetary Authority is poised to launch its sixth round of mortgage tightening measures since 2009 and has given its strongest warning yet of a bubble in the property market. "The overheating property market remains the biggest risk factor to the stability of the Hong Kong economy," Norman Chan Tak-lam, chief executive of the authority, told lawmakers at a monthly financial affairs panel meeting yesterday. Chan said household debt was near the record high of 60 per cent of GDP reached in 2002, with the ratio edging close to 59 per cent in the fourth quarter. His warning came after the previous five rounds of mortgage tightening measures and tax measures introduced in October failed to cool down the market. Despite a fall in sales volume and mortgage applications, prices have shown signs of rising. Prices retreated by 1.6 per cent from a record high after the introduction of a new buyers' stamp duty and adjusted special stamp duty on October 27. But they recovered and are back at new highs, said Macquarie Securities. The Centa-City Leading Index, which tracks home prices in 100 housing estates in the secondary market, rose 0.63 per cent week on week to 119.13 on February 1 - a record. The index's benchmark of 100 reflects prices in July 1997. Chan said property prices were rising due to a lack of supply as well as hot money from abroad flowing into the city. Countries such as the US and Japan have adopted monetary easing policies to lift liquidity and boost their economies. "These monetary easing measures have caused inflation problems in Asia and have added uncertainties to the markets and economy in Hong Kong," he said. Chan said current interest rates were close to zero and could go up at any time. "If the interest rate rises, some borrowers may have difficult repaying their mortgage and that would add to risks faced by the banks." Financial services sector legislator Christopher Cheung Wah-fung agreed with the HKMA move, "to ensure the stability of the local financial sector as property prices have obviously gone too high already". The HKMA's fifth round of mortgage tightening came in September. It was designed to make it harder for people to get a mortgage for a second property while cutting the mortgage-to-income ratio from 50 per cent to 40 per cent. The previous four rounds of measures were aimed at the luxury market.

ESF to end admission priority for non-Chinese speakers (By Dennis Chong) Foundation changes tack on admissions policy, with the move likely to increase the competition for primary places among expatriate children - ESF's Island School on Borret Road, Mid-Levels. The English Schools Foundation announced on Monday it will be ending its admissions priority for children who do not speak Chinese. The move is likely to increase the competition for expatriate children seeking to enrol at its primary schools. And it comes at a time when the ESF is seeking to secure official funding for its English-medium schools from a government increasingly inclined to view it as an outdated colonial institution. Another change in admissions policy announced on Monday includes scrapping the priority for interviews for primary school places given to children who have attended ESF-affiliated kindergartens, from which around 600 children graduate every year. The changes will begin taking effect from August, the ESF said. But the one most likely to alarm expatriate families is the ESF's decision to end the priority given to non-Chinese speakers for primary school places. The policy was maintained previously on the assumption that Chinese speakers could go to Chinese-medium schools. Such a change is likely to make it more difficult for non-Chinese speaking children to find a school place, because of the increased competition it will create for places at the ESF's English- medium primary schools. ESF chief executive Heather Du Quesnay said that stringent interviews would be conducted for school applicants, which would include English proficiency tests. She did not believe the new system would reduce the number of non-Chinese students at ESF schools. And she insisted the changes had nothing to do with the foundation's on-going attempts to persuade the government to maintain, if not increase, the ESF's annual HK$283 million subvention, or subsidy. She told a news conference the implementation of the policy to give priority to non-Chinese speakers had been unsuccessful. She said: "It's pretty difficult to test if the child cannot speak Cantonese. We have never been able to do it. That's one of the reasons the system didn't work very well." For years, children unfamiliar with Cantonese – mainly expatriates – were treated favourably when applying for a place at one of the ESF schools. The schools were set up in the 1960s by the British colonial government to serve non-local families, many of them civil servants from Britain. They [non-Chinese taxpayers] will just leave Hong Kong if they can't find a school place - Each year the ESF offers about 13,000 places and the competition for these has become keen in recent years. Demand from both local families and expatriates has grown, particularly after the government switched the medium of instruction for most of its public schools to Chinese. Last year, more than 2,400 applications were made for places at ESF primary year one admission, according to the ESF office, compared with 1,340 in 2007. Thousands are on the schools' waiting list. Some expatriate parents said the new arrangement would make it harder for expatriate families whose children do not speak Chinese to find a school place. The make-up of the ESF primary and secondary schools has changed greatly in recent years. According to the ESF's annual report, 44 per cent of its students are now ethnic Chinese. Amanda Chapman, head of the Native English-speaking Teachers' Association, said modifying the language criteria was unfair for non-Chinese-speaking taxpayers because these families were already finding it difficult to find school places. "They will just leave Hong Kong if they can't find a school place," Chapman said. Willy Ewal, an expatriate father, said he believed the ESF had the right to change its admission policy. "The government wants to make it private so [the ESF] has to behave like a private school. They need the money, so money will come first," Ewal said. An Education Bureau spokeswoman said in response to the announcement that the ESF has autonomy in deciding on its curriculum, the student mix and admissions criteria. "In the context of the ongoing subvention review, the services provided by the ESF should be underpinned by, amongst other things, relevant parameters in its admission policy as a condition for granting new subvention, if any," the spokeswoman said. Du Quesnay said she did not face pressure from the government over the admissions policy changes. She said fees for the next school year would be announced next month. And she said the ESF was also considering a new "nomination rights" scheme for companies. Purchasing the rights would give them advantages in the admissions process. Legislator Ip Kin-yuen, who represents the education sector, said any arrangements should not be at the expense of the educational needs of children. He added that the availability of quality school places, along with air quality and high rents, was an area of concern for sustainable development in the city.

Chief executive urged to show caution in race to boost housing supply (By Joyce Ng) Leung is urged not to sacrifice community facilities or quality urban living - Stanley Wong Yuen-fai says the Town Planning Board serves as a gatekeeper against excessive urban building density. Chief Executive Leung Chun-ying has been warned not to sacrifice quality urban living and community facilities in his desperate hunt for housing land. The message was spelled out by influential figures in the wake of his policy address, which put housing at the top of his administration's agenda. One of the short-term measures to increase land supply involves the rezoning of at least 36 "government, institution or community" sites into residential use. The sites were originally for schools, community halls, welfare or recreational buildings. But Donald Choi Wun-hing, managing director of Nan Fung Development, said: "A blind, expeditious, short-term fix of turning sites with other land uses into residential use regardless of other needs is dangerous. A blind, expeditious, short-term fix of turning sites with other land uses into residential use regardless of other needs is dangerous - "Demand for better air ventilation, humane urban planning and sustainable development must not relent just to build more homes." His concern was shared by Stanley Wong Yuen-fai, vice-chairman of the Town Planning Board, and Institute of Planners president Peter Cookson Smith. Wong said his board would be scrutinising the applications to rezone the sites in the coming months. But he said: "The board is not a rubber stamp and will serve as a gatekeeper against excessive urban building density." He said the board had turned down a rezoning proposal in Ma On Shan recently. Similarly, Cookson Smith said he had doubts about raising the plot ratio in urban areas and about lifting building restrictions in Mid-levels and Pok Fu Lam. He said the government should co-ordinate land use in the New Territories, where large-scale but scattered land acquisition by developers had made proper planning difficult. The three were among six influential figures invited to voice their views on the housing measures in Leung's policy speech in the latest SCMP Debate. They agreed most of the other housing and land measures in the policy address were on the right track - noting it would take a few years before the effects were felt. But they were divided over last year's "Hong Kong property for Hong Kong residents" initiative, requiring private developers to sell the flats on new sites to permanent residents only. While others regard the policy as damaging protectionism, Lawrence Poon Wing-cheung, of the Institute of Surveyors, Peter Pun Kwok-shing, former director of planning, and Shih Wing-ching, founder of Centaline Property, showed support. Poon said the policy should apply only to land suitable for small to medium-sized flats. But Shih said it should also cover the resale of the homes and give priority to permanent residents who are first-time buyers. He recommended that half of new sites should be set aside for this purpose. "If the government really thinks people's housing needs are its top priority, the reduction in land revenue should not be seen as a problem," Shih said.

Media and lawmakers have no excuse for indulging fantasies of Lew (By Mike Rowse) Mike Rowse says the chief executive was right to keep away from Lew - Chief Executive Leung Chun-ying was right not to make Lew Mon-hung a member of the Executive Council. Chief Executive Leung Chun-ying has made hundreds of decisions over the past seven months, some good, some bad and some indifferent. No doubt he will make many thousands more. But there is already a strong candidate for the best decision of his time in the top slot, and that is his resolve not to make Lew Mon-hung a member of the Executive Council. Lew - whose Chinese nickname is "Dream Bear" - is the person who attended a high-profile dinner together with a core member of Leung's team, Fanny Law Fan Chiu-fun, and an alleged local triad member in the middle of the chief executive election campaign. The sight of a former chief of the Independent Commission Against Corruption dining with a top gangster certainly grabbed the headlines. No doubt it was out of gratitude for helping to generate all this favourable publicity that, according to Lew, candidate Leung promised him an Exco seat if he won. Following his arrest by the ICAC this year in connection with corruption allegations involving his listed company Pearl Oriental Oil, Lew allegedly appealed to Leung to intervene. When Leung made no response, Lew went public with the Exco promise and also made other allegations in an interview with a local magazine, iSun Affairs. For example, he claimed Leung's campaign manager Barry Cheung Chun-yuen had confessed to him that the three professionals who "cleared" Leung's house on The Peak of having unauthorised building works did not exist. To call Lew a loose cannon would be very unfair - to cannons. Notwithstanding the sheer improbability of much of this, and in some cases plausible evidence to the contrary - Cheung, for example, pointed out that two of the three had been publicly named - newsrooms throughout Hong Kong decided that these ravings were the top item of the day. Some of our legislators quickly joined in the circus and proposed special powers be invoked to investigate these matters. There is a famous character in American literature called Walter Mitty. According to the Wikipedia entry relating to this James Thurber creation, he is a person with a vivid fantasy life, an "ordinary person who indulges in fantastic daydreams of personal triumphs". The same entry goes on to say, "In the brief snatches of reality that punctuate (his) fantasies, the audience meets well-meaning but insensitive strangers who inadvertently rob (him) of some of his remaining dignity". Does this remind you of any of the parties involved in our own drama? As he surveys the train wreck of his public life - Lew has now lost his position on the Chinese People's Political Consultative Conference, and the ICAC case rolls on - presumably the dream is now being replaced by a rather dispiriting reality. The most striking aspect of the whole affair is the eagerness with which some in the community are willing to use any stick to beat the chief executive. The one-sidedness of much of the media coverage, the suspension of critical faculties by otherwise intelligent people; is this the level to which our political life has stooped? As another columnist for this paper has pointed out, if the supposed deal on an Exco seat were true, then Lew himself would have committed a criminal offence. No doubt he will be taking some legal advice on this before his next interview with our anti-corruption agency. But when all is said and done, we should not think too badly of Lew. In his own mind, no doubt he genuinely believed he was in line for high office. I am told that up to now, there has been no equivalent in Chinese folklore of a Walter Mitty-like character. Well, now, there is. Mike Rowse is the search director of Stanton Chase International and an adjunct professor at the Chinese University of Hong Kong. mike@rowse.com.hk 

Hong Kong orphans subjected to racism in Britain: report (By Stuart Lau) Difficulties of girls taken away in 1960s by adoptive parents are revealed, with many complaining of prejudice and alienation - Commuters walk across London Bridge, as Tower Bridge is seen in the background in the City of London on January 25, 2013. Social welfare sector lawmaker Peter Cheung Kwok-che calls on the adoption service providers to take a more forward-looking approach when communicating with would-be parents. Hong Kong orphans taken away by their adoptive British parents in the 1960s experienced racism, prejudice and alienation, according to a UK report. The findings have raised concerns about whether local organisations arranging interracial adoptions place enough emphasis on preliminary guidance for interested parents. It has also led to calls for Britain to review its adoption reform proposals and consider the long-term impact on children adopted by parents of a different race. The report by the British Association for Adoption and Fostering (BAAF) was published in The Observer newspaper on Sunday. The 72 Hong Kong-origin respondents were among more than 100 girls sent to mainly white families during the 1960s. They said common experiences included "varying levels of racism, prejudice and feelings of belonging and difference within their adoptive families and wider communities". Fifty-four per cent said they felt "uncomfortable" hearing remarks that they looked different from their adoptive family and three-quarters admitted they wanted to look less Chinese. For a minority, the report said, "race-based bullying" and discrimination "had a substantial negative impact on their well-being". The BAAF added: "For some women … separation from their birth family and being Chinese in the UK has proved to be difficult." Race-based bullying and discrimination had a substantial negative impact on their well-being - Figures from the Social Welfare Department show there were 26 overseas applications for adopting a Hong Kong child pending by the end of last year. There were also 191 local applications and 19 "private" applications from people such as the children's relatives. A total of 110 children were available for adoption at the end of December. None of them was described as "normal and healthy" and 71 were disabled. Currently, the department accredits three non-governmental organisations - International Social Service Hong Kong Branch, Mother's Choice and Po Leung Kuk - with arranging inter-country adoptions. Neither the department nor any of the service providers were available for comment on Sunday. Social welfare sector lawmaker Peter Cheung Kwok-che, of the Labour Party, called on the groups to adopt a more forward-looking approach when communicating with would-be parents. He said: "In the second interview of the screening, for instance, parents should be reminded, at a later stage, to prepare their children against future discrimination." But he added it would not be appropriate for follow-up evaluations to be carried out on the adoptive families. The department says on its website its priority is to place children with families "of the same cultural or ethnic background". It adds: "Inter-country adoption should only be [for those] in need of a permanent adoption placement, but where no suitable local homes are available to them." It said this usually applies to older children or those with special needs.

 China*:  Feb 6 2013

Going 'green' proves lucrative for farmers (By Xie Yu in Shanghai) A tourist picking mulberries in an orchard on Chongming island, Shanghai. Chongming, the biggest offshore island within Shanghai and also the least industrialized region within the city limits, is actively promoting its organic agricultural products. Organic produce cultivates a healthy profit margin, say producers on Shanghai island - Zhao Fenna, a farmer in her 50s, is doing a roaring trade in the market despite selling vegetables and other agricultural produce that are smaller, more expensive and less pristine than those of her rivals. "That's because I am selling 'green', 'ecological' products from Chongming," she said. Chongming county, the biggest offshore island and also the least industrialized region within the city limits of Shanghai, actively promotes its organic agricultural products. "It turns out that our food, including cauliflowers, asparagus and organic rice, is highly popular in the market. Chongming has become the biggest vegetable source for Shanghai," said Zhao Qi, county head of Chongming. Chongming white hyacinth beans, asparagus, crab field rice, sweet sorgo, sweet and crispy taro, gold melons, yams, goat meat and crabs also sell well in the market. There are 175 outlets all over the city in which we can sell agricultural products grown on Chongming, Zhao said. The number will climb to 500 to 700 in three to five years. In an era when food scandals strike from time to time, the business of producing safe food is full of opportunity. "I expanded our production volume last year but now we can no longer meet the demand," said Song Yongjiu, manager of Qimao farmers' cooperative on Chongming island, which specializes in growing 'ecological' rice crops. It is called 'ecological' because we use less pesticide and less fertilizer. Our formula was designed by professors at agriculture institutions, he said. This cooperative produced more than 2,000 tons of rice last year. It sells at 8 yuan ($1.3) a kilogram, double that of ordinary rice. Song said growing "pure organic" rice crops, which require no pesticides or chemical fertilizers, would be too costly for him. "It is very hard to avoid plant diseases or pests. It is even harder to make money if you add in the expense of renting the land," he said. But Song said he is committed to working with the professors to discover how to use as few chemicals as possible while at the same time achieving a high output. "It is important to find the balance because consumers nowadays attach great importance to the source of food," he said. Another specialized cooperative, Jianlu (which literally means "healthy and green"), also based in Chongming, produces 15,000 tons of high-quality "green" cauliflowers and 1,000 tons of asparagus annually, said its manager Zhao Shuyuan. It makes an annual profit of 10 million yuan by selling the products to the domestic market and exporting to South Korea and Southeast Asia. Compared with farmers' cooperatives such as Qimao and Jianlu, organic farms such as Tony's Farm run an even more lucrative business. It charges 9,980 yuan for an annual membership card, which is worth half a week's allocation of fresh, organic vegetables. The company has rented a plot of 108 hectares in Chongming since late 2011 and began cultivating the soil and improving the water quality for a total investment of 250 million yuan. Zhang Tonggui, founder of Tony's Farm, said revenue in Shanghai is expected to exceed 100 million yuan. His target is to bring the revenue up to 1 billion within five years. Investors have been increasing input into the agriculture sector in recent years, especially in the high-end organic food production and deep-processing industries. A report released by ChinaVenture Group showed the agriculture industry has become increasingly popular among investment institutions since 2010. A total of $887 million flooded into 22 venture capital and private equity funds in the last quarter of that year. During the first three quarters of 2012, a total investment of $214 million poured into the agriculture sector from 37 PE/VC funds. According to statistics released by Zhejiang Provincial Administration for Industry and Commerce, the average annual amount of money invested in agriculture by Zhejiang businessmen has exceeded 10 billion yuan over the past five years. The total amount reached 20 billion yuan last year. But, on the other hand, questions have been constantly raised about whether China's "organic food" claims are trustworthy and how farmers can avoid polluted soil, air and water. "There are at least 30 test bodies in China these days that are legally permitted to release certificates for 'organic food'. I am afraid some certifications we saw on the market are actually paid for with cash," said Cheng Cunwang, chairman of Tianyuan Zhengguo Bio-agriculture, an organization that promotes community-supported agriculture in China. China's first standards for organic food were issued by the nation's environmental protection authority. But the Ministry of Agriculture and the General Administration of Quality Supervision, Inspection and Quarantine later also drew up standards for organic food. "It is questionable how many of the organic certificates are reliable these days," he said. Cheng himself is promoting community-supported agriculture in several cities across the country. Before each planting season, community members sign a contract with farmers, sharing the benefits and risks with them and paying in advance for the produce of that season. He said CSA fosters closer ties between community members and farmers. As a result, members' confidence in the food is based more on their understanding of the farm rather than certificates. The Ministry of Agriculture revealed agriculture was the country's biggest water polluter as early as 2010, based on a two-year study. Fertilizers and pesticides have played an important role in enhancing productivity but, in certain areas, improper use has had a grave impact on the environment, the study said. "The point is that polluted water and a polluted environment make the crops harmful to health. It is necessary and urgent to encourage any attempts to change traditional farming methods through an emphasis on green agriculture," Cheng said.

Vowing to be different with the nuptials (By Tang Zhihao in Shanghai) A groom helping his bride to finish her makeup before their wedding ceremony in Zhengzhou, the capital of Central China's Henan province. Younger generation seeks to enjoy modern style of marriage ceremony - Wang Xiaoqiang, a 26-year-old white collar worker in Shanghai, doesn't really care that the Year of the Snake 2013 is not regarded as a propitious year for weddings. "I was told Lunar 2013 is not a good year to get married but that is something believed by elderly people," said Wang. According to the Chinese Lunar Calendar, there will be no li chun (the beginning of spring, one of 21 four-solar terms) during Lunar 2013. Some Chinese media have quoted Chinese experts as saying that it is "feudal superstition" to say Lunar 2013 will be "a widow year", which means women who get married this year will suffer bad luck. The reality is the young generation do not take the traditional belief seriously. Experts say there will be no significant effect on wedding-related commerce in 2013. Wang is busy with matters such as booking pre-wedding photos and a video and looking for a place to hold his wedding banquet for his nuptials in October. "Many people rushed to tie the knot on Jan 4, 2013, because they believe they will love each other forever if they get married on that day. But news reports said four couples who got married on that day have already divorced. How do you explain that? That day is not in the Year of the Snake," Wang said with a big smile. The pronunciation of 1314 (Jan 4, 2013) is similar to yi sheng yi shi (love you for a lifetime), making it one of the most romantic days on which to wed. There were 7,300 weddings in Shanghai on that day. Wang's view is shared by He Lina, secretary-general of the Shanghai Wedding Celebration Association. "Many people have asked my opinion about the so-called "widow year" and the possible effects on the wedding industry. What I want to say is it is superstition without any scientific support and there will be no significant impact on the wedding industry," she said. Looking around China, it seems the wedding-related business is not being affected by the "widow year". Chinese media have already reported that in Shenyang, the capital of Northeast China's Liaoning province, and Hefei, capital of East China's Anhui province, wedding banquets to be held during this year's May Day Holiday and the National Day Holiday in October are almost fully booked. She admitted that there will be fewer people getting married in 2013. However, she said it was not caused by the "widow year". According to He, there will be 100,000 people holding wedding ceremonies in Shanghai in 2013, compared with 120,000 in 2012. "Many people born during the baby boom of the 1980s have already got married so there will be fewer people getting married in 2013," she added.

"Journey to the West: Conquering the Demons" premieres in Beijing - Director Stephen Chow (C) and leading casts attend the premiere of the movie "Journey to the West: Conquering the Demons" in Beijing, capital of China, Feb. 3, 2013. The movie is expected to hit the screen on Feb. 10, 2013 in Chinese mainland. 

Ministry acts on dairy safety (By ZHENG JINRAN) China's food safety watchdog plans to introduce tougher regulations on the import and export of dairy products, following a series of scandals. Any imported dairy product that fails to meet safety, health and environmental standards is likely to be destroyed within three months, or returned to its country of origin, according to a regulation released by the General Administration of Quality Supervision, Inspection and Quarantine on Friday. The Supervision and Management Regulation on the Inspection and Quarantine of Imported and Exported Dairy Products will come into effect on May 1. Wang Dingmian, the former vice-chairman of the Guangdong Dairy Industry Association, welcomed the move and said that stricter supervision could help protect customer safety, and force manufacturers to pay more attention to the country's existing nutritional standards. "Standards do need to be improved, otherwise the effects will be limited," Wang said. Zhang Silai, a former head of pediatrics at Beijing Hospital of Integrated Traditional and Western Medicine, agreed, adding that dicyandiamide, or DCD, in contaminated milk powder from New Zealand, was an example of one substance that had escaped inclusion in the current regulations. "It's an element that should not be allowed in milk, yet it's not on the forbidden list in China," she said. "We don't yet know what harm that element could have." DCD is used to improve water quality on some farms by reducing nitrate levels, as well as cutting greenhouse gas emissions. In September, traces of the chemical were discovered in products being exported from New Zealand. The issue has received huge attention in China after it was exposed a week ago. The New Zealand Ministry for Primary Industries has since insisted there is no food safety risk — however, many Chinese parents remain nervous of using imported products from New Zealand, especially after hearing that DCD has been linked to melamine, which was the chemical at the center of the contaminated baby formula scandal in 2008 in China. Both Wang and Zhang said they believed there was no need for parents to worry about milk powder from New Zealand, because of the tiny quantities of the substance involved. A person weighing 60 kg would have to drink more than 130 liters of the milk to be over the European Commission's acceptable daily intake of DCD, and "considerably" more to have adverse health effects, said Wayne McNee, director-general of New Zealand's Ministry for Primary Industries, last week. China has become the world's largest baby formula milk powder market, because many Chinese parents have had low confidence in its own domestic brands since 2008. About 80 percent of imported dairy products were from New Zealand in 2012, Wang added. Chen Zhuolin, the mother of a 15-month-old girl, said: "I'll never allow my baby girl to have domestic milk powder, even though I pay a lot more for imported baby formula." She said that she was going to Hong Kong every month to buy baby formula. Some regions, including Hong Kong, have just issued amount restrictions on purchasing milk powder, as a result of many parents doing the same.

Hong Kong*:  Feb 5 2013

Concern over lack of English language skills among Hong Kong students (By Linda Yeung) While Hong Kong has stressed bilingualism as a key goal, the city falls far behind Singapore in English literacy, with no remedy in sight - King Ling pupils use English in some classes. Every Saturday afternoon Cindy Tse takes her eight-year-old son to a private class near his school, where he joins other children for two hours under the guidance of an expatriate teacher. "We want to increase his chances of listening and talking in English, as he goes to a Chinese-medium school," says the doting mother. Many others like her spare no efforts in brushing up their children's language skills - and not just in English. Demand for Putonghua teachers is soaring as China's clout in the global economy increases. Since 2009, the Education Bureau has delivered HK$10 million under a special grant to 47 schools to promote six languages other than Chinese and English - Urdu, Hindi, German, Japanese, French and Spanish. About 15,000 people study French in Hong Kong in primary, secondary and tertiary education classes, with private tutors, at private centres or at the Alliance Francaise - a global institute promoting French language and culture. The French consul said last year that French had become Hong Kong's fourth language. But while it has long been a key goal of the government to foster bilingualism in Hong Kong, the language skills of the city's young people have become a cause of significant concern. Hong Kong compares favourably with other countries in the region in terms of language skills, but it trails far behind its key rival, Singapore. Singapore has a much higher proportion of people who are literate in English, according to Amy Tsui Bik-may, chair professor of language and education at the University of Hong Kong. As its economy grew in recent decades, the government of the Lion City made a conscious effort to popularise the use of English. In 1980, the proportion of Singaporean families who used English as their main language in the home was just 8 per cent. That figure had risen to 23 per cent in 2000 and stood at 48 per cent in 2010. In comparison, according to last year's census, the proportion of Hong Kong's population which use English as the main language at home is just 3.5 per cent. About 45 per cent of Hongkongers used English sometimes while speaking Cantonese as their main language, Tsui said. And it isn't just the proportion of people speaking more than one language; language standards have also become a cause for concern, especially since the introduction of the government's mother-tongue teaching policy in 1997. The policy saw all but a handful of secondary schools required to switch to teaching all classes in Cantonese, rather than English, and is cited as having encouraged more local parents to seek places for their children at international schools. The government changed direction in 2009, when it announced that from the 2010-11 academic year, schools would be allowed to teach a class in English as long as 85 per cent of students in a class are in the top 40 per cent of their age group academically. It ended the strict segregation of schools into Chinese and English streams and allowed Chinese-medium schools to set aside a quarter of their lesson time for "extended learning activities conducted in English". But the changes are not sufficient to remedy the declining standard of English. Jao Ming, chairman of the Eastern District Parent-Teacher Association, echoes a common concern about the lack of a stimulating linguistic environment in the territory. "Learning in a person's native language is a good idea, but you need support measures in society to ensure that students are well exposed to English outside school; there aren't such measures." His daughter, who learned in Chinese, struggled to cope when studying at university, where lessons are often delivered in the lingua franca. "She often studied until very late at night to catch up. She had to make double the effort in her first year and her results in that year were not good either." The issue of medium of instruction has long been divisive, a subject of debate among those who favour mother-tongue teaching on the grounds that it will help students learn and others who insist on the value of learning in English in a globalised world. Anita Poon Yuk-kang, associate professor in Baptist University's department of education studies, is a staunch advocate of using English as the medium of instruction. She sees the idea of "fine tuning" the mother-tongue teaching policy as being inadequate for achieving effective bilingual education. Hong Kong has a long way to go, she feels, in raising the level of proficiency in both English and Chinese. She calls for the creation of a holistic curriculum based on studies of the common threads in teaching the two languages. "I don't see bilingual education coming yet. It requires long-term planning and funding from the government, but that is not happening. As an international city, we have no choice but to use English as the medium of instruction," she says. James Lam Yat-fung, chairman of the Subsidised Secondary Schools Council, agrees that Hong Kong is not a bilingual society, at least on the surface. "It lags far behind Singapore," he said. "We have more Chinese than English signs here. There isn't the linguistic environment here. Employers in the commercial sector and universities have worries about students' English standards." There isn't the linguistic environment here. Employers in the commercial sector and universities have worries about students' English standards - More than 15 years after the handover, students appear to be more comfortable learning in Chinese. The typical student, Lam says, will want lessons to be taught in Chinese even when they are relying on an English-language textbook. "They don't want to translate ideas into English, or vice versa," he explains. In the past three years, about 70 per cent of Form Three students achieved basic competency in English in territory-wide assessments carried out by the Hong Kong Examinations and Assessment Authority. But among the problems identified was students' lack of the topic-specific vocabulary they needed to help them express their ideas. There were wide variations in the standards of the bottom 30 per cent who failed to meet the benchmark, Lam added. In the Chinese-medium school where he works, at which English is used to teach maths and science subjects in some classes in junior forms, the changes to the policy on medium of instruction have helped increase students' confidence about learning in English. Still, in last year's maiden Hong Kong Diploma of Secondary Education examination, only 0.7 per cent of candidates reached the highest level, 5**, in English; only 0.8 per cent achieved it in Chinese. A report issued by the University Grants Committee in 2010 on aspirations for the higher education sector urged institutions to make renewed efforts to ensure and enhance students' bilingual (Chinese and English) and trilingual (Cantonese, Putonghua and English) abilities. Grasping two languages is never easy, particularly in a predominantly Chinese society like Hong Kong. Lam believes there must be more research into how best to enhance students' acquisition of both languages. He echoes Tsui's concern about the quality of teaching. Lack of exposure to a different language environment has undermined the standards of serving English teachers and those under training, he says. "Some are not good at communicating in the language. To attract more talent to the profession, the government should review the entry-level salary for potential teachers with English-related qualifications from other fields. It is a matter of whether it wants Hong Kong to be an open or inward looking place." For now, the burden is perhaps on parents to expose their children to more English - on top of Putonghua. But they'd better make sure their children are building the right foundation to use the language, rather than merely getting prepared for examinations. "There is so much drilling with exam papers in class due to the exam-oriented system in Hong Kong, something that seems hard to change," said Jao.

Antony Leung warns rising interest rates could derail flat supply boost (By Joyce Ng) Rise in interest rates once US economy recovers could sap demand for extra homes CY plans, as happened with 1997 target, Antony Leung says - Antony Leung Kam-chung. Former financial secretary Antony Leung Kam-chung says the government's plan to boost the housing supply could flood the market with more flats than it can absorb if interest rates rise owing to a rally in the US economy. Leung warned of a repeat of the failed "85,000 flats a year" target announced by then chief executive Tung Chee-hwa in 1997. By the time the new flats were ready, he said, the market would have shrunk due to external economic factors, leaving it unable to absorb all the flats. Leung, a member of the Executive Council from 1997 who was named financial secretary in 2001, said the new administration was right to address the city's housing problem by increasing supply. But he was worried about complications arising from the US economy. Asked if he thought the market slump following the announcement of the government's target of 85,000 flat completions a year would repeat itself, Leung said: "It is possible." He added that a rise in real interest rates led to the 1997 target not being met. "Our inflation rate follows the mainland market, but our interest rate is tied to the US rate because of the linked exchange rate. We've had quite a seriously negative real interest rate for the past few years," he said. "When this interest-rate environment changes, the property market will turn downward," Leung, a former banker who now works for investment firm Blackstone, said. The target set in 1997 was affected by external factors, he said. The administration quietly abandoned the target the following year as the economic impact of the East Asian financial crisis was felt, but Tung only publicly confirmed in 2000 that it had been dropped two years earlier. Although the target was achieved in 2000 - with half the flats produced for private or subsidised sale the rest for public rental - by then the market had slumped. The Hong Kong Association of Banks sounded a similar warning to Leung's last month, saying higher interest rates would mean an increase in monthly repayments for mortgage-holders. The US Federal Reserve expects to keep interest rates at near zero until the unemployment rate drops to 6.5 per cent, which it forecasts to happen by 2015. But many economists fear the rate may change earlier. Meanwhile, the Long Term Housing Strategy Committee met yesterday to discuss whether there should be a minimum income level for applicants for subsidised flats under the Home Ownership Scheme flats, said Secretary for Transport and Housing Professor Anthony Cheung Bing-leung. The scheme has only a maximum monthly income limit of HK$40,000. "It sounds strange that some applicants say they have no income. If they don't, how will they pay the mortgage?" said Cheung, referring to Greenview Villa, a subsidised housing project that drew almost 60,000 applicants last month. The committee will make a decision later.

ICAC 'used' to taint political reputations, says former No 2 (By Simpson Cheung and Niall Fraser) People with 'motives' may seek to damage the reputations of high-profile foes by filing graft complaints, says agency's former No 2 - Tony Kwok Man-wai. People who make high-profile corruption complaints are trying to use the ICAC to tarnish the reputations of political opponents, according to a former No 2 in the anti-graft agency. Tony Kwok Man-wai says people with "political motives" may see a complaint - however lacking in substance - as an easy way to inflict political and personal damage. A senior legal source agreed that people were "politicising" the process and called on the ICAC to decide sooner whether complaints had substance. Kwok, a former Independent Commission Against Corruption deputy commissioner, backed chief executive Leung Chun-ying during his election campaign. His comments come as ICAC investigations into four of Hong Kong's most senior officials - past and present - continue and as corruption trials await two other former senior officials. "When the ICAC tell them [the complainants] they will start to investigate, they tell the press about it in a high-profile way as if the person under investigation had been convicted," said Kwok, who retired from the ICAC in 2002 after 33 years of service. He said the anti-graft agency pursued cases even if evidence was weak and in many cases the opening of an investigation was a legal requirement and largely procedural. Critics say Kwok's comments could detract from the ICAC's legal obligation to take seriously all complaints - especially against the rich and powerful - wherever they come from. Separate investigations into corruption allegations, some more serious than others, are under way into Leung, his predecessor Donald Tsang Yam-kuen and Henry Tang Ying-yen, who stood against Leung in last year's race for the top job. Former government No2 Rafael Hui Si-yan is set to appear in the city's biggest corruption trial later this year alongside billionaire property tycoon brothers Thomas Kwok Ping-kwong, 61, and Raymond Kwok Ping-luen, 59 - the co-chairmen of Sun Hung Kai Properties. Last July, then-development minister Mak Chai-kwong and assistant highways director Tsang Kin-man were arrested with their wives. They are suspected of leasing their flats to each other in the 1980s, allegedly cheating the government of housing allowances. The controversy forced Mak to step down just days after taking office. Both men were charged in October and await trial. And executive councillor Franklin Lam Fan-keung, a major real estate investor, is being investigated over the sale of two flats weeks before the government introduced new curbs on the property market in October. Section 30 of the Prevention of Bribery Ordinance makes it an offence to disclose the identity of a person under investigation. But the legal source pointed out that trying to take action under that provision could be a minefield. "There's no doubt the process is becoming politicised but can you imagine the outcry if action was taken ... against someone who had told the media about a complaint they had made against a politically powerful figure? The media would have a field day," the source said. "Perhaps the ICAC needs to close things down quicker." But League of Social Democrats vice-chairman Avery Ng Man-yuen, who made the complaints against Tsang, Lam and Leung, said all the complaints had grounds. "All the cases have reasonable doubts ... that the officials had done something unlawful," he said. Barrister and former ICAC investigator Stephen Char Sik-ngor said the commission had always encouraged people to make complaints and the public would be able to judge if they were legitimate or not. James To Kung-sun, a Democratic Party lawmaker and vice-chairman of the Legislative Council's security panel, said the fact there were so many high-profile cases indicated corruption had become more serious. "Some cases like the Rafael Hui case have been taken to court. We cannot say the situation is not serious," he said. Despite suffering staff shortages, the ICAC is investigating more high-profile cases at once than at any time in its near 40-year history. Last year, former ICAC commissioner Timothy Tong Hin-ming had his term extended for the second time - until June 30. He was succeeded by former director of immigration Simon Peh Yun-lu. Former head of operations Daniel Li Ming-chak also had his term extended twice. It was widely expected that director of operations Rebecca Li Bo-lan would succeed Daniel Li. But instead the ICAC drafted in retired director of operations Ryan Wong Sai-chiu head of operations. Legco recently approved funding for the ICAC to hire an extra assistant director of operations to help handle the huge Sun Hung Kai investigation.

 China*:  Feb 5 2013

Daimler gets 12% of BAIC Motor - A row of new Mercedes-Benz cars are seen on the assembly line in the central Hungarian town of Kecskemet. German luxury automaker Daimler AG yesterday said it will pay 640 million euros (US$875 million) for 12 percent of BAIC Motor, a unit of Beijing Automotive Industries Corp, with which it makes Mercedes-Benz cars in China - the world's biggest auto market. Daimler said the investment was to prepare for a possible initial public stock offering.

Self-developed nuclear reactor ready for export (By WEI TIAN) The construction site of Sanmen Nuclear Power Plant in Zhejiang province, which uses the AP1000 reactor by Westinghouse Electric Co. The design of CAP1400 is based on the AP1000 reactor made by Westinghouse Electric Co. The AP1000 is known for its third-generation nuclear technology, with higher unit efficiency than older models and an optimized layout. China owns the intellectual property rights for the CAP1400, making it possible to export the reactor. "The technology is under evaluation by the National Energy Bureau, and a demonstration project can be built by the end of 2013 at the earliest," said Gu Jun, president of State Nuclear Power, during a press conference in Beijing on Friday. "Exploration of the global market for the CAP1400 will start in 2013," Gu added. Ma Lu, vice-president of State Nuclear Power, said conditions would be mature for the technology to be exported once it gets the green light from authorities. As market exploration will be done in cooperation with Westinghouse, the company can take the lead in the effort as it has established its advantage in the industrial chain. "But in some markets, such as South Africa, we hope that State Nuclear Power can take the initiative and promote the CAP1400," Ma said. Jack Allen, president of Westinghouse Asia, said that a continuous partnership with State Nuclear Power is an important step to achieve mutual success. On Tuesday, the top of the containment vessel was installed on the world's first AP1000 unit, unit 1 of the Sanmen Nuclear Power Plant in Zhejiang, marking the end of general construction works of the unit's nuclear island. The unit is expected to be the world's first AP1000 reactor to begin operations, as soon as in 2014. All four AP1000 units in China are scheduled to be operational by 2016. The construction of the units — two at Sanmen and two at Haiyang in Shandong province — was authorized by Westinghouse and its partner, the Shaw Group, in September 2007.

Hong Kong*:  Feb 4 2013

Blood bank an unwitting victim of 3+3+4 education reform: Red Cross (By Amy Nip) Blood donors at the Red Cross Blood Transfusion Service headquarters in Jordan - The new 3+3+4 education system is taking a toll on an unlikely victim: the Red Cross says its blood bank is suffering from a drop in donations collected from secondary schools. University students generally donated blood less often than secondary school pupils did, Dr Lee Cheuk-kwong, a Red Cross Blood Transfusion Service consultant, said yesterday. "Among undergraduate students eligible to give blood, less than 10 per cent of them actually make donations," Lee said. "But among secondary school pupils, the rate is 15 to 16 per cent." Lee said the amount of blood collected by mobile collection teams at schools decreased last year. He attributed the drop in donations to the 3+3+4 reforms to the education system, which started in the 2009-10 academic year. That year, secondary school education was cut from seven to six years and standard university degree courses were lengthened from three to four years. That was the main reason behind the 14.6 per cent decline in the overall number of bags of blood collected by the mobile teams throughout the city, Lee said. The teams collected fewer than 59,000 bags of blood last year, compared with almost 69,000 in 2011. The number of first-time donors also dropped 15.4 per cent to about 23,500 people, from almost 28,000 in 2011. Lee said that although the society had made more visits to universities, it did not improve the situation. "In secondary schools, we arrange blood donation sessions class by class," he said. "It's different in the universities, as students have different electives." Lee said about 60 per cent of all red blood cells were used on patients aged 60 and above, as many of them were chronic patients in need of surgery for deteriorating organs and more prone to developing cancer. The ageing population would be a big challenge for the Red Cross as demand for blood was bound to go up, he said. "One out of four people [in Hong Kong] will be an elderly person," Lee said. "It means the number of eligible blood donors [aged 16 to 65] will drop." It has been estimated that the city will need an additional 8,000 bags of blood this year, equivalent to the amount of blood collected in half a year at one of the Red Cross' eight blood donation centres. In addition to encouraging students to volunteer for the first time, the society is also calling on those who have done so in the past to make blood donation a regular activity. "They can mark on the calendar certain dates for donating blood," Lee said. This would help ensure a stable supply at the blood bank and prevent a repeat of the situation earlier this month when the bank had to issue urgent appeals for donations as its stock fell to just five days' supply, he said. Lee appealed for people to continue visiting blood donation centres to give blood during the Lunar New Year.

Leung defends tough measures to stop cross-border traders (By Jennifer Ngo) Chief Executive Leung Chun-ying on Saturday defended new government measures to limit the amount of infant milk formula allowed to leave Hong Kong – saying they were harsh but necessary. “I know some of the measures are what people would call ‘ruthless’, but we believe they are needed to achieve our objective [of ensuring Hong Kong babies get what they need],” Leung said. On Friday, the government announced the new plans aimed at curbing mainland traders in infant milk powder, which has led to shortages in the city. Among them is the two can or 1.8kg limit, imposed under a legislative amendment expected to take effect this month. Those found guilty of breaking the rule could face seven years in jail or be fined up to HK$2 million. Leung was asked whether similar measures might be applied to other goods facing shortages due to parallel trading. He said the government “would monitor the situation closely and do what is necessary to ensure Hong Kongers’ needs were met first”. Police Commissioner Andy Tsang Wai-hung said police would work closely with other government departments to control parallel traders. Tsang told local radio that the milk formula shortage was related to parallel trading. Under the new measures, mainlanders who repeatedly travel across the border with bulky packages could be blacklisted by the Immigration Department, with their names passed to Shenzhen authorities. Also, the MTR Corporation will tighten the weight limit for passenger luggage from the current 32kg to 23kg from Monday. Meanwhile, a 24-hour government hotline set up on Friday for local parents to order milk formula brands has received over 2,000 inquiries. Around 1,000 of the inquiries were passed on to brand suppliers.

 China*:  Feb 4 2013

Psy teaches Lin Chiling, Huang Bo "Gangnam Style" - South Korean rapper Psy teaches his insanely popular "Gangnam Style" dance to Lin Chiling and Huang Bo at Dragon TV Spring Festival gala in Shanghai.

Folk customs of Chinese Lunar New Year in C China - Chinese people who live in the central China region have formed various traditions to celebrate the Chinese Lunar New Year.

Asian magic to US (By Han Bingbin and Eric Jou) A screen grab from the popular Chinese TV drama Empresses in the Palace. Wysteria Lane, the fictional setting of the US TV series Desperate Housewives, may have some competition from some more ancient surroundings - or at least that's the plan. Recent stirrings in the Chinese TV scene have pointed that the Chinese TV drama The Legend of Zhenhuan, or Empresses in the Palace, may be headed West. But rumors of such a move are right now only that. The Chinese TV drama, with its critical and meticulous display of the intrigue between emperor's concubines in the imperial palace of the Qing Dynasty (1644-1911), was arguably China's best-received and most influential TV drama last year. It gained a record-breaking 10 percent rating at its peak and some 2 billion click-throughs online. After attracting a large audience on the mainland, the drama has unexpectedly become a popular sensation in Taiwan as well. Unusual for any mainland TV production in the past decade, reactions have included an audience rating that tops many star entertainment shows, many talk shows that sing its praises, and continuous social discussions. For Cao Ping, the TV drama's producer, these are all surprises. She said she could finally hold her head high after news that the show has scored high ratings in Malaysia and Singapore, and that it has been sold to Japan. A US production company noticed that it captivated Chinese audiences in the US, Cao said. But she declined to reveal the name of the company. Confident in both the show's cultural value and its movie-like production level, the company purchased the right for broadcasting in all English-speaking regions, Cao said. Cao said the company will re-edit the 76-episode series into a six-part mini-series with one-hour episodes. Due to the possible edits, there may be some loss in the fluidity of the plot, so Cao said the company is considering investing in reshooting various scenes with the original cast. Apart from reshooting, Cao also said that the company will rescore the series, and the dialogue may be dubbed into English. But Zheng Xiaolong, who directed the series, later said they've agreed that subtitles may be a better choice. Although English subtitles are in the DVD version, the US production team is still in the drafting phase of a better translation as well as a detailed editing plan. Both will then be submitted to Zheng for final approval. Though both Zheng and Cao believe it's going to be the first serious instance of a Chinese TV drama exported to the US. Unlike any previously exported Chinese TV dramas that have ended up in Chinese channels, The Legend of Zhenhuan is believed to have a chance to be broadcast via mainstream TV stations. Rumor has it that the show will be broadcast on HBO. However, the cable movie network has said that it is not currently involved with such projects. Zheng confirmed that the show is not yet decided on a TV network. However, TV critics in the US are skeptical that the show will ever air on a major US TV network, particularly during prime time, its regular programming hours. James Poniewozik, TV critic for Time magazine, said adaptations of foreign-language series such as Intriguement on HBO and Homeland on Showtime, both adaptations of Israeli series, have become more common in the US. But he doesn't see US TV taking foreign productions and running the original in subtitled form in prime time or during prominent programming. "There is just a general feeling that has some substantiation in the commercial film market that the US audience is just not that receptive to reading subtitles," he said. "I don't know what would get lost in cultural translations. I think that inevitably, if you're adapting something from one culture and setting in another culture, you're going to lose some subtleties and cultural references." Using Hamlet as an example, Poniewozik said that productions of William Shakespeare's classic play can be made in a Chinese dynasty rather than the original setting of Denmark, and still express similar themes. But despite the similarities, some elements would get lost in translation. "Cultural translation is one factor, but the language is a bigger factor," he said. 

Hong Kong*:  Feb 3 2013

Young Hong Kong blood among new CPPCC appointees (By Tony Cheung) Retiring veterans make way for younger local delegates to nation's top consultative body - The latest appointments to the nation's top consultative body mark the rise of a younger generation of advisers to Beijing. A number of prominent veterans have retired, clearing the way for their children or fellow party colleagues to join as new members of the body. The list of new appointees to the Chinese People's Political Consultative Conference (CPPCC) was revealed yesterday after a four-day meeting of its standing committee in Beijing. Among over 2,200 CPPCC members, Hong Kong delegates filled more than 200 of the seats, roughly the same proportion as served in the five-year term that is expiring. Prominent new delegates include Thomas Pang Cheung-wai, secretary-general of the Beijing-friendly Democratic Alliance for the Betterment and Progress of Hong Kong; the president of the Chinese Manufacturers' Association, Irons Sze Wing-wai; and Lau Yip-keung, son of the chairman of the Heung Yee Kuk rural affairs body, Lau Wong-fat. Their appointments coincided with the departures of Lau and DAB veteran Jasper Tsang Yok-sing; both served as Beijing advisers for about two decades. The new delegates will begin their five-year terms in March. Pang, a member of Shenzhen's CPPCC, said he hoped his new post would help him reflect Hongkongers' opinions to state leaders. "I have been expressing my views [to municipal authorities] about issues that concern Hong Kong people, for example, our personal safety in Shenzhen," Pang said. "So [as the country's adviser], I will express my views on matters that I could help at the state level." The announcement also confirmed that Henry Tang Ying-yen - Leung Chun-ying's rival in last year's chief executive race - would join as a delegate to the CPPCC, along with a number of high-profile business and community leaders who refused to support Leung in the chief executive race. They include Hospital Authority chairman Anthony Wu Ting-yuk and Peter Lee Ka-kit, son of Henderson Land Development chairman Lee Shau-kee. Both Wu and Lee backed Tang in the nomination process at the start of the chief executive campaign last March. However, Leung's supporters managed to maintain their influence, with the appointment of Leonie Ki Man-fung, an executive director of New World Development who served on Leung's campaign. Another Leung supporter, Vincent Lo Hong-sui, chairman of Shui On Land, was reappointed. Former police commissioner Tang King-shing and Timothy Tong Hin-ming, former commissioner of the Independent Commission Against Corruption, were also appointed. Earlier this week, a number of pan-democrats voiced their worries about their appointment, saying it could affect the neutral public image of the police and the ICAC.

Tennis star Li Na targets new Hong Kong Open next year (By Mathew Scott) Grand slam star pledges to 'fight' to be part of WTA event next year, which will be the first professional tournament in city since 2002 - World No 5 Li Na yesterday threw her support behind Hong Kong when told the city would next year host its own WTA event, breaking a professional tournament drought that dates back a decade. "I will fight for the chance to come [in 2014]," said Li, who will be in town next month for the BNP Paribas Showdown exhibition event. "It depends on my physical condition," added the 30-year-old. "I can't guarantee that I will come [in 2014]. After all there are still some unknown factors." The Hong Kong Open will be staged from September 8 next year, a week after the US Open finishes in New York - a fact that will increase the chances of local fans seeing Li in action. The Hong Kong event has been given "International" status by the Women's Tennis Association, which places it one rung below the organisation's top-level "Premier" events, which in turn sit below the grand slams. The WTA has also scheduled a Premier event for Li's hometown of Wuhan from September 22 next year - just before the China Open in Beijing from September 29. Guangzhou will host an International-level event from September 15. Despite a long and rich history of hosting international tennis events, Hong Kong has been without a formally recognised tournament since the ATP's Hong Kong Open event was held at Victoria Park in 2002. The long-running Hong Kong Tennis Classic exhibition event was last held in 2011 but fell victim to a loss of sponsorship. Tennis-starved fans are, however, being thrown a lifeline on March 4, when the BNP Paribas Showdown pits Li against world No11 Caroline Wozniacki, with the men's action on the day being provided by a clash between grand slam-winning veterans Ivan Lendl and John McEnroe. "It's always fun to play against her - she is a great player," said Li, who holds a head-to-head record over the Dane of three victories to two. "I said to her at the Australian Open in Melbourne, 'Okay, we will fight each other in Hong Kong.' I get along really well with her and her family so I'm looking forward to the event. It should be a lot of fun." Li revealed yesterday she had not picked up a racquet since her loss to world No1 Victoria Azarenka in the Australian Open final in Melbourne last Saturday. Li lost in a three-set thriller that saw the 2011 French Open champion fall heavily and twist her ankle twice. She said she had just been relaxing at her mother's home in Wuhan and would travel to see a doctor in Germany on Monday to fully assess the damage. Li said she remained hopeful she would be fit enough to take part in the Qatar Total Open, which starts in Doha on February 11.

Jackie Chan appointed to Beijing's top advisory body (By Gary Cheung and Ng Kang-chung) Hollywood action star's pro-Beijing stance in recent years may have gained him entry into the mainland's top political advisory body - Action star Jackie Chan, who stirred controversy with his comments on limiting people's right to protest, has been named a Hong Kong delegate to China's top political advisory body. Chinese People's Political Consultative Conference standing committee member Chan Wing-kee, who has seen the proposed list of members who will serve for the next five-year term, said yesterday the Hollywood actor's name was on the list. One of the incumbents, TV actress Liza Wang Ming-chun, was said to have kept her membership, while actor and director Stephen Chow Sing-chi was also recently appointed to the Guangdong chapter of the CPPCC. Political observer Dr Chung Kim-wah, of Polytechnic University, described Chan's appointment - yet to be officially announced - as "another political vase" for decoration's sake. "I don't expect there's anything revolutionary Chan can or will do for Hong Kong in the CPPCC, which is largely a talk shop," said Chung. "But for him, it is very good because he can more strongly secure the China market." Chan's latest movie, CZ12, released in December, reportedly broke China's box office records, earning more than US$130 million in just its first three weeks. The film has a patriotic theme that sees Chan on a quest to steal 12 ancient Chinese zodiac statues taken by Western forces during the 1840s Opium Wars. Chan, 58, has drawn criticism in recent years over his perceived pro-Beijing political stance. "[Chan] knows that his future, and Hong Kong's future, is in China," said cultural critic Perry Lam Pui-li. "If his market were still in Hong Kong, he wouldn't have made those comments." Chan came under fire in December after he told a newspaper that the city's authorities should stipulate what issues people could protest about.

Exhibition on future of design opens at Asia Society Hong Kong Centre (By Charley Lanyon) Fumio Nanjo and Alice Mong - An exhibition at the Asia Society Hong Kong Centre in Admiralty aims to set people thinking about the future of design, its sustainability and what the most cutting-edge designers have to learn from the past. The "Imminent Domain: Designing the Life of Tomorrow" exhibition kicked off on Wednesday night with an opening ceremony officiated by Chief Secretary Carrie Lam Cheng Yuet-ngor, alongside tycoon Ronnie Chan Chi-chung, co-chairman of the Asia Society and chairman of the Asia Society Hong Kong Centre. The exhibition was curated by Fumio Nanjo, director of the Mori Art Museum in Tokyo, who selected 12 of the edgiest local and international designers from a variety of disciplines to present their interpretation of the future of innovation and changing human lifestyles. The exhibition features works from architect William Lim, lighting designer Teddy Lo and interior designer Dylan Kwok, among others. "We are honoured to have 12 of the most extraordinary Hong Kong designers, four globally renowned and at the pinnacle of their success, and the rest on their way to international stardom," said Alice Mong, executive director of the Asia Society Hong Kong Centre, in her opening remarks. "We trust this event will make Hong Kong people proud to call it their own." The exhibition will remain at the centre for two months.

'Long Hair' loses appeal challenging Legco filibuster decision (By Austin Chiu) Lawmaker “Long Hair” Leung Kwok-hung on Friday lost his appeal against a refusal, by the High Court, to hear his judicial challenge against the president of the Legislative Council. Last May legislature chief Tsang Yok-sing decided to halt Leung’s filibuster against a piece of legislation, leading to the lawmaker’s challenge. The panel of three Court of Appeal judges dismissed Leung’s appeal, emphasising the cardinal principles of separation of powers and parliamentary privilege. The panel upheld the earlier ruling that lawmakers have no constitutional right to filibuster. It also upheld a lower court’s order that Leung, of the League of Social Democrats, should pay legal costs to Tsang arising from the original hearing. It further ruled Leung must pay Tsang, and the secretary for justice, costs related to the appeal. Central to the case is Tsang’s decision, on May 17, to invoke for the first time powers in Legco’s rules of procedure to halt a long debate on a legislative bill. The legislation in question was to bar lawmakers who resign from standing in a by-election for six months. In their filibuster, Leung – and lawmakers Wong Yuk-man and Albert Chan Wai-yip – had proposed 1,300 amendments to the election law, dragging the debate out to about 36 hours before Tsang halted it. The bill, which passed on June 1, was introduced to prevent a repetition of a “de facto referendum” on political reform, when five pan-democrat legislators resigned in 2010 only to contest the same seats. Mr Justice Andrew Cheung Kui-nung, Chief Judge of High Court, wrote in his judgment: “First and foremost, under common law, the courts do not interfere with the internal workings of the legislature.” “The legislature has exclusive control over the conduct of its affairs,” he wrote. “The necessary check and balance is achieved not in the courts, but politically.” Cheung, Madam Justice Susan Kwan Shuk-hing and Mr Justice Jeremy Poon Shiu-chor rejected Leung’s claim that his constitutional right to participate in the legislative process was infringed by Tsang’s decision. Cheung wrote that if an individual legislators had the right suggested by Leung, it would open a floodgate of litigation by lawmakers dissatisfied with the rules of Legco’s meetings. “This would have serious impact on the smooth workings of the Legislative Council,” Cheung wrote. Poon wrote: “The application for judicial review was no more than a further but futile attempt by the applicant to delay the legislative process of the bill. Put bluntly, he wanted to pursue something in the court which he had already failed to achieve in the political arena.” The Legco president must have the power to end debates in appropriate circumstances, the appeal court ruled. But Cheung pointed out that this did not mean the president could disregard Legco’s rules of procedure as he liked, because at the end of the day he must be answerable to the electorate.

Limit set on cross-border trading of baby milk formula (By Lai Ying-kit) Health Secretary Dr Ko Wing-man announces measures to combat shortages of baby formula at government headquarters in Admiralty on Friday. The Hong Kong government cracked down on the cross-border trade in baby milk formula on Friday, limiting visitors to taking two tins of milk powder when they leave the city, among other restrictions. The goal is to ensure there is enough baby formula in the stores for local mothers’ needs, after many complained of shortages caused by mainland traders buying in bulk. The new measures also include tighter weight restrictions on luggage on the MTR, tip-offs to Shenzhen customs officers about suspicious travellers, and a milk formula hotline for Hong Kong mothers. Last week the government secured increased supplies from milk formula manufacturers. But on Thursday, Secretary for Food and Health Dr Ko Wing-man said more had to be done because the shortage had not eased. At a press conference on Friday, Ko said: “[Since] the shortage of infant milk formula has much to do with parallel trading … we need to restrict exports.” People crossing the border to the mainland – including visitors and Hong Kong residents – may take no more than 1.8kg of milk formula, or two tins, Ko said. The new measures will require amending the Import and Export Ordinance, which could be completed this month, Ko said. In another move on Friday, the government set up a 24-hour, seven-day-a-week hotline to help Hong Kong mothers make bookings to buy milk formula. The service covers seven major brands used by local mothers, accounting for more than 90 per cent of the market, Ko said. It started operating at 6pm on Friday. In a further measure, Secretary for Security Lai Tung-kwok said Hong Kong would inform Shenzhen customs when officers at border check points spot suspected parallel traders. The mainland side would stop the suspected travellers and inspect their luggage for any smuggled goods, Lai said. Lai and Ko were speaking at the same news conference, also attended by Secretary for Housing and Transport Anthony Cheung Bing-leung. The government will also tighten the weight restriction on passengers’ luggage on the MTR East Rail, which traders use to transport their heavily loaded trolleys to the mainland. From Monday, the maximum weight allowed will be 23kg, down from the current 32kg, Cheung said. Hours before the new measures were announced, cross-border traders were rushing to stockpile milk formula on Friday morning. In Yuen Long and Wong Tai Sin, dozens of people queued outside pharmacies to buy the milk powder, local media reported. Most of them emerged from the stores pushing trolleys piled high with cans of milk powder, TV footage showed. A Hong Kong mother said she visited several shops in Wong Tai Sin on Friday morning but could not find a single can to buy, after all stocks sold out within hours. Many local mothers have complained about the difficulty of finding milk formula in stores because of bulk purchases by mainland tourists and parallel traders. Milk powder from Hong Kong is popular on the mainland, where people have become sceptical about local products following a spate of tainted-milk scandals in recent years.

 China*:  Feb 3 2013

Guangzhou traffic police officer points gun to halt speeding driver (By Peony Lui) A traffic patrol policeman in Guangzhou pointed a gun at a speeding driver. A traffic policeman from Tianhe unit pointed a gun at a speeding driver on Liede Avenue in Guangzhou on Thursday, after other attempts to stop the car failed, Xinhua News reported on Thursday. At 2am, traffic police spotted a red Porsche speeding on Liede Avenue. The driver slammed on his brakes 100 metres before an on-road inspection point, ignored police warnings to stop the car, and, instead, put the car into reverse. A policeman, in an attempt to stop the car, pointed a gun at the driver. The driver stepped out of the car, “smelling of alcohol”, according to the report. He took an alcohol test that showed a result of 71mg/100ml. The driver was convicted of driving under the influence (DUI). He was issued 12 demerit points on his licence and banned from driving for six months. The driver’s friend, who claimed to be an overseas resident, said after the incident, “I didn’t expect them [the police] to take DUI enforcement so seriously.” China has imposed a zero-tolerance policy on driving under the influence since 2009. This year, a controversial new traffic rule penalising drivers who run yellow lights came into effect. While authorities believe the rule will reduce the number of traffic violations, many criticised it as impractical. The incident in Guangzhou attracted Chinese netizen’s attention. While some thought that the police reaction was “too harsh”, most approved of stricter enforcement of traffic rules.

China to further widen VAT reform (Xinhua) Value-added tax reform in some pilot regions will be expanded to more areas as burdens on Chinese business have been reduced, the Ministry of Finance said Friday. As of Friday, the reform, replacing the turnover tax with a value-added duty in transport and some service sectors, has reduced taxes of over 40 billion yuan (6.4 billion U.S. dollars) for more than 1 million taxpayers in 12 pilot regions, according to a conference held by the ministry. The ministry said the reform had reduced burdens on lower taxpayers by an average of 40 percent. Turnover tax refers to a levy on the gross revenue of a business. VAT refers to a tax levied on the difference between a commodity's price before taxes and its cost of production. China introduced the reform in Shanghai last year to avoid double taxation. The program was later expanded to another 11 regions, including Beijing, Tianjin and Shenzhen. The ministry said it will bring the reform in transport and some modern services nationwide, and actively study the possibility of extending the change to more sectors. 

Chinese liquor prices drop ahead of Spring Festival (By By Shi Jing in Shanghai) Well-known Chinese baijiu brands including Moutai and Wuliangye have lowered their prices just before Spring Festival, which is usually the peak season for liquor sales. The price cuts come amid a recent ban on alcohol in military units, as well as a commitment by the central authorities to crack down on extravagance in Party organs, government departments, public-funded institutions and State-owned companies. At Hai Yan, a chain store that sells tobacco and alcohol in Shanghai, prices for Moutai and Wuliangye have dropped by 700 yuan ($112). A sales representative at Shanghai First Food Mall on East Nanjing Pedestrian Road in downtown Shanghai said the prices of all Moutai liquors have been slashed by 10 percent, while the prices of Wuliangye have not changed. The price of Moutai at the Changcheng chain store of tobacco and spirits of Shanghai Huaihai Commercial (Group) Co Ltd in Shanghai has been reduced by 500 yuan. Moutai has now fallen out of the top 10 preferred brands for gifts among Chinese millionaires, according to Hurun Report's 2013 Chinese Luxury Consumer Survey. The drop in popularity came "on the back of a public debate about whether government officials, the largest customer base for Moutai, should be allowed to consume a brand which is effectively a luxury brand with its main product retailing at 1,800 yuan a bottle, and also a health scare involving the use of plasticizers", said Rupert Hoogewerf, founder and chief researcher of Hurun Report. Yuan Renguo, Kweichow Moutai's chairman, said at the recent two sessions of the legislative and consultative bodies in Guizhou that the company will slow its growth rate to reach an 18 percent year-on-year rise by the end of this year. Stocks of major listed liquor makers slumped on Monday, with Moutai dropping more than 5.58 percent and Wuliangye falling more than 2 percent. According to iFind, a financial information product developed by Zhejiang Hithink Flush Information Network, Moutai lost more than 10.9 billion yuan in market value on Monday, and the 13 major listed baijiu stocks lost a combined 26 billion yuan. Since November, the 13 companies have seen their market value shrink by about 200 billion yuan. Yang Chengping, chief adviser of Jiangxi Association for Liquor and Spirits, said the drop in value has been compounded by a decline in overseas capital flowing into the Chinese baijiu industry. "Overseas money flooded the Chinese baijiu industry in 2008, especially speculating on the price of Moutai. Now they are retreating from the market and thus the recent decline in prices," Yang said. But the most urgent issue for the baijiu industry is introducing a production standard, Yang said. "With this price fluctuation and industry adjustment, we hope Chinese baijiu will make their brand names better known and provide consumers products which are safe and of better quality," he said.

Bleak forecast for steel producers (By Du Juan in Beijing and Wang Ying in Shanghai) A production line at a steel mill in Dalian, Liaoning province. China's steel industry will continue to face overcapacity problems after seeing a dramatic decline in profits in 2012, the industry association said on Thursday. China's steel industry will continue to face overcapacity problems this year, and suffer similar financial pressures to 2012, as the sector struggles against rising raw material prices and weak demand. The stark industry outlook came from Zhang Changfu, secretary-general of the China Iron and Steel Association, who revealed on Thursday that the country's major steel companies - which account for 80 percent of the country's total output - had an overall profit of 1.58 billion yuan ($254 million) in 2012, a 98.22 percent year-on-year drop on the previous year. The latest industry figures emerged as four of the country's major listed steelmakers posted preliminary earnings estimates predicting hefty losses for 2012. Angang Steel Co Ltd said it expected net losses for 2012 to widen from a year earlier, after steel prices fell on subdued global demand, meaning it is expecting losses of 4.16 billion yuan in 2012. There also were bleak forecasts from Shandong Iron and Steel Co Ltd (3.57 billion yuan loss), Magang (Group) Holding Co Ltd (3.72 billion yuan to 3.95 billion yuan loss), and Beijing Shougang Co Ltd (300 million to 400 million yuan loss). Speaking at an annual steel industry conference in Beijing, Zhang said: "Steel prices were at a low level for a long time last year because of the economic slowdown. "But, once steel product prices rise, the imported iron ore prices will soar immediately, which has been the key reason for the drop in profits by China's steelmakers." Imported iron ore prices increased by $44 a metric ton from $115 a ton in late December to $159 a ton in mid-January, which added 422 yuan to the cost for each ton of steel production. However, the steel output and imported iron ore quantity have not increased during the same period, which suggests this round of the iron ore price rise was not caused by the demand-supply change, but market manipulation, said Zhang. "The price increase for imported iron ore is much higher than that for steel products, which means iron ore purchase has become a high-risk 'game' in the industry." Zhang added that he expects high raw material costs to continue this year and downstream demand for steel products to grow slow ly. Qu Xiuli, the association's deputy secretary-general, said she expected most steel companies to make efforts to reduce their losses, but it would be impossible for all of them to arrest their losses. However, she added she was hopeful that favorable policies related to the industry will emerge from the conferences to be held in March. Association figures show that by the end of last year, the country's top 10 crude steelmakers accounted for 45.94 percent of total output. Officials have encouraged further consolidation in the industry, to raise that level to 60 percent, but Zhu Jimin, a former chairman of Shougang Group, one of China's major steel companies, said that steel industry integration is a tough test for the government. According to the iron and steel association, 23 of its major member steel companies have reported annual losses for 2012, 15 more than the previous year, totaling 28.9 billion yuan, about seven times higher than in 2011. Of the 26 listed steel companies that have posted their preliminary earnings estimates to far, 19 are expecting a loss or a decline in revenue, according to a report on Thursday in the Securities Daily. Angang Steel said on Thursday it blamed its loss estimate on falling steel product prices last year, due to the combined factors of the global economic slowdown, slower domestic economic growth, sluggish industrial demand, overcapacity and fierce industrial competition. Officials at Anhui-based Magang added that it had failed to digest the narrowed profit margins between the slump in steel prices and steadily rising raw material costs.

Li urges more mutual trust with US (By Cheng Guangjin and Ding Qingfen) Vice-Premier Li Keqiang called for more trust and broadening common interests between China and the United States while meeting a visiting US congressional delegation on Thursday. Vice-Premier Li Keqiang meets Ed Royce, chairman of the House Committee on Foreign Affairs, at the Great Hall of the People on Thursday. Royce is leading a US congressional delegation to China. Li said the two countries should take care of each other's core interests, which form the basis of relations, while managing and controlling contradictions and differences. He hopes the US Congress will play a more constructive role. Headed by Ed Royce, chairman of the House Committee on Foreign Affairs, the five-member delegation consists of Republicans and Democrats. Both parties are active in developing Sino-US relations and the two countries should increase dialogue, deepen cooperation and contribute more to the prosperity of the two countries as well as world peace and stability, Li said. He also noted that China and the US are in different stages of development, and are far more complementary than competitive. Officials from both sides should create a better environment for cooperation between enterprises and localities, Li urged. In 2012, China-US trade increased 8.5 percent from a year earlier to nearly $500 billion. But the past year has also seen growing trade and investment barriers set by the US government against Chinese companies. The US has slapped anti-dumping and countervailing duties on billions of dollars of solar panels from China, and urged US firms to stop doing business with China's telecom giants Huawei and ZTE, saying they could pose a security threat because of ties to the Chinese government. Jia Xiudong, a senior researcher at the China Institute of International Studies, said China and the US are highly dependent on each other, especially in economic and trade areas. However, during the presidential election last year many commercial issues were politicized, which left an impression with many US citizens that China's trade and investment has created problems in the US. "It is not a fact that this has created problems in the US and both countries should properly handle issues to avoid any negative outcome on common interests and general relations," Jia said. The two countries should also increase trust and cooperation on regional and international issues, said Jia, noting that friction between the two have increased in recent years especially with the US "pivot to Asia" and involvement in disputes between its partners and allies in the region and China. Royce, during a visit to the Philippines on Tuesday, said China should agree to face the Philippines before a United Nations arbitration tribunal to avoid a possible crisis over their long-raging territorial disputes in the South China Sea, reported the Associated Press. Last week Manila notified China that it will challenge Beijing before an arbitration tribunal under the 1982 UN Convention on the Law of the Sea. Foreign Ministry spokesman Hong Lei said on Thursday that China does not approve of such a practice that goes against the consensus that has already been reached. China and the Association of South East Asian Nations, of which the Philippines is a member, reached consensus in solving relevant disputes through negotiation between directly concerned sovereign states.

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. 

 *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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