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Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
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Beijing Olympics Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009
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China Projects Bidding Information - update daily    Scholarship & Grants  News Archives in PDF Format 

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

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

Wine-Biz - Hong Kong Brand Hong Kong Video

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

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

  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*:  July 2 2013

Hong Kong amateur filmmakers produce world's first Edward Snowden film (By Agence France-Presse in Hong Kong) American school teacher Andrew Cromeek plays Edward Snowden in the short amateur film 'Verax'. Four amateur filmmakers in Hong Kong have beaten Hollywood to the draw by producing the first film on Edward Snowden, a five-minute thriller depicting the nail-biting intrigue surrounding the intelligence leaker when he was hiding in the city. Shot in less than a week on a shoestring budget, the film imagines the drama which must have unfolded in Hong Kong leading up to Snowden’s bombshell leaks on vast US surveillance programs. “To be the first one to really do anything about it...it was quite invigorating,” cinematographer and editor Edwin Lee told news agency AFP of the YouTube film that used local actors and shaky camera work reminiscent of the Bourne spy thriller series. Snowden, 30, abandoned his high-paying job as an IT technician contracted to the National Security Agency and went to Hong Kong on May 20. He then began issuing a series of leaks on the NSA’s global gathering of phone call logs and Internet data, including in China and Hong Kong, before his dramatic escape to Moscow where he remains holed up in an airport transit area. “This is a spy movie that’s developing,” Lee said of his film which gets its title from the code name Snowden gave himself - Verax. The expats from Ireland, Australia, the US and Canada, of which Lee was the only filmmaker by trade, made the film “to catch onto the interest on Snowden and the attention on Hong Kong”, Lee said. Production for the film took place at breakneck pace as drama, diplomatic intrigue and tensions surrounding Snowden unfolded in the southern Chinese city. “It was a lot of adrenaline... it was all very guerilla filmmaking style,” Lee said. Though production was rushed, the film, which has gained more than 8,500 views on YouTube since it was released on Tuesday, stayed true to the actual locations in Hong Kong where Snowden was reportedly seen. The film covered the swanky Mira Hotel where Snowden initially hid out and carried out his sensational leaks to Britain’s Guardian newspaper. Props such as a Rubik’s Cube, which Snowden reportedly used to identify himself to a Guardian journalist, were also used in the film. Meanwhile, Hollywood is sure to derive inspiration for new plotlines from the riveting Snowden saga. Phillip Noyce, director of action thrillers Salt and The Quiet American, is reportedly keen to turn the real-life hunt for Snowden into a Hollywood thriller with Australian actor Liam Hemsworth in the lead role. “This is a movie that’s playing out before our eyes, even though we can’t see anything,” Noyce told NBC News on Thursday. For Lee and his team, finding an actor to play Snowden was one of the biggest challenges. “We needed someone convincing to play Snowden,” he said, adding that the production team went through a list of friends who would “remotely” look like Snowden. They struck gold with Andrew Cromeek, an American school teacher who needed just the right haircut, among other cosmetic changes, to develop an uncanny resemblance to Snowden. But near the end of production, Snowden escaped to Moscow, a shock development that left the crew disappointed. “We were proud that he would call Hong Kong his refuge. He trusted our rule of law and our government to protect him,” Lee said. “In the end we understood he did what’s best for himself,” he said, adding that the production crew was hoping that Snowden will watch the video. “I’m just waiting for someone to comment on YouTube saying ‘hey you guys did a good job of re-creating me’,” Lee said.

New US consul general Clifford Hart must rebuild trust after Snowden case (By Christy Choi christy.choi@scmp.com) New US consul general Clifford Hart faces task of repairing damage from Snowden case - Stephen Young (left) and Clifford Hart. A veteran diplomat well-known in Asia takes over from Stephen Young next month as US consul general, and one of his first tasks will be to rebuild trust with Hong Kong law enforcement officials following the saga of cyberspying whistle-blower Edward Snowden. Clifford Hart has had five postings in China - including two in Taiwan - and has a long history of advising the US government on the region. He has worked with the National Security Council on China affairs, as well as serving roles in the Soviet Union and Iraq. "[Hart has] been involved in the six-party talks with North Korea, speaks Mandarin and has decades of experience working on Asia issues," said Ross Feingold, a senior advisor with DC International Advisory, which does political risk analysis in East Asia. "Ambassador Hart has the necessary qualifications to succeed Stephen Young." Hart is the current United States envoy to the six-party talks - negotiations between the two Koreas, China, Japan, Russia and the US seeking to dissuade North Korea from its nuclear ambitions. However, with the talks having stalled in 2009, Hart, who took up the role in 2011, has not attended any negotiations during his time. "The timing is a challenge, as he must deal with the continued interest in the Snowden matter," Feingold said. "But both sides will move on from this." Young said last week that Washington's confidence in Hong Kong had been "shaken" and that the trust built up between US law enforcement agencies and their counterparts in Hong Kong had taken a particular blow. The agencies have in the past cooperated closely with their Hong Kong counterparts on matters such as the US' pursuit of legal action against Kim Dotcom, the founder of internet file-sharing website Megaupload. The government allowed Snowden, who leaked details of large-scale hacking and indiscriminate surveillance operations by the US National Security Agency, to leave Hong Kong last Sunday. Officials said they could not detain him because documents provided by the US government did not carry Snowden's correct full name and passport number. The Hong Kong consulate plays a vital role in US efforts to understand China. The outgoing consul general adopted a high profile in Hong Kong, making the rounds of local politicians, getting to know members of the Legislative Council, Executive Council, pro-democracy advocates and members of the pro-establishment camp such as the Democratic Alliance for the Betterment and Progress of Hong Kong. He also met bankers, academics and businessmen. Young has not been shy about speaking on the issue of universal suffrage, urging the city to start dialogue on electoral reforms early at his last appearance at the American Chamber of Commerce. Young's comments on universal suffrage drew criticism from the Office of the Commissioner of the Foreign Ministry in Hong Kong, which said the city's constitutional development was an internal matter and no government or official should interfere with, give instruction on, or make reckless comments about it.

 China*:  July 2 2013

ROK president visits Terracotta Warriors (By China Daily) he President of the Republic of Korea, Park Geun-hye, tours the famous excavation site of the Terracotta Warriors in Xi'an, Northwest China's Shaanxi province, on June 30, 2013. 

Secret documents show NSA spying on EU offices (By Xinhua) The US National Security Agency ( NSA) not only monitors the communication of European citizens, but also has an eavesdropping program targeting the European Union (EU) offices, German magazine Der Spiegel reported Saturday. The magazine cited confidential documents it was partly able to obtain from US whistleblower Edward Snowden. The former CIA agent fled to Hong Kong last month and revealed a NSA-operated classified surveillance project code-named PRISM, which can trace worldwide e-mails and phone calls. A document dated September 2010 and classified as "strictly confidential" showed how the NSA spied the EU's diplomatic mission in Washington, it said. Eavesdropping bugs were installed in the EU buildings and the internal computer network was infiltrated, through which the American intelligence can get access to EU meetings, e-mails and internal documents, it added. The EU representation at the United Nations in New York was also under similar surveillance, the magazine said. In addition, the US intelligence also keeps regular eavesdropping and monitoring of the Justus Lipsius building, the headquarters of the Council of the European Union, it said. The classified phone and internet surveillance program, disclosed by The Guardian and The Washington Post, has sparked an outcry in Europe over concerns about intrusion into the privacy of individuals. The EU has warned the Obama Administration of "grave adverse consequences" to the rights of the European citizens from the spy scheme and demanded "swift and concrete" answers. The US intelligence scandal has also stirred massive controversies in the country about the balance between privacy and national security.

Hong Kong*:  July 1 2013

The US and Snowden meltdown (By Phoenix Kwong and The Washington Post) US may have made the mistake of simply 'going through the motions' over extradition request - Hong Kong made it clear to Washington it would need more information before arresting Edward Snowden and did not make "excuses" to allow him to leave, the justice secretary said. Rimsky Yuen Kwok-keung made the comments in Beijing yesterday as US administration officials attempted to cast doubt on the Hong Kong version of the events that led to Snowden flying to Moscow on Sunday despite the US request for his arrest. Yuen said he told US Attorney General Eric Holder during a telephone call on June 20 that the Department of Justice would need clarification of the request for Snowden's arrest and was preparing a list of questions. "I believe that my message was very clear," he said. US officials insisted they followed procedure and said Hong Kong's concerns about the arrest request amounted to a stalling tactic. They claimed no questions were raised over the charges until June 21, the day the charges became public in the US. One US official close to the discussions said Hong Kong's claim that it could not properly identify Snowden because of inconsistencies in his middle name was "laughable", noting that his videotaped confession was being replayed "all over the news". But Yuen, who was in Beijing for a conference on arbitration, rejected US claims the call for clarification was a delaying tactic. "I disagree that it is an excuse," Yuen said, reiterating that the department had acted in full accordance with the law. Questions are being raised in the US about why Washington did not make more diplomatic overtures to request Snowden's extradition. For the first 12 days, the US administration's effort to extradite Snowden was a by-the-book legal affair - overseen by the US Justice Department and involving few, if any, diplomatic overtures, said senior US officials. That legalistic approach resulted in a political and public relations debacle. By the time US officials began applying diplomatic pressure on the Hong Kong and mainland authorities last weekend, it was too late. Snowden boarded the flight to Moscow in search of asylum. "The administration followed the playbook, except what they didn't seem to anticipate is that Hong Kong would not comply," said Jacques Semmelman, a former federal prosecutor and expert on extradition procedure. Stephen Vladeck, an associate dean at American University's Washington College of Law, said the administration made the mistake of just going "through the motions". He said: "It should have been clear from the get-go that the government was going to need more than just a prima facie case for extradition here, but also the political and diplomatic co-operation of the Hong Kong - and, perhaps, Beijing - authorities." The White House's National Security Council has co-ordinated the broad response to the Snowden case, but let officials at the Justice Department - lawyers, not diplomats - take the lead on the extradition process and make their own decisions, according to a senior administration official. On June 14, the US filed criminal charges against Snowden in federal court, but took a gamble - sealing the charges so they would not be made public. US officials said they feared Snowden might flee if he found out about the charges. They realised they had hit a snag only when the charges were unsealed. That is when the Hong Kong authorities raised questions. As US officials fired off their first statement warning Hong Kong against complicating relations with the US, they learned Snowden was on a flight to Moscow. State Department spokesman Patrick Ventrell said the Hong Kong authorities "were well aware of our interest in Mr Snowden and had plenty of time to prohibit his travel". On Tuesday, Yuen said the US failed to explain how two of the three charges in its arrest request fell within the scope of the extradition deal signed in 1996.

All previous Miss HongKong (Xinhua) The Miss Hong Kong Pageant,or Miss HK for short, is a beauty pageant organized by the leading Hong Kong television station, Television Broadcasts (TVB).

 China*:  July 1 2013

Prudent monetary policy to stay (By WU YIYAO and XIE YU in Shanghai) Zhou Xiaochuan, governor of the People's Bank of China, speaks at the Lujiazui Forum in Shanghai on Friday. He said the central bank will direct banks to release "reasonable lending" and will adjust liquidity at appropriate times. Central bank to speed up opening of capital account, global use of yuan - China's will continue to implement prudent monetary policies, but will conduct preemptive adjustments and fine-tuning in an appropriate way when necessary, according to Zhou Xiaochuan, the governor of the People's Bank of China. The head of the country's central bank said that it will work with other departments to guide financial institutions to maintain reasonable lending levels, and will use multiple tools to adjust liquidity and keep the market stable. Speaking at the Lujiazui Forum in Shanghai on Friday, in his first public comments on the issue, Zhou said: "The PBOC will use all sorts of instruments and measures to adjust the overall liquidity level, so as to ensure the overall stability of the market." He added the bank would ensure the "normal operation" of the economy. There has been anxiety in the market that tightening credit conditions could spread into the broader economy, with some Chinese companies reportedly running short of cash to settle suppliers' bills. Zhou said the central bank would guide financial institutions on maintaining reasonable credit growth while arranging their debts and maturity structures properly, to support the structural adjustment and upgrading of the real economy. He said that the PBOC would continue actively pushing the opening up of the renminbi market, and that China plans more currency swap deals with other central banks, in the pursuit of more commercial banks starting to operate offshore yuan clearing businesses. China will also speed up the opening of its capital account, though the process will be flexible, he added. China's 12th Five-Year Plan (2011-15) calls for a gradual opening of the nation's capital account, which covers investment. The yuan is already convertible on the current account, which covers trade. Shanghai is pushing hard to become a major financial hub, and its mayor, Yang Xiong said the city will strive to become a global renminbi center by the end of 2015. In 2012, the country's yuan-denominated cross-border settlements totaled 500 billion yuan ($81 billion), a 50 percent year-on-year growth, added Yang. Li Lihui, president of the Bank of China, said that simplified benchmark interest rates for deposits and lending and a more significant role for the Shanghai Interbank Offered Rate, or Shibor, in the global market will also help the currency's internationalization. Current cross-border renminbi-denominated settlements are usually used in trade between China and neighboring countries, and Li added that it may take another 15 years for the renminbi to become one of world's major currencies.

South Korea's President Park Geun-hye stands next to a Chinese calligraphy scroll, which was presented by Tsinghua University, after making her address at the university during her state visit to China in Beijing June 29, 2013.

Hong Kong*:  June 30 2013

Arts hub will not seek new funding, says Lam (By Olga Wong and Ada Lee) Construction of some facilities at the West Kowloon arts hub may be delayed and it is likely to include more flats and offices as it tries to survive without further government funding. Chief Secretary Carrie Lam Cheng Yuet-ngor, chairwoman of the West Kowloon Cultural District Authority, said yesterday the authority would adopt a "pragmatic way forward" and pledged that it would not seek more money from the Legislative Council before the first phase of facilities is completed by 2018. She denied that the original HK$21.6 billion budget had soared to HK$47 billion, but declined to give a revised estimate. Lam said the quality of the project would not be affected but there would be deviations from the original master plan designed by Norman Foster. She said the authority hoped the Town Planning Board would approve a "minor increase" in development density of 10 to 15 per cent - equivalent to a floor area of 70,000 to 100,000 square metres - to allow the authority to profit from selling extra space. She did not rule out the possibility of developing this space into flats, offices and hotels instead of arts facilities. "If we think about the city as a whole, which faces a shortage of flats, offices and hotels, it will be good to provide [more] flats, for example," said Lam. The authority could earn an extra HK$15 billion to HK$21.5 billion if flats were built on the extra space, given that flats above Kowloon Station sell for more than HK$20,000 per square foot. Lam said the government had also decided to shoulder all the costs - over HK$10 billion - of building a massive underground structure that will hide traffic and backstage facilities from the surface of the arts hub. Another plan to save money is to ask a private developer to build the Mega Performance Venue and Exhibition Centre, which will hold 18,000 people and be the city's biggest concert venue. Some landscape features in the urban park - originally intended to resemble Central Park in New York - will be replaced by modular arts and cultural venues with catering facilities. Despite the authority's latest investment returns, which increased the budget to HK$23.6 billion, some facilities would be delayed, including the Centre for Contemporary Performance. "We are not going to compromise on the scale or the quality of the project," Lam said. "What we are suggesting is to exercise vigorous cost containment in each and every facility. It is really sort of finding alternative ways to ensure we can develop as many facilities as possible." Economist Raymond So Wai-man said an increase of 10 per cent or more in development density was not "minor". "This scope of relaxation of 10 to 20 per cent means they are finding things very different from the initial financial planning." Professor Bernard Lim Wan-fung, president of the Institute of Urban Design, said the Town Planning Board was often willing to relax the plot ratio by up to 10 per cent. "But if it's more, we really need to do a drawing before we decide if it's too crowded." Lawmaker Alan Leong Kah-kit said the government "owed Legco an apology", as lawmakers had warned the budget would be far from enough. "I hope this project will not be relegated to a real estate development."

Leung Chun-ying, Carrie Lam defend ministers after Regina Ip's criticism (By Tony Cheung tony.cheung@scmp.com) Executive councillor Regina Ip Lau Suk-yee says some ministers are not professional enough and the financial secretary is a miser. But her comments yesterday drew a swift defence of the governing team from Chief Executive Leung Chun-ying. He said it would be more positive to give his administration time and space to deliver on pledges and insisted no one had any plans to quit Exco. Chief Secretary Carrie Lam Cheng Yuet-ngor said all ministers were united in helping Leung introduce new policies. Ip's remarks came when she was asked by a Commercial Radio interviewer whether there were one or two members in Leung's cabinet who could be substituted. "Yes, I think so. Some of them could be more professional," Ip answered. "You can see some of them cannot [comprehend government] papers. They just say whatever they are familiar with in the Legco, and they don't understand the government's affairs." Ip did not mention names, but she was apparently referring to ministers who joined the government last year. However, she apologised a few hours later, saying her comments arose "completely out of the radio host's pressing questions". "I did not [mean to] make any suggestion about replacing officials," she added. In a University of Hong Kong survey this month, Development Secretary Paul Chan Mo-po and Education Secretary Eddie Ng Hak-kim were the least popular ministers - with net approval ratings of minus 27 and minus 19 percentage points respectively. Environment Secretary Wong Kam-sing enjoyed a higher net approval rating of plus 23 percentage points, but Ip indicated that the government's decision on Wednesday to withdraw a plan to expand the Tseung Kwan O landfill demonstrated that Wong "clearly lacked political strength … and wasn't lobbying skilfully enough". Wong later told RTHK that he was still on a learning curve and admitted he had to improve his skills. "The difficulty of the task must not be ignored either," he added. Overall, Ip said, "Leung's biggest setback in the past year was his relatively weak cabinet - they were short of experience [because] many of them were new, and they faced an unprecedented raft of blows, or so-called scandals". However, Ip also suggested it would be unfair to blame Leung alone for all problems in the city. "In the last decade, there were problems which were not properly handled - land and housing, the wealth gap and the failure to transform our economic structure," Ip said. "So public resentment has been growing [since former chief executive Donald Tsang Yam-kuen's tenure] … It was a pity that the former chief executive wasted some opportunities … to carry out long-term planning." Ip also criticised Financial Secretary John Tsang Chun-wah for being "too much of a miser". "He only kept the fiscal reserve from being misused. This is important, but he did not have a strategy for economic development and a policy for [new] industries," Ip said. Tsang, who is in Myanmar, could not be reached for comment, but a government source suggested Ip's comments were unfair to him. "In the budget [in February,] Tsang mentioned a lot about the directions of economic development for Hong Kong," the source said.

Back-up plans mulled as government wises up after budget filibuster (By Joshua But joshua.but@scmp.com) Back-up plans will be in place to deal with delaying tactics as administration wises up to the risks of delays, treasury chief says - Contingency plans to tackle filibusters on the budget will be lined up after the tactic stalled government funding this year, Professor Chan Ka-keung says. He said yesterday he had feared during the four-week debate in the Legislative Council that the administration could run out of money before the bill was cleared on May 21. And a month on, the secretary for financial services and the Treasury remained candid about his disapproval of filibustering, which he labelled "pointless". Chan said the government now was "armed with better knowledge" to handle any future fiscal crises. "From the outset, we did not want the filibustering; it was pointless," he said. "But you have to think about that for the future. We must set out some contingency plans after the next budget is prepared." The appropriation bill was tabled in mid-April but faced 710 amendments, filed mostly by four pan-democrats to demand a universal pension scheme and HK$10,000 cash handouts. Lawmakers vetoed all the amendments and passed the bill on May 21, days after the government's May 15 deadline. It was the first time the budget bill was delayed by a filibuster. During that period, the government operated on an interim fund of HK$75.5 billion. Chan, a key official behind Financial Secretary John Tsang Chun-wah in the filibustering battle, conceded the government would not have exhausted its finances until this month. But the uncertainty made them uneasy as they were not in control. "We could not sit and wait until the budget was passed magically on June 1. Someone could simply request a quorum call and the [Legco] session would end - and we would have had to wait for another week." Chan said he had feared the government might fail to make more payments by June; in fact, it was on the brink of triggering a list of plans as the debate went into early May. It had told the Hospital Authority and the University Grants Committee to be ready for delays in their funding. Having served in government since 2007, Chan said he did not feel the new administration under Chief Executive Leung Chun-ying was more difficult. "It is fair to say we are trying to face some tough issues squarely," he said. "But none of the policies will please everybody."

Working relationship with chief executive is fine, says chief secretary (By Lai Ying-kit yingkit.lai@scmp.com) Chief Secretary Carrie Lam Cheng Yuet-ngor on Friday rejected suggestions that she would resign early because she had only a minor role to play in the current administration. Lam, the city’s second highest ranking official, was responding to questions over her relationship with her boss Chief Executive Leung Chun-ying. Suspicions of tensions between the two arose after former chief secretary Anson Chan Fang On-sang said early this week Lam had been given little chance to voice her views and might resign if the chief executive did not value her advice. But Lam said on Friday she worked well with Leung and had no plan to resign early. “The chief executive has given me many tasks, in particular, the co-ordination of work among different bureaus,” she said. “This can’t be described as a minor role,” she said before attending a lunch at the Legislative Council. Lam also dismissed the suggestion that she might resign before her five-year term ended. “I am devoted to serving the people of Hong Kong, and I don’t have any intention to stop serving them in mid-term,” she said. Leung has also rejected Chan’s suggestion. On Thursday, he described his working relationship with Lam was one of “perfect harmony”. On Friday, he reiterated that his cabinet members would continue to work and co-operate with each other. “No one [in my cabinet] has any plan or intention whatsoever to leave office,” he said. Ahead of the anti-government July 1 march next Monday, Leung also faced questions about the performance of his cabinet team. Asked about suggestions that some of his ministers were incompetent and should be replaced, he urged people to give his team more time. “I think a more positive way of looking at the question is that everyone should give the government, including its political team, the time and the space that is needed for us to deliver on the pledges that we made in our election manifesto,” he said.

 China*:  June 30 2013

Chinese leaders meet ROK president, calling for stronger ties (By Xinhua) Chinese leaders on Friday pledged to push China's strategic relations with the Republic of Korea (ROK) to a new high as they met with visiting ROK President Park Geun-hye. Premier Li Keqiang said China and the ROK are good neighbors and important partners, citing increasing political trust and more common ground in development strategies and goals. Li called on the two countries to take a longer view and a more aggressive attitude, deepen cooperation in trade and the economy, investment, finance and new energy, and speed up the construction of the Free Trade Area (FTA). Li briefed Park on China's economy, saying China's economic restructuring and upgrading will offer more room for China-ROK cooperation. Li called on the two countries to make use of their advantages in technology, markets and human resources and to deepen economic cooperation, which will help boost East Asia cooperation. In regards to the situation on the Korean Peninsula, Li said China's stance on seeking a nuclear-free peninsula is consistent, clear and firm. China would like to make joint efforts with the international community, restart the six-party talks at an early date, resolve disputes through dialogue and negotiations, safeguard the peace and stability of the peninsula and promote development and prosperity in Northeast Asia, Li said. Park said her visit to China, which started on Thursday, has produced fruitful results, including a consensus with Chinese leaders on developing bilateral relations. Stressing that both countries are faced with the tasks of developing their economies and improving people's livelihoods, Park said the ROK would like to deepen pragmatic cooperation with China in all fields, expand investment in China's central and western regions and sign the FTA agreement at an early date, as well as boost bilateral and regional economic cooperation. Park recognized China's role in resolving issues on the Korean Peninsula, saying the ROK would like to maintain close communication and consultation with China in this regard. In a separate meeting with Park, top Chinese legislator Zhang Dejiang said China and the ROK are geographically close, the two peoples share deep bonds and bilateral cooperation has developed robustly since the two countries forged diplomatic relations in 1992. Zhang, chairman of the Standing Committee of the National People's Congress (NPC), the country's top legislature, reviewed the frequent exchanges between the top legislative bodies of the two countries, saying that cooperation in this regard has promoted China-ROK relations. The NPC would like to deepen friendly relations with the National Assembly of the ROK, explore new ways to expand legislative cooperation and carry out the new consensuses of leaders, and bring the bilateral partnership of strategic cooperation to a new high, Zhang said. Park said the consensus reached at the summit will usher in a new chapter of China-ROK cooperation. She proposed that the legislative bodies of the two countries increase exchanges, expand cooperation and boost bilateral relations. Park arrived in Beijing on Thursday for her first state visit to China since taking office in February. Chinese President Xi Jinping and Park reached a series of agreements during their talks on Thursday.

Senior cabinet official Ding Xuedong to be named head of China sovereign fund CIC (By George Chen george.chen@scmp.com) Ding Xuedong, then deputy secretary-general of the State Council, hosts a meeting in Beijing on January 18, 2013. Beijing will soon officially announce the new chairman for China Investment Corp – ending months of internal debates and power struggles over who will manage the US$480 billion sovereign fund of the world's second largest economy. Ding Xuedong, currently deputy secretary-general of the State Council, China’s cabinet, is expected to be officially named the new CIC chairman, two sources familiar with the hiring process said. Ding, 53, is the youngest ever deputy secretary-general. He was also vice finance minister for about two years between 2008 and 2010. “Hopefully, you will see an official announcement about this [the new CIC chairman] within just a few days,” said one of the sources. Another source, who declined to be named due to the sensitivity of the matter, said that Ding, who has worked closely with Vice Premier Wang Yang in the cabinet, will visit CIC's head office in Beijing to meet with senior executives on Friday afternoon. The chairman’s office at CIC has been empty for about three months since former chairman Lou Jiwei, who helped establish the CIC in 2007, was promoted to finance minister as part of the Communist Party’s once-a-decade leadership transition earlier this year. During that changeover, Beijing’s other top finance jobs - heading up the central bank, China Development Bank and the mainland’s “big four” state-owned lenders - were all filled. But the CIC was the notable exception. The hiring process for the new CIC chairman has remained secretive, drawing much interest from the global financial community and the press. Candidates previously rumoured for the job include Ning Gaoning, chairman of the powerful state-owned China National Cereals, Oils and Foodstuffs Corp, also known as COFCO, and Huang Qifan, currently mayor of Chongqing and Tu Guangshao, now deputy mayor of Shanghai and a former vice chairman at the mainland’s securities watchdog. Beijing also pitched some senior commercial bankers and financial regulators for the CIC chairman’s job, sources said. The cabinet, led by Premier Li Keqiang, could not agree on CIC’s chairman job appointment for several months due to various factors. Some candidates personally didn’t want the job because they were worried that some of CIC’s earlier investments might turn into losses over the next few years. Others cannot win enough support from the majority of cabinet members. This was partly because of personal economic backgrounds and career experience, the sources explained. Appointing Ding, a rising star in Chinese political circles, new chairman of the CIC is considered a “safe choice”. This is because of Ding’s previous close working ties with cabinet members and his experience in the finance ministry - mostly relating to agricultural finance. However, his lack of investment experience in international capital markets may raise some doubts from his peers – including some western asset managers.

PBOC to maintain "prudent" monetary policy: Zhou Xiaochuan - China's central bank will continue to implement prudent monetary policies, but will conduct preemptive adjustments and fine tuning in an appropriate way when necessary, said its chief Zhou Xiaochuan Friday.

Chinese President Xi Jinping (2nd R, front) meets with South Korean President Park Geun-hye (L, front) in Beijing, capital of China, June 28, 2013. President Xi Jinping and Republic of Korea (ROK) President Park Geun-hye on Friday continued to exchange views on bilateral ties, the Korean Peninsula and Northeast Asia, as well as other issues of common concern, according to a Foreign Ministry press release. Xi and Park said their Thursday talks were fruitful, adding that the consensus they have reached will serve as guidelines for bilateral relations. The two leaders agreed that both sides are connected in many ways and share many common interests, the release said, adding that both sides can provide each other with great opportunities, as both are concentrating on developing their economies and improving people's livelihoods. They agreed that both sides should enhance communication, continuously deepen their bilateral strategic partnership, make joint efforts to promote denuclearization on the Korean Peninsula and safeguard regional peace and stability. They also exchanged views regarding their experience in governance. Xi's wife Peng Liyuan and State Councilor Yang Jiechi also attended the meeting. Park is visiting China from June 27 to 30 at the invitation of Xi. The two leaders held talks on Thursday and pledged to boost reciprocal cooperation between the two countries in an all-around way.

Hong Kong*:  June 29 2013

U.S. request for Snowden arrest was 'sloppy' (By Patsy Moy - South China Morning Post and Reuters) Lawmakers reject Washington’s criticism of Hong Kong’s handling of case, while Obama dismisses whistle-blower as a ‘hacker’ - US Consul General Stephen Young in Central. Hong Kong lawmakers yesterday lambasted the American government's "loose practice of the rule of law", even as a top US diplomat warned of difficulties ahead in mending relations between the city and Washington. Amid the war of words, US President Barack Obama sought to downplay the international chase for whistle-blower Edward Snowden, dismissing Snowden as "a 29-year-old hacker". Snowden, who is now 30, is wanted on espionage charges for leaking details of secret US government surveillance. The US government had accused Hong Kong officials of feigning confusion over Snowden's name as a pretext for not detaining him before he fled to Russia. A US Department of Justice spokeswoman said the city's request for clarification and additional information was not genuine as images of the former US intelligence contractor were widely available through news outlets. "Hong Kong cannot simply rely on Snowden's picture to confirm his identity. It would be a serious mistake if the Hong Kong government arrested the wrong person," said pan-democratic lawmaker and barrister Ronny Tong Ka-wah SC. The US government could not expect Hong Kong officials to make an arrest based on media photos of Snowden, he said, criticising the US Department of Justice for "not understanding and respecting Hong Kong's legal system and the spirit of rule of law". "It is ridiculous for the US - which always brags about their respect for human rights - to be so loose in handling the request for Snowden's arrest. How could the US government issue documents each bearing three different names for Snowden? This shows their practice is sloppy." US consul-general Stephen Young said that he had spent three years in Hong Kong working for a good relationship between the city and the US, which had now suffered "a loss of trust". Rebuilding that trust, Young said, "is not going to be easy," adding that, "where we have a whole series of agreements, and protocols and practices - our confidence has been shaken." Lawmaker Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said the US government was "shameless" for heaping accusations against Hong Kong to dodge questions about cybersnooping in the city and on the mainland. "The US government is talking nonsense," he said. Chief Executive Leung Chun-ying rejected the accusation that Hong Kong had a pretext for delaying the request for Snowden's arrest. The city's officials were following the principle of procedural justice when it asked the US government to provide information on Snowden, he said. At a news conference in Dakar, Senegal, Obama made light of the matter, saying the US would not be scrambling jets or engaging in diplomatic bartering to get Snowden extradited. He said the damage to national security had already been done and his focus now was making sure it could not happen again. "I'm not going to have one case with a suspect who we're trying to extradite suddenly be elevated to the point where I've got to start doing wheeling and dealing and trading on a whole host of other issues, simply to get a guy extradited," Obama said. Obama said he hadn't called President Xi Jinping or Russian President Vladimir Putin to request their co-operation, saying: "I shouldn't have to." Obama said such matters are routinely dealt with at a law-enforcement level, calling Snowden's extradition "not exceptional from a legal perspective."

Hullett House serves world’s priciest club sandwich (By Anna Healy Fenton anna.fenton@scmp.com) And now for something completely different. The world’s most expensive club sandwich, price HK$480, available at The Parlour restaurant at Hullett House in Tsim Sha Tsui until August 31. How often do you consider the price of that humble staple of the hotel coffee shop and room service menu, the club sandwich? For those of you who have never eaten one, it’s a pretty bland stacked toasted sandwich combination of bacon, turkey or chicken, mayo, lettuce, sliced tomato and sometimes egg. It needs to be eaten quickly or the toast goes cold and chewy, and once the lettuce and tomato have soaked through, the whole thing resembles a soggy brick that falls to pieces in your hands. They are usually served with a swizzle stick to anchor the three or five pieces of quartered toast together. Usually they are garnished with a tired bit of salad and some potato crisps or French fries. Club sandwiches look much nicer than they taste, usually, and it is fair to say few people can eat one without dribbling some of the component parts down their front. I’ve never understood their universal popularity. Chefs hate them: fiddly and messy to make and at half time during the football in any hotel the room service phone rings off the hook with male guests bellowing for a club sandwich NOW. Only in Hong Kong - This month booking site Hotels.com ran a survey of club sandwich prices around the world, Hong Kong’s five-star Hullett House Hotel has teamed up with the website to make the most ludicrously extravagant club sandwich. And the price is double the average cost even of one in the capital of expensive food, Geneva in Switzerland, which according to the Daily Telegraph, topped this year’s global club sandwich index - the annual survey estimating the cost of visiting different cities using the price of a club sandwich as a yardstick. The Hullett House monster deluxe club sandwich features some of the world’s most absurdly over top ingredients, from Beluga caviar, to “A5 Wagyu beef and Balik salmon, which costs around £107 (HK$1,300) per kilo,” said Peter Lee, Executive Sous Chef at Hullett House. It consists of three toasted bread slices, crusts removed, with the above ingredients sticks with black pork bacon, Iberico ham, Belgian figs, sliced Roma tomato, Romaine lettuce, cucumber, French chicken, Italian organic egg, mayonnaise, mesclun salad and green asparagus. So I rang Hullett House to speak to the chef to ask him why. Why make such a ridiculous club sandwich? A rather snooty lady answered the phone. Could I speak to the chef? No. There wasn’t one at the moment, she said. Obviously indisposed due to over indulgence in sandwiches. Could I speak to the public relations person then? No, I could not. Why not? Because they were “between PRS right now.” Oh. Not a good place to be. One last try. Could I speak to the general manager, Mr Au? No. He was out. She did not sound like the sort of girl who passed on messages, so I gave up. The Daily Telegraph had more luck. Hotels.com was happy to chat. "The Club Sandwich frequently appears on hotel menus across the globe, but the creation from Hullett House shows how you can transform a staple into a work of art with a few luxurious ingredients,” said Alison Couper from Hotels.com. Can’t help thinking this kind of “creation” is like Madonna draping herself in crucifixes to shock. It’s not creative, or clever, or difficult. Anyone can be over-the-top, but most choose not to be, because it’s tacky and tasteless.

Ecuador waives US trade rights after threats made over Snowden case (By Reuters in Quito and Washington) US Senator Robert Menendez, chairman of the foreign relations panel. Ecuador said on Thursday it was waiving preferential rights under a US trade agreement to demonstrate its principled approach to the asylum request of former American spy agency contractor and whistle-blower Edward Snowden. US Senator Robert Menendez, chairman of the foreign relations panel, had warned in a statement on Wednesday that accepting Snowden “would severely jeopardise” preferential trade access the United States provides to Ecuador under two programmes that expire next month. “Our government will not reward countries for bad behaviour,” Menendez said. Snowden is still believed to be hiding at an airport in Moscow, where he flew to from Hong Kong on Sunday, awaiting a ruling on his request for asylum from the South American country. The United States wants him extradited to face charges that he stole and leaked details of secret US government surveillance programs. Menendez also called on Russia to stop sheltering Snowden and turn him over to the United States. Officials on Thursday in Quito also said that Snowden’s case had still not been processed because he had not reached any of its diplomatic premises. “The petitioner is not in Ecuadorean territory as the law requires,” government official Betty Tola said at an early morning news conference in Ecuador. Bristling at suggestions Quito was weighing the pros and cons of Snowden’s case in terms of its own interests, officials also said Ecuador would not base its decision on its desire to renew the Andean Trade Preferences Act with Washington. “Ecuador gives up, unilaterally and irrevocably, the said customs benefits,” said another official, Fernando Alvarado. In a deliberately cheeky touch from the government of President Rafael Correa, Ecuador also offered a multimillion donation for human rights training in the United States. “What’s more, Ecuador offers the United States economic aid of US$23 million (HK$178.4 million) annually, similar to what we received with the trade benefits, with the intention of providing education about human rights,” Alvarado added. “Ecuador does not accept pressure or threats from anyone, nor does it trade with principles or submit them to mercantile interests, however important those may be.”

McDonald's loses prime slot in Causeway Bay to Sa Sa make-up chain (By Yvonne Liu yvonne.liu@scmp.com) McDonald's has been driven out of the world's most expensive retailing street as cosmetics chain Sa Sa proves willing to pay sharply higher rent - McDonald's in Russell Street in Causeway Bay is cashing in its chips after another retailer agreed to pay triple the rent. The Big Mac has been priced out of Hong Kong's most exclusive shopping strip to make way for yet another retailer eyeing the wallets of cashed-up mainlanders. Despite McDonald's being the world's largest chain of hamburger restaurants, it still could not afford the rents in Causeway Bay's Russell Street, and has been forced to move out. Operated by McDonald's Corp, the restaurant opened on the first floor of 8 Russell Street in 2006. Donald Cheung Ping-keung, executive director of the landlord, Emperor International, said the 6,000 square feet shop had been leased to Sa Sa International Holdings for HK$1.58 million a month. Sa Sa will move in in October. The rent is more than three times higher than the existing monthly rent of HK$500,000 paid by McDonald's, which signed a lease two years ago. Joe Lin, senior director of retail services at CBRE, said: "Retailers such as luxury watch and jewellery stores who are targeting mainland shoppers are eager to move into the street, as it has become the most famous shopping street to mainland tourists. [Luxury retailers] are willing and able to pay rent of HK$1.6 million for a shop in the street. Other retailers are able to afford a monthly rent of only up to HK$900,000, so it is inevitable that other non-luxury goods tenants have to move out." Lin said retail rents in Russell Street have jumped sevenfold since the Individual Visit Scheme, allowing mainlanders to visit the city, was launched in 2003. By last year, the average rent of street-level shops on the street surpassed Fifth Avenue in New York, making it the most expensive shopping street in the world, according to Cushman & Wakefield. Fifteen of the 28 stores on the street are sellers of luxury watches and jewellery. Including retailers of cosmetics, a money exchange, high-end fashion and luxury accessories, there are 24 stores targeting mainland shoppers. Only four shops do not rely on mainland tourists. Lai Wing-to, a veteran property investor who owned a shop in Russell Street, said: "The retailers open these shops as a way of advertising their brands, and they are also able to generate profit. In the last few years, it has been common to see mainlanders buying dozens of watches." Lin said the non-luxury retailers who are not reliant on mainlanders may generate only moderate profit and may have difficulty affording expensive rents. McDonald's is an example. A Big Mac meal cost HK$21. Even if McDonald's paid no other operating expenses, it would have to sell one Big Mac meal every 35 seconds every 24 hours to pay a monthly rent of HK$1.58 million. Beijing's anti-corruption campaign and the economic slowdown on the mainland have meant that local sales of luxury goods have decreased significantly since early this year. But retail rents are expected to stay firm in the short term. Cheung said there were hundred of international brands in the world and many of them were interested in expanding in Hong Kong. "But the growth in the rent will slow," he said. "We won't see a 20 per cent growth a year as we saw over the last few years. It will be flat, as rents have increased a lot over the last four years." Lin said: "Even if the overall retail rents turn flat or fall, the rents in Russell Street would be the last to suffer."

Hong Kong bid for visa-free access to US in jeopardy after Snowden departure (By Danny Lee danny.lee@scmp.com) State Department official warns that Edward Snowden's departure will have an impact - Hong Kong bid for visa-free access to US in jeopardy. Hong Kong’s refusal to detain Edward Snowden may yet have consequences for the city’s residents. In a case of exquisite bad timing, the row over Hong Kong’s decision to let the NSA leaker fly to Russia - in spite of a US extradition request - came at the same time the US Senate was poised to vote on a massive immigration reform bill. Buried deep in the 1,076-page bill is a long-awaited amendment making Hong Kong eligible to join the US Visa Waiver Program, which allows visitors into the US for 90 days with their passports only. But US State Department spokesman Patrick Ventrell suggested on Tuesday that the waiver, which has been the subject of years of lobbying by Hong Kong, may now be in peril. He had been asked to describe the repercussions of Snowden’s unimpeded departure on Sunday from Hong Kong, on both Sino-US relations and the visa waiver amendment. “Clearly, these issues have an impact when we have a breakdown on co-operation on such a key issue,” Ventrell told the daily press briefing in Washington. His comment came a day after White House spokesman Jay Carney slammed the decision to let Snowden leave Hong Kong, saying it “unquestionably has a negative impact on the US-China relationship”. “We are just not buying that this was a technical decision by a Hong Kong immigration official. This was a deliberate choice by the government to release a fugitive despite a valid arrest warrant,” Carney said. The Hong Kong amendment was inserted into the immigration bill by Senator Mazie Hirono, a Democrat from Hawaii. The amendment was approved by the US Senate Judiciary Committee on May 16, by 14 votes to 4. Those backing the amendment included a bipartisan array of some of the most powerful names in the senate, among them Democrats Dianne Feinstein and Chuck Schumer and Republicans Orrin Hatch and Lindsey Graham. The four opponents were all Republicans, including Ted Cruz, who has been one of the fiercest opponents of the entire bill. Cruz, one of the Tea Party movement’s most powerful voices, said earlier this month he was reserving judgement on whether Snowden was a patriot or a traitor. The Senate was expected to vote on the immigration bill this week, perhaps as soon as Thursday [June 27]. But even if, as expected, it gets through the senate, its fate is far from secure. The bill would still need approval by the Republican-ruled House of Representatives. House speaker John Boehner warned on Wednesday that House Republicans would not feel bound by any Senate immigration bill, regardless of support by some of his party’s senators, and would go about crafting their own version of the legislation. And even if a bill deeming Hong Kong eligible for the coveted waiver is approved by both House and Senate, the measure could be vetoed by US President Barack Obama. Hong Kong’s eventual membership could also be denied, or later suspended, by his security officials. Hirono’s spokesman, Nathan Click, said Hong Kong would need to meet stringent requirements to join the programme, including agreeing to share information and honour extradition requests. None of the other 13 senators who supported the Hong Kong amendment would agree to discuss the impact of the Snowden case on their positions, and nor would any of their spokespersons. The four senators who voted against the measure were also asked for comment, but did not respond. The US consulate in Hong Kong said: “We have no comment on legislation.” Under current regulations, Hong Kong residents are treated the same as mainlanders wanting to travel to the United States. The US consulate moved to streamline the process in March, but Hongkongers must still undergo an interview before being approved for travel. Taiwanese citizens were granted visa-free access last year, while Japan, South Korea and Singapore also benefit from the visa-free programme. Joining the 37 countries that are part of the visa-waiver scheme requires an initial nomination from the US Homeland Security Department. A task force then examines every aspect of the bid, including compliance with extradition requests. A spokesman for the US consulate in Hong Kong said: “We have no comment on the legislation.” Roy Chung Chi-ping, one of the leaders of a recent delegation to the United States from the Better Hong Kong Foundation, said he had received a positive response when discussing the visa-waiver programme with lawmakers and government officials - before Snowden was allowed to leave Hong Kong. The group arrived in the US on June 10, the day Snowden revealed he was the man behind the cybersnooping leaks. Ronnie Chan Chichung, co-leader of the 13-strong delegation, said: “I’m not worried that the US will change its mind. Visa-free visits for Hongkongers to the US are not only beneficial for us, but also for them.” Concern about Hong Kong’s possible admission to the scheme was raised this week by a number of conservative US publications. The Weekly Standard on Monday quoted an unidentified Senate aide as saying: “Hong Kong historically has had a close economic relationship with the US so this amendment made a lot of sense when it was offered. But after they undermined our national security and let Snowden leave yesterday, are we really going to reward the Hong Kong government with Visa Waiver access?” In 2011, about 129,000 Hongkongers travelled to the United States.

Shenzhen visitor at Hong Kong jewellery fair finds and returns HK$250m bag of diamonds (By SCMP) Buyers browse jewellery pieces at the Jewellery & Gem Fair in Hong Kong. It’s not every day that someone in Hong Kong finds a bag of diamonds worth HK$250 million lying around. Even more rare is someone who would willingly return it. But mainland tourist Fu Zhuli did just that during a trip to a local jewellery fair at the weekend. On Sunday, the woman from Shenzhen was strolling through the exhibition hall of the Hong Kong Jewellery & Gem Fair at the Convention and Exhibition Centre when she decided to take a short break. “I went to the café to take a rest and have some chocolate ice-cream. I saw two foreigners chatting…after a while, they left – empty-handed. After a while, when the cleaners came to take the rubbish out, I realised there was a black bag at the foot of their table,” Fu told the Shenzhen Daily. Fu said she could recognise their faces and tell from their accents that the foreigners were from Israel and possibily from the Israeli pavillion in the hall. She went over to pick up the bag and upon opening it, was shocked to find a trove of “good quality, soy-bean-sized roughs". Fu, a jewellery enthusiast, estimated the price of each diamond at about 400,000 yuan to 800,000 yuan (HK$500,000 to HK$1 million) and the total parcel of gems worth at least 200 million yuan. The bag weighed about 3kg. After Fu sat at the table “guarding the bag” and thinking of what to do for two hours, one of the young foreigners came running back into the café. “The shirt on his back was soaked with sweat, and his face was pale. He rushed in and saw the bag with me and leaned forward, uttered some incoherent words and kept bowing and saying ‘thank you’ in Putonghua,” she recounted. “I told him off for being so careless and leaving something so precious behind.” Asked whether she had ever thought of taking the bag, Fu said: “No, I felt I was lucky enough to have seen those nice diamonds. You know, women love jewellery.” She said that she was a Christian and that her husband, who works in the Shenzhen police force, had told her to report the finding to police immediately. She admitted that some of her friends had told her to keep the bag. “I never thought of doing that, I just felt like [the men] would come back to get it so I just sat there and waited,” Fu told the Shenzhen Daily. "I am a very honest, simple person and I believe in sincerity." UBM Asia, the fair’s organiser, said they couldn't confirm the incident as neither Fu nor the bag’s owner had reported the case to them. In April, a Hong Kong man returned a bag containing about HK$74,000 in cash to a relieved owner after it was apparently mistaken for rubbish and kicked out of a bus in Cheung Sha Wan.

Chief executive denies US accusation of feigning confusion over Snowden's name (By Lai Ying-kit yingkit.lai@scmp.com) Chief Executive Leung Chun-ying. Hong Kong Chief Executive Leung Chun-ying on Thursday rejected the US government accusation that the city's officials had feigned confusion over Edward Snowden’s name as a pretext for not detaining the intelligence leaker before he departed to Russia. A US Justice Department spokeswoman earlier on Thursday said Hong Kong was simply trying to create a pretext when it asked the US for a clarification of Snowden’s middle name. The spokeswoman said that because Snowden’s image was widely available through news outlets, Hong Kong’s request for information was not genuine. It was not a pretext at all. We were just following the laws of Hong Kong. Leung said the US accusation was not true. “It was not a pretext at all. We were just following the laws of Hong Kong,” he said during a media session on Thursday afternoon. The chief executive said there was a real need to determine certain facts about Snowden with the US authorities when its request for his arrest was being processed. Hong Kong Secretary for Justice Rimsky Yuen Kwok-keung on Tuesday said the US had failed to give Snowden’s passport number and confirm his full name, making it impossible for the city to issue an arrest warrant. “There were some important facts that we needed to determine from the United States authorities,” Leung said. “We were just abiding by a very fundamental principle of procedural justice and fairness.” Snowden, a former contract employee for the National Security Agency in Hawaii, left Hong Kong on Sunday and is now in the transit area of a Moscow airport. He is facing espionage and theft charges in the United States after leaking details about secret US surveillance programmes to the news media. Ecuador is considering granting Snowden political asylum, a process that could take up to two months.

 China*:  June 29 2013

Actor Liu Ye (R) and actress Zhang Ziyi pose for photo after they received the Order of Arts and Letters by the French government in Beijing, capital of China, June 27, 2013. Established in 1957, the order is the recognition of significant contributions to the arts and literature. 

Visit aids 'trust-building process' (By Wu Jiao and Li Xiaokun) President Xi Jinping and his Republic of Korea counterpart Park Geun-hye enjoy time with youngsters from China and the ROK in Beijing on Wednesday. Chinese and ROK presidents committed to maintaining regional peace. Beijing and Seoul on Thursday stressed a joint commitment to the denuclearization of the Korean Peninsula and maintaining regional peace, calling for an early restart of the Six-Party Talks to realize that vision. President Xi Jinping and Park Geun-hye, visiting president of the Republic of Korea, made the remarks as they met at the Great Hall of the People. Observers said Beijing and Seoul are expected to see progress in their common understanding on the Korean Peninsula issue, and that China-ROK ties will achieve remarkable growth under the two new presidents. The nations also agreed to reinforce bilateral strategic communication on political and security issues, which analysts said is conducive to the Northeast Asian situation. Park, a self-taught fluent Mandarin speaker, arrived in Beijing earlier Thursday to kick off her four-day state visit. It is her second overseas visit since taking office in February, after a US visit last month. She has put the Korean Peninsula situation at the top of the agenda for her China trip. "China is firm and serious about its commitment to denuclearize the Korean Peninsula," Xi said. He added China is against any move undermining regional peace and stability and insists on solving problems through dialogue and negotiations. Xi welcomed the "trust-building process" on the peninsula raised by Park. The process aims at containing the Democratic People's Republic of Korea's nuclear development, pushing its cooperation with the ROK and gradually building trust between the two. He noted "positive changes" on the peninsula recently, calling for relevant sides to "seize the opportunity and work together to strive for an early restart of the Six-Party Talks". While a planned meeting with Seoul fell through, Pyongyang has offered direct talks with Washington, and has sent two envoys to Beijing in the past four weeks. Park said she appreciates Beijing's key role in pushing forward denuclearization and maintaining peace on the peninsula. Seoul is committed to improving ties with Pyongyang on the basis of dialogue and trust, paving the way to final peaceful reunification of the peninsula, she said. 

France wants more Chinese investment (By Li Xiang in Paris) French President Francois Hollande on Tuesday said his country wanted to attract more investment from China. Addressing a group of Chinese entrepreneurs at the Elysee Palace, Hollande said more Chinese investment will help improve the French job market and to help the country's enterprises grow in the global market. French President Hollande shakes hands with Liu Chuanzhi, founder of Chinese PC maker Lenovo Group, who leads the visiting delegation of China Entrepreneur Club at the Elysee Palace. "Europe needs China for its own growth and China needs Europe to develop its business and to gain access to the technology of tomorrow," he said. Hollande mentioned several areas, including food, health and urban development, where China and France could further develop cooperation. According to Invest in France Agency, China is the eighth largest foreign investor in France last year with 31 investment projects that created 645 jobs. However, Chinese investment in France represents only 4 percent of the total foreign investment in the country, far behind the United States (23 percent) and Germany (16 percent). Commenting on the trade dispute over the solar panels between China and the European Union, Hollande said that both sides should avoid unilateral measures of protectionism or market closure that could hurt interests of both sides. "France has always supported that these disputes should be resolved through negotiation instead of pointing fingers at each other," he said. Hollande also vowed to develop Paris into a major yuan trading hub in the eurozone, noting that discussion between the French and Chinese central banks over a possible currency swap is progressing.

Setting sail into uncharted waters (By Shi Jing in Shanghai) An international yacht exhibition in Haikou, Hainan province. It is expected by China Cruise and Yacht Industry Association that there will be more than 100,000 yachts owned by Chinese people within the next 10 years. Boat dealership has expansion plans in spite of the downturn in global economy Putting your head into the center of the Dyson vacuum fan attracts customers to your stand at a trade fair, Lars Petersen, general manager of Jebsen Marine Division, told his young team members at the start of the China (Shanghai) International Boat Show in mid-April. People might wonder why the Dyson fan is on show at the stand of the exclusive dealer of British luxury yacht brand Fairline. It turns out it is part of the package that international luxury distributor Jebsen Group has come out with this year. If you buy a boat, you get a Porsche car, wine and Champagne plus a Dyson fan. Petersen calls it "quite nice cross-branding". From a quick look at Petersen's profile, it can be easily seen the package promoted this year is related to his 15 years of experience working for the Porsche side of business at Jebsen. The 48-year-old went to Hong Kong in 1994 and started dealing on the Chinese mainland from 2004. The company opened its first Porsche Center in Beijing in 2001. Now, as general manger of the marine division, a position to which he was appointed in 2010, Petersen is making use of the network he is proud to have built up. "We go into the showrooms, talk to existing customers and introduce to them what other products we have. The customers in general feel confident because they know us and they have spent money with us," he said. Although Petersen does not speak Mandarin, which he regrets, he claims himself to be "half-Chinese" and to know very well how to deal with rich Chinese people. The trick is to find a connection. "I bet you drive a Porsche" is usually the patter that Petersen starts with when he first meets a customer. Once they know Lars was involved in Porsche sales, the ice is broken. "It's all about guanxi in China," he laughed.

Giant rubber ducky may float on West Lake (By China Daily) Dutch conceptual artist Florentijn Hofman looks for a location using a model duck for his big yellow duck show at the West Lake scenic area in Hangzhou, East China's Zhejiang province, June 26, 2013. A 16.5-meter inflatable rubber duck designed by Hofman made its first public appearance in China on May 2, at Hong Kong's Victoria Harbor. He's planning another show at West Lake later this year. 

ROK president arrives in Beijing for visit (By Xinhua) Republic of Korea President Park Geun-hye arrived in Beijing on Thursday morning, kicking off her first state visit to China since taking office in February. Park's visit opens new chapter in China-ROK ties - ROK President Park Geun-hye arrives at the airport in Beijing June 27, 2013. During her four-day tour, Park will hold talks with Chinese President Xi Jinping, who invited her to visit China, and meet with Chinese Premier Li Keqiang and top legislator Zhang Dejiang. The two sides will exchange views on bilateral ties and major international and regional issues of common concern, according to the Chinese Foreign Ministry. Besides Beijing, Park will visit Xi'an, capital city of Shaanxi province in western China. 

Hong Kong*:  June 28 2013

Hong Kong property investment abroad doubles (By Paggie Leung paggie.leung@scmp.com) Cooling measures at home and the recovery by markets worldwide trigger an outflow of US$4b for 29 office properties costing US$2.5m or over - Investments by Hong Kong-based fund managers, institutions and individuals in commercial properties around the world have almost doubled in the last 12 months. he capital exodus has been triggered by the government's property-cooling measures and a recovery in global markets. Figures retrieved on Monday from the database of global property research firm Real Capital Analytics show that investments totalling US$4.09 billion poured out of Hong Kong in the past year to purchase 29 office properties worldwide with price tags of US$2.5 million or above. That figure was up nearly 90 per cent from US$2.16 billion year-on-year, while the number of transactions was up 164 per cent from 11 deals. London was the top destination for the investment flows, with seven office premises purchased by Hong Kong funds in the last 12 months totalling US$1.02 billion, followed by Singapore at US$884 million. Richard Kirke, managing director of the Hong Kong office of Colliers International, said policy restrictions on the property market in Hong Kong and the mainland had driven Chinese investors to foreign markets, where yields were higher. "There is also good evidence that the market is recovering in the United States and in London," Kirke said, while the slowdown in the mainland's economy was also affecting investment decisions. Jones Lang LaSalle said prime office yields in New York and London were around 4.6 per cent and 4.0 per cent respectively in the first quarter of this year, compared with 2.9 per cent in Hong Kong. Kirke said overseas retail and residential properties were also in demand among many Chinese investors. He believed the outflow of capital would continue, given that stamp duties in Hong Kong can be as high as 8.5 per cent, compared with between zero and around 4.5 per cent in other overseas markets. To curb price growth, the Hong Kong government introduced a series of measures including a new 15 per cent buyer's stamp duty on certain buyers in October. In February, it stepped up its campaign to curb property demand and price-growth by imposing more controls, including a doubling of stamp duty. Denis Ma On-ping, director of research at Jones Lang LaSalle for the Greater Pearl River Delta region, said several factors - including the government's cooling measures - had seen inquiries for international residential properties rise by 10-15 per cent since late February. "The relative strengthening of the Hong Kong dollar against currencies such as the British pound and Japanese yen; a higher number of projects being launched on the market in cities such as London and New York; and a greater emphasis among developers to target buyers from Asia has also contributed to the pick-up in demand," he said. London had become a popular destination for Hong Kong investors, said Knight Frank's head of research for Greater China, Thomas Lam. Prices of prime London properties are expected to grow by 6 per cent a year in the coming years. Hong Kong, however, is forecasted to see a decline of between five and 10 per cent in home prices this year. In the US, an improved economy has lifted the housing market, said Weimin Tan, managing director of Castle Avenue Partners at Rutenberg Realty in New York. More foreign buyers began entering the market in February, he said, and about 60 per cent of his clients were now from Hong Kong or the mainland. Grace Mak, private client executive director at National Australia Bank, said the softening of the Australian dollar had also driven more Hong Kong investors to look at the market there.

US failure to clarify Snowden papers tied HK's hands, says justice chief (By Patsy Moy patsy.moy@scmp.com) Justice chief says US failure to clarify arrest request and to respond to snooping claims were among reasons why Snowden could not be held - Washington's failure to answer questions about cybersnooping in Hong Kong was part of the reason the city was unable to hold Edward Snowden, the justice minister said last night as he hit back at claims that local authorities stalled on arresting the American whistle-blower. Rimsky Yuen Kwok-keung said the lack of a response to the former National Security Agency contractor's claim of US hacking in the city and a failure by American authorities to clarify aspects of their request for an arrest left Hong Kong with no lawful grounds to detain Snowden. Without the information, there was "no legal basis to ask the court to issue a warrant for the provisional arrest", Yuen said. "Without the warrant of arrest, the Hong Kong government had no legal basis to restrict or to stop Mr Snowden from leaving." Despite Snowden's departure, Yuen said Hong Kong still required a "comprehensive and satisfactory" reply from the US on the cybersnooping accusation. "Our stance is very clear, we had no deliberate intention whatsoever to free Mr Snowden or to delay the US request for arrest," Yuen said. "All the way, we were strictly following Hong Kong law and our treaty with the US, as well as relying on the rule of law. All the way we had communicated with the US. But up to this moment, the US still has yet to reply to us with the information we requested last Friday." Yuen said information on cyberhacking would have been material in deciding whether to deport Snowden as it may reveal whether the offences he was accused of were "political" in nature. Hong Kong's treaty with the US does not allow extradition when an offence is "political". Yuen said certain other requirements of the extradition treaty and the city's Fugitive Offenders Ordinance were not met. Yuen confirmed the government had received the request by the US for the provisional arrest of Snowden, but not for his surrender, on the afternoon of Saturday, June 15. The document sent to the local authorities listed the offences as unauthorised communication of national defence information, wilful communication of classified communications intelligence information to an unauthorised person and theft of government property. The Department of Justice had studied the charges to consider whether they met legal requirements. On Thursday, Yuen spoke to US Attorney General Eric Holder, telling him the city would strictly comply with its own law and the 1996 treaty with the US. Yuen also described the case as complicated, and said his department would need time to manage it. The next day, Yuen said, Hong Kong asked the US whether the offences it identified were listed in the treaty and asked Washington what evidence it intended to rely on to charge Snowden. He warned a lack of vital information would have legal consequences. Confusion about Snowden's middle name also caused concern, Yuen said. Hong Kong immigration had the name "Joseph", US documents referred to "James", while a court document mentioned only "J". "We believe his name needed to be clarified or it would create legal problems," he said. The US also failed to provide his passport number. "In our view, passport numbers are key information to identify a person." Earlier, White House spokesman Jay Carney hit out at Hong Kong's failure to hold Snowden. "With regards to … the Chinese government, we are just not buying that this was a technical decision by a Hong Kong immigration official," he said.
NEGOTIATIONS
Justice Minister Rimsky Yuen Kwok-keung's account of his negotiations with Washington. All times are Hong Kong time.
June 15, afternoon: Hong Kong receives a US request for the provisional arrest of Edward Snowden
June 17: Department of Justice e-mails US authorities stating that Hong Kong is preparing a list of inquiries to seek clarification about the request for Snowden's arrest
Wednesday: US Attorney General Eric Holder attempts to contact Secretary for Justice Yuen
Thursday morning: Yuen speaks to Holder
Friday morning: Through the Security Bureau, the government writes to the US government requesting clarification about Snowden's allegations of US snooping on computers in Hong Kong
Friday afternoon: Department of Justice contacts US Justice Department to seek additional information on its request for a provisional arrest

No reply from US on hacking claims disappointing, says security minister (By Lai Ying-kit yingkit.lai@scmp.com) Secretary for Security Lai Tung-kwok says the government is still waiting for a reply from the US to questions about its alleged hacking activites in the city. Hong Kong’s security minister on Wednesday repeated calls by the government for the United States to clarify claims made by Edward Snowden that it had been hacking into computers in the city. Secretary for Security Lai Tung-kwok also said the Hong Kong government was disappointed by the lack of a response on the part the US to its request for verification of the hacking claims. The city’s security bureau wrote to the US government on June 21 asking for verification. “We hope that the US government can give Hongkongers a comprehensive account [on the matter] as soon as possible,” Lai said after a Legislative Council meeting. The explosive claims were made by whistle-blower and former CIA contractor Edward Snowden during a June 13 interview with the South China Morning Post while in Hong Kong. In the interview, Snowden said the US had been hacking into computers in Hong Kong and China for years. Snowden left the city on Sunday for Russia after the US laid charges against him and had requested that Hong Kong authorities arrest him. The 30-year-old is now in a transit area of a Moscow airport. Lai said the government would vigorously follow up on the matter. He said internet security and privacy were essential to Hong Kong's role as a financial centre.

 China*:  June 28 2013

South Korean president puts China ahead of Japan in visiting Beijing (By Kim Wall kim.wall@scmp.com) North Korea's nuclear programme and trade relations will be high on the agenda during a three-day state visit that signals Seoul's new priorities - Pyongyang's nuclear programme is set to top the agenda when South Korean President Park Geun-hye arrives in Beijing tomorrow for a three-day summit with President Xi Jinping. The state visit is Park's second since she came to power in February. The first was to the United States last month. In the past, South Korean leaders have traditionally visited Tokyo before Beijing. Park told senior South Korean officials that her priorities during the visit would include peacekeeping initiatives with North Korea, the success of which she said "largely depends on how much co-operation she can get from China", Chosun Ilbo reported. Analysts say the timing is perfect for Seoul to get Beijing to exert more pressure on North Korea. "When Xi met Obama recently, the leaders prided themselves on being on the same page regarding North Korea's nuclear situation, and when Park met Obama recently, the outcome was the same," said Jaewoo Choo, from the department of Chinese studies at Kyung Hee University in Seoul. "It is only logical that Beijing and Seoul will find common ground now too." China has grown increasingly impatient towards its long-term ally North Korea since Pyongyang conducted an underground nuclear test in February. Beijing has moved to enforce the UN's latest sanctions against the North and restricted Pyongyang's financial operations in China, which were widely blamed for funding its nuclear program. During a visit to Beijing last week, UN secretary-general Ban Ki-moon praised Xi for China's role in defusing tensions on the peninsula. "China has been tough enough towards North Korea, but it would still like to give them a chance," Choo said. Another topic high on Park's agenda is trade. For South Korea, whose largest trading partner is China, the prospects of closer relations with Beijing are laced with financial incentives. China and South Korea have been in formal free-trade negotiations since last year and it is hoped that Park's visit might spark a breakthrough ahead of the sixth round of talks in Busan next week. Accompanied by a large business delegation featuring representatives from Samsung and Hyundai Motors, Park will visit Xian where Samsung is building a US$7 billion complex. South Korea is one of only a few economies that enjoys a trade surplus with China. Bilateral trade exceeded US$53 billion in the last year. Dr William Choong, an analyst at the International Institute of Strategic Studies in Singapore, said Beijing was being "very straightforward and clever" in the way it was trying to balance American influence in Asia. "It's using the carrot of investment opportunities in China to entice US defence allies into its orbit; to buy enough goodwill and diplomatic capital for return favours in the future," he said. Despite warming ties with Seoul, Choong does not see any major shift in Beijing's policy towards Pyongyang, even as it seems to take its commitment to UN sanctions more seriously. "China follows the Goldilocks formula," he said. "It will push, but not too hard. It will not push North Korea over the edge; China can't afford a collapse." Park, who is fluent in Putonghua and reportedly fascinated by Chinese culture, may be the person to achieve a new bilateral rapprochement. The Korean news service Yonhap reported that she would deliver parts of her speeches in Chinese during her visit. The move would almost certainly spark headlines, as well as win Chinese hearts and minds. "President Park has a soft spot for China," said a recent article by China News Service. "This kind of friendly public diplomacy gives a good impression to Chinese people and is extremely important." While the summit will be the first between new administrations in both countries, the two leaders are no strangers to each other. Park has met Xi twice before, when he was Communist Party secretary of Zhejiang in 2005 and 2006. Now the stakes are higher. Professor Jin Canrong , from the school of international studies at Renmin University, said Seoul could serve as a bridge between Beijing and Washington. "South Korea needs to befriend both superpowers; the most appropriate role to take in the future would be as a bridge between China and the United States," he said, adding that Seoul was already doing that to some extent. "The strategists in Seoul are very clever - with Washington they stress the common value of democracy and with Beijing, they talk about the cultural value instead, which is Confucianism." It remains to be seen how Park will handle her position in a complex diplomatic triangle that spans the Pacific. Professor Kang Myung-koo, at Seoul National University, said he was optimistic that Park's strategy would be to lean closer to Beijing than did her pro-US predecessor, Lee Myung-bak. "South Korea can't be the balancer; it's rather the opposite," Kang said. "Traditionally Japan was seen as our second most important partner, but without the Chinese market the South Korean economy can't survive. We need to be realistic."

Photo of attractive female graduate crashes Chinese university’s website (By Chris Luo chris.luo@scmp.com) Screen grab of Renmin University of China's website. The website of one of China’s top universities has been attracting a very high number of visitors - and at one point crashed on Sunday. But it was not the US National Security Agency who was responsible. It was all due to the photo of an attractive young female graduate on the site. This incident occured at Beijjing's Renmin University of China amid a time when high school graduates have almost completed their college entrance exams; many people suspect the photo is one of the ways the university uses to attract new students. The school’s decision to put up the photo - which is unusual for Chinese universities - not only drew countless clicks on its website, but also excited people’s curiosity as to who the student was. According to The Beijing News, she is the university's arts school graduate majoring in the double bass. Her photo was shot by a 2011 graduate, Mao Yanzheng, who is now a professional photographer. “It’s unbelievable that it takes only one photo to make a person famous,” Mao told the newspaper. He shot over 300 photos and chose two he thought were the best for the university’s website. Mao said he only did it as a favour. The university’s decision to use the photo sparked different views online. Some netizens praised the picture for capturing the beauty of youth during graduation time. “This student embodies the elegant, fresh look of our graduates,” a Renmin University graduate commented online. Some admirers even dubbed the attractive graduate a “Renmin goddess.” This term is very popular among young people in China to refer to pretty women whom they find unattainable. However, others did not approve of putting her photo on the website, saying it was a deviation from the university’s fundamental principles. “Is Renmin University about entertainment or academic work?” one person asked online. Others said it was indicative of the failings of China’s education system. “Do schools now advertise their academic work, or how beautiful their students are,” another internet user said.

Looted relics to return home this week (China Daily) Two pieces of looted Chinese cultural relics, bronze sculptures of a rabbit head and a rat head, are expected to return to China this week, sources told Beijing Morning Post on Tuesday. Chinese bronze sculptures of rat and rabbit heads. Liu Yang, an expert from the Yuanmingyuan Academic Committee, said the relics were scheduled to return to China in the second half of 2013, but will be returned at least two months ahead of schedule. Liu also revealed that the two bronze animal heads will go to the National Museum of China. The museum also confirmed that the donation of the relics is set for June 28. The two pieces, once housed at Yuanmingyuan, or Old Summer Palace, were looted by Anglo-French allied forces during the Second Opium War in 1860. The two bronze heads were auctioned for 14 million euros ($17.92 million) each in Paris in 2009, which triggered wide international concerns and protests in China. The French art-collecting Pinault family bought the sculptures from their previous owner and expressed its will to donate them back to China this year. The Chinese side spoke positively of the act, regarding it as an observation of international conventions concerning the protection of cultural heritage, a token of friendship and conducive to bringing more looted Chinese relics back home. So far, five of the 12 bronze animal heads from Yuanmingyuan have returned, but the whereabouts of five others are still unknown.

 

Shenzhou X capsule touches down successfully (By Xin Dingding) Commander-in-chief of China's manned space program Zhang Youxia announced that the Shenzhou-10 mission was successful after the three crewmembers landed safely and left the spacecraft's reentry module Wednesday morning. Return capsule of Shenzhou X spacecraft touched down successfully at around 8:07 a.m. Beijing Time Wednesday at the main landing area in north China's Inner Mongolia autonomous region. Three astronauts within the return capsule all reported good health condition prior to their entry of the black-out area, the control center said. The three astronauts on the country's fifth and longest manned mission are expected to complete their trip and return to Earth at around 8 am on Wednesday. Before its return, the manned Shenzhou X spacecraft conducted the country's first test flight around the Tiangong-1 space module on Tuesday, as future vessels will need to dock from more than one direction. On Tuesday morning, the astronauts left the orbiting space module where they had lived for 12 days. The three astronauts — crew commander Nie Haisheng, astronaut Zhang Xiaoguang and female astronaut Wang Yaping — closed the module's hatch at 5:07 am, according to the manned space program. Before they left, each of them used sign language to express their gratitude to scientific staff on the ground and others following the space mission. At 7:05 am, the spacecraft undocked from Tiangong-1. The spacecraft then flew around the space module. In the process, both vessels were maneuvered to reverse their positions in orbit, and then conducted a rendezvous procedure. "The first circling and rendezvous test was successful, and we have achieved our expected result," said a space program spokesman. Bao Weimin, the technological division chief of the spacecraft's builder, China Aerospace Science and Technology Corp, said the experiment was conducted to gain experience for the future construction of a space station in orbit. A space station might have multiple docking ports, requiring spacecraft to dock from different directions, so China must test these skills, Bao said. The experiment was also a test of the ground staff's ability to maneuver the vessels as well as a test of the spacecraft's performance, said a space expert who declined to be named. "It's the same as piloting a jet. The pilot will always want to develop better skills to control the jet, so that he can be flexible when tough situations emerge," the expert said. Tuesday also marked the end of the mission of Tiangong-1, which was sent into orbit on Sept 29, 2011. The simple space lab, designed with a two-year lifespan, had operated in orbit for 634 days by Tuesday, the spokesman said. The unmanned Shenzhou VIII spacecraft docked with it in 2011, and the manned Shenzhou IX vessel in 2012. It has sheltered six astronauts on two missions. Zhou Jianping, chief designer of the manned space program, told China Daily in March that the space lab has sufficient fuel to operate in orbit for another two years. He did not reveal what additional tasks it will be used for. The Shenzhou X spacecraft blasted off from northwestern China on June 11.

Hong Kong*:  June 27 2013

Hong Kong minister rejects US accusations of deliberately delaying Snowden's arrest (By Lai Ying-kit yingkit.lai@scmp.com) US failed to provide information vital to processing whistle-blower's arrest - Secretary for Justice Rimsky Yuen Kwok-keung. Hong Kong’s justice secretary said on Tuesday the United States had failed to provide crucial information necessary to support its request for the arrest of whistle-blower Edward Snowden before he had left the city. The missing information included things as basic as a confirmation of Snowden’s full name and passport number, Secretary for Justice Rimsky Yuen Kwok-keung said on Tuesday. “Up to the moment Snowden left the city, the US government had not replied to the Department of Justice’s request for the necessary information,” he said. “Therefore, it was impossible and there was no legal basis under Hong Kong law for the Department of Justice to ask a Hong Kong judge to sign off on a provisional arrest warrant,” Yuen said. “[Thus] there then was no legal basis to restrict or ban Mr Snowden from leaving Hong Kong.” Yuen’s public remarks – his first on the Snowden case – came after the White House said it was disappointed with the city’s failure to arrest the fugitive whistle-blower who has made public information detailing US internet spying programmes around the world. Snowden left Hong Kong on Sunday and is believed to be in a transit area of a Moscow airport. The former CIA contractor had previously told the Post in an exclusive report that the US had been hacking into computers in Hong Kong and China since 2009. Yuen said the US government had not responded to Hong Kong’s request for a confirmation of Mr Snowden name and passport number even though it had mentioned that he was a US passport holder, Yuen said. The name used in US government diplomatic documents was Edward James Snowden, the US Department of Justice referred to him as Edward J Snowden, and Hong Kong’s Immigration Department had him recorded as Edward Joseph Snowden, Yuen said. “I couldn’t say the three names were consistent, so we needed further clarification. Otherwise, there would have been legal problems with a provisional arrest warrant,” Yuen said. The US also failed to explain to Hong Kong authorities how two of the three charges the US mentioned in its arrest request fell within the scope of a US-Hong Kong rendition of fugitive offenders agreement signed in 1996. The Hong Kong government on June 15 received the US request for the provisional arrest of Snowden on three charges, namely unauthorised disclosure of national defence information, unauthorised disclosure of intelligence and stealing state property. Yuen said the US had failed to tell Hong Kong authorities which part of the agreement covered the first two charges. He also said documents from the US made no mention of what evidence they had against Snowden, a requirement for Hong Kong courts to move ahead with a provisional arrest. Yuen chronicled the process of how Hong Kong had been dealing with a US request for the provisional arrest of Snowden starting from June 15. He rejected US suggestions that Hong Kong had been employing delaying tactics. “We had not been deliberately delaying the process. All along, we have acted in full accordance with the law,” Yuen said. “And any suggestion that we deliberately let Mr Snowden get away and had done anything to obstruct normal operations is totally untrue.” He said that on June 17, Hong Kong e-mailed the US Department of Justice, saying that it was drafting a list of questions for clarifications and further details needed to process the request. Yuen said that on June 21 – two days before Snowden left — the Security Bureau wrote to the US government asking it to clarify reports that the US had been hacking into computers in Hong Kong. On the same afternoon, Hong Kong’s Department of Justice e-mailed and sent by speed-post to the US its request for further information to support the US request for the provisional arrest of Snowden. As of Tuesday, Hong Kong had not received a reply from the US to this request.

Hutchison expands infrastructure in Hong Kong to increase bandwidth (By Bien Perez bien.perez@scmp.com) Upgrade of infrastructure will increase transmission speeds to 100 gigabits per second from 10Gbps and meet demand for bandwidth - Jennifer Tan, Hutchison Global Communications' managing director, says upgrading the backbone network will be the firm's focus this year. Fixed-line network operator Hutchison Global Communications (HGC) is expanding its high-capacity infrastructure as it prepares to launch a range of new services from the second half of this year. With a capital expenditure budget of HK$700 million, HGC has started deploying a new "backbone network" that will increase transmission speeds to 100 gigabits per second from 10Gbps to meet demand for high bandwidth from businesses and consumers. The "100G" network will enable HGC, a division of Hutchison Telecommunications Hong Kong, to deliver online and content services to its network of more than 10,000 buildings with direct fibre-optic connections. It will also serve as the infrastructure through which TVB Network Vision, the pay-television business of free-to-air broadcaster Television Broadcasts, will transmit matches of the 2014 football World Cup in Brazil to subscribers. Jennifer Tan Yuen-chun, HGC's managing director, said: "Upgrading our backbone network is the major focus this year." The company recently contracted Swedish firm Transmode to supply packet-optical networking systems for this new high-capacity network for three years. This will interconnect a large number of HGC's corporate customers, its data centres and submarine cable landing stations across the city. "I believe we have invested the most over the past 10 years to develop an advanced high-speed network, compared with other providers," Tan said. "We are working hard to deliver a network that will support intelligent buildings and the smart-connected devices that people use." Byron Chiang Yung-hon, technology director at HGC, said the network will allow more than a million TVB subscribers to watch World Cup matches in ultra-high definition. "We're moving seamlessly into the content business with TVB as our partner," Chiang said. The new network is also expected to accelerate HGC's effort to provide an array of cloud-computing services to both business and consumers in the city. Cloud computing enables companies and consumers to buy, lease, sell or distribute over the internet as well as private networks a vast array of software, business systems, data and other digital resources, including storage, as an on-demand service, like electricity from a power grid. Such resources are hosted in data centres. HGC teamed up last year with technology giant Oracle, consulting firm PricewaterhouseCoopers and other major carriers in a consortium - the Asia-Pacific Cloud Alliance - that aims to accelerate adoption of cloud computing in the business community. Research firm Ovum has forecast that spending by Asia-Pacific companies on cloud services will reach US$12 billion by 2016. Raymond Ho Wai-ming, consumer market director at HGC, said the company was keen to use its 10G network to promote video-on-demand programming from third-party content providers like TVB to the more than 1.6 million households that it covers. Hutchison Telecommunications Hong Kong, controlled by Li Ka-shing, is involved in a variety of businesses.

Moscow says Snowden has not crossed Russian border and lashes out at US criticism (By Agencies in Moscow) Foreign Minister Lavrov says Snowden did not cross border to exit airport - Russia's Foreign Minister Sergei Lavrov. Russia on Tuesday denied it had any involvement in the travel of fugitive US intelligence leaker Edward Snowden and lashed out at Washington for accusing Moscow of assisting him. “We are in no way involved with either Mr Snowden, his relations with US justice, nor in his movements around the world,” Foreign Minister Sergei Lavrov told a news conference. Lavrov did not confirm or deny that Snowden had landed as previously reported at Moscow’s Sheremetyevo airport on a flight from Hong Kong on Sunday. But he insisted that he had never crossed the Russian border to exit the airport. “He chose his route on his own. We learned about it, as most of those present did, from the mass media. He did not cross the Russian border,” Lavrov told reporters. Meanwhile a Moscow airport source said that the former US spy agency contractor arrived in Moscow from Hong Kong on Sunday afternoon and was due to depart for Havana the following day, but did not use the ticket. The source said he was travelling with Sarah Harrison. Harrison is a British legal researcher working for the anti-secrecy group, WikiLeaks. “She (Harrison) came together with Edward Snowden from Hong-Kong on June 23 around 5pm,” the source said. “He had a ticket to go to Havana on the 24th, but he did not use it. She also had one, but she didn’t use it either.” Sources quoted by Russian news agencies have said that Snowden spent at least Sunday night in a hotel located in the transit area of Sheremetyevo which would not have required Snowden to pass through passport control or have a Russian visa. The White House had earlier called on Moscow to look at all the options available to expel Snowden back to the United States. US Secretary of State John Kerry had expressed anger over Russia’s apparent role. But Lavrov slammed Washington and rubbished suggestions that Moscow was complicit in Snowden’s disappearance. “We think the attempts to blame Russia of breaking US laws and even complicity are absolutely groundless and unacceptable,” he said, complaining the accusations were accompanied by “threats”. “There are no legal grounds for such behaviour by US officials,” he added. Lavrov is the most senior Russian official to have commented on the Snowden affair since anti-secrecy website WikiLeaks said he had travelled to Moscow from Hong Kong on Sunday. He had been expected to travel on with Aeroflot on Monday to Havana, but never appeared on the flight. Lavrov gave no indication of his whereabouts now.

 China*:  June 27 2013

HKND boss outlines grand plans for Nicaraguan canal (By Kwong Man-ki in Beijing) Nicaraguan canal needed to cope with expected surge in energy exports from US after shale comes on line - HKND boss Wang Jing says his company is open to investment from global companies and is already talking to large financial institutions. Nicaragua's President Daniel Ortega (left) shakes hands with HKND chairman Wang Jing after signing a concession agreement earlier this month to build a canal. The mystery man who piqued the interest of the world with his US$40 billion plan to build a canal across Nicaragua finally met the media on Tuesday to outline his grand vision. Wang Jing, chairman of HKND which has won a concession to design, build and manage a canal to rival Panama’s was upbeat about the project, despite its huge costs. Earlier this month, it was reported that the company’s bet on the canal was based on the US shale revolution, which will require bigger tankers which the Panama Canal will not be able to handle. Wang said HKND was “open to investment from global companies”, and was already talking to large banks and financial institutions. “We have had preliminary contact with large companies, including those from the energy sector,” Wang told the media at a briefing in Beijing. He said HKND was responsible for raising money for the canal, adding that the Nicaraguan government would not be investing in the project. “But the government will provide preferential policies, such as tax relief to support the project,” Wang said. He said HKND’s stake in the project would change from time to time as other investors joined in, but emphasised that HKND’s holding would be large enough to ensure that he remained chairman and had a say in matters. Wang also emphasised that the Chinese government was not involved. “As the foreign ministry said earlier, this is a private investment,” he said. Wang Jing played down his origins when questioned by the media. “I’m just an ordinary Chinese citizen who was born in Beijing in December 1972,” he told reporters. Beside his investment in Xinwei, a telecommunications company, Wang said he had also invested in gold mines in Southeast Asia, with reserves of more than 100 tonnes, and also had put money into the sports, aviation and aerospace sectors. And while he leapt to prominence with the Nicaragua project, his original studies in Beijing were not business-related. Wang told the media he studied Chinese medicine. “It may disappoint you,” he said. Few details have emerged of the route of the canal, which is expected to be significantly longer than the 77-kilometre Panama Canal. Engineers have also said that the geography poses major challenges - not least a 20-foot tide differential between the two coasts. HKND Group is a unit of holding company the HK Nicaragua Canal Development Investment Co, which was incorporated last year, according to the Hong Kong Companies Registry.

China and US wage war of words over Snowden's flight from Hong Kong (By Reuters in Beijing) Foreign Ministry spokeswoman Hua Chunying on Tuesday defended the Hong Kong government’s decision to let Snowden go. China rebuked the United States on Tuesday for accusing it of facilitating the flight of fugitive US spy agency contractor Edward Snowden, and said suggestions that it had done so were “baseless and unacceptable”. The remarks from the Chinese foreign ministry and earlier comments from state media have underscored the strain in ties between the two countries since Snowden, who is wanted by the US government on charges of espionage, fled Hong Kong on Sunday. The White House said the decision by the Chinese territory to allow Snowden to leave was “a deliberate choice by the government to release a fugitive despite a valid arrest warrant, and that decision unquestionably has a negative impact on the US-China relationship”. China rejected the accusation. “The US side has no reason to call into question the Hong Kong government’s handling of affairs [which were done] according to law,” Foreign Ministry spokeswoman Hua Chunying said at a regular briefing. “The United States’ criticism of China’s central government is baseless. China absolutely cannot accept it.” Hua also defended the Hong Kong government’s decision to let Snowden go, saying it “handled the relevant case completely according to law. “This is beyond dispute. All parties should respect this.” Experts on both sides however said the tirade should quickly blow over, and that neither country would be keen to let ties deteriorate permanently just weeks after a successful summit meeting between President Barack Obama and President Xi Jinping. “China does not want this to affect the overall situation, the central government has always maintained a relatively calm and restrained attitude because Sino-US relations are important,” said Zhao Kejing, a professor of international relations at China’s elite Tsinghua University. “The United States has no reason to exert greater pressure; otherwise, it would lose moral support.” Kenneth Lieberthal, a China expert at the Brookings Institution who was an Asia adviser in Bill Clinton’s White House, said sanctioning Beijing was “inconceivable” and linking Snowden to other issues would undo careful policy aimed at handling issues in separate lanes to avoid big ruptures in ties. “Over the years, we’ve sought to prevent any serious disagreement in one issue area from spilling over and degrading the entire relationship,” he said. At the summit earlier this month, Obama confronted Xi over allegations of cyber-theft. Xi earlier told a news conference with Obama that China itself was a victim of cyber attacks but that the two sides should work together to develop a common approach. Snowden’s revelations of widespread snooping by the U.S. National Security Agency in China and Hong Kong have given Beijing considerable ammunition in the tit-for-tat exchange. “In a sense, the United States has gone from a ’model of human rights’ to ’an eavesdropper on personal privacy’, the ’manipulator’ of the centralised power over the international Internet, and the mad ’invader’ of other countries’ networks,” said the overseas edition of China’s People’s Daily, which can reflect the government’s thinking. “The world will remember Edward Snowden,” the newspaper said. “It was his fearlessness that tore off Washington’s sanctimonious mask.” Beijing was torn about keeping Snowden or letting him go, but decided that allowing him to leave was “the lesser of three evils”, a source with ties to China’s leadership told Reuters, requesting anonymity to avoid repercussions for speaking to a foreign reporter. “If Snowden was handed over to the United States, China would be perceived to be a running dog of the United States and be criticised by (Chinese and foreign) Internet users sympathetic to Snowden,” the source said. “Allowing Snowden to continue to stay in Hong Kong or come to the mainland would cause more trouble and headache,” the source said. “Allowing Snowden to leave was the only option”. The Chinese government has said it was gravely concerned by Snowden’s allegations that the United States had hacked into many networks in Hong and China, including Tsinghua University, which hosts one of the country’s Internet hubs, and Chinese mobile network companies. It has said it had taken the issue up with Washington. “Not only did the US authorities not give us an explanation and apology, it instead expressed dissatisfaction at the Hong Kong Special Administrative Region for handling things in accordance with law,” wrote Wang Xinjun, a researcher at the Academy of Military Science, in the People’s Daily commentary. State news agency Xinhua was more conciliatory in its tone. “Both Beijing and Washington fully know that an isolated case should not be allowed to hurt one of the most critical relationships in the world,” Xinhua said in a commentary. “It is in the interest of both countries to keep the positive momentum in bilateral relations.” Still, China’s academics and state media have been loud in their calls for the Obama administration to apologise to Beijing. “The United States should not shift the real focus,” said Liu Feitao, the deputy chief of US studies at the China Institute of International Studies, a think-tank affiliated with China’s foreign ministry. “This thing has nothing to do with China, except that America owes China an explanation on the cyber-attack leaks by Snowden.”

China shares trim losses after Monday shock (China Daily) China shares pared hefty losses after earlier testing 4-1/2-year lows on Tuesday ahead of a press conference in Shanghai at which traders hope the Chinese central bank and authorities will address recent market turmoil. The benchmark Shanghai Composite Index lost 0.19 percent, or 3.73 points, to end at 1,959.51, the lowest point in nearly seven months. The Shenzhen Component Index shrank 1.23 percent, or 93.43 points, to 7,495.10. China's central bank on Monday urged lenders to control risks from credit expansion after the country's short-term interbank rates rocketed to unusual levels during the past two weeks, signalling no intention to ease the cash crunch that investors fear would exacerbate the current economic slowdown. The announcement took a heavy toll on the stock market. The benchmark Shanghai Composite Index plummeted 5.3 percent on Monday to close at 1963.23, its biggest daily loss in nearly four years. Bank shares led the losses, with investors concerned over the cash squeeze that has seen banks put the brakes on new lending, which has in turn been a drag on the economy. Analysts said the bank sent a clear signal that the worst phase of the liquidity squeeze in the past several weeks is over.

Hong Kong*:  June 26 2013

SOUTH CHINA MORNING POST EXCLUSIVE: US hacked Pacnet, Asia Pacific fibre-optic network operator, in 2009 (By Lana Lam lana.lam@scmp.com) According to information provided by Edward Snowden to the Post, computers owned by Pacnet in Hong Kong were attacked by the US National Security Agency in 2009, but the operation has since been shut down - Pacnet is one of the largest fibre-optic network operators in the Asia Pacific region. Computers at the Hong Kong headquarters of Pacnet – owner of one of the biggest fibre-optic networks in the region – were hacked by US spies in 2009, adding fuel to the diplomatic fire that has engulfed the Obama administration this month over its cyber-snooping activities worldwide. According to information provided by Edward Snowden to the Post, computers owned by Pacnet in Hong Kong were attacked by the US National Security Agency but the operation has since been shut down. The latest revelations come as the scope of cyber-spying by US and UK secret agents widened with new reports by The Guardian newspaper claiming the UK spy agency, GCHQ has the means to tap into a wealth of data held in fibre-optic cables. Last week, Snowden made the explosive claim that hundreds of computers in Hong Kong and mainland China had been targeted by the NSA over a four-year period. The information on the attacks on Pacnet are based on a range of details including dates, domain names, internet protocol numbers and other operational details provided by Snowden. If the legal system in a country allows for tapping into fibre-optic connections, there is little control over it at the other end. Pacnet, which has global headquarters in Hong Kong and Singapore, owns more than 46,000 kilometres of fibre-optic submarine cables and provides connections to 16 data centres for telecom companies, multinationals and governments across Asia Pacific. Its regional network spans Hong Kong, the mainland, Korea, Japan, Taiwan, the Philippines and Singapore. Pacnet has five data centres on the mainland with the most recent opening last December in Tianjin. It also has offices in the Netherlands and the US. Last Thursday, Pacnet announced that its joint venture in China, Pacnet Business Solutions, had signed new deals with the three major mainland telecom providers: China Telecom, China Unicom and China Mobile. Pacnet said its service agreements with the three companies would see it provide “border gateway protocol” services to the firms. Broadly speaking , the “border gateway protocol” is the protocol which ties the internet together. The move allows the company to service global cloud computing providers who want to set up on the mainland. The claims about the NSA hacking into computers such as Pacnet’s follows on from last week’s revelation that the Chinese University of Hong Kong had been targeted by the spy agency. Snowden says that the US is targeting “network backbones” through which large quantities of data pass. The university is home to the Hong Kong Internet Exchange, a comprehensive infrastructure hub through which all the city’s internet traffic passes. After Snowden’s claims were made public by the Post, Hong Kong Secretary for Security Lai Tung-kwok announced that police had checked the hub and that the government had set up round-the-clock monitoring of the exchange. Chinese University says it checked its servers and had not detected any attacks, but it did not specify between what period it had investigated. According to its official website, Pacnet owns and operates the leading pan-Asian submarine cable network and has a presence at 19 cable landing stations, extending from India to the US. In January 2008, the company was rebranded Pacnet after a merger between Asia Netcom and Pacific Internet, which the company claimed made it the communications firm with the largest regional footprint and the most extensive submarine cable infrastructure. Pacnet is privately owned. According to its website its ownership includes London-based Ashmore Investment Management and Clearwater Capital Partners of New York. Reuters reported in January last year that the owners’ plans to sell the company had stalled due to lower than expected bids.The majority of fibre-optic connections in Hong Kong lead to the United States because some of the most important internet services – such as the domain name service, some popular cloud computing services and search engines like Google and Yahoo – have their roots in the US, said professor Chow Kam-pui, associate director of the Computer Forensics Research Group at the University of Hong Kong. Professor Chow Kam-pui, associate director of the Computer Forensics Research Group at the University of Hong Kong. “If you’re on the internet, you would be using fibre-optic connections to the US most of the time,” he said. He said if the NSA tapped into fibre-optic connections it would probably do so at the American end, he said. Tapping into the connections at the Hong Kong end would need physical access to the system, he added. “If the legal system in a country allows for tapping into fibre-optic connections, there is little control over it at the other end,” he said. he claims that the NSA has been hacking into computers with links to fibre-optic networks comes as new Guardian reports reveal that Britain’s Government Communications Headquarters had secretly gained access to the network of cables which carry the world’s phone calls and internet traffic and has started to process vast streams of sensitive personal information which it is sharing with its American counterpart. The documents show that one key innovation was that the data could be drawn from cables for up to 30 days so it could be sifted and analysed. That operation, codenamed Tempora, has been running for some 18 months, The Guardian reported. The types of data collected ranged from recordings of phone calls, email messages, Facebook entries and the history of any internet user’s access to websites. “It’s not just a US problem. The UK has a huge dog in this fight,” Snowden told the Guardian. “They [GCHQ] are worse than the US.” The Guardian’s report said a source with knowledge of intelligence argued that the data was collected legally under a system of safeguards, and had provided material that had led to significant breakthroughs in detecting and preventing serious crime. UK officials could also claim GCHQ “produces larger amounts of metadata than NSA”. (Metadata describes basic information on who has been contacting whom, without detailing the content.) The documents reveal that by last year GCHQ was handling 600m “telephone events” each day, had tapped more than 200 fibre-optic cables and was able to process data from at least 46 of them at a time. Additional reporting by Jennifer Ngo and the Guardian

Hong Kong government hits back at US criticism over Snowden arrest demand (By Patsy Moy - South China Morning Post and Agence France-Presse) Washington accused of failing to provide crucial information on arrest demand - Hong Kong has hit back at US criticism over the way it handled whistle-blower Edward Snowden, saying Washington failed to provide crucial information it needed to legally detain or prevent the former CIA analyst from leaving the city. Reliable sources with knowledge of the government's handling of the case have told the Post that a lack of detailed evidence to support the charges Washington outlined against Snowden and insufficient passport information - including Snowden's full name and passport number - meant they were duty-bound under Hong Kong laws to seek more details. The White House said it did not accept Hong Kong's explanation, warning the decision to allow Snowden to leave had harmed Sino-US relations. Responding to allegations by the US that Hong Kong had allowed Snowden to leave the city despite the revocation of his passport, the Hong Kong Immigration Department said: "So far no notification has been received from the US government of Mr Edward Snowden's passport being revoked." WikiLeaks founder Julian Assange said Snowden had left Hong Kong with a refugee document supplied by Ecuador, which is considering Snowden's application for asylum. The sources also told the Post the Hong Kong government had to ensure key information such as the accurate and full passport number of Snowden and his name were provided, because if the details were not all present and correct they could face a legal challenge at a later date. "To ensure procedural fairness, the Hong Kong government needed to secure this information and also enough evidence about the charges [pressed by the US government] against Snowden. Failure to do so would give rise to the possibility of a judicial review by Snowden," the sources said. Snowden's full name is Edward Joseph Snowden. Hong Kong barrister Michael Blanchflower, SC, explained that the US government was required to provide specific information. This would include: the criminal charges in the US, the issuance of a warrant of arrest in the US, a description of the person, the information that the person was believed to be in Hong Kong, and also information supporting the charges to give Hong Kong an idea of the underlying conduct alleged to satisfy criminality. Commenting on Snowden's case, Chief Executive Leung Chun-ying said Snowden had left Hong Kong through a "lawful and usual channel", though he realised "there have been expressions of displeasure on the part of ... the United States". Leung said the Hong Kong government was still processing the request by the US government for the provisional arrest when Snowden left Hong Kong. Therefore, there was "no legal basis" to stop him from leaving. He insisted Hong Kong followed the law in handling the case. "The people of Hong Kong and our friends in the international community expect us to follow the laws of Hong Kong itself. They expect us to uphold our rule of law and, equally importantly, they expect us to follow procedural fairness and procedural justice. We were asking the United States government for further important information on the case, and there was no legal basis to stop Mr Snowden from leaving Hong Kong," Leung said. The US Department of Justice said senior US officials had been in touch with their Hong Kong counterparts since June 10. Last Wednesday, US Attorney General Eric Holder spoke to Hong Kong's Secretary for Justice, Rimsky Yuen Kwok-keung, and urged Hong Kong to honour the request for Snowden's arrest, it said. The US Department of Justice has denied there was anything missing in its request. In unusually direct criticism of Beijing, White House spokesman Jay Carney said the US did not accept explanations the decision was simply a determination handed down by local Hong Kong authorities. "We are just not buying that this was a technical decision by a Hong Kong immigration official," he said. "This was a deliberate choice by the government to release a fugitive ... and that decision unquestionably has a negative impact on the US-China relationship. The Chinese have emphasised the importance of building trust. They've dealt that effort a serious setback."

SOUTH CHINA MORNING POST EXCLUSIVE: Snowden sought Booz Allen job to gather evidence on NSA surveillance (By Lana Lam) Edward Snowden tells the Post he took a job at NSA contractor Booz Allen Hamilton to collect proof of surveillance program. Edward Snowden secured a job with a US government contractor for one reason alone – to obtain evidence on Washington’s cyberspying networks, the South China Morning Post can reveal. For the first time, Snowden has admitted he sought a position at Booz Allen Hamilton so he could collect proof about the US National Security Agency’s secret surveillance programmes ahead of planned leaks to the media. “My position with Booz Allen Hamilton granted me access to lists of machines all over the world the NSA hacked,” he told the Post on June 12. “That is why I accepted that position about three months ago.” During a global online chat last week, Snowden also stated he took pay cuts “in the course of pursuing specific work”. His admission comes as US officials voiced anger at Hong Kong, and indirectly Beijing, after the whistle-blower was allowed to leave the city on Sunday. Snowden is understood to be heading for Ecuador to seek political asylum with the help of WikiLeaks, which claimed to have secured his safe passage to the South American country. Snowden, who arrived in Hong Kong on May 20, first contacted documentary maker Laura Poitras in January, claiming to have information about the intelligence community. But it was several months later before Snowden met Poitras and two British reporters in the city. He spent the time collecting a cache of classified documents as a computer systems administrator at Booz Allen Hamilton. In his interview with the Post, Snowden divulged information that he claimed showed hacking by the NSA into computers in Hong Kong and mainland China. “I did not release them earlier because I don’t want to simply dump huge amounts of documents without regard to their content,” he said. “I have to screen everything before releasing it to journalists.” Asked if he specifically went to Booz Allen Hamilton to gather evidence of surveillance, he replied: “Correct on Booz.” His intention was to collect information about the NSA hacking into “the whole world” and “not specifically Hong Kong and China”. The documents he divulged to the Post were obtained during his tenure at Booz Allen Hamilton in April, he said. He also signalled his intention to leak more of those documents at a later date. “If I have time to go through this information, I would like to make it available to journalists in each country to make their own assessment, independent of my bias, as to whether or not the knowledge of US network operations against their people should be published.” Two days after Snowden broke cover in Hong Kong as the source of the NSA leaks, Booz Allen Hamilton sacked him.

Restaurant's HK$1 chicken gimmick won't fly under new trade rules (By Amy Nip and Patsy Moy) Restaurant's HK$1 promotion could fall foul of stricter trade ordinance if it doesn't mention the cost of those spring onions or ginger paste - Simon Wong Ka-wo. Restaurants that use gimmicks such as offering a dish for just HK$1 while charging for unspecified extras could in future be committing an offence under the Trade Descriptions Ordinance. This was one of several examples given in the final version of new enforcement guidelines for Customs and Exercise and Communications Authority officers. The ordinance now covers services as well as goods. The guidelines will come into effect on July 19. The guidelines cited an example of promoting chicken for HK$1 while charging for extras such as the spring onion and ginger paste that come with it. Traders are warned that misleading omissions in sales material could leave them liable for failing to properly inform customers before they buy something. The introduction to the 44-page booklet says the guidelines only "serve as a guide as to when conduct may constitute a contravention of the fair trading sections". "It is impossible to cover all circumstances in light of the developments and innovations in commercial practices, nor should the booklet be treated as having any legal effect," it warns. "Ultimately, only a court of law can decide whether conduct contravenes the fair trading sections, taking into account the evidence of each case." Misleading trade descriptions were a topic hotly debated by retailers during the public consultation. An example in the consultation guidelines states that traders who label their crabs "Yangcheng Lake hairy crab" when the crabs are in fact bred and harvested in other places are likely to be accused of providing a false trade description. But retailers said the name of a place that came before a food product did not necessarily denote its origin. A Fuji apple, for example, was not necessarily harvested in Japan, they argued. To address their worries, the Customs and Exercise Department added a suggestion that traders provide more detailed descriptions on such products - such as labelling Fuji apples as "Fuji apple from China". A person may be acquitted if there is enough evidence that he or she did not know the goods did not conform to the description, the guidelines adds. While the court will decide whether to accept such a defence, a retailer that requires suppliers to provide proof such as certificates of origin would be more likely to have the defence accepted. Restaurant chain Tao Heung, which has been offering a HK$1 chicken dish since 1996, said there were no extra charges except the conventional 10 per cent service charge. The restaurant drew criticism earlier this year when the chicken ran out before the stated promotion period. A spokesman said the company would review its marketing information and poster designs to accommodate the new legal requirements. Simon Wong Ka-wo, president of the Federation of Restaurants and Related Trades, said very few restaurants or food sellers would have certificates proving their products' origin. "Almost all of Hong Kong's food is imported. We are in a passive role when it comes to proving food origins," he said. Under European Union rules, only food produced in a given area using recognised expertise can be identified as such. The only sparkling wines that can call themselves "champagne", for example, are those produced in the Champagne region. The certification system for Yangcheng crabs, however, has always been questioned by crab farmers as dubious. Even if food sellers found some names misleading, they could do little to change them, Wong said. "People usually think Wagyu comes from Japan, but many countries also give their beef the same name and back their claims with various certification systems," he said.

Hong Kong lawyer Albert Ho says 'middleman' urged Snowden to leave (By Lana Lam lana.lam@scmp.com) Democrat met government official; Snowden's HK lawyers handled Libyan rendition case - Democratic Party lawmaker and lawyer Albert Ho Chun-yan revealed last night he was part of last-minute top-level discussions with the government on the fate of Edward Snowden. The senior partner of Ho, Tse, Wai & Partners, said that acting on Snowden's instructions he met a top government official last Friday to discuss the American's situation and clarify some legal issues, but received an unsatisfactory response. Ho said that at an unspecified time after the meeting, an informal message regarding Snowden's stay in the city was relayed to the whistle-blower through an intermediary. This coincided with US espionage charges being made public, forcing Snowden to make a decision on his movements. Ho told reporters on Monday that an individual claiming to represent the Hong Kong government had indicated to Snowden that he was free to leave the city and should do so. I have reasons to believe that... those who wanted him to leave represented Beijing authorities - "By going through not entirely legal avenues, and using a person whose identity isn't entirely clear to tell [Snowden] that the government wants him to leave. This is a highly unusual action," he said. “I have reasons to believe that... those who wanted him to leave represented Beijing authorities,” Ho said. “The Hong Kong government has no power to decide or say anything whatsoever, not even the power to notify me [about an official stance],” said Ho. “Bejing would not step forward to the front stage because it will affect Sino-US relations. So, it would operate behind the scenes to make Snowden go. The Hong Kong government may not have had any role other than not stopping him at the airport.” Sources with knowledge of the government's handling of the case had said on Sunday that Ho was giving his interpretation and version of events, adding that the government had handled the matter in accordance with the law. Ho's involvement came as members of Snowden's legal team went public for the first time yesterday. Two Hong Kong lawyers with extensive experience in human rights cases - including the secret 2004 rendition of a Libyan man and his family from Hong Kong to Tripoli by US and UK spies - spoke to the Post. Barrister Robert Tibbo and solicitor Jonathan Man Ho-ching confirmed they were brought in to represent Snowden about two weeks ago and kept in close contact with the whistle-blower. "Snowden left Hong Kong through legal, legitimate means and the proper immigration channels," Tibbo told the South China Morning Post. "We have been acting for Snowden for the past two weeks." Snowden is wanted by the US government on charges of espionage and theft after leaking classified documents detailing extensive cyberspying networks by the National Security Agency. Man, an associate at Ho, Tse, Wai & Partners, is part of the legal team planning to sue the Hong Kong government over its role in the rendition of a Libyan dissident and his family to Tripoli. Sami al-Saadi claims that security officials in Hong Kong conspired with US, British and Libyan spies in his illegal extradition to Libya. He says Hong Kong authorities detained him and his family for almost two weeks and forced them on to a private jet to Tripoli via Bangkok in March 2004 where they were tortured and persecuted.

White House says it strongly objects to Hong Kong allowing Snowden to flee (By Agencies in Washington) The White House on Monday said it expects the Russian government to “look at all options available” to expel former government contractor Edward Snowden back to the United States to face espionage charges. The White House National Security Council spokeswoman Caitlin Hayden said the United States also registered strong objections to authorities in Hong Kong and China through diplomatic channels at the decision to let Snowden flee. It “noted that such behaviour is detrimental to US-Hong Kong and US-China bilateral relations,” Hayden said. Hayden also said that given the intensified co-operation between the United States and Russia after the Boston Marathon bombings in April and a history of working together on law enforcement matters, the United States wanted Moscow to help on the Snowden case. A senior administration official said Snowden’s claim that he leaked details of the National Security Agency’s secret surveillance programs to protect democracy and individual rights is “belied by the protectors he has potentially chosen: China, Russia, Cuba, Venezuela and Ecuador”. “His failure to criticise these regimes suggests that his true motive throughout has been to injure the national security of the US, not to advance Internet freedom and free speech,” the official said. Beijing 'made final call' Beijing made the final decision in allowing Snowden to leave Hong Kong on Sunday, it has been reported. The New York Times said that the move allowed China to resolve the diplomatic problem of preserving a stable relationship with the United States while dealing with a Chinese public that widely regards the former National Security Agency contractor as a hero. Although Hong Kong has insisted that its judicial process is independent of China, the Chinese government has the final say in foreign policy and exercised its authority in allowing Snowden to leave on a flight bound for Moscow, according to sources who spoke on condition of anonymity. Jin Canrong, the mainland's leading foreign relations scholar and associate dean of Renmin University's School of International Relations, told the South China Morning Post Snowden's departure was ideal for Beijing. "A time bomb that could threaten the Sino-US relationship has been defused, even though the saga will go on and Snowden can still make more revelations. The strategy Beijing has been using in dealing with the case was to let Hong Kong handle it independently and keep a distance from it. I believe Beijing would not proactively take advantage of the intelligence Snowden revealed, because that would provoke Washington and rub salt into its wounds. "The broader picture of the bilateral relationship is the context where Beijing acts, and it [Beijing] would like more co-operation and less unnecessary confrontation," Jin said. "Actually Beijing made some gains from the Snowden saga, because his revelations provided Beijing some bargaining chips for future negotiations with Washington in cybersecurity; Washington has lost the moral high ground on this front." US 'disappointed' The United States was disappointed by Hong Kong’s “troubling” failure to arrest Snowden before he fled the territory, an official said on Sunday. A Department of Justice spokesperson insisted US officials had fulfilled all the requirements of Washington’s extradition treaty with the autonomous Chinese region and were “disappointed” by the decision to let him go. Snowden, a 30-year-old former intelligence contractor, is wanted by the United States on espionage charges, after he quit his job with the National Security Agency and fled to Hong Kong with a cache of secret documents. On Sunday, Snowden left Hong Kong and fled for Moscow, despite Washington having requested his arrest and extradition. Hong Kong officials said the documentation supporting the extradition request had been incomplete. But the US Department of Justice denied there was anything missing. “The US is disappointed and disagrees with the determination by Hong Kong authorities not to honour the US request for the arrest of the fugitive,” the spokesperson said in a statement. “The request for the fugitive’s arrest for purposes of his extradition complied with all of the requirements of the US-Hong Kong Surrender Agreement,” the statement said. “At no point, in all of our discussions through Friday, did the authorities in Hong Kong raise any issues regarding the sufficiency of the US’s provisional arrest request,” it said. “In light of this, we find their decision to be particularly troubling.” The statement said senior US officials had been in touch with their Hong Kong counterparts since June 10, when they learned Snowden was in Hong Kong and leaking details of secret surveillance programmes to the media. On Wednesday, US Attorney General Eric Holder spoke to Hong Kong Secretary for Justice Rimsky Yuen and urged Hong Kong to honour the request for Snowden’s arrest. The Hong Kong government had said that, as it “has yet to have sufficient information to process the request for provisional warrant of arrest, there is no legal basis to restrict Mr Snowden from leaving Hong Kong”. US warns Western hemisphere. The United States continued efforts to prevent Snowden from gaining asylum. It warned Western hemisphere nations that Snowden “should not be allowed to proceed in any further international travel, other than is necessary to return him to the United States,” a State Department official said. US Senator Charles Schumer charged that Russian President Vladimir Putin likely knew and approved of Snowden’s flight to Russia and predicted “serious consequences” for a US-Russian relationship already strained over Syria and human rights. “Putin always seems almost eager to stick a finger in the eye of the United States – whether it is Syria, Iran and now of course with Snowden,” Schumer, a New York Democrat, told CNN. He also saw “the hand of Beijing” in Hong Kong’s decision to let Snowden leave the Chinese territory despite the US extradition request.

 China*:  June 26 2013

Snowden to leave Moscow for Cuba: media (By Xinhua) A car of the Ecuadorian Embassy in Moscow is seen on the way to Sheremetyevo airport in Moscow, June 24, 2013. According to Russian media reports, former U.S. intelligence contractor Edward Snowden arrived in Moscow from Hong Kong on Sunday on a commercial flight and the Ecuadorian ambassador in Moscow was waiting for him at the Sheremetyevo airport. Former U.S. intelligence contractor Edward Snowden is expected to leave Moscow for Cuba on Monday, local media said. Snowden would take the SU150 flight at 14:05 p.m. (1005 GMT) from Terminal D of Sheremetyevo international airport, the Interfax news agency quoted an unnamed source as saying. Xinhua reporters saw cars of Ecuadorian embassy en route to Sheremetyevo. Ecuadorian Foreign Minister Ricardo Patino Aroca said late Sunday on his Twitter account that his government had received an asylum request from Snowden. The flight time is 12 hours 40 minutes, and the plane will land in Havana, Cuba at 18:45 p.m. local time (2245 GMT), the source said. 

Spacecraft completes manual docking (By Xin Dingding) A screen at the Beijing Aerospace Control Center shows Shenzhou X astronauts Nie Haisheng (center), Zhang Xiaoguang and Wang Yaping celebrating after the spacecraft completed a manual docking with the orbiting Tiangong-1 space module on Sunday. Country able to assemble a space station by 2020, expert says. The Shenzhou X spacecraft completed a manual docking with the orbiting Tiangong-1 space module on Sunday, the last docking maneuver before China's manned space program enters the space lab stage. Carrying three astronauts, the spacecraft was manually separated from Tiangong-1 at 8:26 am on Sunday, according to the Beijing Aerospace Control Center. Piloted by the crew commander Nie Haisheng, the manned spacecraft approached the Tiangong-1, made contact with it at 10 am, and the two were locked together at 10:07 am. The other two crew members, Zhang Xiaoguang and female astronaut Wang Yaping, assisted Nie by monitoring instruments and making sure the craft was on target. The manual docking on Sunday is the country's second, following a successful manual docking between the manned Shenzhou IX spacecraft and Tiangong-1 in 2012. Previously, the unmanned Shenzhou VIII spacecraft had conducted two robotic dockings with Tiangong-1 in 2011. Shenzhou IX and Shenzhou X have each completed a robotic docking with the space module. Multiple docking experiments were arranged to confirm China has mastered the space rendezvous and docking technologies, because each docking attempt between two vessels moving at 28,000 kilometers per hour could have different results due to the changing space environment, space experts said. China is the third country to independently master the space rendezvous and docking technology, after the United States and Russia. "China has now accomplished one and a half steps in its three-step manned space program," said Qi Faren, the first chief engineer of the Shenzhou spacecraft, at a science lecture targeting young people in Beijing on Friday. Only two more vital technologies need to be conquered before the country is able to assemble a space station by 2020, he said. "One is a space freighter that sends fuel and cargo up but does not return to Earth. The other is the technology to recycle water, air and other necessities that can meet astronauts' needs in long-duration missions in space," he said. Zhou Jianping, chief designer of the manned space program, said in March that China will launch the Tiangong-2 space lab in two years, and a space freighter will be launched after that to conduct a fueling experiment with the space lab. Launched on June 11 from Northwest China's Gobi Desert, the Shenzhou X is scheduled to return to Earth on Wednesday. On Sunday, after the manual docking between the Shenzhou X spacecraft and the Tiangong-1 module, the three astronauts entered the space module again to carry out scientific experiments. According to earlier media reports, the 15-day mission also includes an experiment in which the Shenzhou X flies around the Tiangong-1 module, as the future assembly of a space station requires a vessel to dock with the orbiting module from more than one direction.

Snowden exposes more US hacking, then flies (By Li Xiaokun in Beijing and Chen Weihua in Washington lixiaokun@chinadaily.com.cn and chenweihua@chinadailyusa.com) Journalists await passengers of a flight from Hong Kong while trying to ascertain whether former US spy agency contractor Edward Snowden is aboard, at Moscow's Sheremetyevo airport on Sunday. The case of Edward Snowden - the former US National Security Agency contractor who revealed massive secret surveillance programs carried out by Washington - took a dramatic turn on Sunday when he suddenly left Hong Kong, following the disclosure of still more US hacking activities against China. Snowden landed in Moscow on Sunday morning, but, according to reports, Russia was not his final destination. WikiLeaks, an anti-secrecy organization which has been helping Snowden evade extradition to the US, said on Sunday that Snowden is "bound for the Republic of Ecuador via a safe route for the purposes of asylum". Ricardo Patino Aroca, Ecuador's foreign minister, tweeted after Snowden's arrival in Moscow that his government had received an asylum request from Snowden. Since there is no direct flight between Moscow and Ecuador's capital of Quito, Snowden is booked to fly first to Havana, Cuba, on Monday, Russian news agency Interfax reported. There had been speculation earlier that Snowden might seek asylum in Iceland. Hours after Snowden boarded a Russian Aeroflot passenger flight, the Hong Kong government released a statement saying that Snowden left "on his own accord for a third country through a lawful and normal channel". The statement said the documentation of the US request for extradition did not "fully comply with the legal requirements under Hong Kong law" and "has yet to have sufficient information to process the request for provisional warrant of arrest, there is no legal basis to restrict Mr. Snowden from leaving Hong Kong". Michael O'Hanlon, a senior fellow at the Brookings Institution, told CNN on Sunday that he would not be surprised if Snowden were even given asylum in Russia, because the US would do the same thing if the US got a hold of someone of this kind from Russia. While some in the US are disappointed that Snowden was not arrested in Hong Kong, the public attention in China on Sunday has been focused on Snowden's new revelation that the US has been hacking into Chinese mobile phone companies and a backbone network to steal text messages and data of millions of Chinese citizens. The South China Morning Post revealed Snowden's claims, a few hours before his departure for Moscow. Chinese Foreign Ministry spokeswoman Hua Chunying said Beijing is concerned with reports of US government hacking on China and has made appropriate representations to the US. A commentary by Xinhua News Agency on Sunday said Snowden's disclosures of US spying activities in China have "put Washington in a really awkward situation". "Washington should come clean about its record first," it said. "It has to share with the world the range, extent and intent of its clandestine hacking programs." Jia Xiudong, a senior researcher of US studies at the China Institute of International Studies, said: "The scale and scope of US monitoring of China's Internet information is shocking, it is beyond expectation." "The US is the largest source of foreign cyber- attacks on China," Jia added. "Now Snowden's claims show that many such attacks may be backed by the US government." The National Computer Network Emergency Response Technical Team/Coordination Center of China told China Daily that in the first five months of this year, 13,408 overseas Trojan horses or bot control servers - two popular hacking tools - hijacked around 5.63 million mainframes in China. Of those, 4,062 US-based control servers hijacked 2.91 million mainframes in China. Snowden, who turned 30 last Friday, said that "the NSA does all kinds of things like hacking Chinese cell phone companies to steal all of your SMS data". The NSA also made sustained attacks on network backbones at Tsinghua University and computers at the Hong Kong headquarters of telecom service provider Pacnet, he said. In one single day in January, at least 63 computers and servers at Tsinghua University were hacked by the NSA, Snowden said. Tsinghua is home to one of the Chinese mainland's six major backbone networks, the China Education and Research Network, known as CERNET, from where Internet data from millions of Chinese citizens could be mined. Pacnet owns one of the most extensive fiber-optic submarine cable networks. It recently signed major deals with China's top mobile phone companies, and owns more than 46,000 kilometers of fiber-optic cables. The cables connect its regional data centers across the Asia-Pacific region, including the Chinese mainland, Hong Kong, Taiwan, Japan, South Korea and Singapore. The South China Morning Post said Snowden provided the information on June 12. The documents listed operational details of specific attacks on computers, including Internet protocol addresses, dates of attacks and whether a computer was still being monitored remotely. "What is the connection between Tsinghua's CERNET and terrorism?" Jia asked. "Obviously US Internet attacks against China are not for anti-terrorism efforts, as Washington has argued, but for other reasons that might include commercial and strategic motives," Jia said. "The US owes an explanation to China, and the world." However, Jia said Washington might, as always, avoid facing the issue and he did not expect it to stop hacking China. Cybersecurity is expected to be in spotlight in next month's China-US Strategic and Economic Dialogue in Washington.

Hong Kong*:  June 25 2013

Hong Kong has 'no legal basis' to keep Snowden, bound for Venezuela via Moscow and Cuba (By Lana Lam lana.lam@scmp.com) Snowden left 'on his own will' and did not have any help or protection from Hong Kong authorities, a government source tells South China Morning Post - US whistle-blower Edward Snowden has left Hong Kong and is on a commercial flight to Russia, but Moscow will not be his final destination. The fugitive whistle-blower boarded the Moscow-bound flight earlier on Sunday and would continue on to another country, possibly Cuba then Venezuela, according to media reports. The Hong Kong government said in a statement that Snowden had departed "on his own accord for a third country through a lawful and normal channel". The 30-year-old left from Chep Lap Kok airport on a flight scheduled for 10.55am. He is believed to have boarded Aeroflot Flight SU213, which landed at Moscow’s Sheremetyevo International Airport at 5.03pm local time, according to the airport's website. "Snowden left Hong Kong on his own will," a government source told the Post, adding that the Hong Kong government had not provided Snowden with any assistance or protection during his whole stay. The source dispelled media claims that the government had provided him a "safe house". It was understood that Snowden's departure was a relief to the Hong Kong government, which had been making all legal preparation to deal with new developments regarding the case. Regina Ip, former secretary of security, told the New York Times: "I think [the US] government will be upset for a while, but I hope that they will shrug it off, because our government acted in accordance with the law. Our government officials can breathe a sigh of relief." Final destination? Russian news agencies Interfax and Itar-Tass reported Snowden is booked on a flight from Moscow to Cuba on Monday. Itar-Tass said Snowden would fly from Havana to Caracas, Venezuela. “A passenger under that name will arrive in Moscow from Hong Kong today on flight SU213, and tomorrow, on June 24, he will fly to Havana on flight SU150,” the state news agency ITAR-Tass quoted a source at the airline as saying. “Also tomorrow, he will go to Caracas from Havana on a local flight.” 'No legal basis' The Hong Kong government said it had notified the US government about Snowden's departure. Snowden is wanted by the US government after he disclosed classified documents detailing the clandestine cybersnooping programmes carried out by Washington’s National Security Agency. The US government on June 14 filed espionage and theft charges against the former CIA technician, and the US National Security Council confirmed that it had put in a formal extradition request to the Hong Kong government. The Hong Kong government said on Sunday that it had requested more information so the Department of Justice could consider whether to go forward with the US extradition request. “As the HKSAR government has yet to have sufficient information to process the request for provisional warrant of arrest, there is no legal basis to restrict Mr Snowden from leaving Hong Kong,” the statement said. WikiLeaks' role - WikiLeaks, whistle-blowing website founded by Julian Assange, said on Twitter it had helped Snowdwn secure political asylum in a “democratic country”. It also said it had arranged his travel papers and "safe exit from Hong Kong". Snowden "is bound for a democratic nation via a safe route for the purposes of asylum, and is being escorted by diplomats and legal advisors from WikiLeaks", the group said in a statement. According to a Moscow-based reservations agent contacted by the New York Times, Snowden is traveling with one other person, who was identified by only the last name Harrison. The companion is believed to be Sarah Harrison, a journalist and legal researcher for WikiLeaks and assistant to Assange. WikiLeaks in a profile on Harrison said she has "courageously assisted Mr Snowden with his lawful departure from Hong Kong and is accompanying Mr Snowden in his passage to safety". Snowden "will be met by diplomats from the country that will be his ultimate destination", Assange told Australian media on Sunday. "Diplomats from that country will accompany him on a further flight to his destination." It has been previously reported that Iceland or Ecuador were possible options for Snowden to seek political asylum. US reaction - The US Justice Department said on Sunday that it would seek the co-operation of law enforcement authorities in countries where Edward Snowden may travel, Agence France-Presse reported. Justice Department spokeswoman Nanda Chitre said the United States would "continue to discuss this matter with Hong Kong and pursue relevant law enforcement cooperation with other countries where Mr Snowden may be attempting to travel”. Officials with US Secretary of State John Kerry, who arrived on his first official visit to India on Sunday, declined immediate comment on the news of Snowden's flight, AFP reported. The Russian embassy in Beijing would neither confirm nor deny Snowden is on a flight to Moscow. The Russian consulate in Hong Kong declined to comment. Russian President Vladimir Putin’s spokesman, Dmitry Peskov, said on Sunday that he was unaware of Snowden's location or plans, Reuters reported.

Updated: 2013-06-23 16:32 HONG KONG - The Hong Kong government confirmed Sunday afternoon that U.S. whistleblower Edward Snowden had left Hong Kong for a third country.

 China*:  June 25 2013

China, Britain central banks agree on currency swap line (By Agence France-Presse in London) Bank of England governor Mervyn King. The Bank of England and the People’s Bank of China have signed an agreement to establish a reciprocal, three-year sterling-yuan currency swap line, Britain’s central bank announced. The deal was agreed Saturday between Bank of England governor Mervyn King, who steps down at the end of the month, and his counterpart Zhou Xiaochuan of the central People’s Bank of China. “The maximum value of the swap is 200 billion (yuan) renminbi (US$32.6 billion),” the BoE said in a statement. “The swap line may be used to promote bilateral trade between the two countries and to support domestic financial stability should market conditions warrant.” Zhou and King met in February in Beijing for discussions on the swap line. The City of London financial district launched an initiative in April on making the British capital a centre for yuan business. “It is a testament to the outstanding working relationships between the Bank of England and the People’s Bank of China that this swap line has now been signed,” King said. “In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the bank will have the capability to facilitate renminbi liquidity to eligible institutions in the UK.” It is the latest in a string of bilateral currency agreements that China has signed in recent years to promote use of the yuan in trade and investment.

China in $270b oil deal with Russia (By Du Juan) China and Russia are to deepen their existing energy industry cooperation after signing a deal to supply oil to China worth $270 billion over the next 25 years. The deal will see the supply of 365 million metric tons of oil to China starting from next month, according to media reports. Igor Sechin, the chief executive of Russian state-controlled oil giant Rosneft, was widely quoted after being interviewed during Russia's annual economic forum in Saint Petersburg, who said deliveries could start as early as this year. The oil is likely to be delivered to China via the existing Eastern Siberia-Pacific Ocean oil pipeline that will pump direct into the Chinese region of Mohe in Heilongjiang province. The deal was signed on Friday between Rosneft and China National Petroleum Corporation, the country's largest State-owned oil and gas producer. Asked to comment on the report, a source from CNPC told China Daily that the deal had been in discussion for months, since Chinese President Xi Jinping visited Moscow and an agreement was signed in March. The source said the price of the deal had been a major sticking point between the nations. During his visit to Russia on Thursday, Vice-Premier Zhang Gaoli said that China was keen to work together with Russia to maximize the potential for bilateral economic cooperation.

Home of space dreams (By Zou Hong) Shenzhou X manned spacecraft blasted off on June 12 from Jiuquan Satellite Launch Center, which is also home to scientists, soldiers and their families. Zou Hong unveils daily life at the center in Gansu province. The "Cape Canaveral of China" - Jiuquan Satellite Launch Center, also known as Dongfeng Space Center - is located at the depth of Badain Jaran Desert, 210 kilometers from the northeast of Jiuquan city, Gansu province. The setting sun creates a mysterious hue over the skies at the satellite launch center, which is the main draw of the city of Jiuquan in Gansu province. Built in 1958, the Jiuquan Satellite Launch Center is the earliest and largest satellite launch center in China. Since its establishment, it has achieved many firsts for the development of the space industry of China, including the launch of China's very first satellite in 1970. It is also the breeding ground and launching pad of many vital space projects, including Shenzhou X manned spacecraft that blasted off on June 12, bringing the nation one step closer to setting up its own space station in 2020. While the city is the cradle for space dreams, people in the city live a simple life, with no bars and night clubs. Most of the residents are scientists, members of the military and their family members, who dedicate their time to realizing the nation's space mission.

Astronauts re-enter space module after docking (By Xinua) Three astronauts aboard the Shenzhou-10 spacecraft re-entered the orbiting Tiangong-1 space module after successfully completing a manual docking procedure on Sunday, according to the Beijing Aerospace Control Center. Launched on June 11 from northwest China's Gobi Desert, the Shenzhou-10 manned spacecraft completed a manual docking procedure with the Tiangong-1 at 10:07 a.m. Sunday. The three astronauts entered the module at 1:09 p.m. They will carry out scientific experiments aboard the module. On June 13, the Shenzhou-10 successfully completed an automated docking procedure with the Tiangong-1, with three astronauts aboard the Shenzhou-10 entering the space module. At 8:26 a.m. Sunday, the spacecraft was manually separated from the Tiangong-1 module. After the Beijing Aerospace Control Center remotely examined the spacecraft and the module, the Shenzhou-10 approached the module, with astronaut Nie Haisheng piloting the spacecraft and the other two crew members, Zhang Xiaoguang and Wang Yaping, monitoring instruments and making sure the craft was on target. At 10:00 a.m. the spacecraft made contact with the Tiangong-1 and at 10:07, the two connected. The Shenzhou-10 is China's fifth manned spacecraft. Its current flight is China's first application-orientated space flight since the country's manned space program started in 1992. China is the third country after the United States and Russia to acquire the technologies and skills necessary for space rendezvous and docking procedures, as well as supply manpower and material for an orbiting module via different docking methods. Previous docking procedures conducted between Shenzhou-type spacecraft and the space module include two automated dockings by the unmanned Shenzhou-8 in 2011 and both an automated and manual docking by the manned Shenzhou-9 in 2012. The Tiangong-1 space lab has been in orbit for more than 600 days. It will remain in service for another three months. The module is considered the first step in building a permanent space station, which the country aims to do by 2020.

Hong Kong*:  June 24 2013

EXCLUSIVE - South China Morning Post: US hacks Chinese mobile phone companies, steals SMS data: Edward Snowden (By Lana Lam) The US government is stealing millions of text messages in their hacking attacks on major Chinese mobile phone companies, Edward Snowden has told the Post. The US government is hacking Chinese mobile phone companies to steal millions of text messages, Edward Snowden has told the South China Morning Post. And the former National Security Agency contractor claims he has the evidence to prove it. The former CIA technician and NSA contractor, hiding in Hong Kong after the US sought his arrest, made the claims after revealing to the Post that the NSA had snooped on targets in Hong Kong and on the mainland. “There’s far more than this,” Snowden said in an interview on June 12. “The NSA does all kinds of things like hack Chinese cell phone companies to steal all of your SMS data.” Text messaging is the most preferred communication tool in mainland China, used widely by ordinary people and government officials from formal work exchanges to small chats. Government data show that the Chinese exchanged almost 900 billion text messages in 2012, up 2.1 per cent from the year before. China Mobile is the world’s largest mobile network carrier, with 735 million subscribers by the end of May. China Unicom, the second largest, has 258 million users. China Telecom comes in third with 172 million users. Snowden’s leaks have rocked the international community for the past two weeks and fired up a debate about US government surveillance of citizens’ phone calls and internet browsing data without due cause. For years, cybersecurity experts on the mainland have been concerned that telecommunications equipment was vulnerable to so-called “backdoor” attacks, taking advantage of foreign-made components. They have kept quiet because domestic hardware suppliers were still striving to catch up with their international competitors. The NSA does all kinds of things like hack Chinese cell phone companies to steal all of your SMS data. Now, as the likes of Huawei, Datang and ZTE dramatically improve their suite of products and the reliance on foreign-made parts has dropped, some experts with ties to Beijing have become more vocal. Fang Binxing, president at the Beijing University of Posts and Telecommunications and widely believed to be the father of China’s “great firewall”, which restricts access to the web, told News China in October last year that foreign equipment was a serious threat to national security. President Fang Binxing of the Beijing University of Posts and Telecommunications. “China should set up a national information security review commission as soon as possible,” he said. Telecom companies have started replacing foreign-made equipment. China Unicom quietly replaced all Cisco routers at a key backbone hub in Wuxi, Jiangsu last year, according to the National Business Daily. The changes are being kept quiet to avoid panic and embarrassment to the government, people in the industry say. A series of reports based on documents provided by Snowden to The Guardian revealed how the US compelled telecommunications provider Verizon to hand over information about phone calls made by US citizens. The leaked documents also revealed the Prism programme, which gave the US far-reaching access to internet browsing data from Google, Facebook, Apple, Skype, Yahoo and others. The US and UK also had technology which gave them unauthorised access to Blackberry phones of delegates at two G20 summits in London in 2009, Snowden said. The US government has defended its electronic surveillance programmes during congressional hearings with claims that up to 50 would-be terrorist attacks were foiled because of the intelligence gathered by the NSA. US President Barack Obama says the NSA is not listening in on phone calls or reading emails unless legal requirements have been satisfied.

EXCLUSIVE - South China Morning Post Hong Kong: NSA targeted China's Tsinghua University in extensive hacking attacks, says Snowden (By Lana Lam) Tsinghua University, widely regarded as the mainland’s top education and research institute, was the target of extensive hacking by US spies this year. People walk in front of a historic gate in Tsinghua University in Beijing on April 24, 2011. Tsinghua University in Beijing, widely regarded as the mainland’s top education and research institute, was the target of extensive hacking by US spies this year, according to information leaked by Edward Snowden. It is not known how many times the prestigious university has been attacked by the NSA but details shown to the Post by Snowden reveal that one of the most recent breaches was this January. The information also showed that the attacks on Tsinghua University were intensive and concerted efforts. In one single day of January, at least 63 computers and servers in Tsinghua University have been hacked by the NSA. Snowden said the information he shared on the Tsinghua University attacks provided evidence of NSA hacking because the specific details of external and internal internet protocol addresses could only have been obtained by hacking or with physical access to the computers. The university is home to one of the mainland’s six major backbone networks, the China Education and Research Network (CERNET) from where internet data from millions of Chinese citizens could be mined. The network was the country’s first internet backbone network and has evolved into the world’s largest national research hub. It is one of the mainland’s non-commercial networks, owned by the Ministry of Education, but operated and maintained by the university and other colleges. Universities in Hong Kong and the mainland were revealed as targets of NSA’s cyber-snooping activities last week when Snowden claimed the Chinese University of Hong Kong had been hacked. Chinese University is home to the Hong Kong Internet Exchange, the city’s central hub for all internet traffic. Snowden said the NSA was focusing much attention on so-called “network backbones”, through which vast amounts of date passed. In the wake of Snowden’s claims, the Ministry of Foreign Affairs set up an office to deal with diplomatic activities involving cyber security. The new cyber affairs office is the first of its kind on the mainland with a Foreign Ministry spokeswoman saying that Beijing, long accused of cyberhacking by the United States, has been a “a major victim” of cyberattacks and that it opposed “cyberattacks in all forms”. She added that the central government would discuss cybersecurity issues with the United States at next month’s Sino-US strategic and security dialogue. Professor Xu Ke, deputy director of the Institute of Computer Networks at Tsinghua University, has previously said that most data passing through network backbones was not encrypted. Xu said most attacks on such networks were carried out by governments because individual hackers “could gain little”, as the amount of information they faced would be “colossal”. Only governments or large organisations would have the resources and manpower to “find the needle in a haystack”, he said.

Hong Kong govt silent on Snowden’s fate as lawmakers call for China to decide (Agencies in Hong Kong Reuters and Associated Press) A monitor broadcasts news on US government charges against Edward Snowden at a shopping mall in Hong Kong on June 22, 2013. Hong Kong authorities were silent on Saturday on the fate of a former US National Security Agency (NSA) contractor ahead of an expected extradition request by the United States where he has been charged with spying. But a Hong Kong newspaper said he was under police protection. Edward Snowden was charged with theft of US government property, unauthorised communication of national defence information and willful communication of classified communications intelligence to an unauthorised person, according to the criminal complaint, dated June 14 and made public on Friday. Two US sources, speaking on condition of anonymity, said the United States was preparing to seek Snowden’s extradition from Hong Kong, which is part of China but has wide-ranging autonomy, including an independent judiciary. Documents leaked by Snowden and revealed by him in Hong Kong showed that the NSA had access to vast amounts of internet data such as emails, chat rooms and video from large companies such as Facebook and Google, under a government program known as Prism. The Washington Post said the United States had asked Hong Kong to detain Snowden on a provisional arrest warrant. Hong Kong Police Commissioner Andy Tsang declined to give details but said Hong Kong would deal with the case in accordance with the law. “The laws that are enforced in Hong Kong are Hong Kong laws, not foreign laws,” he told reporters. The Apple Daily newspaper said police had provided Snowden with a safe house and protection. Police had checked his documents to make sure he hadn’t overstayed but didn’t talk to him on other matters or take any statement, the paper said, citing police sources. The US Consulate referred inquiries to the US Department of Justice in Washington. Hong Kong legislators said that the Chinese government should make the final decision on whether former National Security Agency contractor Edward Snowden should be extradited to the United States now that the Justice Department has charged him with espionage and theft of government property. Outspoken legislator Leung Kwok-hung said Beijing should instruct Hong Kong to protect Snowden from extradition before his case gets dragged through the court system. Leung also urged the people of Hong Kong to “take to the streets to protect Snowden.” Another legislator, Cyd Ho, vice-chairwoman of the pro-democracy Labour Party, said China “should now make its stance clear to the Hong Kong SAR (Special Administrative Region) government” before the case goes before a court. It is not known if the US government has made a formal extradition request to Hong Kong. When China regained control of Hong Kong in 1997, the former British colony was granted a high degree of autonomy and granted rights and freedoms not seen on mainland china. However, under the city’s mini constitution Beijing is allowed to intervene in matters involving defence and diplomatic affairs. The United States and Hong Kong signed an extradition treaty which came into effect in 1998. China has urged Washington to provide explanations following the disclosures of National Security Agency programs which collect millions of telephone records and track foreign internet activity on US networks, but it has not commented on Snowden’s status in Hong Kong. He said in an interview with the South China Morning Post that he hoped to stay in the autonomous region of China because he has faith in “the courts and people of Hong Kong to decide my fate.” He and his supporters have also spoken of his seeking asylum from Iceland. A prominent former politician in Hong Kong, Martin Lee, the founding chairman of the Democratic Party, said he doubted whether Beijing would intervene at this stage. “Beijing would only intervene according to my understanding at the last stage. If the magistrate said there is enough to extradite, then Mr. Snowden can then appeal,” he said. Lee said Beijing could then decide at the end of the appeal process if it wanted Snowden extradited or not. While espionage and theft of state secrets are not cited specifically, equivalent charges could be pressed against Snowden under Hong Kong’s Official Secrets Ordinance, legal experts say. Snowden, however, could claim political asylum. Under article six of the treaty, extradition should be refused for “an offence of a political character”. Legal sources in Hong Kong say Snowden has already approached prominent human rights lawyers in preparation for a protracted extradition battle. If Hong Kong authorities don’t charge him with an equivalent criminal act, authorities cannot arrest or take legal action. He was also theoretically free to leave the city, one legal expert said. Simon Young, a law professor at the University of Hong Kong, said a formal extradition request would likely be made through diplomatic channels to Hong Kong’s chief executive, who must decide whether or not to issue an “authority to proceed”. A magistrate would then issue a warrant for the arrest and then decide whether there was sufficient evidence to commit Snowden to trial. While China has veto power over extradition proceedings if its “defence or foreign affairs would be significantly affected”, this power has rarely been invoked by Beijing for previous cases involving non-Chinese nationals. “If he requested asylum, then from a humanitarian standpoint, we should protect him,” said 60-year-old resident Elli Fan near a street-side banner saying “Protect Snowden. Protect Freedom.” An Icelandic businessman linked to the anti-secrecy group WikiLeaks said on Thursday he had readied a private plane in China to fly Snowden to Iceland if Iceland’s government would grant asylum. A one-page criminal complaint unsealed Friday in federal court in Alexandria, Virginia, said Snowden engaged in unauthorised communication of national defence information and wilful communication of classified communications intelligence information. Both are charges under the Espionage Act. Snowden also is charged with theft of government property. All three crimes carry a maximum 10-year prison penalty. The complaint will be an integral part of the US government’s effort to have Snowden extradited from Hong Kong, a process that could become a prolonged legal battle. Snowden could contest extradition on grounds of political persecution. Hong Kong lawyer Mark Sutherland said that the filing of a refugee, torture or inhuman punishment claim acts as an automatic bar on any extradition proceedings until those claims can be assessed. “Some asylum seekers came to Hong Kong 10 years ago and still haven’t had their protection claims assessed,” Sutherland said. Organisers of a public protest in support of Snowden last week said on Saturday there were no plans for similar demonstrations this weekend.

 China*:  June 24 2013

China calls US the world's 'biggest villain' as Washington 'expects' Snowden extradition (By Agence France-Presse in Beijing) Xinhua, China's official news agency, says the US is the world's 'biggest villain' for IT espionage. The United States is the world’s “biggest villain” for IT espionage, China’s official media said on Sunday after new allegations of anti-Beijing cybersnooping emerged. “These, along with previous allegations, are clearly troubling signs,” the Xinhua news agency said in a commentary. “They demonstrate that the United States, which has long been trying to play innocent as a victim of cyberattacks, has turned out to be the biggest villain in our age,” it said. The comments came after the United States slapped an arrest warrant on Snowden on Friday, and White House National Security Advisor Tom Donilon said the charges “present a good case for extradition under the treaty, the extradition treaty between the United States and Hong Kong”. “Hong Kong has been a historically good partner of the United States in law enforcement matters, and we expect them to comply with the treaty in this case,” he told CBS Radio News on Saturday. Xinhua noted that the United States was now trying formally to extradite Snowden from Hong Kong, where he has gone to ground. “But for other countries, Washington should come clean about its record first. It owes too an explanation to China and other countries it has allegedly spied on. It has to share with the world the range, extent and intent of its clandestine hacking programmes,” it said. The United States and China are both victims of hacking and have to work together on the issue, Xinhua said. But it stressed: “The ball is now in Washington’s court. The US government had better move to allay the concerns of other countries.” Pro-Beijing Hong Kong lawmaker Regina Ip, a former secretary for security who sits on the Executive Council, said protections for political asylum-seekers were written into the US extradition treaty in “black and white”. Washington may threaten Hong Kong with a withdrawal of visa-free access to the United States for its residents, she said on the Commercial Radio station. But Ip emphasised: “We have laws, and the United States should also be aware of it.” http://www.cbsnews.com/8301-250_162-57590589/white-house-we-expect-hong-kong-to-comply-with-snowden-extradition/?tag=socsh 

US gifts to Chen Guangcheng 'bugged with tracking devices' (By Reuters in New York) When Chinese activist Chen Guangcheng arrived in the United States in May last year he was given a fellowship at New York University, use of a Greenwich Village apartment, and a pile of gifts from supporters, including smartphones and an iPad. But at least two of the gadgets presented to Chen as gifts may not have been quite what they seemed: They included software intended to spy on the blind dissident, according to Jerome Cohen, an NYU professor who has been Chen’s mentor, and another source familiar with the episode. Like nearly everything surrounding Chen these days, the existence of the spyware is in dispute, and only adds to the public recriminations between NYU and Chen’s supporters over events surrounding the end of his fellowship. Last weekend, Chen accused NYU of bowing to pressure from China by ending the fellowship, and his supporters have suggested that the university is wary of displeasing the Chinese authorities because of its plans for a campus in Shanghai. The allegations are vigorously denied by NYU, which says the fellowship was only ever planned to last a year. These people supposedly were out to help him and they give him a kind of Trojan horse that would have enabled them to monitor his communications secretly. At issue in the latest escalation in the argument are an iPad and at least one of the smartphones that were given to Chen days after he fled China and arrived in Manhattan. The devices were found by NYU technicians to have been loaded with software that made it possible to track the dissident’s movements and communications, according to Cohen and the second source, who was not authorised to speak on the matter. The episode suggests that from almost the day that he arrived at the university there was an uneasy atmosphere between Chen, his supporters, and NYU. Among the first visitors in May last year to the New York apartment Chen had moved into with his family after a dramatic escape from house arrest in China was Heidi Cai, the wife of activist Bob Fu. She brought an iPad and iPhone as gifts. The devices were screened by NYU technicians within a few days and were found to have been loaded with hidden spying software, said Cohen, who arranged the fellowship for Chen at NYU Law School, helping defuse a diplomatic crisis between the United States and China after Chen took refuge in the US Embassy in Beijing. “These people supposedly were out to help him and they give him a kind of Trojan horse that would have enabled them to monitor his communications secretly,” said Cohen. The iPad was eventually cleaned up and returned to Chen at his request, the second source said. The spyware issue was not publicised at the time and has only surfaced because of the recent scrutiny of NYU’s arrangement with Chen. Cohen said he was surprised when he heard that Reuters knew about the episode. Asked about the gadgets, Fu told Reuters that his wife had given two Apple devices to Chen shortly after the dissident had settled in New York. Fu runs a Christian group called ChinaAid that supports underground churches in China and victims of forced abortions. “This is the first time I’ve heard of spyware,” said Fu, who was in southeast Asia when his wife delivered the devices. He called the allegations “ridiculous” and “like a 007 thing.” “We knew that the first thing after they arrived, they’d want to call their family members, so we wanted to provide communication devices, iPhone and iPad,” Fu said by telephone from Texas. Although Cohen and the second source say they were left with no doubt the devices were deliberately installed with spyware, it could not be established whether there might be a more innocent explanation for what technicians believed they had found. The technicians could not be reached for comment. In examining the iPad and the iPhone, they found software that allowed a third party to secretly connect to an inbuilt global positioning system, essentially turning a device into a tracking device, said the second source. The technicians also found hidden, password-protected software that backed up the contents to a remote server, the source added. “It’s perfectly consistent with their desire to manipulate and control the situation and know whatever confidential advice he is getting,” Cohen said in reference to Fu and those around him. At least three other electronic devices, given to Chen and his wife during their first few days in New York by people other than Fu, also included suspicious software, the second source said. That included hidden keystroke-tracking software and bugging software that would allow someone to eavesdrop on conversations taking place near the device, they said. Fu said he consulted ChinaAid’s computer technician on Thursday and “my staffer is 100 per cent sure that the only thing he added on the iPad was a Skype account.” His technician did only routine things like “the activation of the iPad and iPhone, basic instalment, iCloud ... there was nothing else there. They have to provide evidence,” said Fu. “Everything was transparent. There was nothing hidden,” he added. Fu issued a statement on Friday saying ChinaAid had contacted the FBI and requested an investigation. John Beckman, a spokesman for NYU, declined to discuss specifics about the episode. “I do remember hearing about it, I was never really aware of the details, and so I’m not going to comment on it,” he said. Several of Chen’s supporters allege that NYU staff has controlled and withheld access to the activist. NYU rejects these claims and some figures connected with the university, including Cohen, say that some of Chen’s supporters may be trying to manipulate the self-trained lawyer who speaks little English to serve their own political ends. Chen could not be reached for comment. But Mark Corallo, a media consultant who has been working with Chen, said that the gifts from Fu were taken away by NYU before the dissident received them. “The devices were brand-new when ChinaAid gave them to NYU to give to Chen, so there was no need or reason to perform any check,” he said in an email. “And none of these functions was on any of the devices provided to him by ChinaAid.” He added that: “At least to Chen’s knowledge, none of these devices was ever found to have any tracking or listening mechanisms.” A person familiar with the situation later said Corallo’s statement was based on ChinaAid’s account of the episode, and that Chen’s own recollection of events remained unknown on Friday. Cohen and the second source maintain, however, that Chen was told within days of his arrival in an unfamiliar country that people he believed to be his supporters were very likely spying on him. Chen was “furious” and “very upset” when told, the second source recalled. Even so, Cohen said Chen still continued to interact with the Fu family. “That’s his right,” Cohen said.

China, Russia make headway in cooperation (Xinhua) Chinese Vice-Premier Zhang Gaoli (L) delivers a speech at the 17th St. Petersburg International Economic Forum in St. Petersburg, Russia, June 21, 2013. China and Russia are putting their words into action as leaders of the two countries have pledged to expand cooperation in a pragmatic manner. As Chinese Vice-Premier Zhang Gaoli is visiting Saint Petersburg, Russia, for an international economic forum, China National Petroleum Corporation (CNPC) and the Russian oil giant Rosneft on Friday signed a long-term agreement for oil deliveries with an estimated value of $270 billion, a good progress made in energy cooperation between the two neighboring countries. Energy cooperation between China and Russia holds great potential and has gained steam in recent years as the overall ties between the two nations are in their best status than ever. "Russia and China are strategic partners, and the cooperation in energy has been positive," Rosneft CEO Igor Sechin told Xinhua on the sidelines of the Saint Petersburg International Economic Forum, saying his company would cooperate further with Chinese partners. It is believed that the CNPC-Rosneft deal would reshape the geographic feature of Russia's oil exports, which currently are mostly Europe-oriented. For China, the world's second largest economy and a major energy consumer, Russia could offer it with oil and gas to power growth, while for Russia, China would become an ideal export destination for its energy as demand in its main market - Europe - wobbles amid economic woes. Also on Friday, Russian President Vladimir Putin said at a plenary session of the forum that Russian energy company Gazprom is readying contracts for the gas deliveries to Japan and China. The Chinese vice-premier, who began his visit in Saint Petersburg Wednesday, is due to leave Russia Saturday. His visit came in the wake of the successful summit held in Moscow between Chinese President Xi Jinping and his Russian counterpart Putin in March, which is intended to translate the latest highest-level consensus into concrete results, with energy cooperation coming high up on the agenda. The Chinese vice premier's schedule was packed with bilateral meetings with Russian political leaders, including Russian President Putin, as well as business leaders in the country's energy sector. "China would like to work together with Russia to maximize the potential for bilateral economic cooperation and translate the best ever political relationship into results of practical cooperation," Zhang said at a meeting with Putin Thursday. Analysts said the frequent high-level contacts between China and Russia play an important role in boosting bilateral cooperation. "Frequent contact between the two countries' leaders has created a political foundation for further economic cooperation," noted Wu Hongwei, a researcher with the Institute of Russian, Eastern European and Central Asian Studies under the Chinese Academy of Social Sciences (CASS). The two countries are also exploring new areas to deepen relations. When meeting with Putin, Zhang proposed that the two countries should carry out the projects already agreed upon in such areas as energy, infrastructure and investment, while expanding two-way cooperation in high-tech industry, launching new forms of cooperation such as joint research and production, and introducing new projects in new energy, environmental protection and manufacturing. Putin said the two countries have designated energy and high- tech technology as the two areas of priority for further development, and cooperation in the long-term, large projects are showing strong momentum. "Both governments have strong will to strengthen cooperation, and I believe the practical cooperation between Russia and China has a bright future," he added.

Urban planners eye China's cities (By Cecily Liu) An artist's impression of the Shimao Wonderland InterContinental hotel designed by the UK's engineering consultancy Atkins. Urbanization has become the mother of invention in nation. China's rapidly growing built environment is inspiring urban planners to develop new ways of thinking, said Mark Harrison, head of urban planning in Asia Pacific at the United Kingdom's engineering consultancy Atkins. "I think there are so many new ideas being developed and tested out in China, because China is urbanizing at such a rapid speed," Harrison said. Harrison said one example is the incorporation of environmental sustainability considerations into a new city or town at the point of construction, as opposed to introducing measures to reduce environmental damage after it has occurred, which was the case in many European cities. This is because Europe industrialized early and the environmental impact of the built environment was sometimes not properly considered, whereas China's newly built cities have the advantage of learning from Europe's mistakes, Harrison said. "As climate change becomes more of a problem, it is increasingly important to consider factors like traffic, energy use, water use and waste in new cities at the beginning," he said. Harrison's team, which comprises 150 urban planners, has completed more than 800 projects in China, in more than 100 cities. One project is master planning for Songjiang New City, an area rich in history and culture near Shanghai, which was being turned into a new city under the Shanghai government's One City, Nine Towns plan, passed by the Shanghai Planning Commission in 2001. "Songjiang has been developed using the garden city concept, which originated from England," Harrison said. "But different from England, Songjiang has higher density, which needed to be taken into account in the master planning process. "Songjiang also has many aspects of traditional heritage and culture which we have integrated into our overall design." The garden city concept, first proposed by the UK's urban planner Ebenezer Howard in 1898, emphasizes self-contained communities allowing residents to live harmoniously with their surroundings. In the city plan Harrison's team created, modern leisure and recreational features such as a golf course co-exist with traditional landscape in a coherent manner "through careful consideration", he said. The traditional landscape features have been incorporated into tourism locations, whereas more modern facilities are mostly used by the city's residents in their everyday lives. "The key thing is to respect the heritage, and not to destroy it, and also to integrate them with the needs of modern life, transport and facilities," Harrison said. Another feature in Songjiang in which Atkins helped with the architectural, structural and civil engineering work is the Shimao Wonderland InterContinental hotel, being built on the site of a 90-meter-deep abandoned quarry. The five-star hotel is striking because it uses the existing landscape in an innovative way. As water already existed in the old quarry, Atkins has kept water as a main theme, turning the lowest level of the hotel into a venue for water sports, with a spa and a swimming pool. The underwater level is designed to host an aquarium. "Because of the location, we couldn't build a tall tower, so we went down into the quarry and built an interesting design." Apart from new construction projects, Harrison said his team is heavily involved in many regeneration projects to help cities cope with a growing urban population and give them a new look. "Urban areas often just need a new look and refresh. Maybe they suffer from transport problems as car ownership increases rapidly. There may be other concerns such as water quality or the quality of the urban environment." Harrison said one of his team's projects is providing guidelines on the regeneration work for Chengdu, capital of Sichuan province, a city known for its relaxed lifestyle but which has been transformed in recent years as a result of its fast-growing high-tech industries. Features of the regeneration included increasing greenery and building more low-speed roads in the city center, adding central islands to pedestrian crossings to ensure safety, adding more leisure facilities such as shops and restaurants around big community parks, and increasing the use of green material for important public sector buildings. "The key is to identify the real character of the area," Harrison said. "Chengdu has many lively areas, especially its markets. It also has many natural landscape features, like river courses. It is important to make sure they are retained and not destroyed. "So regeneration is about identifying and building on the character of a city to make it livable." Harrison said one clear advantage Atkins has in the field of regeneration is its engineering expertise in brownfield development. As the official engineering design services provider to the London Olympics last year, Atkins demonstrated its brownfield site regeneration expertise by turning an old industrial site into a vibrant, safe sports venue.

Pact to boost cross-Straits service trade (By SHI JING in Shanghai) Chen Deming (right), president of the mainland-based Association for Relations Across the Taiwan Straits, meets his Taiwan counterpart Lin Join-sane, chairman of the Straits Exchange Foundation, during a meeting on Friday in Shanghai. Companies from the mainland and Taiwan will have greater access to each other's service sectors after the signing of a new draft trade agreement. Companies from the Chinese mainland and Taiwan will have greater access to each other's service sectors as commercial ties strengthen across the Taiwan Straits, after the signing of a new draft trade agreement on Friday. Under the agreement — signed by Chen Deming, president of the mainland-based Association for Relations Across the Taiwan Straits and his Taiwan counterpart Lin Join-sane, chairman of the Taiwan-based Straits Exchange Foundation — the mainland will open 80 service sectors to Taiwan, and Taiwan will open 64 sectors to the mainland. The sectors most likely to benefit from the new agreement include commerce, telecommunications, construction, the environment, health, tourism, entertainment, culture, sports, transportation and finance. The draft allows companies from Taiwan to take controlling stakes in joint ventures in the mainland, streamline approvals and expand geographic operations in sectors including banking, hospitals, construction and tourism. Chen said the mainland fully considered Taiwan's market size and the practical needs of the people of Taiwan when formulating its list of services that will be opened to Taiwan. Lin said the new trade agreement will optimize the investment and trade environment of both sides, facilitating further economic integration. Jerry Tsai, chairman of the Taiwan-based MobileTron Electronics Co Ltd said he noticed various conditions in the agreement which can provide more room for understanding on both sides, although he was yet to fully identified how it will specifically benefit his own mobile electronics industry. "Companies from Taiwan should make sure they study the agreement and how trade in their industries might be better served," he said. Chyi Luu, general manager of a hotpot restaurant in Shanghai, who is from Taiwan, said the signing of the agreement offered the Taiwan people living in the mainland a "better level of care and more convenience". He added: "Of course, it is a reciprocal agreement, and is good for the economic development of both sides."

Hong Kong*:  June 23 2013

Hong Kong's village schools make a comeback (By Elaine Yau elaine.yau@scmp.com) An influx of cross-border students is giving a handful of struggling village schools a new lease of life, writes Elaine Yau - Principal Chu Kwok-keung (right) has seen a revival at Ta Ku Ling Ling Ying Public School. Surveying the flurry of construction work at his village school, Chu Kwok-keung feels more than a little vindicated. The principal of Ta Ku Ling Ling Ying Public School, Chu is looking forward to having extensions to accommodate a much bigger intake of pupils in the new academic year. They will have more classrooms, and proper facilities including a library and teachers' room. Located near the Shenzhen border, the school currently runs just six classes, one for each primary level. But come September, Chu says, they will have 128 pupils entering Primary One, which will have four classes. The public school is among six village schools in the border catchment areas of Yuen Long and North District (covering Sheung Shui, Fanling and Sha Tau Kok) which were allocated HK$114.5 million between them for expansion and refurbishment in the past year. It's a reversal of fortunes for village schools, which bore the brunt of closures in a government drive to consolidate underutilised schools. Eighty six publicly funded primary schools were forced to close between 2005 and 2012 because they could not enrol the minimum 16 students for two consecutive years. Of the 100 village schools in operation a decade ago, only about 10 remain. But a swelling stream of cross-border students in recent years - children born in Hong Kong to mainland parents or who live on the mainland with Hong Kong parents - has now given the surviving schools an enormous boost. Shan Tsui Public School in Sha Tau Kok, for example, now has an enrolment of more than 200 pupils, 90 per cent of whom are cross-border children, says principal Siu Hong-cheung. The school was given a complete overhaul last year to meet its growing needs. In the past it only had three classrooms and a playground; there wasn't even a school hall. Following a HK$20 million makeover last year, it now has a library, activity room, computer room and six new classrooms. This expansion has enabled Shan Tsui to switch to a full-day system this year, compared to the past when it ran three half-day classes in the morning and another three in the afternoon, Siu says. Even so, he criticises the government for being slow to respond to the pressure on school places in North District, resulting from an influx of cross-border students. "Six village schools formed a union six years ago to ask for more resources but the government ignored us. They closed too many schools in North District and tackled the problem of shortage of school places too late," Siu says. The number of cross-border students studying in public primary and secondary schools has almost doubled from 4,988 in 2009 to 8,764 this year, Education Bureau figures show. Many clustered in North District, where classrooms were soon packed to capacity. This resulted in 400 children seeking places in the district being allocated outside the school net for the new academic year, provoking an outcry from local parents whose children faced a long commute to class in other districts. As a stop-gap measure, the bureau reopened premises in Sheung Shui once occupied by Fung Kai No2 Secondary School, to offer about 100 places for parents dissatisfied with their children's place allocation. As North District councillor Lau Kwok-fan sees it, this unhappy state of affairs stems from a lack of planning by the government. "The influx of cross-border kids could have been foreseen by looking at population trends," Lau says. "Without mainland residency, Hong Kong-born [children] of mainland parents are denied access to mainland schools, which means most must return [to Hong Kong] when they reach school age. The demand for school places in North District will lessen later as mainland mothers without a local husband can no longer give birth here," Lau says. "But [the pressure] will certainly get more severe in the next few years." Hong Kong births to mainland parents have exploded from just 2,070 deliveries in 2003 to 32,653 in 2010. A government poll at Immigration Department birth registries between 2007 and 2009 pointed to a looming need for school places: of 12,000 parents surveyed, most said their children would return to Hong Kong between the ages of three and 11. Nevertheless, an Education Bureau spokesman says it is difficult to accurately project the demand for school places in North District because "whether and when cross-boundary students would come to Hong Kong to study is very much a personal decision of their parents". For village schools, it has been a long and bitter struggle to stay alive. Shan Tsui Public School, set up in 1958 as a private institution to cater to children in Shau Tau Kok, faced its bleakest period in the '90s as the settlement's population began to shrink after the '80s. "In 1992, we enrolled only 10 students," recalls principal Siu. Prospects began to improve about a decade ago, when it began to take in cross-border children. "As we are situated at the border [Chung Ying Street forms part of the border between Hong Kong and the mainland], the children can get to our school in 10 minutes whereas it would take them an hour to travel to Sheung Shui." But the school had to take extraordinary measures to stave off closure, says Siu, who has taught at Shan Tsui for more than 20 years. "We offered English classes on the mainland for parents. Our parent-teacher association reached out to mainland women's groups. We organised talks on parenting. We even got lawyers and social workers to provide consultation for mainland parents about cross-border marriage issues." At Ling Ying Public School, where 70 per cent of students are from the mainland, Chu reports similar experiences. "We did a lot of promotion work to survive, like reaching out to mainland kindergartens," he says. "Now that admission pressure has lifted, we can concentrate on striving for quality education." The mainland-based students come to school by bus, and teachers are sent to the checkpoints to make sure there are no problems during the crossing. When pupils fall ill, meanwhile, it is staff who take them to doctors as not all mainland parents have year-round border permits. Unlike the cross-border-centric schools, Pat Heung Central Primary School in Yuen Long found a new lease on life when it began catering to ethnic minority students 10 years ago. Built by Pat Heung residents on their own land in 1921, the school occupies a grade three historic building with six classrooms and a small library. As closure loomed, it joined up with another village school and began taking a multicultural route in 2003. Now, just 20 students in the school are local Chinese. The remaining 171 pupils are children from Pakistan, Nepal, Sri Lanka, the Philippines and Africa (five are refugees from the Congo and Somalia). To house the swelling student body, construction has begun on a two-storey teaching block. Classes are conducted in four languages - Urdu, Nepali, English and Chinese - and there are special foundation classes to help non-Chinese students master the local language. The village schools have shown remarkable resilience, says Lo Wai-yin, an assistant professor at the Hong Kong Institute of Education. "Many are labours of love by villagers who raised money to build a school to serve their children. Not only were they learning institutions, they were also a cohesive force that drew the village together," says Lo, who conducted a study of 56 rural schools between 2006 and 2009. "But the Education Bureau only saw them as statistics when they closed them. With the schools gone, many villagers lost a place for communal discussion." While she is relieved that village schools are now enjoying a revival, Lo frets that many will lose their unique identity. "Village schools used to run small classes. Now their class size is over 30, just like mainstream schools," she says. Lo says the government should consider reopening strategically sited village schools such as Ku Tung Public Oi Wah School in Sheung Shui. Just a 10-minute bus ride from the Huanggang checkpoint, Oi Wah closed in 2007. But the premises, which includes a playground and auditorium, are still quite new, Lo says. "If such schools were reopened, other village schools wouldn't have to take in so many pupils and can continue small-class teaching." That prospect is uncertain. The bureau expects demand from cross-border children to fall following the "zero birth" ban on mainland mums. During this transient period, the bureau will adopt "flexible measures", including borrowing school places from other districts, and making use of unused classrooms and vacant school premises, the spokesman says.

 China*:  June 23 2013

Who wants to bet on a Chinese-invested 'Nicaragua Canal'? (By Ivan Castro and Lomi Kriel in Managua, Panama City) Nicaraguan President Daniel Ortega (left) speaks, while Wang Jing (right), boss of HKND Group looks on. HKND has won a concession to design, build and manage a US$40 billion canal in Nicaragua to rival Panama. For centuries since the colonisation of the New World, entrepreneurs have dreamed of building a canal spanning Nicaragua to make it easier to tap Asia’s riches. Sixteenth century Spanish conquistador Hernan Cortes yearned to cleave the isthmus, and ever since, French, American and Dutch financiers have all made abortive, Quixotic attempts to bisect the Central American country’s volcano-studded terrain. Now it’s the turn of the Chinese. And scepticism is as strong as ever. The Hong Kong-based company that won a concession to design, build and manage a US$40 billion canal to rival Panama’s says it has been lured by an energy renaissance in the United States and its belief that world trade could double by 2030. The company, HKND Group, was registered last year in the Cayman Islands. This would be its first infrastructure project, and its 40-year-old boss, Wang Jing, is relatively unknown. There is still no firm route for the proposed canal, which would cost about four years’ worth of Nicaragua’s annual gross domestic product, and would likely be three times longer than the 48-mile (77-km) Panama Canal, which took a decade to build. Engineers also note that the geography poses some major challenges - not least a 20 foot tide differential between the two coasts. For all those reasons, investors and infrastructure experts are highly dubious that a canal will ever be built. “Are international shipping companies going to trust a one-guy shop with minor telecommunications experience to be the system integrator on a US$40 billion project in a country whose transparency is already subject to question?”, said Evan Ellis, a professor of national security studies at the US Government’s National Defense University. Greg Miller, a shipping consultant at IHS Fairplay, a global maritime intelligence company, was also highly sceptical. “The Nicaragua canal will never be built and the only people who’ll financially profit from this proposal are the consultants paid to do the feasibility studies,” he said. Rosario Murillo, the wife of President Daniel Ortega and his government spokeswoman, said at a ceremony with Wang after the concession was granted: “This is a day of miracles, of wonders.” Government officials declined to comment on scepticism that has emerged since then. HKND Group is a unit of holding company the HK Nicaragua Canal Development Investment Co., which was incorporated last year, according to the Hong Kong Companies Registry. It bases its projections for the future success of a Nicaragua canal on the US shale revolution, which has unlocked decades of oil and gas supply. If the United States wants to export more to Asia, the theory goes, it will need to send more and bigger ships from Gulf Coast refineries by canal to the Pacific, and Panama won’t be able to handle it all. “This project can be undertaken now, and only now, thanks to the discovery of prodigious amounts of gas and oil in the United States,” said Ronald MacLean-Abaroa, HKND Group’s spokesman, who is a former mayor of Bolivia’s La Paz and one-time World Bank governance specialist. “Three years ago that didn’t exist,” he told Reuters in an interview, saying the company would seek to raise private financing in Asia. On its website, the company also pointed to growth in US exports of iron ore, coal and grains. Panama canal is already expanding to accommodate growth in traffic, and experts say the shale oil boom could benefit a Nicaraguan project, if it is ever completed. Maersk Line, the world’s largest container shipping company and the Panama Canal’s top customer, has rerouted services from Asia to the East Coast of the United States via the Suez Canal. Its newest ships are too big for the Panama Canal, even after a third lane is built. A spokesman for Maersk Line Central America and Caribbean said it was too early to speculate on the Nicaragua project, but it would be monitoring developments. “We applaud bold initiatives that can boost the possibilities for container shipping for the benefit of both lines and our customers,” Ariel Frias said. Panama Canal officials have said it is too early to speculate on the viability of the Nicaraguan waterway or how it could affect trade. Little is known about the Chinese lawyer and businessman behind the canal project, Wang Jing. According to his identity card data, Wang was born in Beijing on December 24, 1972, but there is no information on him publicly available until 2010, when he became the head of the Xinwei Telecom Enterprise Group, a wireless communications company. Wang visited Nicaragua last year and signed a wireless telecoms deal. Xinwei’s website says the group’s core markets include public telecoms operations, public security, oil fields, power grids, water conservancy and transportation and emergency communication, and lists several subsidiaries in China, Hong Kong, Russia and Cyprus. The site, which does not mention HKND Group, carries photographs of Xi Jinping, now China’s president, and Li Keqiang, now premier, visiting Xinwei. “Your future is very bright. Full of hope,” the site quotes Li as saying of Xinwei, picturing Wang with the leader. It said the visit took place on December 21, 2010. At Wang Jing’s listed office in Hong Kong, a woman declined to say where he was. HKND Group’s plush office takes up a large part of the 18th floor of Two International Finance Centre, which it occupied in May. The office is large and brand new with a view of Victoria Harbour outside its floor-to-ceiling windows. Big LED screens by the front door play the company’s promotional videos in a loop. The office was very quiet and few people were working there. An HKND spokesperson contacted by email said Wang was not available to comment for this story. The company has given little information on the practicalities of building the proposed canal. The concession simply lists a shipping canal, ports and terminals, an oil pipeline, a railway, free trade zones and an airport. Unlike the Panama Canal, a canal cutting across Nicaragua could theoretically be built at sea level, without locks, but there is a problem with the tides at either end. The timing and height of the tides are different, meaning that the water level can be as much as 20 feet higher at one end. “It means a lot of water is going to come from west to east,” said J. David Rogers, professor or geological engineering at Missouri University of Science & Technology. “Everybody would love to have a sea-level canal between the Pacific and the Atlantic,” he said, adding that engineers would likely have to consider tidal weirs. “I’m not saying you can’t do it, but it has some major engineering challenges that have to be overcome, and if it’s your first project, I wouldn’t invest in it.” Environmentalists are concerned the project could contaminate Lake Nicaragua, Central America’s largest reserve of fresh water, which would almost certainly be part of any route. President Ortega said last week the government was going ahead with feasibility studies that should be done by 2015, when work on the canal could begin. Under the terms of the concession, HKND Group would face no legal or economic sanctions for failing to complete the project. “Who knows if this is actually going to happen or not, but it seems much more serious at this point. There’s some real heavy-weights involved,” said Margaret Myers, director of the China and Latin America program at the Washington D.C.-based Inter-American Dialogue. She noted HKND Group says it is working with several respected international companies, including Environmental Resources Management, a leading sustainability consultancy, and consulting firm McKinsey & Company. McKinsey declined to comment, citing client confidentiality. Environmental Resources Management confirmed it had been hired to do a study. Another open question is the financing. Christopher Erckert is a partner at the US Mayer Brown law firm, which advised the Panama Canal Authority in its US$5.25 billion expansion. A specialist in Latin American project finance, he said the main risk would be if Nicaragua nationalized the canal in the future. “Nicaragua is not an investment grade country. That’s a fact,” he said. “That makes this a speculative grade investment... which limits the kind of investors who can play.” Several project financiers Reuters spoke to, who asked not to be named, said they had seen no signs in the industry of interest in the project. If the project does go ahead, it might depend on China’s desire to flex its muscles in America’s backyard. Alfonso Guzman, managing director at Castalia Strategic Advisors, an international economic and financial advisory firm, said it was hard to see how the project would be commercially viable. “The only way it can be viable is if someone like the Chinese government provides a lot of grants and low-cost money so that the cost of the project is low and the prices charged for using this canal are lower or comparable to what the Panama canal offers,” he said.

Vladimir Putin meets with Zhang Gaoli in St. Petersburg, Russia - Russian President Vladimir Putin meets with Chinese Vice Premier Zhang Gaoli in St. Petersburg, Russia, June 20, 2013.

New balance called for on US strategy in Asia (By By Chen Weihua in Washington chenweihua@chinadailyusa.com) Economic and cultural policies 'more enduring in the long run' Daniel Russel, US President Barack Obama's pick as top diplomat for East Asia, believes that US rebalancing of strategy for Asia, underpinned by security concerns, needs to be diversified. In a Senate Foreign Relations Committee confirmation hearing on Thursday, Russel proposed that diversification of the rebalance strategy is of "first and foremost" importance. The security element underpinning the Asia strategy of rebalance is hugely important; it will not go away and it must not go away, according to Russel, who was nominated by Obama on May 15 as assistant secretary of state for East Asian and Pacific affairs to replace Kurt Campbell, who resigned in February. "We must strengthen that," said Russel, who is now a special assistant to Obama and senior director for Asian affairs on the National Security Council. "But there is more to America than hard power," said the 59-year-old career diplomat. "In fact, it is the economic agenda, the energy agenda, the education agenda, the values agenda, the people-to-people connection, the public diplomacy, that I think in the long run will have the most significant and enduring impact in this young, thriving and dynamic region." Many experts, such as Kenneth Lieberthal of Brookings Institution and Stapleton Roy, the former US ambassador to China, have suggested that the US should adjust its rebalance policy, which has focused too heavily on the military aspect. The growing US military posturing in the Asia Pacific has not only caused anxiety in China, which believes the strategy is aimed at containing China, it has also worried some other countries who do not want to be forced to choose between China and the US. Such a concern was discussed when Chinese President Xi Jinping met Obama at Sunnylands, California, on June 7-8. Russel described China as "a hugely important and hugely consequential country in relationship with the United States" and said there is a need for balance between the cooperative elements and competitive aspects of the bilateral relationship. One of his challenges, he said, will be to ensure that two countries cooperate more. "In our competition, we are assured that the competition is a healthy one," he told the one-hour hearing in a relatively relaxed mood compared with several contentious hearings for Obama's nominees, such as Secretary of Defense Chuck Hagel and Secretary of Treasury Jack Lew. Only two Senators, Ben Cardin of Maryland and Christopher Murphy of Connecticut, questioned Russel at the hearing. Russel, with his wife and two sons sitting behind him, said the US is looking for a model of practical cooperation with China that delivers benefits to both people, and to the region, in areas like climate change. He praised the recent Xi-Obama agreement on working through the Montreal Protocol to phase out the use and production of hydrofluorocarbons (HFCs), the so-called "super greenhouse gasses" that are commonly used in air conditioners and refrigerators, saying it "will pay dividends down the road". "North Korea is the other area where our positive cooperation is not only possible, but essential," he said, adding that both Presidents Obama and Xi are committed to deepening dialogue and cooperative efforts to denuclearize the Democratic People's Republic of Korea. Meetings on Wednesday in Beijing between China and the DPRK, and in Washington between the US, Japan and the Republic of Korea have both expressed the hope of resuming the stalled Six-Party Talks. Russel, who is expected to be confirmed easily, said he will do everything in his power to lower the temperature in the East and South China Seas and push claimants onto a diplomatic track. Joining the US diplomatic corps in 1985, Russel also served as the National Security Council director for Japan, the ROK and the DPRK from 2009 to 2011. He previously was director of the State Department's Office of Japanese Affairs. His Asia experience also includes serving as consul general in Osaka-Kobe, Japan, from 2005 to 2008, and early assignments at the US embassy in Seoul. Widely regarded as a Japan expert, Russel prepared for Secretary of State John Kerry's trip to China in April and participated in the Xi-Obama summit at Sunnylands. Kenneth Lieberthal of Brookings described Russel's style as relatively low key. "Overall, he is a calm, professional and pragmatic individual who knows how to get things done in Washington," he said. Bonnie Glaser, a senior adviser for Asia at the Center for Strategic and International Studies, described Russel as having "solid experience in dealing with the full range of issues in the Asia-Pacific region".

President Xi hints at more assertive foreign policy (By Teddy Ng and Kim Wall) President advises Ban Ki-moon that China, as a permanent member of the Security Council, should wield more influence in global affairs - UN Secretary-General Ban Ki-moon talks to the media after visiting a 'low-carbon' exhibition in Beijing. When President Xi Jinping held talks with UN secretary-general Ban Ki-moon in Beijing on Wednesday he urged the United Nations to be "fair and just", indicating that Beijing would like to play a more prominent role in international affairs. Xi and Ban discussed the conflict in Syria and North Korea's nuclear programme, but Xi also outlined China's expectations of the UN, calling on its members to scrap the "zero-sum mindset". The UN should "uphold the principles of impartiality and righteousness" and "speak in a fair manner", Xinhua quoted Xi as saying. In remarks that showed China's growing assertiveness in foreign policy, Xi said China bore heavy responsibilities as a permanent member of the UN Security Council, but the nation "has the capability" to fulfil the mission. China would step up its efforts to promote peaceful settlement of international disputes, and work with other nations to tackle climate change, Xi added. Observers said Xi's remarks signalled a shift in China's diplomatic tactics, with his predecessors having always stressed that China was still a developing country and was reluctant to take on more responsibilities. "The remarks indicated that China does not want to be the supporting actor in global affairs, and it wants to be in leading positions," said Zhao Junjie , an international relations specialist at the Chinese Academy of Social Sciences. China has been calling for a multipolar world order, arguing that the existing international governance structure is dominated by major powers. Beijing also showed frustration when it was condemned, along with Russia, last year for vetoing UN Security Council resolutions against Syria. "Beijing believes its voice and that of the developing nations are not heard enough in the UN and wants it to reform," Zhao said. Jin Canrong , a specialist in international relations at Renmin University, said China wanted a bigger voice in the UN because it had more power and money. "Xi has a more straightforward personality, and he feels confident and proactive in terms of foreign policy," he said. "China's foreign policy used to be reactive but now it's becoming more proactive - regionally as well as globally." Mathieu Duchâtel, head of the China and International Peace and Security Project at the Stockholm International Peace Research Institute, said Xi's remarks were consistent with his heightened focus on foreign policy. "China prioritises making sure the UN Security Council does not function as an instrument for the US and European countries to promote their own interests," he saidchâtel said China wanted the UN to be the main player in international affairs, to balance the US-led North Atlantic Treaty Organisation.

Quantum communications system was used at Party Congress in Beijing (Stephen Chen binglin.chen@scmp.com) Revelation that secret communications system was used at the party congress last autumn shows high level of security concern in Beijing - Secret quantum communications system was used at Party Congress in Beijing. Beijing was so worried about cyberspies during last autumn's party congress that it turned to a secret, state-of-the-art telecommunications network to handle sensitive information. Use of the next-generation quantum encryption technology at the once-in-a-decade leadership transition was revealed in a passing remark reported last week in People's Daily. Chinese scientists are well aware of how vulnerable data can be when it is being transmitted, describing it as the weakest link in their security. Revelations by whistle-blower Edward Snowden that the US is targeting "network backbones" - through which huge amounts of data are transmitted - confirmed their fears. Now all major countries are pouring resources into developing large-scale quantum networks. China came late into the game, but it is now the subject of a major national project. And Beijing plans to launch the world's first quantum communications satellite in 2016, a top mainland researcher told the South China Morning Post. In quantum mechanics, connections are made between two points when photons of light become entangled. This creates an encryption key that can be used to send the message through normal channels. But if somebody tries to spy on that quantum communication, the connection is so fragile it disrupts the entanglement - letting both the sender and the receiver of the message know someone is snooping. For years, Beijing has prohibited key government institutes and agencies from handling sensitive information by connection to the global internet. The enclosed systems include the China Golden Bridge Network, used by government institutes, and several military backbone networks. They run on homegrown operating systems and on computers with core chips designed and developed by Chinese companies. Data is heavily encrypted to ensure security. But even such measures may not go far enough. Data can be intercepted during transmission, while even the best encryption can be deciphered by talented mathematicians equipped with supercomputers. Scientists involved in the quantum programme believe Snowden's revelations will "definitely speed up" China's move to quantum communications. Even before the Snowden incident, Beijing leaders had used prototype quantum networks on critical occasions. The latest example was during the party congress last year, which saw Xi Jinping succeed Hu Jintao as party chief. In the days leading up to the congress, intense horse-trading and negotiations among political leaders required an absolutely safe channel for communication. But scientists still have one serious hurdle to overcome before they can apply the technology on a larger scale. Professor Bao Xiaohui , a quantum information expert with the National Laboratory for Physical Sciences at the Microscale in Hefei , said most quantum communications networks in use today can operate over a maximum distance of only about 50 kilometres. Bao's laboratory is leading the research of quantum communications on the mainland and now holds several records for the distance covered. In traditional telecommunications, digital information is carried by electrons or photons in waves that can be amplified to achieve long-distance communication. But in quantum communication, the information is carried in the quantum state of each photon. The quantum state cannot be amplified once the photon has left the sender - much as a bullet cannot be given more spin after it has left the barrel of a gun. After a certain distance, the quantum state might weaken or disappear. While existing fibre-optic cable networks are ideal for conventional, "wave-like" communications, they are inefficient for carrying individual photons over long distances. To overcome this limitation, scientists have come up with the idea of quantum repeater. When a photon reaches the repeater it activates some sleeping atoms. In a delicate operation, scientists can force these atoms back to sleep and in the process emit a new photon carrying the same quantum state. But the operation is very difficult, Bao says. The energised atoms are quite unstable and can easily be affected by external elements such as the earth's magnetic field and lose their quantum state. To achieve long-distance quantum communication, Bao's team is building what is expected to be the world's first quantum communications satellite. Because photons can travel long distances in the open, especially in space, they could carry the quantum information between two locations thousands of kilometres apart with uplink and downlink to the satellite. Detailed information on the satellite is classified, but Bao says it will look completely different from communications satellites today that rely on microwaves. "It will not have a dish antenna to pick up or beam the signal because the communication would be purely optical," he said. "It will use a lot of mirrors, for sure. To some extent it may look like the Hubble Space Telescope - the difference is that its eyes would be pointing at the earth instead of the far universe." Bao says the quantum satellite's signals cannot be intercepted. Unlike radio waves that would propagate as they travelled, the photons would aim precisely at a specific receiving station. Any attempted interception would be detected. But it is difficult to judge when quantum communication will become available for use by ordinary people. Existing encryption and protection methods are still good enough for the public, Bao says. Tang Wei , cybersecurity engineer with mainland anti-virus company Rising, says that security technology, no matter how advanced it is, can only be as good as the person handling it. "No technology is absolutely safe because all technology is used by humans," he said. "With an insider, you can get into the most heavily guarded system without even touching a keyboard."

Hong Kong*:  June 22 2013

Hong Kong shares sink to 9-month low on Fed, China flash PMI (By A Wall Street trader watches as Federal Reserve chairman Ben Bernanke briefs news media after a two-day meeting. Stocks fell and energy prices eased on fears that the Fed might ease stimulus. Asian markets fell and Hong Kong shares slipped to a nine-month low on Thursday, after the US Federal Reserve signalled a tapering of stimulus and weak HSBC Flash PMI data for China factory weighed on sentiment. In late morning trade, the benchmark Hang Seng Index was down 2.5 per cent at 20,443.8 points, breaking below chart support at September lows at about 20,485. The China Enterprises Index of the top Chinese listings in Hong Kong dived 3.2 per cent. The H-share index is now down nearly 20 per cent on the year and languishing at its most oversold levels since June 1998. China’s factory activity weakened to a nine-month low in June as demand faltered, a preliminary survey showed, heightening risks that a second quarter slowdown could be sharper than expected and raising the heat on the central bank to loosen policy. Tokyo shed 1.04 per cent, Sydney fell 1.24 per cent, Shanghai was 0.77 per cent lower and Seoul down 0.91 per cent. The Fed’s policy-making committee said overnight Wednesday the economy continued to grow at a “moderate” pace but would maintain its $85-billion-a-month bond-buying programme, citing high unemployment and the negative impact of government spending cuts. However, chairman Ben Bernanke said afterwards “the committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year” if the economic outlook continues to improve. Stressing that “our purchases are tied to what happens in the economy”, he said most members of the committee foresaw tapering in the coming months. The announcement sent US stocks tumbling -- the Dow fell 1.35 per cent, the S&P 500 lost 1.39 per cent and the Nasdaq tumbled 1.12 per cent -- while the yield on US Treasuries jumped. “The Fed’s result was not out of line with expectations,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi. “Some transparency as to the possible end of US easing is the biggest takeaway. Players can now factor this into investment strategies. Wall Street’s fall will act as a short-term negative against the larger beneficial effect of a weaker yen.” In currency dealing, the dollar climbed in New York to end at 96.39 yen, well up from 95.05 yen earlier in the day in Asia. On Thursday in Tokyo the greenback sat at 96.66 yen. The euro bought 128.19 yen and US$1.3270 in Asia compared with 128.24 yen and US$1.3297. Global markets have been sent into turmoil in recent weeks as dealers priced in a possible end to the bond-buying, known as quantitative easing. The programme had helped fuel a rally in equities since the Fed said in September it would provide vast sums of cash until the world’s biggest economy showed signs it was back up to strength. Numerous data out of the United States in the past months have pointed to a healthy recovery. Oil prices also eased, with New York’s main contract, light sweet crude for delivery in July, down 78 cents at US$97.46 a barrel and Brent North Sea crude for August shedding 81 cents to US$105.31. Gold was at US$1,347.84 at 0225 GMT from US$1,367.80 late Wednesday.

Hong Kong scouts say they do not discriminate against gay people (By Jeremy Blum jeremy.blum@scmp.com) Unlike the Boy Scouts of America, which still bans gay scout leaders, Scout Association of Hong Kong says it is 'open to all' - Hong Kong Scout Rally 2012 organised by the Scout Association of Hong Kong at Hong Kong Stadium, So Kon Po. Hong Kong’s scouts have distanced themselves from the former practices of the Boy Scouts of America and announced that they do not discriminate against gay people. The “Scout Association of Hong Kong is open to all persons who are interested in scouting”, the organisation said in a statement issued to the South China Morning Post on Wednesday. “Anybody who accepts the aim, mission and method of the association honours the Scout promise and keeps the Scout law is welcome to join.” The statement is consistent with the Scout Association’s rules that say “membership of the association is voluntary and is open to all persons who are prepared to observe and follow the association’s principles… There shall be no discrimination as to admission for any reason of race, creed, class or sex”. The Scout Association’s statement comes in response to the May 23 decision of the Boy Scouts of America, which ended a century-old ban on gay scouts. The ban on gay adult scout leaders was not lifted, however. More recently, two US scout leaders were asked on Sunday to apologise for marching in the Utah Pride Parade in Salt Lake City. The Scout Association was founded in 1915 and as of 2008 had 95,877 uniformed members. Its counterpart, the Boy Scouts of America, was founded in 1910, and is now one of the United States’ largest youth organisations, with almost three million youth members and one million adult volunteers.

Beijing wants Hong Kong to handle Snowden on its own, party newspapers suggest (By Mandy Zuo mandy.zuo@scmp.com) Commentary suggests Hong Kong should follow public opinion on Snowden - A banner supporting Edward Snowden, a former contractor at the National Security Agency, is seen at Central district. In a commentary in response to the Snowden case, the People's Daily said yesterday that Chinese were always unwilling to get involved in other people's "mess". The Communist Party mouthpiece also rejected suggestions by some US politicians that cybersecurity whistle-blower Edward Snowden could be a spy for China, calling it a groundless accusation that had added "a cloud to the clear sky of the Sino-US relationship". Another party newspaper, the Global Times, said in a commentary yesterday that Hong Kong should follow public opinion in handling the case, not worry about Sino-US relations and "be more spontaneous". Professor Liu Jianming, a communication studies specialist at Tsinghua University, said both articles suggested that Beijing did not want to get further involved in the case. "China is taking its usual position of not intervening in other countries' affairs, but it cannot ignore verbal attacks that have twisted the truth," he said. The People's Daily said "the Prism scandal was America's trouble in the first place", but some US politicians were trying to "create a new link between China and the scandal with their own imagination" by hinting that Snowden was a Chinese spy. It said such a link was "nonsense" and Beijing should ask the "big mouths" to shut up. "Pouring dirty water on China shows how American politicians are embarrassed and anxious," it said. The Global Times asked the Hong Kong government to "interact with public opinion directly" in making its choice when an extradition request was made by the United States. "Dealing with the Snowden case properly may be strategically meaningful for Hong Kong's future" it said, because it might broaden connotations of "political liberty". Jin Canrong , a US affairs expert from Renmin University, said both commentaries implied a basic principle of the central government - not letting the scandal affect overall Sino-US relations. He said the Global Times, represented more of the people's views in its commentary. Professor Shi Yinhong , an international relations specialist at Renmin University, said he believed "the central government will not intervene until it's absolutely necessary".

 China*:  June 22 2013

Airline boss got off to a flying start (By By Wang Ying in Shanghai) A Spring Airlines' plane at Pudong International Airport, Shanghai. During the poor market in 2012, Spring Airlines maintained a seat-kilometer utilization of up to 95 percent, in stark contrast with the industry average of between 79 and 80 percent. Spring Airline sees sky-high potential in China's no-frills traveling market - Living in small and cheap hotels with two people sharing a room in downtown London or Singapore, making their own meals in the hotel kitchen with a pressure cooker brought from home, eating only porridge and pickles for dinner. It doesn't seem much of a life, does it? This is not one of those now banal inspirational stories of two partners at the start-up stage of building a later greatly successful enterprise but the real life of Spring Airlines' executives when they are on business trips. As the nation's most successful private airline company and only budget carrier, Spring Airlines Co Ltd has established a strict cost control regime to maximize profits and outperform its State-owned competitors that have posted steep drops in earnings despite enjoying government subsidies. "When we go to the conferences in London and Singapore, we take the bus or subway, not taxis," said Wang Zhenghua, founder and chairman of Spring Airlines. According to an old Chinese saying, 70 is an age that people rarely reach but 70-year-old Wang is still full of energy and passion to make his carrier more successful and financially sound. "We do everything possible to cut costs and that's the reason why we can offer extremely low ticket prices for passengers," Wang said. According to him, the company's marketing expenditure is only 20 percent of its Chinese counterparts. Management costs are 30 to 40 percent lower than the market average. Wang was not born an astute businessman. He first became an entrepreneur at the age of 40 after quitting public service in Shanghai. With start-up capital of 1,000 yuan and some preliminary research on China's tourism market, Wang discovered his own managerial talents. Within 10 years, Wang turned Spring Travel Agency, which he established in 1981, into a leading tourism agency in China. But being ambitious and creative he was not satisfied resting on his laurels. After gaining adequate experience in running the agency, he launched the low-cost Spring Airlines in 2004, a milestone in China's aviation history that enabled more Chinese people to afford to fly. Although there is an unwritten law in the domestic aviation market that says no company will make a profit in its first three to four years of business, no matter how well it operates, Wang and his team shattered that myth by making a profit in its first year even though they only had three planes in operation. Few would now disdain Wang and his dream, which is to emulate the huge success of the world's first budget carrier, Southwest Airlines. Currently, the Shanghai-based carrier has a fleet of 36, 14 of which are owned by the company. "We plan to expand our fleet size to 60 by 2015. That's many more each year," Wang said. Wang's aggressive expansion is backed by the carrier's much-higher-than-average seat-kilometer utilization, a key indicator to reflect a carrier's operating efficiency.

Wanda to build hotel in NYC (By By Zhang Yuwei in New York yuweizhang@chinadailyusa.com) Wanda Chairman Wang Jianlin (third from left) joins in a toast with British Ambassador to China Sebastian Wood (third from right) during a Dalian Wanda Group event at a hotel in Beijing, on Wednesday. Chinese property and cinema conglomerate Dalian Wanda Group said it is buying British yacht maker Sunseeker and will develop a hotel in New York. China's Wanda Group, which owns AMC Theaters, said it will invest $1 billion to build a five-star hotel in New York City, becoming a new addition to the recent Chinese investment in the Big Apple's real-estate market. Wang Jianlin, chairman of the Dalian-based commercial real estate developer, told Reuters in Beijing that the company is in talks with potential partners for construction of a Wanda hotel and an adjacent apartment building in New York. The chairman said the project will probably be announced in the third quarter of this year "if everything goes smoothly". Wanda made headlines last year when it acquired US cinema chain AMC for $2.6 billion - including debt - making it the largest Chinese entertainment expansion in the US and the largest cinema owner in the world. The Wanda group already runs a chain of five-star hotels and has partnered with other hotel groups. The move to build a five-star hotel in New York furthers Wanda's overseas expansion into the US since the AMC acquisition. "Many people have been really bullish on hotels, and the hotel market has been very strong in New York," said David Von Spreckelsen, a division president with US luxury home-builder Toll Brothers City Living in New York. "It will continue to be a place within the US that is desirable and on a world level. Obviously it competes with every major city in the world." Fred Lipman, partner at Blank Rome LLP, said the prices in the real estate market are a major attraction for Chinese investors. "The general perception is this is a good place to invest for real estate at this point based on the current pricing levels," said Lipman, author of International Strategic Alliances: Joint Ventures Between Asian and US Companies. Wanda's move into New York is adding to Chinese investors' volume of real estate in one of the world's most desired cities. Data from the National Association of Realtors show that Chinese mainland and Hong Kong buyers are now the second largest investor group, after Canadians, in the US housing market, contributing to some $9 billion in the March 2011 to March 2012 period. Earlier this month, Zhang Xin, CEO of Soho China, a Beijing-based real estate developer, together with other investors, bought a 40 percent stake of New York's iconic General Motors building in midtown Manhattan for $1.4 billion. New York has long been a hotspot for foreign real estate investors. In the 70s, the Japanese made heavy investments in the city's real estate, said Spreckelsen. "There have been a lot of Europeans investing here over the last couple of years," he said, "and now I see the Chinese just being the next wave". Spreckelsen cautions against foreign investors - including the Chinese - not having sufficient local knowledge before tapping into what he calls a "local game". "Places like New York or Beijing are always going to be solid (for investment), but you need to hire the right people," said Spreckelsen, adding that knowledge of the local market, including the labor market and the government, were important for investors to carry out their projects smoothly. Last September, Beijing-based Xinyuan Real Estate Co Ltd, a US listed company, acquired a parcel of land at Kent Avenue and South 8th Street in the Williamsburg section of Brooklyn for $54.2 million. The company is constructing a condo building that will serve the community when it's complete, said John Liang, a general manger with Xinyuan in New York. Liang said Xinyuan - even though it's a Chinese developer - won't be building a "Chinatown". "We are building an international project and will be run perfectly local," said Liang recently at a China Roundtable discussion in New York, adding they are not relying on selling the condos to Chinese buyers. The company, Liang said, recently raised $200 million and will spend half in the US market in the coming years. "Williamsburg is a strong market. We've done a number of buildings there, and I think they will do well," Spreckelsen noted. Lipman said even though the Chinese are building up investment in the real estate market, the result is still unknown. "You are working on the future projections; it takes time to see (the result)," he said.

Shenzhou X astronaut gives lecture today (China Daily) A special lecture began Thursday morning, given by a teacher aboard China's space module Tiangong-1 to students on Earth. Female astronaut Wang Yaping, one of the three crew members of Shenzhou-10 spacecraft, greeted about 330 primary and middle school students at aBeijinghigh school, through a live video feed system. More than 60 million students and teachers at about 80,000 middle schools across the country are watching the live broadcast on TV. Wang will teach about motion in a microgravityenvironment, the surface tension of liquid, and help students understand the concepts of weight and mass and Newton's Laws. Born in east China's Shandong Province, the hometown of China's most famouseducationist Confucius (551-479 BC), the 33-year-old Wang is the second Chinese female astronaut after Liu Yang, who entered the record books in the Shenzhou-9 mission in June last year. The world's first teacher in space was Christa McAuliffe, a 37-year-old middle school teacher from the United States, but the Space Shuttle Challenger disintegrated after 73 seconds in flight on January 28, 1986. McAuliffe and her other six crewmates were killed. Barbara Morgan, McAuliffe's backup in that mission who became an astronaut later, completed the teaching lesson in space in 2007, when she was sent to the International Space Station with Space Shuttle Endeavor. Via a video feed, she showed students how to exercise and drink water in space. The lesson is aimed at making space more popular, as well as inspiring enthusiasm for the universe andscience, according to Zhou Jianping, designer-in-chief of China's manned space program, who added that the lesson will also accumulate experience for similar larger activities. "The spirit of science of the youth is an important drive for the progress of mankind," said Zhou. "Space activities can help them build up the spirit of seeking science and facing challenges."

Hong Kong*:  June 21 2013

West Africa provides shortcut for rich mainland Chinese to Hong Kong residency (By Patrick Boehler in Hong Kong and Saikou Ceesay in Serekunda) A Google Maps screenshot showing Senegal, The Gambia and Guinea-Bissau in West Africa. Thousands of mainland Chinese have permanent residency in The Gambia, a place they most likely have never visited and never will, as the African country has been unexpectedly profiting from a Hong Kong immigration scheme. The fastest, cheapest way for a Chinese citizen to gain right of residency in Hong Kong under the Capital Investment Entrant Scheme (CEIS) is to first gain permanent residency in Africa's smallest country, according to visa agencies advertising the deal. The scheme, established in 2003, aims to attract high-value individuals to Hong Kong. An eligible applicant would have to invest at least HK$10 million in the city and have residency anywhere except four rogue states and the Chinese mainland. For a Chinese citizen to be eligible, the person needs to be a permanent resident in another foreign country. That's where The Gambia, which does not have diplomatic ties with Beijing, comes in. The country’s loose requirements have turned it into a vehicle for wealthy Chinese to get their foot in Hong Kong's door. It takes six 4cm-by-6cm headshots, 15 working days and roughly HK$100,000 to gain residency in western African country, according to visa agencies in Yunnan and Guangdong provinces. No visit to the country is required. Since the beginning of the Hong Kong immigration scheme, 9,050 successful CEIS entrants from the mainland have cited permanent residency in The Gambia. The figures, provided by the Immigration Department this month, are as of March 31, the latest available numbers. Gambian residencies make up nearly 60 per cent of mainland applicants and 50 per cent of all 17,746 people who have received Hong Kong visas under the scheme. The Gambia ranks No 1 among residency countries cited by CEIS applicants. Guinea-Bissau falls second with 2,931 approved applications, Canada third with 1,207, and the Philippines fourth with 559. “An individual permanent residency in The Gambia costs 80,000 yuan [HK$101,240], a family application costs 100,000 yuan,” said Chen Yunjun, a Shenzhen-based agent with Qiaoshen Emigration Consulting. “One hundred per cent get approved.” “We started [selling] Gambian permanent residencies in Shenzhen in 2011,” she said. “Altogether, we have handled dozens so far.” Huaien Business Consulting, in Kunming, Yunnan province, offers similar prices for a Gambian permanent residency. “It’s 80,000 yuan per person," said a sales agent who gave only her last name as Yu. "We can also get you a passport from Guinea-Bissau, we don’t do Gambian passports,” she said. “That would be 250,000 yuan.” Hong Kong agencies are more expensive. Beng Seng Immigration Consultants charges US$25,000 for an individual application, according to its website. A family application, including one underage child, costs US$32,000. Every additional child costs US$1,000 more. Dozens of visa agencies advertise Gambian residency as a way of getting into Hong Kong through CEIS. Investment in Hong Kong residency via Gambia can be profitable for wealthy mainland Chinese. They would qualify for permanent residency after seven years in the city and can request Hong Kong passports. If they don’t spend more than 183 days on the mainland, they are also exempt from mainland taxes, David Webb, a corporate governance advocate in Hong Kong, noted in a blog post on CEIS last year. The Gambia does not recognise the People’s Republic as China’s legitimate government. It is one of four countries in Africa to maintain relations with the Taiwanese government instead. Earlier this month, the island's ambassador to The Gambia, Samuel Chen, handed a cheque for US$1 million to Minister for Presidential Affairs Momodou Sabally to establish a Youth Development Fund. He donated US$442,000 to the Gambian national football team last week. Despite the high number of Gambian residents recorded by Hong Kong, the African country of 1.8 million people counts only 309 mainland Chinese residents this year, said Buba Sagnia, director general of The Gambia Immigration Department, speaking from his office in the capital Banjul. The number of Chinese residents marks a 70 per cent increase from the previous year, but it can account for only 3 per cent of those Hong Kong CEIS applicants who have successfully claimed Gambian permanent residency. Sagnia declined to comment on the discrepancy between the country's immigration statistics and those in Hong Kong. He also said he did not know how mainland Chinese citizens have been issued Gambian residency without ever coming to the country. According to Gambian immigration law, permanent residency can be granted to people "of good character", who have spent at least five years over the last seven years in the country, of which not more than one in prison. "Chinese citizens getting residency permits without visiting the country started in the first republic of Sir Dawda Jawara," Sagnia said, referring to the now octogenarian first prime minister and former president of the former British colony. Jawara was deposed in a military coup in 1994 by the current president, Yahya Jammeh, who has turned The Gambia into one of the continent's worst human rights offenders. In 2008, Jammeh gave homosexuals 24 hours to leave the country or, if caught, their heads would be "cut off". His country ranked 105th in Transparency International's corruption perception index last year. The ficitious Chinese immigrants "pay for the ID cards and the money goes to the central government," said Sagnia, who has led the immigration department since 2009. "Without economic gains the programme cannot survive." Saikou Ceesay is a news editor with The Standard based in Serekunda, The Gambia

Snowden's Hong Kong hacking allegations will be probed, says security minister (By Lai Ying-kit yingkit.lai@scmp.com) Secretary for Security Lai Tung-kwok on Wednesday answered questions in Legco on Edward Snowden’s allegations that the US had hacked the city’s computer systems. Hong Kong’s security minister remained tight-lipped on how the city would handle US whistleblower Edward Snowden’s case, but pledged the authorities would investigate allegations made by the ex-CIA worker. Secretary for Security Lai Tung-kwok told the Legislative Council on Wednesday the government was concerned about recent reports regarding Hong Kong computers being hacked and would investigate further to discover the truth. He was speaking during an urgent meeting to address lawmakers’ questions on Snowden’s allegations that the US has been hacking Hong Kong’s computers under a top-secret cyber-spying programme. “We will continue our efforts to ascertain the facts and will actively follow up on any cases of rights infringements involving individuals and corporations,” he said. Ex-CIA analyst Snowden earlier told the South China Morning Post that secret and illegal attacks on Hong Kong computers by the US National Security Agency, which he said had been taking place since 2009, had recorded a success rate of more than 75 per cent. One of the targets he identified was the Chinese University of Hong Kong - home to the Hong Kong Internet Exchange - a central hub of servers through which most of the city’s web traffic passes. The university has said it has detected no abnormalities in its server system, but the American’s claims have raised concerns that information on many Hong Kong private and corporate computers might have been intercepted. Lai remained taciturn about lawmakers’ questions about how the government was handling the case, such as whether it had contacted the US government for verification of Snowden’s claims and over procedures for extraditing him. Some also asked whether Hong Kong would seek directives from the central government. Declining to comment on individual cases, Lai repeated that the government would strictly adhere to the city’s legal procedures in dealing with them. “But we would not reveal any details about any actions we have taken or will take,” he said. In response to some legislators’ concerns that Hong Kong might not be able to fend off cyber attacks, Lai said there were measures in place to stop them. He said these included a monitoring system on central system networks, regular checks on internet traffic flows, online security reminders to government departments and a police taskforce to combat cyber crimes.

No special treatment for any Edward Snowden asylum claim, says UNHCR (By Joanna Chiu joanna.chiu@scmp.com) The United Nations High Commissioner for Refugees' office at Yau Ma Tei. Edward Snowden would not be given preferential treatment if he were to apply for asylum in Hong Kong, according to the United Nations High Commissioner for Refugees. “We would prioritise older cases,” said Nazneen Farooqi, a protection officer at the UNHCR office in Hong Kong, at a press conference on Wednesday ahead of World Refugee Day on Thursday. Farooqi added that she was speaking hypothetically as the UNHCR has a strict policy to neither confirm nor deny the existence of an individual asylum claim. Farooqi said that because Hong Kong had no asylum screening system, those seeking asylum, once their tourist visas had expired, were usually detained at an immigration centre while their documents were verified. Detention periods usually range from a few weeks to a few months, but can go on longer, depending on the circumstances, according to the UNHCR. But Snowden’s situation could put pressure on the Hong Kong government to improve its currently flawed system, said Aleta Miller, executive director of the Hong Kong Refugee Advice Centre. The eyes of the world are fixed on Hong Kong’s asylum policy. “The eyes of the world are fixed on Hong Kong’s asylum policy,” she told the South China Morning Post. “I see Snowden’s case as an opportunity to draw attention to the issues and demand that the government creates a fair and efficient system.” But Snowden could also directly seek asylum in Iceland, as he has mentioned it as a possible place of refuge. The Icelandic government has refused to say whether they would grant asylum to him. Regardless of Snowden’s next moves, the fates of the 1,200 asylum seekers and 91 recognised refugees in Hong Kong face a potential tipping point, after court-ordered reforms will change the way the government processes protection claims. Landmark decisions by the Court of Final Appeal in December and March ruled that the government must not rely on the UNHCR to assess asylum claims and, therefore, set up a screening system of its own. The court also ruled that the government must consider the risk of cruel, inhumane or degrading treatment when deciding whether to accept claims under the United Nations Convention against Torture - which Hong Kong has signed. Even when refugees are recognised by the UNHCR in Hong Kong, they can wait for years before being resettled in another country. Hong Kong has not signed the United Nations 1951 Refugee Convention, and does not allow refugees to remain as citizens in Hong Kong.

 China*:  June 21 2013

China's next food scandal: honey laundering (By Patrick Boehler patrick.boehler@scmp.com) Bee-keeper Ma Fuhai seen in a file photo harvesting real honey in the Qinghai Lake area. China's National Television has brought another case of "food forgery" to the spotlight in a country where fake eggs, beef and tofu have become staple items in national news coverage. Police in Chongqing's Hechuan district have discovered a production site for fake honey and confiscated about 500 kilograms of the fake nectar, the national broadcaster said in a report on Sunday. "The artificial honey contained zero per cent real honey," the report said, showing a chemical analysis report according to which the honey contained 187 milligrams of aluminium residue to every kilogram of honey. The report has gone viral on Chinese microblogs, where it has been shared more than 300,000 times, making it one of the most trending topics on Wednesday. Newspapers have followed up with reports on how to identify fake honey. "Artificial honey has a chemical odour, it either has a pungent or a fruity smell, whereas real, pure honey has a subtle scent of flowers," one report reads. "Honey can also be placed on a piece of white paper, if the honey spreads out, it could contain water or cane sugar. Another method is to add boiling water to a small amount of honey, let it cool and then add drops of yellow rice wine, if [the mixture] turns blue, red or violet, the honey contains starch." "Now, being Chinese means being a food inspection safety expert," one person commented on Sina Weibo. "We should get the Nobel Prize for chemistry," another quipped. The China Central Television report, however, wasn't as timely as it claimed. It reported on raids on four production sites which started on April 2 in Chongqing, in which five suspects were detained and 38 buckets full of artificial honey made from water, sugar, alum powder and colouring were confiscated. Since 2010, the group have been producing honey for 10 yuan per kilo and selling it for 40 to 60 yuan. Hechuan farmers made fortunes with their honey; the forgers had exploited that reputation. China is the world's largest producer of honey and exports large amounts to the rest of the world. Last month, a study shook France, according to which 10 per cent of the honey consumed in the country is "fraudulent". The samples had been labelled as French, but originated either in China or Eastern Europe. Two months earlier, after a years-long probe named Project Honeygate, US customs busted a honey smuggling ring, in which leading American honey producers smuggled inferior honey from China via Australia to the US.

Huawei launches vendor-built service operation center (By Xinhua) Huawei has built the telecommunications industry's first service operation center established by an information and communications technology (ICT) solutions provider, it announced on Tuesday. Models present the Huawei Ascend P6 Android-based smartphone during their launch at the CommunicAsia communication and information technology exhibition in Singapore June 19, 2013. The smartphone is the world's slimmest, featuring a 4.7-inch high definition in-cell display and weighs approximately 120g, according to press release. The service operation center, located in Indonesia, is aimed to help carriers tackle the challenges of the digital era by focusing on end-user experience to retain and attract customers, said Frank Yao, vice-president of global marketing execution at the Global Technical Services unit of Huawei. "We've seen more and more telecom operators embarking on the transformation from network centric to service centric operations, however, there has been limited choice and support for these efforts in the market place, leaving operators in a difficult position," Yao told a press briefing on the sidelines of the CommunicAsia in Singapore. The center represents an enhanced approach compared with purely Network Operation Center operations, with a view to ensuring superior service quality and customer experiences by centralizing the management of service-oriented operations and maintenance. Huawei chose to establish the center in Indonesia largely because it is an important market of managed services for Huawei and data usage has been surprisingly popular in the local market, as many subscribers jump directly to mobile data services without being a computer user. Service quality management and customer experience management are considered the most important operational issues facing carriers in the next three years, according to a recent survey of 115 communications service providers by Informa Telecoms and Media. "Those operators that don't make the transition will be at a disadvantage against competitors that can deliver a superior customer experience," said Kris Szaniawski, an analyst at the consultancy. This is also the key to tackling the challenges resulting from the rise of OTT (over-the-top) contents, including messages carried through applications such as Wechat and Whatsapp, the industry veterans said. Telecom carriers may have to move to the user-centric model of operations, as new applications can overtake existing ones within a matter of months, said Danny Yap, director of SP AMS solution development department, Huawei Technologies Malaysia. They may have to either combine the advantages of a traditional carrier and a developer of applications, or tap the gold mine of the vast user data, to offer the best solutions and experience to customers, said Wei Bing, head of marketing department, assurance and managed services department at Huawei. Industry players from Asia and beyond are gathering in Singapore on Tuesday for the four-day exhibition and conference CommunicAsia, which is held concurrently with the Broadcast Asia. They are having discussions on the industry trends as well as challenges facing the players.

Hong Kong*:  June 20 2013

HK$86m teardrop rock gets a stellar new name: Star of China (By Amy Nip amy.nip@scmp.com) Tiffany Chen, vice-chairwoman of China Star Entertainment, sports "The Star of China", so named after she paid HK$86.1 million for the flawless, 75.36-carat gem at an auction held by Christie's last month. The price set a record for a briolette, or teardrop-shaped diamond. According to the auction house, Chen is the first collector to have added "China" to a diamond's name. The world's most expensive briolette diamond has been named "The Star of China" after it was bought for a record HK$86.1 million by Tiffany Chen, wife of entertainment mogul Charles Heung Wah-keung. Wearing the pear-shaped diamond at a naming ceremony yesterday, Chen said she had called it after the couple's company, China Star Entertainment, of which she is vice-chairman. "All women love [jewellery]," she said. "I will wear it on important occasions, not every other day." The gem, weighing 75.36 carats, was sold at a Christie's auction on May 28. It is colourless and internally flawless. It dangles from a necklace made of smaller diamonds. Chen, who also collects jade, confessed that she sometimes sold jewellery she had bought if she had too many pieces or didn't like the design. "Sometimes I go out of my mind and buy too many … some have designs too fancy for my taste," she said, joking that she would sell the Star of China if someone was willing to pay double the purchase price. Christie's said Chen was the first collector to have added "China" to a diamond's name, to which Chen replied: "China is a great power. Many Chinese collectors went after big diamonds but not flawless ones." The former owner of the diamond was not revealed. Francois Curiel, president of Christie's Asia, said briolette diamonds - cut in a water-drop shape - were popular in the 18th century. "Napoleon offered his wife one when they married," he said. Chen's gem, despite being the priciest for its shape, is still much cheaper than the world's most expensive diamond. That title belongs a rare 24.78-carat rectangular step-cut pink diamond bought by dealer Laurence Graff for 45.44 million Swiss francs (HK$353.65 million) from Sotheby's in 2010. In 2009 local billionaire Joseph Lau Luen-hung bought a flawless blue diamond for HK$74 million and renamed the gem "Star of Josephine" after his youngest daughter.

Hong Kong lawyers for Kim Dotcom fear they may be victims of US cyberspying (By Niall Fraser and Lana Lam) Cybersnooping scandal takes a new twist with HK legal firm asking whether its protected communication with clients was intercepted - Kim Dotcom. The global cyberspying scandal exposed by American whistle-blower Edward Snowden has taken a new twist, with the Hong Kong law firm representing internet entrepreneur Kim Dotcom voicing fears US authorities may have intercepted confidential communication with their client. Haldanes wrote to the US Department of Justice last week to express fears that its privileged communications may have been intercepted. It sought assurances that this was not the case. Along with six others, New Zealand-based Hong Kong resident Dotcom is fighting extradition to the US to face charges of copyright infringement, racketeering and money laundering in connection with the file-sharing website Megaupload. All the accused deny the charges. Haldanes' request to the department coincides with a report from Reykjavik that Iceland had received an informal approach from Snowden for asylum there. WikiLeaks spokesman Kristinn Hrafnsson told Reuters that an intermediary had approached him on Snowden's behalf. "On 12 June, I received a message from Edward Snowden where he asked me to notify the Icelandic government that he wanted to seek asylum in Iceland," said Hrafnsson, who is also a journalist in Iceland. The Icelandic government refused to say whether it would grant asylum to Snowden but confirmed it had received the message from Hrafnsson. Iceland has a reputation for promoting internet freedoms, but Snowden has said he travelled to Hong Kong immediately from the United States as he feared the country of only 320,000 could be more easily pressured by Washington. Haldanes' questions about covert surveillance will heap more pressure on the Hong Kong government to address claims by Snowden in an interview with the Post last week that the United States has been hacking into computers in Hong Kong and on the mainland for years under the US spy programme Prism. Last night, in response to questions from the Post, a spokesman for the Department of Justice said: "In accordance with the established practice, the Department of Justice does not see fit to comment on the specific details of individual cases." Haldanes solicitor Geoffrey Booth said: "We have written to the [department] to ask them if there has been any interception of legally privileged material. We haven't had a reply. It would be useful to know from Mr Snowden if he was aware that this particular type of interception was being practised under Prism." Dotcom's substantial assets in the city were frozen by Hong Kong authorities in a joint operation with the US Federal Bureau of Investigation in January 2011. Booth said the law firm was particularly concerned because, while the US response to Snowden's cyberspying leaks now focuses its justification on the grounds that hacking operations help stop terrorist attacks, this was not the case when the scandal first broke. "Senior US government officials are using the justification of preventing terrorist attacks - which no one can argue with. But they have also used the cybercrime investigations as a justification," he said. In the early stages of the scandal, US Attorney General Eric Holder said the Prism programme was aimed at "facilitating the acquisition of foreign intelligence information on targets outside the US". Booth said: "The issue is, have [the US] been eavesdropping on privileged communications between a lawyer and his clients over a matter of alleged copyright infringement? If they have, then this crosses a boundary and needs to be regulated."

Hong Kong lawyers to gain permission to advise mainland Chinese clients (By Patsy Moy patsy.moy@scmp.com) Ambrose Lam hailed the more open policy. People living on the mainland will soon be able to seek advice from Hong Kong lawyers without crossing the border, the Law Society's new president has announced. Ambrose Lam San-keung described the new arrangement as a "breakthrough". He said details would be formally announced by mainland authorities within the next two months and would involve Qianhai special economic zone and Shenzhen. The development follows two years of campaigning and research by the Law Society. "We are looking not only at Qianhai, but the whole of Guangdong province," said Lam. "Qianhai is only a starting point." At present, Hong Kong lawyers can act only as advisers to mainland law firms, Lam said. However, under the new arrangement, Hong Kong lawyers will be permitted to serve clients directly. The arrangement will provide a one-stop shop for advice on cross-border and international cases. Lam, who took over as Law Society president last month, said a law school in Shenzhen would be opened as early as September to train Hong Kong lawyers in mainland law and mainland lawyers in Hong Kong law. The school is likely to be set up within Tsinghua University and would be a joint project by the Law Society, its Shenzhen counterpart and the university. Workshops will include scenarios similar to real-life litigation, Law Society vice-president Stephen Hung Wan-shun said. Lam said the new law school was an important element of the new arrangement, as it would familiarise Hong Kong and mainland lawyers with each other's legal systems and enable them to provide more comprehensive services. Lam said commercial law would be among the first subjects to be taught.

Film boss' wife buyer of world's most expensive briolette diamond (By Ernest Kao ernest.kao@scmp.com) The flawless 75.36 carat briolette-style diamond. The wife of showbiz mogul Charles Heung Wah-keung, is the “anonymous Asian buyer” of a 75.36 carat briolette diamond - one of the world’s most expensive ever to come under the hammer. Tiffany Chen, vice chairwoman of Hong Kong-listed China Star Entertainment, named the HK$86.1 million stone after the company at the viewing gallery of auction house Christie’s in Central on Tuesday. Now called the “China Star Diamond”, the stone was purchased by Chen at the Hong Kong Magnificent Jewels auction on May 28 for a record US$148,000 per carat. Pear-shaped and flawless, it is said to be “the largest and most perfect briolette diamond” ever to be auctioned, according to Christie’s Asia. Reuters reported that it arrived at American diamond dealership, William Goldberg, as a 160.5 carat rough. The stone is a rare Type IIa diamond similar to the Koh-i-Noor diamond set into Queen Elizabeth's crown. Christie's also set a US$26.7 million record in Geneva last month for a pear-shaped colourless diamond which was also said to be the largest ever auctioned. Heung, a former actor with alleged family links to the triads, has corporate interests spanning entertainment, tourism, gaming and film production. His film company, China Star, was founded in 1992 and is responsible for producing films such as Election and Mad Detective. He is the company’s chairman.

Developer-sponsored music festival set for July 1 (By Lai Ying-kit yingkit.lai@scmp.com) Two Hong Kong bands are facing calls to boycott a music festival on July 1 amid criticism from pro-democracy march internet users who say the festival is aimed at drawing participants from the annual protest. The Hong Kong Dome Festival will feature Canto pop-rock bands Rubberband and Mr. as well as five Korean pop groups. It will be staged between 2pm and 6pm on July 1 at the former Kai Tak airport runway. The show will coincide with the July 1 pro-democracy march that draws tens of thousands of participants annually. The march is to start at 2.30pm from Victoria Park and work its way to Central. Internet users raised questions about the concert’s purpose. A Facebook group set up on Monday accused concert organisers of trying to divert people – especially youngsters – from attending the pro-democracy rally with the new show. “[The organisers] offer a special low price of HK$99 [for the concert] and provide coaches for viewers to commute,” the group said. “We are concerned the purpose of the concert is not that pure.” “It is reminiscent of the three large-scale free concerts during the Malaysian presidential election,” it said on the Facebook page. “Music should not be used as a political tool.” The Facebook group called for all the participating bands and singers, both local and foreign ones, to boycott the show. “The Korean version of our appeal is in the making,” it added. The organisers of the music festival – the Hong Kong Performing Industry Association – say the festival’s purpose is to raise awareness about the need to build a new giant domed stadium for large shows. The festival is sponsored by 10 property developers, including Cheung Kong, Sun Hung Kai Properties, New World Development and Henderson Land. Organisers expect a turnout of 18,000. Commercial Radio talk show host Leo Chim Chi-man, a friend of Rubberband drummer Lai Man-wang, quoted Lai as saying on Tuesday the band had not been aware of the show’s nature “until it was too late”. Chim also said Lai pledged to join the pro-democracy march after the concert. As well, a pro-government group announced on Monday that shoppers would get special deals on July 1 at 1,000 shops and restaurants to celebrate the July 1 handover anniversary, but the deals are only good between 2pm and 5pm. July 1 march organisers see this as one more effort by the government friendly camp to divert people from the march.

 China*:  June 20 2013

Foreign investment into China rises just 0.29pc in May as growth slows (By Victoria Ruan in Beijing victoria.ruan@scmp.com) Warnings sounded as weaker industrial growth and external demand limit capital inflows, leading to fall in banks' foreign exchange buys - Foreign investment in China's property sector fell nearly 5 per cent year on year in the January-to-May period. Sluggish industrial activity on the mainland and cooling external demand curbed foreign investment inflows last month but property prices continued to rise. The situation may force policymakers to tread carefully as they try to recalibrate the economy and deliver structural reform. Fewer economists expect Beijing to take aggressive steps to boost domestic growth. Foreign direct investment into China grew 0.29 per cent in May from a year earlier to US$9.26 billion, following a 0.4 per cent rise in April. Foreign investment in the services sector climbed 4 per cent in the January-to-May period from a year earlier, offsetting a 1.4 per cent decline in manufacturing industries, the Ministry of Commerce said yesterday. Foreign investment in the property sector fell nearly 5 per cent in the five-month period compared with a year earlier, the ministry's spokesman, Shen Danyang, said at a press briefing. Property prices continued to rise even after the government tightened controls. New home prices in 65 out of 70 major cities increased in May from April, according to the National Bureau of Statistics. "China's economy has come to a difficult turning point, where many low-end manufacturing industries are losing competitiveness but new growth drivers have yet to be found," said Chang Jian, an economist at Barclays Capital Asia. "While there may be some room for an interest rate cut, it will be restricted by the rise in property prices." Import and export data deteriorated after the foreign-exchange regulator reined in speculative inflows betting on yuan appreciation. The crackdown caused market liquidity to shrink. Central bank data showed banks' foreign-exchange purchases rose only 67 billion yuan (HK$84.8 billion) last month, compared with 294 billion yuan in April. "The trade situation will be quite grim for the full year. Many, many difficulties need to be overcome before macroeconomic targets can be met," Shen said. He noted challenges including yuan appreciation, weak external demand and a slowdown in industrial production. The government is targeting 7.5 per cent economic growth this year, after the economy grew at a 7.8 per cent pace in 2012, the slowest in 13 years. The World Bank last week trimmed its forecast for mainland growth this year to 7.7 per cent from 8.4 per cent. Barclays lowered its gross domestic product growth forecast to 7.4 per cent from 7.9 per cent, saying it believed China's new leaders had a greater tolerance for slower growth. Nomura International's chief China economist, Zhang Zhiwei, said there was a 30 per cent chance that GDP growth would drop below 7 per cent in the third or fourth quarter, citing tightening liquidity. "Rising property prices make it difficult for policymakers to loosen monetary policy, at least in the short term," he said. "We expect the government to continue focusing on financial risks before the [second-quarter] data release on 15 July."

China's Tianhe-2 supercomputer unseats US Titan as 'world's fastest' (By Associated Press in Beijing) The Tianhe-2 was named the world's fastest supercomputer according to an official listing. China has built the world’s fastest supercomputer, almost twice as fast as the previous US holder and underlining the country’s rise as a science and technology powerhouse. The semiannual TOP500 official listing of the world’s fastest supercomputers released on Monday says the Tianhe-2 developed by the National University of Defence Technology in central China’s Changsha city is capable of sustained computing of 33.86 petaflops per second. That’s the equivalent of 33,860 trillion calculations per second. The Tianhe-2, which means Milky Way-2, knocks the US Department of Energy’s Titan machine off the No 1 spot. It achieved 17.59 petaflops per second. Supercomputers are used for complex work such as modelling weather systems, simulating nuclear explosions and designing jetliners. It’s the second time China has been named as having built the world’s fastest supercomputer. In November 2010, the Tianhe-2’s predecessor, Tianhe-1A, had that honour before Japan’s K computer overtook it a few months later. The Tianhe-2’s achievement shows how China is leveraging rapid economic growth and sharp increases in research spending to join the United States, Europe and Japan in the global technology elite. “Most of the features of the system were developed in China, and they are only using Intel for the main compute part,” said TOP500 editor Jack Dongarra in a news release accompanying the announcement. “That is, the interconnect, operating system, front-end processors and software are mainly Chinese,” said Dongarra, who toured the Tianhe-2 development facility in May.

Chinese President Xi Jinping has congratulated those involved in the success of Tianhe-2, the world's fastest supercomputer. In a statement available on Tuesday, Xi extended greetings to all the staff who took part in the development of Tianhe-2, which has a peak performance speed of 54.9 quadrillion operations per second. Xi said the success showed that China has gained a leading place in the world in this field. He encouraged scientists to make further contributions and achievements in a bid to help build an innovative country. The semiannual Top 500 listing of the world's fastest supercomputers was released on Monday. Tianhe-2 is almost twice as fast as the second computer, Titan from the United States. Tianhe-2 was designed and built by China's National University of Defense Technology. The computer matched home-grown Feiteng-1500 CPUs as well as Intel Xeon and Xeon Phi processors. This is the second time China has made it to first place in the Top 500 list. Tianhe-2's predecessor, Tianhe-1A, was the world's fastest supercomputer from November 2010 to June 2011.

Snowden denies being Chinese spy: media (Xinhua) The US whistleblower Edward Snowden said accusations from American politicians that he is a Chinese spy are a "predictable smear" designed to "distract from the issue of US government misconduct", according to a South China Morning Post report on Tuesday. In the second public comments since he admitted exposing secret US cyberspying programmes, Snowden told readers of Guardian webchat to ask themselves, "if I were a Chinese spy, why wouldn't I have flown directly into Beijing? I could be living in a palace petting a phoenix by now." Snowden's comments last night came a day after former US vice-president Dick Cheney said China would "probably be willing to provide immunity for (Snowden) or sanctuary for him in exchange for what he presumably knows or doesn't know." Snowden also denied passing information to Beijing. He said he has had no contact with the Chinese government and he only works with journalists. Snowden answered 18 questions among hundreds of them posted for the online chat. He did not discuss his plans or say whether he is still in Hong Kong. Asked what he would say to others who could leak information on the US intelligence apparatus and its effect on civil liberties, Snowden said, "this country is worth dying for."

Hong Kong*:  June 19 2013

Li Ka-shing to buy Dutch waste firm for US$1.26b (By Donny Kwok and Denny Thomas in Hong Kong) Dutch acquisition marks the group’s second deal in waste management, after Australian private equity firm Ironbridge sold its New Zealand waste company to Cheung Kong Infrastructure - Li Ka-shing’s Cheung Kong (Holdings) is extending its overseas infrastructure empire with the purchase of RAV Water Treatment. Cheung Kong (Holdings), controlled by Asia’s richest man Li Ka-shing, said it will buy Dutch waste processing firm RAV Water Treatment for 943.68 million euros (HK$9.8 billion), in an overseas expansion drive that has targeted infrastructure assets offering steady recurring income. Li’s business empire, which spans property, telecoms, ports and retailing, has been seeking stable investment opportunities in well-regulated markets outside of Hong Kong, where its opportunities for expansion are becoming limited. Other partners in the acquiring consortium include Hutchison Whampoa’s Cheung Kong Infrastructure Holdings, Power Assets Holdings and Li Ka Shing Foundation, according to a statement. They are buying AVR-Afvalverwerking, owner of RAV Water Treatment I, which processes waste and supplies renewable energy from waste incineration in the Netherlands. Cheung Kong Infrastructure, Hong Kong’s No. 2 property developer, and its investment arms have spent US$14.2 billion, including debt, buying assets globally over the past decade, according to Thomson Reuters data. Last year, companies controlled by octogenarian billionaire Li agreed to buy British gas company Wales and West Utilities for US$1 billion. In 2010, Cheung Kong Infrastructure and Power Asset Holdings agreed to buy the British electricity distribution networks of France’s EDF for 5.8 billion pounds (HK$70.6 billion). The Dutch acquisition marks the group’s second deal in waste management, after Australian private equity firm Ironbridge sold its New Zealand waste company, EnviroWaste Services Ltd, to Cheung Kong Infrastructure for NZ$501 million (HK$3.1 billion), including NZ$11 million in debt, in January. Cheung Kong Holdings and Cheung Kong Infrastructure will each hold 35 per cent of the joint venture acquiring the Dutch company. Power Assets will hold 20 per cent and Li Ka Shing Foundation will own 10 per cent. The investment will be financed from internal resources. Shares of Cheung Kong rose 3 per cent on Monday but are down more than 9 per cent since the start of the year. Hong Kong’s benchmark index was up 1.1 per cent on the day, but is down nearly 7 per cent for the year. Among the other Li Ka-shing units involved in the deal, Cheung Kong Infrastructure gained 3.3 per cent, Power Assets was up 1.9 per cent and Hutchison climbed 2.6 per cent.

Lingnan University students threaten boycott over new pro-government president (By Lai Ying-kit yingkit.lai@scmp.com) Leonard Cheng is close to the chief executive and supported Article 23 and national education - Students at Lingnan University threatened to boycott classes in September if an adviser to Chief Executive Leung Chun-ying’s election campaign, Leonard Cheng Kwok-hon, is appointed as the institution’s next president. About 100 students protested in the Tuen Mun institution on Monday morning ahead of a consultation session where Cheng was to discuss plans for his term as president with teachers and students. Cheng, 60, is a dean professor at the Hong Kong University of Science and Technology’s business school and was an adviser to Leung and one of the 11 members of Leung’s election campaign team last year. He was chosen by Lingnan’s council members early this month following a global selection process launched in October after former president Chan Yuk-shee announced his resignation citing health reasons. The university’s student union said students had been denied a say in the selection process and were concerned that Cheng’s pro-government stance would jeopardise academic freedom. “Cheng expressed support for the Article 23 legislation and national education. We are worried that if he becomes president, academic freedom will be suppressed,” Vivian Yip Wing-lam, president of the student union, said on Monday. The students are calling for the university’s council to not appoint Cheng and start its selection process over again. The union said it might stage a class boycott in September if Cheng's appointment stands. Cheng wrote a newspaper article during the anti-national education row last year to accuse a certain group of politicians of taking advantage of the campaign. Last month, Cheng joined a think tank that was formed by pro-government lawmaker Priscilla Leung Mei-fun to discuss political reform and universal suffrage. Lingnan’s council chairman Bernard Chan earlier said the university was hoping Cheng’s abilities would improve governance following an enrolment fiasco at two of its affiliate community colleges last year. The two colleges admitted 8,000 students to 5,800 places to sub-degree courses after it had been under financial pressure to take in more students for years.

Snowden extradition would 'tarnish Hong Kong's image', says China state media (By Agence France-Presse in Beijing) Protesters in Hong Kong march to the US consulate in support of Edward Snowden. A state-backed Chinese newspaper on Monday said extraditing former spy Edward Snowden to the United States would be a “betrayal” of his trust and a “face-losing outcome” for Beijing. The comments are among the strongest to be put forward by domestic media against extraditing Snowden, a former National Security Agency subcontractor who is hiding in Hong Kong. The US has launched a criminal investigation into Snowden after he exposed a massive internet surveillance operation – including claims of hacking directed at China – amid tensions between Washington and Beijing over online espionage. Beijing has been tightlipped on Snowden, with the foreign ministry saying last week it had “no information to offer”. But Chinese media have previously said Beijing should be governed by public opinion in refusing to send him back. Monday’s Global Times editorial went into detail about the “face-losing outcome” for China if he was returned. “Unlike a common criminal, Snowden did not hurt anybody. His ‘crime’ was that he blew the whistle on the US government’s violation of civil rights,” it said. “Extraditing Snowden back to the US would not only be a betrayal of Snowden’s trust, but a disappointment for expectations around the world. “The image of Hong Kong would be forever tarnished.” The editorial also said that “Snowden believes in the democracy and freedom of Hong Kong”, adding: “China’s growing power is attracting people to seek asylum in China”. China’s official army newspaper on Sunday branded the surveillance programme exposed by Snowden as “frightening”. The former spy has vowed to fight any attempt by the US to extradite him from Hong Kong, which retained a separate legal system when it returned to Chinese rule in 1997.

Live updates: Edward Snowden Q&A with the world (South China Morning Post) 29-year-old US surveillance whistleblower Edward Snowden holds Q&A with world readers via the Guardian's website starting at 11pm (3am GMT ). Television screens in Tsim Sha Tsui shows the footage of US surveillance whistleblower Edward Snowden on June 17, 2013. 11:07pm 
Glenn Greenwald asks: 
Let's begin with these:
1) Why did you choose Hong Kong to go to and then tell them about US hacking on their research facilities and universities?
2) How many sets of the documents you disclosed did you make, and how many different people have them? If anything happens to you, do they still exist?
Snowden answers,
"1) First, the US Government, just as they did with other whistleblowers, immediately and predictably destroyed any possibility of a fair trial at home, openly declaring me guilty of treason and that the disclosure of secret, criminal, and even unconstitutional acts is an unforgivable crime. That's not justice, and it would be foolish to volunteer yourself to it if you can do more good outside of prison than in it.
Second, let's be clear: I did not reveal any US operations against legitimate military targets. I pointed out where the NSA has hacked civilian infrastructure such as universities, hospitals, and private businesses because it is dangerous. These nakedly, aggressively criminal acts are wrong no matter the target. Not only that, when NSA makes a technical mistake during an exploitation operation, critical systems crash. Congress hasn't declared war on the countries - the majority of them are our allies - but without asking for public permission, NSA is running network operations against them that affect millions of innocent people. And for what? So we can have secret access to a computer in a country we're not even fighting? So we can potentially reveal a potential terrorist with the potential to kill fewer Americans than our own Police? No, the public needs to know the kinds of things a government does in its name, or the "consent of the governed" is meaningless.
2) All I can say right now is the US Government is not going to be able to cover this up by jailing or murdering me. Truth is coming, and it cannot be stopped." 
10:45pm
Edward Snowden, the 29-year-old American who in late May left his job at NSA contractor Booz Allen Hamilton in Hawaii, fled to Hong Kong and blew the whistle on covert US surveillance programmes at home and abroad, is holding a live questions and answers session with online readers via the Guardian's website. Readers can post questions on the site and Snowden, with the help of Guardian journalist Glenn Greenwald, who first broke the story of Snowden's revelations, will post his answers on the page as well. The newspaper has said that the live chat is subject to whatever conditions Snowden considers safe, and also depends on his access to a secure internet connection. "It is possible that he will appear and disappear intermittently, so if it takes him a while to get through the questions, please be patient," it said. Snowden's last known media interview happened on Thursday with the South China Morning Post at a secure location in Hong Kong, during which he revealed details of US cybersnooping and hacking operations against targets in Hong Kong and mainland China, and vowed to stay in Hong Kong and fight US efforts to extradite him in Hong Kong courts. 

 China*:  June 19 2013

Japan fears losing battle of diplomatic buffets to China (By Agence France-Presse in Tokyo) A view shows the table setting for a luncheon in honour of China's Vice President Xi in Washington, February 2012. Belt-tightening in Japan’s diplomatic service is cutting the quality of canapes on offer abroad, the foreign ministry has said, leading to fears Tokyo is losing the battle of the buffets to Beijing. Diplomats in Tokyo say China appears to be ramping up its spending on its missions while Japanese diplomats are being forced to scrimp, the ministry said. Allowances for embassy bashes have dropped 40 per cent over the last decade, Foreign Minister Fumio Kishida told a parliamentary committee earlier this month. Foreign guests invited to mark occasions such as the Emperor’s birthday have noted the second-rate sake and substandard snacks, Kishida said. One diplomat reportedly complained the Middle East mission where he worked had been unable to afford to serve the popular shrimp tempura, and this had turned off invitees. In contrast, Chinese missions appear to be hosting ever-more lavish receptions. One senior Japanese ministry official lamented “the gap in momentum” between the two countries, which are locked in a tense territorial dispute, Jiji reported. Another diplomat told AFP that a Japanese embassy in a western African country “is located in a multi-tenant building, and when you go down from your floor, shoe-shiners approach you”. “There is no private electric generator inside the building so blackouts happen frequently,” he said. “In contrast, China has nice premises... and when I was there a few years ago it was constructing a brand new building,” he added. An official from the governing Liberal Democratic Party told AFP party food was sometimes paltry. “There are some cases where the contents of meals are so poor that holding a reception just has no meaning,” he told AFP. However, a senior official at a government agency handling economic affairs dismissed the complaints. “The quality of food or wine does not dictate the quality of diplomacy,” the official told Jiji Press. China overtook Japan as the world’s second-largest economy in 2010 and has embarked on a diplomatic charm offensive in many parts of the world as it looks to open up markets for its goods. Japan’s presence on the world stage has diminished since the heady days of its 1980s bubble economy, when the cash-rich government spent heavily on promoting the country abroad. Despite the downsizing, Japan remains one of the world’s largest donors of foreign aid and prides itself on having a positive reputation abroad.

Cheney hint Snowden is a Chinese spy 'sheer nonsense', says China (By Teddy Ng teddy.ng@scmp.com) Foreign Ministry spokeswoman Hua Chunying said the US should pay attention to the world's concerns about its internet surveillance operations. China’s Foreign Ministry on Monday denied Edward Snowden was a Chinese spy and said the United States should give the world an explanation regarding its international internet surveillance program. In its first official response to the recent exposure of the US National Security Agency’s internet surveillance programme by whistleblower Edward Snowden, Foreign Ministry spokeswoman Hua Chunying said the US should pay attention to concerns of the international community on the issue. Hua, in her daily briefing in Beijing, also hit back at the allegation that Snowden could be a spy for China, calling it “sheer nonsense”. Former US vice president Dick Cheney told Fox News on Sunday that Snowden was a “traitor” and he raised questions over Snowdon's decision to flee to Hong Kong, hinting that he could be a spy for China. I'm suspicious because [Snowdon] went to China. It raises questions whether or not he had that kind of connection before he did this DICK CHENEY, "I'm suspicious because he went to China. That's not a place where you would ordinarily want to go if you are interested in freedom, liberty and so forth," Cheney said, adding: "It raises questions whether or not he had that kind of connection before he did this." Beijing has been tight lipped about the saga since Snowden revealed his identity to the media last week, only saying they have no information regarding the case. But Hua said on Sunday that she is aware of media reports that saying Hong Kong citizens wanted Snowden to stay in the city, and that she is aware of the response of the Hong Kong government to the matter. Half of Hong Kong people believe that cyberspying whistle-blower Edward Snowden should not be handed over if Washington makes a formal request for his return, according to an exclusive opinion poll commissioned by the Sunday Morning Post. Chief Executive Leung Chun-ying said on Saturday that "when the relevant mechanism is activated", the Hong Kong government would handle Snowden's case in accordance with the city's laws. He also said the government would follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated.

Envisioning a new future (By GAO YUAN) A Beijing resident examining Canon telephoto lenses at the 16th China International Photograph and Electrical Imaging Machinery and Technology Fair in Beijing in April. Japanese firms view China as the big buyer of high-end cameras - China is the world's largest buyer of high-end cameras, with the expanding middle-class population likely to fuel demand, said an executive from Canon Inc, the Japanese camera maker. "The increasing demand in high quality single-lens reflex cameras is increasing despite the slowing Chinese economy," said Howard Ozawa, managing director of Canon and president of Canon Asia Marketing Group. "Because Chinese people are spending more money on traveling and sightseeing, we've been able to sell our full line of products in the country." Canon hopes it can lift China sales to $10 billion by the end of 2017, boosted by strong demand for cameras and printing devices. The Japanese company heavily relies on foreign markets. Four-fifths of its sales were generated outside Japan, said Reuters. Weaker international demand for compact cameras plus global zeal for smartphones equipped with high-definition cameras is hurting Canon's sales. Canon said its first quarter operating profit fell 34 percent year-on-year. The company's first quarter operating profit was 54.8 billion yen ($552 million) from 82.7 billion yen a year ago. However, Ozawa was optimistic about Canon's business in China although the nation's gross domestic product started to show signs of decline. The GDP of China increased by 7.7 percent year-on-year in the first quarter compared with an advance of 7.8 percent for the whole of 2012. With more and more Chinese people traveling around the globe on vacations, camera sales are set to surge, said Ozawa. The average price for high-end cameras in China is about $100 higher than those in the United States, according to Ozawa. "The price does not seem to weaken Chinese people's interest in such devices." As millions of Chinese tourists spend billions of dollars each year on sightseeing, they will certainly be willing to pay for a high quality camera to capture memories en route, he added. Boosted by increasing incomes, China's emerging middle class spent a record 3 billion euros ($3.8 billion) on duty-free shopping in 2012, according to Global Blue, a European tourism shopping service provider. The company said the sum did not include a large amount of transactions outside Europe. Chinese shoppers are also the most generous group. The average transaction size hit 875 euros last year, the highest among all nationalities, said Global Blue. The second highest spenders were Thais, who on average spent 100 euros less than the Chinese. Like other developed markets, Canon found Chinese customers' requirements are more difficult to satisfy because people like to add more personalized features to their cameras. Manufacturers such as Nikon Corp, Sony Corp and Olympus Corp have released devices featuring personalized functions. "We are aiming to launch more personalized devices in China to fight off competition," said Ozawa. In 2012, Canon's sales in China reached $3 billion because of its advance in camera and enterprise-level businesses. Looking forward, Canon said increasing demand for interchangeable-lens digital cameras is expected to grow in all regions because of expanding user bases in developed countries such as Japan and the US as well as market growth in emerging countries such as China. Since the establishment of its China branch in 1997, Canon now has production plants and research and development facilities in Liaoning, Guangdong and Zhejiang provinces. The company has more than 35,000 staff in China, making it one of the biggest camera makers in the country.

School's in for first overseas campus (By Luo Wangshu,Cao Yin,Wang Hongyi) Malaysian student Bong Meen Szer (center) takes part in calligraphy contest at Xiamen University. She welcomed the college's plan to open a campus in Kuala Lumpur, capital of Malaysia. Cross-border expansion signifies China's growing clout and rising world interest in country, report Luo Wangshu in Chongqing, Cao Yin in Beijing and Wang Hongyi in Shanghai. Loke Pui Yan has been studying for her master's degree at Xiamen University in Fujian province since the autumn. The campus, which is along a beach, is a sight to behold. It is scattered with elegant historical buildings, enjoys pleasant weather and ocean breezes, and almost, but not quite, erases any feelings Loke has of culture shock and homesickness. Although the 29-year-old Malaysian has enjoyed her studies and her stay in China, she was thrilled to learn that the college is ready to establish a campus in her homeland. Xiamen University will be the first Chinese college to open a campus abroad to showcase its ideas and culture, improve China's image in the world and enhance relations with other countries. Unlike Western universities, which have flocked to China, the country has come late to the party. Now it is trying to play catch-up and ride the globalization of the education business. Over the past decades, a large number of overseas universities have come to China to set up joint institutions and exchange programs. The Ministry of Education put the number of joint projects now at about 1,500, including Shanghai New York University, Wenzhou Kean University and Kunshan Duke University. But the number of Chinese higher education institutes going out and establishing cooperation with overseas education bodies is small, although the Chinese government is supporting the internationalization of higher education to spread influence in the world, a process known as soft diplomacy. Zhang Xiuqin, director of international cooperation and exchanges at the Ministry of Education, said China will support and help eligible universities to go out and globalize. Xiamen University announced in February it will be the first one to take the step. And in May, Zhejiang University, one of the nation's top-five colleges, said it will also build a campus in London. It also has signed a Memorandum of Understanding for furthering academic collaboration with London University's Imperial College. Innovative model - "This is indeed an exciting opportunity but needs much innovative effort," said Song Yonghua, executive vice-president of Zhejiang University, speaking of the establishment of the London campus. He said Zhejiang University and Imperial College will start exploring the feasibility of establishing facilities in the new Imperial West campus for joint academic activities. Xu Liping, deputy director of the South Asian Studies Center of the Chinese Academy of Social Sciences, said, "It is innovative for Chinese universities to go abroad to show their educational ideas and culture." Most activities so far between Chinese universities and foreign institutes are too simple and superficial, and do not provide long-term development, Xu said. Chinese universities started to expand toward the end of the 20th century. With the fast development of colleges, many universities are seeking international cooperation, including faculty collaboration and student exchange programs. In addition to these programs, most Chinese universities reach foreign counterparts through Confucius Institutes, offering language and cultural classes. However, setting up campuses and granting degrees is still a new field. "Xiamen University is attempting to break through the superficial educational or teaching communications between countries," Xu said, adding it will be good for China to improve its image in the world and enhance its relationship with neighbors. Xiamen University's 60-hectare Malaysia campus will be built in the capital, Kuala Lumpur, at a cost of about 1.26 billion yuan ($205 million). Construction will start in January 2014 and recruitment will begin in the autumn of 2015. The first class intake will be 500 students. The student population will number 5,000 by 2020. The campus is ambitious to become home to 10,000 students, including 9,000 undergraduates and 1,000 graduate students. Five majors will be open to students in the first stage at the Malaysia campus: Chinese language and culture, Chinese medicine, computer sciences, economics and electronic engineering. All lectures will be in English, except for those on Chinese language and culture and Chinese medicine. "We have set up these schools after several in-depth surveys and consultations with experts on the needs of Malaysian society," said Zhu Chongshi, president of Xiamen University. He said that five more schools will be added in the second phase - chemical engineering and energy, biology engineering, ocean and environmental studies, material sciences, as well as animation and mass media. Najib Razak, the prime minister of Malaysia, invited Chinese universities to set up campuses in his country. Chinese education authorities picked Xiamen University because of its long and lasting ties with Malaysia. Xiamen University was established in 1921 by Tan Kah Kee, a prominent businessman, community leader and philanthropist in the overseas Chinese community of Southeast Asia. "Xiamen University is going to Malaysia, where Tan grew up, 92 years after he set it up in China," Zhu said. "It is a historical payback. "The faculties and students are very excited, believing it will meet Xiamen University's global university development strategic plan." The college already has about 200 Malaysian students, one of the biggest international student populations in China. The new campus will open to the world to recruit students and build faculties. Students from China and Malaysia will account for two-thirds of the student body. Degrees will be granted by Xiamen University in the same way as at its main campus in Fujian. Tuition fees will be cheaper than at other international university campuses in Malaysia but more expensive than domestic private universities. Further details including full curriculum details at Zhejiang University's overseas campus haven't been revealed yet. Soft power and beyond - Education is often seen as an important part of a nation's soft power. Supporting China's universities to establish overseas campuses will help improve China's soft power, extend its influence and help people better understand the country and its culture, according to Liu Baocun, director of the International and Comparative Education Institute at Beijing Normal University. "Establishing campuses overseas and developing academic research will see more positive effects than Confucius Institutes, of which there are more than 700 abroad that teach the Chinese language and promote Chinese culture," Liu said. Xu at the Chinese Academy of Social Sciences agreed that a country's educational development also reflects its soft power. "If the campus is run well, it'll bring rich results for China," he said. China is experiencing soaring economic development, but it also wants its culture to be appreciated by other countries, Xu said, that is why such campuses will have far-reaching significance. Song Yinghui, a researcher of Southeast Asian studies with the China Institutes of Contemporary International Relations, said she believes overseas campuses will be of benefit not only in the field of education but will also have a positive effect on business and politics. "Take Malaysia as an example. The country has just undergone a national election. The new government has an open attitude and is starting to pay attention to Chinese elements across all industries," she said, applauding Chinese universities' plans to establish campuses abroad. "Xiamen University's campus will attract big enterprises in both countries and will inevitably boost their economic development. This campus is helpful not only for education but also for other industries," she added. Foreign campuses of Chinese universities will help them attract high-quality students and maintain their competitive edge, said Wang Huiyao, director of the Center for China and Globalization, a public policy think tank in Beijing. Over the past seven years, the number of students who took China's college national entrance exam has declined. One reason is students are more likely to study abroad, even from an early age. "More Chinese students, especially excellent students, are seeking higher study overseas, which inevitably puts pressure on Chinese universities. In this regard, they have to compete for more students," Wang said. He said that the foreign campuses may help attract more quality students and increase the number of those from abroad. "This is also a step toward adapting to the trend of globalization. In a world of globalization, education resources should also become mobile. Students all around the world can freely choose the education they want to have. Chinese universities should see this trend," Wang said.

Hong Kong*:  June 18 2013

See the bigger picture on the film industry (By Vivienne Chow vivienne.chow@scmp.com) Film Development Council's chairman urges policymakers to consider city's flagship creative industry in light of overall cultural development - Ma Fung-kwok says the city has missed an opportunity. The Film Development Council will review its funding schemes and draft new proposals for nurturing talent, but these won't be enough to move the industry forward if film development is not considered within the context of overall cultural policy, the council's new chairman has said. "If we can't talk about cultural policy, problems with the development of Hong Kong's film industry can't be resolved," Ma Fung-kwok told the South China Morning Post. Ma, who is also the lawmaker for the culture and sports functional constituency, said that cultural and creative industries, which under the government's classification include film and 10 other industries, should be incorporated into and synchronised with the city's cultural policy planning. He cited South Korea's success, saying the country's holistic approach covering creative fields, talent training, research and development, as well as technology, was the key. In Hong Kong, under the current policy structure, film falls under the remit of the Commerce and Economic Development Bureau, which looks at trade and commerce. Such segregation overlooks the cultural side of creative industries, Ma said. He said the current set-up was proposed back in 2003 when the now defunct Culture and Heritage Commission, established by former chief executive Tung Chee-hwa, drafted a cultural policy recommendation report, which covered a range of issues from Hong Kong's cultural identity to arts development, creative industries, heritage and the West Kowloon Cultural District. "In 2004, Tung accepted the proposal. But then, [the commission] was disbanded after he stepped down. Hong Kong went back to the old thinking. We missed the chance," said Ma, who was a member of the commission. Ma said he hopes existing initiatives such as those providing funding for film productions can be kept and fine-tuned in the next few years. He said managing public expectations will also be important coming off the back of last year's audit report on the film industry, which lamented the low return rate of government-funded film projects and had given the public a negative impression. "But this isn't right. If the market is okay and [filmmakers] can make money, they wouldn't have to apply for funding," said Ma, himself a former film producer and co-founder Media Asia, a local film industry powerhouse now owned by showbiz tycoon Peter Lam Kin-ngok. Films should be judged by both their economic value and social value, which includes artistic value, impact on the industry and talent cultivation, he said. A thorough review of the Film Development Fund will be needed, he added. The fund, which has supported film projects, events and screenings of local productions at overseas festivals, will be depleted next year. Since 2007 when the government injected HK$300 million into the fund, it has handed out HK$72.4 million for 26 productions. While the First Feature Film Initiative, a competition of first-time filmmakers that offers a direct subsidy to the winning film project, will help train talent, Ma said he hopes more will be done for script writing and post-production talent. Of the 50 Hong Kong films produced on average a year, few had post-production, such as editing and sound mixing, done here, Ma said. Land policy is also seen as a factor. Ma said it has been hard for cinemas, bookstores and other outlets for cultural content to endure the high rents in shopping malls. "Some districts don't even have cinemas," he said. A review of existing land resources should be done to set aside space for production sets and studios, Ma suggested.

Yuan clearing beats volume in Hong Kong dollars (By Gary Cheung in New York gary.cheung@scmp.com) Daily turnover of yuan interbank settlements in the city hit 390b yuan last month, HKMA chief says, cementing offshore lead in the business - HKMA's Norman Chan, who promoted Hong Kong's lead in yuan business in New York, says the city is not afraid of rivals. The average daily turnover of yuan interbank settlements handled by Hong Kong's yuan clearing platform surpassed settlements in Hong Kong dollars last month, the head of the city's de facto central bank said. Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, said in an interview in New York last week that the robust growth of yuan cleared by the Real Time Gross Settlement system was an indication of a significant increase in offshore yuan commercial and trade activities conducted in the city. The real-time system was upgraded from the Renminbi Settlement System in June 2007 with the Bank of China (Hong Kong) as its clearing bank. According to statistics provided by the authority, the average daily turnover of yuan interbank payments processed through Hong Kong's yuan clearing platform last month reached 390 billion yuan, equivalent to HK$494 billion. That exceeded the HK$487 billion of interbank payments denominated in Hong Kong dollars that were cleared in Hong Kong. It is the first time settlement of yuan interbank payments surpassed that of Hong Kong dollars in the city. In 2010 the average daily turnover of yuan payments through Hong Kong's clearing platform was 5.3 billion yuan. It surged to an average of 213 billion yuan per day last year. Hong Kong was the first and is now the largest offshore yuan business centre in the world. By the end of April the city's yuan deposit pool amounted to 836.6 billion yuan, up 16 per cent year on year. The number of settlement banks and organisations has reached 209. Other countries and cities have been catching up since 2009 when Beijing gradually relaxed rules to encourage international businesses to use the yuan to settle trade and to invest. Singapore, Australia, France, Britain and Japan are also all vying for yuan business. "Hong Kong has the first-mover advantage in developing offshore yuan business and we are not afraid of competition," Chan said. "I am very upbeat on the prospect of the relevant business in Hong Kong." Chan joined a seminar organised by the HKMA in New York last week to promote Hong Kong's role as the global offshore yuan business centre. In another attempt to facilitate offshore yuan business in Hong Kong, Chan said the authority was considering allowing banks to receive yuan funds on the day they are requested under the yuan liquidity facility. Now, banks have to give notice of one business day. In January, the authority cut the notice period for participating banks from two business days. Anita Fung Yuen-mei, chief executive of HSBC Hong Kong, said HSBC and the banking sector welcomed the idea as it would allow banks greater flexibility in managing their yuan business. Meanwhile, Chan said the anticipated withdrawal of stimulus measures by the US Federal Reserve had caused huge uncertainty in financial markets. "The larger the scale of quantitative easing measures and the longer the period those measures are implemented, the larger the risk for withdrawing the stimulus measures," he said. Chan said he was not sure whether the cycle of rises in property prices in Hong Kong had come to an end. He noted that a decrease in prices was not significant despite the huge reduction in property transactions since the introduction of several rounds of measures by the authorities since last year.

'Hong Kong laws apply to Snowden case' (By Kahon Chan in Hong Kong and Zhang Yunbi in Beijing) An interview with Edward Snowden, a former CIA employee who leaked top-secret information about sweeping US surveillance programs, is shown in a subway car in Hong Kong on Sunday. Washington not expected to take 'irregular steps', strain Beijing ties - Hong Kong Chief Executive Leung Chun-ying said the Edward Snowden case will be handled according to local laws, a move observers said requires due respect for sovereignty of jurisdiction. Despite the sensitivity of the case, Washington was not expected to take any irregular steps and strain its relationship with Beijing, analysts said. For the first time, Leung publicly made a specific reference to Snowden on Saturday night. "When the relevant mechanism is activated, the Hong Kong SAR Government will handle the case of Snowden in accordance with the laws and established procedures of Hong Kong," he said in a statement. About half of Hong Kong residents were against surrendering the PRISM whistle-blower Snowden to the United States, according to an opinion poll commissioned by the Sunday Morning Post. - According to the poll, 49.9 percent of the 509 respondents were "against" or "strongly against" the government complying with an extradition request from Washington. Only 17.6 percent said Snowden should be handed over. Shi Yinhong, an international relations professor at Renmin University of China, said the Hong Kong chief is sending a signal that respect should be paid to jurisdiction sovereignty when Washington is solving the sensitive and complicated case. As for the legal case, "Washington is not expected to do whatever it wants without necessary communication with Beijing on legal procedures", he said. Beijing has shown prudence regarding the case, and it may be resolved in an appropriate manner, Shi said. Snowden said on Wednesday that the Chinese University of Hong Kong and "public officials" in Hong Kong had been previously hacked under the US surveillance program. Leung's statement also signaled the possibility of a serious probe into Snowden's claim. "Meanwhile, the government will follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated," it said. According to local laws, the surveillance conducted by law enforcement officers in Hong Kong requires a court order to proceed, although no specific penalties have been outlined. While Snowden's position remains unclear, it was almost certain that the United States will ask Hong Kong to send Snowden back for a trial. An extradition trial in Hong Kong has become inevitable. Su Hao, a professor at China Foreign Affairs University, said although it seems justified for Washington to request the whistle-blower be handed over, the United States is expected to "follow the rules" and established legal frameworks with the Chinese side to resolve the issue. "No substantial legal procedure for extradition can be initiated until the US side makes a clear definition of the whistle-blower," Su said. 

Second West-East Gas Pipeline set to start Hong Kong supplies this summer (By John Cullen) This summer the world's longest natural gas pipeline, stretching from Turkmenistan, begins providing a new supply of energy to Hong Kong - The 5,220-kilometre Second West-East Gas Pipeline stretches from Xinjiang Uygur autonomous region in the northwest to northern Guangdong. It sounds like an engineer's pipe dream - a 9,000-kilometre-long pipeline stretching from Turkmenistan in Central Asia to Hong Kong and bringing energy to the homes of more than 500 million people along the way. This summer, the dream becomes a reality for Hong Kong as the world's longest natural gas pipeline begins providing an environmentally-friendly new supply of energy to keep our city buzzing around the clock. The Second West-East Gas Pipeline is the single biggest energy investment project in the history of the country. Begun in 2008, it is already powering cities across the mainland. It starts in Xinjiang, where it connects to the Central Asia-China Gas Pipeline, and crosses 15 provinces, autonomous regions and municipalities. It can carry 30 billion cubic metres of gas a year. Built by a workforce of 50,000 people, the pipeline passes through mountains, deserts and swamps, and crosses 60 hills and mountains, and around 190 rivers. The project cost 142 billion yuan (HK$178.8 billion) and is operated by the China National Petroleum Corporation. From this summer, it will provide a new source of gas to Hong Kong, replacing the supply the city has been drawing from Yacheng near Hainan Island since 1996 and which is now nearly exhausted. Work on the gigantic project began in 2008. A little over three years later, the main trunk went into operation across the mainland and in August last year the Guangzhou to Shenzhen stretch went live. Now, after a huge engineering effort, Hong Kong is about to join the network. For us at CLP, bringing the natural gas on the final leg of its journey from Central Asia to Hong Kong was a significant challenge that involved building a 20-kilometre undersea stretch, testing our resources and ingenuity and requiring close co-operation to deal with a range of regulatory requirements. The operation involved hundreds of engineers working from the Zhong You Hai 101 Lay Barge, one of Asia's most advanced water-pipe laying and lifting barges that works in shallow and deep waters, carrying 200 pipefitters and welders. The Hong Kong branch line of pipeline links Dachan Island, off Shenzhen, with Black Point power station. It took 1,600 carbon steel pipes, each 12 metres long and weighing approximately 13 tonnes. Every section of the pipeline was meticulously checked. Each weld joint had to pass an automatic ultrasonic testing. The entire pipeline, including its coating and corrosion protection system, was thoroughly inspected before being laid into the seabed. Laying the pipeline meant crossing three major navigation channels - the Tonggu channel and the Dachan Fairway in Shenzhen, and the Urmston Road in Hong Kong - used by a total of more than 400 vessels a day, including ocean-going vessels. Getting a permit to put our pipeline beneath the Urmston Road - one of the world's most heavily used marine channels - took three months of planning and discussions with Hong Kong and Shenzhen officials. Actually laying the pipeline took just three days. A three-metre thick shielding was placed over the pipeline through the entire sub-sea route, to protect against any anchors being dropped or dragged from vessels. This included the marine channels, and a number of existing and planned anchor zones. In one stretch of the Tonggu channel in mainland waters, the pipes had to be dug in 27 metres below sea level for future marine planning of the channel, and to keep them safe from anchor damage. Another complication was the proximity of the existing 780-kilometre Yacheng undersea pipeline. In Hong Kong waters, the new pipeline was in stretches laid 100 metres or less from the Yacheng pipeline. The anchors of our lay barge had to be dropped 200 metres from the existing pipeline and a safety zone set out by buoys was set up as we worked to make sure the Yacheng pipeline was not affected. Throughout the process, section by section and kilometre by kilometre, we worked closely with our colleagues at PetroChina - communicating in English, Cantonese and Putonghua - to ensure that we brought the very best expertise to each situation and difficulty as it arose. Through our joint efforts and team work, the construction process was completed safely, on schedule and without a single lost-time incident. For all of the engineers involved, the challenges - regulatory, logistical and linguistic - were huge. But we rose to those challenges and the rewards should be immense as Hong Kong taps into new, greener energy supply that we hope will serve it for generations to come. John Cullen is Head of Project Development, CLP Power Hong Kong

 China*:  June 18 2013

America's prying eyes have been focused on China 'for years' (By Choi Chi-yuk chiyuk.choi@scmp.com) State media denounce a long-running US campaign of hacking and espionage - CCTV reported over the weekend that US intelligence agencies have for years spared no effort to access classified information from China. US intelligence agencies have been spying on China via land, sea, air and cyberspace for years, including a failed attempt to acquire confidential information about China's fourth-generation stealth fighters, according to state television reports. The official website of China Central Television reported over the weekend that US intelligence agencies have for years spared no effort to access classified information from China, including by using reconnaissance satellites, surveillance aircraft and numerous monitoring posts. The national broadcaster said, the Americans had also been making use of advanced technology to hack into Chinese cyberspace for up to 15 years. The report came after revelations made by former Central Intelligence Agency employee Edward Snowden suggesting that US intelligence agencies had been hacking millions of civilian computers throughout the world, in addition to recording phone conversations. The allegations sparked public outcry over the invasion of privacy. CCTV also reported that the US had failed in an attempt to steal secrets about China's stealth fighters by sending agents to infiltrate facilities and pay bribes in exchange for information from researchers at Chengdu Aircraft Industry Group, which is affiliated with the Aviation Industry Corporation of China (AVIC), a state-owned aerospace and defence giant. No mention was made of when the alleged espionage occurred. The aircraft maker, based in Chengdu, Sichuan, was responsible for the research, development and manufacture of the Jian-20 stealth fighter, which underwent a successful test flight a couple of years ago. A phone operator at the US embassy in Beijing said yesterday that no duty officer was available for comment. Retired People's Liberation Army Colonel Yue Gang, who is familiar with intelligence-related affairs, said that he was unaware of any US attempt to obtain intelligence on the J-20. "We can hardly verify the authenticity of attempted espionage, which could have happened as far back as five years ago," the colonel said. And even if it did take place, according to the former PLA officer, the Chinese side might not have enough evidence to make any arrest. "In another possible scenario, the suspect(s) may have been caught, and the Chinese side subsequently used them in exchange for Chinese agents caught by their US counterparts, in a clandestine manner," he said. Similarly, China's official army newspaper yesterday branded Prism, the US Internet surveillance programme exposed by Snowden, as "frightening" and accused the US of being a "habitual offender" when it came to network monitoring. The PLA Daily hit out at the US for implying that spying on citizens from other countries was justified, and said that the PRISM monitoring programme had probably been used to collect large amounts of data unrelated to anti-terrorism operations. The comments are some of the most scathing to appear in China's state-run press following Beijing's refusal to make an official comment. "US intelligence agencies are 'habitual offenders' with regards to network monitoring and espionage," the article, attributed to the PLA's Foreign Languages Institute, said. "There is reason to believe US intelligence agencies, while collecting anti-terrorism information online have also 'incidentally' collected a lot of information in other fields."

Hong Kong tycoon's firm razes Guangzhou home of opera legend (By Li Jing in Guangzhou and Ng Kang-chung) Tourism Board chief Peter Lam is chairman of company that residents say illegally demolished Guangzhou mansions in the dead of night - The compound where Sit Kok-sin's mansion used to be. Hong Kong tycoon Peter Lam Kin-ngok has been pulled into a controversy over the alleged unauthorised demolition of two historic buildings in Guangzhou, one of which was the home of Sit Kok-sin, the late "King of Cantonese Opera". Residents in Yuexiu district say bulldozers flattened the site early last Tuesday. A visit by a Post reporter yesterday found that the two two-storey houses had been reduced to rubble. A Chinese banner at the entrance to the site reads "Lai Fung Holdings. HKEx stock code 1125". Lai Fung is a member of the Lai Sun Group, of which Lam is chairman. He is also chairman of the Hong Kong Tourism Board. Lai Fung is the group's property development and investment arm on the mainland. Its core business is property development, according to the group's website. The controversy has been brewing in Guangzhou since last week. One resident said: "They came around midnight. If it was not something bad, they should not have needed to do it so secretly. I shouted to ask them to stop but they just did not listen. I woke up the next morning and the houses were gone." Another said: "The developers are too arrogant. They show no respect for our cultural relics. It's a pity that we lost the two historical buildings." An expert on a Guangdong provincial heritage preservation panel, Chen Qi, said: "The government should speed up assessing and categorising our old buildings, otherwise there is a fatal loophole for developers to exploit." The 2,000-square-metre site, near the corner of Guanlu Road and Shishu Road, was acquired by a subsidiary of Lai Fung in 2007. The developer plans to transform the site into a commercial-residential complex with a gross floor area of about 14,000 square metres. The project, originally scheduled for completion in 2011, has been held up because of concerns about the historical value of the buildings. A temporary moratorium on development of the site was reportedly imposed last year by the Guangzhou authorities, pending further assessments of the buildings and discussion with the developers over a possible alternative development plan. A Lai Fung non-executive director, lawmaker Abraham Razack, declined to comment yesterday, saying he was unaware of the controversy. Lam was out of town and could not be reached. Built in the 1940s, one of the mansions used to be the home of Cantonese opera star Sit Kok-sin, who was said to have stayed there for a couple of years in the 1950s. Sit was born in Hong Kong in 1904. Originally a journalist, he formed the Kok Sin Sing Opera Troupe in 1929 and started taking roles on stage and screen. He revolutionised stage make-up, costumes and lighting. He also introduced a northern style of martial arts into his performances and adopted Western musical instruments such as the violin and guitar into Cantonese opera. His unique singing style and versatility in male and female roles won him acclaim as the "King of Cantonese Opera". He died in 1956.

Racist attack on Chinese students in France sparks widespread outrage (By French Agriculture Minister Stephane Le Foll.) Chinese internet users have reacted with outrage to reports of a violent, racially motivated attack on six Chinese oenology students in France. The students were attacked early on Saturday in Hostens, a village in the Bordeaux wine-producing region. Two of the three alleged attackers have been detained and are in police custody. A female student suffered serious facial injuries from a bottle that was thrown at her. French Agriculture Minister Stephane Le Foll said: "It's an unspeakable act. The image of France has been dented with these xenophobic attitudes." The attack was condemned on microblog Sina Weibo. "How dangerous is France! We need to be cautious about going there now, and avoid going as far as we can. We should go to better countries," one user wrote. Concern has grown in China in recent months at the rising number of crimes against Chinese tourists. In March, 23 Chinese were robbed in a restaurant after they landed in Paris. French Tourism Minister Sylvia Pinel said then she would do everything to find the perpetrators. One of the victims of Saturday's attack was the daughter of a retired senior government official, said Georges Jousserand, the head of the school where the students are studying. Police had apparently called on the three suspects that night over the noise they were making. The trio then went to the Chinese students' residence, perhaps thinking they had complained to police about the noise. "When a Chinese student opened the door, he was attacked," Jousserand said. Another source said the three were very drunk and had hurled "racist insults". Interior Minister Manuel Valls promised a stern response.

Xinhua Insight: New preferential policies on Taiwan reflect people orientation - The Chinese mainland on Sunday introduced a slew of preferential policies to boost cross-Strait exchanges with a focus on improving the lives of the Taiwanese. Unveiled at the fifth Straits Forum in southeast China's Xiamen City, the 31 polices regarded legal rights, education, culture, tourism and other aspects of economic and social life. The Supreme People's Court will unveil judicial interpretation for recognizing and implementing the paper of civil mediation followed by Taiwan authorities at village, township and city levels, announced Zhang Zhijun, director of the Taiwan Affairs Office of the State Council. To offer more convenience for Taiwanese visitors, an additional 11 provincial entry-exit administrative departments on the mainland will accept applications from Taiwanese compatriots who reside on the mainland for renewal of their entry permits, Zhang added. Nine such departments already offered the service. The mainland will also open 10 more categories of professional qualification examinations to Taiwan residents, support Taiwanese graduates from mainland colleges to start their own businesses, and provide subsidies for entrepreneurship training to students from Taiwan. According to Zhang, 10 cultural exchanges bases will be set up on the mainland in Henan, Fujian and Beijing. He said that another 11 historical sites will also play the role of cross-Strait communication bases, including the Confucius Temple in east China's Shandong Province, and some revolutionary relic sites in central Hubei Province and southwest Chongqing Municipality. The official, who did not specify when any of these new policies would take effect, added that a cross-Strait copyright trade center as well as a digital publication base working across the Strait will be established in Fujian. In order to boost cross-Strait tourism, residents of 13 more mainland cities will be eligible to visit Taiwan as individual tourists under a new cross-Strait agreement, according to Shao Qiwei, head of the National Tourism Administration. The 13 cities, including Shenyang, Zhengzhou, Wuhan, Suzhou, Ningbo, Qingdao, Shijiazhuang, Changchun, Hefei, Changsha, Nanning, Kunming and Quanzhou, will extend the list of such mainland cities to 26. The fifth Straits Forum opened on Sunday and is scheduled to wrap up on June 21 in Xiamen, a port city at the western side of Taiwan Strait. It features an array of activities on grassroots exchanges between Taiwan and the mainland, including a main conference in Xiamen as well as sub-forums and seminars in cities across the province. Mainland-Taiwan relations entered a tense era after the Kuomintang (KMT) lost a civil war with the Communist Party of China and fled to Taiwan in the late 1940s. But relations between the two warmed up after the KMT, led by a new generation of leaders, returned to power in the 2008 Taiwan election, ending eight years of rule by the pro-independence Democratic Progressive Party. The preferential policies announced on Sunday have drawn wide attentions from both sides of the strait. Many delegates from Taiwan said the decision to allow residents in 13 mainland cities to apply for individual tourism to Taiwan would send ripples of excitement across the island. Chang His-tsung, a spokesman for Taiwan tourism authority, called the 13 cities "top choices" in an interview with Xinhua. The cities are located in different regions of the mainland and the choice fully considered the convenience of cross-Strait flights, Chang said. Wang Hongyuan, head of China Quanzhou International Techno-Economic Cooperation (group) Taiwan branch, was glad to see Quanzhou on the list as more than seven million Taiwan compatriots have their ancestral homes as well as relatives in the city in Fujian Province. "I have often been asked when people from Quanzhou could visit Taiwan independently, and now it comes true," he said. Syu Kuen-chin, a Taiwan expert on trade and employment market, said the over-crowded job market on the island had prompted many graduates there to consider "going west" and seeking a job on the mainland. "The mainland's favorable policy will certainly attract more Taiwanese students to the mainland for education and career," Syu said. PEOPLE ORIENTATION - Experts on Taiwan affairs said the latest policy package focuses on improving the wellbeing of ordinary Taiwanese, including those having settled down on the mainland or local Taiwanese who have close ties with the mainland. "The most salient feature of this year's preferential policies is touching down to the grassroots and focusing on the livelihood issues," said Zhang Wensheng, professor at the Taiwan Research Institute of Xiamen University. Zhang praised the policies of being "subtle and considerate" and comprehensive, covering areas from educational cooperation to copyright trading to direct flights. "The new policies will make cross-Strait communication more convenient and promote cultural integration, reflecting the people-orientated mentality of the cross-Strait exchanges," he said. The latest policy package add to the total 124 such Taiwan-friendly policies released at the Straits Forum since it was initiated in 2008 as a major platform to further grassroots exchanges between the mainland and Taiwan. As direct beneficiaries of the improving mainland-Taiwan relations, the ordinary Taiwanese are becoming supporters of this trend, according to Zhang. "Taiwanese at the grassroots level are realizing their interests are closely tied to the cross-Strait relations and thus becoming the social foundation of the cross-Strait peaceful development," Zhang said.

'So Young' is a tale of lost youth (SCMP) Actress Zhao Wei went back to school to learn how to direct and graduated with a box office hit. Rachel Mok talks to one of the most influential women in mainland cinema - Zhao Wei was always an exceptional student. At the age of 20, she entered the competitive Beijing Film Academy’s Performance Institute after attaining one of the highest scores in its entrance exam. Now the 37-year-old’s directorial debut So Young, a graduation project for her master’s degree in directing at the academy, has made more than 700 million yuan (HK$880 million) at the mainland box office to date, making it one of the top 10 grossing films in Chinese cinematic history. Zhao has consistently been one of the mainland’s most popular and prolific actresses since her 1999 breakthrough in the television drama Princess Pearl. She has appeared in a number of blockbuster films such as Shaolin Soccer (2001), Red Cliff I (2008) and II (2009), and Painted Skin (2008) and its last year sequel. Over the course of her career, the Anhui native has metamorphosed from someone who people associated primarily with Princess Pearl’s adorable Xiaoyanzi (Little Swallow) into one of the most independent and influential women in the mainland film industry. Zhao looks exhausted as she nears the end of a long day of publicity duties for So Young, but it’s clear that she is in control of the proceedings: she knows how many interviews are left, and directs the wardrobe changes for her photos. While rubbing her tired eyes, she reels off facts and figures about her first feature film. Reflecting on the film’s commercial success, the actress-turned-director calmly states, “I did expect the box office to be pretty good, but for it to be this good is a nice surprise”. The initial goals of her first film were modest, she says. “I just didn’t want to embarrass myself. After all, I am an actress with some achievements already. “I wouldn’t want people to laugh at me. That’s why I have to give all that I can, and at least produce something that I will be proud of.” So Young centres on love-crazed university student Zheng Wei (played by 26-year-old actress Yang Zishan). Zheng begins university in love with her childhood friend Lin Jang (Han Geng) but then finds her attention and heart captured by the ambitious Chen Xiaozheng (Taiwanese actor Mark Chao Yu-ting). Moving from the early 1990s into the new millennium, the drama shows a journey of love, joy, and pain through a group of mainland young women – Zheng Wei and her three dormitory mates, Ruan Guan (Maggie Jiang Shuyin), Li Weijuan (Zhang Yao) and Zhu Xiabei (Liu Yase). Why does she think that this 130-minute coming-of-age drama has become such a big hit in her homeland? “Because we in the mainland didn’t have a youth,” Zhao says. “We were all busy being hard-working in our youthful years. We were studying hard, working hard, getting married and buying a flat, and striving to give the best education to our children. The pressure of trying to survive is so heavy in China.” The top student recalls her mother, a primary school teacher, urging her to study hard every day when she was a child. “It was always about preparing for the future. She would sometimes say, if I didn’t study hard, I would end up begging on the street,” says Zhao, the mother of a three-year-old daughter. “Youth is not for enjoyment, and definitely not a luxury for us,” she says. That’s why she thinks people felt sad after seeing So Young. “Some audience members realised they hadn’t really had their youth. The film stirred discussion about what youth is on the mainland, and how we should live in our youthful years.” Zhao believes audiences in Hong Kong and Taiwan will have a very different perspective. According to her, youngsters in Hong Kong or Taiwan are trying to live better, while their counterparts on the mainland are just trying to live. But she acknowledges that times have changed. Many mainland youngsters have the freedom to make choices, and cinema can inspire them to think, says Zhao. “On the surface, different generations may look at youth in a different way, but inside it is the same. When they love, they are courageous, and willing to do anything, including stupid things. When they get heartbroken, they cry as hard as they can,” she says. Based on Xin Yiwu’s popular novel To Our Youth That is Fading Away, So Young’s screenplay was written by maverick writer Li Qiang and its Chinese title translates into English as “A Tribute to Youth”. Rather than go with that litreal translation, Zhao decided that the film’s English title should come from the title of a 1993 song by Britpop group Suede. “Some people suggested the film should be called ‘Too Young’ instead. But it doesn’t mean the same thing to me. Some say So Young sounds strange. Well, so be it,” she says. In Xin’s novel, one of the female leads is a rock music fan, yet it wasn’t specified which band’s music she particularly favours. To decide whether to cite a particular mainland or foreign band, or simply make up one, Zhao listened to more rock music while making this film. In the process, she discovered that, “I like the fact that Suede is melodic and the lyrics have substance. So Young not only suits the theme of the story, it suits the timeframe as well, as we are talking about the mid-1990s,” she says. What’s even better is that, when the story jumps to the new millennium, the London alternative rockers still play a symbolic role. “In the film, the couple tried to meet at a Suede concert to say a last farewell, and it is true that Suede played in Beijing on February 4, 2003,” Zhao again shows her attention to detail by citing the date. “All the [band] posters you saw in the film are from the real collections of diehard fans. We sourced them especially for the film.” Other posters include those of Leslie Cheung Kwok-wing and Maggie Cheung Man-yuk hanging prominently in the girls’ dorm room. Along with hearing Zheng Wei belting out Hacken Lee Hak-kan’s Canto-pop mega hit Red Sun to declare her love to Chen Xiaozheng, these will remind local audiences of the influence that Hong Kong culture had on mainland youth in the ‘80s and ‘90s. The poster of Maggie Cheung in Centre Stageis a personal tribute from Zhao to So Young’s producer, Hong Kong art house filmmaker Stanley Kwan Kam-pang. Zhao, who regards herself as an apprentice to the award-winning veteran, describes Kwan as “harsh, serious and hard working”, and she appreciates the way he shared invaluable insights about filmmaking with her. She recalls how he told her that if he wanted something, and the boss didn’t grant it, he would throw his money on the table, and tell the boss he would rather not be paid himself; he would prefer to get what he needed for the film. “Towards the end of production, when we were running over budget, he got really worried and urged me to finish the film quickly. I told him that I had not been paid yet, and he smiled and said, ‘good’.” With her first directorial outing, Zhao established herself as a hard-working, tough and demanding director – at least according to her young cast. Actress Liu Yase recalled that Zhao slapped her in the face to trigger her emotions, and the lips of Yang Zishan and Mark Chao became swollen when one of their kissing scenes ended up taking more than 12 hours to shoot. The debut director confesses she has no idea what she was like on set – declaring that she became so absorbed in her work that she only wanted to work and shoot. So when the publicity work began and her cast was recalling how demanding she has been, Zhao was taken aback by their stories. “I was like, ‘Oh my god!’ I was kind of upset when they said those things,” Zhao says. After two decades in the entertainment industry, Zhao has every right to be a hard taskmistress. After all, she understands the hardships an actress has to endure on the way to stardom. “Maybe I scared these ‘babies’, but I believe all success comes from hard work,” she says. What’s more, the cast have been given so many film offers, she feels they did not suffer for nothing. “Yes, you suffer at the beginning, but what you gain from that will last you a long while.”

Six Chinese students in France attacked in violent 'xenophobic' act (By Agence France-Presse in Bordeaux) One victim suspected to be 'daughter of retired Chinese political figure', says French newspaper - Chinese tourists visit the Eiffel Tower in Paris, France. Six Chinese oenology students were attacked in the early hours of Saturday in France’s wine-producing region of Bordeaux, the interior ministry said, describing the violence as an act of xenophobia. The students, who had arrived in France only two months ago, were allegedly “violently attacked” by three local men who were visibly drunk and previously known to the police, a ministry statement said. Two of the alleged attackers have been detained and are now in police custody. A female student was seriously hurt in the face by a glass bottle which was thrown at her. “She happens to be the daughter of a Chinese political figure,” said Sud Ouest newspaper on its website. According to other sources, the political figure is no longer in office. “I cannot confirm the name, but it is someone who has now retired, having been the mayor of a big city,” said Georges Jousserand, who heads the school in Bordeaux where the six Chinese between the ages of 22 and 30 were studying. The students were attacked at their home in Hostens, a small village of 1,300 inhabitants located about 50km south of Bordeaux in southwest France. Police had apparently called on the three suspects that night over the din they were making. Following that incident, the alleged attackers went to the residence where the Chinese students were living, perhaps thinking that the students had complained to police about the noise, a source close to the case said. “When the Chinese student opened the door, he was attacked. And while the other students were trying to push the assailants out, it was then that one of the attackers threw a bottle straight in the face of the female student,” according to Jousserand. “Two of the attackers were particularly violent,” he added. Another source close to the affair said the three were very drunk. They knew exactly where the Chinese students lived and hurled “racist insults” at them, said the source. The mayor of Hostens, Michel Viallesoubranne said that the students behaved calmly, while Jousserand said they were “perfectly integrated in this small village”. Interior Minister Manuel Valls condemned “severely this xenophobic act, for which the culprits must answer to before justice”. The students were meant to be studying in France for a year. Concern has grown in China in recent months over the increasing number of cases of thefts and attacks against Chinese tourists. In March, a group of 23 Chinese tourists were robbed in a restaurant shortly after they landed at Paris airport. French Tourism Minister Sylvia Pinel was forced to come out to say she would do everything to find the perpetrators. The attack was widely criticised on China’s most popular social networking service, Sina Weibo, which is similar to Twitter. “How dangerous is France! We need to be cautious about going there now, and avoid going as far as we can. We should go to better countries,” one user wrote. “This is too far for the French people. My impression of France used to be quite good, but now it’s damaged,” said another. One of the victims was the daughter of a retired senior government official, the head of the student’s school said. Chinese media carried reports of the attacks on Sunday, but did not mention the victim’s political connection. The topic of politicians sending their children abroad to study provokes widespread resentment in China and is rarely-discussed by the country’s tightly controlled press, which is rarely allowed to discuss the family life of senior officials. Still, some Internet users speculated that the students were wealthy. “Those who can afford to study abroad are either the children of government officials or rich families,” one user said. “They’re not worthy of sympathy,” another user said. Others reading English-language reports turned their anger on the students. “Even foreigners can’t bear with the migration of corrupt officials and are punishing them abroad. This is karma,” another user said. “That a random violent crime abroad has a government officials child involved again proves there are no clean officials in China,” another wrote. The attack came on the eve of one of the biggest wine shows in the world, Vinexpo, which is held in the region. China, which is French winemakers’ third biggest market, has increased its participation at the show, with 18 exhibitors expected this year, up from two in 2011.

Shanghai's hospice wards offer terminal patients a better last stop (By Alice Yan ting.yan@scmp.com) Shanghai aims to stop terminally ill patients being shunted from one hospital to the next - Terminal patients are often turned away by hospitals. Ten bedridden terminal cancer patients lie in the dimly lit, quiet hospice ward at the Jingan Temple Community Hospital in Shanghai. Most are cared for by auxiliary workers, who look after a few at a time. Dong Wenying, 54, usually spends around an hour a day visiting her 81-year-old father-in-law, Gu Zhenping, a lung cancer patient who has been in the ward for three months. "Our house is small and we don't have enough hands to care for my father-in-law," she said. "This hospice ward helps us a lot and relieves a lot of the burden on my family. Otherwise, we would have to send the old man to a hospital and then be forced to take him out of the hospital every two weeks, like we had to for the past four years. "My father-in-law was rotated among four hospitals, which agreed to admit him after we begged. The fact is, no hospital in Shanghai is willing to accept terminal cancer patients." Dong's family is among the few to have benefited from a municipal government project in which 18 community health centres were ordered to open hospice wards last year. Each centre has 10 beds, but that supply falls far short of demand. Around 36,000 people die of cancer every year in Shanghai, but the city previously had almost no hospice beds. Public hospitals take no interest in those about to die, as there is no money to be made by treating them. So the last stop in most patients' lives is either an intensive care unit or an emergency ward. Li Shuijing, an official from the Shanghai Health and Family Planning Commission's grass-roots health department, said the hospice ward project was a humanitarian initiative by the municipal government and one that demonstrated that Shanghai was more civilised than other mainland cities. She said the project had arisen in response to enormous public demand. In March last year, then-Shanghai party secretary Yu Zhengsheng wrote back to secondary school teacher Qin Ling to show his concern for Qin's struggle to seek medical treatment for his father, who had terminal cancer. Qin had written an open letter to Yu, saying that hospitals either "forcibly" discharged his father or did not want to admit him because of his terminal status or because they were full. Yu said the government would try to change the system. Li said turning existing wards into hospice wards had cost the authorities 27 million yuan (HK$34 million), with most of the funding coming from district governments across Shanghai. Each of the advanced beds in a hospice ward cost 12,000 yuan because they were designed to let patients lie in comfort. "The ward needs to be decorated in warm colours to create a cheerful environment," she said. "Some community health centres also hang images of God or Buddha near the beds, according to the patients' religion." Following intensive training, 120 medical staff have been licensed to work in the hospice wards. Some visited hospices in Hong Kong last year on a trip organised by Shanghai's health authorities. Li said demand was high for Shanghai's current hospice wards, which only admit people whose hukou (residential registration) is in the same district as the ward, and that people had to wait an average of about three weeks before being admitted. Xu Huiming, director of the Jingan Temple Community Hospital, said that a day in its hospice ward cost a patient 218 yuan, much less than average inpatient costs at a Shanghai hospital. Terminal cancer patients stayed there for an average of 29 days before dying. He said the health of each applicant was assessed and only those likely to survive for less than two months could be admitted. Dr Miu Jun, the only doctor on the ward, said that persuading people to give up hope of rescuing their beloved relatives occupied a lot of his time at work. "Most of my patients' relatives still ask us to try what we can to extend the patients' lives," he said. "But I tell them this will add more pain to the patients. I ask them 'What's your goal? Don't you want your relative to pass away in peace and without so much pain?'" He said some of his colleagues at the hospital did not understand the concept of hospices because they had been taught in medical colleges that medical personnel should cure illnesses and save people's lives. Miu said nurses in his ward could become depressed and were under a great deal of pressure when they saw as many as four patients die in a single night. The municipal government said the next step for Shanghai was to open hospice wards in major hospitals in the next three years. But Li said this would be difficult because the big hospitals were generally reluctant to open hospice wards due to financial concerns and the fact that government funding to support the project was meagre. Dr Huang Cheng , from the oncology department of a big Jingan district public hospital, said the hospital turned away all terminal cancer patients and he knew that smaller hospitals in Shanghai were also reluctant to take them in. "The medical insurance authority requires that each bed in public hospitals can't be used by a patient for too long so that medical resources can serve more people," he said. "But terminal cancer patients can stay for weeks or even months." Huang said doctors could only prescribe drugs for such patients, instead of offering check-ups or chemotherapy, and it was not profitable for his department. The authorities also plan to develop more palliative care services for terminally ill patients who stay at home rather than in institutions. Professor Shi Yongxing , a Shanghai-based hospice expert who has researched the subject for more than 10 years, said stay-at-home palliative care would be the best option for most terminal cancer patients in the future, and that it was a good fit with China's traditional "family-centred" culture. "Many people prefer to die at home, with their family members around them," Shi said. Miu said the hospice service was not popular at the moment, with only 26 patients in the community having registered for the it, even though there were more than 2,000 residents suffering from cancer. "I think people will continue with treatment for cancer for as long as they can afford," he said. "People shun talking about death and death education is non-existent in our society." But Dong said her father-in-law's children had come to accept that the old man would die quite soon. "My father-in-law should be thankful to spend the last stage of his life staying in this hospice ward, where the doctor and nurses are kind to him and he doesn't need to be shuffled between hospitals," she said.

Hong Kong*:  June 17 2013

Marchers turn out to support Edward Snowden (By Ada Lee ada.lee@scmp.com) Expats at forefront as hundreds join march in support of NSA leaker, saying he did the right thing and may not get a fair trial if sent home - Protesters head to the consulate. Legislator Starry Lee Wai-king and her DAB colleagues deliver their message. Hundreds of protesters marched to the US consulate and the Hong Kong government headquarters in support of Edward Snowden yesterday, saying the American National Security Agency whistle-blower had done the right thing and should be protected. Chanting slogans such as "NSA has no say", they held placards that read "No big brother state". Organisers from the 27 local groups taking part said 900 people had joined the procession from Chater Garden in Central, while police said the number peaked at 300. They were joined by dozens of journalists and camera crews from around the world. The protesters handed petitions to representatives of the consulate and the Hong Kong government and heard speeches from activists and pan-democratic lawmakers. Earlier, eight members of the Democratic Alliance for the Betterment and Progress of Hong Kong took part in a separate march to the consulate, demanding Washington explain the hacking of computers in Hong Kong revealed by Snowden. A DAB petition said the US should immediately destroy all information obtained without the public's knowledge. The consulate had "no comment" on the protesters' demands. But Nini Forino, director of the consulate's public affairs section, did say: "We support Hong Kong's well-established tradition of respect for internationally recognised fundamental freedoms, including freedom of assembly, free speech and freedom of the press." Many of the participants in the afternoon march were expatriates, including three Americans studying in the city. They described Snowden as brave. "It's a huge breach of privacy," one said of the massive surveillance operation revealed by Snowden. "He could be risking his own life, but he was still willing to do so." Mary Stickley, a teacher and archaeologist from Ireland, said yesterday's protest was her "first ever march". "All governments are doing this to a certain extent, but this is critical," she said, adding that the US surveillance programme was against democracy. She said Hong Kong should not extradite Snowden to the US. Darren Jopling, 39, was marching with his two daughters, aged eight and three. He believed Snowden had picked the right place to come out due to its well established judicial system. A University of Hong Kong student from India said: "Even though I am not American, I still have to worry about America leaking into my private life." She said Snowden, whether he was a hero or not, should have the right to release information in the public interest. Another HKU student, Michelle Wong Zoi-lan, 19, said she was worried whether Snowden would get a fair extradition hearing in the city, since there was a possibility that Beijing would interfere in the protest. She urged the Hong Kong government to consider the importance of freedom and human rights should the United States request that Snowden be extradited. "The US is supposed to be a country with rule of law, but still its government can keep the public under surveillance. It's very worrying," she said. Charles Mok, the lawmaker representing the information technology sector, said the march was not just for Snowden but for everyone. "We want the US government to tell us all what they're taking from us," he said. He hoped Snowden would not cross into the mainland as he was concerned about a possible power tussle between the US and China. Mok said Beijing was notorious for suppressing internet freedom, the very cause Snowden was fighting for. Fellow lawmaker "Long Hair" Leung Kwok-hung, of the League of Social Democrats, said all administrations around the world that allowed internet surveillance should be condemned.

United States cannot hide behind excuses (SCMP Editorial) Chief Executive Leung Chun-ying broke his silence and said that 'when the relevant mechanism is activated', the Hong Kong government would handle Snowden's case in accordance with the city's laws. When a burglary is reported, the immediate action to take is to assess the loss and damage and alert the police to investigate. With any luck, justice will then be served. So after American surveillance whistle-blower Edward Snowden revealed that Hong Kong computers had been hacked for years, the public rightly expects the government to take it up with the US. The breadth and depth of the surveillance on Hong Kong can only be a matter of guessing at this stage. In an exclusive interview with this paper, the former CIA technical assistant said the attacks on Hong Kong cover Chinese University, public officials, businessmen and students. The information obtained remains unknown, but the success rate of the limited sample shown to the Post was more than 75 per cent. The revelation is alarming. Officials should press the US side for clarification Many protesters gathered outside the US consulate yesterday in support of Snowden called for a stop to snooping. Chief Executive Leung Chun-ying broke his silence on the issue yesterday, saying that "when the relevant mechanism is activated", the Hong Kong government would handle Snowden's case in accordance with the city's laws. Needless to say the Snowden case is the most politically sensitive to be handled by the Leung team. He also said the government would follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated. Hong Kong's free flow of information and capital may hold appeal to criminals of all sorts. But the city, after all, is known to be a responsible global citizen rather than a hotbed of terrorism and illicit activities. Given our good record in complying with international standards and requests for help in criminal investigations, it begs the question why clandestine surveillance is still necessary. Social networking site Facebook revealed that it had received up to 10,000 requests for user data in the second half of 2012, covering some 19,000 users' accounts. Microsoft said it had received requests on about 31,000 consumer accounts during the period. It is good that more light has been shed on the scale of the problem. The US authorities owe Hong Kong and the world a full account of its cyberattacks. It cannot hide behind the excuse of national security and hack anyone it wants. Our government should also press for clarification.

Hong Kong Chief Executive C Y Leung said on Saturday (Xinhua) the Hong Kong Special Administrative Region (SAR) government will handle the case of whistleblower Edward Snowden in accordance with the laws and established procedures of Hong Kong when the relevant mechanism is activated. Meanwhile, the Hong Kong SAR government will follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated, he said in a statement. Snowden, the 29-year-old defense contractor who fled Hong Kong on May 20 and is still believed to be hiding somewhere in the city, had exposed two classified US National Security Agency (NSA) surveillance programs, one collecting phone records and the other mining Internet data. In Hong Kong, he provided the Guardian with top-secret documents that has led to a series of revelations about the extent of US surveillance. Snowden also told Hong Kong-based South China Morning Post that the US government had been hacking into computers in Hong Kong and on the Chinese mainland since 2009. Snowden believed there had been more than 61,000 NSA hacking operations globally, with hundreds of targets in Hong Kong and on the mainland. Also on Saturday, hundreds of people held a rally in Hong Kong in support of Snowden. Demonstrators marched from Chater Garden to the US Consulate General in Hong Kong, before continuing on to the Hong Kong SAR government headquarters. Snowden, also a former CIA-employee, has said he'll stay in Hong Kong to fight any attempt to extradite him to the United States.

CY Leung breaks silence on Snowden: Hong Kong will follow up on privacy claims (By Niall Fraser niall.fraser@scmp.com) Hong Kong Chief Executive Leung Chun-ying has refused to comment on the case, including after he returned to Hong Kong on Thursday (above) after an official trip to New York. Hong Kong Chief Executive Leung Chun-ying has broken his silence on the controversy surrounding US whistle-blower Edward Snowden, who is hiding out in the city. Meanwhile, sources close to the government denied previous reports that lawyers from the Hong Kong and US governments have been working together on the Snowden case. Three days after former CIA analyst Snowden, 29, dropped the bombshell that Hong Kong and the mainland had been targets of Washington’s top secret global cyber-spying programme in an exclusive interview with the South China Morning Post, Leung pledged the government would “follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated”. The statement comes after days of silence on the matter amid mounting public and political pressure for the city’s leaders to take some sort of position after one of the biggest whistle-blowers in US history chose Hong Kong as a refuge from a criminal case the US authorities are building against him. The statement said: “When the relevant mechanism is activated, the Hong Kong Sar government will handle the case of Mr Snowden in accordance with the laws and established procedures of Hong Kong. “Meanwhile, the government will follow up on any incidents related to the privacy or other rights of the institutions or people in Hong Kong being violated.” When asked to elaborate on what specific “follow-up” actions the government would take, a spokesman for the Chief Executive’s Office said they had nothing to add. One government source told the Post, "there is no such thing that the US can bully Hong Kong in any way." The comment appears to be a response to claims that Edward Snowden made in an exclusive interview with the Post on Wednesday that the US government was trying to bully Hong Kong into surrendering the whistleblower. Another source said, "There were earlier reports saying that Hong Kong and US government lawyers are working together [on the Snowden case]. That is total nonsense." These sources told the Post that the US government had not raised any official requests with Hong Kong regarding the Snowden case.

Survey: Many Americans say 'Big Brother' is here (By Associated Press in New York) A growing number of Internet users are concerned about the government checking on their online activities - but even more people were worried about businesses doing the same. A US Consulate representative in Central receives a letter from supporters of Edward Snowden, who leaked top-secret information about US surveillance programs. There’s little wonder why George Orwell’s novel 1984 is seeing a resurgence in sales. More than half of Americans polled in a survey released Thursday said they agreed with the statement “We are really in the era of Big Brother.” The survey from the University of Southern California was conducted last year, before recent revelations of large-scale, secret government surveillance programs. Yet it still found that some 35 per cent of respondents agreed that “There is no privacy, get over it.” A growing number of Internet users said they are concerned about the government checking on their online activities, according to the survey. But even more people were worried about businesses doing the same. The USC Annenberg School’s Center for the Digital Future has polled more than 2,000 US households about their Internet and technology use each year, with the exception of 2011, since 1999. Forty-three per cent of Internet users said they are concerned about the government checking what they do online, up from 38 per cent in 2010. But 57 per cent said they were worried about private companies doing the same thing — up from 48 per cent in the earlier study. A last year survey by the Pew Research Center found that almost three-quarters of Americans are concerned that businesses are collecting too much information about people like them, while 64 per cent had the same worry about the government. In addition to their views on privacy, the most recent report also found that 86 per cent of Americans are online, up from 82 per cent in 2010. That’s the highest level in the study’s history and further evidence of how central the Internet has become in American’s lives, especially in the age of mobile devices. “We find that people almost never lose their mobile phone,” said Jeff Cole, author of the study and director of the centre. “They can drop it in the gutter, have it stolen but leave it on the table at a restaurant — most of us don’t even get through the front door before noticing it.” More than half of the Internet users surveyed said they go online using a mobile device, up from a third who said the same thing in 2010. As expected, texting is becoming increasingly important for people of all ages — 82 per cent of mobile phone users text, up from 62 per cent in 2010 and 31 per cent in 2007.
Among other key findings:
— Thirty per cent of parents said they don’t monitor what their children do on social networking sites such as Facebook, while 70 per cent said that they do.
— Nearly half of parents, 46 per cent, said that they have their kids’ passwords so they can access their account.
— People spent more time online than in any previous year of the study. On average, they were online 20.4 hours per week, up from 18.3 hours in 2010 and about nine hours in 2000.
— One per cent of respondents said they visit websites with sexual content “several times a day,” while 69 per cent said they never do.
— Dial-up is going the way of the dodo: 83 per cent said they access the Internet using a broadband connection, up from 10 per cent in 2000.
— The line between work and home life is blurring. Nearly a quarter of Internet users said they “often” use the Internet at home for work-related purposes. Conversely, 18 per cent said they “often” go online at work for non-work related activities. The study did not say whether these were the same people.
The last year poll had a margin of error of plus or minus 2.7 percentage points. And about that 1984 sales surge — the book has been steadily climbing up Amazon’s list of “movers and shakers” books, the online list of the biggest sales gainers over the previous 24 hours. As of Thursday afternoon, the 60th anniversary edition of the classic was No. 6 on the list, with sales up threefold in the previous day.

Hong Kong firm wins US$40 billion Nicaragua canal project (By Reuters in Managua) The US$40 billion proposal by HK Nicaragua Canal Development Investment's (HKND Group) calls for linking Nicaragua's Caribbean and Pacific coasts and includes plans for two free-trade zones, a railway, an oil pipeline and airports - Nicaragua could one day have a rival to the Panama Canal. Nicaraguan lawmakers granted a 50-year concession to a Hong Kong-based company on Thursday for it to design, build and manage a shipping channel across the Central American nation that would compete with the Panama Canal. The US$40 billion proposal by HK Nicaragua Canal Development Investment's (HKND Group) calls for linking Nicaragua's Caribbean and Pacific coasts and includes plans for two free-trade zones, a railway, an oil pipeline and airports. The government says the canal, which has been discussed for decades, could boost the country's gross domestic product by up to 15 per cent. "Today is a day of hope for the poor of this country," said Edwin Castro, a lawmaker in President Daniel Ortega's ruling party, before the vote marking final legislative approval of the deal. The Hong Kong-based HKND group is headed by Chinese lawyer Wang Jing. He also leads Chinese company Xinwei Telecom Enterprise Group, which last year received a mobile-phone concession in Nicaragua. "Central America is at the centre of North-South and East-West global trade flows, and we believe Nicaragua provides the perfect location for a new international shipping and logistics hub," Jing said in a statement after the plan's approval. "We have a lot of work ahead, but we want to be clear that we intend this to be a world-class effort that creates economic opportunity, serves the global trade community, and also protects the local environment, heritage, and culture of Nicaragua." Critics of the plan have railed against selling out state assets to the Chinese. After Thursday's vote, a group of opposition lawmakers left the chamber singing Nicaragua's national anthem before unfurling a banner that read, "Ortega: traitor." About 100 people gathered outside the assembly to protest against the decision. Last week Ortega said the government was going ahead with feasibility studies that should be done by 2015, when work on the canal could begin. Those studies will define what route the canal will cut through the country. Any design would almost certainly bisect Lake Nicaragua, which is Central America's largest lake. Advocates say the proposal plays to Nicaragua's natural strengths, which include low-lying land and the lake. Still, the channel would likely be three times longer than the 77-kilometre Panama Canal. The idea of a Nicaraguan shipping canal is almost as old as the country itself. The United States has eyed a trade route there since the 19th century, around the same time work began on the Panama Canal. But for the project's Chinese backers, the timing appears right. China is the world's second-largest economy and one of the region's top consumers, snapping up Latin American commodities to drive domestic growth.

 China*:  June 17 2013

Protectionism harmful for all: Li (By DING QINGFEN and WEI TIAN) While the global economy is undergoing transformation and consolidation, every nation including China should work to advance trade and investment liberalization to promote global growth, rather than resort to protectionism, said Chinese Premier Li Keqiang on Friday. Premier Li Keqiang meets Klaus Schwab, executive chairman of the World Economic Forum, in Beijing on Friday. "Any nation that conducts trade protectionism is doing harm to its neighbors and will bring all parties concerned to a dead end," said Li during his official meeting with Klaus Martin Schwab, executive chairman of the World Economic Forum. Li's remarks came amid escalating trade friction between China and the European Union. The EU recently said it will impose an interim anti-dumping duty of 11.8 percent on imports of Chinese solar panels, the largest such action by the bloc. The rate may be increased more than five-fold in August if the EU and China fail to reach a consensus on the issue. China has strongly opposed the duties and called for solving the problem through dialogue and consultation. The nation later announced it would initiate an anti-dumping and anti-subsidy investigation into wine from the EU. On Thursday, the EU further requested consultations with China on the latter's anti-dumping duties on certain high-performance stainless steel seamless tubes from the EU, which started in November and are scheduled to last for five years. During a Friday meeting of the State Council, Li called for efforts to boost domestic demand in the solar panel market, so as to support Chinese manufacturers that are under pressure in foreign markets. Experts said the China-EU friction in the PV sector would set a bad example, leading to trade remedy measures in other fields and hindering the global economic recovery. Li's remarks also come as the global economy is still struggling for recovery. The latest Global Economic Prospects report by the World Bank Group said that the global economy is transitioning into what is likely to be a smoother and less volatile period. "The world economy is in a period of deep consolidation and lacks growth momentum, and it is also challenged by various risks," said Li. "The top concern worldwide would be how to sustain stable economic growth," he said. "Nations should enhance cooperation," he said, and more than that, nations should "address each other's concerns while they are committed to seeking their own development and benefits." The euro area is now estimated to contract by 0.6 percent in 2013, even weaker than the previous forecast of 0.1 percent contraction, while China's growth estimate was cut to 7.7 percent from the previous 8.4 percent, according to the World Bank report. "We expect the World Economic Forum would play a significant role in advancing the liberalization and convenience of trade and investment worldwide," Li told Schwab.

Chinese Ministry of Foreign Affairs sets up cyberdiplomacy office (By Stephen Chen binglin.chen@scmp.com) CCTV News reports on the Post''s exclusive interview with ex-CIA operative Edward Snowden, who is in hiding in Hong Kong. The mainland's Ministry of Foreign Affairs has set up an office to deal with diplomatic activities involving cybersecurity, a spokeswoman announced yesterday. That comes in the wake of revelations by whistle-blower Edward Snowden that the US has been hacking into computer networks in Hong Kong and on the mainland for years. The new cyberaffairs office is the first of its kind on the mainland. The Foreign Ministry spokeswoman said the mainland had been "a major victim" of cyberattacks and that the country opposed "cyberattacks in all forms". She said Beijing would discuss cybersecurity issues with the United States at next month's China-US strategic and security dialogue. Mainland security experts said yesterday that Snowden's revelations about Washington's global cyberspying programme would speed up Beijing's drive to replace all foreign-made parts in its internet infrastructure with domestic products. For years, security experts have warned the central government that relying on foreign telecoms equipment - such as core router chips and software - would make China's network vulnerable. Experts said Snowden's claims this week vindicated their view and would help boost Beijing's determination to phase out foreign products. Professor Xu Ke , deputy director of the Institute of Computer Networks at Tsinghua University, which houses one of the mainland's six major internet "backbones", said it had been an ongoing concern. "It's a consensus [among us] that these foreign chips must have a 'back door' inserted inside them," said Xu. A back door in a chip is like a key that allows those with access to tap into a system without alerting the host. Beijing has been gradually replacing foreign parts with domestic ones made by Huawei and ZTE in recent years, another security expert said. But the mainland's core chip technology is still at least two years behind that of the US, he added. Snowden said the US security services target network backbones to gain access to communications between hundreds of thousands of computers. He cited the Chinese University of Hong Kong as one example. Chinese University is home to the hub that carries Hong Kong's internet traffic. The mainland's biggest internet backbone is Chinanet, run by China Telecom, with more than 175 million users. It has data processing centres across the country. China Unicom and China Mobile also operate their own network backbones. The China International Economy and Trade Net is run by the Ministry of Commerce for e-commerce. To protect "sensitive business data", its international bandwidth has been limited to 2Mbps. Among the mainland's non-commercial network backbones, the China Education and Research Network is owned by the Ministry of Education, but operated and maintained by Tsinghua University and other top colleges. The China Science Technology Network is run by the Chinese Academy of Sciences. The number of network backbones is not known as Beijing keeps several large, shadowy networks disconnected from the global net. The China Golden Bridge Network, for instance, was built by the Ministry of Industry and Information Technology for government users and financial institutions. The military also runs several networks. A senior technology official from the central government who refused to be named said the mainland had been "under frequent attack from the US for years". He said China's cybersecurity and surveillance was the responsibility of the military. Xu said most data passing through the network backbones were not encrypted. Attacks on network backbones were mostly carried out by governments because individual hackers "could gain little", as the amount of information they faced would be "colossal". Only governments or large organisations would have the resources and manpower to "find the needle in a haystack", he said. Tang Wei , a senior network security engineer at Rising, a mainland virus protection firm, said the central government was more open to foreign telecoms equipment than Washington. Tang said the US had banned the use of products made by Chinese firms such as Huawei due to security concerns. Beijing, on the other hand, had imposed no such restriction on US products. "If foreign equipment can provide good service at a reasonable price, they will buy foreign brands without hesitation," he said. "Few people would think or care about security."

Hong Kong*:  June 16 2013

Lawmakers warn of stand against stamp duty move (By Sandy Li sandy.li@scmp.com) Complaints from business are being heard in Legco, with some members saying they will vote down the bill if no concessions are made - Groups including foreign chambers of commerce say the government's measures make no distinction between long-term investors and speculators. Lawmakers have warned the government that they will vote against a proposal to double stamp duty on property purchases if the administration fails to make substantial changes. Legislative councillors issued the threat after trade groups, professional and religious organisations condemned the planned bill for not making a distinction between long-term genuine investors and speculators. Hit by a slump in property sales after the introduction of the doubling of stamp duty in February, hundreds of property agents protested outside the Legislative Council building and urged the government retreat on the "unreasonable measures". "About 10 per cent to 20 per cent of agency firms will close down in six months as sales volumes have plunged to a level close to during Sars in 2003. If the situation persists, it will not be surprising to see more than 10,000 agents lose their jobs and more closures," said Tony Kwok Tak-leung, chairman of the Property Agencies Association. Among the 28 deputations voicing their opposition at the Legislative Council's Bill Committee on Stamp Duty (Amendment) Bill 2013 yesterday, chambers of commerce representing thousands of foreign firms in Hong Kong criticised the extra stamp duty as wrongly targeted at companies buying offices for their own use. They said it would severely damage Hong Kong's free market economy. Most organisations suggested the government not penalise long-term investors who buy premises for their own use and should extend the window for exemption for owners to upgrade to bigger flats from the current provision of six months to as long as 24 months. The Hong Kong Christian Council called for an exemption for charity and religious groups which also need to buy premises for their own use. The Liberal Party's James Tien Pei-chun and Starry Lee Wai-king of the pro-government Democratic Alliance for the Betterment and Progress of Hong Kong indicated both parties would vote against the bill if the government refused to address the concerns. "We will not support the bill if the government fails to exempt the extra duty for corporate buyers on purchases of residential and non-residential properties coupled with imposing a sunset clause to end the measure in one to two years," Tien said. He cited the case of Canadian insurer Manulife (International), which faces a extra payable stamp duty of HK$191 million as it bought an office building for HK$4.5 billion for its own use shortly after the doubling of stamp duty took effect. "We don't see the new tax has achieved its purpose of lowering property prices. Therefore, we will not support the bill," he said. Lee, who is also the chairman of the Bill Committee, said the administration should consider the views of those businesses hurt by the move. If the bill is passed, double the existing stamp duty on property sales exceeding HK$2 million will be charged on transactions starting from February 23, the day after the anti-speculation measure was announced. Chief Executive Leung Chun-ying, on a visit to New York, told Bloomberg that the government would not ease its property curbs until there was a steady supply of new properties.

Desecrating the Hong Kong flag does not promote democracy, judge rules (By Thomas Chan thomas.chan@scmp.com) There is no rational connection between desecration of a Hong Kong flag and political messages that activists seek to convey, a magistrate said yesterday. Eastern Magistrate Joseph To Ho-shing said that yesterday before finding Koo Sze-yiu and Ma Wan-ki guilty of attempting to desecrate the regional flag. "The defence has failed to provide evidence to establish the connection between the desecration of the regional flag and the promotion of democracy and human rights," To said. The flag symbolised Hong Kong as an inseparable part of China "on the stroke of midnight on July 1, 1997". The magistrate also rejected the pair's claims that the Regional Flag and Regional Emblem Ordinance was unconstitutional. The charges arose from a protest outside the central government liaison office in Western on April 1 last year. The pair, who are in custody, will be sentenced on June 27. League of Social Democrats chairman Leung Kwok-hung said he would ask Chief Justice Geoffrey Ma Tao-li not to put political and human rights trials before To again. Journalists' groups meanwhile criticised the court's action in requiring TVB deputy news editor Ho Wing-hong to confirm a tape he filmed of the incident. The Journalists Association said such situations could cause reporters to be "conceived as the police's prosecution tool", which might deter people from being interviewed. Journalism Educators for Press Freedom said the requirement was "unusual, unnecessary and unjustified". A police spokesman said the force respected press freedom and had adopted a "fair, just and impartial" approach in the investigation and prosecution.

 China*:  June 16 2013

Beijing will not exploit Snowden case, says senior foreign policy adviser (By Patrick Boehler patrick.boehler@scmp.com) Snowden revelations 'not news' to Beijing, which has no intention of 'turning it into a political case,' says top foreign policy adviser - Protesters supporting Edward Snowden hold a photo of Snowden during a demonstration outside the US Consulate in Hong Kong. The central government will be "very discreet" in handling the possible surrender of US whiste-blower Edward Snowden to the United States, according to a top foreign policy adviser to the Chinese leadership. Beijing "will privately tell the Hong Kong government its views. They will be very discreet," the source said in a phone interview with the South China Morning Post, speaking on condition of anonymity. The source, a senior scholar, said it was not yet clear whether Beijing would intervene in the matter. His comments come after intense speculation in Hong Kong over what role Beijing would play should the US government ask Hong Kong to hand over Snowden under a 1998 extradition treaty. Edward Snowden has left Hawaii for Hong Kong on May 20 and has since been hiding in the city at a secret location. The US Federal Bureau of Investigation's director Robert Mueller said on Thursday he intended to hold Snowden responsible for one of the biggest leaks of US intelligence in history, for which Snowden has accepted responsibility. According to the extradition treaty between Hong Kong and the US, Beijing has "the right of refusal when surrender implicates the 'defence, foreign affairs or essential public interest or policy'". Hong Kong can also refuse to hand him over on humanitarian grounds. Refusals to comment by Chief Executive Leung Chun-ying and the Chinese Ministry of Foreign Affairs spokeswomen Hua Chunying on Thursday have left the world guessing how Beijing will deal with the case. In an editorial on Thursday, the hawkish Global Times said that China's reaction should depend on what explanation the US will give for its hacking of hundreds of servers in China and Hong Kong over the last years, an allegation Snowden made in an exclusive interview with the Post on Wednesday. The source said the Chinese government would not seek to capitalise on the hacking revelations Snowden has made in its dealings with the United States. "China has no interest in turning this into a political case," he said. "These things happen every day and both sides know about it. There is nothing new to this case. Politicising it would make both sides lose." To prove the point, Beijing will let legal authorities deal with questions of Snowden's possible asylum and extradition, the source said. "This is issue is not being handled by the Ministry of Foreign Affairs." 

Macaroon madness (By Mathew Scott) The varieties of macaroons have been expanded to everything, including rose macaroons and mint macaroons. The varieties of macaroons have been expanded to everything, including rose macaroons and mint macaroons. Seeing a dozen people or so line up inside the Laduree outlet in Hong Kong's Harbour City mall is now a common sight. "We're here for the macaroons," Stella Yang says. She and her friends from Shanghai are in Hong Kong for the weekend. "And we don't care how long we have to wait to get them. We've promised friends back home we'll bring them some and we plan to get plenty for ourselves as well." Such passion has followed the macaroon as it has spread its charms across the globe over the past decade. The tasty little treat once reserved for those in France only or for those lucky enough to know friends or family passing through that country, has become increasingly available as the likes of Laudree expands its reach to meet growing demand around the world. And China has not been left out of the craze. The 151-year-old Laduree bakery brand made its first foray into the country with the opening of the Hong Kong shop in December, and in May saw the opening of the first Macarons & Chocolats boutique here to bear the name of the man who has become known as the "Picasso of Pastry" Pierre Herme. Herme, whose own family traces its baking history back to the 1870s, was himself part of the Laduree team before establishing his own brand in 1998. Since then his brand has expanded to such a degree, that the company recently announced plans to triple its production by 2017. There are also chocolates and desserts that are now available under the Pierre Herme name, and an exclusive arrangement with the luxurious Le Royal Monceau, Raffles Paris that sees Herme providing exclusive breakfasts, along with this famous pastry, to guests, as well as the desserts presented at the hotel's two Michelin-starred restaurants, La Cuisine and Il Capaccio. But for many, it will always be about the macaroons and Herme says he is excited to see how customers react to his Hong Kong boutique, situated in the IFC Mall, and that he is eager to learn more about the specific tastes of the people his outlet will serve. "We started the company because we wanted to do things that are new and to find new challenges and that has led us to Hong Kong," Herme says.

Ancient hotpot, modern cuisine (By Zhuan Ti) Sichuan hotpot is a colorful feast for the senses. Sichuan hotpot dates back to the Qing Dynasty (1644-1911) when it was first created in a small town along the upper reaches of the Yangtze River. Local boatmen cooked a kind of spicy soup with vegetable, meat and hot peppers to help them in the humid, cold weather. Over hundreds of years, hotpot evolved to become a major Sichuan cuisine. There are more than 2,000 hotpot restaurants in Chengdu and every restaurant has different recipe for the soup base. Major kinds of soup base include traditional butter, clear oil, porridge, clear soup and cold fish. The dipping sauces are usually made of sesame oil with garlic and green onion. People can put any meat and any vegetables including potato, lotus root and tofu, into the pot. For those who don't like chili, porridge hotpot and clear soup are mild with house special dipping sauces. Mandarin Duck hotpot with half spicy and half clear soup base often satisfies a range of tastes.

Seafood businesses flounder amid spending cut (By WANG ZHUOQIONG) Seafood products displayed at a food and catering fair in Beijing. The crackdown on graft and extravagance is taking its toll on the country's high-end seafood market. Piles of high-end seafood — including lobsters, crabs and abalone — sat quietly in the small tanks of various vendors, during a visit to one of the largest aquatics markets in northern Beijing this week. Store owners at the market, a major wholesaler for restaurants in the area, said they were disappointed by the sluggish levels of business for expensive aquatic products in recent months, the result of the ongoing decline in luxury catering across the nation. "Top restaurants have cut their demands for high-end products," said one shop owner surnamed Lin. "Expensive seafood such as abalone and lobsters are difficult to sell, despite prices dropping 30 percent compared with last year." A kilogram of abalone now costs around 80 yuan ($12), against 140 yuan a year ago, and a lobster can be bought for less than 100 yuan, according to Li Jianchao, a restaurant owner in Beijing. Abalone and lobster account for the majority of high-end seafood dishes in luxury restaurants. Sales of imported dried seafood being sold in Jingshen Seafood Market in southern Beijing, for instance, have dropped two-thirds with almost zero demand from high-end restaurants, according to a report in China Securities Journal. In such a depressed market, many high-end seafood traders have been forced to quit the businesses altogether, the journal added. High-end seafood products at lower prices have lured many individual customers, however, while some medium and lower priced seafood remains popular, with some prices even rising, said Lin. Bian Jiang, assistant director of the China Cuisine Association, said a decline in retail and wholesale seafood sales is inevitable, as the catering industry slows, and the effects are also hitting other related sectors of the industry, from breeding, to feeding, fishing, and seafood imports and exports. "It has been the worst time for seafood-related industries in a decade," Bian said. Homey Group of Shandong province, a listed food processing, aquaculture and ocean fishing company with more than 30 subsidiary companies, including 10 food processing plants, said it expects to see a reduction in its first quarter sales, according to China Investment Securities. In December, the government launched a nationwide crackdown on graft and extravagance, which is now being blamed for what experts suggest is the biggest slowdown in the catering industry in a decade. Revenues of high-end restaurants in Beijing, Shanghai and Chengdu were down at least 20 percent during this year's Spring Festival. In the first quarter of the year, many top catering companies had to close branches or change their menus. However, large chain restaurants have a different view on seafood sales. Jingya Group, for instance, reported its seafood businesses have not been affected by the government policies yet and its seafood buying from suppliers in Shandong is little changed, according to Ma Yuming, a marketing executive at the company.

Hong Kong*:  June 15 2013

Edward Snowden: Classified US data shows Hong Kong hacking targets (By Lana Lam lana.@scmp.com) Top-secret US government records shown to Post by whistle-blower give details of computer IP addresses hacked by NSA in HK and mainland - Members of the League of Social Democrats gather at HSBC headquarters in Central before marching to the US consulate general in support of whistle-blower Edward Snowden yesterday. Classified US government data shown to the South China Morning Post by whistle-blower Edward Snowden has provided a rare insight into the effectiveness of Washington's top-secret global cyberspying programme. New details about the data can be revealed by the Post after further analysis of information Snowden divulged during an exclusive interview on Wednesday in which the former CIA computer analyst exposed extensive hacking by the US in Hong Kong and the mainland. The FBI said yesterday it had launched a criminal investigation and was taking "all necessary steps" to prosecute Snowden for exposing secret US surveillance programmes. FBI Director Robert Mueller told the House Judiciary Committee: "These disclosures have caused significant harm to our nation and to our safety. We are taking all necessary steps to hold the person responsible for these disclosures," he said. Snowden, the man behind explosive leaks of information on the US government's Prism programme that collected phone and web data from its citizens, has pledged to stay in Hong Kong to fight any attempts by his government to have him extradited. The detailed records - which cannot be independently verified - show specific dates and the IP addresses of computers in Hong Kong and on the mainland hacked by the National Security Agency over a four-year period. They also include information indicating whether an attack on a computer was ongoing or had been completed, along with an amount of additional operational information. The small sample data suggests secret and illegal NSA attacks on Hong Kong computers had a success rate of more than 75 per cent, according to the documents. The information only pertains to attacks on civilian computers with no reference to Chinese military operations, Snowden said. "I don't know what specific information they were looking for on these machines, only that using technical exploits to gain unauthorised access to civilian machines is a violation of law. It's ethically dubious," Snowden said in the interview on Wednesday. Snowden, who came to Hong Kong on May 20 and has been in hiding since, said the data points to the frequency and nature of how NSA operatives were able to successfully hack into servers and computers, with specific reference to machines in Hong Kong and on the mainland. According to a New York Times report yesterday, US government lawyers, working with their counterparts in Hong Kong, are understood to have identified several dozen criminal offences with which Snowden could be charged under both Hong Kong and American laws. One of the targets Snowden revealed was Chinese University, home to the Hong Kong Internet Exchange which is a central hub of servers through which all web traffic in the city passes. A university spokeswoman said yesterday that staff had not detected any attacks to its "backbone network". Yesterday's revelation that the US was secretly hacking computers in Hong Kong and on the mainland sent shockwaves around the world and came just days after Snowden first exposed the Prism programme to The Guardian newspaper in Britain. "The primary issue of public importance to Hong Kong and mainland China should be that the NSA is illegally seizing the communications of tens of millions of individuals without any individualised suspicion of wrongdoing," Snowden said. "They simply steal everything so they can search for any topics of interest." Snowden's most recent job was as an NSA contractor with Booz Allen Hamilton but he was fired shortly after he identified himself on Sunday as the source of one of the most significant leaks in US history. Formal charges are the first necessary step that would prompt an extradition request to the Hong Kong government. Snowden could find himself at the centre of a diplomatic storm between Washington and Beijing as he has explicitly chosen to seek refuge in Hong Kong, a move that will test the Sino-US relationship. He said he had chosen Hong Kong because he believed the city's semi-autonomous status and rule of law would protect him from attempts to extradite him to the US. It is understood that Snowden arrived in Hong Kong after leaving his home in Hawaii, telling his girlfriend that he would be away for a few weeks. He stayed at the Mira Hotel in Tsim Sha Tsui before checking out on Monday and has been in hiding since. Snowden said he has not spoken to his family since the revelations were made and lives in constant fear for his own safety. 

US FBI chief defends surveillance programs (Xinhua) The Director of the Federal Bureau of Investigation Robert Mueller on Thursday defended the classified phone and internet surveillance programs, which sparked controversy in the past week, and vowed to hold the leaker responsible for the disclosure. Speaking at a hearing before the US House Judiciary Committee, Mueller said the disclosures about these secret surveillance programs have caused "significant harm to our nation and to our safety." FBI Director Robert Mueller testifies before the House Judiciary Committee hearing on Federal Bureau of Investigation oversight on Capitol Hill in Washington, June 13, 2013. Mueller said the terrorists are consistently looking for ways to have secure communications, and the intelligence system can not afford losing the ability to get the terrorists' communications. "We are going to be exceptionally vulnerable," he said. He even suggested that if the surveillance programs had been in place before the Sept 11, 2001 terrorist attacks, they might have helped yield evidence of connections of the participants and derail the plan. "If we had this program that opportunity would have been there," said Mueller. Two classified National Security Agency (NSA) surveillance programs, one collecting US phone records and the other mining internet data, were revealed last week after leaks from the 29-year-old defense contractor Edward Snowden. "As to the individual who has admitted to making these disclosures, he is the subject of an ongoing criminal investigation," said Mueller. While pledging that the FBI is "taking all necessary steps to hold the person responsible for these disclosures," Mueller declined to comment publicly on the details of the ongoing investigation. US President Barack Obama and other officials of the US intelligence community have stressed that the congressional, executive and judicial levels provided oversight over these surveillance programs. Obama also insisted that the tracking of internet activity had not applied to US citizens or people living in the country. According to the Guardian and the Washington Post reports last Thursday, the NSA and the FBI had been secretly tapping directly into the central servers of nine US internet companies, extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person's movements and contacts over time. The technology companies that participated in the programs reportedly include Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple. Google and other major Internet companies denied news reports that they have given the NSA direct access to their servers to mine users' data and asked the government to disclose more details about the national security requests for their users' data. 

Passengers praise 'magnificent' Kai Tak Cruise Terminal on opening day (By Amy Nip and Phila Siu) Cruise passengers delighted by their reception as sparkling Kai Tak facility opens for business - The Mariner of the Seas, paying its first visit to Hong Kong, docked at the newly opened Kai Tak cruise terminal. Passengers of the Mariner of the Seas arrival at Kai Tak cruise terminal in Kowloon Bay on on Wednesday night. On a day that dragon boats made a splash at venues across the city, one of the world's biggest cruise liners was making bigger waves. The Mariner of the Seas, on its maiden visit to Hong Kong, was the first cruise ship to dock at the Kai Tak cruise terminal - which its passengers described as "magnificent". As the jumbo-sized vessel berthed at a strip of land that once saw jumbo jets coming and going every few minutes, shopping malls in East Kowloon were scrambling for a share of business from its 3,000 passengers. And many of them were here to shop. New Zealander John Hayes, 67, was among the passengers. He said he has been on several cruise trips and this was the best experience. "It's magnificent. I didn't even know [the terminal] is not completed yet," he said after taking a pre-arranged shuttle bus to the APM mall in Kwun Tong. "There was a wonderful welcome at the terminal … with the dramas and dragon dance there." He said he didn't have a shopping budget but would buy whatever he and his wife wanted. He also signed up for a package tour of Hong Kong Island and was looking forward to it. Meanwhile, Chris Harrison, 53, from Australia, said he would spend A$500 (HK$3,600) in the city on items such as designer shoes. He was also unaware that the terminal was unfinished, and said it looked beautiful and functional to him. Another passenger, fellow Australian Dirk Vanheeren, 73, said he had visited Hong Kong three times but was excited to be here again. He also budgeted A$500 for his stay and hoped to buy an iPad for his wife. The 310-metre liner arrived at the terminal last night and is due to leave tonight. But visitors were kept waiting yesterday in a long queue for taxis at the terminal, which the operator said was because many drivers were not willing to make the trek out to the new facility. One crew member said Ocean Terminal in Tsim Sha Tsui was more convenient for shops and restaurants. British passenger Valerie Blakeway was worried that she wouldn't have enough time in the city. "I want to go to The Peak but I don't know if I can make it," she said. Although the city's shopping malls have arranged free buses for cruise passengers, Blakeway said she would rather go sightseeing than shopping. "There are malls everywhere, like Singapore and Dubai,"she said.

'America owes explanation' for hacking, says editorial (Patrick Boehler patrick.boehler@scmp.com) General Keith Alexander, director of the National Security Agency (NSA), commander of the US Cyber Command and chief of the Central Security Service testifies before the Senate Appropriations Committee on the agency's PRISM program. The United States should explain to internet users around the world why it accessed their private conversations, credit cards and emails, one of China's leading dailies said in an editorial on Thursday. "We have to figure out how we are affected by the [hacking], we have the right to ask the American government for an explanation," the editorial read. "For instance, on whether the 'Prism programme' has been used in commercial negotiations between Chinese and US companies," referring to a programme by the US' National Security Agency, which tracks web traffic and phone records. The editorial on the Global Times website appeared half a day after US whistleblower Edward Snowden confronted the South China Morning Post with what he said was conclusive evidence the US had been infiltrating Chinese and Hong Kong networks for years through its "Prism" program. The Global Times is one of China's most widely-sold daily papers. Its editorial line has a reputation for being stridently nationalistic. It offers a hint at a consensus forming among Chinese decision makers on how to deal with Snowden seeking refuge in Hong Kong as Chinese Foreign Ministry spokeswoman Hua Chunying and Hong Kong's Chief Executive Leung Chun-ying refused to comment on the case. The editorial argued that Snowden's statement has "confirmed speculation" on US hacking. China's response to an extradition request for Snowden to the United States will depend on what kind of explanation the US will give for its hacking, the editorial argued. Hong Kong and the US have a treaty that obligates the city to surrender the whistleblower if the US should make such a request, but the treaty grants Beijing a final say in matters of national security. "We should be more clear about America's real side and its hypocritical side, we can't be stupid and naive," the editorial read. "This issue directly touches our vital interests." Snowden's allegations lent credence to long-standing Chinese allegations that the US has been accusing China of hacking US companies to whitewash its own hacking of Chinese companies and institutions. While the US should explain why it hacked Chinese computers, China will not get the apology it wants, said Bonnie Glaser, a China expert at the Centre for Strategic and International Studies in Washington, D C. "[Hacking] is just what governments do," she said in a phone interview. "What are you apologising for? Apologising suggests that you are not going to do it again and implies you did something wrong." "I don't think this is against the norms that exist in the international community," she said. "We are trying to protect our national security. I think the Chinese are doing the same."

Paddling superheroes make a splash (By Johnny Tam, Wei Lo and Jennifer Ngo) From Stanley to Tai O, everyone wanted tostick their oar in at annual Dragon Boat Festival - Tai O fishermen held a heritage-listed parade. There was no chance of staying dry in Aberdeen. In Stanley it was all about beer and costumes, the athletes were in Aberdeen and for those wanting to see a century-old parade, Tai O was the place to be during yesterday's Dragon Boat Festival. The rain didn't dampen spirits on the annual holiday, also known as the Tuen Ng Festival, which commemorates the death of Qu Yuan , a Chinese poet who was born in 343 BC, in the Warring States era. Qu killed himself in a river in despair at the defeat of his homeland's capital - part of modern Hubei . And in that spirit, there was a protest at the races in Tai Po, where Acting Chief Executive Carrie Lam Cheng Yuet-ngor was officiating. About a dozen people called for the Leung Chun-ying administration to step down. Meanwhile, in Tai O, thousands of indigenous villagers and tourists watched a procession on the water, a tradition that is over 100 years old and was included on the national intangible cultural heritage list in 2011. It began when the fishing village was hit by a plague over a century ago. Fishermen paraded along the waterways between stilt houses on dragon boats, towing statues of deities behind them in a bid to cast out the evil spirits. The plague ended, but the custom has continued. "We're proud that we've kept this tradition alive. It allows us to celebrate our origins and it brings a large number of visitors to Tai O," said villager Cheung Tak-sing, 50. In Stanley, there was also plenty to look at. Teams dressed as Darth Vader from the Star Wars movies rubbed shoulders with paddlers done up as superhero Captain America at the International Dragon Boat Championships. And, of course, there were inflatable rubber ducks, like the art installation in Victoria Harbour last month. "This is the best thing that happened this year," said Yara Kostetzer, who organised the event's first team from Brazil. "We did better [in the finals than in the heats], as we concentrated more on the racing and less on the singing. We're better singers than paddlers." But it wasn't all singing. The X-men, who won the men's Grade A event, have been training three times a week since January, coach John Pache said. "We worked hard," said Pache. "For me, I love the intensity, of really hitting it and pushing it." The Liechtenstein Princely Navy was runner-up, with the Hong Kong Sea School Old Boys Dragon taking third place. There were 65 races and 15 prizes. But the serious paddlers were in Aberdeen. Cheng Chi-keung, 43, team captain of the South Eagles Dragon Boat Association, said they trained year round, two to three times a week. It was the first race for Zeth Ko Pak-kan, 23, of the Institute of Architects team. "It was easier than I thought as we've been doing 500 metres in training. The race is only 380 metres. But it did get a bit tougher after the middle part."

CE tight-lipped on Snowden case as lawmakers urge government to tread carefully (By Tony Cheung tony.cheung@scmp.com) Chief Executive Leung Chun-ying has kept silent on the Edward Snowden case. Chief Executive Leung Chun-ying in New York remained tight-lipped about the Edward Snowden case as he has since it began, while a couple of lawmakers urged the Hong Kong government not to tarnish the city’s image when handling the case. In a interview with Bloomberg Television in New York City, Leung was asked whether the government would take any action and whether it would comply if the US issued a warrant for Snowden’s arrest. “I cannot comment on individual cases … I can only say that we follow existing laws and policies,” Leung said. He declined to discuss further on these laws and policies, or whether Hong Kong, alone, could decide on the extradition of Snowden, adding: “We do not comment on or discuss any of these cases.” Asked how the “one country, two systems” principle applied to legal cases, Leung only said: “We have a different set of laws in Hong Kong; we have a different judicial system that is prescribed in our constitutional document called the Basic Law.” Leung said he had no further comments on Hong Kong’s partnership with the US, adding that the city “co-operates with the United States in all areas - economics, financial services and so on.” During the interview with Bloomberg, Leung was asked eight questions by the reporter about Snowden. The chief executive replied seven times that he “could not comment on individual cases”. On Tuesday, before a dinner in Leung's honour hosted by the Hong Kong Trade Development Council in New York, Leung was asked six questions by reporters about Snowden. He responded six times: "I have no comment on individual cases." On Thursday in Hong Kong, Democratic Party chairwoman Emily Lau Wai-hing warned that the government should ensure Snowden’s personal rights and safety because Hong Kong’s international image could be tarnished seriously if the ex-CIA operative was extradited. Pro-establishment lawmaker and lawyer Paul Tse Wai-chun also said he was worried that the city’s high degree of autonomy could be sacrificed if Beijing decided to take a reconciliatory approach on the issue. The lawmakers’ comments came a day after Snowden told the South China Morning Post in an exclusive interview on Wednesday that the US has been “trying to bully” Hong Kong’s government into extraditing him. Snowden’s decision to use a city under Chinese sovereignty as his safe haven has caused a flurry of debate in the city over whether Beijing will seek to interfere in any extradition case involving him. “As [Snowden] is now here, we hope the SAR government can make sure he is safe,” Lau said. “But if he suddenly disappeared and was taken back to Washington … it will deal a heavy blow to Hong Kong’s reputation.” The government should handle the Snowden case carefully because of the international attention now focused on the city, she said. “Every step taken by the government will be under heavy scrutiny, and it must show everyone that it is not taking wrong steps all the time," Lau said. "Otherwise, it will become a joke around the world.” She stressed that Snowden must be allowed, if he wishes, to take his case to the local courts and argue for his rights. Lau added that the Democrats would look into Beijing’s possible role in the matter and scrutinise any of its actions. Tse said he believed the national interest was Beijing’s main priority. “We are not sure whether [Beijing’s] final decision will be a winning solution for [Beijing, Hong Kong and the US], or will compromise Hong Kong’s international reputation and high level of autonomy,” he said. “China was criticised by the US for hacker activities, so could the two countries decide to compromise and avoid trouble?” Tse said. He warned that if Snowden were sent back to the US without going through the local courts, it “could make Hong Kong appear very passive” and not as autonomous as it seemed. 

Edward Snowden: US government has been hacking Hong Kong and China for years (By Lana Lam SCMP) Former CIA operative makes more explosive claims and says Washington is ‘bullying’ Hong Kong to extradite him - US whistle-blower Edward Snowden yesterday emerged from hiding in Hong Kong and revealed to the South China Morning Post that he will stay in the city to fight likely attempts by his government to have him extradited for leaking state secrets. In an exclusive interview carried out from a secret location in the city, the former Central Intelligence Agency analyst also made explosive claims that the US government had been hacking into computers in Hong Kong and on the mainland for years. At Snowden’s request we cannot divulge details about how the interview was conducted. A week since revelations that the US has been secretly collecting phone and online data of its citizens, he said he will stay in the city “until I am asked to leave”, adding: “I have had many opportunities to flee HK, but I would rather stay and fight the US government in the courts, because I have faith in HK’s rule of law.” In a frank hour-long interview, the 29-year-old, who US authorities have confirmed is now the subject of a criminal case, said he was neither a hero nor a traitor and that: US National Security Agency’s controversial Prism programme extends to people and institutions in Hong Kong and mainland China; The US is exerting “bullying’’ diplomatic pressure on Hong Kong to extradite him; Hong Kong’s rule of law will protect him from the US; He is in constant fear for his own safety and that of his family. Snowden has been in Hong Kong since May 20 when he fled his home in Hawaii to take refuge here, a move which has been questioned by many who believe the city cannot protect him. “People who think I made a mistake in picking HK as a location misunderstand my intentions. I am not here to hide from justice, I am here to reveal criminality,” he said. Snowden said that according to unverified documents seen by the Post, the NSA had been hacking computers in Hong Kong and on the mainland since 2009. None of the documents revealed any information about Chinese military systems, he said. I’m neither traitor nor hero. I’m an American - One of the targets in the SAR, according to Snowden, was Chinese University and public officials, businesses and students in the city. The documents also point to hacking activity by the NSA against mainland targets. Snowden believed there had been more than 61,000 NSA hacking operations globally, with hundreds of targets in Hong Kong and on the mainland. “We hack network backbones – like huge internet routers, basically – that give us access to the communications of hundreds of thousands of computers without having to hack every single one,” he said. “Last week the American government happily operated in the shadows with no respect for the consent of the governed, but no longer. Every level of society is demanding accountability and oversight.” Snowden said he was releasing the information to demonstrate “the hypocrisy of the US government when it claims that it does not target civilian infrastructure, unlike its adversaries”. “Not only does it do so, but it is so afraid of this being known that it is willing to use any means, such as diplomatic intimidation, to prevent this information from becoming public.” Since the shocking revelations a week ago, Snowden has been vilified as a defector but also hailed by supporters such as WikiLeaks’ Julian Assange. “I’m neither traitor nor hero. I’m an American,” he said, adding that he was proud to be an American. “I believe in freedom of expression. I acted in good faith but it is only right that the public form its own opinion.” Snowden said he had not contacted his family and feared for their safety as well as his own. “I will never feel safe. “Things are very difficult for me in all terms, but speaking truth to power is never without risk,” he said. “It has been difficult, but I have been glad to see the global public speak out against these sorts of systemic violations of privacy. “All I can do is rely on my training and hope that world governments will refuse to be bullied by the United States into persecuting people seeking political refuge.” Asked if he had been offered asylum by the Russian government, he said: “My only comment is that I am glad there are governments that refuse to be intimidated by great power”. The interview comes on the same day NSA chief General Keith Alexander appeared before Congress to defend his agency over the leaks. It was his first appearance since the explosive revelations were made last week. Alexander’s prepared remarks did not specifically address revelations about the Prism program. Snowden's revelations threaten to test new attempts to build US-Sino bridges after a weekend summit in California between the nations' presidents, Barack Obama and Xi Jinping. If true, Snowden's allegations lend credence to China's longstanding position that it is as much a victim of hacking as a perpetrator, after Obama pressed Xi to rein in cyber-espionage by the Chinese military. Tens of thousands of Snowden’s supporters have signed a petition calling for his pardon in the United States while many have donated money to a fund to help him. “I’m very grateful for the support of the public,” he said. “But I ask that they act in their interest – save their money for letters to the government that breaks the law and claims it noble. “The reality is that I have acted at great personal risk to help the public of the world, regardless of whether that public is American, European, or Asian.” The US consulate in Hong Kong could not be contacted yesterday on a public holiday.

 China*:  June 15 2013

Snowden claims raise alarms on internet security upgrades in China (By Wu Nan in Beijing nan.wu@scmp.com) Revelations by Edward Snowden (pictured on the computer screen) has prompted concerns about internet privacy and information control. US whistle-blower Edward Snowden’s claims about Washington surveillance will prompt China to upgrade its internet security, experts said on Thursday. Liu Qing, chief executive of rednetunion.com, an internet security company based in Shanghai, said the hacking news appeared to confirm that the US views China as a major rival and potential threat. If China wanted to raise its defence against cyber attacks, Liu said, it must further develop its online technology. He said that because global internet data passes through servers hosted in the US, "the country provides more convenience to hack other countries,” he told the South China Morning Post, after Snowden said the US has been hacking computers on the mainland and in Hong Kong for years. Snowden, a 29-year-old American who blew the whistle on the US National Security Agency’s surveillance programme, said he believed there had been more than 61,000 NSA hacking operations globally, with hundreds of targets in Hong Kong and on the mainland. Liu said China would need to invent its own IPv6 identification system, or computer operating system that would be equivalent to the Windows system. Still, the news was not shocking to Liu. “In fact, many countries use hacking as a highly efficient technology to obtain information that will benefit their countries,” he said. Another security expert said Snowden had raised an alarm about cyber security. “We should raise our guard on internet security,” said Tang Wei, of Beijing Rising International Software Company, one of the largest online security companies in China. He said the recent US surveillance leaks had alerted Chinese individuals, companies and governments to heighten their “awareness of internet security”, and necessity of carrying out periodic “security evaluations”. “The question of how to protect privacy better may create new opportunities for IT companies to invent more powerful tools,” he said. According to Sun Weiping, a researcher on China online security studies based in central China’s Henan province, computers on the mainland have frequently been hit by large-scale hacking and viruses. Targets include government departments, businesses and educational institutions. Since early 2000, China has been developing internet security industries in Shanghai and Chengdu as two important bases. By 2002 there were more than 1,000 enterprises operating internet security-related businesses, according to an independent study. China plans to further expand its defence system under a five-year plan. However, some experts believe the potential consequences of Snowden’s revelations might be at odds with the origins of a “free” internet. The World Wide Web was essentially invented so users can freely exchange any information, said Eagle Wan, an expert from the Intelligence Defence Friends Laboratory, who was concerned about the future of the internet. “Science is flat,” he said, borrowing a phrase from the book about globalisation The World Is Flat. “People like Snowden are vigilantes who come out and challenge the traditional structure of information control,” he said. “Only if the structure is broken can we enjoy information freely.” Wan said the Snowden case did not highlight a rift between the US and China, but rather information control, which is a global concern. “Eventually, science and information will make us live in country without borders,” he said. “People like Snowden and [WikiLeaks founder] Julian Assange will appear. They are like rushing waves in the ocean – unstoppable.”

China's EU wine probe sparks worries (By Li Xiang in Paris) France has been pushed to the forefront of the trade dispute between China and the European Union, as friction deepened after Beijing announced it has launched an investigation into EU wine imports. Beijing's move on Wednesday has sparked concern and anxiety among government officials and wine exporters in France, Europe's largest wine exporter to China. French President Francois Hollande expressed alarm at the latest development in Sino-EU trade friction and called for a special meeting of EU member states to create a cohesive and united position in trade negotiations with China. China's announcement came after the European Commission's decision to levy punitive tariffs on the country's solar panel products. France is one of only four EU nations that voted in favor of the anti-dumping taxes of 11.8 percent, which will be in effect from now until August, after which they will be extended to 47.6 percent for another four months. The other three countries that voted for the taxes were Italy, Portugal and Lithuania. The Ministry of Commerce in Beijing said that the wine investigation is not a retaliatory measure, but experts believe that France likely will be hurt the most if Beijing implements tough rules on EU wine imports. French wine exporters said that they have already started to see order delays from Chinese importers. Some speculate that French wines priced between 1 to 3 euros ($1.33 to $3.98) might be taxed. "China's move has created a feeling of anxiety in the French wine industry. Our orders might be delayed as our Chinese importers are waiting for the final decision," said Jean-Pierre Rousseau, managing director of Diva Bordeaux, a major wine exporter in Bordeaux. China is the third-largest market for French wines, with an estimated value of 800 million euros. The value of the Chinese market accounts for nearly 30 percent of Bordeaux's total wine exports. Experts said that a compromise and collaborative agreement between China and the EU are necessary to resolve the dispute. "In the solar panel case and the wine case, we are at the first steps of investigations on both sides. Thus, a mutually acceptable compromise will be negotiated more or less rapidly because a trade war would be too damaging to both sides," said Jean-Paul Larcon, a professor at French business school Ecole des Hautes Etudes Commerciales de Paris. Larcon said the French position in favor of the penalty on Chinese solar exports can be explained by the country's internal debate on its energy policy and the need to diversify energy sources. "French companies have a strong competitive advantage in the nuclear energy sector, but they are quite week in the solar energy sector. So the French position aims to protect French companies in this area," he said. Francoise Nicolas, director of the Center for Asia Studies at the French Institute of International Relations, said that the objective of the tariffs is to engage a dialogue with China, as the imposed duties on the solar panels give Beijing time to come to the negotiating table. "Unlike Germany, I suppose France thinks that there is a need to put stronger pressure to get Beijing to accept discussion and that simple requests are no longer enough," she said. Some are concerned that the trade dispute may put fragile Sino-French relations at risk even though Hollande visited China less than two months ago in hopes of strengthening ties with the Chinese new leadership. "It is not a minor dispute but it should not hide the very well-established long-term cooperation between China and France in the political, economic and cultural domain," Larcon said. "China and France will find a positive solution to the current dispute because of the potential of mutually beneficial collaboration and the interests of French companies," he said.

Brown and Chinese consul talk clean energy and IT (By By Chen Jia in Sacramento chenjia@chinadailyusa.com) Yuan Nansheng, Chinese consul general in San Francisco, and California governor Jerry Brown met on Tuesday to promote cooperation between China and California, just three days after Brown met with Chinese President Xi Jinping. On the heels of a 40-minute chat with Chinese president Xi Jinping in Indian Wells last weekend, California governor Jerry Brown had his first meeting with Chinese Consul General in San Francisco Yuan Nansheng on Tuesday in Sacramento. "California is the first economy and the biggest exporter to China among the 50 states," Yuan said. "We are very glad to see the frequent exchanges (between two sides) so far." Yuan said he is looking forward to working closely with Governor Brown to bring more investment from China to California and enhance cooperation on clean energy, IT, infrastructure, cultural affairs and more. Yuan said he highly appreciated Brown's trade mission to China in April for "promoting exchanges between the two sides", and also applauded the reopening of the California trade and investment office in Shanghai, which will further bilateral cooperation even more, he said. On Brown's one-week trip to China, he led a delegation of 75 business leaders and officials from the Bay Area Council, a business organization in San Francisco that provided $1 million for the reopening of the trade office in Shanghai. During the visit, Brown met with China's premier, the chairman of the National Development and Reform Commission, and top officials from Shenzhen, Guangzhou, Jiangsu and Shanghai. The governor also met with China's ministers of commerce and environmental protection, signing the first agreements ever between a sub-national entity of the US and Chinese ministries, according to the governor's office. "We hope China exports more solar panels and efficient batteries as California continues its efforts to be the first in America in terms of renewable energy," Brown said on Tuesday. "We want China to accelerate its battery technology and invent even more efficient batteries, so we can find a way to store solar and wind energy through smaller and more efficient batteries. The US and China can cooperate to develop these technologies." Brown continued: "We are very interested in electronic vehicles in California because we want to reduce pollution. The cooperation is going well, and BYD is opening a plant for electronic buses in California this year." He noted that California wants more Chinese capital invested in the state's roads, infrastructure, and high-speed rail. During the talk with Yuan, Brown also shared his understanding of the "new type of relations between two powers", calling it "something we need between the US and China". He said that in his 40-minute meeting with Xi he had discussed many issues, including climate change, new technology, "and one of the points I stressed was in this new economy, this new dream, that how we can live together". Brown said the goal should be to produce wealth with less energy and less material, he explained, saying the old way was for a country to expand and take more land and more material from the ground. Increasingly today, wealth comes from the human mind. In Silicon Valley, the wealth comes from imagination, which does not require a huge amount of oil. When great minds get together, they can produce wealth and well-being without having to generate pollution or occupy more land, he said "In that way, every country could achieve its goal without having to disadvantage another country," Brown said. "So it is a new model of a relationship, which I spoke about with Chinese President Xi Jinping." Last weekend, Brown sent President Xi a scale model of a statue by noted Native American sculptor Doug Hyde that sits in downtown Palm Springs. The sculpture represents two Cahuilla women carrying baskets of bounty harvested from the desert and an olla water container. During his China trip in April, Brown presented China's premier Li Keqiang with a Berkeley Mills "natural edge" table crafted from a California coastal redwood tree. Berkeley Mills CEO and founding craftsman, Gene Agress, said the symbolism behind the table's design is peace, prosperity and the value of family. Because of its design and handcrafted construction it will endure for centuries, he said, adding that the table has not been stained, allowing it to take on a natural and uniquely beautiful tone as it ages, and the cedar base has not been finished to allow its fragrant ginger aroma to fill the room it sits in. The coastal redwood is found in groves along California's Pacific coastline from Monterey County to the Oregon border. The governor has tables crafted by Berkeley Mills in his office and home. "I created and designed this table commissioned by Governor Jerry Brown, to symbolize peace, prosperity and friendship," Agress said. "This redwood stood for centuries in one of the beautiful forests in our home state of California. We left the natural edge on the slab to remind us of the natural world we took it from and out of deep respect and humility for the wood."

Shenzhou X docks with space module (Xinhua) Photo taken on June 13, 2013 shows the screen at the Beijing Aerospace Control Center showing the Shenzhou X manned spacecraft conducting docking with the orbiting Tiangong-1 space module. China's Shenzhou X manned spacecraft successfully completed an automated docking with the orbiting Tiangong-1 space module at 1:18 pm Thursday. China's Shenzhou Xmanned spacecraft successfully completed an automated docking procedure with the orbiting Tiangong-1 space module at 1:18 pm Thursday, according to the Beijing Aerospace Control Center. The docking procedure was the fifth to take place between Shenzhou-type spacecraft and the space module. Previous dockings include two automated operations by the unmanned Shenzhou VIII in 2011 and both an automated and manual docking by the manned Shenzhou IX in 2012. The Shenzhou X, which was launched Tuesday afternoon from northwest China's Gobi desert, began to approach the Tiangong-1 automatically at 10:48 am Thursday and made contact with the space module at 1:11 pm. Three astronauts aboard the Shenzhou monitored and reported the docking operation to the control center. According to their mission schedule, the astronauts will enter the space module later and carry out scientific and technical experiments. The Shenzhou Xis China's fifth manned spacecraft and it is the first application-orientated flight under China's space program since the country introduced its manned space program in 1992. The astronauts are scheduled to conduct a manual docking with the space module during their 15-day journey in space, as well as give a lecture to Earth-bound students. China is the third country after the United States and Russia to acquire the technologies and skills necessary for space rendezvous and docking procedures, as well as supply manpower and material for an orbiting module via different docking methods. The Tiangong-1 space lab has been in orbit for about 620 days. It will remain in service for another three months. The module is considered the first step in building a permanent space station, which the country aims to do by 2020.

Xi Jinping meets with KMT honorary chairman (Xinhua) The Communist Party of China (CPC) Central Committee General Secretary Xi Jinping (R) meets with Wu Poh-hsiung, honorary chairman of the Kuomintang (KMT) Party, in Beijing, June 13, 2013. The Communist Party of China (CPC) Central Committee General Secretary Xi Jinping on Thursday met with Wu Poh-Hsiung, honorary chairman of the Kuomintang (KMT) Party. Wu arrived in Beijing on Wednesday for a three-day visit to the Chinese mainland.

US hacking China for years: Report (Agencies) US whistleblower Edward Snowden said the US government had been hacking into computers in Hong Kong and on the Chinese mainland for years. In an hour-long interview with the South China Morning Post, the former Central Intelligence Agency analyst revealed that the US National Security Agency (NSA) had been hacking computers in Hong Kong and on the mainland since 2009. Among the targets were the Chinese University of Hong Kong and public officials, businesses and students in the SAR, and the NSA also hacked mainland targets, the newspaper reported. Snowden believed there had been more than 61,000 NSA hacking operations globally, with hundreds of targets in Hong Kong and on the mainland. Snowden has been in Hong Kong since May 20 when he fled his home in Hawaii to take refuge. He said he will stay in the city “until I am asked to leave”. "I have had many opportunities to flee HK, but I would rather stay and fight the US government in the courts, because I have faith in HK’s rule of law.” The 29-year-old also said he is in constant fear for his own safety and that of his family. Snowden said he was releasing the information to demonstrate “the hypocrisy of the US government when it claims that it does not target civilian infrastructure.”

Hong Kong*:  June 14 2013

Hilton to open more Waldorf, Conrad hotels in China, add 40,000 jobs (By George Chen in Shanghai george.chen@scmp.com) American luxury hotel operator to open more Waldorf Astoria and Conrad properties over the next few years and hire 40,000 new staff - John Vanderslice. Hotel giant Hilton Worldwide plans to add about 40,000 employees in China over the next few years to staff its various new properties, despite growing industry concern about an economic slowdown in the world's No 2 economy. The Virginia, US-headquartered hotel chain operator, bought by private equity firm Blackstone in 2007, planned to focus on expanding its top luxury hotel brands, including Waldorf Astoria and Conrad, according to John Vanderslice, global head in charge of the firm's luxury hotel business. "Five years ago, when Blackstone invested in Hilton, we only had five Waldorf hotels in the world, and now we want to be the fastest growing luxury hotel in the world," Vanderslice said, adding that the focus of the expansion would be in Asia, and in particular, mainland China, given economic difficulties in the United States and Europe in the wake of the 2008 global financial crisis. "It's difficult to do a new hotel in our traditional markets like Europe and America. That is really linked to financing. The traditional banking relationship changed after the financial crisis," he told the South China Morning Post in Shanghai, where the company opened its first Waldorf hotel outside the US about two years ago. He said Hilton did not have a "definite plan" to add hotels in Hong Kong, either, citing the same financing challenges as in Europe and the Americas. He described Hong Kong as "a market that has high barriers due to high costs" which discouraged hotel operators from expanding their operation there. The firm planned to open five more Waldorf hotels in Asia by 2017, Vanderslice said, adding that four of the five would be in the mainland, including one in Beijing and one in Chengdu and two on the well-known resort island of Hainan. At the same time, the group planned to open 11 Conrad-branded hotels in Asia by 2020, including seven on the mainland, following its opening of Conrad Beijing in March, Vanderslice said. Hilton, which runs the Hilton namesake hotels, has 13,000 employees in China. Over the next few years, the company expects to increase that headcount to 60,000, he said. China is already the largest market outside the US for Hilton, which was acquired by Blackstone for US$26 billion. In Asia, Hilton and Conrad hotels are relatively well-recognised compared with Waldorf, given their long history and popularity among high-end business travellers. President Xi Jinping and Premier Li Keqiang have both reaffirmed in recent months their determination to boost foreign investment in China, to help create jobs. Nearly seven million fresh graduates from local universities are struggling to find their first job. Vanderslice said he expected to bring both mainland "old money and new money" to its planned Waldorf hotels in China over the next few years, and that sooner or later the two types of Chinese luxury customers might be attracted to stay in Waldorf hotels when they travel abroad. "Americans will travel in the US for a long time before they go outside the US. I believe Chinese people are the same in that respect, because of the size [of the two countries]," Vanderslice said. "But given their rising affluence, [mainland Chinese] will also go outside soon," When asked if he was concerned about Beijing's recent anti-corruption campaign that some analysts said would hurt sales of luxury products in China, Vanderslice replied: "Government officials won't stay in our hotels. They have their own guest houses." Stephen Schwarzman, Blackstone's founder, contributed US$100 million to set up a scholarship programme at Beijing's Tsinghua University earlier this year.

Hopewell Properties postpones HK$6b IPO: report (By Reuters in Hong Kong) Hopewell Tower in Wan Chai. Hopewell HK Properties postpones HK$6b IPO: report Reuters in Hong Kong Hopewell Hong Kong Properties has postponed plans for an initial public offering in Hong Kong, The Wall Street Journal reported on its website late on Tuesday, citing sources with knowledge of the deal. The unit of Hopewell Holdings was scheduled to price the deal on Wednesday before listing on June 19, but decided to pull the plug due to adverse market conditions, becoming the second postponement in Hong Kong in less than a month, according to the Journal. Financial markets in Hong Kong were shut on Wednesday for a public holiday. The benchmark Hang Seng Index has tumbled more than 9 per cent from peaks in May and is now languishing at its lowest since November and down 5.7 per cent on the year. Hopewell launched the IPO on May 30, offering 340 million new shares in an indicative range of HK$15.30 to HK$17.80 each. The total deal could have potentially fetched HK$6.05 billion (US$779.16 million).

EXCLUSIVE: Whistleblower Edward Snowden talks to South China Morning Post (By Sarah Graham) Ex-CIA contractor speaks to reporter from secret location in Hong Kong, revealing fresh details of US surveillance, pressure on Hong Kong, snooping and cyber attacks on China. Edward Snowden has revealed more details of US surveillance operations - Surveillance whistleblower Edward Snowden has spoken for the first time since blowing his own cover in an exclusive interview with the South China Morning Post. The ex-CIA analyst has been holed up in secret locations in Hong Kong since fleeing Hawaii ahead of highly sensitive leaks revealing details of US top-secret phone and internet surveillance of its citizens. Snowden's actions have been both praised and condemned globally. But he told Post reporter Lana Lam: "I'm neither traitor nor hero. I'm an American." 
Today, he reveals:
more explosive details on US surveillance targets
his plans for the immediate future
the steps he claims the US has taken since he broke cover in Hong Kong
his fears for his family
The 29-year-old was working for defence contractor Booz Allen Hamilton at the National Security Agency (NSA), the biggest spy surveillance organisation in the world, when he leaked information claiming the US was systematically seizing vast amounts of phone and web data. Snowden fled to Hong Kong after using Britain’s Guardian newspaper to expose the agency’s PRISM program which gives officials easy access to data held by nine of the world’s top internet companies, including Google, Facebook, Microsoft and Skype. People who think I made a mistake in picking HK as a location misunderstand my intentions. I am not here to hide from justice; I am here to reveal criminality - “People who think I made a mistake in picking HK as a location misunderstand my intentions. I am not here to hide from justice; I am here to reveal criminality,” Snowden told the Post earlier today. He vowed to fight any extradition attempt by the US government, saying: “My intention is to ask the courts and people of Hong Kong to decide my fate. I have been given no reason to doubt your system.’’ It is believed the US is pursuing a criminal investigation, but no extradition request has yet been filed. Hong Kong has an extradition treaty with the US, although analysts say any attempts to bring Mr Snowden to America may take months and could be blocked by Beijing. His actions have been both praised and condemned globally, with some hailing him a hero while others a traitor. Some senators have accused Snowden of treason.

 China*:  June 14 2013

Inside the NSA’s ultra-secret China hacking group (By Mathew M. Aid - South China Morning Post) The US National Security Agency headquarters in Fort Meade, Maryland. Last weekend, US President Barack Obama sat down for a series of meetings with China’s newly appointed leader, Xi Jinping. We know that the two leaders spoke at length about the topic du jour – cyber-espionage – a subject that has long frustrated officials in Washington and is now front and centre with the revelations of sweeping US data mining. The media has focused at length on China’s aggressive attempts to electronically steal US military and commercial secrets, but Xi pushed back at the "shirt-sleeves" summit, noting that China, too, was the recipient of cyber-espionage. But what Obama probably neglected to mention is that he has his own hacker army, and it has burrowed its way deep, deep into China’s networks. When the agenda for the meeting at the Sunnylands estate outside Palm Springs, California, was agreed to several months ago, both parties agreed that it would be a nice opportunity for President Xi, who assumed his post in March, to discuss a wide range of security and economic issues of concern to both countries. According to diplomatic sources, the issue of cyber-security was not one of the key topics to be discussed at the summit. Sino-American economic relations, climate change, and the growing threat posed by North Korea were supposed to dominate the discussions. Then, two weeks ago, White House officials leaked to the press that Obama intended to raise privately with Xi the highly contentious issue of China’s widespread use of computer hacking to steal US government, military, and commercial secrets. According to a Chinese diplomat in Washington who spoke in confidence, Beijing was furious about the sudden elevation of cyber-security and Chinese espionage on the meeting’s agenda. According to a diplomatic source in Washington, the Chinese government was even angrier that the White House leaked the new agenda item to the press before Washington bothered to tell Beijing about it. Last week’s revelations about the National Security Agency’s Prism and Verizon metadata collection only add fuel to Beijing’s position. So the Chinese began to hit back. Senior Chinese officials have publicly accused the US government of hypocrisy and have alleged that Washington is also actively engaged in cyber-espionage. When the latest allegation of Chinese cyber-espionage was levelled in late May in a front-page Washington Post article, which alleged that hackers employed by the Chinese military had stolen the blueprints of over three dozen American weapons systems, the Chinese government’s top internet official, Huang Chengqing, shot back that Beijing possessed "mountains of data" showing that the United States has engaged in widespread hacking designed to steal Chinese government secrets. Last week’s revelations about the National Security Agency’s Prism and Verizon metadata collection from a 29-year-old former CIA undercover operative named Edward J. Snowden, who is now living in Hong Kong, only add fuel to Beijing’s position. But Washington never publicly responded to Huang’s allegation, and nobody in the US media seems to have bothered to ask the White House if there is a modicum of truth to the Chinese charges. It turns out that the Chinese government’s allegations are essentially correct. According to a number of confidential sources, a highly secretive unit of the National Security Agency (NSA), the US government’s huge electronic eavesdropping organisation, called the Office of Tailored Access Operations (TAO) has successfully penetrated Chinese computer and telecommunications systems for almost 15 years, generating some of the best and most reliable intelligence information about what is going on inside the People’s Republic of China. Hidden away inside the massive NSA headquarters complex at Fort Meade, Maryland, in a large suite of offices segregated from the rest of the agency, TAO is a mystery to many NSA employees. Relatively few NSA officials have complete access to information about TAO because of the extraordinary sensitivity of its operations, and it requires a special security clearance to gain access to the unit’s work spaces inside the NSA operations complex. The door leading to its ultramodern operations centre is protected by armed guards, an imposing steel door that can only be entered by entering the correct six-digit code into a keypad, and a retinal scanner to ensure that only those individuals specially cleared for access get through the door. According to former NSA officials interviewed for this article, TAO’s mission is simple. It collects intelligence information on foreign targets by surreptitiously hacking into their computers and telecommunications systems, cracking passwords, compromising the computer security systems protecting the targeted computer, stealing the data stored on computer hard drives, and then copying all the messages and data traffic passing within the targeted e-mail and text-messaging systems. The technical term of art used by NSA to describe these operations is computer network exploitation (CNE). TAO is also responsible for developing the information that would allow the United States to destroy or damage foreign computer and telecommunications systems with a cyberattack if so directed by the president. The organisation responsible for conducting such a cyberattack is US Cyber Command (Cybercom), whose headquarters is located at Fort Meade and whose chief is the director of the NSA, Gen. Keith Alexander. Commanded since April of this year by Robert Joyce, who formerly was the deputy director of the NSA’s Information Assurance Directorate (responsible for protecting the US government’s communications and computer systems), TAO, sources say, is now the largest and arguably the most important component of the NSA’s huge Signal Intelligence (SIGINT) Directorate, consisting of over 1,000 military and civilian computer hackers, intelligence analysts, targeting specialists, computer hardware and software designers, and electrical engineers. The sanctum sanctorum of TAO is its ultra-modern operations centre at Fort Meade called the Remote Operations Center (ROC), which is where the unit’s 600 or so military and civilian computer hackers (they themselves CNE operators) work in rotating shifts 24 hours a day, seven days a week. These operators spend their days (or nights) searching the ether for computers systems and supporting telecommunications networks being used by, for example, foreign terrorists to pass messages to their members or sympathisers. Once these computers have been identified and located, the computer hackers working in the ROC break into the targeted computer systems electronically using special software designed by TAO’s own corps of software designers and engineers specifically for this purpose, download the contents of the computers’ hard drives, and place software implants or other devices called “buggies” inside the computers’ operating systems, which allows TAO intercept operators at Fort Meade to continuously monitor the e-mail and/or text-messaging traffic coming in and out of the computers or hand-held devices. TAO’s work would not be possible without the team of gifted computer scientists and software engineers belonging to the Data Network Technologies Branch, who develop the sophisticated computer software that allows the unit’s operators to perform their intelligence collection mission. A separate unit within TAO called the Telecommunications Network Technologies Branch (TNT) develops the techniques that allow TAO’s hackers to covertly gain access to targeted computer systems and telecommunications networks without being detected. Meanwhile, TAO’s Mission Infrastructure Technologies Branch develops and builds the sensitive computer and telecommunications monitoring hardware and support infrastructure that keeps the effort up and running. TAO even has its own small clandestine intelligence-gathering unit called the Access Technologies Operations Branch, which includes personnel seconded by the CIA and the FBI, who perform what are described as “off-net operations”, which is a polite way of saying that they arrange for CIA agents to surreptitiously plant eavesdropping devices on computers and/or telecommunications systems overseas so that TAO’s hackers can remotely access them from Fort Meade. It is important to note that TAO is not supposed to work against domestic targets in the United States or its possessions. This is the responsibility of the FBI, which is the sole US intelligence agency chartered for domestic telecommunications surveillance. But in light of information about wider NSA snooping, one has to prudently be concerned about whether TAO is able to perform its mission of collecting foreign intelligence without accessing communications originating in or transiting through the United States. Since its creation in 1997, TAO has garnered a reputation for producing some of the best intelligence available to the US intelligence community not only about China, but also on foreign terrorist groups, espionage activities being conducted against the United States by foreign governments, ballistic missile and weapons of mass destruction developments around the globe, and the latest political, military, and economic developments around the globe. According to a former NSA official, by 2007 TAO’s 600 intercept operators were secretly tapping into thousands of foreign computer systems and accessing password-protected computer hard drives and e-mails of targets around the world. As detailed in my 2009 history of NSA, The Secret Sentry, this highly classified intercept programme, known at the time as Stumpcursor, proved to be critically important during the US Army’s 2007 “surge” in Iraq, where it was credited with single-handedly identifying and locating over 100 Iraqi and al Qaeda insurgent cells in and around Baghdad. That same year, sources report that TAO was given an award for producing particularly important intelligence information about whether Iran was trying to build an atomic bomb. By the time Obama became president of the United States in January 2009, TAO had become something akin to the wunderkind of the US intelligence community. "It’s become an industry unto itself," a former NSA official said of TAO at the time. "They go places and get things that nobody else in the IC [intelligence community] can." Given the nature and extraordinary political sensitivity of its work, it will come as no surprise that TAO has always been, and remains, extraordinarily publicity shy. Everything about TAO is classified top secret codeword, even within the hyper-secretive NSA. Its name has appeared in print only a few times over the past decade, and the handful of reporters who have dared inquire about it have been politely but very firmly warned by senior US intelligence officials not to describe its work for fear that it might compromise its ongoing efforts. According to a senior US defence official who is familiar with TAO’s work, "The agency believes that the less people know about them [TAO] the better." The word among NSA officials is that if you want to get promoted or recognised, get a transfer to TAO as soon as you can. The current head of the NSA’s SIGINT Directorate, Teresa Shea, 54, got her current job in large part because of the work she did as chief of TAO in the years after the 9/11 terrorist attacks, when the unit earned plaudits for its ability to collect extremely hard-to-come-by information during the latter part of George W. Bush’s administration. We do not know what the information was, but sources suggest that it must have been pretty important to propel Shea to her position today. But according to a recently retired NSA official, TAO "is the place to be right now". There’s no question that TAO has continued to grow in size and importance since Obama took office in 2009, which is indicative of its outsized role. In recent years, TAO’s collection operations have expanded from Fort Meade to some of the agency’s most important listening posts in the United States. There are now mini-TAO units operating at the huge NSA SIGINT intercept and processing centres at NSA Hawaii at Wahiawa on the island of Oahu; NSA Georgia at Fort Gordon, Georgia; and NSA Texas at the Medina Annex outside San Antonio, Texas; and within the huge NSA listening post at Buckley Air Force Base outside Denver. The problem is that TAO has become so large and produces so much valuable intelligence information that it has become virtually impossible to hide it anymore. The Chinese government is certainly aware of TAO’s activities. The "mountains of data" statement by China’s top internet official, Huang Chengqing, is clearly an implied threat by Beijing to release this data. Thus it is unlikely that President Obama pressed President Xi too hard at the Sunnydale summit on the question of China’s cyber-espionage activities. As any high-stakes poker player knows, you can only press your luck so far when the guy on the other side of the table knows what cards you have in your hand. (Mathew M. Aid is the author of Intel Wars: The Secret History of the Fight Against Terror and The Secret Sentry: The Untold History of the National Security Agency, and is co-editor with Cees Wiebes of Secrets of Signals Intelligence During the Cold War and Beyond.)

Netherlands opposes EU duties on China solar panels (By Xinhua) The Netherlands is opposed to the European Union's decision to slap provisional anti-dumping duties on Chinese solar panels, Dutch Minister of Foreign Affairs Frans Timmermans said on Tuesday. Timmermans made the remarks during the talks with his Chinese counterpart Wang Yi in Beijing. "The European Commission's decision to impose provisional duties on solar panels from China goes against the principle of free trade and the Netherlands is firmly opposed to it," said the visiting Dutch foreign minister, quoted by a news release from the Chinese Foreign Ministry. On Monday, Timmermans told reporters that the Dutch government, like the German government, truly believes that there should be no confrontation between the EU and China on the issue of solar panels. "I think we should come and find a compromise here. We have been urging the European Commission to try carefully here. There are more things at stake than just one issue in the long-term relationship between the EU and China," he said on Monday shortly before his departure to China. During Tuesday's talks, Wang said he appreciates the Dutch government's stance and hopes that the Netherlands will continue working for dialogue between the EU and China on the matter. Timmermans also congratulated the Chinese side on the successful launch of the Shenzhou-10 spacecraft on Tuesday, adding that the Netherlands is ready to boost cooperation with China in various areas, especially on sustainable development, to forge a future-oriented relationship between the two countries. Hailing the smooth development of the bilateral ties in recent years, Wang said China looks forward to a more matured and stable relationship with the Netherlands based on mutual respect and win-win reciprocity, and new achievements of cooperation in urbanization, energy saving and environmental protection, new energy and other areas. After the talks, the two foreign ministers exchanged diplomatic notes regarding the establishment of consulates in China's Chongqing and the Netherlands' Willemstad.

A dream launch for Shenzhou X (By Xin Dingding) Shenzhou X, China’s fifth manned spacecraft, atop an upgraded Long March-2F carrier rocket, blasts off from Jiuquan Satellite Launch Center at 5:38 pm on Tuesday. Three astronauts aboard the spacecraft for China's longest mission, paving way for space station in 2020 - Shenzhou X and three astronauts blasted off from Jiuquan Satellite Launch Center, Gansu province, into a clear blue sky on Tuesday, bringing the nation one step closer to setting up its own space station in 2020. Two men, mission commander Nie Haisheng and Zhang Xiaoguang, and China's second female astronaut, Wang Yaping, are expected to stay in space for 15 days. They will educate young people about science and perform two space dockings, between Shenzhou X and the unmanned Tiangong-1 space module, a technically difficult procedure that brings two vessels together in high-speed orbit. The trip is the country's fifth manned space mission, 10 years after the country's first astronaut, Yang Liwei, went into space in 2003. President Xi Jinping arrived at Jiuquan Satellite Launch Center on Tuesday to observe the launch. At a sending-off ceremony just hours before the launch, the president, who had just returned from visiting the United States, wished the three astronauts a successful journey. "The mission's members carry the nation's space dream and represent the lofty aspirations of the Chinese people to explore space," Xi told the astronauts. "I wish you success and look forward to your triumphant return." The carrier rocket blasted off at 5:38 pm. About 20 minutes later, Shenzhou X entered its orbit. Zhang Youxia, chief commander of the manned space program, announced the lift-off was a success. Xi responded by shaking hands with mission control personnel and congratulating them. At Beijing Aerospace Control Center, Premier Li Keqiang watched a live broadcast of the launch and congratulated scientists. The mission is the first application-oriented flight of the Shenzhou spacecraft, meaning the program has moved beyond the test phase. "The past nine Shenzhou flights all served the purpose of making technical breakthroughs. The tests have been done. Now, as a product, the spacecraft is put into application," said Zhou Jianping, chief designer of the manned space program. This signals that China's Earth-to-space transport system — comprised of Shenzhou spacecraft and the Long March-2F carrier rocket — has become one of the world's two operational systems ferrying astronauts and supplies between Earth and in-orbit vehicles, Zhou said. The other is Russia's Soyuz spacecraft. Zhang Bainan, chief designer of Shenzhou, said the Shenzhou X mission and following flights will improve the spacecraft's reliability and safety. It is planned that the country will launch a space lab after three spacecraft have completed docking experiments with Tiangong 1, which was launched in 2011. Space rendezvous and docking technologies are crucial for assembling a space station in orbit. Zhou said in March that a space lab will be launched within two years. Also, a freighter will be launched to conduct a fueling experiment that is vital for the building of a space station.

Hong Kong*:  June 13 2013

Entry restrictions lifted on border villages in Hong Kong (By Lo Wei wei.lo@scmp.com) Special permits no longer needed to visit six communities nestled inside former 'bulwark' - A hiker admires the view and greenery at Lok Ma Chau, part of the restricted zone the government is now opening up. Entry restrictions on six villages near the border were lifted yesterday as the government moves ahead with its policy to open an area once sealed as a bulwark against the mainland. But villagers are hoping the area doesn't change too much, aside from gaining better infrastructure, and that it remains tranquil. Accessibility remains limited due to the lack of public transport for some villages, which residents said showed poor planning on the government's part. "The government should have had facilities prepared earlier when they first planned to open up the area," said Fung Hing-chau, 61, village chief of Liu Pok, one of the six villages. "We have been fighting for it in the past few years." The other villages in the area are Tak Yuet Lau, Lutheran New Village, Ma Tso Lung, Lok Ma Chau and Ha Wan. Many residents have already moved out or gone overseas. Many of the area's 700 or so inhabitants are either retirees, elderly or émigrés who have returned home. More than 710 hectares of land between the Lok Ma Chau Control Point and Ng Tung River were opened up in this second stage of reducing the closed area. It is mainly uncultivated fields and fish ponds. Fung, a 22nd generation resident, hopes to convert the fields into organic farms, but without basic transport facilities, he can't take his planning very far. He has been discussing with the government the possibility of extending the minibus route from Sheung Shui past its neighbouring Ma Tso Lung village to his own village. The bus runs five times a day. Currently, villagers who do not drive must walk 10 to 30 minutes to the Lo Wu MTR station. Wong Woon-chuen, 52, the village chief for Ma Tso Lung south, said pavements and a cycling trail could be built by a creek in the village, which could become an attractive sitting-out spot for day-trippers. Lam Kam-fok, 66, who owns the sole store in Lutheran New Village, is taking a wait-and-see approach to any tourist boom. The store has a single old refrigerator stocked with a few dozen cans of soft drinks and he has no plans to expand. He showed off a magazine which featured his nephew, who plays in the German Bundesliga. His family moved to Germany more than 40 years ago and he came back with his wife in 2001. The restricted zone was established in 1951 amid political tension when many mainlanders fled to Hong Kong. In 2008, the government announced the plan to reduce the restricted zone from about 2,800 hectares to about 400 hectares in three stages. Remnants of the area's past role are still clearly visible. Hikers yesterday were seen visiting one of the MacIntosh Forts, a grade two historic building which was once an observation post. Alan Leung Sze-lun, terrestrial conservation manager for WWF (Hong Kong), said parts of the fish pond were ecologically valuable and might deserve protection.

PCCW gets tuned in to free-to-air TV tug of war (By Amy Nip amy.nip@scmp.com) Broadcaster insists it's the strongest of three stations seeking new licences and says they should be granted to all, not just the 'winners' - The publicity battle between three television stations hoping to start broadcasting on free-to-air channels is heating up amid talk that the government may grant new licences only to "winning" bidders. One of the applicants, PCCW, broke its silence on the matter yesterday - insisting it was the best of the three candidates. Hong Kong Television Network (HKTV) and i-Cable Communications have also applied for terrestrial television licences. PCCW also urged the government to give new licences to all three applicants, rather than "winners". "Market forces and ability should ultimately determine success in any competitive business environment. It's unnecessary and undesirable to pick winners and losers," Janice Lee Hoi-yee, managing director of television and new media with PCCW, said yesterday. PCCW is seen by some in the industry as the least qualified of the three. The comments came after reports that the Office of the Communications Authority (OFCA) had sent letters to the three applicants, asking them to submit further information. Lee would not say whether PCCW had received such a letter, saying any communication with the government was confidential. She added that the Broadcasting Authority, OFCA's predecessor, recommended granting licences to all three applicants. But she said PCCW was in a strong position for a licence. "PCCW's media business recorded HK$2.8 billion in revenue … in 2012. "It has overtaken the incumbent to become the largest pay-TV service in Hong Kong in terms of subscriber numbers, revenue and profitability," she said. PCCW's pay-TV service has the broadcasting rights for top sporting events such as the Premier League. But Lee would not say whether they would be shown on any free-to-air channel if PCCW secured a licence. In a bid to glean public support, PCCW has made three of its channels - Now Hong Kong, Now Prime Sports and Now News - available on the internet for free. Lee also backed a call from i-Cable Communications chief Stephen Ng Tin-hoi that any competition for new licences - and renewing the existing ones held by TVB and ATV - should be decided through a market-based approach, such as an auction. Ng has said the matter should be resolved by 2015, when the ATV and TVB licences expire. HKTV has said the licences should be handed out as soon as possible. In a statement yesterday, HKTV asked that the renewal of TVB and ATV's licences be considered separately from the new applications. And it agreed the new licences should be given to all three broadcasters.

Cathay Pacific cuts flights between Hong Kong and Paris over Europe strikes (By Ernest Kao ernest.kao@scmp.com) Charles De Gaulle Airport in Paris. Cathay Pacific has cut half of its scheduled flights to and from Paris in the next three days because of planned industrial action by air traffic control officers in the French capital. The airline on Monday advised passengers booked for flight CX278 from Paris to Hong Kong to make “alternative arrangements” through the “Manage My Booking” system on the airline’s website. Flight CX261 from Hong Kong International Airport to Paris Charles de Gaulle will also be cancelled, the airline said. “Customers who are booked on our flights to and from Paris in the next few days are encouraged to postpone any non-essential travel to later dates,” the airline said in a travel advisory posted onto its website. The airline said it would waive re-booking and re-routing charges for all tickets issued worldwide that have been confirmed from Tuesday to Thursday. Only flights CX279 (Hong Kong-Paris) and CX260 (Paris-Hong Kong) will continue to operate within the period. “There has been no impact on our daily airport operations at this time,” the Hong Kong Airport Authority said on Monday. French air traffic controllers are planning a three-day strike in protest against the Single European Sky (SES) project, an initiative that would essentially create a pan-European airspace. Similar strikes in other European countries are also expected. In April, the European Transport Workers' Federation (ETF), which backs the strike, slammed the project as a "never-ending process of liberalisation, deregulation and cost cutting" in the air traffic management industry.

 China*:  June 13 2013

Small cities play growing role in film market (By Huang Ying) Moviegoers line up to purchase tickets at a theater in Wuhan, Hubei province. China accounted for 8 percent of the global film market with annual box-office receipts of $2.7 billion last year, according to figures from the Motion Picture Association of America. 1,000 digital movie theaters with 3,000 screens in county-level sites - Movie ticket sales have gone crazy in the city of Panjin. Compared with two years ago, in one of the fourth-tier city's "cineplexes" there are now nearly as many tickets being sold in a month as there were in a whole year. Annual box-office revenues in the city — in the southwest of Northeast China's Liaoning province — surged to 25.6 million yuan ($4.17 million) in 2012 from 2.65 million yuan the year earlier, a year-on-year growth of 867 percent, according to statistics from EntGroup Consulting, a Beijing-based entertainment industry consultancy. In April alone, the city's CJ CGV cineplex, owned by a South Korean theater operator, sold two million yuan's worth of tickets to 50,000 customers, said Guo Jinsheng, the manager of the theater, which opened in January. "And that performance is growing month-on-month," added Guo. Panjin is now one of the fastest-growing third- and fourth-tier cities in terms of box-office receipts, and others cities enjoying similar growth include Langfang in Hebei province, and Yueyang in Hunan province. Ticket sales are also gaining momentum in small cities in a country that is now the world's second-largest film market. After the United States, China accounted for 8 percent of the global film market with annual box-office receipts of $2.7 billion last year, according to figures released in March by the Motion Picture Association of America. By May 12, China's total box-office revenues for the year exceeded 8.1 billion yuan, up 39 percent year-on-year, according to official statistics from the film bureau under a new administration formed in March, which falls under the auspices of the State Administration of Radio, Film and Television, and the State Press and Publication Administration. Domestic movies accounted for 63 percent of that, against 34 percent during the same period last year. Small and medium-sized cities were the major driving forces of the domestic movie industry, and represent a massive potential growth market, said Mao Yu, deputy director of the film bureau, in an interview with People's Daily newspaper. "Our customers in third- and fourth-tier cities tend to prefer domestic films to imported ones," added Yi Libin, marketing director at CJ CGV China. 

Shenzhou-10 spacecraft blasts off - China's Shenzhou-10 spacecraft, on a Long March-2F carrier rocket, blasted off from the Jiuquan Satellite Launch Center in northwest China on Tuesday afternoon. China successfully launched its fifth manned spacecraft late Tuesday afternoon, sending three astronauts on the country's longest space trip. With 10 astronauts and six spacecraft launched into space in a decade, China is speeding up on the path of exploration and building a home for Chinese in the galaxy. At a see-off ceremony held hours before the launch, Chinese President Xi Jinping extended good wishes to the three astronauts. "The mission's crew members carry a space dream of the Chinese nation, and represent the lofty aspirations of the Chinese people to explore space," said Xi. The President later watched the launch at the Jiuquan Satellite Launch Center in northwest China, and shook hands with staff at the center after the successful launch. Unlike the space trip of Yang Liwei, China's first astronaut who boarded the Shenzhou-5 spacecraft in 2003, of less than a day, the three astronauts will stay for half a month. In its journey, Shenzhou-10 will dock with the orbiting space lab Tiangong-1 twice, once through automatic operation and the other manual, and a lecture will for the first time be given on board the assembled orbiter to a group of teenage students on the ground. Compared with the previous nine Shenzhou spacecraft, the Shenzhou-10 is no longer experimental but considered an applicable shuttle system for transporting astronauts and supplies to orbiting modules. "It is like developing a new type of car. You have to try it on roads of different conditions. Now trials are over and the car can be put into formal operation," said Zhou Jianping, chief engineer of China's manned space program. On the other hand, the upgraded Long March-2F carrier rocket is technically the same as the one used with the Shenzhou-9 manned spacecraft. "No alteration means that China's rocket technology is becoming mature," said Jing Muchun, chief designer of the carrier rocket. This mission aims to further test technologies designed for docking and supporting astronauts' stay in space, as well as to use new technologies related to the construction of a space station, said Wu Ping, China's manned space program spokeswoman, at a press conference on Monday. The Tiangong-1 space lab has been in orbit for about 620 days, and about three months are left before the designated end of its service. The module is considered the first step toward China operating a permanent space station around 2020 and making it the world's third country to do so. The nation is likely to launch a space station before 2016. There are risks that the conditions of some components on Tiangong-1 might not be at their best since the module is near the end of its service and has gone through four docking tests, Wu said. For Nie Haisheng, commander of the three-member crew and a second-time space traveler, this mission will be longer, with more experiments to be conducted, than his previous outing in 2006. "It will be a new challenge with greater risks," Nie told the media on Monday. However, he is looking forward to entering the space lab module. "My colleagues and I will work in a home for Chinese in space," he said. For this mission, the manned space program also considered approaching the public. In a lecture through a live video feed system, female astronaut Wang Yaping will introduce motion in a microgravity environment, surface tension of liquid, and help students understand weight, mass and Newton's Laws. Wang will also interact with students and teachers on Earth and the lecture will be broadcast live. Ordinary Chinese, especially science enthusiasts, are excited about the new mission. "It is a festival for space fans," said Zhao Yang, a researcher with the China Science and Technology Museum, who just watched the Hollywood sci-fi blockbuster Star Trek Into Darkness on Monday. He was very much interested in the lecture to be given in space, saying, "There might be an interesting introduction about the weightless condition." For renowned science fiction novelist Liu Xinci, Tuesday's events reinforced his belief that he will live to see space travel become accessible for all common people. He has a very vivid vision of future life. "In the next century, human beings will set foot on all planets in the solar system. People will inhabit the moon and Mars. A lot of people will work in space as space journeys will be as easy as flights."

Hong Kong*:  June 12 2013

Hong Kong's CY Leung meets Bloomberg in New York, but no mention of Snowden case (By Gary Cheung in New York) Hong Kong Chief Executive Leung Chun-ying rings the closing bell at the New York Stock Exchange. Hong Kong Chief Executive Leung Chun-ying and New York Mayor Michael Bloomberg met in New York to talk about the challenges facing both their cities, but made no mention of NSA whistle-blower Edward Snowden, who has fled the US to Hong Kong. The 40-minute appointment was hastily arranged and took place in the late afternoon on Monday in New York time. It was originally scheduled for the morning, but it was understood that Bloomberg’s office had suggested the meeting be moved because the Snowden case had attracted massive media attention. But later that day a senior Hong Kong official said: “Bloomberg told the chief executive he decided to reschedule the meeting on Sunday night because of an urgent assignment. We respect the reason the mayor gave.” The official said Bloomberg visited Omni Berkshire Place in Midtown Manhattan where Leung is staying. The senior Hong Kong official said the controversy over Snowden was not mentioned during the meeting. Leung and Bloomberg exchanged views on the challenges facing New York and Hong Kong, including issues on transport, infrastructure development and environmental protection. The meeting was held shortly after Leung presided over the bell closing ceremony at the New York Stock Exchange. Snowden, 29, who is behind possibly the biggest intelligence leak in US history, came out of hiding in Hong Kong – a city he said he chose because of its “spirit commitment to free speech and the right of political dissent”. But the revelation could cause a diplomatic headache for the Beijing and Hong Kong governments. The former CIA technical assistant and an employee of defence contractor Booz Allen Hamilton, Snowden claimed he single-handedly exposed the Prism programme, under which the US government secretly collected information online from private user accounts operated by Facebook, Google, Apple and other internet giants. 

Chow Tai Fook guarantees HK$707m hotel dividend (By Eric Ng eric.mpng@scmp.com) Owners promise minimum first-year payment for shareholders in New World spin-off - Chow Tai Fook guarantees HK$707m hotel dividend. New World Development and its controlling shareholder, Chow Tai Fook Enterprises, have agreed to guarantee a minimum HK$707 million first-year payout from the proposed spin-off of the group's hotel subsidiary. The guaranteed dividend distribution to unit-holders of the proposed NW Hotel Investments Group is for the period between the listing of the investment trust and June 30 next year, New World said in an announcement to the Hong Kong stock exchange. If the actual distributable income of the trust is less than the guaranteed amount, New World and Chow Tai Fook, both controlled by Cheng Yu-tung and his family, will pay the difference to the unit-holders. "The purpose of the distribution guarantee is to assist in smoothing out any possible volatility in the distributions made by the trustee-manager [on behalf of NW Hotel Investments] … thereby providing [unit-holders] with certainty as to the expected income and yield from their holdings," New World said. New World submitted a listing application last month to the stock exchange to spin off its three hotels in Hong Kong - Grand Hyatt Hong Kong and Renaissance Harbour View Hotel in Wan Chai, and Hyatt Regency Hong Kong in Tsim Sha Tsui. The three have a total of 1,787 rooms. In addition, NW Hotel plans to invest in internationally branded hotels in Hong Kong. New World's announcement said it would offer to transfer to NW Hotel its contractual entitlement to the operating results of Hyatt Regency Hong Kong in Sha Tin, if the Chinese University of Hong Kong gave its consent. New World and Chow Tai Fook also plan to sell to the trust their interests in any completed hotel or hotel under development in Asia managed under an internationally recognised brand in which they have an at least a 30 per cent stake. They will also pass on to the trust any opportunity offered to them to invest in such hotels. Both have also agreed to guarantee that Grand Hyatt will pay at least HK$60 million to the trust's manager for the benefit of unit-holders in each of the two years to June 2016, and HK$30 million in the year to June 2017. Grand Hyatt's renovation, lasting until 2016, is expected to affect its operation. The trust will pay out all of its distributable profit in the first year of operation and not less than 90 per cent in later years.

Speculation rife in Hong Kong over Edward Snowden's fate (By Christy Choi and Patrick Boehler) As Hong Kong authorities remain silent on the whereabouts and potential fate of US whistle-blower Edward Snowden, legal and political experts are weighing in on what could happen and the choices available to 29-year-old former intelligence contractor. If Snowden wanted to stay in Hong Kong, his best chance would be to apply for refugee status, under the claim that he could be subjected to torture or cruel, inhuman or degrading treatment (CIDTP) or punishment if extradited back to the United States, said Patricia Ho, a solicitor with local human rights law firm Daly and Associates - "With the reports about the treatment of Bradley Manning, there's an arguable case for him facing CIDTP," said Ho in a phone interview with the South China Morning Post on Monday. Manning, whose trial started last week, has been held in solitary confinement, made to strip naked at night, and checked every five minutes, causing the UN special rapporteur on torture Juan Mendez to formally accuse the US government in 2012 of violating his human rights. "The recent judgment in the Court of Final Appeals with Ubamaka, clearly ruled that anyone facing CIDTP cannot be removed from Hong Kong," said Ho. Hong Kong does not grant asylum itself, but allows those seeking it to stay indefinitely until they are able to find a country willing to host them. Ho said if it's a simple application for protection as a refugee, the matter would not end up in the city's courts, and be dealt as an administrative issue, but that it would likely end up in the courts if the United States files an extradition order. She said if the US government could make diplomatic assurances that Snowden would not face degrading treatment or torture if sent back, they could have Snowden sent back home, but whether or not they would be believed after their treatment of Manning, was another question. Cosmo Beatson, founder of Vision First, an organisation that helps refugees in Hong Kong, said he didn't think claiming refugee status is a viable option for Snowden. "He'll have to surrender his passport, and he'd have to stay in Hong Kong until his claim is settled. I don't see him wanting to give that up if he's being chased," said Beatson. He added that since 1992, only four out of 12,500 such claims have been approved. In Hong Kong, a request for asylum would also trump any US extradition requests, said Nicholas Bequelin, a Hong Kong-based senior researcher with Human Rights Watch. Yet, the US has yet to charge Snowden for leaking the information he claims to have provided to the Washington Post and The Guardian, but the US Justice Department has confirmed a criminal investigation into the leaks. Hong Kong and the US have signed an extradition treaty, under which the city is obliged to send Snowden back, barring these humanitarian considerations or policy objections by Beijing. "It is not so much up to the Hong Kong government to do much, after all the Chinese authorities probably have a say in this," said Joseph Cheng Yu-shek, a professor of political science at City University, referring to a clause in Hong Kong's extradition treaty with the US, which gives Beijing a veto in extraditions. "If one wants the Hong Kong government to do something, there must be sufficient voice from the civil society," he said. "Mr Snowden has to articulate his position first. Does he want to stay in Hong Kong, what does he propose to do in Hong Kong?" "Why not give him asylum?" said a senior European diplomat, speaking on condition of anonymity. "A human rights case in which the Chinese grant asylum to an American - what a master stroke for Beijing."

Treaty gives Hong Kong option to reject Snowden extradition to the US (SCMP) Hong Kong could refuse to extradite US whistleblower Edward Snowden if Beijng wanted to keep him, according to a treaty signed between the United States and Hong Kong almost two decades ago. Hong Kong has the "right of refusal when surrender implicates the 'defense, foreign affairs or essential public interest or policy'" of the People's Republic of China, according to the US-Hong Kong Extradition Treaty signed in 1997. Snowden chose to seek refuge in Hong Kong because of the city's "strong tradition of free speech", he said in an interview with the Guardian published earlier today. He also said that he was concerned about being handed to mainland Chinese or US authorities. The US justice deparment has initiated an investigation into his leaking of a secret US data gathering programme, that has collected records of trillions of online messages and phone calls over several years. US members of congress have already called for his extradition to the US to stand trial. China does not have an extradition treaty with the United States. According to notes on the treaty submitted to the US Senate, the Hong Kong negotiators had insisted on including clauses making it easily possible to deny extradition to the US, arguing that such a clause was essential in obtaining mainland Chinese approval for the treaty. As such, article 3 of the treaty allows the Chinese government to refuse surrendering a person if it thought the surrender "relates to (its) defense, foreign affairs or essential public interest or policy". Hong Kong can also refuse if the city or the mainalnd have begun proceedings for the prosecution of that person. Hong Kong can reject an application if the city felt that the request was "politically motivated" or that Snowden would be prosecuted for his political opinions. Extradition requests can be made either through the US Consulate Generale in Hong Kong or Interpol, according to the treaty. 

China plans $3.75b bonds in Hong Kong (China Daily) China's Ministry of Finance said Sunday that it plans to issue yuan-denominated treasury bonds in Hong Kong worth 23 billion yuan ($3.75 billion). Among the total, 13 billion yuan worth of bonds will be sold on June 26 and the rest will be issued in the second half of the year. In the first batch, 10 billion yuan worth of bonds will be sold to institutional investors via the bond-tendering platform of the Central Moneymarkets Unit (CMU), with the maturities ranging from three, five or seven years to 10, 15, or 30 years. Also, 3 billion yuan worth of bonds will be sold to foreign central banks and monetary authorities. In the batch issued in the second half of the year, 7 billion yuan worth of bonds will be offered to institutional investors while 3 billion yuan worth of bonds will be sold to Hong Kong residents.

Ex-CIA man says he exposed US spy scheme (Agencies) US National Security Agency whistleblower Edward Snowden, an analyst with a US defence contractor, is seen in this still image taken from a video during an interview with the Guardian in his hotel room in Hong Kong June 6, 2013. The 29-year-old contractor at the NSA revealed top secret U.S. surveillance programmes to alert the public of what is being done in their name, the Guardian newspaper reported on Sunday. An ex-CIA employee working as a contractor at the US National Security Agency said on Sunday he was the source who leaked details of a top secret US surveillance program, acting out of conscience to protect "basic liberties for people around the world." Holed up in a hotel room in Hong Kong, Edward Snowden, 29, said he had thought long and hard before publicizing details of an NSA program code-named PRISM, saying he had done so because he felt the United States was building an unaccountable and secret espionage machine that spied on every American. Snowden, a former technical assistant at the CIA, said he had been working at the super-secret NSA as an employee of contractor Booz Allen. He said he decided to leak information after becoming disenchanted with President Barack Obama, who he said had continued the policies of predecessor George W. Bush. "I don't want to live in a society that does these sort of things ... I do not want to live in a world where everything I do and say is recorded. That is not something I am willing to support or live under," he told the Guardian newspaper, which published a video interview with him on its website. Both the Guardian and the Washington Post said last week that US security services had monitored data about phone calls from Verizon and Internet data from large companies such as Google and Facebook. In naming Snowden on Sunday, the newspapers said he had sought to be identified. "The NSA has built an infrastructure that allows it to intercept almost everything," Snowden said in explaining his actions. "With this capability, the vast majority of human communications are automatically ingested without targeting. If I wanted to see your emails or your wife's phone, all I have to do is use intercepts. I can get your emails, passwords, phone records, credit cards," he said. WORKED AT NSA FOR FOUR YEARS The Guardian said Snowden had been working at the NSA for four years as a contractor for outside companies. Three weeks ago, he copied the secret documents at the NSA office in Hawaii and told his supervisor he needed "a couple of weeks" off for treatment for epilepsy, the paper said. On May 20 he flew to Hong Kong. The CIA and the White House declined to comment, while a spokesman for the Director of National Intelligence would not comment directly about Snowden himself but said the intelligence community was reviewing damage done by the recent leaks. "Any person who has a security clearance knows that he or she has an obligation to protect classified information and abide by the law," said the spokesman, Shawn Turner. The NSA has requested a criminal probe into the leaked information. On Sunday, the US Justice Department said it was in the initial stages of a criminal investigation following the leaks. Booz Allen, a US management and technology consultancy, said reports of the leaked information were "shocking and if accurate, this action represents a grave violation" of company policy. It said Snowden had been employed by the company for less than three months and that it would cooperate with any investigations. A spokesman for Dell Inc declined to comment on reports that Snowden had been employed at that company. In 2009, Dell acquired Perot Systems, a US government contractor that did work for US intelligence agencies. Snowden's decision to reveal his identity and whereabouts lifts the lid on one of the biggest security leaks in US history and escalates a story that has placed a bright light on Obama's extensive use of secret surveillance. The exposure of the secret programs has triggered widespread debate within the United States and abroad about the vast reach of the NSA, which has expanded its surveillance dramatically in since the September 11 attacks on Washington and New York in 2001. US officials say the agency operates within the law. Some members of Congress have indicated support for the NSA activities, while others pushed for tougher oversight and possible changes to the law authorizing the surveillance.

 China*:  June 12 2013

US whistle-blower Edward Snowden may put new Obama-Xi relations to the test (By Teddy Ng teddy.ng@scmp.com) US cyber expert Edward Snowden's decision to flee to Hong Kong may be an early test of the burgeoning relationship between Xi and Obama - US cyber surveillance whistle-blower Edward Snowden's escape to Hong Kong presents an early test of the personal relationship established by the Chinese and American presidents at their informal, two-day summit at the weekend. Officials from both sides attempted to spin the summit as one in which President Xi Jinping and US counterpart Barack Obama connected during the eight hours of talks they had and relaxed strolls around the California retreat where the summit was held. It is not known how deep a relationship they forged, with neither side commenting on the talks in that much detail, but both sides will seek to handle Snowden's case delicately to showcase their ability to resolve sensitive issues in a sophisticated manner. "The two nations will do anything at this moment to avoid another confrontation or a symbolically sensitive case like this one," said Jonathan Holslag, the head of research at the Brussels Institute of Contemporary China Studies. "Beijing's main interest is to avoid letting this issue [Snowden's case] be perceived as a divisive event between the US and China." Professor Jia Qingguo , a Peking University international relations specialist, said that with both sides focused on forging rapport and understanding, they would not let the case jeopardise the atmosphere created by the presidents' close personal connection at the summit - which seemed to be one of the few major impacts of the talks - and would handle the latest incident just as they had resolved previous embarrassing cases. Ties between the two nations became more awkward in February last year when former Chongqing police chief Wang Lijun went to the US consulate in Chengdu , reportedly seeking asylum and holding material implicating his former boss, disgraced Chongqing party chief Bo Xilai , in various offences. Wang eventually left the consulate voluntarily and was handed over to state security officials. He was later jailed for 15 years on charges including bribery and attempted defection. Less than two months after Wang's defection bid, the two nations were embroiled in another crisis that threatened to derail a high-level bilateral strategic and economic dialogue when blind Shandong activist Chen Guangcheng fled house arrest and went to the US embassy in Beijing. The two nations first struck a deal that would have seen Chen remain in China to pursue legal studies. But the embarrassment and tensions rose further when Chen said he had been intimidated into accepting the deal and wanted to go to the US. The high-level dialogue proceeded as planned and Chen was put on a plane to the US a month later. Clayton Dube, executive director of the University of Southern California's US-China Institute, said the Snowden case could put Washington, Beijing and Hong Kong in awkward positions - depending on the demands the US made on China. But both nations also had the option of using the case to show co-operation on cybersecurity, he said. "It might mean that the Hong Kong authorities, with the support of the Chinese government, will facilitate American access to this individual," he said. "It is unlikely that any single incident is going to have a profound impact on the relationship." In an effort to showcase their interpersonal connection, Xi and Obama chatted about sport and how they reduced stress in addition to serious talks. But some observers in China and the US said the encounters were superficial, and the two leaders had merely formed a working relationship, instead of becoming friends. "I am sure that the two felt more at ease than when Hu Jintao was president, because Hu's robotic personality precluded any feeling of relaxation," said Professor June Teufel Dreyer, a political scientist at the University of Miami. "Moreover, I strongly doubt that any level of 'personal chemistry' Xi and Obama felt would diminish their desire to make the best interests of their respective countries their first, and only, priority." University of California China watcher Jeffrey Wasserstrom said images from the summit held out hope that the leaders had forged a special relationship. "But we will need to wait for future meetings, I think, to know how much of that is spin and how much of it is more than that," he said. Professor Pang Zhongying , an international relations specialist at Renmin University, said the personal ties could lead to more bilateral exchanges, such as military exchanges, but the impact of such "informal gatherings" should not be overestimated. The informal setting had not obscured the formality of arrangements, Pang said, with the two leaders sitting in identical chairs with their national flags behind them, while no deliverable outcomes should be expected from an informal summit.

Lowering CPI means weaker economy (Agencies) China's annual consumer inflation slowed in May, according to the latest data released on Sunday, suggesting that the world's second-largest economy could be weaker than expected. The National Bureau of Statistics said China's consumer inflation surged 2.1 percent, 0.3 percentage points lower than one month ago or the lowest in three months, while producer prices fell 2.9 percent from a year earlier, the lowest since September. Grain prices soared 5.1 percent, meat and relevant product prices went up 1.6 percent and vegetable prices were down 1.9 percent. Compared with last month, consumer prices fell 0.6 percent in May. Of them, vegetable prices went down 13.8 percent. The bureau said more than 80 percent of the monthly decline in the CPI was accounted for by a drop in vegetable prices when supplies climbed due to warm weather. Vegetable prices fell 13.8 percent in May from April, dragging down the month-on-month headline CPI by 0.5 percentage points. Chief China economist at HSBC Qu Hongbin said overall inflation continues to weaken and it is unlikely that the monetary authority would further implement expansionary monetary policies. China's new yuan-denominated lending fell to 667.4 billion yuan ($107.6 billion) in May, down from 792.9 billion yuan in April and 1.06 trillion yuan in March, according to data released by the central bank on Sunday. The figure was 125.8 billion yuan less than the same period last year, the People's Bank of China said in a statement on its website. The country's social financing, a measure of funds raised by entities in the real economy, amounted to 1.19 trillion yuan last month, shrinking 576.3 billion yuan compared with April. The broad M2 money supply rose 15.8 percent in May from a year earlier, to 104 trillion yuan, up 0.3 percentage points month-on-month. "The inflation data showed China's economic growth continued to slow down. Q2 growth is probably even slower than Q1. In particular, the PPI data showed very weak demand," said Jianguang Shen, chief China economist at Mizuho Securities Asia in Hong Kong. The subdued inflation will enable China to keep an easy monetary stance and some see the possibility that the People's Bank of China could cut rates later this year to reduce financing costs for struggling Chinese firms, provided that housing inflation does not flare up, Reuters reported. "China has rising room and the possibility to cut interest rates in the second half of this year," Shen added. "The financing cost for companies is very high now and the central bank should further pursue interest rate liberalization. China's fiscal policy in the second half needs to protect consumption growth and support investment."

China to launch spacecraft on June 11 (Xinhua) The Shenzhou-10 manned spacecraft will be launched at 5:38 p.m. Tuesday, said China's manned space program spokeswoman on Monday. The spacecraft will take three astronauts, two male and one female, into the space, said Wu Ping, the program's spokeswoman, at a press conference at the Jiuquan Satellite Launch Center. They are Nie Haisheng, Zhang Xiaoguang and Wang Yaping who is female, Wu said. Wang, from a farmer's family in east China, is the second female astronaut in China's manned space mission and the first one born in the 1980s. The spacecraft will travel in the space for 15 days and go through two docking tests with the orbiting space lab module Tiangong-1, one automatic and the other manual, Wu said. Besides medical and technical tests, astronauts will give a lecture to a group of students on the ground inside the Tiangong-1, introducing the weightless condition, Wu said. The Tiangong-1 space lab has been in a stable condition and ready for docking tests and receiving astronauts, she said. "The launch ground and all control systems are ready. Astronauts are in good and stable condition," she said. The upgraded Long March-2F carrier rocket has been fueled since Monday afternoon, Wu said. This mission aims to further test technologies of docking and supporting astronauts' stay in space and try new technologies related to the construction of space station, she said. Food for astronauts, as well as waste processing facilities, will be improved, she said.

Hong Kong*:  June 11 2013

German convert to Chinese medicine joins fight for traditional healing hospital (By Lana Lam lana.lam@scmp.com) Former patient won over by success of treatment for pain asks why Germany has five Chinese medicine hospitals but Hong Kong has none - Marcus Gadau's treatment for back pain as a teenager prompted him to study Chinese healing in Beijing for five years. A decade ago, Marcus Gadau was bedridden with chronic back pain due to a hole in his lung. The 16-year-old could never have imagined his agony would see him leave his home in Germany to study a degree in traditional Chinese medicine for five years in Beijing, become fluent in Putonghua and start a doctorate at Baptist University's Chinese medicine department. Now Gadau has joined the chorus of support for building a Chinese medicine hospital in Hong Kong. "Germany has more than five Chinese medicine hospitals and Hong Kong doesn't have a single one, which seems very odd," he said. Gadau, 26, is planning to open another Chinese medicine hospital in Germany specialising in the treatment of chronic pain. Gadau said it was his experience of traditional Chinese medicine in Germany that had shaped his life. "I was pretty sick between the ages of 16 and 18," he said. "I had chronic lower back pain to the point I couldn't leave my bed. I was so fatigued and always freezing. Nothing helped except acupuncture." After high school, he deferred an offer to study medicine at a prestigious university in Germany to spend a year travelling. He spent four months teaching English in Zhongshan , Guangdong, and then won a scholarship to study at the Beijing University of Chinese Medicine. "I thought to myself that I can always go back to Germany and do the standard thing, but I will try it out for a year," Gadau said. He ended up finishing a five-year combined degree in Chinese and Western medicine in Beijing. Last August, he moved to Hong Kong and started his PhD, researching evidence-based Chinese medicine. "We combine the wisdom of Chinese medicine, which says, for example, that something may be caused by cold or heat, and try to prove that with modern technology, such as a thermo scan." His aim is to change people's misconception that Chinese medicine is based on intangible elements, such as energy flows. "Unfortunately it has this esoteric image in the West, but if you look at Chinese medicine in classic texts, it is a physiological medicine that is not about an energy concept." Gadau said that misunderstanding came about from early translations of Chinese medicine texts which equated qi to energy, whereas the correct definition is blood and oxygen. Baptist University is fighting to build a 1,700-bed hospital offering traditional treatments, but the government wants to use the Kowloon Tong site near the university for housing. "The government said not now and not on that site, but you've got all these students here already," Gadau said. "If you build it further away, you would have to constantly commute between the two." The Town Planning Board is consulting on the proposal, and submissions close on Tuesday.

Police unions slam 'insult of a pay rise' (By Niall Fraser and Joshua But) Four unions representing all ranks write a joint letter to chief executive condemning proposed wage increases they say neglect staff morale - Police of all ranks have told Chief Executive Leung Chun-ying that they feel "insulted, disheartened and betrayed" by a salary rise offer that led them to reject the government's pay adjustment mechanism. In a strongly worded letter to Leung dated June 6 - two days after Secretary for the Civil Service Paul Tang Kwok-wai announced a wage increase of less than 4 per cent for the city's 170,000 civil servants - staff unions representing most of the 30,000 police officers said they were struggling to contain negative sentiment among the rank and file. The Chief Executive's Office last night confirmed receipt of the letter. The letter, seen by the Sunday Morning Post, was signed by the chairmen of all four police unions - the Junior Police Officers' Association, the Police Inspectors' Association, the Overseas Inspectors' Association and the Superintendents' Association. All but the Superintendents' Association on Friday said they would no longer take part in the Pay Trend Survey Committee, as they demanded an independent mechanism to handle police pay. The unions said they would be "in a most difficult position" if the government's decision was not built on consensus and did not take into account staff sentiment. "A significant number of staff feel insulted by the pay increase offers of 3.92 per cent for middle and lower [salary] bands and 2.55 per cent for the upper band," the letter read. "Those frontline supervisors … see any adjustment below inflation as a slap in the face." It said officers "felt disheartened and betrayed" when Tang stressed the survey results were the "prime factor" in civil service pay adjustments. The unions are demanding a universal pay rise of 5.01 per cent including annual pay increments. The Executive Council is expected to make a final decision by Tuesday. Besides inflation, the mechanism takes five other factors into account, including civil service morale and the demands of staff representatives. But staff sentiment was not taken into account, said Benjamin Tsang Chiu-fo, chairman of the inspectors' association, adding that many of his colleagues were disappointed. "The new consensus-building approach in listening to staff views seems to be no more than a hollow promise," the letter continued. "There [is] less confidence in the process of pay adjustments and the leadership of Tang." Tsang said they would not take industrial action. "Our doors are always open but the officials are always speaking in a bureaucratic tone. There has been no consensus in the decision and we just cannot swallow allegations saying we are sore losers." Tang said it would be difficult to fulfil the demand to establish an independent pay adjustment mechanism for the police. A police spokeswoman said management would support its staff to communicate with the government via existing channels to strive for a fair and reasonable pay adjustment.

 China*:  June 11 2013

China and US vow to build a new model for ties at summit in California (By Teddy Ng teddy.ng@scmp.com) At US summit, Chinese president says both sides need a new path that is different from the confrontation and conflict of the past - US President Barack Obama presents Chinese President Xi Jinping with a bench made of California redwood, as they take a joint walk before heading into their second meeting. President Xi Jinping and his US counterpart, Barack Obama, vowed to build a "new model of major country relationships" as they opened two days of talks on a range of issues. Hosting Xi at the Sunnylands Estate in southern California, Obama said the US welcomed the "peaceful rise of China as a world power". But he pressed Beijing on its human rights and cybersecurity, and urged it to play by common economic rules. Xi invited his host to visit China. The two had not been scheduled to meet until the Group of 20 summit in September, but both nations sought an earlier meeting amid rising friction between them over issues including China's alleged hacking of US computer networks and America's military pivot to the Asia-Pacific. In remarks delivered in their first round of talks and at a news conference afterwards, Xi said the Sino-US relationship had reached a "new historical starting point" that required both sides to draw a new path that was "different from the inevitable confrontation and conflict between major powers in the past". He said both nations needed to "think creatively and act energetically" to examine three major aspects of bilateral ties - the nature of the Sino-US relationship both nations want, how the two can co-operate for mutual benefit, and how they can join together to promote world peace and development. "I'm confident in our joint efforts to build a new model of major country relationships. I believe success hinges on the human effort," he said. Obama said tensions in some areas between the two nations were inevitable, but said each needed to understand the other's objectives. He said the decision to meet earlier than scheduled showed the importance of ties between the two nations. "I'm very much looking forward to this being a strong foundation for the kind of new model of co-operation that we can establish for years to come," he said, adding that the US wants to work with China as an equal partner to address global issues. Obama, facing pressure from US politicians and businessmen, said he discussed cybersecurity with Xi, but the two sides avoided a direct public confrontation on the issue. US National Security Advisor Tom Donilon said the talks were “uniquely informal,” “constructive,” “wide-ranging,” and “positive” for a vital great power relationship which is often prickly and requires constant maintenance. bama and Xi agreed to work together for the denuclearisation of the Korean peninsula, following nuclear and missile tests and wild warnings of atomic warfare from North Korea, Beijing’s troublesome nominal ally. They achieved “quite a bit of alignment” on the issue, Donilon said, and praised recent steps by Beijing to quietly rebuke inexperienced North Korean leader Kim Jong-Un. In a more tangible outcome from the talks at the Sunnylands retreat once patronised by Frank Sinatra and Richard Nixon, the White House said Obama and Xi agreed a joint effort to combat climate change, specifically the production of “super greenhouse gases.” “A global phase down of (hydroflourocarbons) could potentially reduce some 90 gigatonnes of CO2 equivalent by 2050, equal to roughly two years’ worth of current global greenhouse gas emissions,” a White House statement said. The gases are used in air conditioners and refrigerators and China - by far the largest producer of HFCs - had until recently resisted efforts by the United States and other nations to scale back emissions of the gases, arguing that alternatives in appliances were not fully ready. But it agreed in April to end HFC production by 2030 as part of a US$385 million assistance package by wealthy countries under the Montreal Protocol, which was set up to fight the depletion of the ozone layer. Xi said a special working group on the issue would be set up under the Sino-US strategic and economic dialogue. Both leaders skipped the usual formalities at the summit, with neither wearing a tie. The White House said celebrity chef Bobby Flay prepared a menu for the two leaders that included lobster tamales, Porterhouse steak and cherry pie. Observers said the initial talks suggested the leaders had made a decent start on fostering a personal relationship, but both sides still needed time to figure out their "new model" of relations. Pang Zhongying , an international relations professor at Renmin University, said: "The remarks by Obama are not something very new, and it may be that he makes the pledges because he needs to give face to Xi." Jin Canrong , a US affairs expert from the same university, said the "new model" was still a vague concept. "But the two leaders have established smooth communications, and this is useful for tackling thorny issues in the future," he said. http://www.youtube.com/watch?feature=player_embedded&v=qgnGOs5TNUo 

Former railways chief Liu Zhijun stands trial for graft (By Keith Zhai in Beijing) He faces charges of abuse of power, taking bribes and malpractice - Liu Zhijun attends a trial on Sunday for charges of corruption and abuse of power at a courthouse in Beijing. The man once responsible for overseeing China’s notorious railway ministry stood trial at a Beijing courthouse on Sunday seeking a lenient verdict for the charges of corruption and abuse of power. Liu Zhijun, 60, appeared haggard when court security officers, holding his arms, brought him into the courtroom at Beijing No 2 Intermediate People's Court at 8.30am, for a hearing that was aired on state-run television. The trial marks one of the mainland's biggest corruption scandals in recent years. The former railways minister, who has been detained since 2011, was accused of taking bribes and other gifts valued at 64.6 million yuan (HK$81.8 million) from 1986 to 2011. He was also charged for taking advantage of his position and helping 11 people get promotions or win contracts for high-speed rail projects. The court said Liu had “no objection” of the charges and that it would issue verdict at a later date. Based on mainland criminal law, Liu could face the death penalty or a life sentence if found guilty. He can appeal once the verdict is made but legal experts said the courts were unlikely to repeal the sentence, given the high profile of his case. The hearing was unusual as Qian Lieyang, Liu’s lawyer, said the prosecutors had proactively suggested a more lenient sentence to the former railways minister during the trial because Liu had confessed all his crimes during the detention and helped to recover most of the corrupted money. “The prosecutors asked the judges to give a leniency to Liu even before I asked for it,” said Qian, who told the South China Morning Post on Friday that he would be pleading for a “more lenient sentence”. Qian said Liu had admitted to the charges, but also argued that he did not think 49 million yuan of the amount stated in the prosecutor's charge constituted to bribery. Qian added that Liu had burst into tears in the courtroom while making his final statements, and told the judges he felt regret for what he had done. Qian also said Liu deserved credit for his involvement as the former railway minister in expanding the country's high-speed railways. Liu requested to remain standing during the three-and-a-half hour hearing because of an “illness”, Qian said, without giving details. Most of the Party officials who are accused of disciplinary violations are expected to receive minimal legal protection. Liu reportedly hired other lawyers but later replaced them with Qian, whom the government had recommended. Guo Peng, the court's spokesperson, said in a media briefing after the trial that Liu didn’t want to hire his own lawyer so the court had hired one for Liu with his approval. “Liu's malpractices have led to huge losses of public assets and of the interests of the state and people, and he should be subject to criminal liabilities for bribe taking and abuse of power,” said Guo. Liu is the most senior official to stand in such a trial since Chen Liangyu, the former party secretary of Shanghai, who was sentenced to 18 years in jail for similar charges in 2008. Experts interpreted Liu's trial as a signal from the country's new leadership, which has been determined to crack down on both "tigers" and "flies" - a metaphor used by president Xi Jinping that referred to high-level officials and junior officials respectively. “I’m fairly disappointed as it is a fake trial as usual,” said Pu Zhiqiang, a prominent Beijing-based human rights lawyer. “No doubt the court and the procuratorate had the endorsement of the party’s disciplinary authorities, and will announce the verdict based on the willingness of the leaders but not the law.” He also questioned why the hearing took just under half a day to process, despite the complexity of the case. “The new leadership has been calling to bring more authorities to court, but this whole trial showed that leaders haven't change their notion towards the rule of law,” Pu said. Liu was sacked in February 2011 and later expelled from the Chinese Communist Party. Only months after his disgrace, a high-speed train crash in Wenzhou, Zhejiang province killed 40 people and injured hundreds. The accident raised concerns over safety of the rapidly growing high-speed rail program. China has poured trillions of yuan to develop a national high-speed rail network. The first line opened only in 2008, but by the end of 2012, the country had built 9,300 km of track.

Hong Kong*:  June 10 2013

Business climate getting bad, says Peter Woo (By Peggy Sito peggy.sito@scmp.com) Wheelock chief cites tighter property rules, rising costs and political changes as problems - Wheelock and Co chairman Peter Woo (left) says he was given the opportunity when he was 36 years old and now, it is time for his son Douglas Woo (right). The business environment for companies in Hong Kong is deteriorating, says Wheelock and Co chairman Peter Woo Kwong-ching. His remarks came against a backdrop of tighter property regulations, rising operating costs and changing political conditions. In his discussions with friends and colleagues, Woo said he found "their general feelings are that the business environment is worse than before". Speaking after the general meeting of Wheelock, Woo said the outlook for the property market might take six to 18 months to see a clearer picture amid the uncertain land supply timetable and tighter regulations. The measures included a 15 per cent tax on non-local and corporate property buyers, the doubling of stamp duties on residential and non residential transactions, and new rules on sales of new flats. In the wake of the measures, Woo said industry players had been facing difficulties. "It is difficult to predict when the conditions will improve and it probably needs six to 18 months," he said. Woo also highlighted the problem of rising construction costs. "Construction cost was about HK$2,000 per square foot five or six years ago but rose to HK$3,500 by the end of last year," he said. He cited the company's acquisition of a site in Tseung Kwan O as an example. In January, Wheelock won the site for HK$1.86 billion, or HK$3,810 per square foot in terms of gross floor area. The construction cost now is comparable to land cost, according to Woo, hinting that rising labour cost is a factor. "We do not want to import foreign labour. Otherwise, it will spark off political issues," he said. Wheelock has two other sites in Tseung Kwan O, won in government tenders at HK$4,580 and HK$4,301 per square foot, respectively. Woo also said his son Douglas Woo Chun-kuen would start taking more responsibilities to ensure the group's transition. "I was given the opportunity by [the late shipping magnate] Pao Yue-kong 30 years ago when I was 36 years old. I think it is the right time to give [Douglas] the opportunity," he said. On June 2, Wheelock announced Douglas Woo would become a director and managing director from July 1. Douglas Woo, 35, is the managing director of Wheelock's wholly owned property arm, Wheelock Properties.

Luxury site attracts developers (By Yvonne Liu yvonne.liu@scmp.com) Residential plot in Ho Man Tin receives 13 bids while commercial land in Ma On Shan gets eight, pointing to preference for urban areas - Residential plot in Ho Man Tin (right) receives 13 bids while commercial land in Ma On Shan gets eight. Developers have shown keen interest in a luxury residential site in Ho Man Tin, with its tender attracting 13 bids. A commercial site in Ma On Shan, however, received just eight bids, said a spokesman for the Lands Department. Vincent Cheung Kiu-cho, a national director of greater China at consultant Cushman & Wakefield, said: "Developers mostly prefer residential sites in urban areas near MTR lines and infrastructure projects. They are less keen on commercial sites unless they are in prime areas." Cheung Kong, Sun Hung Kai Properties, Sino Land and Henderson Land Development submitted bids for both sites. Kerry Properties, Chinachem, K Wah International, New World Development, Wing Tai Properties, Wheelock Properties and Asia Standard International made bids for the Ho Man Tin site, while Wang On and a consortium of Paliburg and Regal Hotels International submitted bids for the Ma On Shan site. The 83,033 square foot Ho Man Tin site at the junction of Fat Kwong and Sheung Foo streets could fetch between HK$3.8 billion and HK$4.38 billion. It could yield a maximum gross floor area of about 387,741 sq ft. The Ma On Shan site, next to a housing estate, could provide a gross floor area of 164,366 sq ft. Worth between HK$600 million and HK$1.31 billion, it could house a hotel or a shopping mall. The government is trying to ease housing supply by increasing land availability. But the number of flats awaiting the Lands Department's approval for pre-sale at the end of last month was at its highest level since October 2002. According to Midland Realty, 14,975 flats are waiting for approval. Only one project in Yuen Long, with 236 flats, was cleared last month. Midland chief analyst Buggle Lau Ka-fai said the number of flats seeking pre-sale approval rose 38.5 per cent in the first five months of the year but those that were approved fell 41.1 per cent. "The government should speed up the processing. More new projects would then be able to come on the market," Lau said. A government spokesman said developers had to meet new requirements to win approval. Fewer projects have been launched because of the new rule on selling new homes. Lai Sun Development has told the Sales of First-hand Residential Properties Authority that Ocean One, its new project in Yau Tong, would not be relaunched for sale on Wednesday as there were errors in its brochure. It is the seventh new project that has to amend its sales brochure after the new law came into effect on April 29. Chinachem also suspended sales of the remaining five flats at Hong Kong Garden and would lease them out instead.

ESF considers corporate scheme for school places (By Linda Yeung and Jennifer Ngo) Faced with financial losses due to subsidy cuts, foundation may launch scheme where firms could reserve places for employees' children - ESF chairman Carlson Tong Ka-shing. The English Schools Foundation (ESF) may launch a corporate nomination rights scheme to make up for its financial losses as the government gradually cuts its subsidy. Companies would be able to pay to reserve school places for the children of employees. From 2016, the foundation's long-frozen HK$283 million annual subsidy, or subvention, will be phased out year by year, over 13 years, until 2028-29. In announcing the news yesterday, ESF chairman Carlson Tong Ka-shing said it had no choice but to accept the Education Bureau's decision. Chief executive Heather Du Quesnay said: "We did what we could and got the best arrangement we could for parents and students." She said a few companies had indicated interest in purchasing nomination rights to reserve school places, but no final decision had been made. The ESF introduced a similar scheme on a limited scale last year, allowing local and foreign parents to pay a non-refundable fee of HK$500,000 to reserve a place for their child, who would be given priority placement should they meet admission requirements. Reduced government support means fees at the ESF's 20 schools and kindergartens will rise by 23 per cent for new students from 2016. Current pupils and those about to enter its kindergartens will not be affected. With the increase, fees for primary pupils would exceed HK$84,000 a year compared with HK$70,000 for the coming year. But that will still be lower than a number of popular international schools, which now charge more than HK$110,000 a year. "Our secondary school fees are currently at average and will still be in the lower two-thirds [compared to other international schools]," said Tong, expressing confidence in ESF schools' competitiveness. A bureau spokesman said: "Continual provision of recurrent subvention to the ESF flies in the face of the government's policy of not providing recurrent subsidy to schools mainly running non-local curriculum." Others, however, strongly believe in the subsidy. Public policy consultant David Dodwell said: "By offering local families more choice, and by delivering consistently excellent results, ESF schools force schools teaching in Cantonese to do better." Janice Chu, whose daughter attends Sha Tin College, said: "The subvention represents a kind of support for a sound educational model that develops students' international outlook and self-confidence, besides English language skills." A single mother whose son is in Year 9 at West Island School said she felt sorry for future parents. "Not everyone is on expatriate deals or has corporate support. I have to find the fees."

 China*:  June 10 2013

Chinese, US presidents start talks (By Zhu Zhe in Annenberg Estate, California) US President Barack Obama meets Chinese President Xi Jinping at The Annenberg Retreat at Sunnylands in Rancho Mirage, California June 7, 2013. Chinese President Xi Jinping said his visit to the United States aims to chart out the blueprint for the development of the Sino-US relations and start cross-Pacific cooperation, while he started the meeting with his American counterpart Barack Obama at the Walter and Leonore Annenberg Estate at Sunnylands in California on Friday. At the start of the talk, Xi thanked Obama for the invitation and said the location of the meeting is quite close to the Pacific Ocean and China is just on the other side. Xi said that when he was visiting the US last year, he said the Pacific Ocean is broad enough for two powers of China and the US and today he sticks to the same belief. After a brief review of the China-US relations in the past 40 years, Xi said the bilateral relationship is at a historical starting point. China and the US have a lot of mutual interests from economic development of each country to the recovery and stability of global economy, from handling regional and international security issues to global challenges, so both countries should seek even more exchanges and cooperation. Xi said he believes the talks in California will achieve significant and positive results and inject more vitality into the bilateral relations. Obama said meeting Xi in a short period of just less than three months after Xi was elected as the top leader of the Chinese government shows the importance that the US attaches to developing the US-China relations. He said another aspect showing the importance is the arrangement of the meeting in which Xi and Obama will meet several times at the Annenberg Estate, known as the David Camp in the West. The leaders will be able to discuss a wide scope of issues and the development of bilateral relations in an informal and candid way. At the start of the meeting, Obama also said he believes such constructive and frank discussions will be very important to the US-China relations. He reiterated the US welcomes the peaceful rise of China to become a global power and the rise of a peaceful, stable and prosperous China is not only in the interest of China, but also in the interest of the US and the world. 

Chinese, US presidents meet for first summit (Xinhua) Chinese President Xi Jinping and his US counterpart, Barack Obama, met Friday in this picturesque estate in Rancho Mirage, California, to exchange views on major issues of common concern. US President Barack Obama (L) meets with Chinese President Xi Jinping (R) at The Annenberg Retreat at Sunnylands in Rancho Mirage, California June 7, 2013. Obama received Xi upon his arrival, and the two heads of state greeted each other. At the beginning of the meeting, Xi thanked Obama for the invitation, saying that he was glad to hold talks with the US president at Sunnylands. "Sunnylands is close to the Pacific Ocean, and China is just on the other side of the ocean," Xi said. Xi recalled his visit to the United States last year when he said that the vast Pacific Ocean has enough room to accommodate the development of the two large countries of China and the United States. "Today I meet here with President Obama to map out a blueprint for the development of China-US relations and conduct cooperation across the Pacific Ocean," the Chinese president said. More than four decades ago, Xi said, the then leaders of the two countries opened the door for China-US interactions with political courage and wisdom, making a "handshake across the Pacific Ocean." Since then, the Chinese president said, the China-US relations, despite ups and downs, have achieved historic progress and brought huge benefits to the two peoples. Noting that their relationship now stands at a new historic starting point, Xi said the two countries share important converging interests, from promoting each other's economic development and steady global economic recovery to addressing international and regional hot issues and global challenges. That requires, he added, the two nations to strengthen bilateral cooperation. Xi stressed that China and the United States, under new circumstances, should have an in-depth review of their ties. "What kind of a relationship do we need? What type of cooperation should China and the United States have to achieve win-win results? How can both countries work together to promote peace and development in the world? These questions are major concerns not only of the two countries and two peoples, but also of the whole international community," he said. The Chinese president called on the two sides to work together to build a new type of relations between major countries in an innovative and active way to serve the fundamental interests of the two peoples and to promote development and progress of human society. Xi said that he was looking forward to having extensive and in-depth exchanges with Obama on major strategic issues of common concern, so as to strengthen mutual understanding and promote comprehensive cooperation between the two countries. "I believe with joint efforts of both sides, the summit will achieve important and positive results, and inject new vigor into the future development of China-US relations," Xi said. Obama, for his part, welcomed Xi's visit and said the US-China relationship is important not only for the prosperity and security of the two countries, but also for the Asia Pacific region and the whole world. "Our decision to meet so early, I think, signifies the importance of the US-China relationship," the US president said. He said that the unusual setting in which the US side is hosting Xi also reflects the importance they attach to the bilateral relationship. The summit meeting provides an opportunity for both sides to have a more extended conversation, to share their visions for their respective countries and to discuss the construction of a new model of cooperation between countries based on mutual interest and mutual respect, he said. Obama said his country welcomes the continuing peaceful rise of China as a world power and in fact it is in the interest of the United States that China continues on the path of success. "We believe that a peaceful, stable and prosperous China is not only good for Chinese but also good for the world and for the United States," he said. Both the Chinese and the US people want a strong and cooperative relationship, Obama said, adding that he is willing to work together with Xi to meet the global challenges. "I'm very much looking forward to this (Xi's visit) being a strong foundation for the kind of new model of cooperation that we can establish for years to come," he said. Following the meeting, Xi and Obama had a working dinner. They will meet again on Saturday morning. The summit is the first face-to-face meeting between the presidents of China and the United States since the two countries completed their latest leadership transitions. Xi arrived in the US state of California on Thursday, after wrapping up a three-nation Latin America tour, which took him to Trinidad and Tobago, Costa Rica and Mexico.

Hong Kong*:  June 9 2013

Casino operator Macau Legend launches up to US$786m for HK IPO (By Reuters) Casino operator Macau Legend Development launched on Friday an up to US$786 million initial public offering in Hong Kong, according to a term sheet of the deal seen by journalists. The company and shareholders Lam Fong Ngo and Grand Bright are selling 2.05 billion shares in the offering, of which 86.2 per cent are new shares issued by Macau Legend, and the remainder existing stock from the two shareholders. The shares are being offered in an indicative range of HK$2.30-HK$2.98 each. About two-thirds of the proceeds of the offering will be used to build the Prague Harbor View Hotel and Palace Hotel, according to the term sheet, and the rest set aside for development of entertainment and shopping facilities, a yacht club and renovation of the Landmark Macau, among other things. CLSA and Citic Securities Company, were hired as joint global coordinators, with Credit Suisse Group AG also acting as a joint bookrunner.

'Alternative' ways sought to resolve case of Occupy Central volunteer Melody Chan (By Johnny Tam johnny.tam@scmp.com) The case of an Occupy Central volunteer arrested for her role in a demonstration two years ago was adjourned on Friday as alternative ways to resolve the controversial case were being sought by the defence. Melody Chan Yuk-fung, 26, who faces one charge of organising a public meeting against the Public Order Ordinance and one charge of taking part in an unauthorised assembly on July 1, 2011, appeared in Eastern Court on Friday morning to answer the charges. But Chan’s lawyer requested an adjournment of the case for three to four weeks as the defence and the prosecution were “discussing alternative methods” to resolve the case. The prosecution did not object to the request and said it would discuss the case with the Secretary for Justice. There was no discussion in court on Friday about whether the charges would be altered or dropped as a result of any discussions. Principal Magistrate Bina Chainrai adjourned the case until July 3 and allowed the extension of Chan’s HK$1,000 bail on the same conditions. Chan had been helping the Occupy Central movement with the organisation of its first “deliberation day” on Sunday, at which the civil disobedience movement plans to set its agenda. The group has a plan to rally at least 10,000 protesters to blockade Central district as part of its fight for genuine universal suffrage. The arrest of Chan, a trainee solicitor and former journalist, has been labelled by Occupy Central supporters as a tactic to suppress the movement’s pro-democracy protest activities. 

Jackie Chan leaves imprints in Hollywood - Jackie Chan on Thursday became the first person to twice leave the imprints of his hands and feet in cement at Hollywood's famed Chinese Theatre.

 China*:  June 9 2013

Participants discuss "China's Changing Economy" at forum - Participants take part in the discussion "China's Changing Economy" during the 2013 Fortune Global Forum in Chengdu, capital of southwest China's Sichuan Province.

China's economy might be No 1 in 2030 (By China Daily) China's economy will become twice as big as that of the United States and larger than both the US and the EU combined within just 17 years, according to one of China's leading economists. Hu Angang, dean of the Institute for Contemporary China Studies, one of China's leading think tanks, makes the prediction in his new book, China 2030. The book, already out in Chinese and to be published in English next month, is likely to attract major interest around the world. His forecast - which also sees China becoming the biggest economy by 2020 - is the boldest and most optimistic prediction yet about China's economic future. It also comes at a time when there are concerns about China's short-term prospects with GDP growth slower than expected in the first quarter at 7.7 percent, down from 7.9 percent in the final quarter of last year. China still has a hurdle to cross just to overtake the US, with China's $8.23 trillion nominal GDP being just over half (52 percent) of the US' $15.68 trillion in 2012, according to the International Monetary Fund. However, the likelihood of matching the US sooner rather than later has certainly increased since Goldman Sachs made its forecast in 2006 that China will be the biggest economy by 2025. That too was also considered optimistic at the time but the financial crisis has hit the US hard and might now even be considered a conservative estimate. Since then, China has emerged in pole position when it overtook Japan to become the world's second-largest economy in February 2011. Hu, who is a professor of economics at China's elite Tsinghua University and the author of no fewer than 60 books, is raising the stakes with his own prediction, going further than any forecast either in China or overseas. He believes China will be driven forward by what he terms five engines: accelerating industrialization, its major role in a new globalized world, its dominance in information technology, the rapid modernization of its infrastructure in areas such as electricity supply and high-speed railways, and the growing internationalization of its own economy. He points out that China's workforce of 780 million is five times larger than the US' 153 million and that it now devotes 3 million person-years to research and development, twice the deployment of the US, both adding to its growth momentum. Goolam Ballim, group chief economist of Standard Bank Group based in Johannesburg, said it is not inconceivable the Chinese economy will be double the size of the US' by 2030. His own forecast is that it will achieve that position by at least 2040. "To some extent it is like the old adage that it is easier to make your second million dollars than your first. Once China has caught up with the United States in terms of GDP, it will be easier for it to progress from there to become twice as big." He said he expects the US to remain a dominant economy but that the world of 2050 could look very different. "The United States is likely to retain a strong global influence, even if it does not have a podium place in the top three. By 2050, the three largest economies in the world could be China, India and Brazil and after the United States, the fifth spot might be taken by Nigeria, as bizarre as that might sound now." Miranda Carr, head of China research at London-based investment research firm NSBO, is more conservative than Hu, predicting China will become the biggest economy between 2025 and 2030 and double the size of the US by 2050. "In some sense, it is entirely plausible that China could become twice as big as the US by 2030," she said. "There is phenomenal room for growth in China, space for major industrial development, and once China gets its own world-class companies, they have a huge domestic market as well as an international market to serve." She points out, however, that for China to make such progress, it will have to achieve near double-digit growth for a continuous period of nearly 40 years, which would be almost unprecedented in economic history. "There are really few examples of that. You would expect some hiccups along the way." George Magnus was one who forecast such a hiccup in his book Uprising: Will Emerging Markets Shape or Shake the World Economy? published two years ago. He anticipated a so-called "Minsky moment", a phenomena named after the US economist Hyman Minsky who warned economies faced an investment bust if they became over-leveraged.

Jiangsu province unveils new patrol ship (By China Daily) Jiangsu province unveils its most advanced patrol ship, China Maritime Surveillance 5001, at Zhongshan Harbor in Nanjing, on May 8, 2013. The 1,000-ton ship started its mission of patrolling China's territorial waters and protecting maritime rights in East China Sea. 

Most Americans positive on China: Poll (By Joseph Boris in Washington josephboris@chinadailyusa.com) More Americans see China as either an ally or at least friendly toward the United States, according to a Gallup survey released on the eve of a historic presidential summit in California. A total of 55 percent of Americans surveyed between June 1 and 4 described China as either a US ally (11 percent) or a nation friendly to the US (44 percent). On the negative side, 40 percent of respondents saw China as either unfriendly (26 percent) or an enemy (14 percent). Polling firm Gallup Inc has asked the same question in annual surveys since 2000 to gauge Americans' view of a country that increasingly competes with the United States economically and is taking a more prominent role in global affairs. This year's poll continues a generally positive trend in public attitudes toward China, apart from a sharply negative turn in 2001 after a Chinese fighter jet collided with a US Navy surveillance plane over the South China Sea. The US plane made an emergency landing on China's Hainan Island, but the central government in Beijing detained the American crew for 12 days before releasing them. As Presidents Xi Jinping and Barack Obama begin an informal two-day summit on Friday, their countries face an unprecedented level of economic interdependence, but also high-stakes tensions. Disputes over alleged cyberhacking, unfair trade practices and the nuclear ambitions of the Democratic People's Republic of Korea have strained diplomatic ties. Respondents in the survey released on Thursday were slightly more negative on China than in Gallup's annual World Affairs poll in February. In that poll, people were asked if they had a favorable or unfavorable opinion of various countries, including China. A total of 43 expressed a favorable view (35 percent "mostly favorable" plus 8 percent "very favorable"), while 52 percent regarded China negatively (35 percent "mostly unfavorable" plus 17 percent "very unfavorable"). According to the latest Gallup survey, younger Americans and people who identify themselves as Democrats are much more likely to see China as a US ally than are older Americans and self-identified Republicans. Jerome Cohen, a law professor at New York University and a leading Western scholar on China's legal system, said earlier that it is good to see most Americans are in favor of friendly ties with China, considering that both nations have no formal alliance. "China is certainly not an enemy of the United States, and the US is not an enemy of China. But there are some people in both nations who think that the two countries are enemies or will become enemies. They are a minority. It is for the rest of us to prove that they are wrong," he said. Cohen feels that China's economic progress is a good thing. "We benefited from China's economic development. But we are a country that is increasingly divided. I think that's a dangerous situation. We have to educate our people more," he says. Although age differences in public attitudes toward China have been consistent in recent years of the survey, Gallup said, Democrats' more-positive views on China aren't necessarily the norm. Some polls over the past 13 years have found no meaningful differences between the two major US political parties. The United Kingdom and Canada ranked highest among those surveyed, with at least 60 percent identifying those countries as US allies and most of the rest describing them as friendly but not allies. Americans also see Israel, Japan, Mexico and India more positively than China, with between 25 percent and 46 percent describing each of these countries as "allies". Compared to other countries mentioned in the June 1-4 poll, China was in a middle group, along with Saudi Arabia, Egypt and Russia. About half of respondents viewed those countries positively, relatively few saw them as US allies and relatively few view them as enemies. Iran and the DPRK were most frequently cited in the survey as enemies of the US, with most other respondents calling those countries unfriendly. Gallup surveyed a random sample of 1,529 adults, age 18 or older, living in all 50 states and the District of Columbia, in interviews conducted by landline or cellular phones. The survey's margin of error is 3 percentage points. Chen Weihua contributed to this story.

Xi arrives in California for summit with Obama (Xinhua) Chinese President Xi Jinping arrived in California Thursday for a meeting with US President Barack Obama, which analysts say will help promote the long-term, sound and steady development of China-US relations. Xi was greeted by local officials at Ontario International Airport, in Ontario, California, after his arrival by special plane. The China-US summit, the first since Xi took office in March, will be held Friday and Saturday at Sunnylands, the Walter and Leonore Annenberg Estate. Xi and Obama are expected to discuss domestic and foreign policies, as well as issues of pivotal importance and regional and international issues of common concern, Chinese officials said. Meeting US National Security Adviser Thomas Donilon in Beijing on May 27, President Xi said that China-US relations are now at an important stage connecting the past and the future. Xi called on both countries to take into account the fundamental interests of the two nations and the world and jointly pursue a path that is unprecedented and inspires future generations. Referring to the China-US summit, Xi said he and Obama will broadly and deeply discuss "important strategic issues of common concern" so as to deepen understanding, enhance mutual trust, accumulate consensus and promote cooperation. "I am convinced that with joint efforts the summit will make important positive progress and inject new vitality into bilateral relations," Xi said, adding that the summit will benefit the two nations, promote peace, stability and prosperity in Asia, the Pacific region and the world. China-US relations have maintained good growth momentum in the past four years, with dialogue and cooperation expanding in the areas of trade, energy, environmental issues and culture.

Henry Paulson calls on Xi, Obama to 'reset' relations in California meeting (By George Chen in Chengdu george.chen@scmp.com) Chinese President Xi Jinping and United States President Barack Obama should use their meeting in California to “reset” US-China relations to focus on mutual economic benefits, advised former US Treasury Secretary Henry Paulson. Paulson, who was also former head of Wall Street bank Goldman Sachs, said Xi had a “different style and tone” to his predecessors. Xi arrived in the US on Friday and will spend two days in informal gatherings with Obama at Sunnylands in Rancho Mirage, California. The meeting has understandably attracted considerable interest from politicians and business leaders. “I think this meeting is very, very important,” said Paulson at the 12th Fortune Global Forum hosted in Chengdu on Friday. “What they need to do is to build the relationship, trust themselves and reach consensus. It’s very clear we need to reset relations between the US and China. It’s now the most important bilateral relationship in the world,” he added. “The cornerstone [of US-China relations] is their economic relationship and the top [leaders] can set the tone. I am hoping one of the things that will come out immediately is their economic negotiators [can say] ‘let’s get some important things done’,” said Paulson. The first meeting between the two leaders, since Xi succeeded Hu Jintao in March, was originally scheduled for September on the sidelines of the G20 summit in Russia. Both sides believed they urgently needed to discuss a number of contentious issues ranging from computer hacking of US organisations to foreign policy issues in Asia. Paulson also said China needed to focus more on long-term growth rather than short-term economic targets. However, making these changes would be “a very difficult process,” he added. “The current growth model [of China] is running out of gas,” said Paulson. “The future of the economy will be in the private sector.” “I think the difficulty is the [mainland] economy’s size. People don’t like change. If there is not a crisis; it’s hard to drive change,” he said. Paulson didn’t elaborate on what things China needed to do to improve its economy, but many analysts say state-owned enterprises in China monopolise too many industries. Although the mainland’s small-and medium-sized private enterprises contribute towards more than 60 per cent of China’s economic growth, many still complain about difficulties getting loans from major state-owned banks. Wu Jinglian, one of the mainland’s most famous economists, told the South China Morning Post last year that economic reform on the mainland had “significantly slowed” since the start of the new century. This was partly due to deep-rooted corruption in China, he said. Henry Paulson said: “The good news is the expectations the Chinese people have are so high because now they have very strong leaders. The bad news is it is almost impossible to meet all their expectations.”

Hong Kong*:  June 8 2013

Former Wan Chai police chief is jailed for a year for misconduct (By Thomas Chan thomas.chan@scmp.com) You've lied in court and shamed the force, magistrate tells senior officer who turned blind eye to licensing offences at restaurant - Titus Wong at Eastern Court. A former Wan Chai divisional police commander was jailed for a year for misconduct in public office yesterday and accused by a magistrate of telling lies in court. Adriana Tse condemned Superintendent Titus Wong Koon-ho, 51, for showing no remorse during the trial and said he had given the worst testimony she had heard during her years as a magistrate. Wong was earlier convicted of receiving discounts and whisky worth HK$5,500 from a Causeway Bay restaurant in exchange for turning a blind eye to it serving alcohol without a licence. He was responsible for advising the Liquor Licensing Board on whether to grant licences. Wong later approved the Chen Teen Bistro's licence application, despite knowing it had served alcohol illegally. He even drank alcohol there when it had no licence, the court had heard previously. Tse said Wong had brought shame on the police force and his fall from grace was entirely of his own making. She said his case was similar to that of former police senior superintendent Sin Kam-wah, who was convicted of accepting free sexual services from prostitutes in 2003. Sin was jailed for three years by the trial judge, a term that was reduced to two after an appeal. "I agree that the offences that Sin committed may be more serious [than those of Wong]," Tse said, adding that police officers should have taken Sin's case as a warning. Defence counsel Albert Luk Wai-hung yesterday submitted to the court 60 letters of mitigation and appreciation, including one from the central government's liaison office in Hong Kong. Luk also asked Tse to take into account Wong's contributions to the city. Tse rebutted this by saying that police officers could not point to their community service as a defence in such circumstances. "They do not serve society for free," she said. "They are well paid for it." Tse also criticised Wong for putting his subordinates in a position where they may have experienced a conflict of interest. She suspected Wong's team responsible for vetting liquor licence applications was involved in misconduct. Tse asked the Independent Commission Against Corruption to investigate further. Wong's application for bail pending an appeal was refused. Luk said outside court that Wong would appeal against his conviction and sentence. A police spokesman said the force adopted a "zero tolerance" approach to corrupt officers and imposed strict requirements on their behaviour and integrity. Police commissioner Andy Tsang Wai-hung earlier said he was disappointed with Wong's conviction and stressed it was an isolated incident.

Stanley Ho's Shun Tak buys 33pc stake in Jetstar Hong Kong (Charlotte So Charlotte.so@scmp.com) Qantas and China Eastern bring local investor on board in move that could help them secure regulatory approval to get in the air - Pansy Ho (second from left) and Edward Lau, chief executive officer of Jetstar Hong Kong, at yesterday's press conference. Qantas and China Eastern launched Jetstar Hong Kong. Shun Tak Holdings is paying US$66 million for a third of the shares of Jetstar Hong Kong, the low-cost carrier awaiting regulatory clearance. The announcement yesterday came two days after the Hong Kong government said it had stopped processing applications of new airlines. "We hope Shun Tak's background and experience in cross-border transportation in the Pearl River Delta (PRD) can speed up the application process," said Pansy Ho, managing director of Shun Tak and daughter of company chairman Stanley Ho. China Eastern and Qantas Group established Jetstar Hong Kong in March 2012, and had planned to be in the air this month. But the budget airline has struggled to receive the necessary licence from the Civil Aviation Department. The presence of gambling mogul Stanley Ho's property-to-transport conglomerate on Jetstar Hong Kong's board could smooth the carrier's relations with the central government, which could help it receive regulatory approval. Following the transaction, Shun Tak, China Eastern and Qantas will each hold 33.33 per cent of the airline. Edward Lau, chief executive officer of Jetstar Hong Kong, said the new airline would create 1,000 jobs. He added the airline would sell tickets at 50 per cent of the price of those offered by full-service carriers. "We will submit our application for the licence to operate scheduled services to the Air Transport Licensing Authority in a few days," he said. "We have a healthy and constructive dialogue with the government and we are confident the licence could be granted by the end of the year." The first A320 ordered by Jetstar Hong Kong is now awaiting delivery. At present, the company has 70 staff. Lau did not elaborate on the operating costs of the airline, noting it had not become operational. Jetstar Hong Kong, which has a capitalisation of HK$1.5 billion, expects to have 18 A320s by 2015. It aims to serve regional destinations within five hours of flight, including Southeast Asia, Japan, Korea and the mainland. If its application is approved, the airline would compete against Hong Kong's dominant carrier, Cathay Pacific Airways. In her comments yesterday, Pansy Ho said that allowing the airline to take off would contribute to co-operation in the PRD region. "Hong Kong is at the centre of a one hundred billion yuan of infrastructure investment in PRD, including high-speed rail and the Hong Kong-Zhuhai-Macau bridge," Pansy Ho said. "The development of the aviation market in Hong Kong will benefit all neighbouring cities, especially Zhuhai and Macau," she added.

Kai Tak sites for 'locals only' flats sell for above estimates (By Yvonne Liu yvonne.liu@scmp.com) China Overseas & Investment has won the two sites in Kai Tak under the "Hong Kong property for Hong Kong people" scheme for a better-than-expected price. The mainland developer paid HK$4.54 billion, or HK$5,157 per square foot, for the two sites, higher than surveyors' forecasts of up to HK$4.4 billion or HK$5,000 per sq ft. Vincent Cheung Kiu-cho, national director of Greater China at consultant Cushman & Wakefield, estimated the price of the project would have to be HK$13,000 per sq ft in terms of saleable area to generate a reasonable profit. Chinachem Group won the tender for a residential site south of Long Ping MTR Station in Yuen Long with a bid of HK$1.3 billion, or HK$2,876 per sq ft, less than the market expectations of more than HK$1.49 billion. This is 11.78 per cent less than the site north of the station sold to the consortium of Sino Land and K Wah International last October. "The location of the Kai Tak sites is much better. As the number of property sales has dropped significantly, it will be easier for developers to get a better sales response if the projects are in a core urban area," said Cheung. "It is just like investing in the stock market. If the market is good, you may be willing to buy some junk stocks. If the market is bad, you will buy blue-chip shares only." Cheung said the good location of the two sites had offset the negative impact of the limitation on buyers. Under the scheme - introduced to help people priced out of the red-hot property market in recent years - flats built on these sites can only be sold to permanent residents for the first 30 years. Corporate buyers, including companies, are banned. Tony Yau Wai-kwong, managing director of China Overseas Property, a subsidiary of China Overseas & Investment, said: "We had taken the restrictions into account. But the location of the sites is very good. "They are the nearest to the future Kai Tak MTR station [on the Sha Tin-Central Link]. Also, most of the buyers in the market are Hong Kong people." He added that the company's total investment would be about HK$9 billion. Yau would not be drawn on the target selling prices. The sites cover an area of 176,056 sq ft and could yield a total gross floor area of 880,280 sq ft. The project could provide at least 1,145 flats.

Bordeaux winemakers sound alarm as EU-China trade war looms (By Agence France-Presse in Bordeaux, France) Workers harvest Cabernet-Sauvignon grapes near Bordeaux. Fears of an EU-China trade war mounted on Wednesday after Beijing launched an anti-dumping investigation into European wine imports, a move greeted with alarm in the vineyards of Bordeaux, France. The announcement of the wine dumping probe came a day after the European Commission imposed anti-dumping duties on solar panels imported from China. China is Bordeaux’s biggest export market and takes around one in five of the bottles produced in the renowned area, where up to 55,000 jobs depend on the sector. “We are taking this very seriously,” said Allan Sichel, the president of the Bordeaux wine merchants federation. “We are not yet at the stage of retaliatory measures but that could be the outcome.” He said Bordeaux was the leading wine imported into China, “so it is Bordeaux that will be hit the hardest”, and that Chinese sanctions “would be catastrophic for the majority of winemakers”. The commission announced the immediate imposition of a tariff of 11.8 per cent on Chinese solar panels. That will rise to 47.6 per cent on August 6 if there is no resolution of the dispute. France has urged its EU partners to stand up to Beijing on allegations of selling solar panels below cost in a bid to corner the European market. But the 27-nation EU is divided over the decision to launch a dumping probe. German government spokesman Steffen Seibert said Chancellor Angela Merkel agreed with China’s leadership when they said they wanted a negotiated solution. “It isn’t in Europe’s, Germany’s or China’s interests to seek a trade dispute,” he told reporters. German Economy Minister Philipp Roesler reiterated that Berlin regarded the French-backed decision as a “serious mistake” by the commission, the executive arm of the EU and its representative in global trade discussions. Brussels claims the Chinese panels are being sold at up to 88 per cent below cost in the European market, threatening 25,000 jobs in the European industry and breaching international trade rules. China branded the tariffs “unfair” and immediately announced the investigation into wine imports. As analysts warned that a damaging trade war was now a real possibility, Chinese officials urged the EU to show “sincerity and flexibility” in trying to resolve the issue. China’s decision to focus its retaliation on the wine sector suggests France may be paying the price for its high-profile support for the commission’s action over solar panels and for a broader “rebalancing” of trade with China. That was a campaign promise by President Francois Hollande ahead of last year’s election. According to commission figures, China bought 763 million euros’ (HK$7.6 billion) worth of wine from Europe last year, of which 546 million euros came from France, 89 million euros from Spain and 77 million euros from Italy. The Chinese wine market is of enormous importance for producers around the world. Regarded by many in the industry as the answer to a global glut, it is only in its infancy, with imported wine still the preserve of a tiny minority of the 1.3 billion population. A commission spokesman in Brussels said China was entitled to start an investigation but insisted there was no basis for it. They did not believe any dumping had taken place, nor were the wines exported to China subsidised, he added. Although the EU does not subsidise exports of wine directly, it does provide support to producers through a variety of programs which could, arguably, be viewed as having on impact on the prices they can afford to sell at. Yao Wei, a Hong Kong-based economist with Societe Generale, said the spat over solar panels and wine was rooted in China’s “huge” overcapacity in many industries. “In order to digest its overcapacity, China will unavoidably intensify global trade tensions,” she predicted. “It will certainly face more and more similar trade frictions, not just with the EU.” China is the EU’s second-largest trading partner with US$546 billion in two-way business last year, according to Beijing’s figures.

Stanley Ho’s Shun Tak buys into Qantas’ Jetstar Hong Kong joint venture (By Reuters in Hong Kong) (From left) Jetstar chief executive Bruce Buchanan, Qantas chief executive Alan Joyce and China Eastern Airlines chairman Liu Shaoyong. Qantas Airways and China Eastern Airlines have sold a US$66 million stake in their budget airline joint venture to a Hong Kong-listed company, a move expected to pave the way for an operating licence. Property-to-transport conglomerate Shun Tak Holdings, founded by Macau casino tycoon Stanley Ho, will take 33.3 per cent of Jetstar Hong Kong, which was launched last year but is still awaiting approval for its air operator’s certificate. Partnering with a well-connected Hong Kong investor could help Qantas and China Eastern, which had targeted a launch date of mid-this year, allay regulatory concerns over whether Jetstar Hong Kong fits the criteria of being a local business, according to local media reports. The new tie-up means Qantas, Australia’s flagship airline, China Eastern, the country’s No 2 airline by market value, and Shun Tak will each hold 33.3 per cent of Jetstar Hong Kong, which will have total capitalisation of US$198 million. China Eastern and Shun Tak also said in statements the venture’s initial fleet plan comprised the acquisition or leasing, or both, of 18 Airbus A320s over the first three years of operation. The purchase of 18 Airbus A320s carries a catalogue price of US$1.65 billion. The joint venture will give Qantas access to the fast-growing Chinese market and will look after China Eastern’s aspirations in the low-cost sector. The business aims to tap rising demand not just from Hong Kong, which caters to around 40 million passengers a year, but also from greater China – a market that Qantas has said is set to see 450 million passengers by 2015.

Hong Kong in Asia's top 10 for most expensive city for expats (By Ernest Kao ernest.kao@scmp.com) Hong Kong dropped one place to become the 38th most expensive location in the world for expatriates but stood in 10th place among Asian cities, according to a bi-annual survey on living costs around the world. The cost-of-living survey looked at a basket of consumer goods and services commonly purchased by international assignees in more than 400 cities worldwide. Excluded from the basket were accommodation and utilities costs. The survey, by human resources firm ECA International, is used by companies to calculate compensation packages for expatriates and ensure their purchasing power is not compromised. In Asia, Hong Kong was ranked the 10th most expensive, surpassed by Singapore, Beijing, Shanghai, Seoul and Tokyo, which ranked first for the second year in a row. Average prices in Hong Kong’s basket rose 3.9 per cent from the same period last year, slower than the 6 per cent rise from the 2011 to last year period. The biggest factor in rising prices this year were big increases in food prices and the cost of dining out. But that was somewhat countered by cheaper electronic goods and petrol prices - The official Composite Consumer Price Index (CCPI) rose 4 per cent last year, according to the Census and Statistics Department. “Although prices have remained relatively static in Hong Kong from last year, higher inflation in mainland China tends to have a knock-on effect on Hong Kong,” said Lee Quane, ECA International’s regional director for Asia. “With a relatively stronger renminbi, local importers have to pay much more for mainland imports. These prices are passed on to consumers.” Quane said Hong Kong’s stability and lack of currency risk would still make it an attractive city for international assignees and multinational companies. The city, however, was at risk of losing competitiveness to equally stable cities such as Singapore. Currency fluctuations played the biggest role in moving countries up or down the list on this year’s survey, according to the report. Tokyo, which ranked first last year fell to sixth worldwide this year and was taken over by Oslo. “The significant depreciation of the yen against other major currencies in recent months is the primary reason for this drop. It means that for many companies, the cost of maintaining their assignees’ purchasing power while posted there has fallen,” said Quane. A similar cost-of-living study, released in February by the Economist Intelligence Unit, ranked Hong Kong in 14th place among 131 cities worldwide.

 China*:  June 8 2013

Peng Liyuan charms Mexico with her fondness for local soap operas (By Patrick Boehler patrick.boehler@scmp.com) Peng Liyuan observing the making of a soap opera episode, Mexico City, on Wednesday. China's First Lady has delighted Mexico by appearing at a children's hospital and a production site for the country's popular television dramas - of which she is reportedly an ardent fan. Mexican media has already called her "China's Michelle Obama" and the "mother and general of all of China" prior to her appearances on Wednesday. They reported extensively on all the details of her visit to the television studios of Televisa San Ángel in Mexico City, a major production site for telenovelas broadcast throughout the Spanish-speaking world. Peng had admitted her fondness for the drama-prone television series to her Mexican counterpart Angélica Rivera during their first meeting in China in April. Prior to becoming Mexico's first lady, Rivera used to be a well-known telenovela actress at San Ángel. The first ladies observed the filming of a scene of La Tempestad, a romantic drama about human trafficking, and met the cast of another soap opera, De que te quiero, te quiero. Prior to her tour of the film studios, Peng visited a children's hospital, where China has donated one million yuan for equipment. Her visit to Televisa was not without controversy. The world's biggest Spanish-language broadcaster supported the election campaign of Rivera's husband, Enrique Peña Nieto, the Guardian reported last year. Xi and Peng have since travelled to Yucatán for a day of sightseeing at the remains of the Mayan city, Chichen Itzá. 

Many inspired by 'Chinese Dream' (By An Baijie) High-school student Zhang Nietian could not believe that his "Chinese dream"-themed letter to President Xi Jinping got a reply last month. Zhang, 17, chairman of the students' union in Shijiazhuang No 1 High School of North China's Hebei province, wrote a letter on behalf of the school's more than 3,000 students to the president on April 7. "The Chinese dream is the dream of everyone of us, the young students. Just as you have said, it's the greatest dream of the Chinese people to achieve the great rejuvenation of our nation," Zhang wrote in the letter. "We will study hard to increase our knowledge and fulfill the dream." The students' letter was answered by Xi on May 4, China's Youth Day. In his letter, Xi greeted the students and praised them for their ambition and enthusiasm toward the country. Xi expressed his wishes for the students to uphold their beliefs, study hard, and make contributions to the fulfillment of the "Chinese dream". "I felt excited after receiving the letter from the president," Zhang said on Tuesday. "We will keep the President's words in mind, be diligent and study hard." The "Chinese dream" vision was launched to prominence by Xi on Nov 29, when he visited The Road of Rejuvenation exhibition at the National Museum of China. Xi was elected as general secretary of the Communist Party of China Central Committee on Nov 15. "Everybody has one's own ideal and pursuit as well as one's own dream," Xi said during the visit. "History tells us that everybody has one's future and destiny closely connected to those of the country and nation." During a keynote speech on March 17, Xi said the dream of a great rejuvenation of the Chinese nation "is a dream of the whole nation, as well as of every individual," adding that it could only be realized by the people. Everybody has a dream - Shortly after Xi's remarks, many people shared their own dreams through the Internet, which range from "less corruption" to "higher income" and "a more equal society". "My version of the Chinese dream is national prosperity, social progress and people's happiness," Yi Zhongtian, a renowned Chinese history scholar, wrote in his micro blog. "We need a Chinese dream, but also more practitioners to fulfill it." Li Liancheng, a deputy to the National People's Congress and also a village official from Puyang city in Central China's Henan province, said that the Chinese dream is the farmers' dream. "If the farmers nationwide could lead a better life, the Chinese dream would be realized," Li said, adding that farmers should have equal rights to education, health insurance and pensions that urban residents enjoy. On May 31, one day ahead of International Children's Day, Vice-President Li Yuanchao called for teaching about the Chinese dream to children, to inspire them to become contributors to national rejuvenation. The Chinese Young Pioneers, the country's largest children's organization, should promote the Chinese dream among children and inspire their interest in science and creativity, Li said when visiting students in Xianyang city of Northwest China's Shaanxi province on Friday. Common goal - Zhou Tianyong, deputy director of the International Strategy Institute with the Party School of the CPC Central Committee, said that Chinese dream has set a common goal among the public, and it is expected to make the nation more cohesive. "Just like the American dream, which has become a core value of the people in the United States, the Chinese dream will also become the people's common ideal and belief," he said. The fulfillment of the "Chinese dream" is based on the country's rapid economic growth, which has provided more opportunities for the people, especially younger talents, Zhou said. About 272,900 Chinese students who studied overseas came back to China after graduation last year, with a year-on-year increase of 46.57 percent, according to data released by the Ministry of Human Resources and Social Security on March 21. "China's rapid development has served an engine for global growth, and Beijing's pursuit of peaceful development has made great contributions to world peace," said Zhang Lian'gui, a professor of international study with the Party School of the CPC Central Committee. The Chinese dream will not pose any threat to other nations, since peace is in line with the heritage of the country's thousands of years of history and culture, he said. Buddhist master Hsing Yun, founder of Taiwan's influential Fo Guang Shan Monastery, has spoken highly of the "Chinese dream", according to a report of the Xinhua News Agency. "It is a big dream and a great one," the 86-year-old said on April 6 while attending a forum in the town of Bo'ao in south China's Hainan province. "It means making China a strong and harmonious country, where justice and fairness is honored, people are happy and the social environment is safe and comfortable," he was quoted as saying.

China's middle class emerges, to spend more (By Andrew Moody and Lyu Chang) Proportion of people earning between $17,000 and $35,000 a year set to soar - Chinese consumption, largely driven by the middle class, will account for $6.2 trillion, just under a quarter of the $26 trillion of additional global consumption in the years up to 2025, according to McKinsey & Co. This is more than the three next BRICS countries combined with India contributing an extra $2.5 trillion, Brazil $1.4 trillion and Russia $770 billion. Karl Gerth, author of As China Goes, So Goes The World: How Chinese Consumers are Transforming Everything and lecturer in Modern Chinese History at Oxford University, said every company in the world now has to have a strategy for the Chinese middle class. "They certainly better have or if not, have an incredibly good justification for their shareholders," he said. But who is this middle class that is so significant to the world and also in transforming China from an export and investment-led economy to a consumption one? Is it different in its makeup to that in Europe or the United States, where there are also markedly different interpretations of the term either side of the Atlantic. And also what makes them tick, what are their desires and aspirations and how do these differ from those in other countries? In this issue, we look at the middle class attitudes toward and demand for healthcare, education, overseas travel, cars and home improvement products as well as fine dining, movies, luxury goods, financial services and online shopping. Yuval Atsmon, principal in McKinsey & Co's Shanghai office and a core member of the leadership of the Greater China Consumer Retail Practice as well as co-author of the 2012 Annual Chinese Consumer Report, said the big trend over the next decade is that there is going to be a huge increase in the number of people in China of Western-style middle class incomes. The proportion of people in China earning between $17,000 and $35,000 a year is set to increase from just 6 percent in 2010 to 51 percent in 2020. "When we talk about people entering the middle class, we normally define this as around $10,000 a year, when people start having the opportunity to make discretionary spending choices instead of worrying about the basics such as food, clothing and housing," he said. "The higher income bracket more accurately reflects what we really mean about being middle class." Helen H. Wang has made a name for herself writing about the Chinese middle class and, in particular, with her book The Chinese Dream: The Rise of the World's Largest Middle Class and What It Means to You. Originally from Hangzhou in Zhejiang province, the California-based consultant defines the middle class in her home country as anyone who earns between $10,000 and $60,000. "While the average income of the Chinese middle class may be lower than those in the Western countries, the cost of living in China is also lower," she said. She said it is also misleading to regard car ownership as a badge of achieving Western-style middle class status. "It is a myth. Many middle class people in the West do not own cars and cannot afford foreign vacations. Some choose not to," she said. "My sister-in-law is a professor in Boston. She doesn't have a car. She prefers to use the public transit system and save money on parking and maintenance." Gerth at Oxford University said what it means to be middle class in China has radically changed in recent decades. "I have been going to China for 26 years and then if you had a nice pair of blue jeans and a bicycle, it made you middle class and comfortable. I don't think that passes anymore. No Flying Pigeon (famous Chinese bicycle brand) is going to get you a date," he said. The academic said the current Chinese class system may appear to be more like that of the US where it is often defined on income and not other social factors but he thinks that this is likely to be just a "temporary blip" relating to its stage of development. "I live in England where class is something of an obsession but the longer I live here I begin to think that it is more similar to China and that it is America that is an exception," he said. "I think factors such as which foreign school or university your children went to will begin to matter more in China and the class system will begin to ossify like in Europe." Some see the queues outside Apple stores in major cities in China as being indicative of China's growing middle class. A recent study by the Boston Consulting Group indicates Chinese consumers were prepared to pay a 30 percent higher premium price for iPhones despite their incomes being much lower than that of US consumers. John Ross, visiting professor at Antai College of Economics and Management of Shanghai Jiao Tong University and a former policy adviser to ex-London mayor Ken Livingstone, said this does not accurately reflect the realities of the market since Apple only has a 7.5 percent share of the Chinese smartphone market. "Even Samsung, which has been the market leader, is losing share. It is cheaper Chinese brand smartphones such as Lenovo, Coolpad and Huawei which are the big gainers," he said. "This shows the extreme sensitivity of China's consumers to price," he said. Ross said there are many difficulties in trying to assess whether people are middle class in China by the consumer choices they make. "In the US or Europe, McDonald's or KFC, for example, would be considered very cheap and available even to those with very low incomes," he said. "In China these are relatively higher priced, not bottom of the price range, items. This is why, for example, a KFC restaurant in China has far more 'eat in' tables than a KFC in the US or Europe." Martin Jacques, author of When China Rules the World: The Rise of the Middle Kingdom and the End of the Western World, believes attempts to define the middle class in China can be hopelessly vague. "We have got to remember the middle class is a pretty nebulous category. What essentially is the middle class in China and the developing world? Is it really just the new urban classes who have got a bit of money they didn't have before. It is essentially an urban concept." Gerth at Oxford University said the Chinese middle class could be dismissed as just another nouveau riche phenomenon with people buying branded goods just to make statements about who they are. "It probably is some sort of nouveau riche phenomenon but it is more of an intensified example of something familiar to us. It is not that it somehow hasn't happened anywhere else. Chinese people aren't Martians," he said.

Hong Kong*:  June 7 2013

Kai Tak port goes big with ocean liner from Royal Caribbean (By Amy Nip amy.nip@scmp.com) Travel operator Royal Caribbean will run pleasure trips out of Hong Kong with a vessel that can carry more than 3,000 passengers - Mariner of the Seas. Royal Caribbean International will be the first cruise line to organise round trips from the Kai Tak Cruise Terminal after the new facility launches its soft opening next week. From autumn, Royal Caribbean will run return trips of its voyager-class ocean liner, Mariner of the Seas, out of Hong Kong - the first cruise operator to announce the use of the city as a home port. "Hong Kong is one of the most important home ports in Asia," said Dr Liu Zinan, the company's managing director of China. "Asia, including China, is one of the strategic markets for Royal Caribbean." The Mariner, with a length of 311 metres and gross tonnage of 138,000, can hold more than 3,000 passengers. It is the largest cruise liner to set up home ports in Asia, where it also operates out of Singapore and Shanghai. The vessel has never visited Hong Kong before because it is too big for Ocean Terminal in Tsim Sha Tsui to handle. When the Kai Tak terminal building opens next Wednesday, the Mariner will be the first ship to use the immigration counters, during a Singapore-Shanghai voyage in which Hong Kong is a port of call. Shorter trips out of Hong Kong are lined up starting in autumn. At the end of October, the vessel will embark on a four-night round trip to two Taiwanese cities, Kaohsiung and Taipei. A three-night return trip to Kaohsiung will take place in November, following which the Mariner will leave Hong Kong for Singapore for the winter season. Royal Caribbean also deploys Voyager of the Seas, which has the same passenger capacity as the Mariner, in Asia. Liu said the company, which owned an international fleet of 22 vessels, would continue to increase its presence in the region. Royal Caribbean Cruises, the parent firm of Royal Caribbean International, is one of three members of Worldwide Cruise Terminals, the consortium that operates the Kai Tak terminal. Nine cruise ships have made bookings to berth at the new facility within the first year of its opening, though none will stop by between June and August. Liu said the typhoon season was not to blame. Rather, he said, the consortium needed to persuade cruise liners to adjust their deployments, which were usually planned 18 months ahead. Making a city a home port is considered to bring bigger economic benefits than transits, as passengers may stay extra nights in the city before or after their standard itineraries. Last year, such passengers spent an average of HK$4,833 a day, twice as much as conventional tourists. Jeff Bent of Worldwide Flight Services, another Worldwide partner, said the terminal was to open in the third quarter after all the works were completed.

Buyers line up for third batch of low-risk bonds (By Jeanny Yu and Johnny Tam) Number of subscribers for latest tranche of iBonds, which are linked to inflation, jumps 40 to 50 per cent from last year's offering - Chan Yun-tong is hoping for some extra yum cha cash. The third batch of HK$10 billion inflation-linked bonds is proving a sell-out despite low inflation, with investors piling into the risk-free product in a sluggish market. The number of subscribers jumped by 40 to 50 per cent from last year at major banks such as HSBC, Bank of China (Hong Kong), Bank of Communications' Hong Kong branch and DBS as they started taking orders for the so-called iBonds yesterday. The rise was more significant at smaller banks due to a lower base, with China Citic Bank International seeing more than double the applicants from last year. Around 7,000 investors yesterday placed orders at seven major local brokers, including Phillip Securities and Bright Smart Securities, according to data obtained by the South China Morning Post. The total number of applicants is estimated to have already reached 35,000, with the subscription amount hitting HK$1.54 billion as of yesterday. "We think the final number of subscribers will at least exceed 400,000 this time, compared with 330,000 last year and 155,000 in 2011," said Gary Leung Wai Kei of Bank of China (Hong Kong). Investors who bought iBonds in 2011 would get total returns - combining secondary-market gains and interest payments - of 12 per cent if they sold now, Leung said. Those sold last year would similarly deliver primary subscribers a 10 per cent return as of yesterday. But returns on the third batch may not be that high as the expected inflation rate this year is around 3.5 per cent. The first batch in 2011 saw high inflation and returned a yield of 6 per cent. But analysts expect demand for the bond to be solid given the near-zero interest rate on bank deposits and the sluggish performance of new stocks. The bonds carry a floating interest rate linked to the consumer price index for the preceding six months. The minimum interest rate is 1 per cent - payable every six months. Hong Kong ID card holders can apply for iBonds until 2pm on June 13. They will be issued on June 24 and listed on the stock exchange the next day. The iBonds issued in 2011 rose 6.7 per cent on the first day of trading, while the 2012 batch rose 5 per cent on debut. "We expect iBond prices to rise to HK$105 on the first day of listing, given the current yield of three-year Hong Kong Exchange Fund notes is 0.3 per cent," said AMTD Financial Planning. As the bonds entail a minimum subscription of HK$10,000 per lot, investors would only make a profit of HK$500 per lot. "If it pays for a few yum cha trips, I'll be satisfied," said 77-year-old retiree Chan Yun-tong, a first-time investor, who said he wanted to put in HK$50,000.

Sun Hung Kai high-profile corruption trial set for May 2014 (By Patsy Moy patsy.moy@scmp.com) Sun Hung Kai Properties (from left) chairmen Raymond Kwok Ping-luen, Thomas Kwok Ping-kwong and executive director Thomas Chan Kui-yuen in February. Hong Kong’s biggest corruption case in history involving the co-chairmen of Sun Hung Kai Properties is set to be tried in May next year. The listing was conducted at a close-door hearing at the High Court on Wednesday morning. The criminal trial of the high-profile scandal involving brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen will take place between early May and mid-August for an estimated 70 days. The Kwok brothers and former chief secretary Rafael Hui Si-yan have been charged with bribery. The ICAC alleges that, between 2000 and 2009, Hui took more than HK$34 million in bribes, and the rent-free use of a flat in Happy Valley, from four other defendants in return for favours. The pre-trial review is set for September 3.

Lung Mei artificial beach gets go-ahead over environmental concerns (By Lai Ying-kit yingkit.lai@scmp.com) The creation of an artificial beach near Tai Po at Lung Mei, the habitat of a protected species of seahorse, was given the go-ahead on Wednesday over the objections of a group of environmentalists. The decision has angered the Save Lung Mei Alliance, a concerned group that has vowed to take the government to court in an attempt to block the HK$200 million project. The group had earlier asked Chief Executive Leung Chun-ying to put the project on hold by revoking a work permit issued for the scheme. But the government said on Wednesday in a statement that it would not take such an action and that the Civil Engineering and Development Department had already awarded the contract for the project. “The Chief Executive-in-Council decided [on Tuesday] not to invoke the power to suspend, vary or cancel the environmental permit issued for the project, and has informed the petitioners in writing accordingly,” the government said. Explaining the government’s decision, Secretary for the Environment Wong Kam-sing said on Wednesday afternoon the area’s ecological value was low compared with three neighbouring locations. A government assessment released late last month confirmed the existence of the protected seahorse species Hippocampus kuda in Lung Mei. In the eight-week study between December and January, inspectors sighted the spotted seahorse 27 times at all the four sites, which included nearby Ting Kok East, Yung Shue O North and Lai Chi Chong to the east. It recorded the fewest seahorses - only two - in Lung Mei. Last Friday after the study was released, Save Lung Mei alliance spokesman Derek Li Kam-wa said the department, while noting the existence of the rare seahorse, had intended to play down the value of Lung Mei by comparing it to three other sites in Tai Po and Sai Kung. "How can you compare four sites, all high in ecological value, and ask people to wipe out one? Even children know this is nonsense," Li said. Peter Li Siu-man, another spokesman for alliance, said on Wednesday the group was angered by the government decision. He said officials had ignored scientific evidence and unilaterally pressed ahead with the plan. Li said the alliance would file a judicial review in an attempt to block the project. 

 China*:  June 7 2013

China has ‘mountains of data’ about US cyber attacks, says official (By Reuters in Beijing) China’s top internet security official says he has “mountains of data” pointing to extensive US hacking aimed at China, but it would be irresponsible to blame Washington for such attacks, and called for greater co-operation to fight hacking. Cyber security is a major concern for the US government and is expected to be at the top of the agenda when US President Barack Obama meets with Chinese President Xi Jinping in California on Thursday and Friday. Obama will tell Xi that Washington considers Beijing responsible for any cyber attacks launched from Chinese soil and must take action to curb high-tech spying, White House officials said on Tuesday. China’s internet security chief complained that Washington used the news media to raise cyber security concerns which would be better settled through communication, not confrontation. “We have mountains of data, if we wanted to accuse the US, but it’s not helpful in solving the problem,” said Huang Chengqing, director of the National Computer Network Emergency Response Technical Team/Co-ordination Centre of China, known as CNCERT. “They advocated cases that they never let us know about,” Huang said in comments on Tuesday and carried by the government-run China Daily newspaper on Wednesday. “Some cases can be addressed if they had talked to us, why not let us know? It is not a constructive train of thought to solve problems.” CNCERT has instead co-operated with the United States, receiving 32 internet security cases from the United States in the first four months of this year, and handling most promptly, except for a few that lacked sufficient proof, Huang said. Designs for more than two dozen major US weapons systems have been compromised by Chinese hackers, the Washington Post reported late last month. The compromised designs included combat aircraft and ships, as well as missile defence systems vital for Europe, Asia and the Gulf, the newspaper said, citing a report prepared for the US Defence Department by the Defence Science Board. Huang did not deny the report, but suggested that if the US government wants to keep weapons programmes secure, it should not allow them to be accessed online. “Even following the general principle of secret-keeping, it should not have been linked to the internet,” Huang said. Cyber attacks from the United States have been as serious as the accusations from Washington, Huang said. CNCERT, which issues a weekly report on cyber attacks against China, says that 4,062 US-based computer servers hijacked 2.91 million mainframe computers in China.

China hits back at EU over solar panel duties with anti-dumping probe on wine (SCMP) China launched an anti-dumping and anti-subsidy probe in European wine on Wednesday in response to the European Union’s decision to impose duties on imports of Chinese solar panels, as tensions increased between two of the world’s biggest trading blocs. The EU will impose duties on imports of Chinese solar panels from Thursday, but announced a dramatically reduced initial rate after pressure from some large member states in the hope of reaching a negotiated settlement with Beijing. China’s Commerce Ministry said the EU’s duties were imposed despite China making great efforts and showing enormous sincerity in trying to resolve the matter through talks. “The European side still obstinately imposed unfair duties on Chinese imports of solar panels,” the ministry said in a statement on its website. The ministry said the Chinese government had begun an anti-dumping and anti-subsidy probe into EU wines at the request of Chinese wine manufacturers. “The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China’s market by use of unfair trade tactics such as dumping and subsidies,” it said in a separate statement. “This is impacted upon our wine industry, and [they have] asked the Commerce Ministry to begin and anti-dumping and anti-subsidy probe,” the ministry added. “We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law.” China imported 430 million litres of wine last year, of which more than two-thirds came from the EU, according to Chinese customs figures. Imports from France alone came to 170 million litres. The European Union is China’s most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the 27-member bloc totalled 290 billion euros (US$376 billion) last year, with 144 billion euros going the other way. The EU now has 31 ongoing trade investigations, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers. The EU says it has evidence that Chinese firms are selling solar panels below cost - a practice known as dumping. But the initial duty of 11.8 per cent announced on Tuesday by European Trade Commissioner Karel De Gucht was far below the average 47 per cent that had been planned. China’s Commerce Ministry said it noted the lower initial rate, but called on the EU to “show more sincerity and flexibility to find a resolution both sides can accept through consultations”. China does not want to see this spat affect the overall state of trade ties with Europe, it said.

China firmly opposes EU solar panel duties (Xinhua/Associate Press) China firmly opposes the European Commission's decision to slap provisional anti-dumping duties on Chinese solar panels, a spokesman for the Ministry of Commerce (MOC) said on Wednesday. Shen Danyang added that it came despite herculean effort and utmost sincerity from the Chinese side. On Tuesday, the European Commission announced its decision to introduce anti-dumping duties on solar panels imported from China. An interim punitive duty of 11.8 percent will apply to all Chinese solar panel imports starting from Thursday, and the duty will be raised to an average of 47.6 percent two months later if the two sides fail to find a solution. China has noticed the EU reduced the proposed rate from 47.6 percent to 11.8 percent and looks forward to seeing more sincerity and flexibility from the European side for a solution acceptable to both parties, Shen said. Economic ties underpin the China-EU relationship, which China hopes will not be affected by trade frictions in the solar panel industry, said the spokesman, adding China is ready to sit down with the European side for more discussions on solar panel prices. China targets EU with anti-dumping probe of European wine - China announced a trade investigation of European wine Wednesday after the European Union hit Chinese exporters of solar panels with anti-dumping duties. The Ministry of Commerce’s announcement of the wine probe came in the same statement that expressed “resolute opposition” to punitive European tariffs on Chinese solar products. The European duties are a blow to financially strapped manufacturers that are struggling with excess production capacity and a price-cutting war. A foreign ministry spokesman, Hong Lei, did not respond when asked later at a regular briefing whether the wine investigation was retaliation for the solar duties. Concern about possible retaliation rose after Chinese Premier Li Keqiang warned last month that European anti-dumping action over solar panels would harm both sides. Most of China’s imports of European wine come from France, Spain, Italy and Germany, according to the Ministry of Commerce. That means that with the exception of Germany, any commercial impact would fall on countries whose governments supported the anti-dumping tariffs. “We believe there is not dumping of European wines on the Chinese market,” said a spokesman for the European Commission, Roger Waite. In Paris, the French agriculture minister, Stephane Le Foll, denied his government subsidizes exports. “France doesn’t export at a loss or with subsidies,” said Le Foll. “There is not one export subsidy.” Waite declined to say whether EU officials see the wine probe as retaliation. But the head of a French wine exporters group expressed alarm that the industry was caught in the dispute. “The use of our sector as leverage in a trade dispute is particularly regrettable,” said Louis Fabrice Latour, president of the Federation of Wine and Spirits Exporters of France. “We fervently hope that the European Union and China will be able to defuse these trade tensions by dialogue.” Following the 2008 global crisis, China along with the European Union, the United States and other major governments pledged to avoid taking action that might impede trade. But they are mired in a series of disputes over market access and possible improper subsidies. On Tuesday, the EU announced duties averaging 47 per cent on Chinese-made solar panels, cells and wafers but said it would postpone imposing the full tariffs until August to allow time for negotiation. “We hope the European Union will further show sincerity and flexibility and a mutually acceptable solution can be found through consultations,” said the Chinese statement. The ministry said it would conduct an anti-subsidy and anti-dumping investigation of European wine but gave no details of how Beijing believed exports were being subsidized. Dumping means selling a product abroad at a lower price than at home but some governments also take action if the price is deemed to be below production cost or unfair in some other way. Chinese imports of European wine rose by 60 per cent a year by volume in 2009-12, according to a statement on the commerce ministry’s website. It said 2012 imports totalled 25.7 million litres worth $1-billion (U.S.). China accounted for 8.6 per cent of European Union wine exports last year, according to EU figures. France was the biggest exporter to China, selling wine worth €546-million. The trade in solar panels is many times larger than that of wine. European imports of Chinese-made solar panels totalled €21-billion in 2011. EU Trade Commissioner Karel De Gucht said Chinese dumping was threatening 20,000 jobs in Europe. Last year, the United States imposed anti-dumping tariffs of up to 250 per cent on Chinese solar panels following similar complaints.

Chinese President Xi Jinping arrived here Tuesday for a three-day state visit aimed at lifting China-Mexico ties to a higher level. Xi's plane touched down at the Benito Juarez International Airport in Mexico City, where Mexican Foreign Minister Jose Antonio Meade Kuribrena was on hand to greet the Chinese president and his wife Peng Liyuan. The Chinese leader is scheduled to hold talks with his Mexican counterpart Enrique Pena Nieto, who visited China and met Xi two months ago, on bilateral cooperation. Xi is also expected to meet parliamentary leaders of Mexico to exchange views on bilateral issues. During Xi's visit, the two countries will sign a series of cooperation deals in such areas as economy, trade and academics, and issue a joint statement, according to Chinese diplomats. In a written statement released upon his arrival at the airport, Xi conveyed the Chinese people's sincere greetings and best wishes to the Mexican people. He said the traditional friendship between China and Mexico dates back to ancient times, adding that the two countries have already become key cooperative partners for each other in the world. To comprehensively deepen China-Mexico strategic partnership conforms to the practical and long-term interest of the two countries and peoples, helps promote solidarity and cooperation among developing nations, and is conducive to world peace, stability and development, Xi said. "I expect to have in-depth exchanges with President Enrique Pena Nieto and other leaders of Mexico on bilateral relations and international and regional issues of common concern so as to deepen trust, expand cooperation and enhance friendship," Xi said. China-Mexico relations have been developing at a fast pace since the two countries became strategic partners in 2003. They have maintained frequent high-level exchanges and deepened political mutual trust. China is Mexico's second largest trading partner, while Mexico is China's second biggest in Latin America. Last year, the two-way trade stood at 36.7 billion U.S. dollars. Bilateral cooperation has also expanded continuously in the sectors of culture, education, science and technology, and tourism in recent years. Both as major developing countries, China and Mexico have coordinated well on international affairs within the frameworks of the United Nations, the G20, and the Asia-Pacific Economic Cooperation. Xi arrived in Mexico after a state visit to Costa Rica, his second stop on a three-nation Lain America tour. Costa Rican President Laura Chinchilla and Foreign Minister Enrique Castillo saw Xi off at the airport upon his departure from San Jose. Mexico is the last leg of Xi's three-nation Latin America tour, which started with Trinidad and Tobago. From Mexico, he will fly to the U.S. state of California to meet with U.S. President Barack Obama.

Mandarin hotel group plans China expansion (By WU YIYAO in Shanghai) Mandarin Oriental Hotel Group said in Shanghai on Tuesday that it plans to expand operations in China. The expansion will make China its biggest global market in five years. The hotel group signed a global partnership agreement with UnionPay International specifying that group hotels across the world will accept UnionPay cards (with card number starting with 62 and UnionPay logo on card face) within one year and various kinds of card services will be provided to UnionPay cardholders. Michael Hobson, the group's chief marketing officer, said China is already its second-largest market. Wang Lixin, chief business development officer of UnionPay International said UnionPay International is strengthening its cooperation with relevant sectors from home and abroad, and providing convenient and favorable payment service to UnionPay cardholders.

Relationship 'relaunched' (By Zhu Zhe in Mexico City and chen weihua in Washington zhuzhe@chinadaily.com.cn and chenweihua@chinadailyusa.com) Chinese President Xi Jinping and his Mexican counterpart Enrique Pena Nieto are pictured during the welcoming ceremony at the Campo Marte Military camp in Mexico City on Tuesday. China and Mexico, two of the world's emerging powers, "relaunched" a stronger partnership with the signing of a dozen agreements on Tuesday, during the first day of Chinese President Xi Jinping's three-day visit. Xi said his meeting with Mexican President Enrique Pena Nieto has been fruitful and produced much consensus. "Our joint announcement to elevate our strategic partnership to overall strategic partnership reflects both the reality of the bilateral relations as well as pointing to the direction of its future development," Xi told the press after meeting his Mexican counterpart. Xi, who last visited Mexico in 2009 as China's vice-president, arrived in Mexico City after touring Trinidad and Tobago and Costa Rica, where agreements to develop ties were also signed. The agreements and Memorandum of Understanding signed on Tuesday between Mexico and China cover cooperation in energy, new industry trade, infrastructure construction, mining, trade remedy, education, banking and entrepreneur exchanges. The two leaders also agreed that Mexico will begin to export pork and tequila to the Chinese market; and China has promised to provide 100 scholarships to Mexican students each year for the next three years. The Mexican government will set up a special trade office to facilitate bilateral cooperation. Pena Nieto, the Mexican president, said Xi's official visit proves the two countries have reached a high level in their friendship, trust and cooperation. He believes China and Mexico will explore more means of effective cooperation and that Mexico will attract Chinese investment for large projects, such as those for energy and infrastructure. Pena Nieto, who took office last December, visited China in April to attend the Boao Asia Forum in Hainan province, where he met Xi. Trade between the two countries was $36 billion last year, more than seven times the level in 2003 when China and Mexico established a strategic partnership. Theodore Kahn, a researcher at Inter-American Bank, described Xi's visit to Mexico as a chance to "relaunch" the two countries' relations after a decade. "Both countries have something to gain by closer ties, but seizing the opportunity will require dropping long-held preconceptions about the commercial relationship," Kahn wrote in The Diplomat publication on Tuesday. "The arrival of new leaders in both countries presents an opportunity to forge a closer, more fruitful alliance between two key emerging markets." Kahn believes Mexico should get over its obsession with trade deficits, which he said are numbers that fail to capture the complexity of the countries' commercial relationship and obscures opportunities for more positive cooperation. He believes that Mexico stands to gain from China's expanding foreign direct investment, particularly in the energy sector, and in Mexico's own increasingly competitive manufacturing industry, especially in wake of rising Chinese labor costs. "Cooperation in these areas of mutual interest would give Mexico more leverage to address the trade balance issue in a pragmatic way," Kahn said. "Bilateral trade deficits are not in and of themselves a bad thing, especially in a global economy characterized by fragmented production. "Stronger overall ties, grounded in cooperation on areas of mutual interest, will make progress on trade issues more likely." Shannon O'Neil, senior fellow for Latin American studies at the Council on Foreign Relations, said that in the past few years, many in Mexico saw China as a competitor in international trade. She believes Xi's visit and the agreements are an opportunity to begin changing this perception and reality, increasing trade in both directions. On Thursday, Xi is scheduled to fly to California to meet US President Barack Obama. R. Evan Ellis, an analyst on Latin American economic, political and security issues at the Pentagon-funded National Defense University in Washington, said Xi's visit could help transform China's relations with the region. Whereas previous Chinese leaders deferred to Latin America and the Caribbean as "America's back yard", Ellis said, Xi has been making efforts to more deeply engage his country in the region. Discussions about Latin America aren't likely to make it onto Xi's packed agenda with Obama in California, but the fact the Chinese leader will have just arrived from a country as crucial to US interests as Mexico is a clear signal of China's increasingly confident role in the region, Ellis said in a talk at the Center for Strategic and International Studies on Tuesday.

Hong Kong*:  June 6 2013

Most Hong Kong university students would consider working in China, survey shows (By Ernest Kao ernest.kao@scmp.com) Despite a growing cultural rift between Hong Kongers and their mainland counterparts, most local university students would consider working on the mainland, a recent survey has found. The survey, conducted by the Hong Kong United Youth Association-affiliated Student Exchange Network, polled 695 students across the city’s eight universities and found 85 per cent Hong Kong students would consider going to China for “short-term career development” or internships. This represented a two per cent rise from the same study conducted last year. Though most acknowledged mainland wages would be lower than wages in Hong Kong, most felt that a few years of hands-on experience in China would be beneficial to their careers in the long-run. “The local employment situation has changed since the financial crisis. I think most young people are open to the option of working in China and don’t mind getting the early exposure nowadays,” said Billy Chan, senior manager at Page Personnel Finance, a Hong Kong-based recruitment consultancy. “Companies [in Hong Kong] are also increasingly looking for candidates with solid hands-on work and life experience … China and overseas internships are definitely a plus.” A general consensus among respondents was that most Hong Kong businesses had close relationships with China and that economic prospects there were more optimistic than in Hong Kong. Establishing personal networks and connections in China were also a factor. "I think the idea of working in China will become increasingly appealing if the economy in Hong Kong continues to underperform," said a year-two business accounting and finance student at the University of Hong Kong, who requested annonymity. She is currently interning at a bank in Guangdong. "Many of my classmates failed to get the internships they wanted in Hong Kong, so several opted for [work in] the mainland," she said. Most respondents however, only wanted to stay for an average of three years before moving back to Hong Kong. Only 15 per cent of respondents said they would "stay more than six years" in China. According to the survey, most respondents said they expected to make HK$8,000 to HK$10,000 for a job in China, that would otherwise pay HK$10,000 to HK$15,000 in Hong Kong.

Government offers civil service pay increase (SCMP) Civil servants offered pay increases of up to 3.92 per cent - The government has offered a pay increase to staff in the civil service, Secretary for the Civil Service Paul Tang announced on Tuesday. Civil servants in the lower and middle salary bands have been offered 3.92 per cent pay increases, while those in the upper salary band and directorate have been offered rises of 2.55 per cent. The increases follow the net pay trend indicators for the respective salary bands derived from the recent findings in the this year Pay Trend Survey, Mr Tang said. These include the state of Hong Kong’s economy, changes in the cost of living, the government’s fiscal position, staff pay claims and civil service morale. “Apart from pay trend annual adjustment, there are other issues that we should do in order to uphold the morale of civil service, which will include providing extra manpower, or maybe other fringe benefits, as well as increasing communications between management of the departments and the staff,” he said. He added that the government was acting according to a tested mechanism that it had been operating for the last 20 years, which is not linked with inflation.

 China*:  June 6 2013

Shenzhou X spacecraft gets set to blast off on two-week trip (By Stephen Chen binglin.chen@scmp.com) Three astronauts will take part in mission to make final preparations for space laboratory - Three Chinese astronauts will blast off in the Shenzhou X spacecraft this month for a two-week mission to make final preparations for the construction of a space laboratory next year. China Central Television reported yesterday that the spacecraft, mounted on top of a Long March 2F rocket, had been wheeled to a launch pad at the Jiuquan Satellite Launch Centre in Inner Mongolia, with the mission scheduled for the middle of this month. The crew will dock the Shenzhou X with the Tiangong I space module and live there for more than a week, testing equipment and technology crucial to space station construction. The entire mission will last about 15 days, or two days longer than the maiden flight to Tiangong I last year. If the mission is a success, China will press ahead with the construction of a two-module space laboratory next year that could increase the amount of time that astronauts can stay in space from days to weeks. The mainland space authorities said the crew had been chosen but, in keeping with tradition, their identities would not be disclosed until the last minute. China has about 30 astronauts trained and mission-ready, but only nine have been to space before. This month's mission could be the last chance for some to join them because they are nearing retirement age. Zhou Jianping , chief designer of China's manned space project, said at the annual meeting to the National People's Congress in March that the crew of Shenzhou X would be completely different from the crew last year. He also expected one member to be a woman. Liang Xiaohong , a chief designer of the Long March rockets, told Xinhua the astronauts' safety was their top concern, and the new rocket would be safer than ever before. The team had made 17 improvements to the rocket's reliability, she said. A fully automatic ejection system meant the astronauts would be able to bail out and land safely during the climb, even after leaving the earth's atmosphere. Later this year, a lunar probe will be launched to land on the moon and deploy a robotic rover, the first since the early 1970s.

China to send another female astronaut to space (By China Daily) China is set to send another female astronaut to space in the upcoming manned spacecraft Shenzhou X mission. Wang Yaping, 35, will join the three-person crew and become China's second female astronaut sent to space after Liu Yang, who was on board the Shenzhou IX last year. "Wang is highly likely to be sent to space if she is in good condition," said Zhang Jianqi, director general of the China Space Foundation and former deputy commander of the country's manned space program, confirming domestic media reports. Wang and Liu were both selected as candidates for the Shenzhou IX mission. Wang then became Liu's backup. Wang, a native of Yantai, East China's Shandong province, was selected as a pilot at the age of 17. She participated in the rescue work after the Sichuan earthquake in 2008 and piloted the aircraft for the artificial rain mission during the Beijing Olympic Games. The Shenzhou X spacecraft, carried by a Long March-2F rocket, was transported on Monday morning to the launch site in Jiuquan, Northwest China's Gansu province. The spacecraft, which will be launched in mid-June from the Jiuquan Satellite Launch Center, will dock with the lab module Tiangong-1.

China, Costa Rica agree to enhance ties (Xinhua) Chinese President Xi Jinping (L) shakes hands with Costa Rican President Laura Chinchilla during their talks in San Jose, Costa Rica, June 3, 2013. Chinese President Xi Jinping and his Costa Rican counterpart Laura Chinchilla agreed Monday to enhance communication and cooperation between the two countries for further development of bilateral ties. In talks with Chinchilla, Xi said China-Costa Rica relations, although only six years old, have achieved sound development, adding the closer ties are proven to be in the fundamental interests of both countries and their people. The China-Costa Rica relationship is in a position to become a paradigm of cooperation between countries of different size and national condition, he said. Chinchilla said the two countries, since the establishment of bilateral relations, have witnessed frequent high-level exchanges and fruitful results in cooperation in various fields, which brought tangible benefits to both sides. Costa Rica wants to deepen mutual trust, cooperation and friendship with China, she said, adding she wish the Chinese people make new achievements in realizing the Chinese dream. The two presidents reached comprehensive consensus and agreed on a four-point proposal to promote bilateral cooperation. Firstly, China and Costa Rica should enhance high-level exchanges between the governments, legislatures and political parties to consolidate mutual trust. They should continue to firmly support each other on issues concerning their core interests, the two leaders said. Secondly, the two countries agreed to push forward pragmatic cooperation. They should expand the scope, optimize the structure and enlarge the size of bilateral trade under the framework of the free trade agreement. China supports Costa Rica in constructing a special economic zone, while Costa Rica welcomes Chinese enterprises to invest on its soil. The two countries would also mull cooperation in the area of clean energy. Thirdly, China and Costa Rica agreed to deepen cooperation in such domains as culture, education, sports and tourism. They agreed to strengthen youth and local-level exchanges and implement projects related to overseas study and the Confucius Institutes. China will continue to provide personnel training for Costa Ricans, while the Latin American country will simplify visa procedure for the Chinese to facilitate people-to-people exchanges. Fourthly, the two countries agree to enhance cooperation on the world arena and strengthen communication and coordination on major issues including climate change and sustainable development. They should push forward democracy in international relations and jointly safeguard the interests of developing countries as a whole. The two leaders also exchanged views on the relations between China and Latin American and Caribbean countries. They agreed to work for the establishment of a China-Latin America cooperation forum and support each other to host China-Latin America agriculture ministers' forum within this year. Costa Rica, to take up rotating chair of the Community of Latin American and Caribbean States next year, would play an active role in promoting the overall cooperation between Latin America and China. China and Costa Rica, both developing countries at a similar stage of development, face common tasks in developing economy and improving people's livelihood, Xi told reporters at a joint press conference with Chinchilla after their talks. True friendship can stand the test of geographic distance, Xi said, expressing the belief that the young generation of the two countries will carry on the China-Costa Rica friendship. For her part, Chinchilla said Xi's visit deepened friendship and cooperation between China and Costa Rica, and her country believed that the two would enjoy an even vaster space for development. Also on Monday, Xi and his wife Peng Liyuan received the Key to San Jose, capital of Costa Rica. San Jose Mayor Johnny Araya described the key as the highest honor awarded to foreign guests by his city. Xi said the key embodies the friendship from the Costa Ricans, calling for more exchanges at local levels to enhance mutual understanding and friendship between the two peoples. Local-level exchanges are an important platform for bilateral cooperation, Xi said, adding China wants to cooperate with San Jose, a well-known garden city, in green technologies and environmental protection. Costa Rica is the second leg of Xi's three-nation Latin American tour, which began with Trinidad and Tobago and is to end with Mexico. Afterwards, he will fly to the US state of California to meet with US President Barack Obama.

US to replace EU to be China's largest trade partner in 2013 (By Hu Yuanyuan) The US is expected to replace the EU as China's largest trade partner this year, as rampant trade protectionism in the EU has damaged bilateral trade, a government adviser told China Daily. "US trade with China may hit $450 billion in 2013, while EU trade with China will hover around $420 billion," said Wei Jianguo, former vice-minister of commerce. He is now vice-chairman and secretary-general of the China Center for International Economic Exchanges, a high-level government think tank. The EU is China's largest trade partner while China is the EU's second-largest. However, China's trade with the EU fell 3.7 percent year-on-year in 2012 and 1.3 percent year-on-year in the first four months of this year, according to the General Administration of Customs. "The decline is partly due to the EU's growing trade protectionism and curbs on the export of high-tech products to China," said Wei. The EU now has 31 trade investigations, 18 of them involving China, industry statistics show. After claiming to have opened an anti-dumping and anti-subsidy investigation into mobile telecommunications network equipment and components from China, the EU is planning to impose anti-dumping taxes of 47.6 percent on average on China's photovoltaic products. It would be the largest trade remedy case between the two sides in history. The preliminary verdict will be released on June 6, and the final decision will be made by the end of the year.

Peng Liyuan visits children in Costa Rica (Xinhua) China's first lady Peng Liyuan visits the National Children's Hospital of Costa Rica, accompanied by Emilce Miranda, mother of Costa Rican President Laura Chinchilla, in San Jose, June 3, 2013. 

Hong Kong*:  June 5 2013

Wheelock names Woo's son managing director (By Enoch Yiu enoch.yiu@scmp.com) Douglas Woo's appointment to company board seen as another family succession move in city - Property and logistics conglomerate Wheelock and Co is the latest company to see a potential successor joining the board. Douglas Woo Chun-kuen, the 35-year-old son of chairman Peter Woo Kwong-ching, will become a director and managing director from July 1. He will get a director's fee of HK$70,000 and a salary and bonus of HK$10.6 million this year. Douglas Woo, a former analyst at investment bank UBS, is the vice-chairman and managing director of the group's property arm Wheelock Properties. Wheelock said Douglas Woo "will involve more in the group's corporate management" and would be working with deputy chairman Stephen Ng Tin-hoi and chief financial officer Paul Tsui to "form the core group to ensure total continuity and seamless transition". In March last year, Cheng Yu-tung, the founder of property giant New World Development, stepped down as chairman and was succeeded by his son and managing director, Henry Cheng Kar-shun. Henry's son, Adrian Cheng Chi-kong, an executive director, was assigned to oversee the overall operations of the group while daughter Sonia Cheng Chi-man was appointed an executive director to look after the hotel business. Li Ka-shing, the chairman of Cheung Kong (Holdings) and Hutchison Whampoa, in May last year announced that his elder son, Victor Li Tzar-kuoi, would take the helm of both companies. As part of the wealth split, younger son Richard Li Tzar-kai, who controls media and information technology services giant PCCW, will have his father's full support to invest in business, with no conflict with Victor's business. Peter Woo had last year disclosed his succession plan, with daughter Jennifer Woo Chun-en appointed to oversee luxury retailer Lane Crawford and Douglas the property business. Douglas Woo studied at Winchester College in Britain and graduated from Princeton University in the US with a degree in architecture. He has a master of business administration degree awarded jointly by the HKUST Business School and the Kellogg School of Management of Northwestern University in 2010.

Property tycoon Lee Shau-kee offers land for affordable housing for young people (By Peggy Sito peggy.sito@scmp.com) Lee Shau-kee, chairman of Henderson Land, said on Monday that he offered the government seven sites for affordable housing for young people. Henderson Land Development chairman Lee Shau-kee is in talks with the government to donate a plot of farmland in Fanling to build affordable housing for young people. The site, which could provide more than 1,000 units, was one of the seven sites presented by Lee and his listed flagship company Henderson Land, Lee said after the company's annual general meeting on Monday. “We presented seven sites and the government picked the Fanling site to study as a possibility,” said Lee. The more than 100,000 square foot Fanling site had a market value of between HK$200 million and HK$300 million, he said. The plot is owned by him personally and not by the listed developer so the scheme would not affect shareholders’ interest. Lee first publicly raised the idea in January, saying affordable 300 sq ft homes could be built on his company’s plots in the New Territories and be priced at HK$1 million each for sale to first-time buyers. In return, the government should exempt him from paying the premium for changing the use of the land. “The cost of a 300 sq ft unit is around HK$1 million, taking into account that construction cost is about HK$3,000 per square foot,” said Lee. The selling price cannot be as low as HK$1 million if land premium is charged, he said. “We will not be responsible for the construction, we will just donate the sites,” said Lee. Some of the seven sites are owned by his listed vehicle Henderson Land, but not all sites are suitable for donation, said Lee, adding that the government needed to consider many factors, such as infrastructure, pollution and environmental protection. “Some minority shareholders might not agree if the company donated a site [other than Fanling] to the government for free. But I would compensate them if a Henderson site were donated,” said Lee. He did not elaborate on the compensation options.

Octopus scammer pleads guilty to adding HK$434,350 to cards (By Johnny Tam johnny.tam@scmp.com) A former Octopus card technician who added HK$434,350 of value to Octopus cards using a home-made machine built from stolen parts pleaded guilty to theft and forgery in District Court on Monday. The court heard that the 27-year-old defendant Lau Chi-chiu stole 23 component parts of a value-adding machine from a workshop operated by MTR contractor Thales Transport & Security at Nam Cheong station between February 2010 and February 2012. Using the stolen parts, Lau built himself a value-adding machine at his home in Yuen Long and fraudulently added HK$434,350 to 61 Octopus cards between October 2011 and March 2012. The cards then were used to buy goods, mainly milk powder, which was then resold online. Police began their investigation in December 2011 after the MTR Corp and the company Octopus Cards complained to them about suspicious “added-value” transactions, the first such instance since the Octopus system was launched in 1997. Lau, an Institute of Vocational Education graduate, his wife, father, mother and sister were all arrested by police in March of last year, but only Lau was charged. Before sentencing, Lau’s lawyer on Monday asked the court to adjourn the case as he said he “had just received a psychiatric report on the defendant” and “had to clarify it with him and the psychiatrist”. He also said he need to clarify with the prosecutor the exact amount of goods – including the milk powder bought with the cards – seized from Lau and the balance left unused on the cards before proceeding. District Court Judge Garry Tallentire agreed to adjourn the case until Wednesday. Lau’s bail was continued until then.

 China*:  June 5 2013

China tycoon Zhang Xin in deal for New York's GM Building (By Reuters in New York) Two big Manhattan property deals signal recovery and China interest in US commercial real estate - The General Motors tower in New York is valued at US$3.4 billion. A group of investors, including Chinese real estate tycoon Zhang Xin, paid about US$1 billion for a 40 per cent stake in a landmark New York office building, a person familiar with the deal said on Sunday, in the latest sign of how foreign investors are fuelling a US commercial real estate market recovery. The deal, which closed on Friday, comes in the same week that food company Shuanghui International agreed to buy pork producer Smithfield Foods for US$4.7 billion. That purchase, if approved, would be the largest ever acquisition of a US company by one from China. Later this week, a summit between US President Barack Obama and Chinese counterpart Xi Jinping on trade and other issues could provide a further boost to Chinese investments. The Sungate Trust, which is controlled by the family of Soho China chief executive Zhang, joined with M Safra and Company, the investment firm of Brazil’s Safra family, to buy the stake in the General Motors Building, which values the tower at US$3.4 billion, the source said on Sunday. The deal makes the two million square-foot building – a 50-story tower overlooking New York’s Central Park and featuring Apple’s flagship Fifth Avenue store – the most expensive US office building. The news comes amid talks to sell 650 Madison Avenue, another office building close to the General Motors tower, to a group of investors for US$1.29 billion, in yet another pricey transaction. New York-based Crown Acquisitions and real estate investment firm Highgate beat others, including foreign investors, to buy the 27-story office and retail tower from private equity firm Carlyle Group. In addition to office space, the GM Building and 650 Madison contain extensive space for stores. Rents for retail stores often can be more than triple those for office space, giving both the buildings premium valuation. Still, these deals underscore how the commercial property market is benefiting from foreign investors flocking to US real estate, attracted by stability, higher yields and protection against inflation. Prices of top Manhattan office buildings have regained much of what they lost in the financial crisis. In April they were roughly 20 per cent below 2007 highs but were trending up, according to the most recent figures from the Green Street Manhattan Office Price Index. Prices of office buildings in the New York Metro area were up 25 per cent year over year in April, with Manhattan up 51 per cent, according to Real Capital Analytics. “It’s pretty clear to us that New York is one of the safest havens for investment around the world around today,” Haim Chera, principal of Crown, said. “The theory goes that rental growth in hard assets of this quality will be a safe place to protect.” Chinese investment in US real estate, already on the rise over the past four years, could increase further. Beijing’s State Administration of Foreign Exchange, which manages more than US$3.31 trillion, was reported to be exploring investing in US commercial real estate. All the interest is good news for the US commercial real estate market. In just the past three days, New York office properties have attracted about US$2.8 billion of investment commitments. Besides the GM building and 650 Madison Avenue, the source said broker CBRE sold Australian bank Macquarie’s New York headquarters building at 125 West 55th Street in Midtown Manhattan on Friday for more than US$450 million. The sellers of the 40 per cent stake in the GM building, also called 767 Fifth Avenue, were Goldman Sachs Group’s US Real Estate Opportunities Fund and Meraas Capital on the behalf of Middle Eastern investors. The other 60 per cent is owned by landlord Boston Properties, which together with its partners, paid about US$2.8 billion to acquire the GM building from Macklowe Properties in 2008. The names of the Middle Eastern investors could not be learned. But the sovereign wealth funds of Qatar and Kuwait invested in the original deal through the Goldman entity, as did a private equity firm affiliated with the ruling family of Dubai. Zhang planned to invest in the GM building with her own personal wealth, not Soho China’s funds, a source has previously said. Zhang’s family acquired a 49 per cent stake in Park Avenue Plaza in 2011 for nearly US$600 million. She also tried to provide US$800 million in financing for Vornado Realty Trust to build an office tower above the Port Authority bus terminal in Midtown Manhattan, but that was project was ultimately scrapped. Darcy Stacom, one of the CBRE brokers on the GM deal, which was first reported by the Wall Street Journal, could not be reached for comment. Zhang and M. Safra and Co also could not be reached for comment. The deal for the GM stake closed on Friday. Eastdil Secured handled the sale of 650 Madison Avenue for private equity firm Carlyle Group. Other bidders included Vornado and a consortium of General Growth Properties and Brookfield Office Properties, Reuters previously reported. The news of the final sale was earlier reported by Bloomberg.

Chinese president arrives in Costa Rica for state visit (Xinhua) - Chinese President Xi Jinping and his wife Peng Liyuan wave upon their arrival in San Jose, Costa Rica, June 2, 2013. Xi Jinping arrived here Sunday for a state visit to Costa Rica. Chinese President Xi Jinping arrived here Sunday for a state visit to Costa Rica with the purpose of promoting cooperation between the Asian giant and the Central American country. Upon his arrival, Xi said Costa Rica is an important country in Central America and expanding bilateral cooperation is not only in line with the fundamental interests of the two nations but contributive to world peace and development. Xi added that he looks forward to exchanging views with President Laura Chinchilla and other Costa Rican leaders on bilateral relations and other issues of common concern. The Chinese president said he is confident that the visit will help the two sides cement mutual trust, expand cooperation, deepen friendship and achieve win-win results. Costa Rican Foreign Minister Enrique Castillo extended a warm welcome to Xi and his wife, Peng Liyuan, at the airport. Since China and Costa Rica established diplomatic ties in 2007, bilateral cooperation has borne rich fruit in various fields, with two-way trade growing rapidly thanks to their free trade agreement, which came into effect in August 2011. Last August, Chinchilla paid a state visit to China, which injected new impetus to the comprehensive development of bilateral relations. Xi's ongoing visit "can further strengthen the cooperative relations in economy and trade and in investment for the benefit of both peoples," Chinchilla told Xinhua in a recent interview. Xi came to Costa Rica after wrapping up a state visit to Trinidad and Tobago, where he also met with the leaders of eight other Caribbean countries. From Costa Rica, he will travel to Mexico for a state visit, and then fly to California for a summit meeting with U.S. President Barack Obama. In a joint interview with media outlets from Trinidad and Tobago, Costa Rica and Mexico ahead of his Latin America tour, Xi said the purpose of the trip is "to deepen the traditional friendship between China and Latin America and expand their mutually beneficial cooperation." "I am confident that the visit will give a strong boost to the China-Latin America comprehensive and cooperative partnership featuring equality, mutual benefit and common development," Xi said.

CEO of world's largest advertising firm sees global prominence for Chinese brands (Xinhua) Chinese companies are looking at a promising future where domestic brands will become famous internationally, according to the chief executive of the world's largest advertising company. In a recent interview with Xinhua, Sir Martin Sorrell, chief executive of WPP (Wire & Plastic Products Group), said he believes that China's great size offers its domestic business a big advantage, which can be used as a platform to grow their firms into global brands. Sorrell is about to embark on a two-week trip to China in which he will discuss with his top executives the strategy of his firm's 1.5-billion-U.S.-dollar business in the country. "In China you have 1.3 billion people. It's four or five times bigger than America. So, if you think about it from a Chinese company's point of view, and if I was running a Chinese company I would want to make sure that I had done everything I could in China that I could before expanding abroad," he said. Sorrell, whose firm employs 165,000 people in 110 countries, said a large and strong domestic market was a good base for international growth, and pointed to the advantages that the United States and Japan have in the global economy. He also said that people worldwide are going to see more and more of global Chinese brands. NO HARD LANDING - "What we want to do is to increase our relationships with -- I call them local Chinese companies but they are big companies -- not only to build their businesses in China but to build them outside China because China is becoming a more and more important force on the world stage," he said. Sorrell believes China's strength lies in its domestic economy, saying that its 12th five-year plan highlights fewer savings and more consumption. The WPP was "very excited about the growth opportunities" and "are very bullish on China," he said, adding that "We think the new leadership is going to make a big difference." Sorrell said he does not believe there would be a 'hard landing' as the Chinese economy focuses less on growth through exports than on a greater exploitation of the potential of its domestic markets. "We don't think there will be a hard landing in China, it is a soft landing...The data we are getting is good data, and it is good data in terms of performance," he said. He also said that his business is focused on exploring the potential buying power of the new middle class. FASTER GROWTH RATE - Sorrell said his business, which had first been in the Chinese market in the late 1980s, plans to expand its presence in China. It currently turns over 1.5 billion U.S. dollars worth of business each year, with a workforce of 15,000 to 16,000. "We want to grow that at twice the GDP growth rate -- so the growth rate is 7.5 percent which is the target for the 12th Five-Year plan. We want to grow somewhere around 10-15 percent," Sorrell said. He also said that the WPP seeks to acquire domestic Chinese businesses, and pointed to the acquisition this month of Sinotrust, which specializes in the research of the automotive industry. Sorrell's trip to China will take him to a number of cities including Beijing, Qingdao, Shenzhen, Hangzhou, Nanjing, Shanghai and Chengdu. He said his firm's China strategy would be focused on all big cities, not just the giant, well-known cities. He said people often forget there was a big hinterland to China, adding that despite many cities in China are not as big as Shanghai or Beijing, yet they "are big." The WPP, which has now been operating in 80 cities in China already, seeks to do business in all cities where there are significant population concentrations, Sorrell said.

Rising tide in sales of smaller marine crafts (By Shi Jing in Shanghai shijing@chinadaily.com.cn) Yachts on show during China (Shanghai) International Yacht Show in April. The yacht market in China, especially in the Yangtze River Delta region, where there is abundant water, is expanding rapidly. Small yachts are very popular in the Chinese market. The more mature the market is, the more popular smaller yachts will become. This is a rule of thumb in the yachting industry that is now taking shape in the Chinese market. During the China (Shanghai) International Yacht Show in April, the number of smaller yachts shorter than eight meters in length that were sold showed a 43 percent year-on-year increase. Thibaut de Montyalon, director of the French sail and motor manufacturer Beneteau, said the four models of his company's smaller yachts were the most featured this year. Hubei Sanjiang Boats Science and Technology Co sold three smaller yachts at prices ranging from 65,000 yuan ($10,603) to 358,000 yuan during the four-day boat show. Silver Marine (Shanghai) Co sold 12 P580 yachts worth a total of 6 million yuan. Sea Lord International received six orders for smaller yachts priced at 350,000 yuan each. Thomas Dammrich, president of the National Marine Manufacturers Association of the United States, said during a forum at the yacht show that owning a private yacht is not a way of showing off wealth in the United States. It is more of a recreational tool for middle class families and social echelons above them. As a mature yacht show, the rising number of smaller boats exhibited indicates that the industry in China is developing according to the general rules of the yachting industry. Smooth Marine Equipment Ltd, based in Hong Kong, sold eight jet skis during the yacht show and received another 10 orders. The sales were up 10 percent year-on-year, according to May Y.M. Chan, director of the sales and marketing department of the company. There is more than one reason. First, Chan said the jet skis are from Bombardier Recreational Products, which is a well-known brand that easily wins over buyers. Second, sales of smaller yachts will easily outshine those of luxury boats during a slowing economy in which people have to be careful with their recreational budgets. "It is also very important to notice that the rising middle class in China has prompted the shift. A growing number of them would like to lead a healthy lifestyle and smaller yachts can help them to realize that goal," she said. The market in China, especially in the Yangtze River Delta region, where there is abundant water, is expanding so rapidly that Smooth Marine set up a Shanghai office in July last year, noticing the demand. "Because we are creating two more sub-dealers this year to bring the total number to 13, we hope sales revenue in China will go up by 15 percent," said Chan. The recently issued Outline for National Tourism and Leisure will provide much room for the further development of the yachting industry in China, said Yang Xinfa, deputy secretary-general of the China Association of the National Shipbuilding Industry. "Recreational yachting and equipment manufacturers are very likely to be the first industries to benefit from the policy," he said. Lyu Anni, marketing director of BAFS Yacht Sales Co Shanghai, said sales of smaller yachts ranging from 200,000 to 400,000 yuan are almost as good as those that cost more than 10 million yuan. The company sold more than 10 small yachts last year, seeing an almost 20 percent increase year-on-year. The small yachts, which are about four to five meters in length, sell especially well at BAFS Yachting. "These relatively cheaper yachts are mostly used nearby. Most of the customers are individuals," said Lyu. Hu Xiaoming, sales director of Visun Royal Yacht Club in Sanya, said yachts ranging from 40 to 50 feet (about 12 to 15 meters) in length had good sales last year. But he also warned that "the more expensive a yacht is, the fewer the number of people will buy one," especially when the economy is not that promising. Lars Petersen, general manager of Jebsen Marine, is also very happy to see sales of smaller boats rising in China although their company specializes in the sales of super luxury yachts such as the British brand Fairline. "Although the marinas are not full of yachts at the moment, you see more and more of them. It is also fun with smaller yachts. The attraction starts with jet skis, which are quite fun too, and moves on to maybe even some locally produced yachts," said Petersen. "It is important that the whole industry including small boats, sailing yachts and large yachts moves forward and develops," he added. 

Xi arrives in Costa Rica for state visit (Xinhua) Chinese President Xi Jinping arrived here Sunday for a state visit to Costa Rica to promote cooperation between China and the Central American country. Xi is scheduled to meet his Costa Rican counterpart Laura Chinchilla on the development of bilateral ties. He is also expected to visit a local farmer's family during his stay in the country. Since China and Costa Rica established diplomatic ties in 2007, fruitful achievements have been made in their cooperation in various fields. Last August, Costa Rican President Laura Chinchilla paid a state visit to China, which injected a new impetus to the comprehensive development of bilateral relations. Xi, who flew into San Jose from Port of Spain after his state visit to Trinidad and Tobago, is currently on his first trip to Latin America after becoming the president in March. He will also visit Mexico. "The purpose of the visit is to deepen the traditional friendship between China and Latin America and expand their mutually beneficial cooperation," said the Chinese president in a joint written interview with the media of Trinidad and Tobago, Costa Rica and Mexico ahead of his visits to the three countries. "I am confident that the visit will give a strong boost to the China-Latin America comprehensive and cooperative partnership featuring equality, mutual benefit and common development," Xi said. China and Latin America have expanded pragmatic cooperation in recent years, delivering tangible benefits to both peoples. With two-way trade reaching $261.2 billion in 2012, China has become the second largest trading partner of Latin America and the Caribbean, which witnessed the world's fastest growth of exports to China. By investing nearly $65 billion in Latin America and the Caribbean in accumulative terms, China has helped create much-needed jobs in the region. After his Latin American trip, Xi will travel to US state of California for a summit meeting with his US counterpart Barack Obama. The China-US summit will be the first of its kind since both nations completed their most recent leadership transitions. Xi and Obama are expected to exchange views on domestic and foreign policies, as well as issues of pivotal importance and regional and international issues of common concern, Chinese officials said. The summit would be conducive to strengthening strategic communication, increasing mutual trust, deepening bilateral cooperation and managing differences between Beijing and Washington, analysts said.

Shenzhou X spacecraft ready for June launch (China Daily) The Shenzhou X spacecraft, carried by a Long March-2F rocket, is transported to the launch site on Monday morning in Jiuquan, Northwest China's Gansu province. The spacecraft, which will be launched in mid-June from the Jiuquan Satellite Launch Center, will carry three astronauts and dock with Tiangong-1. 

Hong Kong*:  June 4 2013

Liaison office staff warned not to take gifts (By Tony Cheung tony.cheung@scmp.com) Accepting presents during events such as Dragon Boat festival against Beijing's policy, staff told, but some doubt impact of warning - The central government's liaison office has warned its staff to "decline gifts such as food and fruit during festivities", including this month's Dragon Boat festival. The statement comes after Communist Party General Secretary Xi Jinping made a call last December to end official extravagance. The liaison office's statement, released on its website on Friday night, reiterated staff "must strictly abide by the central government's eight requirements about improving working styles and maintaining close contact with the people". Office director Zhang Xiaoming announced in February that while the bureau would keep close contact with the people, it would reduce general social activities, ban officers from receiving expensive gifts from residents, and decline festive hampers. Since then, the liaison office's receptions have come under question after it was revealed that Timothy Tong Hin-ming, while commissioner of the Independent Commission Against Corruption, hosted lavish meals for top officials from the office. Wang Zhimin, a deputy director of the liaison office, earlier described the receptions Tong had hosted for his officials as "normal exchanges". The liaison office is tasked with representing the central government in Hong Kong, and liaising with different organisations and sectors to foster exchanges. Veteran China watcher Johnny Lau Yui-siu said the high- profile announcement was intended to show the liaison office was in step with Beijing's views. But he called the ban a "superficial gesture" and questioned whether it would have lasting impact. "It confirmed, indirectly, that giving and receiving gifts has been common for the office. Lau said: "The [ban] will have a short-term effect, but since those formalities are common in China, I think the practice could re-emerge in some other form after a period of time." Democratic Party lawmaker Albert Ho Chun-yan also worried that the ban "could do little to tackle corruption in general". Lawmaker Wong Kwok-kin, from the Beijing-loyalist Federation of Trade Unions, welcomed the liaison office's decision. "I know businessmen love to offer those gifts … and I have seen hampers and boxes of mooncake piling up in the liaison office during festivities in the past," Wong said.

Airport becomes last line of defence in fight to keep Chinese mainlanders out of maternity wards (By John Carney john.carney@scmp.com) Airport becomes last line of defence in fight to keep Chinese mainlanders out of maternity wards - Hong Kong International Airport has become the new front line in the battle to keep expectant mainland mothers from giving birth in the city. Last month a mainland couple were so desperate to have their baby in Hong Kong that the man's wife pretended to be Filipino and tried to fool immigration officials at the airport by using a false Philippine passport. Fong Waiyan and his wife, Fan Yueying, were arrested at Manila's Ninoy Aquino International Airport last month when Hong Kong immigration sent them back to the Philippines after discovering that Fan was using a fake passport. "The couple left Manila using their Chinese passports. But upon arriving at the Hong Kong airport, Fan pretended to be a Filipino by presenting a fraudulent Philippine passport to the immigration officer," a spokesman for the Philippine immigration authorities said. "The woman was denied entry due to a dubious immigration departure stamp on her passport and Fong decided to go back with her to Manila." Fan confessed to using the fake Philippine passport so she could give birth to her second child at a Hong Kong hospital instead of on the mainland. Both were blacklisted and will be deported. "Fan said they found a website that offers speedy processing of third-country nationality and which they contacted and paid 200,000 yuan [HK$251,000] for making the Philippine passport," the spokesman said. Since the "zero-birth quota" policy came into effect at the start of this year, the number of pregnant mainland women having emergency deliveries in Hong Kong has dropped significantly. There were just 22 in January and 34 in February. That compares to an average of 150 a month in late 2011, a record year when 43,982 mainland women gave birth in Hong Kong hospitals. A total of 4,202 pregnant mainlanders without bookings for deliveries at local hospitals have been refused entry by the Immigration Department so far this year. That was more than double the 1,931 women who were stopped in 2011.

Reserved property scheme may become policy (By Paggie Leung paggie.leung@scmp.com) Sales of plots to build flats for permanent residents will continue, perhaps long-term, minister says after strong developer response - Paul Chan Mo-po, Secretary for Development. The sale of land to build flats reserved for Hongkongers will continue and could become a formal, long-term policy, the development minister said yesterday. The comment came a day after tenders for the first two sites offered under the "Hong Kong property for Hong Kong people" scheme, at Kai Tak, drew a strong response from developers, with 29 bids. Speaking on an RTHK radio program, Secretary for Development Paul Chan Mo-po said the response showed the demand for land sites remained strong. Chan said the government was considering offering more sites, including some in the northeastern New Territories. The scheme might need to pass through the Legislative Council so the government could run it more effectively, he said. "We're going to legislate the Hong Kong Property for Hong Kong People scheme to prove the government's determination to implement this scheme in the long run," Chan said after the program. "The recent two sites that we offered were under a pilot scheme. If we want to extend the scheme and build on it, we think it would be better if we go through a legislative process," he said. He said the government had been discussing the legislation details with the secretary for justice, but he did not reveal details. Lawmaker Wong Kwok-hing, chairman of Legco's housing panel, said he had not heard about the proposed legislation before. "It's a bit strange because I think the scheme, which is an administrative policy, has not received much opposition and I don't see the need to make it a law," Wong said. Under the programme, apartments built on the designated sites can be sold only to local permanent residents for the first 30 years. An eligible buyer can jointly own one with family members, who do not need to be permanent residents. Vincent Cheung Kiu-cho, national director for Greater China at property consultancy Cushman & Wakefield, said the sale and resale conditions of apartments to be built on sites under the programme were currently written into the tender documents and land leases. He said he believed the government might want to formalise these conditions into a law so all the terms would apply whenever a site is identified for the scheme. "Right now these conditions are bound by a form of contract. But after legislation, they will be bound by the law, which may give some legal definition to some terms," he said.

 China*:  June 4 2013

China accuses US of ' political prejudice' over Tiananmen (By Associated Press in Beijing) China accused the United States of 'political prejudice' and 'ignoring facts' about the 1989 Tiananmen Square protests. China accused the United States of “political prejudice” and “ignoring facts” for calling on it to fully account for those killed, detained or missing in the 1989 bloody military crackdown on protesters in Tiananmen Square. State Department spokeswoman Jen Psaki said Friday that the US was remembering the “tragic loss of innocent lives” ahead of the 24th anniversary on June 4 of the violent crushing of student-led pro-democracy protests. In response, Foreign Ministry spokesman Hong Lei said that China urges the US “to discard political prejudice and correctly treat China’s development,” according to the Xinhua News Agency’s English service late Saturday. “A clear conclusion has already been made concerning the political turmoil that happened in the late 1980s,” Xinhua said, citing Hong. The US releases “similar statements year after year, ignoring facts and making groundless accusations against the Chinese government,” which is a “rude interference in China’s internal affairs,” it said. The Chinese government has never fully disclosed what happened when the military crushed the protests, which it branded a “counterrevolutionary riot.” Hundreds, possibly more, were killed. The topic remains taboo in China, and Hong’s statement was not available on Xinhua’s Chinese service or the Foreign Ministry’s website. “We renew our call for China to protect the universal human rights of all its citizens; release those who have been wrongfully detained, prosecuted, incarcerated, forcibly disappeared, or placed under house arrest; and end the ongoing harassment of human rights activists and their families,” Psaki said in her statement.

US defence chief Chuck Hagel offers Hawaii meeting to ease Asian tensions (By Agencies in Singapore and Minnie Chan minnie.chan@scmp.com) Defence chief Chuck Hagel also tries to assure Beijing the US 'pivot' to Asia isn't aimed at China - The US defence chief yesterday offered to host a meeting of Southeast Asian defence ministers in Hawaii next year, and at the same time sought to ease China's doubts over the US' military "pivot" to Asia. Defence Secretary Chuck Hagel was speaking at the annual Shangri-La Dialogue security forum in Singapore. Territorial disputes in the South China Sea between China and its Asean neighbours are likely to be one of the key issues on the agenda in Hawaii. Four of Asean's 10 member states - Brunei, Malaysia, the Philippines and Vietnam - are disputing territory in the South China Sea with China. Smaller member countries such as Laos and Cambodia have come under increasing Chinese economic and political influence, partly as a result of foreign aid from Beijing. On Friday, Vietnam's prime minister, Nguyen Tan Dung, said: "There have emerged preferences for unilateral might, groundless claims and actions that run counter to international law and stem from imposition and power politics." Zhou Fangyin , an expert in global strategy at the Chinese Academy of Social Sciences, said the US would also use the Hawaiian meeting to address the Asean countries' doubts over its "pivot" towards the Asia-Pacific. "The Asean countries will be worried about whether the 'pivot' is a temporary strategy, and whether the US will leave in the same way it exited the Middle East," he said. Hagel held out hope for improving military relations with China while warning on cyberattacks from China. Taking questions after his speech, Hagel was challenged by a Chinese military delegate over what Washington could do to reassure Beijing that it really wanted a positive relationship when it was focusing so many military resources on the region. "US officials have on several occasions clarified that the rebalance is not against China," Major General Yao Yunzhu , an expert on Sino-US defence relations at the PLA Academy of Military Science, told Hagel. "However, China is not convinced." Hagel replied: "How can the US assure China of our intentions? That's really the whole point behind closer military-to-military relationships. We don't want miscalculations and misunderstandings and misinterpretations, and the only way you do that is you talk to each other." British defence minister Philip Hammond said rising defence spending in Asia was "worrying" amid growing tensions over territorial disputes and competition for resources. "[It] has the potential to become at best a prolonged source for instability and at worst, a driver for conflict," he said.

China patrols in disputed seas are 'legitimate', says top PLA general (By Associated Press in Singapore) Qi Jianguo, deputy chief of the General Staff of the People's Liberation Army, delivers a speech at the Shangri-La Dialogue in Singapore. China on Sunday deflected criticism over its actions in several maritime disputes with its neighbours and defended its relationship with North Korea. Lieutenant General Qi Jianguo, deputy chief of the People’s Liberation Army, reiterated at an annual security conference in Singapore that the Chinese government and military seek only peaceful development and that other countries should not view its strengthening military as a threat. China is embroiled in a series of running disputes with its neighbours, including a high-profile one with Japan that has soured bilateral relations, and with several countries around the South China Sea who dispute China’s claims to potentially oil-rich areas of the sea. Beijing and Tokyo have been caught up in a long-running battle over what the Japanese call the Senkaku Islands and the Chinese call Diaoyutai. China recently asserted its dominance by sending government ships into Japanese territorial waters in April. Qi said China was only safeguarding its sovereignty in its dispute with Japan, where both claim ownership over the islands, and with other countries such as Vietnam and the Philippines in the South China Sea. Chinese warships and the patrolling activity are totally legitimate and it is uncontroversial to patrol within our territory. “We are very clear about that, so the Chinese warships and the patrolling activity are totally legitimate and it is uncontroversial to patrol within our territory,” Qi said when being questioned by delegates. Qi faced a series of pointed questions about China’s growing military and regional assertiveness, and joked that he thought he would have “an easier time than Chuck Hagel,” the US defence secretary who is also at the conference. Qi repeated China’s stance that it wanted to resolve the disputes through bilateral negotiations. Some of the countries want multilateral talks, feeling China’s size is too much of an advantage in direct talks. He also repeated China’s stance on North Korea, where the US is seeking Chinese assistance in resolving problems with Pyongyang, which has raised tensions with a series of rocket launches, an underground nuclear test and threats of nuclear strikes against the US and its allies. Qi said China wants the tension on the Korean Peninsula reduced through talks, and that Beijing backs the denuclearisation of the peninsula. China is impoverished North Korea’s economic and diplomatic lifeline, providing nearly all of its fuel and most of its trade. Qi also dismissed concerns of any imminent collapse in North Korea. “I think we are overestimating the situation in North Korea. As far as we know, it is stable and we don’t see any sign of break down in the country,” he said in answer to a question.

Xi calls for legislative exchanges with Trinidad and Tobago (Xinhua) President Xi meets Trinidad and Tobago's Senate President Timothy Hamel-Smith, left, and Speaker of House of Representatives Wade Mark in Port of Spain, Trinidad and Tobago, June 1, 2013. President Xi and Prime Minister of Trinidad and Tobago Kamla Persad-Bissessar, left, attend the unveiling ceremony marking the start of the construction of a children's hospital by a Chinese company in the central city of Couva, Trinidad and Tobago, June 1, 2013. President Xi Jinping on Saturday called for more exchanges between the legislative bodies of China and Trinidad and Tobago while meeting with the parliament leaders of the Caribbean nation. "I hope the legislative bodies of the two countries can maintain exchanges, and learn from each other on legislation, supervision and governance," Xi said when he met with Senate President Timothy Hamel-Smith and Speaker of House of Representatives Wade Mark. Xi said legislative exchanges can enhance mutual understanding, consolidate public support for the development of the bilateral relationship and promote friendly cooperation between the two countries. The Chinese president also spoke highly of the achievements that Trinidad and Tobago has achieved in social, economic and ecological development. Xi arrived in Trinidad and Tobago on Friday evening for a three-day state visit, the first by a Chinese head of state since the two countries established diplomatic ties in 1974. Xi said he has reached new major consensus on expanding bilateral cooperation with the leaders of Trinidad and Tobago during his visit. Smith and Mark, for their parts, recalled their visits to China last year, saying the tour helped them better understand the country's development path and governing methods. They said Trinidad and Tobago supports the Chinese people to pursue their Chinese dream, and their country's parliament hopes to have regular exchanges with the National People's Congress of China to further promote bilateral ties.

Hong Kong*:  June 3 2013

NTT unveils Hong Kong's first 'financial data centre' (By Bien Perez bien.perez@scmp.com) Finance industry firms and IT companies have already booked 80 per cent of facility's capacity - The facility is NTT's largest and most advanced data centre investment. It has more than 140 sites worldwide. NTT Communications, the information technology services arm of Japanese firm Nippon Telegraph and Telephone, expects to buttress Hong Kong's position as an international financial centre with the opening yesterday of its new HK$3 billion data centre in Tseung Kwan O. Takanobu Maeda, president and chief executive of NTT Com Asia, the regional subsidiary of NTT, said the complex was Hong Kong's first "financial data centre" consisting of high-performance infrastructure designed to meet the requirements of financial services providers and information technology companies. The facility is the largest and most advanced data centre investment by NTT, which operates more than 140 sites around the world. Its other Hong Kong data centre locations are located in Kwai Chung and Tai Po. A data centre is a secure and temperature-controlled facility equipped to house large-capacity server computers and data-storage systems. They are maintained by multiple power sources and have high-bandwidth internet connections. Brandon Lee Ming-fai, the chief strategy officer at NTT Com Asia, said the new NTT financial data centre was Hong Kong's first such facility with a so-called Tier-IV rating. The rating is the highest industry certification possible. It is given to places that can host critical computer systems in such a way as to be safe from earthquake, leak or fire. The NTT complex is for two data centre towers and a command building. It contains space for more than 6,000 racks of servers. Lee said the first data centre tower was already 80 per cent booked, by financial services providers and technology firms, half of which were based outside of Hong Kong. Susie Ho Shuk-yee, the Permanent Secretary for Commerce and Economic Development, said: "The Hong Kong government is committed to promoting the development of high-tier data centres." A cluster of 12 data centres are currently located in the Tseung Kwan O industrial estate. The NTT complex sits across from the HK$1.5 billion data centre of bourse operator Hong Kong Exchanges and Clearing.

Top banks forced to pull back on higher rates (By Kanis Li kanis.li@scmp.com) Big four lenders offer better mortgage terms to some clients as small players gain market share - Although property sales are sluggish, competition in the home loan market is heating up as smaller lenders spot an opportunity to undercut the leaders. Leading banks in Hong Kong are being forced to step back from their mortgage rate increases to defend their market share from smaller players. The top four mortgage banks - Bank of China (Hong Kong), HSBC, Hang Seng Bank and Standard Chartered - are now resuming offering lower rates to selected customers or adding flexibility to the loan plans after raising the official rates in March. "We are facing a net outflow of business as new loans shrink and existing clients repay their loans," a senior executive at a leading bank said. The market share of the top four banks in residential and commercial property loans fell slightly to 69 per cent in April from 69.2 per cent in March, Centaline Mortgage Broker research based on Land Registry data shows. Banks are watching anxiously for the market share report for last month, in case they need to extend discounts further. HSBC and Hang Seng have started to unofficially offer rates as low as 2.15 per cent to some clients. HSBC offers that rate to Premier account holders, people familiar with the situation said. Hang Seng is also doing so for its best clients. The best official lending rates remain at 2.85 to 3.15 per cent for HSBC and 2.4 to 3 per cent for Hang Seng. The Hong Kong Monetary Authority ordered banks in February to hold more capital to back up their mortgage lending. The four banks raised their mortgage rates by 0.25 percentage point in March because their costs of capital had increased. Few smaller banks followed. However, even as property deals remain sluggish, money lenders are luring customers who fail the banks' stress tests. Figures from brokerage mReferral show the number of mortgage applications to non-bank institutions soared 48.7 per cent to 2,639 in this year's first four months from the same period last year. Anthony Hong, an executive director of Hitachi Capital (HK), said mortgages were much larger in size than their vehicle leasing loans and "could bring a pretty good return to us, as the cost of funds remains quite low under quantitative easing". The senior bank executive said: "At this stage, we still hope to keep the shelf price unchanged, so we offer lower rates only to our high-end clients." Standard Chartered launched a new fixed-rate mortgage plan on Thursday, following HSBC and BOCHK. It offers a fixed rate of 3.25 per cent for the first 10 years, and prime minus 2.85 per cent for the rest of the term. BOCHK and Standard Chartered also are allowing borrowers to transfer their fixed-rate mortgages to a new home loan when they sell a flat and buy a new one.

How calorie-counting and supermarkets are hitting Hong Kong's rice shops where it hurts (By Xenia Chan and Hedy Bok) Wong Tak-kam says in the 1970s there were more rice shops in Hong Kong than banks. In this latest episode of our Uniquely Hong Kong series, a traditional rice shop owner laments how his business is declining in changing times, but argues it still has a vital role to play - Traditional rice shops are dying out in Hong Kong due to changing consumption habits among younger Chinese and competition from supermarkets, says Wong Tak-kam - owner of one of city's oldest rice shops. The 68-year-old, who runs Shing Hing Tai Rice Shop, has been in business since 1970 - five years after his father first opened the shop in Shek Kip Mei. Despite rice traditionally being the staple diet of southern China, rice shops in Hong Kong are struggling. Wong says the shops still perform an important role offering quality rice to customers. He explains that a bag of rice is as unique as a cup of tea - each bag has its own flavour and character. Wong also says his prices match those of supermarkets - although his shop has a wider selection. "They [supermarkets] sell pre-packaged bags of rice which taste bland, because manufacturers follow a one-recipe-fits-all formula. There are also artificial colourings." Consequently, Wong rarely visits supermarkets except to learn what his "competitors" are selling. He admits, however, that supermarkets are more convenient. He says another reason for the decline in rice consumption - perhaps more than the advent of supermarkets - is today's obsession with slimming. "Women are afraid of eating carbohydrates, getting fat, and contracting diabetes." Wong shakes his head. "Rice can't be substituted. Rice is what makes us Chinese; the rice "qi" (or spirit) can't be replaced by noodles or bread," he stresses. Preparing containers of rice for sale is something of an art. The rice "master" must understand how much old and new rice is to be mixed to maximise taste and quality. "Old" rice is more fragrant, and a year older than freshly harvested rice. "Old rice used to be the norm when people were poorer in the 1970s," explains Wong. "It expanded more, so it could fill people's stomachs better. But it was also very hard. So, now, we add in newer rice. New rice is smaller and has smoother texture, so together, it's filling, fragrant, and settles better in the stomach." There is also red, brown, and organic rice. Wong says these have become more popular in recent years, owing to today's increasingly health-conscious culture. The most popular brand comes from Thailand, but he also stocks rice from the United States, China and Vietnam. Other types include pearl and glutinous rice. Wong is meticulous about quality. "If it's yellow, and smells bad... it's no good. Too old, and it'll be a mess when cooking. You want white and fragrant rice." However, Wong says it has not been hard keeping up with trends. "I know people's tastes, so it's quite easy for me to know the proportions they want." He said this was true of all rice masters. They sit down with their customers and work out their preferences. Once the rice master establishes the proportions of each type for an individual bag, he puts it into a rice-sifting machine. Wong's machine is as old as the shop itself, but still does a remarkably good job - dirt, sand, silt and even bugs are separated into a bucket. After the rice is clean, it is bagged and stored until Wong makes home deliveries. He typically does this every 2-3 weeks, a far cry from the 1970s, when he made deliveries every other day. However, sometimes he gets more business. Recalling one incident 10 years ago, he says: "It was around the time of Leslie Cheung Kwok-wing's {death] and Sars. Everyone was scared there would be no more rice. So they stocked up." He adds: "You can't keep rice for so long - it will go bad. Weevils will get in, and the rice will be inedible. And besides, if there's no rice, you can always eat something else." Then he quickly adds that rice, when available, should always be the first priority in Chinese food. "Rice isn't very nutritious, but it gives me a lot of power. That's why we rice masters can do such heavy labour," says Wong. To demonstrate, he lifts three bags, in total 75kgs, onto his shoulders and jumps on his bike, to deliver his bags for the week. But Wong is pessimistic about the future. "Everyone is so old now," he says, referring to his contemporaries. "And no one wants to be in this business. It's physically taxing," he points to his hunched back, "And it doesn't pay well. When I retire, I'm just going to close my shop. No one is going to follow in my footsteps." His wife jokes. "And our rice-sifting machine will go to a museum." Then, gesturing towards her husband, she adds: "even he's old enough to be a relic."

 China*:  June 3 2013

Beijing visa-free tourists allowed to retrieve prohibited goods (Xinhua) Beijing relaxed its 72-hour visa-free transit policy on Wednesday by allowing tourists traveling under this arrangement to claim back prohibited-entry goods upon leaving the capital. Goods including pets and food are prohibited from entering Beijing, although they can be stored upon arrival. Travelers are allowed to apply to retrieve them upon departure, although this did not previously apply to those taking advantage of the 72-hour visa-free transit policy. In announcing the move, a spokesman for the Beijing Entry-Exit Inspection and Quarantine Bureau clarified that some fresh foods that are not easy to preserve would not be returned. To prevent infectious disease or animal and plant disease from entering the country, the bureau also signed a memorandum of understanding with the Beijing Municipal Commission of Tourism Development on Wednesday. The two government organs will report overseas epidemic situations to each other so as to prevent the entry and spread of infectious viruses.

China wants dispassionate cyber talks with US (By Agencies in Beijing) A security officer patrols outside the Shangri-La Hotel in Singapore where the Shangri-La Dialogue is taking place on Friday. China and the United States should have dispassionate discussion and forge cooperation on the issue of cybersecurity, China's Foreign Ministry said on Friday. The remarks came after US Defense Secretary Chuck Hagel said that the issue was likely to come up, in a brief meeting with Chinese delegates on the margins of the Shangri-La Dialogue, which runs from Friday to Sunday in Singapore. Hagel, who was en route to the conference on Friday, said he would also address cybersecurity in his speech on Saturday. "China would like to exchange ideas with the US on issues of common concern," spokesman Hong Lei said when asked whether Beijing and Washington would talk about cyberattacks in Singapore. "We believe that we should have dispassionate discussion on the issue, bring in highlights in cooperation and jointly explore a peaceful, secure, transparent and equal cyberspace," Hong said. Ministry of National Defense Spokesman Geng Yansheng said on Thursday that Qi Jianguo, deputy chief of the general staff of the Chinese People's Liberation Army, will lead the Chinese delegation to the dialogue. He said Qi would address the general meeting to clarify China's defense policies and initiatives on regional security cooperation. Qi will also "meet leaders of defense departments and the military of relevant countries and exchange ideas on the regional security situation and bilateral military relations", Geng said. "Cyberthreats are real, they're terribly dangerous," Hagel said on Friday. "They're probably as insidious and real a threat (as there is) to the US, as well as China, by the way, and every nation." Cyber conflict could lead to "quiet, stealthy, insidious, dangerous outcomes", from taking down power grids to destroying financial systems or neutralizing defense networks, Hagel said. "That's not a unique threat to the US, (it affects) everybody, so we've got to find ways here of working with the Chinese, working with everybody, (to develop) rules of the road, some international understandings, some responsibility that governments have to take," he said. Hagel's remarks came two days after news reports said the US Defense Science Board - a committee of civilian experts who advise the US Defense Department - had concluded that Chinese hackers have gained access to the designs of more than two dozen major US weapons systems in recent years. The Pentagon downplayed the report as outdated and overstated. But it also underscored concerns about Chinese hacking in a separate report to the US Congress earlier this month, accusing Beijing of using cyber espionage to modernize its military. Beijing has dismissed such accusations, saying they are groundless and that China itself is also a victim of the attacks. Hagel said he had invited Chinese Defense Minister Chang Wanquan to visit the US and a trip was being organized for August. Wu Shicun, head of the National Institute of South China Sea Studies, who was invited to the Shangri-La event, said that the South China Sea issue is among the highlights of the meeting. Tensions between China and the Philippines escalated this week over a Philippine warship that has been grounded on a Chinese reef in the South China Sea for years.

Xi arrives in Trinidad and Tobago for state visit (Xinhua) Chinese President Xi Jinping (2nd L) shakes hands with Trinidad and Tobago President Anthony Carmona after Xi and his wife Peng Liyuan (1st L) arrived at the Piarco International Airport in Port of Spain, Trinidad and Tobago on Friday evening. [ PORT OF SPAIN - President Xi Jinping arrived at Trinidad and Tobago on Friday evening, kicking off a seven-day visit to Latin America and the Caribbean to give the relations between China and the region a further boost. This is the first time that a Chinese president has ever visited the Caribbean country since the two nations established diplomatic ties in 1974. A number of cooperative documents covering economy, trade and education are expected to be signed. The special flight of President Xi landed at the Piarco International Airport at around 7 pm local time amid slight rain. The Chinese leader stepped off the plane with his wife Peng Liyuan, who was dressed in white and light green, both in smiles. The couple received a warm welcome at the airport from Trinidad and Tobago President Anthony Carmona and his wife, as well as Prime Minister Kamla Persad-Bissessar. Twenty-one gun salutes were fired. Xi said Trinidad and Tobago is a country with major influence in the Caribbean region, and he is looking forward to having in-depth exchange of views on bilateral relations and international and regional issues of mutual interest with leaders of the country. During his stay in Port of Spain, Xi will also meet leaders from eight other Caribbean countries. "I look forward to discussing bilateral relations with them and exploring together ways to boost cooperation," he said. "I believe that with the concerted efforts of all participants, these meetings will be successful and elevate the friendly relations and cooperation between China and Caribbean countries to a new level."

Hong Kong*:  June 2 2013

I Am Home exhibition reveals Hong Kong's lofty ambitions (By Kylie Knott kylie.knott@scmp.com) Scenes from the Inter Cities/Intra Cities show, back in Hong Kong after success in Venice. Geographically speaking, Hong Kong is a blip on the world map. But despite its small size the city made a big impression at last year's Venice Biennale International Architecture Exhibition, with the city listed among the top five exhibits at the annual event, held under the name "Common Ground". Hong Kong's exhibits, "Inter Cities/Intra Cities: Ghostwriting the Future", turned the spotlight on the architectural and cultural regeneration of Kowloon East, one of the largest regeneration projects in the world. Now Hongkongers will get a chance to see the exhibition. Under the name "I Am Home", the response exhibition is being held in three different locations of Kowloon East. "Kowloon East is an interesting area - a rapidly changing area of 600,000 people that includes Kwun Tong," says the exhibition's curator, Chris Law Kin-ching. "We want this response exhibition to promote the continuing dynamic growth of Hong Kong as a world-class city and to also allow the people of Hong Kong the chance to enjoy the exhibition, which gained a great amount of interest abroad." The show comprises 15 curated works as diverse as Hong Kong Honey, a group of local beekeepers, artists and designers that promotes the value of bees and the benefits of locally-produced honey, to big construction projects such as the Kai Tak Cruise Terminal project by architectural firm Foster + Partners. "There's a lot of visionary ideas here from some young and talented architects and designers - it's very inspiring and impressive that young people are thinking about the future and how living conditions can be improved," says Law. Law says one exhibit, "The Shared Sky", shows a tower block that shifts and turns in the sky so everyone can enjoy the views. Another exhibit looks at how the elderly have been affected by urban renewal. "I Am Home" is co-organised by the Hong Kong Institute of Architects and Hong Kong Arts Development. It will take on the form of a roving exhibition and will be open to the public until June 18 at various locations within Kowloon East.

 

Shortages hamper Tung Chung hospital (Johnny Tam johnny.tam@scmp.com) Lantau facility will open in September, but due to lack of staff will run only A&E services, for eight hours a day, for the first five months - Chief manager Dr Chong Yee-hung in the trauma room of the A&E department at North Lantau Hospital. Tung Chung is due to have its own hospital this year, but 24-hour accident and emergency services will not be available until the third quarter of next year due to a shortage of medical staff. North Lantau Hospital, under the Kowloon West Cluster, will open in late September, but operations will be launched in phases, with the accident and emergency department in service eight hours a day, from 9am to 5pm for the first stage. The hospital - near Yat Tung Estate - is a seven-storey, crescent-shaped block. Construction began in January 2010, with a HK$2.48 billion budget, and ended in December last year. Interior renovation and equipment installation are under way. "It's common for newly opened hospitals to have a run-in period to ensure everything goes well," said Dr Chong Yee-hung, chief manager (North Lantau Hospital). "But once we're on track, we'll push the schedule forward [for the next stage]." The hospital is expected to provide accident and emergency services for 16 hours every day by January, at the latest. But residents must wait another six months until the service can be offered full-time. By the end of last year, the Hospital Authority had hired more than 80 new employees. However, recruitment was not running as smoothly as it could, due to the severe shortage of doctors. "The city's supply of doctors is very tight. We hope to have one more year [before providing the 24-hour services] to recruit more graduates," Chong said. He admitted the hospital still needed 10 more doctors to provide all-day accident and emergency services. Islands District councillor Bill Tang Ka-piu said the arrangement was disappointing for the residents of Tung Chung, but it was better than having no hospital in the area. "At least there's a timetable showing that [the 24-hour services] will come in a year," said Tang of Yat Tung Estate North constituency. Currently, Tung Chung residents requiring hospital care must travel about 30 minutes to Princess Margaret Hospital. North Lantau Hospital has 160 beds, but will wait until it is fully operational before accepting in-patients. However, people who need other specialist services the hospital does not provide will have to be taken to other hospitals within the cluster. There will also be 20 day-beds for patients undergoing minor operations not requiring overnight stays. The new town, at the northwestern corner of Lantau Island, has a population of about 100,000. The government wants to extend Tung Chung through reclamation as part of its plan to ease long-term housing needs. A three-hectare piece of land next to the hospital has been reserved for extension to cope with a possible increase in population.

Kai Tak residential sites attract hordes of bidders (By Yvonne Liu yvonne.liu@scmp.com) The site of the old Kai Tak airport, part of which will be redeveloped into a residential area for permanent Hong Kong residents. Two residential sites in Kai Tak on Friday received a huge response from developers who submitting a total of 29 bids despite the restriction that the flats built on the sites must be sold to Hong Kong permanent residents. The smaller of the two sites attracted 16 bids, while the adjacent one, 13 bidders, said a Lands Department spokesman. The sites are in the centre of the Kai Tak development area and near the future Kai Tak MTR station on the Sha Tin-Central Link line. Surveyors estimated they could fetch HK$3.96 billion to HK$4.4 billion, or HK$4,500 to HK$5,000 per square foot. The smaller site covers an area of 83,647 square feet, which could yield a total gross floor area of 418,235 sq ft. The larger site has an area of 92,409 sq ft and could provide a total gross floor area of 462,045 sq ft. Developers such as Cheung Kong, Nan Fung Development, Chun Wo Development, Paliburg, Regal Hotel International, Chinachem, Sun Hung Kai Properties, Emperor International, Wheelock Properties, Sino Land, New World Development, Lai Sun Development and Glorious Sun Enterprises, K Wah International, Wing Tai Properties, Henderson Land, and China Overseas Land and Investment submitted bids for the smaller site. Most of them also submitted bids for the adjacent larger site, except Emperor International and Chun Wo Development.

 China*:  June 2 2013

Foreign companies adapt to China's changing retail landscape (By By Li Jiabao and Li Woke lijiabao@chinadaily.com.cn and liwoke@chinadaily.com.cn) Rising costs, growing impact of e-commerce pressure overseas firms - Foreign retailers in China are changing their strategy in the nation amid fierce competition, rising costs and consumers' changing demand, Ministry of Commerce spokesman Shen Danyang said on Thursday. Both foreign retailers and their local counterparts are facing heated competition as China's retail market keeps expanding. The recent closures and mergers among foreign retailers, especially in the home appliance and building materials retail sectors, are the result of "normal" competition, Shen told a news briefing. Last year, the world's largest convenience store retailer, 7-Eleven, confirmed store closures in Guangzhou, capital of Guangdong province. Even the world's largest retail giant by sales, Wal-Mart Stores Inc, closed two stores in Wuxi and Shenzhen - the location of its China headquarters - in April after a business appraisal. Home Depot Inc closed all seven of its remaining stores in China last September after years of financial losses, while Best Buy Co closed its nine outlets in the country in early 2011, after having discovered that its Western business model didn't work well in China. In addition to store closures, other foreign retailers have slowed their expansion in the nation. Wal-Mart said it plans to open around 33 stores a year. In past years the figure was around 50. "Store location, company strategy and business performance combine to create a decisive factor regarding the adjustment of stores," said Li Ling, senior director of public relations at Wal-Mart China. Shen said: "After a period of rapid expansion, some foreign retailers have entered a phase of restructuring and slowed their pace. "But some are still successful and investing more in logistics, distribution networks and after-sales services, along with opening more outlets, which is also the result of competition." He added that foreign retailers in China, on the whole, have good operations and a total of 321 foreign-funded enterprises were established in 2012 involving $1.91 billion in direct investment, up 5.46 percent year-on-year. Overall foreign direct investment in China declined 3.7 percent year-on-year in 2012. Although some traditional retailers' business slowed, others have maintained or increased their growth rate. France's Carrefour SA, the world's second-largest retailer by revenue, said it will retain an annual growth rate of around 20 to 25 new outlets in China. Carrefour announced on March 18 it had opened its first hypermarket in the Inner Mongolia autonomous region, improving its presence in lower-tier cities. Carrefour currently has 220 stores in more than 60 cities across China. In 2012, Germany's Metro Group opened 12 stores, three to four times its original annual growth rate. The stores are mostly located in second- and third-tier cities, including Zhongshan and Shunde in Guangdong province. Du Hongyan, a retail analyst at CIConsulting, said in a research note last week that China's retail sector is experiencing transformation, which forces business players to adjust their strategies. Foreign retailers in China gained a competitive edge with their advanced management and technology, as well as preferential treatment in land use and taxation in past decades. But rising costs in recent years, especially in first- and second-tier cities, are putting a great deal of pressure on foreign retail giants in China, in addition to the growing impact of e-commerce, Du said. Sales channels are no longer the key factor for profitability and competitiveness as a result of the impact of e-commerce. Community stores, and shopping centers with outstanding services and facilities, as well as e-commerce are proving more popular than large shopping malls, Du added. Shin Kong Place, which topped sales among department stores in 2011, achieved total sales revenue of 7.3 billion yuan ($1.19 billion) in 2012, up 12.3 percent year-on-year. In comparison, it experienced rapid sales growth from 2009 to 2011 at an average annual rate of 30 percent. Another retail giant, Guangzhou Grandbuy, saw negative net profit growth for the first time since it was publicly listed in 2007, and its annual operating revenue grew just 2.3 percent year-on-year to 7.35 billion yuan in 2012, while in 2010, it grew by more than 20 percent, according to the annual financial report of the Shenzhen-listed company. Du added that cities in central and western regions will have more potential in expanding consumption while e-commerce will continue denting offline store sales, with its impact spreading from first and second-tier cities to smaller ones. Online sales surged to 8 trillion yuan in 2012, an increase of 31.7 percent year-on-year, according to the ministry.

Backstreet Boys love China's pandas (China Daily) Members of the reunited Backstreet Boys take time out from their China tour to help feed baby pandas with bamboo and milk at Chengdu Research Base of Giant Panda Breeding in Southwest China's Sichuan province, May 30, 2013. The boys are expected to perform in Chengdu on May 31, 2013, their first concert in the city since they reunited. 

Acquisition to sharpen Chinese meat processor's edge - Shuanghui International, China's largest meat processor, has agreed to buy Smithfield Foods for 7.1 billion U.S. dollars, a move deemed to elevate the Chinese company's global profile and sharpen its competitiveness in the domestic market.

China will study the possibility of joining the Trans-Pacific Partnership (TPP) on the basis of equality and mutual benefit, a Ministry of Commerce (MOC) spokesman said on Thursday. "We will analyze the advantages, disadvantages and the possibility of joining the TPP, based on careful research and according to principles of equality and mutual benefit," said MOC spokesman Shen Danyang. He made the remarks at a news briefing in response to a question regarding China's attitude to joining the TPP, which is a proposed free trade agreement under negotiation by 12 nations including the United States, Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Japan. "China also hopes to exchange information and materials with TPP members on the negotiations," according to the spokesman. Shen said that the diversification of the regional economic situation should be considered in building the free trade zone, and openness, inclusiveness and transparency should be advocated.

Children's Day celebrated across China - Various activities are held across China to celebrate the coming International Children's Day.

Hong Kong*:  June 1 2013

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

South China Morning Post (SCMP) launches campaign to celebrate Hong Kong (By Ada Lee ada.lee@scmp.com) Major Post initiative to hail city's unsung heroes and highlight its history and culture for newspaper's 110th anniversary praised by chief executive - Chief Executive Leung Chun-ying and young artist Kenny Lau Kin-gi at the launch of the Celebrating Hong Kong campaign. The South China Morning Post launched a campaign last night to celebrate the city's culture, history and ordinary people as the newspaper marks its 110th anniversary. The campaign - Celebrating Hong Kong - includes awards to recognise the city's unsung heroes and will also feature debates and a charity auction. SCMP Group chairman Dr David Pang Ding-jung said the aim of the campaign was to "focus a measure of our energy on the positives around us". He said at the launch in Admiralty: "The South China Morning Post was born in the city 110 years ago. We've seen good and not so good times, sickness and health, war and peace, poverty and prosperity. Throughout it all, we have always loved our home, and have watched it grow from strength to strength, one day at a time." Chief Executive Leung Chun-ying described the Post' s initiative as "a great way to bring people together in the best interests of our city, to mine the best ideas, to envision the city's future and to recognise our unsung heroes." Former chief secretary David Akers-Jones will chair the judging panel for the Spirit of Hong Kong Awards. They will be based on stories in the Post's Heartbeat series about people in occupations not commonly known among Hongkongers. He said the Post's name was redolent of the city's history. And of the awards, he said: "We're looking for the unsung heroes - people that perhaps don't automatically come to mind but really, in their way, great or small, they made a contribution to Hong Kong." Standard Chartered chief Benjamin Hung Pi-cheng, seven-year-old artist Kenny Lau Kin-gi and Olympic cyclist Sarah Lee Wai-sze are the campaign's ambassadors, along with other business and academic figures. Lau said: "I love Hong Kong because I was born in Hong Kong. It is so colourful - the dolphins are pink, Big Buddha is brown, the beaches are golden, cha siu bao is white and the people come in all different colours." The Post will also host a series of debates called Redefining Hong Kong. The lunchtime discussions will be co-hosted by industry experts and the campaign ambassadors and will cover a wide range of topics. The charity auction, which will feature donations from artists and designers, will be held early next year. It will raise funds for the needy. The Post's chief executive officer, Robin Hu, said the newspaper had played the role of a recorder, observer and interpreter in the past century. "As history evolves, we've always been there. We're there on the front line." He said the Post would seize the opportunity to become a "global newspaper" in the digital world and amid the growing global focus on China. He added: "We must offer first-class journalism, and that must remain our top priority." Hu said the campaign was the newspaper's way of giving back to the city, after the newspaper was nurtured by Hong Kong. Editor-in-Chief Wang Xiangwei said the Post hoped to feature stories about things Hongkongers appreciated, but perhaps took for granted. "These things deserve to be recognised and reported on," Wang said.

Foreign chambers cry foul on doubling of stamp duty (By Sandy Li sandy.li@scmp.com) Tax on commercial property unfairly targets firms seeking permanent homes, businesses say - Manulife paid HK$191 million more to purchase its new tower in Kwun Tong. Chambers of commerce that represent hundreds of foreign firms in Hong Kong are voicing unhappiness at the recent doubling of stamp duty on commercial property purchases. The government's February 22 tax increase on property sales exceeding HK$2 million was designed to rein in speculation. But foreign firms say they have been unfairly targeted by the move, which greatly raises their business costs in the city. The top bracket - on sales of more than HK$20 million - rose to 8.5 per cent of property value, from 4.25 per cent. Because of the increase, Canadian insurer Manulife Financial had to pay HK$383 million instead of HK$191 million when it spent HK$4.5 billion to purchase the planned West Tower at One Bay East in Kwun Tong last month for its own use. The Canadian Chamber of Commerce has written to the Legislative Council, urging the government to grant an exemption to long-term buyers of office space for their own use. "[Chamber members] are purchasing the office space to try to fix their costs in an expensive city," said David Nesbitt, the chamber's executive director. "But they are unfairly punished. We have written a letter laying out our disagreement with long-term and normal purchasers [of commercial properties] being punished by the taxation, which isn't aimed at them." Nesbitt said the chamber represented 180 companies operating in Hong Kong, from large organisations like Manulife to firms with a handful of employees. "Some of our members are considering purchasing [commercial] property or have already done so," he said. The Australian Chamber of Commerce said it would also be expressing its concerns that the raised duty would discourage genuine users from buying commercial properties. The American Chamber of Commerce is drafting its views on the issue, people familiar with the matter said. The British Chamber of Commerce is also said to be concerned. The Canadian chamber's letter was sent to the Legislative Council's Bills Committee on Stamp Duty (Amendment) Bill 2013 last week, urging the government to consider the "unintended consequences" of the doubling of stamp duty for all buyers. The chamber suggested the government consider the example of Singapore, which included an exemption from extra duty for non-residential properties held for more than three years. A spokeswoman for the Australian chamber said its construction and finance committees would be responding with suggestions for exemptions. "The negative flow-on effects include limited diversification of ownership as well as fewer choices for commercial tenants," she said. The Australian chamber is the second-largest in Hong Kong, with almost 1,400 members representing about 500 companies. A spokesman for the American chamber, the largest chamber, refused to comment. A member of the British chamber's real estate panel did not return calls. A member of the Legco's Bills Committee said a meeting would be held today to discuss the issue.

Hong Kong no longer ranked world's most competitive economy (By Ng Kang-chung and Stuart Lau) Hong Kong has lost its status as the world's most competitive economy, according to the latest report by the International Institute for Management Development (IMD). Its overall ranking has dropped to third this year, overtaken by the United States and Switzerland. The institute's research, which covered 60 economies, shows Hong Kong has performed worse in all four major areas studied - economic performance, government efficiency, business efficiency, and infrastructure. The biggest fall was seen in economic performance, from fourth last year to eighth. Singapore was the only other Asian economy in the top 10 as ranked by the institute, a leading global business school based in Switzerland. But the Lion City also fell, from fourth to fifth. Chinese University economist Dr Andy Kwan Cheuk-chiu said: "The crux of the problems of Hong Kong are high property prices and rents. The business environment is getting worse and this would discourage overseas investors too." Kwan said the government should consider pursuing new industries to drive growth, instead of depending on the so-called "conventional economic pillars" such as finance, logistics and trade, tourism and professional services. Secretary for Financial Services and the Treasury Professor Chan Ka-keung attributed Hong Kong's weakening edge partly to the weak growth in major advanced markets. "Our assessment is that the Hong Kong economy, as well as the entire Asian region, has been affected by external factors," he said. Hong Kong General Chamber of Commerce chairman Chow Chung-kong was satisfied that Hong Kong's ranking was "still very high", despite a slight fall. But he admitted air pollution was hurting competitiveness and warned of more business closures should standard working hours be put into legislation. The IMD world competitiveness report came as the latest blow to Hong Kong. A survey last year by Transparency International - an international corruption watchdog - showed Hong Kong's global graft-free ranking fall two places to 14th. Earlier this month, United States social concern group Freedom House also ranked Hong Kong 72nd in press freedom, down from 71st last year and 70th in 2011.

Forking out for the stork (By Tiffany Ap tiffany.ap@scmp.com) Pregnancy can be fraught enough, but the medical bills for giving birth in Hong Kong sometimes add an extra layer of anxiety for parents-to-be - Maternity services offered at Hong Kong hospitals present a wide range of choices for almost any budget. Selecting the right one is a personal decision that involves considerations such as affordability, the level of comfort desired during the hospital stay, quality of medical care and intangibles such as the ability to bring in an outside doctor. "Shopping for a hospital is like taking a second mortgage out on your home," says Shannon Ng, describing how the cost of giving birth in Hong Kong can add up. Ng is an expectant mother and plans to have her baby at the government-operated Queen Mary Hospital. "For us, it was about finding the right balance between affordability and good health care." Ng and her partner reached their decision after conducting a cost/benefit analysis on the various options. In the end, they selected a trade-off, utilising Hong Kong's publicly-funded medical system for the delivery of the baby, but supplementing ultrasound scans and prenatal visits throughout the pregnancy with a private doctor. Ng, who is 17 weeks into her pregnancy, estimates the total medical bill for having her baby at between HK$30,000 and HK$40,000. Ng said a big factor in the decision were uncertainties over costs at private hospitals. Private hospitals offer maternity packages based on natural births or caesarean deliveries, but the costs easily add up beyond the advertised price in the brochure. It costs more to upgrade the room, which can range from a shared ward with multiple beds to a private hotel-like suite. An epidural analgesia shot is extra. Some hospitals even charge a fee to have the father present in the room during the delivery. If a mother tries natural labour but ends up needing an emergency caesarean, that will tack on more fees to cover the cost of the operating theatre and an anaesthetist. A last-minute caesarean can easily double the bill, as mothers need to stay longer in the hospital. Most natural deliveries require a three-day hospital stay, whereas mothers who undergo surgery will take about five days to recover before they are ready to go home. The Consumer Council estimates luxury hospital packages start at around HK$100,00 for a four-day plan, but can rise to well above HK$200,000 in the case of a caesarean. Finding the best medical care is another important consideration when choosing between public and private options. Alicia Eaton, a mother of twin boys born in 2012, opted for Hong Kong Adventist. Eaton made sure she toured the maternity ward before booking a space. A radiographer by profession, who had experience working in hospitals, she knew what to survey the scene for. "I noticed there were a few free rooms and the nurses were not running about. I've seen that in public hospitals in Australia where they look really tired and they've been working massive shifts. When that happens, mistakes can be made. But they were not over-exerting themselves. It looked like a pleasant working environment," she says. She also spoke to the nurses to gauge the level of service. "I'd ask things such as what kind of care would [the nurses] be involved in with the newborn? What was the basic wait time to actually deliver? What was the likelihood of sharing the room? How often was the ward overcrowded, if at all?" Eaton says. Eaton says she also peppered hospital staff with questions about specific issues that were flagged by her online research. "Someone commented that if it was busy you might be placed on the surgical ward instead of the maternity ward [after giving birth], meaning you'd be on a different floor to your newborn. That was a concern, but I asked the nurses and they said the likelihood was very low." New Zealander Helen Douglas says she and her partner chose Queen Mary Hospital as the location for the birth of her daughter by caesarean earlier this year. The quality of emergency services was a factor in the decision, according to Douglas, who said she could have taken out medical insurance to ease the cost burden of a private hospital. "Medically it's a good place to be, if something goes wrong [at a private hospital] you end up at Queen Mary Hospital anyway," Douglas says. She was in a ward designed to accommodate eight women, an experience that at times left her longing for more privacy. "It would have been nice to have a private room, but you are there for such a short period of time, it doesn't matter," she says. If you have a private doctor, make sure the medical facility of your choosing allows visits by external healthcare professionals. If there is a conflict, it is not clear that deposits made to secure a private hospital bed will be refunded. Generally, refunds are only issued in instances where there are clear medical grounds that necessitate patient transfer. But whether parents choose the private or the public route, booking early is essential. Devanshi Bhatnagar, who gave birth at Hong Kong Adventist Hospital last year, paying approximately HK$100,000, says she had to make do after a cheaper private hospital closer to her home was booked out. Securing a private hospital spot involves a long waiting process, which means it is necessary to book just 10 weeks into a pregnancy, she says.

Developer Hopewell Hong Kong launches up to US$780m IPO (By Reuters in Hong Kong) Hopewell Tower, where the new mega tower will be built. Hopewell Hong Kong Properties, a unit of Hopewell Holdings, launched on Thursday an up to US$780 million (HK$6.05 billion) Hong Kong initial public offering, according to a term sheet of the deal seen by Reuters. The company is offering 340 million new shares in an indicative range of HK$15.30 to HK$17.80 each, putting the total deal at up to HK$6.05 billion. About 40 per cent of the IPO proceeds will be used to develop Hopewell Centre II, with 22 per cent set aside for the purchase and development of Amalgamation Properties and potential new developments. Another 30 per cent will be used to pay down debt. BOC International and Credit Suisse were hired as sponsors and joint global coordinators of the IPO, with Citigroup, HSBC and JPMorgan also acting as joint bookrunners.

Chinese wonder why their tourists behave so badly (By Reuters in Beijing) Chinese tourists take a break in a luxury store in Causeway Bay. From faking marriage certificates to getting honeymoon discounts in the Maldives to letting children defecate on the floor of a Taiwan airport, Chinese tourists have recently found themselves at the centre of controversy and anger. Thanks to microblogging sites in China, accounts of tourists behaving badly spread like wildfire across the country, provoking disgust, ire and soul-searching. While in the past such reports might have been dismissed as attacks on the good nature of Chinese travellers, people in the world’s second-largest economy are starting to ask why their countrymen and women are so badly behaved. “Objectively speaking, our tourists have relatively low-civilised characters,” said Liu Simin, researcher with the Tourism Research Centre of Chinese Academy of Social Sciences. “Overseas travel is a new luxury, Chinese who can afford it compare with each other and want to show off,” Liu said. “Many Chinese tourists are just going abroad, and are often inexperienced and unfamiliar with overseas rules and norms.” When a story broke recently that a 15-year-old Chinese boy had scratched his name into a 3,500-year-old temple in Egypt’s Luxor, the furore was such that questions were even asked about it at a Foreign Ministry news briefing. “There are more and more Chinese tourists travelling to other countries in recent years,” ministry spokesman Hong Lei said on Monday. “We hope that this tourism will improve friendship with foreign countries and we also hope that Chinese tourists will abide by local laws and regulations and behave themselves.” Other incidents have attracted similar anger, including that of a mother who let her children defecate on the floor of Kaohsiung airport in Taiwan, just metres from a toilet. She did put newspaper down first. Embarrassment over the behaviour of some Chinese tourists has reached the highest levels of government, which has tried to project an image of a benign and cultured emerging power whose growing wealth can only benefit the world. This month, Vice-Premier Wang Yang admonished the “uncivilised behaviour” of certain Chinese tourists, in remarks widely reported by state media and reflecting concern about how the increasingly image-conscious country is seen overseas. “They make a terrible racket in public places, scrawl their names on tourist sites, ignore red lights when crossing the road and spit everywhere. This damages our national image and has a terrible effect,” Wang said. The central government has reissued guidelines on its main website on what it considers acceptable behaviour for tourists, including dressing properly, queuing up and not shouting. To be sure, the influx of newly wealthy Chinese travelling around world has bought economic benefits widely welcomed in many countries, and many tourists are well-behaved and respectful. More than 83 million Chinese tourists travelled overseas last year, and Chinese expenditure on travel abroad reached US$102 billion last year, the highest in the world according to the UN World Tourism Organisation. By 2020, about 200 million Chinese are expected to take an overseas holiday every year. Criticism of bad behaviour has in the past been levelled at American, Japanese and Taiwanese tourists, when they were also enjoying new wealth and going abroad for the first time. Eventually, experts say, the criticism will fade. “Travelling is a learning experience for tourists,” said Wang Wanfei, a tourism professor at Zhejiang University. “They learn how to absorb local culture in the process, and get rid of their bad tourist behaviour.”

 China*:  June 1 2013

Hotel Manager job at US$330,000/year Could this be the best job in China, or the world? (SCMP) The 'Suitcase House', one of the featured villas at Commune by the Great Wall and designed by Hong Kong architect Gary Chang. Blueprints for a new Australian spy facility aren't the only thing China allegedly wants - they are now also vying against the Aussies to offer the best job in the world, or sort of. Real estate giant Soho China is calling on applicants for a hotel manager position that comes with a two million yuan (HK$2.5 million) annual paycheck, 60 days of paid leave and the most priceless benefit of all - “fresh breathable air” around the clock. According to a post on Wednesday on the company’s official Sina Weibo account, the chosen candidate will be stationed at the secluded Commune by the Great Wall resort, nestled high in the hills beside the wall’s ancient ruins in Beijing’s Yanqing county. The Commune complex is known for its stylish villas and suites designed by different Asian architects. A private path provides access to an untouched portion of the Great Wall of China, according to its website. “Many of the positions at our company are well compensated and everybody is welcome to apply to the job," said Soho China's head of personnel Liu Yu. That was all she said she could disclose. Travel website TripAdvisor.com ranks the hotel No 1 out of 35 hotels in Yanqing county. Most reviews describe the hotel as being “quiet”, “relaxing” and a “unique experience”, but some guests said the hotel was “overpriced” and had poor service. Australia’s tourism promoter launched a wildly successful campaign in 2009 dubbed “Best Job in the World” which opened up a wide range of adventure and outdoor enthusiast positions to applicants around the world. The campaign was run again by Tourism Australia this year and two Hongkongers were shortlisted for jobs as a park ranger and outback adventurer. Australia's Best Job in the World comes with an annual salary of A$50,000 (HK$405,000) and allowances and benefits worth another A$50,000. In 2012, Soho China founders Pan Shiyi and his wife Zhang Xin were ranked 21st on Forbes China Rich List. The company invests in properties in Beijing and Shanghai, most of which are designed in a modern architectural style.

Course teaches Chinese women how to marry 'elite' foreigner in 90 days (By Ernest Kao ernest.kao@scmp.com) Shanghai company offers training classes for women seeking elite Westerner husbands - Couples find marital bliss at a mass wedding in Hangzhou, but others may need some help. Enter: Seek-a-Husband training. Droves of women from across China flocked to Shanghai's Love and Marriage Expo this month in hopes of learning a tip or two about how to get hitched. But Liang Yali, founder of the Seek-a-Husband Training Programme, has been teaching such skills in the metropolis for years. Ninety days – that’s all it will take for her training programme to teach single women how to find – and marry – that laowai (expatriate) knight in shining armour, Liang purported, in an interview with the Modern Express newspaper. After a 1½-month courtship, Liang managed to find the American husband of her dreams – you know, the “honest, considerate type” who happens to be a general manager at some big multinational corporation. The two are now happily married. Liang decided to enter the “marriage business” in 2009 after her experiences as a divorced and single mother. She said she had hoped to “mass produce” her happiness to the spurned and desperate. Her Seek-a-Husband course, which specialises in teaching women how to find “elite Westerner” husbands, launched in Shanghai to widespread acclaim – she boasts that her success rate has stayed at a constant 60 per cent – as well as controversy. The programme’s target market is women above 35, divorcees and the so-called shengnu or “left-behind woman”, although clients are getting younger by the day. Nearly 2.87 million mainland couples divorced in 2011, up 7.3 per cent from 2010, according to Ministry of Civil Affairs' statistics. Meanwhile, a survey conducted by the ministry last year showed that 70 per cent of mainland women would tie the knot only with a man who owned at least one flat. “Many Chinese women over the age of 35 experience difficulties finding husbands domestically, but in the west, in many foreigners’ minds, women aged 35 are seen as most attractive,” Liang told Modern Express. She said her courses teach women how to select appropriate targets, use charm and to sell their "intellect". She gave examples of success stories such as how a 35-year-old woman from northeastern China learned a bit of English and managed to find a husband who worked as a manager at a large German construction company. The least expensive one-day course costs 2,800 yuan (HK$3,500), and more advanced modules can be taken for more than 40,000 yuan. There’s also the “unlimited” package, which entitles customers to attend all classes for a cool 100,000 yuan. Liang’s venture has been slammed repeatedly for ethical reasons. It drew heat recently after its youngest client was reportedto be just 17 years old. It has also been criticised for teaching women to “throw money at love” and encouraging young girls to look for rich, expat “sugar daddies”. But Liang stressed that “if your purpose is to find a rich man, please do not sign up. We are in the business of happiness”.

North Carolina mayor seeks good ties (By By Caroline Berg in New York carolineberg@chinadailyusa.com) Huntersville Mayor Jill Swain, at Shanghai Zhenhua Port Machinery Co in Shanghai, said she was in awe of the incredible work done at the company and wanted to capture a moment with a couple of the employees. Jill Swain, the 52-year-old mayor of Huntersville, North Carolina, was raised when China was mostly unknown and inaccessible to US citizens. This month, she finally visited the country in an eight-day trek spanning 23,000 miles and seven cities. She joined a small delegation from her state as they sought to increase trade opportunities between the US and China, with a focus on bringing Chinese manufacturing companies to the South. Assisting in coordinating the itinerary was SoZo Group, an investment advisory and economic-development company operating in Hong Kong and the US that helps establish partnerships between companies and communities. Swain and four representatives from Alabama - Dothan Mayor Mike Schmitz, Dothan City Manager Michael West, Thomasville Mayor Sheldon Day and Monroe County Commission Chair Greg Norris - toured Hong Kong, Beijing, Shanghai, Nanjing, Bazhong, Nanchong and Langzhong. Swain received an invitation in part because of Huntersville's working relationship with George Harris, SoZo Group general counsel and a lobbyist who represents the town in Washington, DC. Harris accompanied the delegation to China. "The trip was important for me because I thought there would be potential opportunities to bring economic developments into the town of Huntersville," Swain said. The mayor is seeking to diversify the tax base for the town's more than 48,000 residents and to showcase to potential Chinese manufacturing partners what Huntersville has to offer toward economic development. She's also after additional cultural opportunities for the town. The delegation attended 34 meetings and met with Chinese government officials and business leaders spanning a number of manufacturing industries, including aviation, ship-building, heavy machinery, railway equipment, 3D printing and metal production through several receptions hosted by the Asian Manufacturing Association (AMA). "I tend to believe that Huntersville is really poised for more high-tech businesses, and yet there were some manufacturing businesses that we visited that I would be thrilled to have," Swain said, mentioning 3D printing as an example. "The options are limitless." Huntersville is near the large Charlotte metropolis, which has a number of world-renowned universities, including the University of North Carolina, which recently opened an energy facility, according to Swain. "I think we have access to some pretty darn smart minds for any area of research and development," Swain said. "Personally, I'm interested in energy and the green sector and transportation." On June 12, SoZo Group will host a US-China manufacturing briefing in Washington, DC, to announce the host city for the first US-China Manufacturing Symposium in November, which will take place somewhere in the South. "I saw [during the trip] that this is really an opportunity for us to start building bridges and building relationships that may help change long-term the relationship between the US and China," Swain said.

Food firm China's biggest buy in US (By Michael Barris in New York and Joseph Boris in Washington michaelbarris@chinadailyusa.com and josephboris@chinadailyusa.com) In what would be the biggest takeover of a US company by a Chinese buyer, Shuanghui International Holdings Ltd has agreed to pay $4.72 billion to acquire Smithfield Foods Inc, the world's leading pork producer, to meet growing demand for US-made pork. The transaction, which also includes $2.38 billion in assumed debt, is China's largest cross-border deal since CNOOC Ltd last year paid $15.1 billion for Canadian oil and gas producer Nexen Ltd. It faces regulatory scrutiny because it would bring a major US business under foreign control. The announcement on Wednesday comes a week before the June 7-8 meeting in Southern California between US President Barack Obama and Chinese President Xi Jinping. It also comes at a time when food safety, along with environmental pollution, is a chronic problem in China, prompting the central government to crack down on some food producers. The country is the world's largest consumer of pork. In a conference call with analysts after the deal was announced, Smithfield CEO C. Larry Pope characterized the transaction as "exporting America to the world" rather than as part of a strategy to import Chinese pork into the United States. The companies had been in discussions for four years before reaching agreement, he said. "We saw the opportunity," Pope said, but "pricing has always been an issue". Shareholders have long been critical of Smithfield's stock price with Pope in charge. Terms of the deal prompted at least one lawsuit by shareholders who claim the company board breached its fiduciary responsibility by accepting an offer that was too low. In March, Continental Grain Co, which owns about 6 percent of Smithfield's outstanding shares, called on management of the Virginia-based company to consider breaking it up into separate segments - hog production, fresh pork and packaged meats - to boost its share price on the New York Stock Exchange. Smithfield stock will no longer be publicly traded once the deal closes, expected later this year. Under the agreement, which requires the approval of Smithfield shareholders, Shuanghui will pay $34 for each Smithfield share. The offer represents a 31 percent premium to the shares' Tuesday closing price of $25.97. Based on Smithfield's 138.8 million shares outstanding, the cash portion of the deal is worth $4.72 billion. The companies valued the deal, including assumed debt, at $7.1 billion, meaning the value of the debt is about $2.38 billion. With annual revenue of $13 billion and more than 46,000 employees, Smithfield, based in a small Virginia town of the same name, has facilities in 26 US states, including the world's largest slaughterhouse and meat-processing plant, in North Carolina. It also has operations in Mexico and 10 European countries. The company's brands include Smithfield ham, Farmland bacon and Healthy Ones lunch meats. It raises some 15 million pigs a year and processes 27 million, producing more than 6 billion pounds (2.7 billion kilograms) of pork. Hong Kong-based Shuanghui owns businesses in food production, logistics and flavorings. The deal gives Shuanghui, which already is the majority shareholder in China's largest meat-processing enterprise, a major foothold in the US food industry. Amid a fourfold increase in the nation's annual per-capita meat consumption, China became a net importer of pork in 2008. According to the Earth Policy Institute, an environmental organization, China has imported about 400,000 metric tons of pork annually in recent years, compared with a global pork trade of almost 7 million metric tons. In the past decade, Chinese pork prices have more than doubled, contributing to a slowdown in consumption, according to Dutch financial-services provider Rabobank. In a statement to China Daily, the National Pork Producers Council, a Washington-based industry group, declined to comment directly on the Shuanghui-Smithfield deal, but it said the sale "does have the potential to increase US pork exports to China, which would benefit all US pork producers". In the companies' announcement, Shuanghui Chairman Wan Long said: "Together we will be able to meet the growing demand in China for pork by importing high-quality meat products from the United States, while continuing to serve markets in the United States and around the world." The proposed takeover is subject to approval by US regulators on antitrust and competition grounds, as well as a review by the Committee on Foreign Investment in the United States. The interagency committee, led by the Treasury Department, evaluates large or sensitive deals involving foreign investors that could affect US national security. CFIUS has in the past rejected some proposed acquisitions by Chinese companies. A federal judge in Washington is still considering a lawsuit by Chinese-controlled Ralls Corp that challenges Obama's nullification in September, following a CFIUS review, of a deal for Oregon wind farms near a US Navy weapons-testing facility. It was the first time in 22 years that a US president had blocked a foreign company for national security reasons. A Treasury Department spokeswoman declined to comment, saying federal law bars CFIUS from publicly disclosing information filed with it, including whether a filing has been made. In announcing the deal, Smithfield's Pope cited Shuanghui's recognition of the US company's "outstanding food safety practices" and said those, as well as management, won't change. As the nation's chief regulator of meat products, both domestic and imported, the US Department of Agriculture will also have a say in the CFIUS review. That US producers, including Smithfield, export around the world makes it unlikely that safety concerns about imports would be enough to scuttle the deal. US Representative Randy Forbes, a Republican whose southeastern Virginia congressional district includes the town of Smithfield, said the deal "warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards". "I look forward to following that review process closely," Forbes said in a statement. Andy Levine, a New York-based partner of law firm Jones Day who specializes in mergers and acquisitions, told Bloomberg Television it was unclear if the deal would clear the CFIUS review. It's "theoretically possible", Levine said, to argue that meat products are a potential national security risk due to food production's role as critical infrastructure. An obstacle for the deal, he believes, could arise from arguments that Shuanghui would have access to sensitive technology. In China, citizens were outraged in March when over 16,000 rotting pigs were found floating in the Huangpu River, one of Shanghai's main water sources. 

Chinese students tackle US foreign policy (By Chen Weihua in Washington chenweihua@chinadailyusa.com) Former US labor secretary Elaine Chao (front right) sits among the audience on Wednesday evening before delivering a keynote speech at the 10th Foreign Policy Colloquium held by the National Committee on US-China Relations at the George Washington University Elliott School of International Affairs. While Chinese President Xi Jinping and US President Barack Obama look forward to knowing each other's thinking better at their meeting in Sunnylands, California, on June 7-8, a group of Chinese students at US universities are spending three days this week learning how American foreign policy is formed. Elaine Chao, the US secretary of labor from 2001 to 2009, gave the students her views on China-US relations and the unique features of the American culture and society, telling them to interact with Americans and don't be afraid of making mistakes. "You can engage in personal diplomacy," she told some 150 Chinese students on Wednesday at the 10th Foreign Policy Colloquium held by the National Committee on US-China Relations (NCUSC) at the George Washington University Elliott School of International Affairs. Chao, the first Chinese and Asian-American woman appointed to the US cabinet, described American society as diverse, individualistic, less hierarchical and full of energy and based on high trust. "I hope students from both countries can learn how diverse each country is," she said. Chao described the stark difference of how decisions are made in each country. As a former deputy transportation secretary, Chao said it takes 20 years to build an airport and 18 years to build a road in the US because "everybody has to agree and consensus has to be built". "China is a very efficient form of decision-making," Chao said. "If the government wants to build a road, it will be built in six months, 12 months or at most 18 months." Yang Liu, a student at North Dakota State University, said the American society Chao described very much reflects what she experienced in the past year. A junior, Yang said she will apply for graduate school to study China-US relations. The Foreign Policy Colloquium is a three-day program designed by the NCUSCR to help Chinese graduate students in various disciplines better understand the complex forces that shape American foreign policy. Each year, about 150 to 200 graduates students from universities across the US travel to Washington for the event, interacting with current and former administration officials and members of Congress, as well as representatives from academia, the military, think tanks, lobbying firms and the media. "These students, among the best and brightest of China, will help shape China's understanding of America's foreign policy," said Stephen Orlins, president of NCUSCR. "Their experience at this program will pay dividends for US-China relations for decades to come." There were almost 200,000 Chinese studying in universities across the US in the 2012 academic year, a hefty increase of 23 percent from the previous year, according to statistics from the Institute of International Education, a nonprofit organization in the US. Chinese Ambassador to the United States Cui Tiankai could not attend Wednesday evening's event as previously scheduled. He had to travel back to China, accompanying the visiting US National Security Adviser Thomas Donilon, and to prepare for President Xi's meeting with President Obama next week. Cui, a graduate of the Johns Hopkins University School of Advanced International Studies, is among a number of Chinese leaders who have studied in the US. He was China's vice-foreign minister before assuming his current post in March. On Thursday, the students will have a day of lectures, including two on US foreign policy given by James Goldgeier, dean of School of International Service at American University, and David Rothkopf, CEO and editor-at-large of The Foreign Policy Group. The students will also get an opportunity to visit key institutions such as State Department, Department of Commerce, Human Rights Watch and Environmental Defense Fund. On Friday, the students will join panel discussions on global, security, economic and trade issues, ending the program on Friday evening with a speech by Orlins on his vision for the future of China-US relations. 

Hong Kong*:  May 31 2013

Pro-Beijing forum attacks advocacy of Hong Kong's special identity (By Ada Lee ada.lee@scmp.com) Defenders of local culture and advocates of autonomy for the city are dismissed as having psychological problems during pro-Beijing forum - A recent outspoken defence of local culture was the result of a "psychological imbalance" among Hongkongers who felt powerless when faced with the mainland's economic growth, said speakers at a pro-Beijing forum yesterday. They said such sentiments about Hong Kong's identity were an insignificant dead end and that their advocates were only giving vent to their anger and "abasement". The event, organised by the Hong Kong Development Forum, was intended to "rethink the rise of nativism", and was hosted by Hang Lung Properties chairman Ronnie Chan Chichung. Professor Lau Siu-kai, former head of the Central Policy Unit think tank, and lawmaker Regina Ip Lau Suk-yee said Hongkongers had long felt superior to people across the border, but that with the mainland's growth they feared they were losing their edge. They also felt their interests were being harmed by travellers buying up stocks of infant formula milk and causing a shortage of maternity beds. They are two sides of the same coin - pride and abasement. The city's leader should look at this psychological issue among Hongkongers and see how we can boost our confidence again. "They are two sides of the same coin - pride and abasement," Ip said. "The city's leader should look at this psychological issue among Hongkongers and see how we can boost our confidence again," she said, adding that some people were "fantasising some collective memory". Lau said the campaign had no clear objectives or strategies and lacked a powerful leader. Peking University law professor Qiang Shigong said the lack of national education in the city made it difficult for Hongkongers to understand the culture on the mainland. Economist Francis Lui Ting-ming said it was impossible for the city to gain autonomy because its economy could not stand without the mainland. Pro-autonomy academic Dr Horace Chin Wan-kan and Civic Party lawmaker Claudia Mo Man-ching dismissed the arguments expressed at the event as "nonsense". Chin said Beijing should ask itself why Hongkongers had become psychologically imbalanced after the handover, if indeed they had. Mo, who co-launched an initiative named "HK First" to defend the city's culture from "mainland-isation", described Qiang's remarks as moronic. "If we don't defend our culture, Hong Kong will not be Hong Kong in 20 years. We will lose our language and culture," she said.

Mainland Chinese's declining spending hits rents for Hong Kong's street-level shops (By Sandy Li sandy.li@scmp.com) Tenants, hurting as mainland shoppers buy less due to slowing economy and war on officials' luxury spending, negotiate down rental increases - Rents for street-front shops in prime locations are plunging as tenants and landlords adjust to a fall in mainland visitors that has triggered a slowdown in the growth of retail sales. Retail sales by volume were up 10.2 per cent year on year in March, down from a growth rate of 21.9 per cent in February, according to the latest government data. Growth in sales of jewellery, watches and high-priced gifts slowed even more sharply, falling from 27.9 per cent in February to 9.8 per cent in March. Official data for April is due out this week, but retailers of expensive watches and jewellery say sales of items priced between HK$1 million and HK$5 million have dropped by as much as 15 per cent since March as the slowing mainland economy and Beijing's campaign to curb extravagant spending by officials cut into spending by mainland visitors. "For the past several years, the aggressive opening of new jewellery and luxury watch stores in locations such as Causeway Bay saw landlords lifting rents for ground-level shops sky high … to cash in on an influx of mainland shoppers," said Yam Wing-yin, chairman of real estate agency Sheraton Valuers, which specialises in selling and leasing shops. "Today landlords have become more realistic and are lowering their asking rents." Tenancies up for renewal are being negotiated at big discounts to the jaw-dropping rent rises originally sought by landlords. Watch and jewellery retailer Chow Tai Fook recently leased a 4,500 sq ft street-level shop in Yee Wo Street, Causeway Bay, for HK$2 million a month. Although that was 10 per cent up on the rent paid by the previous tenant, King Fook Jewellery, it was 40 per cent below the landlord's original asking price of HK$3.3 million. Hong Kong's oldest retail chain, Sincere Department Store, earlier this month rented a 21,000 sq ft, two-storey outlet on Percival Street for HK$2.1 million a month, about half the HK$4 million sought by the landlord. Sheraton Valuers' Yam said limited supply of triple-A retail space in Russell Street, Causeway Bay, Canton Road in Tsim Sha Tsui and Sai Yeung Choi Street in Mong Kok would ensure that rents in these locations would not come under downward pressure. Tenants who cater for local customers have also seen sales affected by the spending slowdown and are digging in against big hikes sought by landlords. Joyce Peng, who runs a 400 sq ft live-music bar, Joyce is Not Here, in Soho, said spending by her customers was down 10 per cent. Despite that, she said the landlord intends increasing the rent from HK$38,500 a month to HK$68,000 when the lease comes up for renewal at the end of June. "It is outrageous. Rents in the surrounding area have begun easing … I can only afford to continue here at a rent of HK$45,000 a month," she said. Maureen Fung Sau-yim, Sun Hung Kai Properties' leasing department general manager, said it would be healthy to see overall rents adjusting to the present sales climate and stabilising at present levels. But she expected rents in the group's shopping malls to increase when agreements came up for renewal since demand for space remained strong, and existing tenants continued to enjoy growth in sales because of their location.

No plans to replace Hong Kong chief executive, says top mainland official (By Lai Ying-kit yingkit.lai@scmp.com) Wang Guangya, director of the State Council’s HK and Macau Affairs Office, said the central government had no ‘Plan B’ to replace the chief executive. A senior mainland official assured a delegation of local representatives at a meeting in Beijing that the central government had no plans to replace Hong Kong Chief Executive Leung Chun-ying, said a member of the delegation on Wednesday. Wang Guangya, director of the State Council’s Hong Kong and Macau Affairs Office, “told us that he had noticed that a rumour was being circulating in some Hong Kong media that the chief executive would be substituted,” said Chan Yung, a district councillor who led the 80-person delegation to the capital. “He said the central government had no ‘Plan B’ to replace the chief executive,” Chan quoted Wang as saying, after their meeting on Wednesday morning. The delegation consisted mainly of representatives from Hong Kong’s fisheries trade. Chan said Wang during the meeting expressed hope that every sector of Hong Kong society would continue to support the Leung administration despite it having made a rough start. “He also wished that Hong Kong could unite and focus on economic and domestic issues,” said Chan. Chan is a district councillor in North District and a Hong Kong delegate to the National People’s Congress. The speculation about Leung’s future was first raised by a columnist from a Chinese-language newspaper. In an article carried in the Apple Daily on Monday, China commentator Willy Lam said that Beijing had decided to sack Leung as his cabinet had been engulfed in a series of scandals since he took office last July. Lam, citing unspecified sources, described as being close to Beijing, said a taskforce led by National People’s Congress chairman Zhang Dejiang had begun work to replace Leung in a so-called “Plan B” for Hong Kong leadership. Asked by the media about the report on Tuesday, Chief Executive Leung Chun-ying said he had not heard of the rumoured plan to replace him.

Want your own giant rubber duck? Buy one on Taobao (By Patrick Boehler patrick.boehler@scmp.com) A giant rubber duck manufactured by a company in Guangzhou. If you enjoy the giant rubber duck floating in Victoria Harbour and cannot bear its scheduled departure on June 9, you can now buy one for yourself. "We have been making giant rubber ducks for many years," said a KK Inflatable saleswoman, identified only by her surname Kuang. "We didn't just start this year." The Guangzhou-based producer of inflatables sells versions of the yellow duck on Taobao, China's largest shopping site. Your very own supersized bath accessory could even be 3.5 metres taller than the 16.5-metre-high installation now floating in Hong Kong's harbour. A smaller two-metre-tall duck comes at a bargain of 2,800 yuan (HK$3,500). An inflatable the size of Hong Kong's Rubber Duck by Dutch artist Florentijn Hofman comes with a price tag of 118,000 yuan. The 20-metre-tall über-duck costs 149,800 yuan. The company also sells air pumps for 200 yuan. The bird's colour can be changed upon request, and delivery costs apply. The company also offers a three-year warranty for your duck, but does not have a return policy. Kuang declined to say how many of the ducks she has sold so far, but large rubber ducks have already started to appear thoughout mainland China. Another company in Nanjing sells for 3,000 yuan four-metre-tall inflatables that are less authentic-looking. "Our ducks don't float," cautioned a saleswoman surnamed Liu. A nine-metre-tall duck can be ready for shipping within China in a week. KK Inflatable advises the use of a wet cloth or a broom to clean the duck. If you're tired of ducks, Kuang's company also sells supersized inflatable beer cans, fighter jets and Mexican bandits.

 China*:  May 31 2013

The Industrial and Commercial Bank of China (ICBC) plans to create a RMB cross-border business center in Luxembourg to cover Europe, it said on Tuesday. The bank revealed the plan in a seminar attended by ICBC Chairman Jiang Jianqing and the Finance Minister of Luxembourg Luc Frieden. In an interview with Xinhua, Xu Zhi, head of Financial Markets Department of ICBC (Europe), said that last year, ICBC (Europe) made financing cross-border trade in RMB for a total of 10.8 billion yuan (1.7 billion U.S. dollars), and generated a combined total of 25.9 billion yuan in RMB cross-border transaction. Headquartered in Luxembourg, ICBC (Europe) operates a network which covers major European cities, including Paris, Amsterdam, Brussels, Milan, Madrid, Barcelona, Warsaw and Lisbon. During the first four months of this year, ICBC (Europe) was more dynamic in its RMB business, recording 17.5 billion yuan on the financing of cross-border trade and 16.4 billion yuan on cross-border transactions. In March 2013, ICBC (Europe) helped the French company Renault to issue bonds of 750 million yuan through ICBC (Asia) on the Hong Kong market. According to Li Yanni, director of the RMB cross-border business division at ICBC headquarters in Beijing, the Chinese commercial bank has 400 facilities in 39 countries and regions and better access to capital markets in 18 African countries as the single largest shareholder of South Africa's Standard Bank. Since the launch of RMB cross-border business in 2009, ICBC has actively promoted the implementation of the RMB in cross-border business operations. Its RMB compensation network now covers nearly 70 countries and regions, and RMB cross-border business has reached a total amount of 3,000 billion yuan. Jiang said he appreciated Luxembourg, which has 20 billion yuan of deposits in RMB, as one of the most important financial centers in Europe and in the world and an excellent platform for the development of RMB cross-border business. Frieden welcomed the development of RMB cross-border business of ICBC in Luxembourg and Europe and stressed the "common success" for ICBC and Luxembourg. 

Military ties in focus before summit (By Zhao Shengnan) General Fan Changlong (center right), vice-chairman of China's Central Military Commission, and other Chinese officials meet US National Security Adviser Tom Donilon (center left) and his delegation in Beijing on Tuesday. China and the United States pledged on Tuesday to boost military ties during a visit to Beijing by a senior US official in preparation for a summit in June between the two countries' top leaders. Experts said that military relations between the world's two largest economies have been warming up recently. Washington has gradually realized the importance of the relations to achieve regional stability as it carries out its Asia-Pacific "pivot" policy, they added. "Both countries' defense departments and militaries should strengthen communication and cooperation," Fan Changlong, vice-chairman of China's Central Military Commission, told Tom Donilon, US national security adviser. Donilon was on the last day of a three-day trip ahead of the planned meeting between President Xi Jinping and US President Barack Obama on June 7 and 8 in California. The top task for the two militaries is now to implement their leaders' consensus to improve military ties, said Fan. This means building a new type of military relationship that is free of a zero-sum mindset and that is in accordance with the development of overall relations, he said. Donilon called for both countries to improve strategic communication and cooperation in "non-traditional security challenges", including peacekeeping, disaster relief operations and actions against piracy, to reduce differences, avoid misjudgment and jointly address regional security problems. 'Important stage' - "An essential part of building a new model for relations between great powers is ensuring we have a healthy, stable and reliable military-to-military relationship," Donilon said. During a meeting with Donilon on Monday, Xi said that Sino-US relations were at "an important stage connecting the past and the future". However, building trust between the two militaries is regarded as one of the main challenges the two countries face in mending relations that have been troubled by issues that include trade disputes and allegations of Chinese cyberattacks, analysts said. Steps to increase positive interactions between the two sides' militaries have been modest so far, including joint anti-piracy drills in the Gulf of Aden and a project to simulate a response to natural disasters. Mistrust lingers - Fan Jishe, a US studies expert at the Chinese Academy of Social Sciences, said the mistrust between Beijing and Washington will likely not be resolved overnight. The US has repeatedly questioned the purpose of China's military modernization, while China is concerned about Washington's new focus on military alliances in Asia and its plans to redeploy more weaponry and troops to the Asia-Pacific region. Through regular and intensified exchanges, Washington aims to know more about the changes in the Chinese military and reduce tension in Asia-Pacific region, he said. Tensions increased in part by Washington's backing of its allies Tokyo and Manila, which have territorial disputes with China, during Obama's first term, he said. Shen Yamei, a researcher on US studies with the China Institute of International Studies, said the two militaries have engaged in high-level contacts to boost ties and that cooperation projects in non-traditional security areas are a relatively easy way for both sides to start deepening interactions. No country can handle such threats, which seldom involve sensitive issues such as sovereignty and territory, alone, she said.

Hong Kong*:  May 30 2013

Hong Kong tech start-ups need more active help (By Mark Sharp mark.sharp@scmp.com) There's new life in the tech start-up scene, but science parks may not be the best way to nurture innovation, says Mark Sharp - Studying for his master's degree in 2008 at Stanford University, Daniel Cheng Yuen was struck by how fragmented information was when looking for campus club activities, which run into the thousands. He returned to Hong Kong with a solution: a mobile application called Purpella that centralises the search for events on and off campus. But he lacked the resources to get his start-up off the ground. "For more than three years, I approached people for help. Then, in 2011, I met Kevin," Cheng says. That's Kevin Yeung Ka-wei, an investor and philanthropist who heads the local branch of the UN's World Food Programme and co-founded food bank Feeding Hong Kong. He had never invested in technology before. But Yeung agreed to back Cheng on condition that he first help develop a free app that could help people in Hong Kong search for the most suitable medical professional for their condition. Cheng and a small team came up with FindDoc, which went on to be named Hong Kong's best app last year by the non-profit Internet Professional Association (iProA). Despite the achievement, Yeung laments that the government didn't reach out to Cheng's team beyond a handshake and a photo. In contrast, as Cheng's team prepared to launch Purpella on campuses in America, the offices of New York mayor Michael Bloomberg and his San Francisco counterpart, Edwin Lee, e-mailed to ask if they could offer any assistance. "San Francisco and New York really take innovation seriously because they've both witnessed all the benefits technology created in their cities," Cheng explains, citing tax revenue and job creation as examples. "They really want to help promising start-ups build in their cities. "Their approach is really useful because each start-up has different requirements, in addition to money. There are not enough people like Kevin who appreciate innovation here," he says. Purpella has just launched in New York and Columbia universities. Early results have been encouraging and Cheng and his team are ramping up efforts to launch in more universities. But it irks Yeung that Hong Kong should take a lackadaisical attitude while two US cities actively courted Purpella. "There's only so much individuals like myself can do. Our government needs to want innovation and technology, and it needs to engage meaningfully to help. They need to take the lead in creating that ecosystem. "The current dependence on individuals is just not healthy and not scalable. The fact is that Dan could have built Purpella four years ago," says Yeung. For all the talk a decade ago about fostering a tech hub with multibillion-dollar projects such as Cyberport and the Hong Kong Science Park, the environment for tech entrepreneurship has yet to match the hoopla. San Francisco's richer culture for investment and innovation is one reason Geng Cong is moving there to develop his website for personal histories, called Waslu. He got the idea when his grandfather died, and is leaving his job at an investment bank in Hong Kong to launch his site. "I realised at his funeral that his story, because he's an everyday person like 99 per cent of people, will be forgotten in time. And it's a shame because his story is every bit as valuable as somebody like Steve Jobs or Bill Gates. So I wanted to create something that allowed us to preserve the stories of everyday people," Geng says. He says he found little useful information for local start-ups on the Hong Kong government website. "Even if we look at InvestHK, the investment arm of the government, they primarily target overseas and mainland entrepreneurs and SMEs, and multinationals that are setting up an office, or retaining foreign direct investment," he says. A spokesman for the Innovation and Technology Commission says a start-up or tech entrepreneur can apply for financial assistance under the Small Entrepreneur Research Assistance Programme (Serap). Funds are intended for "activities from research and development all the way to commercialisation, helping them to turn innovative technology ideas into some commercially viable products and services." Applicants for Serap funding must provide details on the project, including justifications for funding in terms of innovation and technology, commercial viability, team capability and relevance with government policies or overall public interest. Applicants who pass an initial screening are then assessed by an independent panel drawn from a pool of technologists, professionals, academics and venture capitalists. The ITC says it usually takes fewer than 50 working days to process an application. At the government-run Science Park, start-ups are offered subsidised office space, support services in marketing, finance, technology and management. Financial aid packages range from HK$300,000 for app developers to HK$860,000 for biotechnology start-ups. Its incubation programme has a high survival rate: more than 70 per cent of graduated start-ups are still in operation. "Three of them have been listed in Hong Kong and one in the US," the ITC spokesman says. "These companies have filed over 600 intellectual property registrations, received 220 technology awards and attracted over HK$800 million of angel [or] venture capital investment." But Yeung has doubts about the ability of such parks to nurture true innovation and encourage young "technopreneurs" to realise their ideas. "Innovation has never been about hardware. Innovation is created when great ideas are brought to life by brave and brilliant people with hard work. People and ideas are the key ingredients for innovation. "As an investor, my wish is to play a role in the growth stories of world-class start-ups; ideally, ones that utilise Hong Kong's untapped talent," he says. "But to thrive, innovation needs a healthy ecosystem that supports these people and their ideas. Flashy buildings in remote locations coupled with endless bureaucracy for innovators to obtain much-needed early stage funding helps nobody. "Look at all the most successful tech companies - Apple, Google, Facebook, HP, eBay and Microsoft. Not one started life in a science park. Each was created in a garage or a bedroom. They built their own science parks only after they made it," Yeung says. Adam Lindemann, co-founder of investment firm Mind Fund, says that Hong Kong has lacked the spirit of technology-based innovation and entrepreneurship despite its pro-business environment. But this is starting to change, he says. "What is required is not government support, but acceptance by conservative people that it is good to aim for the next Mark Zuckerberg to come out of Hong Kong." The city has to create home-grown role models - "a few brave pioneers to pave new paths", Lindeman says. The owners of the MaBelle Jewellery chain aim to nurture that pioneering spirit through their social enterprise, CoCoon. Launched a year ago, the Tin Hau-based venture offers a co-working space where tech entrepreneurs can meet fellow start-up founders. "If we have 200 people here, and everyone employs three people - themselves, a co-founder and an intern - that's already 600 good jobs," CoCoon co-founder Theodore Ma Heng says. His father, Maximillian Y.K. Ma, who chairs the Lee Heng Diamond Group, had long lamented a decline in entrepreneurial spirit as the financial sector grew to dominate Hong Kong. His grandfather, who came from the mainland with just a change of clothing and founded the family's diamond trading business 64 years ago, was their original entrepreneur. "My father and his brothers picked up the wholesale business and created another 12 companies. We are the beneficiaries of the Hong Kong society that embraces entrepreneurship." So the family decided to help reverse the decline. "It started off with the vision of building a start-up community, to revive it in Hong Kong", he says. Ma believes the tide is starting to turn on the entrepreneurial front. "The banking community is shrinking, to a certain degree, due to the [unfavourable] global financial situation, and it has released a lot of talent. A lot of bright people got into banking first, but they are thinking, 'What's next?'" The ecosystem is changing, Ma says, and organisations like CoCoon, Startups HK, universities, M21 by the Youth Federation and Good Lab are building up entrepreneurship-related programmes. "I think we'll be reaching a critical mass soon," he says.

Shaw Prizes still favour men of science (By Christy Choi christy.choi@scmp.com) Women researchers notably absent from line-up of laureates and prizegivers say groundwork for success needs to be laid through education - (Left to right) Ching Pak-chung, Council member; Yang Chen-ning, chairman of the Board of Adjudicators of The Shaw Prize; Mona Shaw, chairperson of The Sir Run Run Shaw Charitable Trust; and Kenneth Young, vice chairman of the Board of Adjudicators of The Shaw Prize. It's still a man's world in the Shaw Prizes for scientific research, with only one woman winning an award in the past decade. And while strides are being made to tip the gender balance, the prizegivers said at this year's awards that it was not up to them to give more recognition to female scientists. "That would be paying attention to gender," said Professor Kenneth Young - in reference to the prize's mission to be neutral and without care for the scientist's personal background - at the announcement of this year's laureates yesterday. "The issue has to be addressed elsewhere, starting with education, role-models etcetera. Not at the end." "I imagine it'll be another 10-15 years before we see women [more well-represented among Shaw laureates]", said Professor Ching Pak-chung, Shaw Prize Council member and electronic engineering professor at the Chinese University of Hong Kong. "I have more and more female students on my research teams." Last year's Shaw laureate for astronomy Jane Luu was the first woman to have won the prize, which awards US$1 million to scientists in the fields of astronomy, life science and medicine and mathematics, for their contributions to the advancement of science and humanity. This year the Shaw Prize for Astronomy went to Professors Steven Balbus and John Hawley for their work on magnetorotational instability, which explains turbulence and where energy goes when objects spin in space. The prize for Life Sciences and Medicine is shared by Jeffrey Hall, Michael Rosbash and Michael Young for their work on identifying molecular mechanisms underlying circadian rhythms - showing how humans have an internal clock that moves in approximately 24-hour cycles. And the Mathematics prize was awarded to David Donoho for his work on data compression and removing noise from data. "He's one of the most well-known and influential mathematical statisticians alive today," said Tony Chan, president of the Hong Kong University of Science and Technology. Chan said he was speaking as a professional mathematician and not as a member of the Shaw Prize selection committee. "He's had a huge impact on medical imaging." "Imagine if you could go into an MRI machine, which usually takes about 30 minutes, and be there for a tenth of that time, but get the same result. That's what his algorithms help do." Chan described the process as akin to taking a low-resolution image on a digital camera, and being able to reconstruct all the extra missing information to create a higher-resolution image. The Shaw prize was established by film mogul Run Run Shaw in 2003.

Central pier meant for 'PLA training, berthing' (By Olga Wong olga.wong@scmp.com) For the first time, development authorities lay out instances when the military part of the waterfront will be out of bounds to the public - The military berth along the Central waterfront. The government has specified for the first time the circumstances in which the People's Liberation Army will occupy a military pier at the new Central waterfront, but it declined to estimate how often the space would be open to the public. Secretary for Development Paul Chan Mo-po and his officials came under pressure yesterday from pan-democrat and pro-government lawmakers to commit to the frequency with which visitors could access the 0.3-hectare pier, which is nearing completion along 150 metres of the waterfront. The PLA's Hong Kong garrison would use the area only in when conducting military training, berthing military vessels, running ceremonial activities and carrying out pier maintenance, deputy secretary for development Thomas Chan Chung-ching said. "Except when there are emergencies or special circumstances, the pier will be open to the public," he said. Paul Chan told lawmakers that the army had pledged not to add extra structures to the pier. The site now has four one-storey structures, which house public utilities, and electronic gates that will be activated to fence off the pier when the military is using it. In February, the government proposed rezoning the area from open space to a military site, prompting harbour activists to fear reduced accessibility of the waterfront. The Town Planning Board received close to 10,000 public submissions on the issue before the deadline yesterday. The army's pledge to open up the area when it was not in use, and to provide a road behind the pier connecting the east and west parts of the promenade, has not allayed the concerns. Yesterday, Paul Chan sparked heated debate in the legislature with his stern words that the opponents had ignored the need for military defence and the fact that the city had returned to Chinese sovereignty. "It was a solemn pledge of the army. I hope the public will no longer bear misunderstanding, mistrust and hostility towards the [rezoning]." Kenneth Chan Ka-lok, of the Civic Party, said rezoning meant any decision to open the site would rest solely with the army. "It's not about trust … It's about urban planning." He moved a motion opposing the rezoning, but failed to gain majority support. James Tien Pei-chun, of the Liberal Party, said: "From the point of view of 'one country two systems', there's a need in principal [to rezone]. But can you estimate how many days it will be open to the public? People may be more receptive if you have an estimate." Thomas Chan said the government could not give an estimate on behalf of the army. The New People's Party's Regina Ip Lau Suk-yee, a former security chief, said she was responsible for the talks with the army. "Hongkongers lack military knowledge and a sense of crisis … It would be ridiculous if the army had to ask the Rubber Duck to leave when it needed the pier."

No plans to replace Barry Cheung or reshuffle Exco, says CY Leung (By Lai Ying-kit yingkit.lai@scmp.com) Chief Executive Leung Chun-ying said on Tuesday he had no plans to resuffle Exco following the resignation of Barry Cheung Chun-yuen. Chief Executive Leung Chun-ying said on Tuesday he had no plans for a reshuffle of the Executive Council or to appoint a new member to replace Barry Cheung Chun-yuen. Last Friday, Cheung resigned from all of his public positions – including as a member to Leung’s top policy advisory body – while police investigated Cheung and his failed company the Hong Kong Mercantile Exchange (HKMEx). At first Cheung, HKMEx’s founder and former chairman, took a leave of absence but later resigned amid mounting pressure. Speaking before a meeting with his Exco members on Tuesday morning, Leung said Cheung’s resignation did not raise the need for the appointment of new members as the council did not require a specific number, and in fact, it had more members than either of those of the Tsang and Tung administrations. Cheung became embroiled in controversy after the commodity trader HKMEx could not show it had enough capital for nine months’ operation as required by the Securities and Exchange Commission (SFC). As a result, the exchange returned its licence to the SFC and stopped operations. Some politicians have called for a review of the function and composition of Exco, which they say is losing authority following various scandals involving its members. One area to be looked at, they suggested, was the duration of leave of absence Exco members are allowed to take. Another Exco member, Franklin Lam Fan-keung, has been on indefinite leave of absence since November after coming under investigation by the Independent Commission Against Corruption. Leung was also asked on Tuesday if he had known about the HKMEx financial problems when re-appointing Cheung as chairman of the Urban Renewal Authority. He did not say whether he knew anything at that time. He only said Cheung had been nominated for reappointment by development secretary Chan Mo-po and he had approved it.

More than 170,000 living in subdivided flats in Hong Kong (By Joyce Ng and Peggy Sito) Study commissioned by government to give first indication of scale of problem doubles previous estimate - and actual total may be even higher - Number living in subdivided flats put at 171,000. More than 171,000 people are living in substandard, subdivided flats in Hong Kong, it was claimed yesterday. The estimate is more than double the total of 64,900 given by the Census and Statistics Department last October. And the figure is thought to be even higher as researchers could not examine illegal homes in industrial buildings, said the secretary for transport and housing, Professor Anthony Cheung Bing-leung. See more photographs of Hong Kong's cramped subdivided flats - The study was commissioned by the government to give a first indication of the scale of the problem. Cheung said after a meeting of the Long Term Housing Strategy Steering Committee yesterday: "I can't say whether it's a large or small number, or whether there's an increase, because this is the first time we've done it. But as we draw up the housing strategy, we'll take the data into account." The committee will make its recommendations by August. The study results coincided with another government release, which said home prices are the least affordable since 1999. The mortgage-to-income ratio of a 45 square metre home, for a family earning the median income, surged from 52 per cent in the preceding quarter to 56 per cent in the first quarter this year. And in a further indication of the city's housing woes, it was revealed the number of applicants on the waiting list for public rental accommodation climbed to a 20-year high of 228,400 by the end of March. The administration has identified the problem of subdivided flats as a priority. Low-income families and new immigrants often choose to dwell in such units, conveniently located in old buildings in the urban centre. But poor workmanship means they create fire risks and a danger of leaks and structural overload. The estimate of 171,300 is 2.6 times the figure given by the Census and Statistics Department. The study was carried out by Policy 21, a company set up by academics from the University of Hong Kong. Researchers visited 10 per cent of the city's 18,600 blocks older than 25 years. Blocks of residential or mixed uses were sampled from each of the 18 districts. They found flats were divided into 3.6 sub-units on average and projected there were 66,900 subdivided homes. Of these, 30,600 lacked their own kitchen, bathroom or water supply. Committee member Dr Andy Kwan Cheuk-chiu said the government should focus on the 30,600 units in the worst condition. He said: "They should see if people living there are in need of social welfare and relocation, and whether the buildings have a safety problem." Sze Lai-shan, of the Society for Community Organisation, said the government should reinstate rent control - which Cheung has repeatedly ruled out - and give a rent subsidy to such residents.

Rock climbing is catching on in Hong Kong (By Elizabeth Choi life@scmp.com) Rock climbing is catching on as Hong Kong's rugged terrain entices more visitors and locals to rise to the challenge, says Elizabeth Choi - Veteran climber Conway Leung leads a mountaineering team up Ma On Shan, also known as Horse Saddle Mountain. Climbing is becoming increasingly popular in Hong Kong, which offers some good locations for enthusiasts of the sport. Rock climbing at Shek O. On any given Saturday, hundreds of people will mill around Central in search of the perfect brunch spot. But for the avid outdoor climber, Central's largest boulders offer a far different type of pursuit. The top of Central Crags scrapes the sky at 316 metres, providing the type of view even the most luxurious rooftop bar would struggle to emulate. Once up there, every iconic building that has graced a Hong Kong postcard is in sight. But the greatest reward of the view is knowing you didn't get to see it by using a lift. "Although it's unlikely to ever become a mainstream climbing destination, Hong Kong offers probably the second best climbing destination in Asia, after Krabi. Few places can match Hong Kong in terms of the sheer diversity of good quality climbs available a short distance from each other," writes Stuart Millis, author of Hong Kong Bouldering. These days, however, it seems more and more are becoming privy to Millis' observations on Hong Kong's enticing topography. The first instances of climbing in Hong Kong can be traced back to 1956 when the British Army was based at Kai Tak airport. "They saw Lion's Rock [in Kowloon] and they wanted to climb it," says Conway Leung, who has been climbing since 1977 and is president of China Hong Kong Mountaineering and Climbing Union (CHKMCU). "Once they climbed it, they learned the rock well. They sketched pictures of it and mapped out its routes by difficulty." These images would become part of Hong Kong's earliest climbing guide. Until 1967, locals did not really climb. But the Hong Kong riots of that year led the government to decide that climbing might be an effective way of diverting youthful energy away from rioting. So the Social Welfare Department decided to introduce it at summer camps led by the British Army, Leung explains. It's a dangerous sport. You must take precautions like learning how to fall properly. The youths didn't have army training, but were interested in army life, so the British Army taught sports like rock climbing," Leung says. CHKMCU was established in 1984 to unify a growing number of groups looking to organise their own climbs. Today it operates as a government-subsidised entity that provides Hong Kong's official certification for climbing sanctioned walls. Hong Kong climbers are largely expats and visitors, but cultural events such as the Cheung Chau Bun Festival, and increased government backing of outdoor sports has led to a bigger interest in climbing among locals. "You can tell by the schools," says Nikolai Ng, a 19-year-old sponsored climber who is widely sought by outdoor skills training companies to lead programmes and design courses. "Many schools are building climbing walls and many even have climbing teams." With the inclusion of sports climbing in the 2020 Olympics, CHKMCU believes that interest in climbing will continue to persist. It recently proposed two indoor and outdoor climbing walls be included in the HK$19 billion Kai Tak Stadium project. The Leisure and Culture Services Department has built at least six climbing facilities in five different areas of Hong Kong, and newly opened private gyms already see several dozen members climbing on any given weeknight. The two-year-old Da Verm Climbing Club in Sai Ying Pun receives an average of 40 members each weeknight. San Po Kong's Just Climb, which opened last May, has nearly 60 climbers every night. Most climb outdoors as well, says Nick Chan, an instructor at Just Climb. The indoor gym provides a place to practice after work in the week. Learning to climb is an accessible sport, since most indoor and outdoor facilities offer beginner courses with basic equipment available for rent. It's important to take proper instruction, experts say. "I would strongly discourage learning from your friends," Rachel Lam, a member of Da Verm, says. "Once you get into it, you realise that it is a dangerous sport. Things such as learning how to fall properly, and many other precautions, should be learned before attempting to climb." Common injuries, like strained tendons or pulled leg and back muscles, can occur when climbers haven't properly warmed up or have acquired bad habits. The initial awkwardness of clinging to a wall on all fours (or worse, falling off the wall) can be off-putting to new climbers. The key is to stick with it after the introductory course. It's also important to maintain the right attitude. "Climbing is an all-body sport," says Patrick Li, an instructor at Da Verm. "It improves your posture and your sense of balance, and it also strengthens your back, leg and forearm muscles." But negative thinking alone can greatly affect your climbing experience, and many climbers acknowledge the sport is as much mental as it is physical. "In the beginning, it isn't easy to climb," says Danny Ho, founder of Just Climb. "You will fall. That is inevitable. But how do you change your attitude to make yourself stronger? What do you do once you fall? That is what climbing is about." Ultimately, there is much more to climbing than muscle strength or better balance, says Ng, a former Da Verm instructor. "Climbing is not only a sport - it's a lifestyle," he says. "When you climb, you have to think. You use strategy to figure out how to go up the rock. You have to be smart about the decisions you are making." Unlike other sports, the risk of death is very real at advanced levels of outdoor climbing. "But everyone helps you. You have your friends, you meet people when you climb and they help you. You have a community," Ng says.

Hong Kong meat traders urge end to beef importer monopoly (By Lai Ying-kit yingkit.lai@scmp.com) Beef in Hong Kong was 50 per cent more expensive than in the mainland - The retail price of fresh beef in Hong Kong has doubled over the last year says Fresh Beef Traders Alliance convenor Hui Wai-kin. An alliance of meat traders on Tuesday renewed calls for ending the monopoly enjoyed by the city’s sole fresh beef importer, which they said had contributed to rising prices of the meat. Fresh Beef Traders Alliance convenor Hui Wai-kin told local radio the retail price of fresh beef was HK$100 per catty (604 grams) in late April — double the HK$50 per catty in the same month last year. Hui said the increases had driven away an estimated 40 per cent of their customers, who now opted for frozen beef, and caused the closing of a number of meat vendors. Hong Kong imports live cattle from the mainland through its sole distributer Ng Fung Hong. Since 2012, the company has increased its wholesale prices to retailers six times. Hui also said a recent survey conducted by the alliance found that beef in Hong Kong was about 50 per cent more expensive than in the mainland. He urged the government to open up the beef market to stabilise beef prices. Late last year, the government began a study to find out why beef prices kept rising. The results were expected later this year.

 China*:  May 30 2013

China enlists EU states to counter Brussels on tariffs (By Teddy Ng teddy.ng@scmp.com) Beijing counters European Commission's tough trade tactics by setting EU states against it and wooing European states outside 27-nation bloc - China, dismayed at the tougher stance Brussels is taking in trade disputes, is seeking to put pressure on the European Commission by engaging EU member states and strengthening trade ties with non-EU European countries, analysts say. The tactic was manifested during Premier Li Keqiang's recent visits to Switzerland and Germany, which is opposing a proposal for tariffs on imports of Chinese solar panels. Li returned to Beijing yesterday. Li's trip came after the EC, the 27-nation bloc's executive arm, accused China of pricing its solar panels too cheaply and proposed the imposition of a 47 per cent tariff on such products by June 5. China is banking on Germany to lead opposition to the proposal, which is reportedly opposed by more than half of the EU's 27 members. "China is trying to benefit from Europe's internal divisions," said Jonathan Holslag, head of research at the Brussels Institute of Contemporary China Studies, adding that China had deepened ties with southern and eastern Europe during the euro- zone crisis. "The main aim is to keep the export channels open and to prevent member states swinging behind a more assertive European Commission." On Monday, the EC warned against "pressure being exerted by China on a number of EU member states". "It is the role of the European Commission to remain independent, to resist any external pressure and to see the 'big picture' for the benefit of Europe, its companies and workers based upon the evidence alone," said John Clancy, spokesman for EU Trade Commissioner Karel De Gucht. China has also stepped up its involvement with non-EU states. It is expected to sign a free trade agreement (FTA) with Switzerland in July, following the signing of its first European FTA with Iceland this year. On Monday, the Ministry of Commerce said negotiations for a similar deal with Norway had entered the "final stage" - after stalling for more than two years over the Nobel Peace Prize awarded to dissident Liu Xiaobo . Feng Zhongping , director of European studies at the China Institute of Contemporary International Relations, said China was forging ties with non-EU nations because of difficulties over a free trade deal with the EU. "China is telling Europe that the Chinese economy is open by having trade agreements with non-EU states," he said. Last year, China and 16 central and eastern European countries, many of them EU members, agreed to set up a secretariat for co-operation. China also pledged a US$10 billion loan and another US$500 million was designated for an investment fund. "China believes that smooth ties with Germany and France can guarantee a stable Sino-European relationship," said Zhao Junjie, a European studies specialist at the Chinese Academy of Social Sciences. "But China also interacts with marginalised European nations. By pouring in aid and grants, Beijing hopes these nations will not resort to an anti-China stance." Francois Godement, head of the China programme at the European Council on Foreign Relations, said Germany had rejected the tariff proposal because China could "take tough action against German businesses" such as carmakers. But he said whether the EU would drop the proposal remained to be seen. "There are occasions that member states have said something, but the end result is a different thing," he said. Zhao said China and the EU expected the other side to blink. "Europe does not have many alternatives, and it will feel the heat if China adopts counter measures," he said.

3-D printers help China jet development take off (By Minnie Chan minnie.chan@scmp.com) Use of 3-D printing means China's aviation industry is saving money and materials and could soon rival manufacturers in the US - Creating a miniature plastic aeroplane using a household computer and a 3-D printer is no longer just a dream for aircraft enthusiasts. But what about printing out a real plane? Chinese scientists and aviation engineers says it's possible. And they're now starting to print out aircraft components from a 3-D printer without the help of traditional manufacturing processes such as casting, forging and assembling. These can even include key structures such as landing gear, which has to be able to withstand extreme forces. 3-D printing, also known as laser rapid forming, is an emerging manufacturing technology in which blueprints made on computers can be turned into actual products by printers that add layer after layer of material until the finished shape is achieved. It's not clear how many materials Chinese scientists can use when printing out aircraft parts, but Stratasys, the world's leading manufacturer of 3-D printers, says its machines can combine more than 100 different materials to form 3-D products, including wood, plastics and metals. Reports on the mainland have said 3-D printing technology has been used by China's aviation industry. It features in the country's first home-grown commercial airliner, the C919, its first aircraft-based jet fighter, the J-15, its multi-role fighter and bomber, the J-16, its first home-made stealth jet fighter, the J-20, and its mid-sized, fifth-generation jet fighter, the J-31. The J-20 appeared much earlier than Western military analysts had expected. Former US defence secretary Dr Robert Gates once said that China would not have a "fifth-generation aircraft by 2020". Beijing responded by showing him the J-20's successful maiden test flight when he visited the country in January 2011. In the 1980s and 1990s, China took at least 10 years to develop the J-10, its third-generation all-weather jet fighter, currently a mainstay of the People's Liberation Army Air Force. But the development of the J-15 took just three years and it made its maiden test flight on August 31, 2009. The PLA Navy announced the formal establishment of an aviation force for future carrier-based operations earlier this month, and the next day China Central Television reported that the first of its J-15s had been put on the production line early this year. Sun Cong , deputy chief engineer at the Aviation Industry Corporation of China (AVIC), the nation's leading military aircraft manufacturer, said the unprecedented adoption of 3-D printing technology for his J-15 project had made a significant contribution to its success. "I would like to say that … the world was not astonished by our technology, but by China's efficiency in aviation industry development," Sun, the J-15's chief engineer, told Science and Technology Daily in March. "The J-15 project started without a solid technical basis … but now it has caught up to the technical level of the US' most advanced third-generation, carried-based aircraft, the F/A-18 Hornet." Sun told the Beijing Times the primary force-bearing structure of the J-15, including its landing gear, was formed by high-tensile titanium alloy powder sprayed from a 3-D printer. Aviation engineer Huang Weidong , a professor at the College of Material Science and Engineering at Northwestern Polytechnic University in Xian , Shaanxi , produced a three-metre-long titanium structure that is a key component of the C919's wing, on New Year's Eve last year. He told the Chinese industry website lasterfair.com he had been using 3-D printing technology since 1995, with the output of his research commonly used in the aviation, aerospace, machinery, medical and other sectors. "After near 20 years of research and development, [3-D printing technology in China] can produce … products that can replace metal structures made by complicated traditional manufacturing processes," he said. "We have applied the technology to [the aviation] industry, including sizeable titanium alloy structures and aircraft engine renovation, as well as some other high-end components." Another aviation materials specialist, Professor Wang Huaming , from the Beijing University of Aeronautics and Astronautics, told a workshop at the Chinese Academy of Sciences late last year that China now needed just 55 days to "print out" four hyperboloid cockpit window frames for the C919. He said a European aircraft maker had said it would need at least two years to do the same job, with the cost of making a mould put at US$2 million. "The traditional aircraft manufacturing industry doesn't only need much more time, but also wastes too many expensive materials," Wang said in a video clip of the workshop posted on the internet. "Normally, just 10 per cent of raw materials would be utilised, with the rest all cut and dropped during the processes of casting moulds, forging, cutting and polishing." For example, US-based Lockheed Martin Aeronautics needed 2,796kg of titanium alloy to produce an F-22 fighter jet, but only 144kg of the material actually made it into the plane, he added. Wang, who formed a team of researchers to study 3-D printing materials in 2000, said they were now able to mix many different kinds of materials together to imitate some sophisticated, high-end aircraft components. He said his research team had made many breakthroughs in 3-D printing technology, such as printing out key titanium alloy structures as big as 5 square metres which had been used in many new-generation military aircraft projects. "For me and many Chinese aircraft engineers, we all dream of 'printing out' all kinds of plane components we need one day," he said. He believed 3-D printing technology could soon help the country overcome a long-standing technical bottleneck that was hampering its production of sophisticated aviation engines. Sidney Wong, an engineer and associate director of the Hong Kong Polytechnic University's Institute for Enterprise, said 3-D printing technology could help China speed up the research and development of new generation aircraft. "As 3-D printing technology can save both time and materials, researchers can easily print out all kinds of high-end and sophisticated components they need to assemble prototypes within a short period," he said. "Without the hindrance of making moulds and other complicated traditional manufacturing procedures, the cost of making prototypes is much lower, and scientists and engineers can repeatedly produce more and more duplicates for tests and modification." Wang said China's large-scale 3-D printing technology had surpassed that of the United States because many US counterparts were just using the new technology to produce "knick-knacks". But Luo Jun , chief executive of the Beijing-based Asian Manufacturing Association, said there was "still a certain gap" that Chinese scientists needed to bridge to catch up with their US and European counterparts in the development of 3-D printing. "It's a fact that all sizeable and intricate metal structures and components made by 3-D printers in China can replace those parts made by traditional manufacturing processes … but such an achievement still fails to solve the core problem of China's aircraft manufacturing," Luo said, referring to the engine problem. "3-D printing is an emerging technology, but it still needs to be underpinned by traditional industry … there is still a certain gap between China and the US' technology, including its stability, accuracy, materials and related skills." In August, US President Barack Obama announced the formation of the National Additive Manufacturing Innovation Institute, with an initial investment of US$30 million, the National Journal reported. It said the US Army had deployed a helicopter-borne 3-D printing laboratory to Afghanistan, and the military already used 3-D printers to manufacture some non-critical aircraft components.

Confirmed cases of H7N9 bird flu drug resistance (By Agence France-Presse in Paris) Nurses leave a bird flu isolation unit at a hospital in Shanghai. Laboratory tests have revealed resistance in some H7N9 bird flu patients to the only available treatment, said virologists who unveiled “concerning” study results on Tuesday. Three out of 14 patients monitored at a clinic in Shanghai had a genetically-mutated version of the virus that makes it drug resistant, a team of researchers in China wrote in the journal The Lancet. Of the three, one developed drug resistance only after being medicated, “probably as a result of treatment with Tamiflu” – a widely-used antiviral drug, said a statement. This gave rise to fears that treatment might actually cause resistance to the only available drugs. The apparent ease with wich antiviral resistance emerges in A/H7N9 viruses is concerning - “The apparent ease with wich antiviral resistance emerges in A/H7N9 viruses is concerning,” wrote the study authors – insisting that early treatment remained the best course of action. These are the first clinically confirmed cases of H7N9 resistance. On Monday, Chinese health authorities said no new human cases of the deadly H7N9 bird flu strain had been recorded for the second week in a row. A total of 130 people have been infected and 37 died since the outbreak started in China in February. The virus is believed to spread to humans from birds, but fears were that it would mutate into a form transmissible from human to human. The results of a lab study published in the US journal Science last month showed the H7N9 strain can spread among mammals, specifically ferrets, and would do the same between humans under certain conditions. For the new study, researchers followed 14 H7N9 patients admitted to the Shanghai Public Health Clinical Centre between April 4 and 20. All had been given antiviral treatment, either oseltamivir (Tamiflu) or peramivir, which caused virus levels in 11 patients to drop. Tamiflu and peramivir belong to a class of antiviral drugs called neuraminidase inhibitors – the only known treatment for H7N9. Three patients, however, had a “persistently high viral load” in spite of treatment and had to be placed on oxygenation life support machines, wrote the authors. Two of them died. The authors said that apart from throat swabs, they also found virus traces in the blood, faeces and urine of some patients, and urged further studies to determine whether it could spread in ways other than coughing or sneezing. They also noted that two of the drug resistant patients had also been treated with corticosteroids, a drug that is also widely used in flu treatment. The team said there should be further studies to determine whether corticosteroids may aid drug resistance to develop. H7N9 causes severe pneumonia with a fever, cough and shortness of breath and is deadlier than the common, seasonal flu. The World Health Organisation (WHO) had earlier said that the H7N9 virus would likely react to existing antivirals like Tamiflu. The agency said work on a vaccine, which must be strain specific, had started – but observers have said it would probably be too late in case of an epidemic. Last week, the WHO’s deputy head Keiji Fukuda said the world was not ready to deal with a major flu pandemic. H7 influenza viruses comprise a group that normally circulate among birds, of which H7N9 forms a subgroup that had never been found in humans until the Chinese outbreak.

China announces convention on civilized tourist behavior (By Xinhua) The Chinese government on Tuesday promulgated a national convention calling on the Chinese people to take note of their behavior and act as civilized tourists when travelling. A combination of detailed regulations, the convention was issued by the National Tourism Administration and posted on the Chinese central government's website on Tuesday. "Being a civilized tourist is the obligation of each citizen," according to the convention, which singles out "protecting cultural relics" as one of the norms to be abided by tourists. The convention rejects behaviors such as doodling on, or carving characters into, ancient relics, as well as climbing or touching cultural relics. Photos can only be taken of relics when allowed by local regulations, according to the convention. It also promotes seven other norms to be followed by citizens, including maintaining a clean environment, complying with public orders, protecting ecology, protecting public infrastructure and utilities, respecting other people's rights, showing courtesy when with others and seeking appropriate entertainment. It labels actions such as spitting, littering, vandalizing, jay-walking and cutting queues as improper behavior. Graffiti recently left in an Egyptian temple by a teenage Chinese tourist has caused an uproar among other Chinese citizens, who have reflected on how to better regulate behaviors in order to build a good national image. The convention was issued as Chinese citizens have been traveling more both at home and abroad in recent years. Government data show that nearly 3 billion domestic trips were made in 2012, and that outbound trips exceeded 80 million in the same year.

China slams Japan's criticism of Premier Li's speech (Xinhua) Foreign Ministry spokesman Hong Lei on Tuesday criticized a Japanese politician's remarks that Chinese Premier Li Keqiang's speech in Germany "ignored history." On Sunday, Li visited Cecilienhof Palace in Potsdam, capital of the German federal state of Brandenburg, the site of the Potsdam Proclamation in 1945, which set the terms for Japan's surrender in World War II. He said that all the territories Japan stole from China, such as Northeast China, Taiwan and related islands, should be restored to China. On Monday, Japan's Chief Cabinet Secretary Yoshihide Suga rebutted Li's claim, saying, "That remark ignores history. (Japan) can never accept it." Foreign Minister Wang Yi, who is in Berlin accompanying Premier Li Keqiang on his trip to Europe, has stated China's solemn position on Suga's remarks, said Hong. Hong reiterated that in modern times, Japanese militarists launched an aggressive war against China and illegally occupied and stole Chinese territories, including Taiwan and its affiliated islands. "These historical facts should not be obliterated," he said. In 1945, Japan announced its acceptance of the Potsdam Proclamation as well as its unconditional surrender. Article 8 of the Potsdam Declaration makes it clear that the terms of the Cairo Declaration shall be carried out. In December 1943, leaders of the United States, Britain and China signed the Cairo Declaration, declaring that all the territories Japan had seized from China should be returned. In the China-Japan Joint Statement issued in 1972, the Japanese government also promised to earnestly implement Article 8 of the Potsdam Declaration. "These are unmistakable historical facts," Hong said. He asked the Japanese side to face history squarely, clarify and correct relevant statements and never again make remarks that lack common sense.

Haiyang-6, a Chinese research vessel, is seen at a dock in Guangzhou, capital of south China's Guangdong Province, May 28, 2013. An expedition team of 96 members aboard Haiyang-6 set out for the Pacific Ocean Tuesday to carry out a five-month survey on undersea mineral resources.

Singapore 'looking to widen its yuan role' (By WANG XIAOTIAN) The opening of the Monetary Authority of Singapore's first representative office in Asia in Beijing on Tuesday is being seen by the financial industry as a sign of Singapore's readiness to play a bigger role in the yuan's internationalization. The development is also viewed by Chinese and Singaporean officials as a milestone in further strengthening bilateral financial cooperation. The Beijing office is the authority's third overseas after London and New York. "We look forward to taking full advantage of this milestone collaboration to deepen our financial and economic cooperation and take our bilateral relations to new heights," Tharman Shanmugaratnam, deputy prime minister of Singapore and minister for finance, said in Beijing. Shanmugaratnam, who is also chairman of the Monetary Authority of Singapore, said financial cooperation has become an increasingly important pillar in the relationship between China and Singapore. Zhou Xiaochuan, governor of the People's Bank of China, said the expanded footprint of the Singaporean monetary authority will not only bring better communication between the two central banks, but should also promote the business of commercial banks from both countries. Shanmugaratnam said economic changes are taking place in China at a time when other Asian nations are "moving up the curve of development, and it will lead to growing connectivity between Asia and China, and new patterns of connectivity in goods and services." China was Singapore's third-largest merchandise trading partner last year. In services, China was Singapore's fifth-largest export destination, and Singapore was China's 13th-largest trading partner in 2012. Singapore was also the third-largest source of foreign direct investment into China last year, after Hong Kong and Japan. Trade: More financial cooperation expected - Bilateral trade between the two countries was further boosted with the signing of the China-Singapore Free Trade Agreement in September 2008, the first comprehensive bilateral FTA China signed with an Asian country. Zhou said,"We anticipate that the financial sector in Singapore can make a bigger contribution to China's ongoing financial reform." Six of the top 10 Chinese banks have a presence in Singapore, while three Singaporean banks have a presence in 15 Chinese provinces. Shanmugaratnam said, "There is potential to further these financial interconnections as China gradually widens and deepens its financial markets." He said the Monetary Authority of Singapore has started holding an annual exchange of views with the China Banking Regulatory Commission on mutual cooperation and market development, and is planning to deepen engagement with China's national securities and insurance regulators. "We hope for more such bilateral collaboration as China continues the progressive internationalization of its financial market and currency," he said. The opening of the MAS Beijing office came a day after Standard Chartered and HSBC Holdings launched the first batch of offshore yuan-denominated bonds in Singapore, and Industrial and Commercial Bank of China's Singapore branch began yuan clearing services in the city state. ICBC said on Tuesday in a statement that it conducted 53 yuan clearing transactions valued at more than 1.6 billion yuan ($259 million), and opened clearing accounts for 49 banks during its first clearing day. "Key banks in Singapore are ready to actively participate in the promising new market," Shanmugaratnam said. According to Zhou, Singapore has become the second- biggest yuan transaction center after Hong Kong since it launched the business in 2009. China and Singapore doubled the size of their currency-swap arrangement to 300 billion yuan in March, a month after the People's Bank of China, the country's central bank, approved the Singapore branch of ICBC as its clearing bank. As of June 2012, deposits of the currency in Singapore stood at about 60 billion yuan. 

Communist Party's moral guardians wade into debate on Chinese tourism behaviour (By Patrick Boehler patrick.boehler@scmp.com) A Chinese tourist poses in front of a portrait of Sun Yat-sen at Tiananmen Square in Beijing. The Chinese Communist Party's moral guardians have united with the tourism regulators in a joint call for Chinese citizens to behave when leaving their homes to see their country and the world. The party's Central Guidance Commission for Building Spiritual Civilisation and the China National Tourism Administration have re-issued a 128-character-long rhyme that should help tourists remember the rules of "civilised behaviour" on the road. It reminds them to queue orderly, and not to shout and waste food. "Gambling and pornography, we resolutely oppose," the somewhat imperfect rhyme reads. The appeal, which has circulated online, comes days after a 13-year-old boy from Nanjing wrote his name on the 3,500-year-old Luxor Temple in Egypt, starting a heated debate about the wanting behaviour of Chinese tourists abroad. The number of Chinese tourists going abroad has ballooned to 83 million last year, from 10 million in 2000, according to the World Tourism Organisation, making the world's most populous nation also the largest contributor to international tourism. The government also published another list of pleas for domestic tourists that is roughly twice the length in character. Citizens are reminded not to talk too loudly in public and not to step on grass. They should not chase, hurt or feed wild animals and should boycott activities linked with "feudal superstitions". Of course, they should also reject gambling and drugs. The two advisories come a day after Ministry of Foreign Affairs spokesman Hong Lei called on Chinese citizens to behave abroad and repeated similar calls by Vice-Premier Wang Yang. Around the Lunar New Year, the comedy movie Lost in Thailand became an instant hit for parodying the clichéd, hapless behaviour of Chinese travellers in the Southeast Asian nation. In France, constant complaints could even lead French designer Thierry Gillier to reconsider a ban against Chinese tourists at his boutique Parisian hotel Zadig, which is expected to open its doors to guests next year. Gillier was forced in September to apologise after saying he would reject Chinese tourists because many other guests "are looking for quiet hotels with a certain privacy".

Australian PM refutes claims of Chinese cyber hit (By Xinhua) Australian Prime Minister Julia Gillard on Tuesday refuted claims about cyber attacks by Chinese hackers, calling them "inaccurate". An Australian investigative television program this week reported that one such attack had resulted in Chinese hackers gaining access to top secret and detailed blueprints of spy agency ASIO's new headquarters in Canberra. "As the attorney-general has stated - neither he nor the director-general of ASIO intend to comment further on these inaccurate reports," Gillard told the parliament. She did not elaborate on what elements of the Australian Broadcasting Corporation (ABC) Four Corners reports were incorrect. Foreign Minister Bob Carr said that Australia's strategic partnership with Beijing would not be jeopardized over the allegations. "It's got absolutely no implications for our strategic partnership. We have enormous areas of cooperation with China," Carr told Sky News. "I won't comment on whether the Chinese have done what is being alleged or not. "Every Australian knows how economically important it's been to this country to have the relationship we enjoy with China today," he added.

President Xi meets with mayor of Los Angeles (By Xinhua) Chinese President Xi Jinping met with the mayor of Los Angeles on Tuesday in Beijing, and the two sides agreed to strengthen local-level exchanges and people-to-people contact. During the meeting with Mayor Antonio Villaraigosa, Xi said the two sides need to work from the top level as well as from grassroots level and up to push forward the development of China-US relations. He said the roots of China-US relations are deep in the local, non-governmental and grassroots sectors. Chinese President Xi Jinping (R) shakes hands with Antonio Villaraigosa, mayor of Los Angeles of the United States during a meeting on Tuesday in Beijing. "The growth of China-US relations is inseparable from exchanges and cooperation at local levels, and even so with universal participation and the active support of the people of the two countries," Xi said. He said the two sides should start from the local, non-governmental and grassroots levels, take advantage of their specific and mutually complementary characteristics and consolidate the social foundation of China-US relations through substantial cooperation. Xi emphasized that the two sides need to work from the top through lower levels and enhance the structural design for advancing bilateral links. Xi said he will meet with US President Barack Obama in early June to plan for the future development of China-US relations. The Chinese president said that at present, China-US relations are at a crucial stage of opening up to the future. He said in March, he and President Obama had a telephone conversation and reaffirmed their common will to work for the development of the China-US cooperative partnership and actively build a new type of relationship between major powers. Villaraigosa said it is an honor that the China-U.S summit will be held in Los Angeles. He expressed his belief that the summit will be critical for enhancing mutual trust and advancing US-China relations. He said the two countries should respect each other, seek common ground while maintaining differences, strengthen cooperation and realize common development and prosperity. The mayor of Los Angeles said the two sides should strengthen cultural, people-to-people, economic and local exchanges and advance bilateral relations from the grassroots level. Xi said during his visit to Los Angeles last year, he was deeply impressed with the warm welcome he received from the local people. He expressed his appreciation to Villaraigosa for his active role in promoting local-level exchanges and cooperation between the two countries. As the second largest city in the United States, Los Angeles has been a leading city and enjoys great potential in carrying out cooperation with China, the Chinese president said. He also expressed his hope that Los Angeles would continue to advance its cooperation with China by utilizing its own advantages and become an angel city for friendly cooperation between China and the US - Villaraigosa recalled Xi's visit to Los Angeles, saying the visit left a good impression on the people of Los Angeles and helped deepen the American people's understanding of China. The mayor said China's growth has brought about major opportunities for Los Angeles, and the city is ready to serve as a bridge of US-China cooperation.

 *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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