China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
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How to Do Business with China, through Hong Kong & Setting up Business in China?
Hawaii Failed Business Image and Continue Missed Opportunities

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Hong Kong, China & Hawaii News Archive for Year 2002  Archive Jan 1, 2003.........:>
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(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.3)

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

Wine-Biz - Hong Kong Brand Hong Kong Video

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

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

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

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

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

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

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

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

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

Hong Kong*:  Aug 1 2013

Developer Hang Lung sees profit plunge 23pc (By Anita Lam anita.lam@scmp.com) Developer says government cooling measures, which hit earnings, are likely to stay in place until housing supply catches up with demand - From left, Hang Lung Properties' managing director Philip Chen; chairman Ronnie Chan; executive director Ho Hau-cheong. Hang Lung Properties, which saw underlying net profit drop 23 per cent in the first half of the year, said Hong Kong's housing market has entered a "cold winter". Ronnie Chan Chi-chung, chairman of the company and a key supporter of government chief executive Leung Chun-ying, said the government's policies to cool property prices are likely to remain in place in the near future. But he said there was no need to further tighten the measures since transactions had already hit a two-decade low. "When housing supply catches up with demand it will be the right time to remove these measures," Chan said He said the group, which sold only five units in its two developments - HarbourSide and AquaMarine in the six months to June, has chosen "price" over "quantity", adding there may be chances for the developer to clear the remaining 1,400 units in the next few months. The average unit sales price was HK$39,000 per square foot at HarbourSide and HK$10,600 per square foot at AquaMarine. The group saw its worst half-year sales in Hong Kong since 2008 following the introduction of new transaction duties and tightened mortgage lending as part of the government's efforts to curb asset bubbles. Rental profit for the group's mainland operations - which made up more than half its revenue - jumped 12 per cent in the six months to June, a sharp slowdown from a growth of 26 per cent over the same period last year. But its earnings excluding revaluation gains and deferred tax, despite falling 23 per cent to HK$1.93 billion, beat a median estimate of HK$1.82 billion by five analysts surveyed by Bloomberg. Chan said he was optimistic about the mainland's long-term prospects despite slower economic growth and high-end consumption. The group acquired land in Wuhan for 3.3 billion yuan (HK$4.14 billion) in February to develop a high-end shopping mall. Despite weakened sales, Chan said the company still has more than HK$38 billion in cash and will acquire more land on the mainland when the opportunity arises. Chan, who had a war of words with Financial Secretary John Tsang Chun-wah earlier last month over government spending policies, said he purchased land in Tung Chung with four other developers earlier this year, indicating that he has no plan to withdraw investments from the city. Hutchison Whampoa's plan to sell its supermarket chain ParknShop has triggered speculation that the group's owner Li Ka-shing, who backed Leung rival Henry Tang Ying-yen during the chief executive election, is moving capital out of Hong Kong. Hang Lung's shares closed 0.2 per cent higher at HK$25.15 yesterday. It will pay an interim dividend of 17 HK cents.

Chan proposes plan to buy disused land and rent it out (By Ada Lee and Jeffie Lam) Development chief considering providing displaced farmers with access to farmland - The government might buy disused private farmland in the northeast New Territories and rent it to farmers displaced by new towns in the area, the development chief said. Paul Chan Mo-po said 34 hectares of fallow land had been identified in Kwu Tung South, but much of it was in private hands and some owners, looking forward to benefits from future development, had said they would not rent it to anyone. Chan told lawmakers yesterday his bureau was studying, with the Food and Health Bureau, the possibility of buying the land and renting it out after "suitable management". He did not give details, but said the government would also consider designating the land permanently for agriculture so owners would give up thoughts of selling it to private developers. Asked how the needs of the displaced farmers would be met given a queue of about 200 farmers was already waiting to take over fallow land, Chan said they would get priority. Chan, who was attending a Legislative Council hearing on the controversial plan for new towns at Kwu Tung North and Fanling North, faced calls to give more details of his family's interest in land covered by the development. In the continuing conflict-of-interest row over ownership of land at Kwu Tung North by a company linked to his family, lawmakers and people attending the meeting urged Chan to step down or give up responsibility for the development. After the meeting, Chan admitted there was room for improvement in his handling of the issue, but he did not apologise. "I may have been a bit clumsy in my expression," he said. "Looking back, I do believe I could have handled the matter better." Meanwhile, Legco president Jasper Tsang Yok-sing warned the government against falling into the "Tacitus Trap", in which it would be viewed as lying or doing the wrong thing even when it was truthful and acting correctly. Tsang said on radio that the public had higher expectations of government officials and demanded them to be "whiter than white". "They should draw a better line between their privacy and the public interest," he said. The Tacitus Trap is named after Roman historian and senator, Publius Cornelius Tacitus, who said policies of an unpopular government would not be welcomed whether they were good or bad.

New US consul general Clifford Hart praises Hong Kong's rule of law (By Lana Lam lana.lam@scmp.com) Veteran diplomat Clifford Hart takes office as the top US representative here and in Macau - Hong Kong's new US consul general Clifford Hart is a veteran diplomat and a former special envoy in six-party talks with North Korea over its nuclear plan. The new United States consul general praised Hong Kong's rule of law and freedoms as the key reasons more than 60,000 Americans call the city home, and says he looks forward to Hongkongers' move towards "genuine democratic suffrage". A veteran diplomat with 30 years' experience including five postings in China, Clifford Hart arrived on Tuesday to take office. "Respect for the rule of law and globally recognised fundamental freedoms underpin Hong Kong's status as 'Asia's World City', and both are vital for prosperity and stability for this thoroughly international, thoroughly Chinese society," Hart said yesterday. The Putonghua-speaking diplomat replaces Stephen Young, who vacated the post last month after a three-year stint as the country's top representative in Hong Kong and Macau. "Since my first visit nearly 30 years ago, Hong Kong and Macau have fascinated me with their open, law-based societies, dynamism, and exquisite integration of modernity and traditional Chinese culture," Hart said. "I am honoured I will be here for the next phase of Hong Kong's democratic development and progress towards genuine universal suffrage under the 'one country, two systems' framework." Hart is expected to meet key government and business leaders in his first few weeks in the city, with one of his top priorities likely to be the thorny issue of US whistle-blower Edward Snowden, who was allowed to leave Hong Kong in June despite a Washington request to arrest him on espionage charges. The failed extradition request strained relations between Hong Kong and the US, which typically share a close and co-operative bond. On Macau, Hart said it was a unique region, rich with history, that had seen "rapid economic development in recent years" with US companies playing a key role in the rise of the gambling enclave. "I intend to continue to work with the government and people of Macau as the region diversifies its economy and overcomes the challenges brought on by economic success," he said. Hart's most recent post was as a special envoy in six-party talks with North Korea over its nuclear plans. Previously, he has worked as the US National Security Council's director for China and Taiwan, as well as in the Soviet Union and Iraq. He holds a master's degree from the University of Virginia.

 China*:  Aug 1  2013

Chinese students targeted for British university growth (By Liz Heron) British government sets sights on Chinese students to reach its target over next five years - British government sets sights on Chinese students to reach its target over next five years. The British government has launched an ambitious drive to expand the number of foreign students going to British universities by 20 per cent in the next five years, with China being one of the targeted growth markets. It aims to attract 90,000 extra international students to Britain before 2018 and secure contracts with overseas institutions worth £3 billion (HK$35.6 billion) by 2020. Under the international education strategy launched on Monday, Britain will also double investment in partnerships with universities in developing countries and expand the Chevening scholarship scheme. Last year, 10 students from Hong Kong and 89 from mainland China received scholarships to study in the UK under the British government's global scholarship scheme. International students contributed £6.3 billion in living expenses and £3.9 billion in tuition fees to the UK economy last year . Undergraduate and postgraduate students from outside the EU need to pay twice as much for courses as home students. Income from students outside Britain and Europe now accounts for almost 10 per cent of universities' total funding. British education exports were worth an estimated £17.5 billion in 2011. The global education sector was valued at US$4.45 trillion last year and is expected to grow by 7 per cent a year up to 2017. "Overseas students make a huge contribution to Britain ... that is why there is no cap on the number of legitimate students who can study here," Britain's business secretary, Vince Cable, said. "Thanks to our world-class universities, our network of UK alumni who are now in positions of influence around the world is impressive, opening doors that would not otherwise be possible." Eric Thomas, vice-chancellor of the University of Bristol, was appointed UK Education Champion to lead the export drive and chair a new International Education Council that will co-ordinate institutions taking part. China is identified as one of the key target markets in the report, together with India, the United States, Brazil, Mexico, Indonesia, Turkey, South Korea and Russia. Chinese students account for about 15 per cent of non-EU students in Britain, according to Chinese government figures. Last year, more than 65,000 Chinese students applied to study in the UK. Britain also remains the most popular destination for Hong Kong students going abroad. According to the latest figures from the Universities and Colleges Admissions Service, more than 6,400 Hong Kong students applied for universities in Britain last year, representing a 36 per cent increase. And Hong Kong is among the fastest-growing markets for schools in Britain.

Xi vows to build marine economy, but peacefully (By Zhuang Pinghui pinghui.zhuang@scmp.com) President Xi Jinping has said China will increase its capabilities to protect its maritime rights while seeking common interests with its neighbours. The remark was made at a Politburo study session about how to turn China into a maritime power on Tuesday, Xinhua reported yesterday. The choice of topics for the study sessions for the top 25 members of the party usually aims to highlight the priorities of the party leadership, or send a political message. During the session, Xi said that in "no way will the country abandon its legitimate rights and interests, nor will it give up its core national interests". But he also pledged to use peaceful means and negotiations to settle disputes and strive to safeguard peace and stability, Xinhua said. It said the country would adhere to the policy of "shelving disputes and carrying out joint development for areas over which China has sovereign rights", while also seeking common interests with other countries. China is engaged in territory disputes with its neighbours in the oil-rich South China Sea and the East China Sea. Xi said China would give more support to exploring ocean resources and use the contributions to the economy to turn the nation into a maritime power. Gao Shu, a professor with Nanjing University's School of Geography and Oceanographic Sciences, said achieving Xi's vision would require developing resources not only in China's coastal areas but also in oceans around the globe. "The marine economy accounts for a lower percentage of GDP in China than it does in other countries, and a growing marine economy will contribute to the growth of the national economy," Gao said. China announced its aspiration to become a maritime power during the 18th party congress last November.

Corporate investigators on edge after China detains foreign consultants (By SCMP) GlaxoSmithKline offices in Beijing. risk consultants are increasingly wary of doing business in China. The detention by Chinese authorities of a British corporate investigator and his American wife in the wake of a corruption probe into pharmaceutical giant GlaxoSmithKline has had a chilling effect on other risk consultants working in China. It’s unclear why Peter Humphrey and Yu Yingzeng, whose firm ChinaWhys has done work for GSK and other drug makers, were detained. But corporate investigators said they were concerned about the repercussions for the industry. Multinationals, banks and investors rely on corporate investigators for information about potential partners and investments in China, where a lack of transparency is a hurdle to doing business. Restrictions in the flow of such background information could potentially leave foreign investors exposed to greater risk in the world’s second-largest economy. ChinaWhys offers “discreet risk mitigation solutions, internal process audits, due diligence and commercial investigation services”, according to the firm’s website. “(Humphrey’s) detention is really disturbing. It gives me an uneasy feeling that people who, on the face of it, are trying to help companies and individuals navigate their way around the system are being targeted,” said Gary Miller, litigation partner and head of the fraud group at London law firm Mishcon de Reya. Mike Vermillion, senior director of third-party risk management solutions at Oregon-based consultancy Navex Global, called the detentions chilling. “I am certainly not getting on a plane to China next week,” Vermillion said. Two sources with direct knowledge of the matter have said Humphrey and Yu were detained by Chinese authorities in Shanghai on July 10. They did not specify who was holding the couple. A Shanghai police spokesman said police there had neither detained nor had any contact with Humphrey. He said Humphrey’s case was being handled by Beijing. Police in the capital declined to comment. British diplomats have said they were giving consular assistance to a Briton detained in Shanghai but have declined to provide further details. US diplomats have said the same thing about a detained American. Other investigators questioned - Their detention has not been an isolated case. Two industry executives said investigators from other companies were being “invited for tea” by Shanghai authorities, a euphemism for informal questioning in China. Some investigators, worried they are under surveillance, have scaled back their use of email. Some declined to speak to reporters over the phone, afraid that authorities were listening in to their conversations. Several investigators said that they had become more cautious about which projects to accept, avoiding any the government might see as sensitive. Investigators said they had also heard of people requesting reassignment to Hong Kong, which has a separate legal system to mainland China. These movements could not be confirmed. A series of incidents in recent years has highlighted China’s growing willingness to investigate, detain and prosecute people for crimes involving the use of information for commercial purposes. Corporate investigators first came under China’s microscope last year after a spate of accounting scandals at US-listed Chinese firms that led to forced delistings, shareholder lawsuits and investigations by overseas regulators. Many of the scandals followed reports by short-sellers who accused the firms of financial irregularities. Some corporate investigators in China had worked with short-sellers and hedge funds doing research on those companies, said Paul Gillis, professor at Peking University’s Guanghua School of Management. It is unclear if the recent detentions are related to that work. Short-sellers borrow shares, sell them in the expectation that their price will fall and then buy them back at a lower price. “I know there’s been a great deal of unhappiness with the activities of short sellers ... That’s been one of the things that China has been quite irritated about,” said Gillis. Jon Carnes, a US-based short-seller who attacked several Chinese companies between 2010 and 2011 using the pseudonym Alfred Little, has said one of his Chinese researchers had been jailed in China. Industry has grown rapidly - The corporate investigations business has expanded rapidly in China in recent years in response to concern about compliance issues, in the wake of increased enforcement of the US Foreign Corrupt Practices Act (FCPA) and a surge in international deals involving Chinese firms. The big four international accounting firms – KPMG , PricewaterhouseCoopers, Deloitte and Ernst & Young, along with companies such as Control Risks, FTI Consulting and Kroll are among the largest operating in China. Investigators say the industry has also grown to include hundreds of small companies and individual operators as well, including ChinaWhys, a consultancy founded by Humphrey in 2003. Humphrey is a former journalist who worked for Reuters for 16 years until 1998. British drug maker GSK has declined to comment on the work ChinaWhys did for the firm except to say that Humphrey is not, nor has he ever been, an employee. GSK is in crisis in China after police this month accused it of funnelling up to 3 billion yuan (HK$3.8 billion) to travel agencies to facilitate bribes to doctors and officials. The company, Britain’s biggest pharmaceutical maker, has said some of its Chinese executives appeared to have broken the law. With the investigation industry’s expansion in China, particularly among smaller firms, came an illegal trade in private information, including bank, telephone, and even hukou or household registration records, investigators said. Some investigators claimed they could place moles inside companies. “Parts of the investigations industry in China were flying very close to the sun from a legal standpoint for a very long time,” said Velisarios Kattoulas, chief executive of Poseidon Group, a risk management consultancy active in China. Starting as early as late last year, police began questioning hundreds of people involved in the trade of protected information, according to several investigators. At least one small investigations company in China closed down as a result, investigators said. It was not clear if this firm was run by expatriates or locals. Legal grey area - Investigators concede some parts of their work stray into a legal grey area in China. Private investigations are prohibited under a 1993 Ministry of Public Security notice, though this, like other laws and regulations in China, has only been selectively enforced. One Chinese lawyer who works with investigation companies said that because they cannot get business licences as private investigators, such firms often register as “business advisers”. This can leave them in a legally precarious situation. “The negative part of this is that the government can get you whenever they want,” this lawyer said. It is not only corporate investigators who have fallen foul of Chinese law on the commercial use of information. In December last year, a Chinese court sentenced four former executives from a Shanghai unit of Dun & Bradstreet, a global business information firm, to prison for illegally buying information about Chinese consumers. Dun & Bradstreet said in May last year it was shutting the unit. The scrutiny on corporate investigators comes as China prepares to reopen its equity markets to initial public offerings after unofficially halting IPOs last October as part of a crackdown on fraud. It is unclear if any investigators were caught up in that crackdown. At the same time, the government has been tightening access to corporate records. Last summer, it began restricting the availability of corporate filings to China’s main business registry, the Administration of Industry and Commerce. These restrictions are still in force, investigators say.

Aso's Nazi remarks alarm Asian nations: FM spokesman - A spokesman for China's Foreign Ministry said Wednesday that Japanese Deputy Prime Minister Taro Aso's Nazi remarks have alarmed Japan's neighbors and the international community about the country's development direction. On Monday, Aso said in a lecture that Japan should learn how Germany's constitution under the Weimar Republic was transformed by the Nazis in the early 1930s before anybody knew what was happening. Aso also said it is natural to visit the war-linked Yasukuni shrine to pay tribute to those who sacrificed their lives for the country. The shrine to the 2.5 million Japanese war dead, including 14 convicted Class-A war criminals, is seen as a symbol of Japan's past militarism. Japan's neighbors in Asia and the international community have to heighten their vigilance over the country's development direction, since a major Japanese leader spoke openly to amend the pacifist Constitution following an example set by the Nazis, spokesman Hong Lei said in a press release. The Yasukuni shrine issue concerning how Japan views its history of aggression and whether it respects the feelings of people of war-victim countries in Asia, said Hong. "We demand the Japanese side reflect on its history, fulfill its commitments on historical issues and win the trust of Asian neighbors and the international community through concrete actions," he said.

Hong Kong*:  July 31 2013

HK Open helps city stay on top, says Fanling golf club (By Amy Nip amy.nip@scmp.com) Golf club argues that if Fanling loses its courses the city could lose its status as Asia's World City - The Hong Kong Golf Club has appealed to the city's positioning as Asia's World City as a defence against suggestions its golf courses in Fanling be redeveloped for housing. The club, which runs the three 18-hole courses that some say should make way for a new town, urged the government to consider the impact on the city's standing as a leader in Asian golfing. In a statement yesterday, it stressed the importance of the site in hosting the annual Hong Kong Open. "Apart from the Macau Grand Prix, the Hong Kong Open is the only world-class sporting event with a history of more than half a century in the region, and is one of the few world-class sports events held annually in Hong Kong at the same venue," it said. The international event promoted the image of Hong Kong as an international city with top-tier golfing facilities, attracting overseas viewers and making it possible for talented local golfers to compete with the best players in the world, the club claimed. In the overall interests of the community, it said, it would respect the government's decision over the land use of the 176-hectare Fanling site. But it would "strongly urge due consideration be given to maintain Hong Kong's position as 'Asia's World City' with golfing and sporting facilities appropriate to its international status". The club also appealed for public support by highlighting the non-exclusiveness of its Fanling facility. Some 800 indigenous villagers enjoy free access because of a deal their ancestors struck when they sold the land to the club's owners decades ago. Last year, those villagers played almost 14,000 rounds of golf on the courses, the club said. That was in addition to the more than 30 per cent of the club's total rounds played by other non-members, including local and international visitors. Earlier, the Hong Kong Golf Association - whose members include the Hong Kong Golf Club, Clearwater Bay Golf and Country Club, Discovery Bay Golf Club and Shek O Country Club - made a similar claim about how the Fanling site was indispensible for the HK Open. The association spoke up last week after lawmakers passed a non-binding motion asking the government to develop the Fanling site instead of razing existing villages for new towns in the northeastern New Territories.

New law forces airlines to display full price of flight deals on ads (By Charlotte So charlotte.so@scmp.com) Ads for air fares that until how have stripped out taxes and fuel surcharges to suggest flights are cheap will now have to state those costs clearly, under Hong Kong's new Trade Description Ordinance. Fasten your seat belts: plane fares are about to soar. Well, not exactly. You will still be paying the same, only now you will know what you are in for as airlines will have to disclose all the hidden costs of flights in their advertisements. A "special" HK$1,880 round trip ticket to Sydney that Virgin Atlantic launched last week actually tots up to HK$4,535 after factoring in HK$2,655 in taxes and fuel surcharges - Ads for air fares that until how have stripped out taxes and fuel surcharges to suggest flights are cheap will now have to state those costs clearly, under Hong Kong's new Trade Description Ordinance. For example, a "special" HK$1,880 round trip ticket to Sydney that Virgin Atlantic launched last week actually tots up to HK$4,535 after factoring in HK$2,655 in taxes and fuel surcharges, which is stated in the disclaimer to the advertisement. In many cases, these charges are not even included in the disclaimer. From now on, however, they will have to be, if not included in the banner price itself. The impact of stricter rules on supposed discounts and special prices, which came into effect on July 1, has already been felt in several other industries. It is now set to force a new level of transparency in the fiercely competitive airline sector just as the peak holiday period gets under way. Cathay Pacific Airways said it would now provide a ballpark figure for taxes and surcharges in advertisements. In the past, Cathay ads would only state that fares are subject to applicable taxes and surcharges, without specifying the figures. Qantas' Hong Kong general manager, Wyn Li, said it would put the all-inclusive price in its banner ads to make it even clearer - a practice mandatory in its home base of Australia. Singapore enforced a similar system two years ago. Industry veterans said Singapore Airlines took a hit in the Hong Kong market when it started advertising the all-inclusive prices up front because its fares suddenly began to look far less appealing than those of Rivals. Legislative Council member Wayne Yiu Si-wing said the 800-odd travel agencies in Hong Kong, which are general sales agents for airlines, will risk breaking the new law if they don't state the full prices to customers. As the lowest air fares always fluctuate because of differences in booking classes and availability, Yiu said that he had "asked travel agents to be more careful in explaining [the rates] to their customers".

Justice secretary wants Apple Daily editor jailed for contempt of court (By Austin Chiu austin.chiu@scmp) Secretary for Justice Rimsky Yuen Kwok-keung is requesting that the High Court imprison the editors of Chinese-language newspaper Apple Daily and its sister publication, Sharp Daily, for contempt of court. Government lawyers have also said Apple Daily editor Cheung Kim-hung and Sharp Daily editor Li Pang-kay should be fined for “publishing… or permitting to be published” newpaper articles on March 20. These articles, on two people suspected of having committed a murder, were published when the pair were facing criminal proceedings. In two writs filed with High Court on Tuesday, the government lawyers named the two newspapers as defendants. These articles, on two people suspected of having committed a murder, were published when the pair were facing criminal proceedings - The court papers also noted that the Apple Daily had published a video on its website relating to the case. The government lawyers are asking for permission to make an application for committal against the editors and their newspapers. The court documents have not identified the articles apart from giving a general description of them. News reports show that Apple Daily and Sharp Daily had an exclusive interview with Henry Chau Hoi-leung, 29, who in March was accused, with a friend, of murdering and dismembering his parents at their Tai Kok Tsui apartment. The interview was conducted at the Siu Lam Psychiatric Centre, where Chau has been remanded. The articles were published on March 20, matching the publication date of the articles in question. On March 21, Commissioner of Police Andy Tsang Wai-hung said they were seeking legal advice from the Department of Justice because the reports gave details about the case after court proceedings had already started and could, therefore, prejudice its outcome.

 China*:  July 31  2013

2,290 disciplined for excessive extravagance (By AN BAIJIE) Government officials violated new Party guidelines against corruption - More than 2,000 Party and government officials have been punished as of late June for breaking new Party rules against extravagance and excess formality, an official from China's top anti-graft agency said on Monday. A total of 2,290 officials violated the guidelines, said Xu Chuanzhi, head of the department responsible for the supervision of Party officials' work habits under the Central Commission for Discipline Inspection of the Communist Party of China. The CPC Central Committee issued the guidelines in December to improve Party work habits. The commission publicized eight typical cases, in which officials had misappropriated public funds for entertainment purposes or illegally accepted cash and gifts. In one of the cases, an official from Qingshan district of Wuhan, the capital of Hubei province, received a grave warning for taking 10 civil servants sightseeing to Hainan province at public expense. Anti-corruption authorities ordered those officials to pay for their trips, the commission said. In another case, Wang Qinsheng, deputy head of the Hunan provincial department of justice, received a warning for accepting money and gifts at his son's wedding in January, the commission said. The official was exposed in an online post that accused him of taking bribes at the event. The post also pointed out that more than 20 police vehicles and 100 officials from judicial authorities attended the wedding. The Hunan Party Commission for Discipline Inspection announced afterward that Wang received around 140,000 yuan ($22,800) from 78 people at the wedding, and the official has turned over the money to the commission. In the wake of that scandal, the Hunan Party Commission for Discipline Inspection released the draft of a new rule last week that bans officials from accepting bribes at birthday celebrations and their family members' weddings and funerals. In response to some people's claims that accepting gifts and money at birthday celebrations and wedding ceremonies is a private issue and should not be banned, Hunan's anti-graft agency said on Monday that the officials can either accept the ban or resign. The release of typical cases and the number of officials punished is a regular occurrence that aims to push forward the Party's campaign to improve work habits. The guidelines include reducing traffic controls imposed for officials' convenience, banning red-carpet arrangements, and resisting extravagant and bureaucratic visits and meetings. The CPC Central Committee also initiated the "mass line" campaign in mid-June. The campaign, which is scheduled to run a year, requires officials to give top priority to the interests of the people and maintain close ties with the public. The Central Commission for Discipline Inspection of the CPC asked officials and Party members to stick to the eight bureaucracy-busting guidelines, eliminate improper work habits and firmly carry forward the "mass line" campaign, the statement said. It also urged disciplinary authorities at all levels to strengthen inspection and supervision and punish those violating the anti-bureaucracy rules.

Drug firms seek expert advice as unease spreads in wake of GlaxoSmithKline affair (By Toh Han Shih, Kwong Man-ki and Daniel Ren) Beijing's crackdown on the drug industry has spurred international pharmaceutical companies to seek advice from risk consultancy firms, who are themselves uneasy about the ongoing investigations. The government has detained at least four senior Chinese GlaxoSmithKline (GSK) executives, as well as 18 GSK employees, in its investigation into suspected bribery by the UK pharmaceutical giant. "We have definitely seen a surge in inquiries recently from companies operating in the health care sector," said Ben Wootliff, Greater China and North Asia corporate inquiries director for Control Risks, a risk consultancy firm. "Clients are increasingly worried that the due diligence they have done on third-party suppliers, including travel agents and marketing firms, is insufficient," said Wootliff. "It's not just the health care sector that is worried. Any firm which has a big sales operation in China is now more concerned." Hugo Williamson, managing director of Risk Resolution, said his firm had been approached by a number of drug companies in recent weeks seeking due diligence into mainland partners, sales agents, distributors and related parties. "We are also looking at a number of firms' anti-corruption procedures to examine if they are suitable, given the changing global regulations and evolving situation in China," Williamson said. But risk consultancy can itself be a risky business. The founders of Shanghai risk consultancy firm ChinaWays, Peter Humphrey and his wife Yu Yingzeng, were detained recently, reportedly as part of the GSK investigation. Three consultants the Post spoke to declined to comment on the pair's detention. During a visit to GSK's plants in Dongli district and Binhai New District in Tianjin , security staff told the Post the plants were operating normally. Operations at GSK's research and development centre in Shanghai also appeared normal when the Post visited it. Some staff outside having lunch said they were nervous about the company's prospects in China. "The employees are feeling uneasy about the company's future but we hope our work won't be affected," one employee told the Post.

Half of major SOEs' profits set to be made from abroad (By BAO CHANG) Better use of resources and choice of market to help meet the target - Half of central government State-owned enterprises' profits will come from their overseas operations in the next five years, compared with less than 38 percent at present, according to the State-owned assets watchdog. The target can be achieved through better allocation of resources, choice of market, brand-building and industrial upgrading, rather than asset acquisitions, experts say. "We will focus on the structure of corporate profits when we evaluate central SOEs' international operations in the next few years," said Liu Nanchang, director of the Performance Evaluation Bureau of the State-owned Assets Supervision and Administration Commission. The SOEs' international networks and business scale will also be key criteria in the assessment, he added. Since 2003, when the commission was formed, it has carried out annual reviews on the performance of central SOEs and their leaders. At the start of the nation's 12th Five-Year Plan (2011-15), the commission made it a top priority to develop central SOEs into top multinationals globally. Forty-four central SOEs are listed on the Fortune Global 500 in 2013, with China Petrochemical Corp, China National Petroleum Corp and State Grid Corp in the top 10. The Fortune Global 500 is an annual ranking of the top 500 corporations worldwide, measured by revenue. It is compiled and published by Fortune magazine. Liu said: "We plan to take five to 10 years to allocate the major part of central SOEs' resources in global markets. "We will spare no effort to promote international competitiveness of the central SOEs, which are requested to withdraw from low-end industrial chains and concentrate on premium overseas markets." Overseas assets of Chinese companies, which have more than 15,000 branches worldwide, are valued at more than $1 trillion, with half coming from State-owned enterprises, according to the commission. But compared with their foreign counterparts, the overseas business of Chinese enterprises still accounts for a relatively small proportion, according to Kang Yan, senior partner at Roland Berger Strategy Consultants (Shanghai). He attributes this to a lack of motivation. While Japanese and South Korean companies have faced shrinking domestic markets, Chinese enterprises have generated large profits from the domestic market in recent years, making them less eager to tap the international market, according to Kang. 

Hong Kong*:  July 30 2013

HK$10.9m worth of Ice seized at airport (By Lai Ying-kit yingkit.lai@scmp.com) Andy Hui Wai-ming (left) and other customs officers show how smugglers stored methamphetamine in false suitcase compartments on Monday. Two Filipinas were arrested for drug trafficking at Hong Kong International Airport in Chek Lap Kok after HK$10.9 million worth of the illegal drug methamphetamine, or Ice, was found in their suitcases, customs officials said on Monday. Weighing 14.5 kilograms, the seized Ice represented the largest seizure of the drug from passengers since 2011, customs said. The drugs were found by customs officials in plastic bags concealed inside the secret compartments of three suitcases carried by the pair. The pair, aged 27 and 31, were departing for Clark in the Philippines when they were stopped by plainclothes officers at the airport on Sunday. Andy Hui Wai-ming, head of customs drug investigation, said at a press conference on Monday “the workmanship of the suitcases was good ... and they put men’s suits in them as a cover-up to mislead law enforcement agencies,” he said. The two were probably working for a drug trafficking ring in the Philippines, Hui said, adding that the department would contact its counterparts in the Philippines for further investigations. Under Hong Kong law, those convicted of drug trafficking could be sentenced to life imprisonment and fined up to HK$5 million.

Hong Kong Stadium mudbath blamed on poor management (By Olga Wong, Johnny Tam and Chan Kin-wa) Turf expert says pitch drainage system may have been blocked by the use of cheap sand as Manchester United cancel training session - Ground staff work on the pitch at the Hong Kong Stadium ahead of tonight's clash between Manchester United and Kitchee. Poor management has been blamed for the waterlogged pitch that has turned the city's top sports arena into an international laughing stock. Manchester United called off an open training session at Hong Kong Stadium last night ahead of tonight's match against local champions Kitchee. And there were even fears fans may be denied the chance to see the English Premier League Champions due to the appalling state of the playing surface. Dryer weather expected today, however, will hopefully ease concerns. Hong Kong Stadium manager Wong Ying-ming admitted that there had not been enough time to sieve the sand provided by the contractor and separate impurities, such as pebbles and shells. He added that a large quantity of sand was needed to patch up the pitch after the heavy rain. Stadium staff, assisted by Tottenham Hotspur's groundskeeper, worked to pick out impurities before the Barclays Asia Trophy matches on Saturday. A source close to the Leisure and Cultural Services Department, which manages the stadium, said about 50 staff were deployed from its contractors to work on the muddy pitch at the weekend. Dr Eric Lee Yin-tse, a turf specialist involved in football pitch and race course design, believed the drainage system under the stadium's pitch was blocked. He said the blockage was probably caused by the use of cheap sand usually used in construction and which contains impurities such as shells and pebbles. "Good sand particles are of similar size. It reduces soil compression. Grass will only grow stronger and denser in well-ventilated soil," he said. He added that the same problem was causing the deterioration of the pitch at Tseung Kwan O Sports Ground, where the 2009 East Asian Games were held. The source added that the local climate was a challenge for the department's consultant from New Zealand, adding: "Hong Kong requires a very different way of handling the turf. Because of the very wet weather, we need to create more holes in the soil to allow better evaporation, in addition to covering the botched pitch with more sand." A Leisure and Cultural Services department spokesman confirmed its consultant was from New Zealand, but provided no further details. The government has blamed the weather and the frequency of matches - with two Barclays Asia Trophy matches played on both Wednesday and Saturday - for the state of the pitch. It led to United's planned training session being moved to the Tseung Kwan O ground yesterday morning. United boss David Moyes said of the playing surface: "I hope it will be OK … players have been brought up playing on different pitches." He added: "I'm disappointed we could not let more people come in to watch [the training]. We wanted to try to give the pitch an opportunity." And while there have been worries players could get injured, defender Phil Jones assured supporters: "No matter what's presented to us, we'll be ready and hopefully put on a display." But the chairman of the Hong Kong Football Association, Brian Leung Hung-tak, said fans might be deprived of the chance to watch Premier League sides in future if the standard of the pitch cannot be assured. And Kitchee captain Lo Kwan-yee said fans may be left disappointed by tonight's game. He said: "I believe [United] won't make a full effort in the match as they don't want to be injured. Fans may be disappointed if they only send second-tier players on to the field." Match organisers are likely to net HK$18 million in receipts, with the government receiving a 20 per cent levy.

Kim Jong-un gives nod to Hong Kong firm to redesign Pyongyang airport (By Olga Wong olga.wong@scmp.com) Local firm's design impressed Kim Jong-un, who asked that Pyongyang's airport be upgraded too [North Korea - The Democratic People's Republic of Korea is a country in East Asia, located in the northern half of the Korean Peninsula bordering South Korea and China. Its capital, Pyongyang, is the country's largest city by both land area and population. It is a single-party state led by the Korean Workers' Party (KWP), and governed by Supreme Leader Kim Jong-un since 2012. It has a population of 24,052,231 (UN-assisted DPRK census 2008) made up of Koreans and a smaller Chinese minority. Japan 'opened' Korea in 1876 and annexed it in 1910. The Republic of Korea (ROK) was founded with US support in the south in August 1948 and the Soviet-backed Democratic People's Republic of Korea (DPRK) in the north in September that year. ] Artist conception of the Kumgang Tourism airport in North Korea. An unidentified middleman with a company registered in Hong Kong has been authorised by the North Korean government to select a Hong Kong-based architect to redesign the secretive country's airports. Local urban planner Otto Cheng Ping-lun, of PLT Planning and Architecture, told the South China Morning Post his proposal to redesign the military airport at Kamgang Tourism Zone, Wonsan, into one for civilian use had impressed state leader Kim Jong-un so much that North Korean authorities invited him to bid for the redesign of Pyongyang's airport as well. "We were told that Kim was happy with our design. However, Kim said the airport in the capital should not look worse than the one in the economic zone. That's why we were also asked to upgrade the airport in Pyongyang," Cheng said. Cheng said the exterior of the airport at Mount Kamgang - a scenic tourism area in the southeast of the country - resembled the drum used by dancers in traditional Korean musical performances. "We were approached by a potential investor who is very close to the North Korean government," he said. Cheng said the investor, whose company is registered in Hong Kong, was authorised by North Korea to choose an architect to design the Pyongyang airport. He declined to reveal further details of the investor, including whether he was a mainlander. "My partner was invited [to fly to North Korea] on a private jet provided by the investor. Of course, they had to leave their mobile phones in the airport before entering the country," he added. In contrast to Hong Kong's International Airport, which receives over 55 million passengers a year, the US$200 million project in Kamgang can only accommodate 12 planes and would receive 1.2 million tourists annually. The project requires lengthening the runway from 2,450 metres to 3,500 metres. Cheng said construction was on hold after the missile tests conducted by Kim earlier this year, but he was optimistic that the project would go ahead. "We believe [Kim Jong-un] will turn his attention to the economic front soon," he said. News of Cheng's firm being invited to redesign the military airport was first revealed last month by North Korea News, an independent website based in Washington and Seoul. North Korea's consulate in Hong Kong did not reply to the Post's inquiries regarding the airport plans. Cheng started his career in the early 1990s and worked for major planning firms in Hong Kong. He was involved in drafting the city's Metro Plan for urban areas in the 1990s and designing Tung Chung new town. But he said local projects were now less satisfying as the city was less receptive to creative ideas. The airport is not the first unusual project awarded to Cheng's firm, which is run by 30 staff in two offices in Hong Kong and Shanghai. Most of his projects have two things in common - they are very large in scale, and involve clients from non-Western countries, such as Iraq, Peru, Russia and the mainland. Some are linked to the families of state leaders, like North Korea. Cheng admits there is a downside to working with such clients. "We didn't get paid for a new town design of 6,000 hectares when the government of Kyrgyzstan was overthrown," he said. PLT Planning is now designing a new town of 24 sq km for the government of Abu Dhabi, eight times the size of the new towns planned in the New Territories. The firm's British partner, Sheppard Robson, was noted for designing the UK's first zero carbon house in 2007.

Asian-American films celebrated in NYC (By Caroline Berg in New York carolineberg@chinadailyusa.com) Brian Yang (left), Allen Lu and Christopher Chen (not pictured) co-produced the documentary LINSANITY about NBA basketball player Jeremy Lin. The film is one of 70 works featured in this year's Asian American International Film Festival in New York. Nearly 400 submissions vied for a spot in this year's Asian American International Film Festival (AAIFF) in New York, which ultimately selected 70 entries. "They curate such a strong program of films each year," Brian Yang, film producer and actor, told China Daily. "They bring in all kinds of people from around the world." The festival, which began on Wednesday and will run through Aug 3, will present 26 feature films and 44 short films made for, by and about Asians and Asian Americans. The program spans six themes, including "Asian American Achievements," "LGBTQ Features," "Remembering the Forgotten War," "Exploring Asian Filmscapes," "Taiwan Cinema Days" and "Celebrating Female Filmmakers - In Memory of Marilou Diaz-Abaya." The festival aims to provide a comprehensive picture of the Asian and Asian-American independent film world, and this year will include works from or featuring characters from Australia, Canada, the Chinese mainland, Hong Kong, India, Indonesia, Israel, Japan, Korea, Malaysia, Nepal, Pakistan, The Philippines, Singapore, Taiwan, Turkey, the UK and the US. "The festival has grown," said Yang, who has lost count of the number of times he has attended or participated in the annual event, which is now in its 36th year. "I was talking with a friend yesterday about how well attended all the screenings are." Screenings will be held at the Anthology Film Archives, Asia Society, Museum of Chinese in America and New York Institute of Technology. The festival includes special events and presentations throughout the 11-day event. On closing night, for example, a screening of the North Korea repatriation drama Our Homeland will be followed by an award ceremony and gala reception with the filmmakers. "The wide range of genres, visual styles and storytelling approaches speaks to the diversity and richness of Asian and Asian-American cinemas," festival curators La Frances Hui and L. Somi Roy said in a press statement. Among the feature films in this year's program, one will make a world premiere, one will make an international premiere, six a US premiere, seven an East Coast premiere and eight a New York premiere. Yang has two films in this year's AAIFF lineup. He co-produced the documentary LINSANITY about the Chinese-American NBA basketball player Jeremy Lin, and he also starred in the feature length drama Someone I Used to Know. "Having a platform like this is great for the artists and filmmakers to share their voice and their vision," Yang said. "You don't make movies to exist in a vacuum, where you're watching it yourself all day long. You want to share it with an audience and [AAIFF] really provides this opportunity." Outside AAIFF, Yang can be found acting on the television series, Hawaii Five-0. He was also recently the host for a reality show in China called Shanghai Rush, which is China's biggest-budgeted reality show to date. "Being an Asian American in this industry, you always feel like you're swimming upstream, but I think it's gotten better over the years," the 39-year-old actor said. "Agents are always sending you auditions and scripts, and you're like, 'Another role marginalizing another Asian American.'" Asians do more than martial arts or deliver food, said Yang, who is Chinese American. He said Asians contribute in a variety of ways, just like any other racial or ethnic group, including working as doctors, engineers and, yes, even basketball players. "That's always been the gripe over the years in terms of having Asian Americans front and center in the mainstream media's eye," Yang said. "We are three-dimensional characters that are a part of the fabric of this country." Asians accounted for the greatest population growth among ethnic or racial groups in the US in 2012, 18.9 million people, according to the US Census Bureau. Yang said he believes change is effected by people in positions of power. In the film world, that is producers, writers, directors, networks or studios. He said these are the people and organizations that have the ability to see the US as a colorful landscape and create characters and opportunities for people who are otherwise in the minority. "While it remains a challenge, I don't want to harp on the fact that the odds are stacked against us," Yang said. "I think it's important to keep doing and let the chips fall where they may, because you can't spend your career planning or always thinking that you're not getting a fair shot."

 China*:  July 30  2013

China's Brain drain may be world's worst (By He Dan and Yang Yao hedan@chinadaily.com.cn and yangyao@chinadaily.com.cn) But more and more specialists are returning for home advantages - Sun Zhipei has only been in Helsinki for four months, but he has already decided it is where he wants to settle. The 35-year-old nanotech scientist previously spent almost 10 years living in Spain and Britain, and said he would not entertain the idea of returning to his native China. "I can have more control about what I want to study here and carry out projects I'm interested in," said the associate professor at Aalto University, who gained his PhD at the Chinese Academy of Sciences' Institute of Physics. Sun's attitude perhaps goes some way toward explaining a People's Daily report in June that said China is experiencing "the world's worst brain drain". Eighty-seven percent of the mainland's top specialists in science and engineering who went abroad for work or study have no plans to return, the paper quoted an unnamed official with the Party's coordination group on specialists as saying. The group consists of 20 Party and government agencies, including the Organization Department of the Communist Party of China's Central Committee, which oversees human resources. China Daily interview requests with the organization department went unanswered. Although independent experts and statistics do not confirm the severity of the brain drain, there is little doubt it exists. Wang Huiyao, director-general of the Center for China and Globalization, a Beijing-based think tank, said since the reform and opening-up policy of the late 1970s, 2.6 million Chinese students have studied overseas, of which about half went to the United States. The US is also the No 1 destination for many Chinese students, he said, with more than 190,000 on campuses last year. Meanwhile, US Department of Homeland Security data show about 32,000 people from the Chinese mainland became naturalized US citizens last year, while 82,000 received green cards. Cao Cong has published several essays and books about brain drain issues, and is an associate professor of social sciences at the University of Nottingham in Britain. He estimates that 90 percent of Chinese students who get a PhD in the US choose to settle down there. But why are the mainland's top scientists and engineers so reluctant to return home? "Chinese institutions have new research equipment, much of it better than at places in the US," said Joseph Jen, former undersecretary for research, education and economics for the US Department of Agriculture. "I would say the most important reason good Chinese scientists choose to stay in the US is because of the scientific culture ... (in which) scientists have bigger freedoms to pursue research of their choice. "In the US, graduate students are trained to be independent and innovative," said the 74-year-old, who was born in Chongqing but later settled in the US, earning a PhD in biochemistry at the University of California. "In China, barring some exceptions, students are instrument operators, without opportunities to develop independent thinking and new creations." Jen said he also believes that getting the best jobs in China still requires guanxi, or good connections, which is not the case in the US. However, he conceded that although the US has material advantages, "racial discrimination still exists, and many Chinese-Americans are bothered by that." Chen Zhengyu, an MBA student at Cambridge University's Judge Business School, said most of his Chinese friends who are professionals or scientists stay abroad for their children's education. "It is a significant factor for Chinese parents to settle in Europe," he said, adding that many people want an alternative to a model focused on exam scores. Under the Medium- and Long-Term Talent Development Plan (2010-20), China plans to lure back 2,000 top Chinese specialists, ideally in the fields of IT, biotechnology, aerospace, environmental protection, agricultural technology and transportation. Since the 1990s, the government has launched at least seven major projects. From 1990 to 2010, the Ministry of Education invested 600 million yuan ($98 million) to provide seed funding for more than 20,000 returnees to do scientific research. The CAS also launched a plan in 1994 to lure overseas Chinese scientists by offering 2 million yuan for research, which has so far lured back 1,568 top scientists. Pan Shilie decided to return in 2007 after attending a job fair in Chicago organized by the Chinese Academy of Sciences. At the time he was three years into a postdoctoral research program at Northwestern University in the US. "Every year, deans of research institutes affiliated to the CAS go to the US and Europe to hunt for overseas Chinese candidates," said the 40-year-old, who hails from Henan province. "After talking with employers, I realized the research platform in China is also good. But what was more important is I felt the sense of belonging. My heart never settled abroad." Pan has been working for the CAS' Xinjiang Technical Institute of Physics and Chemistry for the past six years. After being recruited via the Hundred Talent Program, he received 2 million yuan, which included funding and a 270,000 yuan relocation allowance. Although the incomes and benefits for domestic scientists still lag behind Western countries, he said the gap is narrowing. "China has been increasing investment in research and development, while the economic downturn in the US and Europe means my friends overseas face pressure to cut funding," he said. In a speech in Beijing in June, Zhan Wenlong, vice-president of the CAS, said more native scientists and researchers are returning. "Respect, care, trust and helping them to fulfill their development potential are the missions for our academy," he said. "We work toward the goal of building an ecosystem for innovation by managing the forest that allows trees to grow in rich soil and abundant sunshine." Zhan said his academy will also guarantee four-fifths of a researcher's time will be spent in research. Last year, the CAS launched a 3H Project that gives favorable policies to solve researchers' concerns on housing, health insurance, and home life, such as their children's education and employment for their spouses. However, the overall technology level in China is still lower than in the US, West European countries and Japan, said Gui Zhaoming, a professor at Wuhan Institute of Technology. "For overseas specialists who have the aspiration to be an entrepreneur in China, lack of funding is the biggest obstacle," he said. Favorable financial policies have been launched to help specialists come back. Returnees can enjoy a 15 percent preferential tax policy if they start a high-tech enterprise. However, China's private equity and venture capital system hinders entrepreneurship, as regulations are underdeveloped and the nation's credit system is not fully developed, he said. "If they can't get investment, they can never translate their ideas into a business," Gui said. "That is why they hesitate to come back." And working in an environment that brings together different nationalities is also attractive to some specialists.

Nearly half of mainland China flight delays blamed on management problems (By Mandy Zuo mandy.zuo@scmp.com) Nearly half of hold-ups attributed to problems with management due to increasing air traffic - Passengers queue up for a security check at Pudong International Airport in Shanghai. Management problems were blamed yesterday for 42 per cent of delays to commercial flights on the mainland as public discontent about unreliability mounts. Air traffic control measures accounted for 26 per cent of delays, bad weather about 21 per cent and military restrictions 7 per cent, China News Service said, quoting official figures. The report also said that civil aviation utilises 34 per cent of mainland skies, while the military uses 25 per cent. No flights are reportedly allowed in the remaining 41 per cent of airspace. It was recently revealed that some mainland airports, particularly in Beijing and Shanghai, had the world's worst record for delays. Authorities attributed it to a rapid growth in the number of flights in recent years. They said this had put additional strain on management and security at airports. In the past five years, the number of flights arriving and departing from Beijing Capital International Airport increased by nearly 29 per cent, and those out of Shanghai Pudong and Guangzhou Baiyun airports were up 36 and 33 per cent, respectively. Wang Liang, executive deputy director of the Shanghai Circulation Economics Institute, said that poor management - not only by airline companies, but also airports and air traffic control (ATC) authorities - was mainly to blame for the massive flight delays on the mainland. "Air traffic demand has ballooned, but management has lagged far behind," Wang said. According to statistics from the Civil Aviation Administration, a quarter of flights were not on time last year. Wang said ATC authorities should be more efficient in handling departures and other measures should be taken across the aviation industry to curb delays. "Though quite a few airports have been built, there needs to be more feeder routes so pressure on the main routes can be eased," he suggested. Wang Jiangmin , a staff member with the Beijing branch of China Southern Airlines, said limited resources had restricted the domestic development of civil aviation. "There are not enough air routes and airports," he said. According to statistics by FlightStats, a US-based website providing airport and flight information, mainland airports accounted for the top seven in terms of flight cancellations, and for the top eight in delays, among all departure airports in Asia and the Pacific region in the past month. Beijing Capital International, which has had the world's second-largest passenger throughput in the past three years, was far ahead of all other airports in the region by recording delays or cancellations for more than 16,000 flights arriving at the airport and for about 20,000 departing flights during the period. An average of nearly 220,000 people travelled through the airport every day last year, said the China News Service report.

Author explores 'China bashing' (By Zhang Yuwei in New York yuweizhang@chinadailyusa.com)Lionel Vairon presents a different analysis of the China-bashing phenomenon in his new book. The debate over China's rise being a "threat" to many Western countries isn't a new topic, but a new book entitled China Threat? The Challenges, Myths and Realities of China's Rise presents some unique analysis for this ongoing discussion. "The West has been controlling the world for quite a few hundred years, so it is difficult for them to accept the idea that China is joining the top leaders for the future," said author Lionel Vairon, an avid China watcher and a former French diplomat for 16 years. Vairon describes China bashing, which especially spread to a larger degree during and after the 2008 Beijing Olympics when China was in the world spotlight, as a "campaign". The "threat" perception of China's rise - typically linked to the country's mighty economic growth - mostly comes from the fact that it's hard for Western powers to adapt to the new reality, said Vairon. For many Western pundits, the world's second-largest economy that had double-digit growth and has been one of the major drivers of global economic growth poses challenges and even a threat - rather than opportunities - to the already-existing West-dominated global system, said Vairon. There also needs to be further understanding between China and the West, said Vairon, citing as an example the fact that of the 22 books written about China in France during the 2008 Olympics all were negative. "In terms of marketing, it is much easier to be against and criticize China than try to have a balanced opinion," he added. "I believe that having a new actor in the international society - which is not necessarily aligned with the European and American way of looking at the world - could be a plus," said Vairon. China serves as "an important factor to have a more balanced international-relations system", he said. The second-largest economy's rise has come a long way, along with constant criticism from the West at different levels - economic, military and political. "It's a psychological problem that we believe we are always on the right side," said Vairon. "It doesn't mean that China is always on the right side, it just means that we have to always look at all the possibilities." "We are always asking China to be what we are not, and I think that's sometimes a problem", said Vairon. The US-China relationship has been defined as one of the most important ones in 21st century, yet misunderstandings and conflicts occur now and then. Despite some progress by the US and China through recent events, such as the summit between Chinese President Xi Jinping and his counterpart Barack Obama, and the just-concluded US-China Strategic and Economic Dialogue, the two countries should work on "real moves", the French author believes. "Both countries, I think, are mostly working on symbols, now in terms of reality - real moves - we have to see where it leads us," said Vairon.

Hong Kong*:  July 29 2013

In-store surveillance systems raise privacy fears in Hong Kong (By Danny Lee danny.lee@scmp.com) Images from a CCTV camera with a mock heat map showing the most active part of a retail store highlighted in red. Hong Kong shoppers are being secretly monitored by a state-of-the-art, heat-sensitive, in-store surveillance system to find out what they buy, when they buy it and how they move around stores. Privacy campaigners say the new technology - pioneered in the US and now being used in stores in the city and on the mainland - violates shoppers' rights. However, one company selling the so-called in-store analytics system is adamant its products are less intrusive than conventional security systems. Tim Callan, chief marketing officer of RetailNext, said the system ensured better privacy than standard in-store surveillance cameras because shopper's faces are not identified. Privacy advocates disagree, saying such technology siphons off customer data without their knowledge. Customers cannot opt-out and shoppers have no say in how their data is used. Hi-tech cameras work with multiple lenses positioned to cover the entire floor space. Within minutes, the video footage is converted into a computer file format containing data on customer movements, broken down by sex. The system can determine the most heavily trafficked areas of a store by creating a multi-coloured heat-map. The programme assesses what customers are doing and looking at, so stores can rearrange fixtures and fittings in order to entice shoppers to spend more. RetailNext confirmed at least one of its systems was being used by a Hong Kong retailer, but declined to identify the company, citing client confidentiality. Nick Pickles, director of privacy at the London-based campaign group Big Brother Watch, said the new developments were "very worrying". Locally, the Privacy Commissioner's office said it would have to further investigate the practice before it could determine whether RetailNext's technology breached Hong Kong's personal data laws. The Sunday Morning Post contacted several major Hong Kong retailers, asking if they were aware of these monitoring technologies, and whether or not they intended to use them. A Chow Tai Fook spokeswoman confirmed the jeweller was looking into a "hi-tech system to study shopper habits". "We are aware of this kind of real-time in-store analytics engine. We are also studying a similar technology for a more advanced system to study customer behaviour," said a spokeswoman. A spokeswoman for A. S. Watson said it did not use the system but was aware of these "special technologies", adding that its group of companies had no plans to use such a system in-store. Lane Crawford, Sa Sa and Sogo were also contacted by the Post, but declined to comment. Guidelines on CCTV Surveillance Practices issued by the Privacy Commissioner's office said retailers "should explicitly inform the people affected [that they] are subject to surveillance" and should "state the reasons for collection". However, it also states in-store surveillance can be "necessary" for "legitimate functions", leaving the non-binding guidelines open to interpretation. Lawmaker Charles Mok, an information technology expert, said retailers needed to be open and transparent about their snooping practices. "Customers must have the right to know that they are being monitored in the stores, and their actions are being tracked and such information is used for analysis," he said. RetailNext said its technology was nothing new in the retail industry. "The vision behind in-store analytics is to provide the same kind of capabilities to understand what's happening inside brick-and-mortar stores that the e-commerce world have used and enjoyed for more than a decade," RetailNext's Callan said. Retailers are able to increase customer spending and reduce in-store thefts each by 10 per cent, making the technology an attractive investment. Callan said the cost of the system depended on the number of stores and the floor space.

Hong Kong actress Carina Lau sets off weibo storm over Tiananmen photo (By Stuart Lau stuart.lau@scmp.com) Hong Kong actress Carina Lau Kar-ling stirred a war of words on the mainland’s biggest microblog on Sunday after she posted a photo of herself in Tiananmen Square, with the giant portrait of Mao Zedong looming over her.

 China*:  July 29  2013

Xi Jinping and Japan's Shinzo Abe may hold summit soon, says adviser - Japanese Prime Minister Shinzo Abe could soon hold a summit meeting with China’s president, Xi Jinping, an adviser to Abe said on Sunday, adding that he had met senior officials close to the Chinese leader on a secret visit to Beijing this month. SINO-JAPAESE SUMMIT RULE OUT (By WU JIAO and PU ZHENDONG) Tokyo 'must show sincerity' to improve strained relations - Beijing ruled out the possibility of an upcoming leaders' summit with Tokyo on Monday, urging the Japanese government to take concrete measures to improve strained ties rather than brandishing "empty slogans". The message from a government official, who declines to be named, comes after Isao Iijima, a close adviser to Japanese Prime Minister Shinzo Abe, said on Sunday that Abe could hold a summit with President Xi Jinping in the "not-too-distant future". Iijima said his assumption is based on his four-day visit to Beijing in mid-July, during which he met "several prominent figures"close to Xi, the Yomiuri Shimbun newspaper reported. But the official said that Iijima did not meet any Chinese government officials. "What Iijima told reporters on Sunday is not true and is fabricated, based on the needs of Japan's domestic politics,"he said. His visit to China was mainly to discuss his tour of the Democratic People's Republic of Korea, and there was no consultation between the two sides on a leaders' meeting, according to the official. The Ministry of Foreign Affairs said in a brief statement on Monday that Iijima has not conducted official activities during his visit to China, and Chinese officials were not in contact with him. Iijima's remarks were widely quoted by the international media, with the world watching to see how Asia's two biggest economies are to mend ties that have been hit by the dispute over the Diaoyu Islands. However, Japanese Chief Cabinet Secretary Yoshihide Suga said at a news conference on Monday, "No immediate schedule for a leadership summit has been set." Iijima is not the only politician in Japan playing up the possibility of a leaders' summit. During his just-concluded visit to Southeast Asia, Abe also repeatedly called for dialogue with Beijing without any conditions attached. Beijing responded to Abe's move by saying its door is always open for talks, but the problem lies with Japan's unwillingness to face up to reality and start serious consultations with China. Japan should "stop using empty slogans about so-called dialogue to gloss over disagreements", Foreign Ministry spokesman Hong Lei told China Daily on Monday. Analysts said that as Abe faces huge pressure to break the deadlock with China, what he and his administration want now is to achieve progress in China ties with the minimum price paid. Given Japan's hard-line stance on the territorial dispute, it is unlikely that the leaders of the two countries will agree on a meeting that cannot make progress on existing problems, experts said. Liang Yunxiang, a professor of Japanese studies at Peking University, said Abe hopes to improve relations with China on a macro level, because worsening ties cause great concern in Japanese society, and extending an olive branch to China gives him the diplomatic initiative. But Liang said fragile Sino-Japanese relations will not improve if Japan continues to send "dialogue signals"without showing sincerity. "Tokyo needs to realize that the situation hinges on when it pulls back from its previous false claims,"he said. Jin Canrong, deputy head of the School of International Studies at China's Renmin University, said the message from Iijima is mainly aimed at helping Abe shake off the pressure to improve ties with China from Japan's economic sector and the United States. During his troubled 2006-07 term in office, Abe tried to mend ties with China that had become frayed during the five-year stint of his predecessor, Junichiro Koizumi. Li Wei, director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, said: "Japan has all the time resorted to empty talk about improving China-Japan relations, but it never engages in substantive actions. "It is doing so (sending out information about bilateral meetings) to make the Japanese people believe that the Abe government is making efforts to mend the Sino-Japanese relationship." The earliest date for a meeting between Xi and Abe on the international stage might be the G20 Leaders' Summit in St Petersburg, Russia, on Sept 5-6.But the Chinese official said that based on the status quo, it is unlikely that there will be a China-Japan leaders' summit during this event, and not even at the Asia-Pacific Economic Cooperation forum meeting in Indonesia in October. Japanese Vice-Foreign Minister Akitaka Saiki arrived in Beijing on Monday for a two-day visit. Japanese media once again played up Saiki's trip. The Kyodo News reported that Saiki will discuss the leaders' summit with Chinese officials during his visit. The Chinese official said, "Saiki is the newly appointed vice-foreign minister and he is just undertaking a routine visit after taking the job." Foreign Minister Wang Yi and Vice-Foreign Minister Liu Zhenmin will hold talks with Saiki and are expected to raise the Diaoyu Islands issue with him. Cai Hong in Tokyo and Zhang Yunbi in Beijing contributed to this story. Contact the writers at wujiao@chinadaily.com.cn and puzhendong@chinadaily.com.cn

EU solar trade dispute diffused (By Lyu Chang lvchang@chinadaily.com.cn) China and the European Union sealed a deal on Saturday to end their long-term trade dispute over Chinese solar panels that has threatened to escalate into a full-blown trade war involving European wines. The settlement - with Chinese manufacturers agreeing to sell domestically produced panels at a minimum near spot market prices - came after six weeks of negotiations that began when the EU decided to impose provisional anti-dumping duties averaging 47.6 percent on imports of Chinese solar panels, cells and wafers, starting in August. EU solar trade dispute diffused EU Trade Commissioner Karel de Gucht said in a statement that he was "satisfied with the offer of a price undertaking submitted by China's solar panel exporters", referring to a minimum price for imports from China. "We found an amicable solution that will lead to a new market equilibrium at sustainable prices," De Gucht said. He said the next step is to submit this offer for European Commission approval. Under the deal, China will also be allowed to meet about half of Europe's solar panel demand, if taken at last year's levels, an EU diplomatic source was quoted by solar exchange pvXchange as saying. EU consumption was about 15 gigawatts in 2012, and China will be able to provide 7 gigawatts without being subject to tariffs under the deal, Reuters quoted a pvXchange source as saying. But whether those terms are in the deal has not been confirmed by the authorities of the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products and the European Commission. The Chinese Ministry of Commerce said China welcomes the deal, which "showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve the issue". Ministry of Commerce spokesman Shen Danyang called the agreement "open, cooperative and stable". He said the dispute's resolution has led to a sustainable economic and trade relationship. Shen added that China is willing to expand photovoltaic industry exchanges and cooperation. Chinese solar panel production quadrupled between 2009 and 2011 to more than the rest of the total global. The European Commission accused China of dumping its solar panels at below production costs in Europe. Since June 6, EU imports of Chinese solar products have been subject to a punitive 11.8 percent duty until Aug 6. The duty would have been raised to 47.6 percent the following day if the two sides could not sort out the dispute. China's commerce ministry conducted an anti-dumping probe into wine exports from Europe that has already affected the imports of French wines in response. Experts said the disputes come second to the two parties' business relationship. The EU is China's most important trading partner. China is second only to the United States for the EU.

Hong Kong*:  July 28 2013

Dressed to thrill, cosplayers bring fantasy to life at comic expo (By Charmaine Che and Ernest Kao) Fans of animation and video games descend on convention centre for five-day event - Sexy, silly, cute and outright bizarre sums up the atmosphere at the Convention and Exhibition Centre on Friday, the opening day of the annual Ani-Com & Games Hong Kong fair. The event showcases the latest trends in comic books, animation and computer games, but has also become a stage for Hong Kong's burgeoning cosplay culture. "I feel more likeable, unique and cute when I am dressing up," said 15-year-old Lai Oi-ying, who arrived dressed in a Pikachu costume, one of the main characters from the Japanese series Pokemon. "I love Pikachu's personality and character and want to make him better known to others by bringing him to life." Kiki Fung, a 15-year-old cosplayer, came dressed as the eyepatch-wearing femme fatale from the Japanese anime Love, Chunibyo & Other Delusions. "After putting on this costume, I feel like I'm a totally different person," Fung said. She spent about HK$600 on her outfit, most of which she bought over the internet. "It's also kind of nice because I've never had so many people want to take photographs of me," she said. In leather trenchcoat and shaggy blonde wig, Jennifer Sora Bae, 16, was living out her interpretation of Belphegor from Katekyo Hitman Reborn. She said cosplaying was less about fashion and more about socialising. "I think it's fun to dress up as your favourite character, entertain people and make new friends." More than 170 exhibitors have registered and organisers are expecting over 700,000 visitors over the five days of the event. Despite an amber rainstorm warning, thousands of diehard comic book and anime fans lined up outside the fair in the early hours. Security guards had to corral visitors into waiting zones before the doors opened at 10.15am. Edmond Tsoi Chi-wai, who was the first person in line for the 12th year in a row, grabbed his spot at 2am on Tuesday. Freeman Yu, 16, joined the queue at 6am yesterday. He said he was prepared to spend about HK$3,000 on comic books and related merchandise. The fair comes four years after the government invested HK$55.5 million in the animation and comics industry, in a bid to nurture creative talent and support start-ups, according to Andrew Wong Ho-yuen, permanent secretary for commerce and economic development. Cheng Hon-yee, chairman of the Animation, Comics & Games Expo, said the investment reflected changing attitudes towards the industry. It has gone from being "outcast and discriminated against in society to being widely accepted and respected". The fair is promoting a family deal that allows one adult to bring two children for free. In previous years, media reports had focused on what was perceived as the sexualisation of female icons. It ends on Tuesday.

Pacnet launches security probe after Edward Snowden Hong Kong hacking claims (By Bien Perez bien.perez@scmp.com) Cable network giant launches investigation into whistle-blower Edward Snowden's allegation of a major breach at its Hong Kong headquarters - Pacnet, the operator of Asia's largest privately owned submarine cable network, is conducting a sweeping security audit across its operations after Edward Snowden's claim of a major security breach at the company. Jim Fagan, president of Pacnet's managed services business, said the action was initiated after the Sunday Morning Post reported last month that computers at the company's Hong Kong headquarters were hacked by the US National Security Agency (NSA) in 2009. "We started an investigation soon after seeing that report because the security of our network and our customers' data is paramount," Fagan said. "When that security gets called into question, you want to go back and look at things." He added: "We've never seen the documentation behind that report, so we really didn't have much to go on. From that perspective, I can't confirm or deny whether that [security breach] happened." Snowden, the fugitive former US intelligence contractor, alleged that hundreds of computers in the city and on the mainland were targeted by the NSA over a four-year period. British newspaper The Guardian and The Washington Post also reported Snowden's claim that certain US mobile network operators helped the NSA collect the phone data of their customers. We started an investigation soon after seeing that report because the security of our network and our customers' data is paramount. When that security gets called into question, you want to go back and look at things - agan said Pacnet, which changed senior management and reorganised its business last year, had "never been involved with any of that" [surveillance]. "We've engaged third-party security firms to do a forensic analysis of our network and our servers. This process will see if there is any evidence of a breach in 2009," Fagan said. He declined to identify the firms, but expected the audit to be completed in a few months. "Our security policies and protocols are also being reviewed, so we can get recommendations to improve it," he said. "When we finish this process, we will talk to our customers about what we've found and what we're doing." Snowden said Pacnet's computers in Hong Kong were successfully hacked by the NSA, but the operation has since been shut down. His data on Pacnet was based on information including dates, domain names, internet protocol numbers and other operational details. Pacnet owns and operates the EAC-C2C fibre-optic submarine cable network that spans Hong Kong, the mainland, Korea, Japan, Taiwan, the Philippines and Singapore. It also runs the EAC Pacific submarine cable system, part of the Unity cable network, which connects Japan and the US. Snowden is still in the transit area of Moscow's Sheremetyevo airport after arriving there from Hong Kong on June 23.

Hong Kong's family-owned banks struggle with succession as top executives age (By Kanis Li kanis.li@scmp.com) Bank of East Asia, Wing Hang Bank among local lenders struggling with leadership transitions - Succession plans at family-owned banks in the city remain uncertain with top executives at Bank of East Asia and Wing Hang Bank already older than 65 years of age. Human resources experts say that while white-haired bankers might have deep social networks as personal capital, they might be physically weak. Preparations need to be made before seasoned bankers can step down from a business, especially a family-owned one, they say. "The choices for the next boss of a family-owned business are always limited, as he must be a family member who is willing to take over control," said Alexa Chow Yee-ping, managing director of Centaline Human Resources Consultants. Kevin Au Yuk-fai, director of the centre for family business at Chinese University, said: "It takes at least 10 to 15 years for the transition of leadership in a family business." In contrast with other family-owned businesses, the banking industry is highly regulated, making succession planning more difficult. Fan Choi, head of wealth planning at Coutts in North Asia, said: "Banks have to consider a lot of different aspects of the candidates and it takes a large amount of time." Besides good education, a successor needs a lot of practical experience, Choi says, adding that "he or she needs coaching and mentoring from senior employees and executives to prepare for the role". "There will never be a right time for retirement," Choi said, because the financial industry was dynamic, prone to crisis and subject to the regular tightening of regulation. David Li Kwok-po, the 74-year-old chairman and chief executive of Bank of East Asia, the biggest family-owned lender by market value in the city, has seen his term as chief executive extended four times since he turned 60. According to the bank, he will keep the role until March 2015. Li's two sons, Adrian Li Man-kiu and Brian Li Man-bun, were both appointed deputy chief executives in April 2009. Patrick Fung Yuk-bun, chairman and chief executive of Wing Hang Bank, turned 65 last year. Another family-owned lender, Dah Sing Bank, completed its succession process two years ago. Harold Wong Tsu-hing, now in his early 40s, was appointed chief executive, succeeding Derek Wong Hon-hing, in his early 60s. Harold Wong is a son of David Wong Shou-yeh, the owner of the Dah Sing Group. Chong Hing Bank appointed Felton Lau Wai-man as its chief executive in November after owner Liu Lit-chi retired, separating the ownership and management of the bank. Choi said such models worked when both the owners and management held the same values.

Chan must resolve land scandal, urges Legco president (By Joshua But and Joyce Ng) Development chief advised to respond decisively to questions over land ownership [Paul Chan Mo-po is Hong Kong's Secretary for Development. An accountant and the former President of the Hong Kong Institute of Certified Public Accountants (HKICPA), he was appointed by Chief Executive Leung Chun-ying after the resignation of Mak Chai-kwong following a housing allowance scandal. In July 2013, Chan was accused of a conflict of interest when it was revealed that he or his family had an interest in a plot of land in the New Territories that the government had plans to develop.] Secretary for Development Paul Chan Mo-po should settle the land scandal once and for all by clarifying all questions over his ownership of land in the New Territories, the Legislative Council president said. In a radio programme on Saturday morning, Jasper Tsang Yok-sing said Chan had failed grasp the full impact of the scandal, which was revealed recently by a Chinese-language newspaper. Tsang said Chan had only been answering public queries about the scandal, “bit by bit”. “For politicians, perception is reality. If you give a public impression that you lie from the beginning, then whatever you say will be considered lies,” he said. Tsang said he thought Chan was still the best person to manage the northeastern New Territories Development plan. “The plan is the top priority for the Development Bureau. It is unacceptable if the secretary can not handle it,” he said. But Tsang would elaborate on whether Chan should continue as development chief. Reports in the past few days showed that Chan's wife, Frieda Hui Po-ming, and son had co-owned with others - through a number of companies - 18,000 sq ft of land in Kwu Tung North, which is earmarked as a new town. Chan, as a company director at the time, although not a shareholder, bought the land in 1994, two years before the area was identified for development. Over the week, pressure has mounted on Chan to resign from his role overseeing the development at Kwu Tung North. His wife has offered proof of the disposal of shares in the company which owned the land there.

 China*:  July 28  2013

High-powered GSK team flown in to aid China graft probe (By Toh Han Shih hanshih.toh@scmp.com) The former head of GlaxoSmithKline (GSK) in China and a high-powered team from the drug giant's London headquarters will visit China soon to co-operate with the investigation into the company, as more details of arrests and financial and sexual bribery emerge. In a letter sent on July 25 from GSK to the Ministry of Public Security, the London- and New York-listed firm said it would send Mark Reilly, its global audit team, security personnel and senior lawyers to Shanghai, the ministry announced yesterday. "The company has guaranteed a quick and effective response to the Chinese investigation and will continue to develop its business in China. The Ministry of Public Security welcomes GSK's attitude and hopes GSK will restore normal operations in China as soon as possible," said the ministry. GSK's operations in China were nearly paralysed and totally controlled by its London headquarters, while many mainland sales representatives had left the firm, Xinhua reported. Asked if GSK's China operations had suffered, a GSK spokesman replied: "It is too early to say what the impact … will be. Both ourselves and the Ministry of Public Security are keen to maintain business continuity so our medicines can be available to our customers in China." Since June 17, police have arrested 18 GSK employees in Zhengzhou , the capital of Henan province, reported Xinhua. A 31-year-old GSK sales manager in Zhengzhou, identified as Mr Li, was quoted by Xinhua as describing how in early July he was told by his superiors to attend a meeting of GSK sales representatives in Zhengzhou to receive instructions on how to respond to police investigations. But Li was taken away by police before the meeting could start. Another GSK sales representative in Zhengzhou was given an allowance of 7 per cent of sales to "improve relations with clients", Xinhua reported. Under the guise of expenses for seminars, sales representatives used the money to pay for doctors to enjoy massage and sauna sessions, as well as to hire prostitutes, the sales representative told Xinhua. "Half the seminars were fake," she said. The GSK spokesman said Herve Gisserot had replaced Reilly as general manager of GSK's China Pharmaceuticals business. "Herve's appointment will enable Reilly to dedicate himself to helping to direct our response to the investigation." GSK's finance head in China, Steve Nechelput, was no longer barred from leaving China and would continue in his current role based in China, the GSK spokesman added. "It's unusual that the Chinese government played up the investigation in state media in such a high-profile manner," said a lawyer specialising in pharmaceuticals. "Normally from my experience, compliance investigations in China used to be low-key. "The Chinese authorities want to give a warning to foreign companies to behave in China. There is speculation that the government may want to use this investigation to push foreign companies to lower their drug prices in China," said the lawyer, who did not want to be identified. GSK has already agreed to lower its drug prices in China.

China, EU reach deal on solar panel dispute (Xinhua) The China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the European Commission have reached a deal to resolve a dispute involving solar panels. "After weeks of intensive talks, I can announce today that I am satisfied with the offer of a price undertaking submitted by China's solar panel exporters," EU Trade Commissioner Karel De Gucht said in a statement, referring to an agreement for a minimum price for China's imports. "We found an amicable solution ... that will lead to a new market equilibrium at sustainable prices," De Gucht said. The Commissioner said the next step for him is to table this offer for approval by the European Commission. Further details of the legal acts concerning the undertaking arrangement can only be released following their adoption by the Commission. The Chinese Ministry of Commerce, meanwhile, said China welcomes the deal which "showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve the issue." According to the Ministry of Commerce spokesman Shen Danyang, resolving the trade dispute is conducive to an open, cooperative, stable and sustainable economic and trade relationship between China and the EU. He added that China is willing to further promote exchanges and cooperation with the EU side in the photovoltaic industry field. Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand, and the Commission accused China of dumping its solar panels at below the cost of production in Europe. The European Commission on June 4 decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. Starting from June 6, EU imports of Chinese solar products was subject to a punitive duty of 11.8 percent until August 6, from when on, the duty would have been raised to 47.6 percent if the two sides could not sort out the dispute through negotiations.

Chinese developer buys LA site for $1b project (By MICHAEL BARRIS) Shanghai's Greenland Holdings Group acquired a site in downtown Los Angeles from a California teachers' pension fund on Friday to build a $1 billion project that will include a hotel, office units and residences. The property purchase marks the latest foray by Chinese developers into overseas markets. The state-owned real estate developer – which is building China's second-tallest tower – acquired the 25,600 square-meter site from the California State Teachers' Retirement System, the second-biggest US pension fund. "We have a signed agreement for purchase of the property," said Michael Sicilia, media-relations manager for CalSTRS. He would not disclose the purchase price. The company expects to begin construction in six to nine months, he said. Greenland could not be reached for comment. Chinese developers are moving into the US and other overseas markets as China's leadership maintains residential-property curbs aimed at holding down skyrocketing prices. Greenland said earlier this month it planned to spend 10 billion yuan ($1.63 billion) on overseas property projects this year. "We are extending the China market abroad, and we prioritize our investment to countries where Chinese immigrants, students and tourists like the most," Greenland Chairman Zhang Yuliang was quoted as saying in a statement Friday. In February, China Vanke Co, the largest Chinese developer traded on the nation's stock exchanges, announced a $620 million luxury high-rise condominium project in San Francisco with its New York-based partner, Tishman Speyer Properties LP. Xinyuan Real Estate entered the US market in October with a $54.2 million residential-land purchase in Brooklyn, New York. Three years ago, Greenland said it would spend 30 billion yuan ($4.8 billion) to build a 636 meter (125-story) tower in Wuhan, the capital of Hubei province. The Wuhan Greenland Center, which would be the country's second-tallest after a proposed 660-meter structure in Shenzhen, is expected to be completed in 2016. The developer said on Friday that its $480 million redevelopment project in Sydney that it announced in March has been approved by Chinese regulators and sales will start this year, according to Bloomberg News. Shanghai Greenland and Canada's Brookfield Asset Management bought two buildings for the redevelopment, which Shanghai Greenland said at the time was the biggest deal of its kind by a Chinese firm in Australia.

Chinese soldiers leave for joint drills in Russia (Xinhua) China on Saturday began to send military personnel and armaments to Russia, where they will join 20-day joint anti-terrorism drills held by both parties. The transfer of Chinese troops for the exercise will be completed by August 2, according to Zhang Yan, deputy commander of the 646 Chinese military personnel participating in the drill. The Chinese officers and soldiers will be sent to the drill venue in Russia's Chebarkul training range in seven batches, with four traveling by air and three by train, Zhang said. With 72 people on board, two Mi-171 military transport helicopters and four Z-9 armed helicopters from the Chinese side took off from an airport in Hailar in northern China's Inner Mongolia autonomous region on Saturday morning. They will travel more than 5,000 km and are expected to arrive at the drill venue in five days. In addition, 119 officers and soldiers set out by train at noon on Saturday from the border city of Manchuri in Inner Mongolia. According to the schedule, five fighter-bomber JH-7A jets will set out from an airport in Urumqi in Northwest China's Xinjiang Uygur autonomous region on July 31 and are expected to arrive in Russia the same day. The exercises, dubbed "Peace Mission 2013" and scheduled to run from July 27 to August 15, will be carried out in Chelyabinsk in Russia's Ural Mountains region.

Sovereign fund sees 10.6% return (By CHEN JIA) Better performance spurred by higher equity prices around world - China Investment Corp, the country’s sovereign wealth fund, achieved a 10.6 percent gain from its global investments in 2012, compared with a 4.3 percent loss in 2011, according to the company’s annual report on Friday. The cumulative annualized return of CIC’s overseas investments rose to 5.02 percent by the end of last year, from 3.8 percent up to 2011. Net income increased to $77.4 billion, up from $48.4 billion in 2011, the report said. The better performance was mainly because of higher equity prices in global markets last year, with the company adjusting its investment portfolios, a CIC spokeswoman said. By the end of last year, the company’s total assets rose to $575 billion from $482 billion in 2011. On July 5, the State Council, China’s cabinet, appointed its deputy secretary-general Ding Xuedong as chairman of the sovereign wealth fund, filling the vacancy left by Lou Jiwei, who was appointed finance minister in March. CIC will diversify its foreign exchange funds, increase investment in public equities and look for long-term investment targets with stable returns, the spokeswoman said. The company, which manages part of the nation’s $3.5 trillion foreign exchange reserves, had invested about 32 percent of its money in public equities and 19.1 percent in fixed-income securities by the end of 2012. Of the fixed-income securities, 54.7 percent comprised sovereign bonds of advanced economies, including the United States and European countries, while emerging markets comprised 17.5 percent, according to the annual report. CIC’s investment in the US stock market accounted for 49.2 percent of its funds in public equities. “We have increased purchases of public equities and steadily boosted long-term investment in infrastructure construction, energy and mineral resources, and real estate,” the spokeswoman said. CIC: Volatility in markets predicted - Ding, the chairman, said, “The subdued global economic recovery, compounded by rising investment protectionism, will cast a prolonged shadow over the outlook for global financial markets.” He predicts increased volatility on world markets as major developed economies start reducing their quantitative easing programs, posing challenges for institutional investors. Xu Hongcai, a senior financial researcher at the China Center for International Economic Exchange, a government think tank, suggested that the sovereign wealth fund sell some foreign equities to cash in on the return. “Once the developed countries start to reduce asset purchasing, capital may flow out of China and other emerging markets. So the CIC should foresee the potential risks,” Xu said. According to the US Treasury Department, China’s holdings of US Treasury bonds increased by $25.2 billion in May and the total reached a record high of $1.315 trillion. It rose by $151.9 billion from a year earlier. “It is very urgent for CIC to diversify the investment in US Treasury bonds,” said Xu. “A better choice is to invest in overseas infrastructure projects and support Chinese enterprises to accelerate the Going Out strategy (which encourages Chinese enterprises to invest overseas).” Teresa Lin, DBS managing director and joint group head of corporate and investment banking, said the upturn in global equities is likely to continue in coming months. “The eurozone debt crisis has, for now, been stabilized by the commitment of unlimited central bank support. “US politicians were never going to send the country into deflation and financial crisis despite the haggling over the debt ceiling and government spending cuts. Life goes on and the equities risk premium goes down.” In 2012, the State Council injected another $19 billion into the sovereign wealth fund after raising $30 billion in 2011. The company was launched in 2007.

Hong Kong*:  July 27 2013

Cash rebate fails to spark buyers' interest in project (By Sandy Li sandy.li@scmp.com) Just one unit at luxury project in Causeway Bay is sold in the first three hours after sales begin - The first batch of 50 units at yoo Residence, to be completed in 2015, is priced at HK$33,000 per square foot on average. A luxury residential project in Causeway Bay received a tepid response despite a cash rebate of 3.75 per cent offered by the developer to make up for the extra stamp duty. Yoo Residence, developed by Couture Homes and ITC Properties, sold a 539 square foot unit for HK$16.41 million, or HK$30,460 per square foot of saleable area, in the first three hours after sales began at noon yesterday, the company said. The firm released for pre-sale 50 units at yoo Residence, due for completion in June 2015, at an average of HK$33,000 per square foot. Deducting the 3.75 per cent cash rebate, which is equivalent to the additional stamp duty yet to come into effect, the buyer paid HK$15.8 million, or HK$29,317 per square foot. The proposed new stamp duty for homes worth more than HK$10 million is 7.5 per cent, compared with the current 3.75 per cent. Those buying homes worth more than HK$10 million now would have to retroactively cover the extra when the new rates take effect. Lily Cheng, a senior district manager at Centaline Property Agency's Wan Chai and Causeway Bay branch, said yoo Residence was the most expensive project to hit the market by per square foot value since the rules on marketing of new flats took effect on April 29. "Given that these units each cost more than HK$10 million, buyers will take more time to make up their minds. The response to these flats should not be compared with that in the case of mass housing projects that involve small lump sum payments," Cheng said. Prices for the first batch of 50 flats at the 144-unit yoo Residence, sized between 355 and 539 sqft, range from HK$10.16 million to HK$19.1 million. Big-ticket property transaction volumes have dropped sharply since February, when the government proposed to double stamp duties. According to Midland Realty, the number of deals for homes priced above HK$10 million plunged 43.5 per cent to 202 in May from January, the month before the new stamp duty was floated. Couture Homes, a subsidiary of ITC, said it had sold 37 upper-floor units at an average of HK$35,299 per square foot in saleable area before the rules on new flat sales came into being. Colliers International expects prices for luxury homes to fall about 10 per cent in the next 12 months and those for the mass market to drop up to 15 per cent. It bases its calculations on the possibility of an increase in interest rates in 2015.

 China*:  July 27  2013

China's VAT reform to benefit more businesses (Xinhua) Over 1 million more taxpayers will be included in China's value added tax (VAT) reform, which is set to expand nationwide in August, according to the State Administration of Taxation (SAT). In an effort to avoid double taxation for businesses, the Chinese government introduced a pilot plan in Shanghai last year to replace the business tax in transport and some service sectors with a value-added duty that is charged only on the added value of each link in the production chain. The plan was later extended to another 11 regions, including Beijing, Tianjin and Shenzhen, and the government decided in April to spread the practice nationwide starting August. In the first five months of 2013, the reform has eased tax burdens by 40.6 billion yuan (6.57 billion U.S. dollars) for 1.29 million businesses in the nine regions that first piloted the scheme, deputy head of the SAT Xie Xuezhi has revealed. In addition to bringing the reform to more regions, the government is also considering extending the plan currently applied to transport and some service industries to more areas. The State Council, China's cabinet, said in April that it would extend the reform "at a due time" to railway transport, postal services and telecommunications industries.

Yum won't chicken out from expansion (By By LI WOKE) KFC owner presses on with plans to open 700 more restaurants this year - Yum Brands Inc, the owner of the KFC and Pizza Hut restaurants, said on Thursday it will maintain the speed of its expansion in China despite the tainted chicken scandal. "Yum said it would open 700 eateries this year. We have no change to this plan," said Sam Su, chairman and chief executive officer of Yum China. In July, Yum Brands Inc said its second-quarter earnings fell 15 percent as a result of decreasing Chinese sales caused by the country's bird flu outbreak and the effects of a food safety scandal. In July, the fast-food giant based in Louisville, Kentucky, said its second-quarter earnings fell 15 percent as a result of decreasing Chinese sales caused by the country's bird flu outbreak and the effects of a food safety scandal. According to the parent company of Taco Bell, KFC and Pizza Hut, same-store sales in China, which generated more than half of its total revenue last year, fell 20 percent in the second quarter, including a 26 percent decline at KFC but 7 percent growth at Pizza Hut. "Business in China has been picking up gradually," said Su, as Yum's same-store sales decrease in China narrowed to 10 percent in June from 19 percent in May. Su said he believes China sales will turn positive in the future as the company made food safety a top priority. At the end of last year, Shanghai's food regulators said eight batches of chicken supplied to the company by Liuhe Group Co had excessive levels of antibiotics. Yum said it stopped all supplies from Liuhe in August 2012, but its China business has been greatly affected since then. To help ease the dropping off of business and win back brand confidence, it announced new quality-assurance measures in February this year. The moves include eliminating uncertified poultry producers; improving control of suppliers and implementing timely reporting and communications with the public. "We have struck off 4,700 unqualified chicken houses and three poultry suppliers since February this year. The new measures will become long-term standards," said Su. Bian Jiang, assistant director of the China Cuisine Association, said the negative impact on Yum will not last long because of its effective prevention and treatment measures, as well as its timely and transparent information to the media and public. "Currently, people are not panicking about chicken safety and have a restored confidence in the product, even after the bird flu incidents, which is a very positive sign for the whole industry chain," said Gong Guifen, deputy secretary-general of the China Animal Agriculture Association. Yum's first branch opened in China in 1987. Today it has nearly 6,000 restaurants in the country. McDonald's Corp, Yum's largest rival in China, said the chicken scare had also taken a small bite out of its business. The world's largest restaurant chain released its second quarter results this week, revealing a global comparable sales increase of 1 percent.

A camp that gives a genuine experience (By Jin Zhu and Zhao Xinying) Italian Michela Orsi is visiting China thanks to a youth camp that focuses on giving young people an authentic taste of China. Held by the Beijing Foreign Studies University, the summer camp, called "You and Me, in Beijing", provides an international platform combining education with entertainment. Wei Lai (right), 11, teaches 15-year-old Michela Orsi from Italy how to use a Chinese calligraphy brush on Sunday in Beijing. Orsi is one of 117 middle school students from 10 countries participating in the "You and Me, in Beijing" BFSU Summer Camp 2013. The camp, organized by Beijing Foreign Studies University and the Confucius Institute Headquarters, aims to create the cultural exchanges between China and other countries. It has attracted young people from 17 cities in 14 countries over the past five years. "It is my first time traveling abroad and also my first time with a Chinese family," Orsi said. "Everything here is different from Italy." The 15-year-old from Maglie in Italy studied Chinese for a year before her 10-day trip. As a part of the trip, Orsi was invited to stay with a Chinese family in Beijing on Sunday. "Compared with studying Chinese in foreign countries, overseas students can learn a great deal when they spend time with Chinese people," said Sun Yan, a teacher accompanying the Italian students on the program. Sun has been working for the Confucius Institute at the University of Rome for three years. "The institute organizes Italian students to visit China every summer," she said. "Not every family can afford to give their children financial support to travel abroad. But for a foreign student studying Chinese it would be regrettable if they could not visit China," she said. The program also includes visiting places of interest, art appreciation and folk customs. About 200 students from 10 countries who are registered students at Confucius Institutes or students of primary and secondary school courses of Confucius Institutes attended the summer camp this year. The institutes cooperate closely with foreign universities and schools. In a language class on Monday, Dimitra Kaneva said the sentence "my father is a policeman" in Chinese. Before coming to Beijing for the summer camp, although she had been studying Chinese for two years and mastered more than 600 characters, Dimitra, a 15-year-old from Bulgaria, said she could not speak Chinese well. Now she understands the tones better. Feng Ruoyu, one of the language teachers in the summer camp, said they designed the syllabus in accordance with the activities that students participated in during the camp. "For example, teachers got the overseas students to use Chinese words, phrases and sentences about prices and bargaining before they went shopping," she said. Feng said they focused more on vocabulary rather than grammar. "By practicing in real situation, the students learn faster," she said. Dimitra said she had been interested in China and Chinese culture since she was a little girl. She said she had been fascinated by Chinese buildings and had been looking forward to seeing the Forbidden City ever since she saw The Last Emperor. "The Forbidden City is great," she said after a visit there. "Just like what I saw in the movie." Dimitra also studied calligraphy and tai chi, a kind of traditional Chinese shadow boxing. "Last year, I displayed my calligraphy and I took part in a tai chi competition in my school," she said. Roger Jaurena, a 17-year-old from Barcelona, Spain, introduced a castanvela, a Spanish musical instrument to his Chinese friends. "People in southern Spain often use it in flamenco, a traditional Spanish dance," he said. Jaurena had been interested in China and itsculture for a long time. He is studying Chinese at the Confucius Institute in Barcelona. Chen Hanqi, a 10-year-old primary school student in Beijing said this is the first time he played with people from other countries. "Foreigners are hospitable, open-minded and full of energy, which I should learn from," he said

Hong Kong*:  July 26 2013

Yuan funding rules eased to shore up Hong Kong's offshore lead (By Enoch Yiu enoch.yiu@scmp.com) With an eye on global rivals, HKMA acts to boost banks' yuan liquidity with overnight and one-day options, including same-day service - HKMA acts to boost banks' yuan liquidity. The Hong Kong Monetary Authority (HKMA) has introduced two measures to enhance local banks' yuan liquidity in its latest effort to fend off increased international competition for a slice of the offshore yuan business pie. The de facto central bank announced yesterday that banks would, from today, be able to get overnight and one-day yuan funding from the HKMA in addition to seven-day funding and that they could receive it on the same day if they put in the request before 3pm. Previously, at least one day's notice had been required. An HKMA spokesman said past experience showed the peak of Hong Kong bank borrowing from the authority was nine billion yuan (HK$11.3 billion) in a single day, before a long holiday. "The two measures should be able to enhance yuan liquidity management for banks," he said. The HKMA has implemented many measures to boost the city's yuan business. In April it removed the yuan net open position limit for Hong Kong banks and lifted the 25 per cent minimum liquidity ratio for yuan deposits. Last month it launched the world's first offshore yuan interbank rate fixing. "It is true that Hong Kong still has the first-mover advantage in being an offshore yuan trading centre but there is no monopoly for Hong Kong to do yuan business," the spokesman said. "As such, the HKMA has to do more to enhance our competitiveness." The yuan is not yet fully convertible but since 2009 Beijing has allowed overseas parties to use the currency to settle trade and investment. Last month, US$3.37 trillion worth of yuan was transferred in and out of Hong Kong, up 96 per cent year on year. However, Hong Kong's share of offshore yuan business dropped to 78 per cent, down from 81 per cent a year earlier, with other markets catching up. London was second on the league table last month with US$238 billion and Singapore third with US$127 billion. Trailing were Taiwan at US$79 billion, the United States at US$66 billion and Australia at US$26 billion, payment data company Swift says. Hang Seng Bank executive director Andrew Fung welcomed the measures, saying they provided a new backstop to liquidity and were part of the evolution of the market. The mainland has bolstered its efforts to internationalise the yuan since 2009 as part of its ambition to make it a reserve currency like the US dollar. Hong Kong was anointed as the first offshore yuan trading centre in 2003. In the past two years, global rivals - led by London and Singapore - have been making aggressive moves to take market share in the lucrative trade.

Hong Kong Golf Association asks government to rethink housing plan (By Joyce Ng joyce.ng@scmp.com) Hong Kong Golf Association says loss of two courses would hamper the Hong Kong Open and also hinder progress of city's amateurs - The Hong Kong Golf Club pays the government nominal rent for use of the land in Fanling. The Hong Kong Golf Association has called on the government to leave the city's golf courses alone and says they are vital for the development of the sport in the city. The HKGA said Fanling, the course targeted for possible reuse for housing, is indispensible for hosting the popular Hong Kong Open international tournament. In a statement yesterday, the association said it was "disappointed" that lawmakers and the government were eyeing the golf sites for redevelopment. "The HKGA has no facilities of its own and must rely on all golf clubs and driving ranges, whether private or public, to support its mission in training and coaching players for Hong Kong," it said. It has a squad of 110 members who have free use of the private clubs. Four private golf clubs are the constituent members of the association: the Hong Kong Golf Club, which runs the three 18-hole courses in Fanling, the Clearwater Bay Golf and Country Club, the Discovery Bay Golf Club and the Shek O Country Club. The HKGA gave its view after lawmakers passed a non-binding motion on Monday to call on the government to develop the Fanling golfing site instead of razing existing villages under the new town scheme for the northeastern New Territories. Officials said the 170-hectare golfing site would be covered by a separate new-town study next year. Commenting on the proposals to take over two out of the three courses in Fanling for housing, golf association chief executive Iain Valentine said the Fanling site had sufficient space to ensure that the popular Hong Kong Open, a co-sanctioned tournament between the Asian and European Tours, ran smoothly. "Reducing the Fanling site is reducing the possibility of hosting championships and being able to cater to spectators," he said. The spectator experience at the tournament was "second to none", the statement added. It said golf clubs provided facilities not only for their members, but also for the public and the development of Hong Kong's amateur golf to an international level. Having paid a land premium of HK$1,000 to the government for Fanling, the Hong Kong Golf Club collects millions of dollars in membership fees, and is open to non-members during the week, charging each individual a green fee of HK$2,000. The association compared the city with Singapore, which had courses offering twice as many holes. However, the Singaporean government announced in January it was also looking at recycling golf sites for other land uses to cope with population expansion. In an earlier reply to a Post inquiry, Singapore's Ministry of Law said the majority of the city's golf course leases would expire between 2021 and 2030. Hong Kong has six golf venues - in Fanling, Deep Water Bay, Clear Water Bay, Discovery Bay, Shek O, Sai Kung and Chek Lap Kok. The first three operate under private recreational leases and can be reclaimed for public use.

Michael Yeung Ming-cheung, vicar-general of the Catholic diocese, who knew Chan through his charity work for Caritas before he became a lawmaker, yesterday described the development minister as "neither a bad guy nor a greedy man". Paul Chan, a man determined to rise above poverty (By Cheung Chi-fai and Joshua But) Paul Chan with son Tian-hsing (left), wife Frieda and daughter Joyce Chan (right).  Born to a squatter family, Paul Chan's focus in his early life was to improve his living conditions - In the last political crisis he faced just days after his appointment as development minister last July, Paul Chan Mo-po sought to reassure Hongkongers that he was devoted to public service. "Serving the society is the primary goal of the second half of my life," he told reporters then, as he rejected calls for his resignation over accusations he was involved in a venture that rented out subdivided flats. A year on, Chan, 58, is embroiled in yet another controversy - this time over his family's investments in New Territories agricultural land included in government development plans. Chan, the former head of the Institute of Certified Public Accountants, probably never anticipated the bumpy road of public service when he won his seat in the legislature in 2008. Born to a family living in the Shek Kip Mei squatter area, the first half of Chan's life was one of poverty. "Being from the bottom of the society, I was often looked down upon when I was young," he once said. But material deprivation also gave him a clear direction in life: to rise above the poverty he was born into. In the early 80s, he put himself on the fast track towards obtaining the qualifications to become an accountant. He also studied for a master's degree in business administration. At work, he would switch jobs as long as his new employer offered him better pay. In a 2006 interview with Next Magazine, Chan said he worked very hard in his younger days, hoping to lift his family out of their poverty and to improve their living conditions. But while his hard work did pay off and he became better off, his mother died of brain cancer in 1984 while his sister - who managed to obtain a law degree despite being ill - died of complications from an undisclosed hereditary disease in 1997. "Yes, I have come to the top, but what now?" he said. "Perhaps [Chan] has failed to handle [these controversies] wisely, but he is sincere," said Yeung. "I hope the matter can be resolved soon."

U.S. dollar loan rise triggers warning (By Enoch Yiu enoch.yiu@scmp.com) Sharp growth in greenback funding spurs Monetary Authority to raise risk alert and order banks to tighten credit controls - Hong Kong Monetary Authority orders banks to tighten credit control after an explosion in US dollar loans this May. Hong Kong banks are building up a potentially dangerous exposure to foreign currency loans after an explosion in US dollar loans in May. That lending surge triggered moves by the Hong Kong Monetary Authority to rein in over-aggressive lending, forcing banks to step up credit controls to manage the risks. Bank loans in May increased 40 per cent from April, followed by a 20 per cent growth in June. Of the amount, 60 per cent was in US dollars. The growth over the two-month period is higher than the average of 19 per cent for the first six months. "It is quite a worrying sign as the growth rate is substantial," a HKMA spokesman said. "The HKMA is contacting all banks to understand why there is such a strong growth in US dollar loans, and whether such a trend will continue." The HKMA believes one reason might be because of a lack of liquidity in the international market, which led some multinationals to tap for funds in Hong Kong. "Since Hong Kong is an international market, it is natural for international firms to tap funds here," the spokesman said. "However, the HKMA needs to make sure Hong Kong banks have the credit controls in place to ensure they are not expanding lending too quickly while not paying sufficient attention to credit quality." In addition, the HKMA is also concerned whether banks have sufficient US dollar liquidity. "Banks may want to expand their US dollar loan business because they have too much deposits on hand. But they need to be careful in managing their foreign currency liquidity. It would be risky if they cannot attract sufficient US dollar deposits when they step up lending in that currency too quickly," the spokesman said. HKMA will conduct on-site checks and meetings with banks to ensure sufficient risk management is in place. The monetary authority has also ordered banks to tighten their lending to moneylenders to ensure it does not affect the HKMA's measures to cool the property market. Moneylenders are financial firms that only offer loans and are not subject to the regulation of the HKMA. There are about 50 moneylenders that borrow from banks for financing personal and mortgage loans to consumers. In March, moneylenders offered about HK$8 billion in mortgage loans, which is less than 1 per cent of the total issued by banks. However, some moneylenders offered loans up to 95 per cent of the value of the property for mortgage loans as they do not need to adhere to the HKMA's tightened policy on mortgage loans. The HKMA spokesman said if moneylenders could offer better terms than banks, many borrowers might turn to them for funds. Many might consider taking mortgage loans from them instead of banks. As such, the HKMA has ordered banks to require those moneylenders that borrow from them to comply with HKMA requirements. "If the property market falls and the borrowers cannot repay their loans, the moneylenders would suffer," the spokesman said.

 China*:  July 26  2013

Disgraced Politburo member Bo Xilai was formally charged with bribery, embezzlement and abuse of power yesterday, as the new leadership rushes to bring closure to the nation's biggest political scandal in years.

Freer access to websites planned in Zhuhai zone (By He Huifeng huifeng.he@scmp.com) Investors in Hengqin New Area may be able to use social media sites now blocked nationwide - A developing area in Hengqin, Zhuhai. The country's internet police are considering a plan to open a small hole in the "great firewall of China", allowing users in Zhuhai's special economic zone to access some blocked foreign websites. Authorities in the city's Hengqin New Area said they were working with the Ministry of Industry and Information Technology and telecommunication providers to open internet access for companies and workers.The central government currently blocks access nationwide to many foreign websites, including Facebook, Twitter, YouTube and numerous media outlets. Ye Zhen, deputy director of the Hengqin New Area's administrative committee, told the Zhuhai Special Zone Daily that the idea is to improve the business environment for investors from Hong Kong, Macau and overseas. "We are adopting suggestions garnered from overseas entrepreneurs who would like to invest in the new area, seeing what kinds of websites they would like to access usually," Ye was quoted as saying. Hengqin would be the first public area on the mainland to have such internet access, although the central government exempted certain areas from internet restrictions during the 2008 Olympics and the World Expo in Shanghai in 2010. However, Ye cautioned that not every blocked website could escape censorship. "We should consider various matters," Ye said, citing "safety". Hengqin officials refused to provide an exact timeline. "We are still studying and drafting the proposal," said Niu Jing, director of the Hengqin New Area's administrative panel. "We will hand over the plan for approval by the Ministry of Industry and Information Technology and the State Internet Information Office, but we are really not sure about the agenda status for this policy," Niu said. Zhuhai residents applauded the proposal but believed the most sensitive websites, such as those operated by human rights groups and other groups deemed subversive by the Communist Party would remain off-limits. Chen Yanhui said: "I think they would only allow some international social media, but still create a blacklist for the most sensitive websites."

IT offers 'fresh momentum' (By Zheng Yangpeng) New sectors will open up despite weak demand and overcapacity - Although several indicators point to an overall weakening in the industrial sector, officials at the Ministry of Industry and Information Technology still see major opportunities for the information technology sector in the second half of the year. Efforts to boost demand in the IT sector will provide "fresh momentum" for China's industrial growth in the second half of the year, Zhu Hongren, chief engineer and spokesman for the ministry, said at a Wednesday news conference. The country's IT spending grew 19.8 percent year-on-year to 1.38 trillion yuan ($225 billion) from January to May. The government plans to boost IT spending by more than 20 percent annually through 2015. His comments echoed those in a meeting held on July 12 by the State Council, in which Premier Li Ke-qiang called for upgrading the nation's economic structure by boosting demand in the IT industry. Zhu Jun, an official at the ministry, said during Wednesday's conference that specific measures to boost demand in the IT sector include launching the "broadband China" program and accelerating the construction and upgrading of infrastructure in the telecommunications and Internet sectors. Also, to boost demand, the nation will establish public information service platforms and develop more IT products and content. The State Council meeting also promised to issue operating licenses for the fourth-generation mobile Internet this year. China has also issued standards for optical fiber home access and ordered that all new housing at county-level and above must have access to optical fibers. China aims to boost public and household spending on the IT industry by more than 20 percent annually through 2015, according to the State Council meeting. From January to May, IT spending grew 19.8 percent year-on-year to 1.38 trillion yuan ($225 billion). E-commerce turnover rose 46 percent to 4 trillion yuan, according to the ministry figures. As growth in China's traditional industrial sectors slows, the nation is seeking new growth engines in emerging industrial sectors. Zhu Hongren said the goal is to make the IT sector the nation's third-largest, after real estate and vehicles. Industrial output grew 8.9 percent year-on-year in June, dragging the first-half figure to 9.3 percent, well below the 10 percent annual growth target set by the ministry. Another important indicator, the Producer Price Index, which measures inflation at the wholesale level, contracted for the 16th consecutive month. The slowdown showed no sign of improving in July. The preliminary reading of the Purchasing Managers' Index released by HSBC Holdings Plc on Wednesday was 47.7, the lowest in 11 months. Readings below 50 indicate contraction. But Zhu contended that there are also signs pointing to an improvement of the industrial structure. High-technology industries' added value in the first half grew 11.6 percent, 2.3 percentage points above the average for all industries. From January to May, the gross profit of large enterprises expanded 12.3 percent year-on-year, compared with a 2.4 percent drop a year earlier. Still, the country's industrial economy is plagued by weak demand, overcapacity and growing problems for small and micro enterprises, Zhu admitted. In addition to IT, officials said there are another two "silver linings" for the economy: demand to combat air pollution and new measures to invigorate the corporate sector. New measures in these two fields will be rolled out soon, Zhu said. Wang Xiaokang, president of the State-owned China Energy Conservation and Environmental Protection Group, said there is "tremendous potential demand" in the environment-related area. Priority sectors include soil and underground water remediation, sewage pumping networks, air pollution controls, heavy metal decontamination and energy efficiency, Wang said.

Smithfield deal will get second vetting (By Zhang Yuwei in New York yuweizhang@chinadailyusa.com) Smithfield Foods Inc, the world's largest pork processor, said Wednesday that a US foreign-investment committee will conduct an additional 45-day-long review of its proposed $4.7 billion takeover by Shuanghui International Holdings Ltd, China's largest meat producer. A Smithfield statement announcing the secondary review offered no comment on the reason for it. But some experts say following a 30-day review, the Committee on Foreign Investment in the United States, or CFIUS, which vets proposed foreign acquisitions of US companies for national security concerns, is conducting the additional scrutiny due to "political pressure". "Moving to the second phase review of this transaction is clearly in response to political pressure exerted by Senate hearings on the takeover earlier in July," said Clif Burns, a Washington-based attorney with Bryan Cave LLP. If it goes through, the deal - valued at about $7.1 billion including debt - would be the largest takeover of a US company by a Chinese buyer. But since the announcement in May, some US lawmakers have been voicing concerns about the merger. The inter-agency committee within the US Department of Treasury is looking at the deal for potential national security concerns, a review process that is confidential. Earlier this month, Starboard Value LP, a New York-based hedge fund and a large Smithfield shareholder, urged Smithfield to explore other options rather than go ahead with Shuanghui. In a Congressional hearing on this acquisition earlier this month, Smithfield Foods CEO Larry Pope tried to soothe concerns over issues including pork imports from China. "This transaction is about exporting high-quality meat products from the US to China to meet the growing global demand for pork and increase global food safety standards," Pope told the Senate panel. Burns said even though senators' concerns over the Chinese acquisition that pose challenges to food safety and security were not explained, "the argument was made in the hearing that the acquisition of Smithfield was a security issue because it could affect the security of the nation's food supply". "The Senators also tried to conflate the economic impact of large takeovers into a national security issue as well, which would certainly take CFIUS reviews into areas not clearly intended by the Congress when it passed the legislation enabling CFIUS in the first place," said Burns, whose law practice focuses on export control and economic sanctions. Another reason for the additional review, Burns noted, is linked to the mega size of this deal. "I suspect that these issues are raised simply because of the size of the transaction and would not have been raised in the case of smaller deals involving US food processing companies," said Burns. Another Washington-based lawyer, who is familiar with Smithfield but asked not to be identified, agreed. It has become "increasingly common" in CFIUS cases that the committee cannot complete its review within the first 30 days and requires up to an additional 45 days for "high-profile Chinese acquisitions", said the source. The additional days, he added, doesn't necessarily mean that CFIUS has found any national security issues that would cause a failure to approve the transaction. Virginia-based Smithfield and Henan-based Shuanghui International, a privately owned meat processing company, continue to expect the transaction to close in the second half of this year. Both companies, however, said they don't plan to comment further on the confidential review process.

Hong Kong*:  July 25 2013

Hong Kong actor's criticism of simplified Chinese character use stirs up passions online (By Lai Ying-kit yingkit.lai@scmp.com) Hong Kong actor Anthony Wong Chau-sang. Award-winning Hong Kong actor Anthony Wong Chau-sang has stirred up passions in cyberspace with his lament at what he sees as the "death" of China’s ancient culture in the mainland due to its use of simplified Chinese characters. Wong’s message has drawn both fierce criticism and passionate support from mainland and Hong Kong users of the Sina Weibo micro-blogging site. “Over half of the population in China does not read traditional Chinese characters. Sigh. The Huaxia civilisation is dead,” Wong said in his message posted early this week. (Huaxia refers to Chinese civilisation in historical literature.) Some bloggers who agreed with Wong pointed out that traditional characters were important as they were used to write most of China's ancient cultural classics. But critics of Wong said the Hong Kong star had failed to acknowledge the merits of the mainland’s simplified characters. “One of its big advantages is that it makes it easier to reduce illiteracy, and therefore promote cultural exchange,” said one user identified as Happy Spear. The issue of simplified Chinese characters often touches the nerves of the people in Hong Kong, which along with Taiwan, uses the traditional characters as their standard written form of Chinese. Last April, a Hong Kong café chain was forced to change its menus that used simplified Chinese characters only after it was accused of discriminating against Hongkongers by internet users.Wong, often an outspoken critic of the mainland in his blog and other media, was also accused by some bloggers of simply using the issue of simplified characters to promulgate his anti-mainland sentiments. “You habitually look down upon mainlanders to establish your own sense of superiority! You oppose everything [that is] mainland Chinese. You prefer to be a British dog rather than a Chinese man,” one user said in a reply to Wong. “[You have] no dignity and no brain!” a user identified as Moonshadow Sunlight wrote. Wong, 50, has won the Hong Kong Film Awards Best Actor Award twice, in 1994 for his serial killer role in The Untold Story and in 1999 for his appearance in Beast Cops.

HK$3m stolen from actress Liza Wang Ming-chun's luxury home (By Clifford Lo clifford.lo@scmp.com) The luxury house of local television personality Liza Wang Ming-chun in Clear Water Bay was burgled and a safe containing HK$3 million in cash and jewellery taken, according to police. Wang, 65, made a report to police at about 10.15pm on Monday after her domestic helper alerted her about the break-in. Wang and her two domestic helpers were not at the three-storey house at Rainbow Villa on Silver Lake Road at the time of the break-in, police said. The residence was targeted at about 9pm on Monday when Wang’s two domestic helpers left the house to walk the dogs. They discovered the break-in when they returned home half an hour later and found the house had been ransacked. “The one-cubic-metre safe was stolen from the second-floor master bedroom, where it was hidden in the closet,” a police officer said. He said initial investigation showed the safe contained HK$3 million in cash, jewellery and other valuables. “We believe a burglar climbed onto the first-floor balcony and pried open the sliding glass door to enter the house,” he said. The officer said footprints found on the balcony showed that one intruder was involved. An initial investigation indicated that only the master bedroom had been ransacked, according to police. The burglar fled with the safe before the two helpers returned home at about 9.30pm. Police have mounted a search, but no one has been arrested. Detectives from the Kwun Tong district crime squad are investigating the case. Another police officer said there had been several recent burglaries in nearby areas in Tseung Kwan O and officers were looking into whether they were linked. Taiwanese musician Liu Jia-chang was targeted by burglars in April 2012 and lost property worth more than HK$14 million from his luxury three-storey home in Tseung Kwan O. One of the items taken was artwork by Chinese ink master Qi Baishi estimated to be worth HK$10 million. A safe containing more than HK$4 million in cash and jewellery was also stolen during the raid on the Junk Bay Villa house, about one kilometre away from Lisa’s house.

New app Tower of Saviors is at the top of its game (By Shirley Zhao shirley.zhao@scmp.com) Struggling young entrepreneur tastes success with his winning mobile game Tower of Saviors - Terry Tsang Kin-chung's company Mad Head has become the city's hottest mobile game developer. Eighteen months after quitting his job to start his own business, Terry Tsang Kin-chung had just HK$9.96 in his bank account. But now, another 3½ years later, Tsang's company Mad Head has become the city's hottest mobile game developer. One of the firm's games has been Hong Kong and Taiwan's highest-grossing Android app in the past two months. Released in January, smartphone game Tower of Saviors has attracted more than five million downloads worldwide - with three million from Chinese-speaking users - making it one of the most popular games on both Android and iPhone systems in the two places. Tsang said a sixth of the downloaders paid to play the game, and its daily average revenue per paid user was US$40. "Starting my own business had always been my dream," said Tsang, 31. "I thought of giving up … but I really wanted to keep doing what I liked." Tsang, who has a master's degree in civil engineering from the University of Science and Technology, quit his HK$40,000-a-month fund-selling job in June 2008 to start a creative business company with his brother. With initial capital of HK$60,000 they created a website generating online greeting cards. But more than a year into the business, they were still not making any profit. To sustain the company, Tsang took several part-time jobs such as private tutoring and selling iPhone cases. It was not until 2010 that he earned a few thousand dollars by designing a Facebook app for a local shopping mall. After making some money creating more Facebook apps such as psychological test games, he decided to take the plunge into the smartphone apps market. It took him and his team seven months to create Tower of Saviors, during which they worked 14 hours a day. Upon its release, the game became an immediate hit, with 5,000 people playing it simultaneously after just one week. Now, Tsang is partnering with mainland social media giant Tencent to release and promote the game on the mainland. He will also take the game to this year's Animation, Comics and Games Expo, which begins on Friday. Already considering the development of his next hit, Tsang said he believed determination was a key ingredient for success. "There are many opportunities for start-ups here," he said. "But you need to be determined and complain less."

How to stop the online snoops (By Jamie Carter) PeekTired of being hounded by online retailers, indexed by search engines and possibly monitoredby Big Brother governments? Jamie Carter looks at ways to thwart the cyber snoops - Search engine DuckDuckGo does not record user information or profile its users. Netizens are flocking to such services in the light of Edward Snowden's revelations about online snooping.It's been more than a month since the Post exclusively interviewed surveillance whistle-blower Edward Snowden, but the fallout from his revelations about the US PRISM cyber-snooping program continue. Among them were claims that US authorities have hacked Chinese mobile phone companies to access millions of private text messages, while Tsinghua University in Beijing appears to have been targeted, too. It has brought attention to just how public our personal web browsing, online chat, file transfer, voice-over IP calls, cloud storage and e-mail really are. But is there anything we can do to stay safe from the snoops? There are multiple ways of "digital shredding", encrypting data and staying anonymous, but before we explore the options, it's worth asking why you want to operate in secret. Also, if you encrypt your data, does that make you more suspicious to government snoopers? Kevin Curran, a senior member of the Institute of Electrical and Electronics Engineers, reckons anyone making such arguments is living in the past. He says we've moved on from a time when the only people using encryption were paranoid geeks, terrorists and law enforcement agencies. Forget the Big Brother angle and think of it this way: is locking your house at night suspicious behaviour, or having a PIN code on your smartphone? Keeping your private data secure is good practice for individuals and is becoming a necessity for businesses. But there is no silver bullet that will keep all of your data and online behaviour safe. "What you need to do to hide from online snoops depends in large part on what sort of snoops you want to hide from, and how valuable your information is to those snoops," says Lysa Myers, virus hunter at security software company Intego. Its Identity Scrubber software - aimed at frequent travellers - digitally shreds sensitive data on a Mac. "It's quite difficult to hide yourself, if someone pursuing your information is sufficiently determined," says Myers, who recommends we take many small steps to protect privacy rather than attempt to erase all traces of ourselves online. Aside from letting politicians know your stance on cybercrime laws and the government's ability to search people's data, she recommends going through the privacy and security options already built-in to most software, including the operating system, which you've likely ignored so far. "Encrypting data at rest on a local device is best practice," agrees Curran, who says that anything held behind a firewall is likely to be encrypted. "All data prior to be sent to a service like Dropbox should be encrypted before uploading to the cloud service," he adds. People with the Ultimate or Enterprise version of Windows 7 or Windows 8 can use the built-in BitLocker software to encrypt the drive, while others include TrueCrypt, DiskCryptor and CloudFrogger. Anonymising web proxies are another way to protect yourself by completely obscuring your IP address, and thus your identity. Two examples are Proxify and hidemyass.com which let users visit websites from within a closed-off, encrypted Virtual Private Network (VPN), although using either is as easy as visiting a webpage. Anyone snooping around will see only scrambled, encrypted data. "By connecting to the internet via a VPN, any data transmitted is encrypted and cannot be read by snoopers," says Danvers Baillieu, chief operating officer at Privax, which owns Hide My Ass. "Decrypting VPN traffic is theoretically possible, but would require a huge amount of time and processing power." Many firms provide VPNs for staff to connect to base when working remotely, Baillieu adds. "The main reason to use a VPN is as an extra layer of security from hackers and snoopers - not necessarily government." VPNs scatter your data to proxy servers around the globe for it to be encrypted before its journey into the wider internet, but there are downsides. "They can be slow and practically unusable when it comes to streaming video or other bandwidth intensive applications," Curran says, a problem that stems from the constant redirection of data to multiple proxy servers. "They have also been subject to law enforcement subpoenas to release data on user IP addresses, so the professionals steer clear." But encryption technology is just one of several approaches taken by professional anti-snoopers. Disconnect.me, an anti-tracking browser extension that takes seconds to download and install, is a bit of an eye-opener. Revealing exactly which websites are covertly tracking your every move (probably hundreds) around the internet with their "cookies", it can block 2,000 websites from doing so. Cookies are also the enemy of a service called Ghostery, which is available as a free Chrome plug-in. Those worried their Mac is being accessed by snoopers and rogue applications are assuaged by Little Snitch, a firewall that acts as a guard; you can deny or permit every single incoming and outgoing internet communication. Secure search engines are, at last, making the headlines, too. "When you search on DuckDuckGo you are truly anonymous," says Zac Pappis, chief operating officer at DuckDuckGo.com which has broken all of its traffic records since the PRISM story broke. "People are being drawn to us because of our strong privacy policy. They are staying because they're getting a better search experience, including less spam, clutter, ads and better instant answers," Pappis says. DuckDuckGo, which doesn't gather user information or profile its users, is now handling over three million direct searches daily, as are rivals like Ixquick and StartPage. The most famous "anonymiser" is Tor, which is in the category of steganography: the art of writing hidden messages. It's definitely one for the geeks, using a network of volunteers worldwide to forward encrypted traffic anonymously between multiple routers to hide IP addresses and other identifying data. "Tor is the gold standard for remaining anonymous online," says Curran. "To the best of any security expert's knowledge, Tor is completely anonymous." That means websites whose location is impossible to identify, invisible browsing habits and instant messaging that can't be eavesdropped on. In something of a privacy landmark for the internet, the latest version of Tor allows for users to advertise public services online without the need to reveal a public IP address. "This is completely new for such a high profile service, and now stops others from gaining any knowledge of where such a service is physically located in the world," says Curran, who underlines how the use of Tor prevents websites from being shut down by governments: "How do you shut down a site which is hosted by a million-plus users?" In fact, much of the anti-snooping technology that exists is used by investigative journalists, political activists and whistle-blowers - like Snowden - and, of course, by government agencies. Tor might be going a bit too far for some, but it's easy enough to protect your online chat conversations, all of which are stored by Google, Microsoft and Yahoo. The likes of TorChat, ChatSecure and Off-the-Record Messaging all encrypt your conversations, and keep them private within compatible messaging software, one of which is Pidgin. If you can't avoid using Gmail chat or other "big brands" of chat, consider disabling the logging of past conversations, which is usually a default setting. For those who rely on a smartphone for instant messaging, the Wickr and Gliph apps do a similar job, although only between users. Anonymous e-mail is easier than you might think. Those worried about Google, Microsoft or other US-based companies accessing their e-mail histories can use anonymous e-mail service providers such as Tor Mail, or secure cryptographic software such as Pretty Good Privacy or the free GNU Privacy Guard. Tor Mail uses anonymous servers that retain no e-mails or logs. "It doesn't matter if they are seized, or shut down or if the law enforcement agencies attempt to seize identifying information on users of the service," says Curran. But what about online phone conversations? With Skype now known to have been targeted by US snoopers, open source and snooper-proof software like Silent Circle and RedPhone could become popular. Perhaps the ultimate anonymiser is Burner Phone, which totally prevents telephone communications from being targeted by third parties. "Each phone has a hardware identification number called IMEI," explains entrepreneur-programmer Randall Degges of Burner Phone. "When you place a phone call with a normal phone, your IMEI number is broadcast along with your call, making it easy to track your phone usage even if you switch SIM cards, or get a new phone number. Our Burners ensure you get a new IMEI with each order, making it impossible to associate a hardware phone with a specific person." Each Burner comes with a SIM card that must be activated before use, and is assigned a random phone number. If that seems ideal for criminals, you'd be right. "Our product is intended to help people maintain private communications, which is why we take a 'no questions asked' policy," says Degges. "What people do with this technology is up to them."

 China*:  July 25  2013

Diageo buys remainder of Chinese distiller (By Reuters in London) Drinks powerhouse Diageo, whose brands include Johnny Walker, Smirnoff and Guinness, is to acquire the remaining 47 per cent of Shuijingfang Group. Global drinks firm Diageo on Tuesday said it had received approval from Chinese authorities to become the sole shareholder in Sichuan Chengdu Shuijingfang Group Company (SJF Holdco), the owner of white spirits company ShuiJingFang. Diageo said it would acquire the remaining 47 per cent stake in SJF Holdco owned by its Chinese partners for 233 million pounds (HK$2.8 billion). As a result, SJF HoldCo will be converted from a joint venture into a wholly foreign-owned enterprise owned by Diageo. On completion, Diageo’s indirect interest in Shanghai-listed Shuijingfang, one of the best known producers of China’s ‘Bai Jiu’ spirit, will rise to 39.71 per cent from 21.05 per cent, it said.

'Hello beautiful!' Xi Jinping's 'flirtatious' greeting surprises China (By Amy Li chunxiao.li@scmp.com) First Vice Premier stunned China watchers with his casual humour during a recent trip to America, and now President Xi Jinping has been heard calling a young woman "beautiful" in front of reporters - Xi Jinping is heard calling a local Wuhan woman "beautiful". While journalists around the world reported the birth of a baby for Catherine, the Duchess of Cambridge, Chinese media on Tuesday were focused on President Xi Jinping, 59 - who was heard calling a young woman in central Wuhan city “beautiful” in front of reporters. This came just days after former president Jiang Zemin gave Xi his full backing during a meeting with former US secretary of state Henry Kissinger, calling him a “very capable and talented state leader” “Hello beautiful,” Xi hailed local woman Guo Tingting during his visit to “Wuhan Citizens Home,” a government service centre on Monday, according to the Chutian Metropolis Daily. “This is definitely better than calling women “comrades,” a microblogger wrote. Often used by communist party members when referring to fellow cadres, the word "comrade" has now taken on a more popular meaning in China - “homosexual". Guo, who was apparently exhilarated after her good looks were acknowledged by the president, told her work mates: “Who will dare not to call me a beautiful after this?,” media reports said. While most people seemed to appeciate the casual way Xi greeted Guo, some were critical. “That sounded quite frivolous,” one microblogger wrote. “China needs a leader who can make meaningful exchanges,” another said, “Not someone who speaks fancy words.” While Chinese leaders are often mocked for their stiff facial expressions, immaculate black hair, and lack of humour, some officials in Xi's administration are believed to have adopted a more personable leadership style than their predecessors. China’s Vice-Premier Wang Yang, for instance, had recently compared the relationship between China and US to a “straight” marriage. His "humour" was applauded by Chinese media. 

Rescuers work at Yongguang Village of Meichuan Town in Minxian County, northwest China's Gansu Province, July 22, 2013. The death toll has climbed to 89 in the 6.6-magnitude earthquake which jolted a juncture region of Minxian County and Zhangxian County in Dingxi City Monday morning.

New visas to boost family reunions (By ZHAO YINAN) Foreigners' relatives expected to benefit from the change - Relatives of foreign residents in China will soon have more opportunities to visit their loved ones, thanks to new visa rules announced on Monday. Under regulations from the Legislative Affairs Office of the State Council, an S visa will be created for family members of professionals from overseas. Spouses, young children, parents and parents-in-law will all qualify for the visa when the regulations take effect in September, authorities said. S1 visas will allow a stay of more than six months, while S2 visas will be for shorter visits. No details about S2 visa applications were announced, but experts said having a new category for foreign expatriates' relatives will make applications more convenient and easier. Under existing rules, foreigners arriving in China for family reunions can only apply for an L visa. Wang Huiyao, director-general of the Center for China and Globalization, an independent, non-profit think tank in Beijing, said he believes the new move will help attract and retain international expertise. The Legislative Affairs Office said in a statement: "Foreigners holding an L visa could be coming for tourism, family reunions or personal affairs. That visa category doesn't precisely correspond to the purpose of a visit." The office said it has subdivided visa categories to more accurately state the reason for travel, adding that it hopes the regulations can deepen China's opening-up, boost tourism and attract more overseas talent. The number of foreigners entering and leaving China has increased at an average rate of 10 percent annually since 2000, reaching 54.3 million last year, according to the Ministry of Public Security. By the end of 2011, 4,752 foreigners had been granted permanent residency. Among them, more than 1,700 green card holders are overseas professionals working in China, and the rest are family members who have come to be reunited with them. Arthur Glauser, 33, a teacher at an international school in Tianjin has worked in the city for four years. He and his Chinese wife have a child. Glauser said his parents have never had a chance to visit his home in China and that he has no immediate plans to leave. "It would be lovely to have my parents spend a little time with their grandson," he said. He said family reunions will be an issue for an increasing number of foreigners in coming years, as China is wooing overseas experts and many foreigners are looking at opportunities in the country. Glauser said he believes more people will consider settling down in China, but they will all face the same dilemma of how to balance life far away from home. Liu Guofu, an immigration law professor at Beijing Institute of Technology, said the government has shown its sincerity toward global talent with the new policy. "People being allowed to apply for S visas include the parents and parents-in-law of foreigners, which is much more generous than the international standard, which limits this to only spouse and children," he said. "The policy will benefit many foreigners, making their lives much easier and more comfortable ... so that they can work in the country for a longer period." But he said the change will bring challenges in the handling of foreigners, adding, "There are many other ways to attract talent and create a friendly environment for these professionals." 
Changes - Streamlined procedures for overseas Chinese:
A Q visa will be introduced in response to calls by overseas Chinese for improved exit and entry procedures. It will mainly be issued to people who apply to visit their families, and will allow a relatively long stay.
Personal information verification:
Financial, educational, medical and telecommunications institutions can verify a foreigner’s personal details through public security bureaus. Police can only issue notifications that state whether the information is true or false. They cannot provide specific information about a person, to protect privacy.
Foreign interns and part-time work:
To curb illegal employment, foreign students must have an academic institution’s approval and footnote on their visas — added by a public security bureau — to take up part-time work or an internship.
Categories
Visa categories have been increased from eight to 12.
New & revised categories:
F — For travelers who arrive for exchanges and visits (previously included business visitors).
M — For travelers on trade and business missions.
Q — For overseas Chinese traveling for family reunions, including Q1 and Q2.
R — For foreign workers whose skills are urgently needed by China.
S — For foreigners who come for family reunions, including S1 and S2.
L — For general visitors (previously included the functions of the new S visa).
Unchanged categories:
C — For international flight crews.
D — For permanent residents.
G — For transit passengers.
J — For journalists, including J1 and J2.
X — For students, including X1 and X2.
Z — For foreign workers.
Liu does not think the government needs to go beyond international convention, which only allows for a spouse and children to visit on a family reunion visa. "Public security authorities will face more pressure," he added.
Apart from the S visa, the regulations introduce another three categories.
These are an R visa for foreign experts whose skills are urgently needed in China, an M visa for visitors on trade and business missions, and a Q visa for families of Chinese citizens living abroad and foreigners with permanent residence in China.

"No back-tracking": US' top envoy (By Chen Weihua in Washington chenweihua@chinadailyusa.com) Danny Russel, assistant secretary of state for East Asian and Pacific affairs, says on Monday in Washington that building a better relationship is one of the three pillars of US policy in the Asia-Pacific region. The US's new top diplomat for East Asia reaffirmed that building a better relationship with China will be one of the three pillars of his country's policy in the Asia Pacific region. Danny Russel, who started his job as assistant secretary of state for East Asian and Pacific affairs just a week ago, described the other two pillars as modernizing its five treaty alliances in the region - namely Japan, the Republic of Korea, Australia, Thailand and the Philippines - and participating in the building of regional institutions such as the East Asia Summit and Trans-Pacific Partnership (TPP). "The United States has placed a premium on trying to build a cooperative partnership with China through direct and high-level dialogue," Russel said on Monday in his first press briefing in the new job. He described himself as being involved in improving the "hugely consequential relationship" with China throughout his career, especially in the last few years when he served as special assistant to the President and National Security Staff senior director for Asian affairs prior to the new post. "This is an ongoing project. It continues and will continue," said the career diplomat who spent most of his work life dealing with East Asia. "We are exploring the areas in which cooperation between the US and China, two major economies, can make a positive and practical impact both on the wellbeing and lives of the citizens of both our countries, but also in the region and in the global economy and in the global context," said Russel. He said the two sides are working hard to develop a candid dialogue in areas of disagreement. "There are areas of disagreements and we need to make sure that we understand the motivations and objectives of the other side," he said. Russel said such spirit was behind the Sunnylands summit between Chinese President Xi Jinping and US President Barack Obama in California in early June as well as the 5th China-US Strategic and Economic Dialogue in Washington 10 days ago. "The US and China don't agree on everything, of course, but we talk about everything," said the 59-year-old. Russel accompanied Secretary of State John Kerry to China in April. He also attended the opening session of the 5th S&ED. He described the willingness of senior officials to talk directly and constructively on regional and multilateral meetings as "emblematic of the determination of both sides to ensure the lines of communication between our two nations are wide open". "It is clearly my belief and my impression that maintaining a good line of communication between Washington and Beijing is also a priority for the other countries in the region," he said. He said countries throughout the region expect and want the US and China to maintain high-level dialogue and practical cooperation help generate positive results. Bonnie Glaser, a senior advisor for Asia at the Center for Strategic and International Studies, said the US and China continue to try to promote cooperation where their interests converge, and manage disputes on issues where they disagree. "President Obama remains committed to developing a positive relationship with China as well as to the US rebalancing to Asia," she said. "It remains important for our leaders and senior policy officials to have frequent dialogues in person and by phone, to coordinate our respective policies," Glaser said. Russel said he came away from the recent S&ED with a sense of continued progress, when the two sides talked hot issues such as the denuclearization of the Korean Peninsula, Syria, climate change, cyber space, human rights, maritime security and the relationship between the two militaries. He described the S&ED as underscoring the global reach and global impact of the world's two largest economies. "We really show the breadth of our engagement, of the continued strides we are making in expanding meaningful cooperation on issues that are genuinely important to both our people, to the region and to the world as well as the progress in managing areas where we have real disagreements," he said. Russel said there is no "let-up, no backtracking" of US commitment of rebalancing to the Asia-Pacific region, where the US claims to have enormous interests and investment. Many Chinese have remained suspicious of the US rebalancing strategy, regarding it as a scheme to contain China's rise. Some US scholars have also called to adjust the strategy to play down the military component and enhance the economic aspect of the program. Russel, who had worked many years in Japan as a diplomat, emphasized the "peaceful and responsible" management of territorial disputes between China and Japan in the East China Sea. He said the US continues to encourage the diplomatic process to manage the issue in a way that will reduce tensions, reiterating the US stance of not taking sides on the issue of sovereignty. However, in China, many see the US stance on the territorial disputes in both the East China Sea and South China Sea as biased in favor of its allies Japan and the Philippines. On Monday, the Chinese Foreign Ministry website posted news about former Chinese President Jiang Zemin meeting former US Secretary of State Henry Kissinger and his family members in Shanghai on July 3. Both emphasized the importance of a cooperative bilateral relationship to the whole world.

Poisoning points to rat meat in Beijing lamb skewers (By Patrick Boehler patrick.boehler@scmp.com) Meat skewers sold in Guizhou province. Findings on cases of counterfeit meat sold across China have attracted attention in recent months. An incident of poisoning in Beijing has been traced to yangrou chuanr, the ubiquitous lamb skewers sold on streets, in what could be more proof that rat, dog and cat meat are being widely used among street hawkers. Beijing hospital No 307, which is affiliated with the Academy of Military Medical Sciences of the People's Liberation Army, found traces of bromadiolone in a blood sample of a 20-year-old tourist from northeastern China. Doctors believe the tourist ingested the widely used rat poison during an evening of drinks and lamb skewers with his parents and girlfriend at a Beijing roadside food stand, the Beijing Evening News reported on Monday. The patient's back and ankles were covered with bruises the size of a sheet of paper, doctors said. The poisoning case comes two months after the nation's Ministry of Public Security released its findings of counterfeit-meat sales throughout China. The inquiries showed that rat, fox and mink meat had been sold as lamb at Shanghai hotpot restaurants and that duck meat was used for Inner Mongolian beef jerky. Last year, Dr Yu Ying - billed as China’s real-life answer to Dr House from the US television medical drama House and nicknamed “emergency room superwoman” - revealed a similar case of poisoning by rodenticides in meat skewers. Netizens have called for a boycott and stricter inspections of street food hawkers, a measure likely to highlight the work of chengguan, or urban management officers, who are tasked with cracking down on illegal hawkers but are often accused of corruption and arbitrary violence. 

Hong Kong*:  July 24 2013

New marine safety measures set for next year (By Jolie Ho jolie.ho@scmp.com) Five new measures designed to improve marine safety after last October's Lamma Island disaster that killed 39 people will be implemented in March and September next year. Marine Department chief Francis Liu Hon-por announced the schedule for implementing the previously annouced measures at a Legislative Council panel meeting on economic development on Monday. As of March 2014, all passenger vessels carrying more than 100 passengers must have a muster list so that every member of the crew is aware of his or her duties in the event of emergency. By then as well all vessels must have improved signage and directives relevant to lifejackets on-board, and watertight doors must be fitted with alarms to the wheelhouse to indicate whether they are open or closed. The last two measures are set to take effect in September 2014. The first states that all vessels carrying more than 100 passengers must have a lookout on the bridge, in addition to the coxswain, at night and at times of reduced visibility. All seaman working as lookouts must have an eyesight test every five years. High-speed ferries must have a look-out at all times. The second measure states that the minimum number of crew for a ferry or launch must take into account the manning requirements necessary for specific emergency situations, such as collision, grounding and abandonment of ship. However, the Marine Joint Conference, an alliance that comprised of 21 groups from the maritime industry, criticised the Marine Department for not seeking the consensus from the industry. They specifically said that it would be difficult to recruit lookouts, saying there was already a lack of manpower in the industry.

Development chief Paul Chan refuses to quit, denies conflict of interest (By Olga Wong and Lai Ying-kit) Secretary for Development Paul Chan speaks to the media before the Legco meeting on the new town development. Secretary for Development Paul Chan Mo-po faces fresh calls to quit after he and his wife were found to have run a company, later sold to his in-laws, that owns at least three pieces of agricultural land to be acquired by the government for redevelopment in Kwu Tung North. The calls were made by lawmakers in a legislative meeting on new town developments in northeastern New Territories this morning after Apply Daily had revealed on Monday that Chan and his wife had potential conflict of interests as they once owned the land within the new town developments. Chan is in charge of the massive new town project. The Apple Daily reported that Chan bought the three lands for HK$350,000 in 1994 and then transferred them to a company in which his wife Frieda Hui Po-ming and her brother were shareholders. The report said the lands had been left idle over the years and their owners were expected to get HK$12.4 million in removal compensation under the development plan. Chan, who took office at the end of July 2012, was also said to have failed to declare his interest in the land as an Executive Council member. “You only have two choices left. One is to quit. The other is to disconnect with the new town developments,” said lawmaker Frederick Fung Kin-kee. But Chan said the accusations were “unfair” and “misleading”. He admitted that the company Statement Industries, in which he and his wife had owned 37.5 per cent shares, had acquired a farmland covers 20,000 sq ft in Kwu Tung, near Sheung Shui, in 1994. Chan was the person who had signed on the provisional agreement for sales and purchase. But Chan said his wife had already sold all the shares to her family members and quit as a director in early October last year when Chan was aware that the land would be part of the future new town developments. He also said he had informed the chief executive about the matter. “The land was for leisure purposes. We went there with our children,” he said. Chan denied that he had failed to declare his interest to the Exco as he did not have any “beneficial interest” in the land ownership. “The fact is that my wife and I and my children no longer have any interest in lands in the northeast New Territories. The allegations against me are unfair and misleading,” Chan said. Chan was urged to resign last year when his wife was revealed to have run a business of renting out subdivided flats shortly after taking up the post as the development chief.

 China*:  July 24  2013

Rare appearance as ex-president Jiang Zemin meets Henry Kissinger (By Chris Luo chris.luo@scmp.com) Former Chinese President Jiang Zemin votes at the 18th Communist Party Congress in Beijing last November. Former president Jiang Zemin, in a departure from the usual practice of ex-holders of the position, met former US state secretary Henry Kissenger on July 3, Xinhua news agency and the Chinese foreign ministry's website reported on Monday. The meeting seems to show that Jiang still wields significant political power even though he stepped down from all official posts more than a decade ago. At the meeting, Jiang repeatedly praised President Xi Jinping for acting decisively when dealing with recent unrest in the northwestern region of Xinjiang, and complimented his efforts to forge friendly Sino-US relations during his visit to the US. Xi took decisive action and swiftly took control of the situation in Xinjiang after the recent terrorist attacks, Jiang was reported as saying. "A vast country like China needs a strong leader,” said Jiang. “[It] inevitably will have all kinds of problems … what is important is that they be dealt with decisively.” "Xi Jinping is a very capable and intelligent state leader," Jiang was quoted as saying. A spate of vlolent incidents have occured in Xinjiang in recent years as extremists waged a violent campaign against the Chinese government for regional independence. The most recent incident occured last month when 16 rioters stormed several government offices, including a police station in Turpan, resulting in 35 deaths. At the meeting, Jiang also reportedly underlined the importance of friendly Sino-US relations by commenting favourably on the two-day summit between Xi and US President Barack Obama in California back in June. “[Xi and Barack Obama] exchanged opinions on many important issues, which was very beneficial in promoting Sino-US relation,” he said. “As long as both of our countries maintain a frank dialogue, we can foresee a bright future for the world,” the report quoted him as saying. 

China's Haixun 21 starts patrol mission on waters of Xisha Islands - China's patrol vessel Haixun 21 cruises on the waters the Jinqing Island of Sansha City, south China's Hainan Province, July 22, 2013.

Chinese admiral to visit the US (By Chen Weihua in Washington and Zhao Yanrong in Beijing chenweihua@chinadailyusa.com and zhaoyanrong@chinadaily.com.cn) Joint naval exercise reflects improvement in military ties - China will send its senior naval commander to visit the US in September ahead of next year's Rim of the Pacific naval exercises, which will involve naval forces from both countries, a senior US officer said. Admiral Jonathan Greenert, chief of US Naval Operations, said at the Pentagon on Friday that he looks forward to greeting his Chinese counterpart, Admiral Wu Shengli in September. He also said China will join the Rim of the Pacific 2014 exercises, which he said could be bigger than the last one, which involved 22 nations. The large-scale exercise has long excluded China, the major nation in the Asia-Pacific, which is often seen as a target instead, experts said. The inclusion of China in the exercise is seen by experts as part of an ongoing improvement in military ties between the two nations. Greenert said the US and China have participated a number of recent bilateral military exchanges, including the ASEAN disaster relief and humanitarian assistance exercises hosted by Brunei last month. The two countries have agreed that they need to establish protocols at sea that will make both comfortable, as well as improving communication and cooperation where necessary, according to Greenert, commander of the US Seventh Fleet from 2004 to 2006. "We are going to share insights on things," He said. "And we've got to eliminate miscalculation." Chinese Minister of Defense Chang Wanquan is expected to visit the US in August, before Wu's scheduled visit, US media quoted US Defense Secretary Chuck Hagel as saying. This follows a trip to China in April by General Martin Dempsey, US Chairman of the Joint Chiefs of Staff. Meanwhile, Hagel is expected to pay a return visit to China in 2014, according to the outcome document of the fifth round of the China-US Strategic and Economic Dialogue held in Washington a week ago. The S&ED outcome document also says the two nations are committed to strengthening their military-to-military relationship. Both have decided to actively explore a notification mechanism for major military activities and to continue discussions on the rules of behavior on military air and maritime activities. Senior military officials also attended the dialogue. Both countries have sent out positive signals in the past year regarding military cooperation, including a pledge by President Xi Jinping and President Barack Obama at Sunnylands, California, early last month to boost exchanges. On July 16, Vice-Admiral Scott Swift, commander of the US Seventh Fleet, dismissed claims of a cold war between China and the US and emphasized the friendly relationship that is developing. US media reported last week that the US has agreed to let Chinese naval vessels make port calls at US naval bases. Pan Zheng, a military scholar with the National Defense University of the People's Liberation Army, said the US invitation to China to join the Rim of the Pacific exercises is of great symbolic importance in bilateral military ties. "However, it is just the start, which does not mean substantial progress in that regard," he said. Shen Dingli, vice-dean of the Institute of International Affairs at Fudan University in Shanghai, said such incremental improvement could be significant. But he cautioned that the foundation is still fragile. "The Obama administration is still likely to sell arms to Taiwan during his remaining more than three years in office," Shen told Shanghai's Wenhui Daily. "If the US takes such a step, it would deal a heavy blow to bilateral military cooperation." US arms sales to Taiwan in the past have resulted in suspensions of military exchanges between China and the US. While applauding the progress, Shen pointed out that obstacles still exist. "From Chinese side, (it is) anything the US government and military will do to impair China's sovereign rights and economic rights," Shen said, adding that these include the issues such as Taiwan and territorial disputes in South China Sea. He said from the US side, anything China will do to challenge the US dominance in East Asia will regarded an obstacle. Writing in China Daily last month, Yao Yunzhu, a major general and director of the Center on China-America Defense Relations at the Chinese Academy of Military Science, called for greater efforts to address the trust deficit between the two militaries. 

Hong Kong*:  July 23 2013

Queen of Beans' cup runneth over (By Amy Nip amy.nip@scmp.com) The woman helping fuel Hong Kong's passion for coffee wants customers to learn more about the trade as she expands her empire - Centuries of wine-drinking have helped create a sophisticated culture of bouquets, blends and body. Now it's coffee's turn, and Jennifer Liu Wai-fun is at the forefront. Liu is the woman behind Sir Hudson International, the company that runs Habitu, Coffee Academics and Suzuki Cafe - 23 outlets in all. The wine tasters of the coffee world are called Q graders. They rate the quality of coffee beans on a scale from 0 to 10 in a process called "cupping", she explains. They work in teams of four, testing freshly brewed black coffee but do not confer with each other as they rate aroma, flavour, aftertaste, acidity and body, among other factors. A score of six means good quality, while nine stands for outstanding. "One day before cupping, they should stick to plain food, such as bread. Other days, they should also cut down on smoking and consumption of spice and alcohol." The taste buds of these professionals are highly valuable assets. Coffee taster Gennaro Pelliccia, who samples products for Costa Coffee, has had his tongue insured for £10 million (HK$118 million), according to newspaper reports. The sum beat that of Bordeaux winemaker Ilja Gort, who took out a £3.9 million policy to protect his nose. The Q graders originally used to help coffee farmers test the quality of their beans so that they got the right price from large corporations. Now they also assist coffee shops on quality control. Although cupping assessments have been carried out by Habitu and other chains for quite a while, they were usually carried out behind closed doors. But now Liu, 41, wants to demystify the process to give customers a sense of how the coffee trade operates. A new branch of Coffee Academics set to open in Wan Chai will feature a cupping table where the Q graders will work. Enthusiasts can also join classes on the fundamentals of cupping. Liu, the third generation of the family behind Chong Hing Bank, has overseen a gradual evolution in her business - from simply serving customers to being "the leader of local coffee culture". Her aim is to provide professional training, elevate standards of roasting and brewing, and educate the public. Her ambition has developed in her 10 years in the industry. At the start, she had only one simple wish: to be able to get a good cup of coffee for her own enjoyment. "I prefer European-style coffee, but no one was doing that. So I opened a shop so that I would have something to drink," she says. To compete with the city's dominant American-style coffee chains Starbucks and Pacific Coffee, she aims for quality in both coffee and food, dismissing the notion that microwave-heated buns are universal cafe fare. In 2003, a harsh year for businesses as the severe acute respiratory syndrome pandemic put a gloom over the city, she opened Habitu Ristorante in Causeway Bay. The chefs went on to develop the menu for the chain which has grown to 15 outlets since. Following the expansion of business, maintaining the standard of coffee quality among different baristas becomes a more pressing issue. To do so, Liu established the Coffee Academy last year, an institute which trains the baristas who work for her company as well as offering courses to the public. Every three months, her baristas return for five to six hours of extra training and testing. Those who excel are chosen as instructors at the academy. Producing an above-average cappuccino was just the beginning of the story. As the number of cafes - including many independent outlets - mushroomed, Liu moved up into niche and specialised coffees by opening Coffee Academics. She believes there is an increasing demand for these kind of specialised products as Hongkongers begin to think more highly of the drink. "Coke is made with a secret formula and its taste has remained the same over the years. The coffee bean is an agricultural product, and its flavour changes according to soil and weather conditions. "The harvest of crops, transportation, roasting, blending and brewing all affect a coffee's flavour. It is ever-changing." The chain recently bid for a coffee bean called "orange honey Geisha" from Panama, which was given the highest cupping score by a group of top judges in 2004. The bean has never before been available in Hong Kong. It is said to have floral notes with an aroma of caramel and chocolate. The special consignment has only enough beans to make 1,000 cups at a cost of more than HK$100 a cup. Liu has not decided what to do with the beans yet, but Geisha coffee is highly unlikely to be listed on the menu. It could be an exclusive event for special customers, she says. Despite soaring shop rents, she had no fears about establishing Coffee Academics' first foothold on Yiu Wa Street just behind Times Square in Causeway Bay. For shops in tourist hotspots, rents can account for more than half of costs. But landlords are under pressure from growing concerns over lack of conservation and shops being turfed out of sites they have occupied for many years, making tenants' lives a bit easier, Liu says. She is now looking further afield, and plans to open two Habitu cafes in Shanghai. Her company is also in talks with Eslite, Taiwan's famous chain of book shops, to open in-store cafes. But "I won't be making something like 'egg tart coffee' and calling it a representation of Hong Kong", she says. Nor will her shops be making Chinese-style coffee. Rather, it is the cosmopolitan spirit and cultural diversity of Hong Kong that Liu intends her cafes to convey. "Coffee is a global language. What I'm trying to do is to bring in cosmopolitan tastes, establish the local coffee trade's international standing, and to train local professionals," she says.
Jennifer Liu
Education
1997 Graduated from Cornell University in New York with a Bachelor of Architecture degree
Milestones
2003 Opened Habitu Ristorante in Causeway Bay
2006 Opened Caffe Habitu
2012 Started Coffee Academy training institute
2013 Started new café brand, the Coffee Academics. It will have two outlets by the end of this month. Habitu will open two outlets in Shanghai.
Her company runs 15 Caffe Habitu outlets, four Suzuki cafés, Habitu Ristorante and Harakan Japanese Dining Room

Different outlooks for Hong Kong, Taiwan and mainland women (By Kate Whitehead) A study by a communications agency finds that the women of Hong Kong, Taiwan and the mainland have vastly different outlooks on their lives and expectations, writes Kate Whitehead - It's not easy being a woman in this city. Whether you're a teenager, a career woman, a mother or a retiree, Hong Kong women face greater pressures and are more pessimistic than those in Taiwan or on the mainland. That insight didn't come from a university-funded study, but courtesy of a communications agency, today's most ambitious anthropologists. Starcom MediaVest is all about understanding human behaviour better so they can promote their clients' brands - think Wrigley and Coca-Cola. "In order to understand people you need to eat with them, drink with them, hang out with them, be part of their life and the lifestyle they are leading," says Joanna von Felkerzam, Starcom MediaVest's director of research and insights for Asia Pacific. The agency earlier released "a study that interviewed more than 11,500 women across 26 cities in Hong Kong, the mainland and Taiwan. Titled "Women", it is the largest female-focused survey ever conducted by a communications agency in Greater China. The results will no doubt help brands connect with consumers, but they also reveal insights into the lives of the women in a region where life choices and expectations are changing fast. The differences between Hong Kong, the mainland and Taiwan are especially telling. Take the "Golden Girls", retirees who are said to be in their so called golden years. Overall, this life stage is seen to be the happiest - the women are vibrant, full of life, and want to contribute. On the mainland they are relied on to babysit their grandchildren while their own children often work in another city. In Taiwan they are internet savvy and connect with their daughters on Facebook. But the picture isn't as rosy in Hong Kong. "The truth is in Hong Kong they are pretty much disenfranchised; they feel isolated from even their own children and grandchildren," says Von Felkerzam. The solution for advertisers is easier than for the women themselves. Justin Low, the agency's brand reputation and communications director, Greater China suggests: "If Cartier wants to target the older ladies, they should do an ad to target the daughters, saying: 'You haven't spent enough time with your mum; this is a time to reconnect with her.' You can cater your ads to target another demographic to get them to purchase stuff for the demographic that you want." The pressures on Hong Kong women start at an early age. On a superficial level, the study found secondary school and university students are attention seeking and self-indulgent. But a closer look shows these young women fall into two categories - the ones who want to stretch their wings and get some experience before joining the workforce and those who lack confidence and guidance. "Young girls in Hong Kong have been accused by their parents and grandparents of being lazy, having no initiative, kind of free-riding," says Von Felkerzam. But the reality is young women joining the workforce struggle to break through the so-called glass ceiling to senior levels. "You need to empty the seat before someone young can get in and no one is leaving those seats. So the hierarchies are well established and these girls are thinking, where am I going to go and how hard do you have to work to get anywhere?" she says. It's a different story on the mainland. "Chinese women feel that there is no glass ceiling, they can go as high as they want," says Bertilla Teo, Starcom MediaVest CEO North Asia and Greater China. The entrepreneurial spirit embraced by mainland women explains why many get the nerve to open businesses without any experience. "In China opportunities abound. There is so much mobility across different tiers," says Von Felkerzam. "They see the internet as a way of reaching different places at the press of a button; all you need is to know what to sell and who to sell it to. But in Hong Kong, women want to work for a good, established company or become doctors or lawyers or work in finance; so their paths are much more linear." However, Teo sees a flipside to the go-getter attitude of young women on the mainland - the mistress phenomenon. "For some of the university students, sadly, a big win route is being a career mistress," she says. "We spoke to a university student in Guangzhou who told us about her classmates - they don't mind that they are a mistress to a government official. They have a go-getter mentality - they want big cars, a good house. That's their motivation." Taiwanese women, on the other hand, have a less aggressive approach to achieving their goals. As young women they yearn for and seek experience as career women, and many are comfortable to either stop work altogether or drop down a level in order to start a family. From their adolescence through to their golden years, Taiwanese women are seen to have a more balanced, spiritual perspective. "Taiwanese women are content about taking one or two years off when they have children; they don't see it as diminishing their achievements or their pride. In Hong Kong and the mainland, women just don't do that," says Von Felkerzam. And there are new emerging social dynamics between men and women in Taiwan. Men are taking more supportive roles in some areas traditionally seen as women's - helping with grocery shopping and home cooking. One of the most surprising findings for Von Felkerzam is that Hong Kong's career mothers are desperate for love from their children and disappointed that they're not seeing it reciprocated. That isn't an issue in Taiwan. "It immediately shows that the more time you spend with your kids, the more love you see back. And it translates in the future where these Taiwan mums, now in their 60s, are on Facebook with their daughters and the rest of the family, and know what's going on, whereas Hong Kong mums are neglected and feel like they are missing out. They have articulated that this is a struggle for them," she says. On the mainland, children develop close bonds with their grandparents, who are often the primary carers. There may come a time when mainland mothers resent their parents' close relationship with their children and feel like they've missed out, says Von Felkerzam. But for the moment, their priority is on making money and striving to reach the next level. For the advertising gurus, these insights will mean rethinking their strategies. Traditionally, mothers have been seen as time starved and the advertising solution has been to offer time-saving tips such as quick recipes or apps to help them become more efficient. Advertisers seeking to connect with Hong Kong mothers may want instead to offer tips on how to spend quality time with their children. Of course, these are broad generalisations and there are differences within the regions, particularly on the mainland where response varied greatly between women in cities of different sizes. Ten years ago, when Teo first went to the mainland, young people all wanted to move to Beijing, Shanghai and Guangzhou to seek their fortunes, but today many are happy to stay in their home city and make a life there. "We always thought these young people in tier three and four cities wanted to move to tier one or two cities, but when we interviewed them they [said] they are happy. They've heard the stories and the consensus is that maybe tier one isn't for everyone," says Low. Taiwanese women may have come out trumps in this study as the most balanced and happiest, but it's not all gloom for Hong Kong women. Attitudes are already changing. Youngsters observe the long hours that older women put into their career and find that it doesn't seem to be making them happy, so they are questioning whether they want that life, too. They also look to their own mothers and see the pressure they are under juggling a family and a career. "Young Hong Kong women are not being programmed to be the career-minded girls in the way today's career women were," says Von Felkerzam. "It's a big societal change that Hong Kong has to go through and what doesn't make it easier is knowing that across the border are these generations of ambitious, driven women and this competitive spirit."

 China*:  July 23  2013

Yuan influence on the rise worldwide (By Wang Xiaotian in Beijing and Singapore, and Li Xiang in Paris) More nations turn to Chinese currency for investment and trade settlement - Although the money markets have gone into a tizzy recently, there have been some unrelated developments that clearly underscore the growing global influence of China's currency, the yuan also known as renminbi. Indications that the yuan is well on its way to becoming an "international" currency heightened after important currency trading centers such as Paris, Luxembourg, Frankfurt, Sydney and Dubai expressed interest in becoming offshore yuan-trading centers. Major money markets, including Hong Kong, Taipei, Singapore and London, are already part of the lucrative offshore yuan-trading club. "There is no doubt that the renminbi is gaining international recognition and that there is demand for it outside the Chinese mainland," says Ravi Menon, managing director of the Monetary Authority of Singapore. "The expansion of offshore renminbi-funding centers as well as the setting up of swap lines between the People's Bank of China and various central banks, including the latest agreement with the UK, bear evidence to this." He says a stable and thriving Chinese economy is the best foundation on which to further the use of the yuan globally. Zhang Lei, general manager of the global payment and clearing division at Bank of China, says: "The internationalization of the yuan has entered a critical period as yuan usage is strengthening in regions outside the Asia-Pacific." Although there are several contenders, the European cities have the best credentials for bagging yuan deals, he says. Growing interest - The Frankfurt-based European Central Bank is likely to enter into a swap agreement with the People's Bank of China for as much as 800 billion yuan ($130 billion), Bloomberg reported earlier this month, citing prominent lobby group Frankfurt Main Finance. The deal, four times the 200-billion-yuan agreement signed in June between the Bank of England and PBOC, is expected to give central banks from the eurozone access to yuan funds. "One of the major themes of the current negotiation is whether it should be mandatory for all members of the eurozone or it is only on a volunteer basis," says Philippe Mongars, deputy director of the market operation department at the Bank of France. French President Francois Hollande said earlier that the Bank of France and the PBOC will soon reach a deal over a currency swap agreement within the framework of the ECB. Nearly 10 percent of the commercial transactions between China and France are currently settled in yuan. Banking deposits in yuan in Paris have amounted to about 10 billion, the second largest pool of such deposits in Europe, according to Paris Europlace, a professional association that supports the French financial industry and promotes Paris as an international financial center. Zhang, however, feels the eagerness and readiness of Luxemburg is more obvious because it appointed BOC as the first yuan-clearing bank in the country as early as July.
Luxemburg, the world's eighth largest financial investment center and Europe's biggest fund management center, had secured yuan deposits of 20 billion yuan by January, the highest in the eurozone. Yuan loans extended in Luxemburg reached 30 billion, while local fund industries manage yuan assets of 200 billion. The largest offshore yuan center, Hong Kong, which accounts for 70 percent of overseas yuan deposits, held deposits of 698.5 billion yuan by May, according to data released by Hong Kong Monetary Authority. "In financial terms, Luxembourg is even more important than Paris or London," says Nicolas Mackel, chief executive of Luxembourg for Finance, an agency that promotes Luxembourg as an international financial center. "We consider ourselves as a European hub especially in financial services. We don't do trading financing in that sense. But there are other services relating to renminbi that we could focus on." More than half of Chinese investment in Europe gets structured through Luxembourg. The increasing presence of Chinese banks will also give his country an edge, Mackel says. Luxembourg is already the European headquarters of BOC and Industrial and Commercial Bank of China. China's Construction Bank, the second-largest Chinese lender, will soon open its European headquarters there. Joachim Nagel, member of the executive board of the Deutsche Bundesbank, says the strong trading position between Germany and China has generated enough momentum for setting up an offshore yuan-trading center in Frankfurt. "I believe the renminbi will develop into a global reserve currency. There is intense competition in the financial world for being a part of the renminbi trading system," says Nagel. He says the biggest challenge for contenders such as Germany would be to initially maintain a certain amount of liquidity in Frankfurt. Major multinational companies and banks could be the "ice breaker" by bringing in the desired volumes through yuan trading. "The renminbi is a big currency and will play a bigger role in the future in the international market. I think the market is big enough to have multiple yuan-trading centers in Europe," Nagel says. Mongars, of the Bank of France, feels that there would not be too much competition among the major European financial centers, because the currency swap deal will serve as a back-up facility when there is a serious liquidity shortage of the yuan in the eurozone, and also negates the need for an alternative funding source. Wim Raymaekers, head of the banking market at the Society for Worldwide Interbank Financial Telecommunication, says financial institutions in the UK, France and Germany are increasingly adopting the yuan to support trade settlement by their corporate customers. Outside Europe, Dubai is likely to become another major offshore yuan-trading center after Taipei as it refocuses on its roles as a regional hub for trading, logistics and tourism, says a recent report published by Standard Chartered Bank. Financial institutions in Dubai have been actively participating in yuan deals, facilitated by the 35-billion-yuan currency swap agreement signed last year between China and the United Arab Emirates. The Dubai International Financial Centre has already introduced a payment system to allow clearing and settlement in the yuan. Peter Sun, managing director for transaction banking, Africa, at Standard Chartered, says the chances of establishing an offshore yuan center in Africa are also high. Mauritius, with a free flow of dollars and trading with other African countries, is becoming a new regional treasury center, and companies in Africa are moving there from the traditional locations such as London and Dubai, he says. Menon, of the monetary Authority of Singapore, says: "As the use of the renminbi expands over time in the region and beyond, there will be room for more than one offshore renminbi center. Each will have its own niche and strength." They will also play complementary roles in developing the offshore yuan market, Menon adds. For instance, "offshore renminbi liquidity in Singapore should be fungible with renminbi liquidity in other offshore centers. This will help ensure that surplus liquidity in one center can be channeled to meet the demands in another, thereby improving the efficiency of the overall renminbi market," he says. Guo Tianyong, a professor at the Central University of Finance and Economics in China, says: "Major cities around the world have become increasingly vocal on opportunities from yuan business in the past few months. The recognition and acceptance of the yuan is very encouraging if we realize that internationalization of the currency is just a three-year baby." In 2010, Beijing launched its ambitious project to float the yuan globally by allowing companies worldwide to settle their international trade in the Chinese currency. Despite the increase of yuan centers worldwide, the dominance of Hong Kong won't be threatened, as the biggest proportion of yuan flows are still conducted through the special administrative region of China, says Piyush Gupta, chief executive officer of DBS Bank Ltd, Singapore's largest commercial bank. George Chin, a professor at York University in Toronto, says central banks, governments and private investors are seeking alternative foreign exchange reserves and investment options. For traders, there are real cost efficiencies to be gained by shifting to yuan settlement. Raymaekers says the internationalization of the yuan will continue to increase in the near future, albeit with some volatility. "Based on payment transactions going over SWIFT in June 2013, we see that the yuan again rose up the ranks versus other global currencies and may actually join the list of top 10 currencies soon." The Chinese currency is ranked 13th globally among world payment currencies, up from 20th in January 2012.

Carrier hopes to bring nation's first seaplane service to Sansha (By By HUANG YIMING and WANG QIAN) In Mo Qun's eyes, Sansha, the country's youngest city, will become China's Maldives, attracting tourists for island-to-island trips in the near future. Mo, general manager of Meiya Air Co Ltd, said the company has purchased five amphibious aircraft to help realize that dream. Tourists arrive at Yongxing Island in Sansha, Hainan province, on Sunday. China’s youngest city, Sansha was established last July on Yongxing Island in the South China Sea and is expected to become a popular travel destination. Two Cessna planes, which can take 19 passengers each, are already in Sanya, and the rest will be delivered soon, he said. "Meiya Air is planning to launch air express routes from Sanya to Sansha," Mo told China Daily on Sunday, adding that the 70-minute flight would attract tourists who are put off by the 10-hour boat trip. "Then flights between the islands of Sansha will be our next target," he said. However, he said the company is still waiting for government approval of its plans. Sansha is China's youngest city, having been set up in July on Yongxing Island in the South China Sea region to administer the Xisha, Zhongsha and Nansha island groups and their surrounding waters. With a total area of 13 square kilometers and a maritime area of 2.6 million sq km, it is the smallest prefecture-level city in both population and land area. On Friday, phase 1 of a port on Yongxing Island for civil use was completed with nine berths built, for an investment of about 340 million yuan ($55 million). A new supply ship, the Sansha No 1, will be completed in early 2014 to help transport much-needed materials to the islands. Mo said seaplanes have an advantage in Sansha because they don't need a runway for take-off or landing and can fly about 1,500 kilometers before refueling. The distance from Sanya to Sansha is about 340 km. Meiya Air is the country's first licensed operator authorized by the Civil Aviation Administration of China in May to offer amphibious air services. The company will establish a branch in Sansha for the potential business opportunity there, said Mi Jianxin, Xisha project manager of Meiya Air. Xiao Jie, the mayor of Sansha, said island-to-island trips are still a subject of discussion. He said that, early in September, the Sansha government began to draft a plan for transportation between the islands, and it was finished recently. He did not reveal details. Currently, no civilian planes are permitted to fly to Sansha. The Yexiang Princess Cruise and Qionghai No 3 are the only ships that can take tourists to Sansha. In the past year, the Qionghai No 3, a supply ship that can also take passengers, sailed to Sansha 70 times, while the Yexiang Princess Cruise made about 16 voyages, ferrying a total of nearly 40,000 people, plus 7,000 metric tons of goods, according to the Sansha government. As development of the area continues rapidly, Luo Songshan, a researcher for the Investment Research Institute of National Development and Reform Commission, warned comprehensive research is needed. "Learning from the Maldives is a good way to make full use of the beautiful scenery, but we must adjust (the development plan) according to Sansha's situation," Luo said. Wei Shichuan, a professor at Hainan University's College of Politics and Public Administration, said environmental protection is more important than economic development in Sansha, which means scientific research is needed before any decisions are made.

Hong Kong*:  July 22 2013

(Why fly 5,000 miles to California) Palm Beach in Cheung Sha Hong Kong offers sun, sand and surfing for children (Chris Lau chris.lau@scmp.com) Wave reviews for kids' water sports club - Summer board riding camps offer both training and equipment rental. Mick Ware and his family live in Sai Kung, but during the summer they rent his company's holiday house on the south shore of Lantau Island. While many Hong Kong children spend summers at air-conditioned shopping malls, checking out the latest cool toys and games, and sipping fizzy drinks, the Wares go to Palm Beach, a campsite on the boundary of upper and lower Cheung Sha Beach that rents out water activity equipment and offers teepees for families to hire for overnight stays. The point is to provide alternatives to children burying their noses in screens, be it a smartphone, tablet or computer. And that's why Eliza Lee Yuk-ying and her business partner, Tommy Leung Mun-tong, opened Palm Beach four years ago. "Kids these days spend too much time interacting with screens, playing computer games and mobile phones," Lee says. "We just want to give them a chance to be exposed under the sun and do some real outdoor activities." Palm Beach offers a board riding camp every summer for young surfers aged seven to 14 who register to learn a variety of water sports and have fun safely. In the three-day camp, kids will get to try out skim boarding, a small board on which surfers ride in shallow waters, on top of waves; boogie boarding, in which riders lie on the board to surf; and stand-up paddle boarding, in which surfers stand and use the paddle to propel themselves. Each session costs about HK$2,000. Two of Ware's sons - James, 11, and Jack, eight - are in their third year at camp. Another son, the youngest, is expected to join next year. Mick Ware, who has 30 years of surfing experience, says his children enjoy the variety available. "Jack, the younger boy, enjoys boogie boarding more, while James enjoys skim boarding more," he says. James says: "We're allowed to do whatever we want. And whatever we wanted to do, they would be there to help us. I chose skim boarding and they taught me all about it. They taught all the cool tricks and some basics." He hopes to perfect his 180-degree turn this summer. "The best thing I can do so far is to go really fast," he says. Lee says it's that variety that makes Palm Beach stand out. "Our theory is that not every kid enjoys the same sport," she says. "We give them the opportunity to try as many things as possible so that they can make up their own mind." Of course, Palm Beach is not the only place offering summer surfing classes. Treasure Island and Global Adventures - also on Lantau - says it teaches children to teenagers according to their ability and by level. Another factor in choosing Cheung Sha Beach, Mick Ware says, is that it's not particularly dangerous. The children can go out 10 to 15 metres from the shore, and the water is still shallow. "Even if there was some trouble, the guys can just stand up most of the time." The camp, Ware also suggests, has got good skim boarding instructors, setting him and his wife free from worries. One of those instructors is Leo Espada, from the Philippines. Apart from rapidly changing surf conditions, Espada says another common threat is being hit by surfboards. "They need to learn the proper way to hold the board and how to drag it out safely," says Espada, who has been skim-boarding for 14 years. He sees to it that his students learn the correct steps on the dry land first, before venturing into the sea. Palm Beach's leaflet for the camp states: "All participants must be able to swim at least 15 metres." But as with any activity, there are drawbacks. Parents may not want their children to go all the way to the south shore of Lantau, even though Lee points out that Palm Beach runs a shuttle bus between the camp and the Tung Chung MTR station. But Ware says the time outdoors with his family is all worth the trouble: "Finding a good activity - not only for fun, but also to allow kids to learn a set of skills and go into the water - that is quite hard."

Safety questioned at Hong Kong Airlines (By Simon Parry) Company defends its record as captain speaks out on what he calls 'terrible standards' As Christopher Allan prepared to jet out of Hong Kong with his family before taking up a new job overseas, one thing was certain about their travel arrangements: They wouldn't be flying with Hong Kong Airlines. "I wouldn't put my wife and kids on Hong Kong Airlines - I really wouldn't," the 56-year-old said of one of the world's youngest and fastest-growing airlines. Like any paying customer, Allan is entitled to choose whatever airline he feels happiest with. What makes his choice intriguing, however, is that Allan was moving abroad after working as a senior captain and examiner of pilots on Hong Kong Airlines. His lack of faith in the airline, he says, is based upon his experiences in two years as a pilot with Hong Kong Airlines and the "terrible standards" he claims to have encountered while testing pilots in simulators last year. A former British Royal Air Force pilot, Allan spent more than 21 years with Cathay Pacific where he flew Boeings and worked as a pilot examiner before retiring and then joining Hong Kong Airlines in 2010 where he retrained to become an Airbus captain. Two years later - and just two months after being appointed an examiner - Allan resigned from his position over what he claimed were worryingly poor standards among the pilots he tested and his general concern over safety issues at the seven-year-old airline, which has a fleet of 28 aircraft. Weeks later, while he was serving out his notice, he says he was asked by his manager to "go easy" when he conducted a mandatory six-monthly test in a flight simulator on a senior airline executive who still captains some flights. When he refused the request, Allan says, he was removed from examining duties before the test. He responded by contacting the Civil Aviation Department and asking it to sit in on the examination which, Allan says, the executive duly failed. Allan and another serving Hong Kong Airlines pilot called for a meeting with department officials at which they presented documents outlining a series of alleged irregularities in Hong Kong Airlines practices, which they asked officials to investigate. It was what Allan saw as the department's unwillingness to act upon his complaints that made him go public with his concerns as he left Hong Kong to take up a new position as a pilot with Etihad. Hong Kong Airlines declined to comment directly on Allan's complaints, but said in a statement: "Safety has always been our number one priority and will always be … We always comply with all safety standards set by the Hong Kong Civil Aviation Department, which are regarded as the strictest in the world." A department spokesperson denied Allan's complaints had been overlooked and said in a statement: "An investigation was conducted in response to Mr Allan's complaints and so far there is no objective evidence to support Mr Allan's complaints." In an interview shortly before he left Hong Kong, Allan told the South China Morning Post that his experiences as an examiner, giving mandatory six-monthly tests to the airline's community of pilots, had appalled him. "In the short time from August to October, when I resigned, I saw such terrible standards throughout the airline that I was honour-bound to hand in my notice," he said. "There is nothing worse in aviation than working for a company that doesn't respect safety and standards. At Cathay, I failed one or two guys in 21 years. At this airline, it was two a week. They were that bad. The standards were so poor." Allan said: "From personally examining individuals in the [flight] simulator, I have seen standards I have never seen in 36 years in aviation." In the simulator tests he conducted as an examiner, he says he encountered "captains who could not do approaches … guys drifting off the runway and almost crashing, totally misunderstanding the whole safety issues of the aircraft and losing an engine". Allan described the standard of pilots at the airline as "minimal". "There are some good pilots, but there is an overwhelming number of very average to below average pilots and that was reflected in their failure rate," he said. "When I resigned I said to the director of flight ops, 'I'm sorry but I cannot stay with this airline because I am being associated with a standard that is below industry levels'. "His reply to me was, 'I had to get aircraft airborne and people in seats to fly them. We will get better'. "I told him, 'You are not doing anything to reach the standard'." In his resignation letter to the director of flight operations, S.Y. Chow on October 22, Allan wrote: "It is with regret that my aspirations for a career in [Hong Kong Airlines] do not coincide with that of the company and management. On too many occasions, I find my principles and standards in conflict with those of our daily operation." Within weeks, Allan says he was asked by a manager three or four days ahead of a scheduled test to "go easy" on a senior airline executive who was to take a routine examination in a simulator. "He [the manager] said 'Be lenient on him because he doesn't fly a lot'," he said. "Basically, I said to the manager I would treat him the same as everyone else. He then chose to take me off the roster and put another examiner on. I saw the roster change and called up crew control and said 'Why was I taken off the check?' The crew controller said they wanted a Mandarin-speaking examiner, which is totally against regulations. The check is done in English. I then called the company and asked why I was taken off the check. They put me back on the check, but a day later they removed me from examining duties." Allan said he then alerted the department, asking it to do a no-notice check on the exam. They did as he requested and the executive failed the simulator check and subsequently had to undergo retraining, he said. Asked about the incident, the department spokesman said: "Mr Allan made a formal written complaint against Hong Kong Airlines on 12 November 2012. The CAD immediately performed an inspection on the flying training of [Hong Kong Airlines] on 13 November 2012. No anomalies were found and Mr Allan was informed of the result." Stripped of his examining duties, Allan and another serving pilot then compiled a dossier of alleged irregularities and safety issues in the airline's operations, and called for a meeting with department officials. A meeting at the department was held on December 5 involving the two pilots, three senior department officials and a representative from Hong Kong Airlines, according to documents seen by the Post. A dossier of e-mails and internal reports on incidents involving Hong Kong Airlines planes, which were allegedly either not reported or not acted upon correctly was offered to the department officials at the meeting, but not accepted, according to Allan. "I am very disappointed with the CAD," he said. "The CAD has always been an authority I have looked up to and here they are not even doing their job." The department spokesman said Allan was asked to provide documentary proof of his allegations "to support our investigation" after the meeting on December 5. "No further documents have been received," the statement said. "Nevertheless, in view of the serious allegation, albeit verbal or without solid evidence, the CAD has performed a thorough investigation and so far no objective evidence could be found to substantiate Mr Allan's allegation." Any suggestion that the department had not taken seriously or properly investigated Allan's claims was unfair and unfounded, the statement said. "Safety is always our top and utmost priority, and therefore we treat every enquiry and complaint against safety seriously," it said. "We have been handling Mr Allan's complaint according to established procedures, and despite the lack of document proofs, we investigated each of Mr Allan's allegation(s)." In response to Mr Allan's complaints that safety standards are so low at Hong Kong Airlines that it could be at risk of an accident, the statement said: "While the CAD will not comment on individual operator's performance, we would like to reiterate that Hong Kong Airlines is one of the airlines holding a Hong Kong Air Operator's Certificate. "Its operations are regulated and monitored closely by the CAD. To ensure safe operations and the operator's compliance with the CAD's requirements, we regularly hold meetings with HKA, conduct various inspections and audits on flight operations and airworthiness aspects similar to what we do to other local airlines." In a written statement, an airline spokesman said: "Hong Kong Airlines has a policy of not commenting on matters concerning our former employees." However, the statement went on: "Hong Kong Airlines is committed to growing in Hong Kong. In the last two years, we have put great resources and capital in sustaining this commitment. "We now provide more than 2,000 jobs [and] contribute to the prosperity of the Hong Kong SAR. Our drive to realise our goals is not and will never be at the expense of safety and standards. "As a young and growing airline, Hong Kong Airlines is in need of human resources, especially those in critically important positions, which include the pilots. In the process, we have been reaching out to attract the best personnel, but retaining only those who are able to meet our standards. "We make no apology for making sure that only competent and safe pilots are at the control of our aircraft." The statement concluded: "We would also like to add that all reports that affect safety are scrutinised and acted upon, without hindrance or influence by our top management, unless they are baseless, frivolous and not substantiated." Allen, for his part, insists his only motivation in speaking out was to respond to his professional conscience. "I am not trying to bring this airline down. I am trying to bring it up," he said. "If they don't sort this out and administer a proper standard, they [Hong Kong Airlines] will have a hull loss - in other words a crash. "Colleagues have said to me 'If you say nothing, you will have resigned, walked away and taken a job with Etihad.' "They told me 'If there is a crash, people will say 'What did you say? Who did you tell?'"

Hutchison Whampoa denies it plans to quit Hong Kong amid speculation over possible ParknShop sale (By Kanis Li kanis.li@scmp.com) Li Ka-shing's group confirms strategic review of ParknShop amid speculation of US$2b sale, but dismisses rumours it is withdrawing from city - Billionaire Li Ka-shing's conglomerate Hutchison Whampoa said yesterday it had no intention of withdrawing from Hong Kong, despite launching a review that could lead to the sale of its ParknShop supermarket chain. It said a subsidiary, A.S. Watson & Co, was conducting a strategic study of the business "to optimise value for shareholders". But it stressed that media rumours that it may be pulling out of the city were "groundless". Leaving his home yesterday morning, Li referred to the review, saying: "It is a normal business activity." But in response to questions from reporters, he denied it was related to the political situation or public opinion of Chief Executive Leung Chun-ying. He added: "Please do not speculate." According to a report in The Wall Street Journal on Friday, the ports-to-telecoms conglomerate has hired investment banks Goldman Sachs and Bank of America/Merrill Lynch to sell ParknShop for up to US$2 billion. The group decided last month to sell the chain to raise cash to help it through one of the most challenging business environments for years, the report said. But the group said yesterday it had not yet set a definite timetable for completing the review and the process did not necessarily mean there would be a sale. A ParknShop spokeswoman confirmed an earlier media report that a change would be made next month to the name of the employer on the work contracts, from A. S. Watson & Co to ParknShop (HK). But employment terms and conditions would not be affected, she said. ParknShop and its rival Wellcome, owned by Dairy Farm International Holdings, have more than 70 per cent of market share in the city. ParknShop operates 345 stores - more than 270 of them in Hong Kong - and employs about 13,000 staff in Hong Kong, Macau and on the mainland. The supermarket chain reported revenue of HK$21.7 billion last year, which contributed 5.4 per cent to Hutchison Whampoa's overall figure. But the report in The Wall Street Journal said Li planned to exit the grocery store market partly because it is "mature and growing slowly". Secretary for Development Paul Chan Mo-po dismissed talk of a connection between a possible sale and the administration's performance as "speculation". New People's Party lawmaker Regina Ip Lau Suk-yee, an executive councillor, said the enforcement of the Competition Ordinance - and the work on implementing standard working hours and universal suffrage - might have raised fears among some in the commercial sector. She believed the ParknShop review was solely a commercial consideration.

 China*:  July 22  2013

Former Taiwanese premier gives insight into Xian incident (By Minnie Chan minnie.chan@scmp.com) Nationalist marshal Chang Hsueh-liang's role in the famous Xian incident during the second Sino-Japanese war troubled him until the day he died, according to his close friend former Taiwanese premier Hau Pei-tsun. Nationalist marshal Chang Hsueh-liang's role in the famous Xian incident during the second Sino-Japanese war troubled him until the day he died, his close friend former Taiwanese premier Hau Pei-tsun revealed. On the one hand, Kuomintang leader Chiang Kai-shek could never forgive Chang's betrayal during the incident, which put the civil war on hold to fight the Japanese invaders. But Chang could never forgive the Communist Party for resuming the war a decade later. In 1936, Chang, who was then the Kuomintang's military chief in Manchuria, famously kidnapped Chiang from his residence in Xian and forced him to enter a truce with Mao Zedong's communists. "Chiang never forgot Chang's betrayal, but Madam Chiang Soong Mei-ling treated Chang very well," Hau told a City University lecture on Friday. Hau was chief aide to Chiang from 1965-70. Chiang kept Chang under house arrest throughout the second world war, sending him to Taiwan in 1946. "If Chiang let Chang stay on the mainland, he was afraid that people in Manchuria would want Chang … to do something," Hua said. Chang was freed after Chiang's death in 1975. But he refused to return to his hometown in Liaoning because he also could not forgive the Communist Party over its decision to continue the civil war. "He lost his freedom in betraying Chiang just because he didn't want to see civil war," said Hau. "However, both Chiang and Mao Zedong failed to keep their promise and went to war again. That made him very unhappy."

China starts construction on 'world's tallest building' (By Chris Luo chris.luo@scmp.com) A illustration of Sky City in Changsha, which will be 838 metres tall, 10 metres taller than the current title-holder, the Burj Khalifa in Dubai. China has embarked on the construction of an 838-metre-tall building in Changsha that is billed as the “world’s tallest”. Developer Broad Group on Saturday held a ground-breaking ceremony in the capital city of central province Hunan to start building the 208-storey tower, the Xiaoxiang Morning Herald newspaper reported on Sunday. Upon completion, the building would be about 10 metres taller than the Burj Khalifa in Dubai, currently the world’s tallest. The Changsha project, carried out by China Construction Fifth Building, is expected to be completed in April 2014, said Zhang Yue, founder and chairman of the Broad Group. It was slated to open in May or June next year. The skycraper will contain a total area of 1.05 million square metres and will cost a whopping 5.2 billion yuan (HK$6.5 billion) to build, government-run news portal voc.com.cn reported. Named “Sky City”, the mega building is designed to house various public facilities so the “building can serve as a city”, the developer said. It would house schools, an elderly care centre, hospital, offices in lower levels, while apartments and hotels would make up the upper levels. Changsha-based technology enterprise Broad Group was founded in 1988. Its products include energy-saving electronic equipment and quake-proof construction materials. China is home to five of the world's top-10 tallest buildings, according to a list in Forbes magazine last year. 

Sympathy for Beijing bomber as a frustrated life is revealed (By Agence France-Presse in Beijing) A man watches the closed-circuit television system broadcasting an explosion in T3 terminal at the Beijing Capital International Airport on Saturday. Chinese citizens expressed support on Sunday for a disabled man who set off an explosion at Beijing’s international airport, injuring himself in an apparent protest against police brutality. Messages of support posted online came after reports said 34-year old Ji Zhongxing was driven to the act by a years-long battle for justice after being severely beaten by police. Wheelchair-bound Ji warned passengers in the airport before detonating the small device late on Saturday in an apparent attempt to draw attention to his case without harming others, the Beijing News reported. A policeman who rushed to the scene was the only other person injured in the explosion, the state-run China Radio International said. “He warned those passing by... what a good member of the public, who in this country is willing to stand up and say they are more righteous than him,” Zhao Xiao, a professor at the Beijing Institute of Technology wrote on Sina Weibo. “By warning others to move away, he is a good person... I hope authorities will be understanding, or they will set off a vicious cycle,” lawyer Yuan Yulai wrote. “He was not as crazed as the police who beat him in the first place,” another Sina Weibo user said. Ji moved from the eastern province of Shandong to work as a motorcycle driver in the southern city of Dongguan, where he was severely beaten by police staff in 2005, causing him to become disabled, according to multiple reports which could not be independently verified. He had “lost all hope with society”, following an unsuccessful battle for compensation, Hong Kong broadcaster Phoenix TV reported. Ji was arrested at the scene and taken to hospital where he had his left hand amputated, the broadcaster said. Lawyers for Ji could not be reached on Sunday. Phoenix TV said at least one lawyer could not comment due to “pressure”, from the local government in Dongguan. Reports said Ji had grown frustrated at China’s “petitioning” system, which allows citizens to file complaints directly with government departments. Petitioners whose complaints have been ignored have for decades staged protests across China, with some using violent acts to draw attention to their case. An unemployed man who had been a petitioner killed 47 people last month by setting off an explosion on a bus in the coastal city of Xiamen, state media reported. Internet users favourably contrasted Ji’s decision to warn passengers with the behaviour of the petitioner behind the Xiamen attack. “It’s a big step forward...because Ji chose to inflict the smallest amount of injury,” one Sina Weibo user wrote.

Hong Kong*:  July 21 2013

HK$17m ivory seizure by customs largest since 2010 (By Lai Ying-kit yingkit.lai@scmp.com) Customs officers inspect some of the African ivory seized on Thursday in Hong Kong en route from Africa to the mainland. Hong Kong customs officials announced on Friday the seizure of HK$17 million worth of illegal ivory tusks, their largest seizure since 2010. The tusks were found inside a cargo container from the West African country of Togo. Wong Wai-hung, customs divisional commander, said on Friday the smugglers had taken a new – though longer – route this time to ship the illicit elephant tusks from Africa to Southeast Asia. The smugglers used to start in East Africa countries, such as Tanzania and Kenya, then head east to through Singapore and Malaysia before reaching Hong Kong, Wong said at a press conference. The new route by which the smugglers hoped to escape detection, started in Togo, headed west and north to Morocco, before turning east to Asia, he said. “This route is twice as long,” Wong said. Since 2010, Hong Kong officials had made nine other seizures of illicit ivory tusks and all involved the old route, Wong said. Thursday’s seizure involved 1,148 tusks of various sizes and weighed 2,183 kilograms. The HK$17 million haul was discovered in a cargo container at Kwai Chung Container Terminals. Officials said the tusks were concealed behind wooden planks in a corner of a 20-foot-long container that had been destined for trans-shipment to the mainland. According to reports by the United Nations and a wildlife agency, Hong Kong is on the frontline in the fight against illegal ivory trafficking and has a growing role as a key transit point in the illicit trade. Ivory has always been in demand in China and elsewhere in Asia, where it is prized as a source of wisdom, sign of nobility and symbol of wealth. Concern groups say the mainland market has seen considerable growth as its economic power has risen.

Shannon Lee mobbed as she opens Bruce Lee exhibition in Hong Kong (By Vivienne Chow vivienne.chow@scmp.com) Bruce Lee was a Chinese American martial arts expert and movie star best known for films including Enter The Dragon and Game Of Death. Born on November 27, 1940 in San Francisco, he was the son of Cantonese opera singer Lee Hoi-Chuen. Lee returned to Hong Kong at three months old and was raised in Kowloon, where as a child he appeared in several films. In his late teens he moved to the United States where he began teaching martial arts, eventually moving into films. Lee is widely credited with changing the perceptions of Asians in Hollywood movies, as well as founding the martial art of Jeet Kune Do. Lee died in Kowloon Tong on July 20, 1973 aged 32 from acute cerebral edema. The daughter of kung fu legend Bruce Lee was mobbed on Friday as she opened the preview of an exhibition paying tribute to the actor on the eve of the 40th anniversary of his death. Shannon Lee was swamped by press at the opening ceremony of "Bruce Lee: Kung Fu, Art, Life" exhibition at Hong Kong Heritage Museum in Sha Tin. 

 China*:  July 21  2013

China successfully launches 3 experimental satellites (Xinhua) A Long March-4C carrier rocket carring three satellites for scientific experiments blasts off from the launch pad in the Taiyuan Satellite Launch Center in Taiyuan, capital of north China's Shanxi Province, July 20, 2013. China successfully launched three satellites for scientific experiments, namely the Chuangxin-3, Shiyan-7 and Shijian-15, into space at 7:37 a.m. Saturday. The three satellites will be used mainly for conducting scientific experiments on space maintenance technologies.

Tokyo's 'big leap' aimed at China (By LI XIAOKUN and ZHAO SHENGNAN) Japan took a "big leap" in using its defense forces to target China last year as the United States at the same time listed China as its greatest potential security challenge, according to a report from a Chinese think tank on Friday. Observers said the military tension arose from territorial disputes, unease over China's rapid growth and attempts to use China as a scapegoat to justify a military buildup by Tokyo and Washington. The annual report on Japanese military power, released by the China Strategic Culture Promotion Association, said two of the most eye-catching changes in Japan's defense forces in 2012 were Tokyo's efforts to normalize its defense power and to use it against China. Last year, then-Japanese prime minister Yoshihiko Noda became the first Japanese government leader to make "strong military-related statements" on the Diaoyu Islands on public occasions, the report said. Noda and current Prime Minister Shinzo Abe visited branches of the Japan Coast Guard and the Japan Self-Defense Forces in Okinawa. Such visits have rarely been made by Japanese prime ministers since the end of World War II, it said. Since tensions over the Diaoyu Islands increased in mid-2012, Japan's military deployment, equipment upgrading, military drills and construction of military facilities have all been accelerated, it added. "Although this is not meant to provoke China into military action, it has undoubtedly complicated and endangered the situation in which accidents might be triggered and the dispute that already existed might escalate out of control," the report stated. Japan's national defense budget for the 2012 fiscal year "not only reveals Japan's ambition to step up efforts to become a major military power, but also explains its efforts to continue stirring up the so-called China threat", it said. The budget lists a string of objectives, including "improving the security environment in the Asia-Pacific region and the world". The report said Noda had been ambitious in "normalizing" Japan's national defense and had acted to achieve that aim since 2011, while the Abe administration is even "more enthusiastic" about this. For instance, since Abe took office in December, the Japanese government has taken "historic steps" in attempting to revise the constitution, establish national defense forces, amend the national defense program guidelines, exercise collective self-defense, set up the National Security Council, raise military spending and build up military strength, according to the report. Luo Yuan, deputy executive of the association, said, "China-Japan relations are also disturbed by growing right-wing forces in Japan, which stir up the China threat to justify their ambition to get rid of the shackles of the post-war system." Fan Gaoyue, a researcher from the association, said tensions over the Diaoyu Islands can hardly be eased in the short term as the Abe administration further strengthens its hawkish stance. "If the ruling party led by the conservative Abe wins the Senate elections this month, it is likely to make more provocative moves over the Diaoyu Islands to seek public support to amend the constitution and upgrade self-defense forces to an army," Fan said. It is the second time the think tank has issued reports on Japanese and US military power. In 2012, it became the first Chinese non-governmental body to touch upon the topic. In its report on US military power last year, the association said the US national defense budget in the 2012 fiscal year had been increased despite appearing to have been cut. The entire budget for that year saw a slight decrease due to a cut in the overseas contingency operations budget in Pakistan and Afghanistan. However, the base budget was $553.1 billion, an increase of $4.2 billion from the 2011 fiscal year, the report said. It also said that according to the new US guidance for defense strategy, issued in January 2012, China and Iran are of particular concern for the US. "In terms of threat assessment, the US takes China as its greatest potential security challenge," the report said. A series of US-led joint military exercises, such as Rim of the Pacific 2012 and Exercise Gold Cobra 2012, apparently had China as a target, it said. Rim of the Pacific 2012, which was expanded to cover 22 participant countries including India and Russia, did not invite China, one of the major nations in the region, the report added. Luo Yuan said Washington is concerned that a rising China may challenge its leading role in global affairs. "China is willing to enhance trust with the two countries (Japan and the US) through cooperation and improving its military transparency," Luo said. "But Beijing also has to prepare itself economically and defensively for any emergency triggered by outside provocation."

Vehicle kills one Asiana air crash victim: coroner (Xinhua) A coroner in San Mateo County, the US state of California said on Friday that a teenager victim of Asiana Flight 214, which crashed on landing at the San Francisco airport on July 6, died of multiple injuries consistent with being run over by a motor vehicle.

Interview: Disputed DIAOYU islands with China NOT Japan's territories: Japanese scholar (by Liu Tian, Guo Yina of Xinhua) Murata Tadayoshi, honorary professor at Japan's Yokohama National University, speaks during an interview with Xinhua News Agency in Tokyo, Japan, July 18, 2013. The Japanese scholar has said that the disputed islands between Japan and China are not Japanese inherent territories and he questioned statements by the Japanese Foreign Ministry on the disputed issue through his recent researches. A Japanese scholar has said that the disputed islands between Japan and China are not Japanese inherent territories and he questioned statements by the Japanese Foreign Ministry on the disputed issue through his recent researches. Murata Tadayoshi, honorary professor at Japan's Yokohama National University, concluded in "The Origin of Japan-China Territorial Disputes," his new book based on documents released by the Japanese government, that the disputed islands are not a part of Ryukyu, which was occupied by Japan in 1879 and changed its name to Okinawa. "Geographically speaking, it is difficult for Okinawa fishermen to cross the 2000-meter-deep Okinawa Trough by small ships. However, for those who came from Fujian and Taiwan, the water surrounding the islands is shallow sea and they can fish there, even now," Tadayoshi told Xinhua in a recent interview. He said that based on his research, he found that then Okinawa Governor Sutezou Nishimura was reluctant to follow then Home Minister Aritomo Yamagata's order to erect territorial markers on the islands as the governor knew the relations between the islets and China. "In 1885, Nishimura suggested the Japanese government not to set indications on the islands because he actually acknowledged the relations between the islets and China and he replied to Yamagata that he was worried about the marker erecting," said Tadayoshi, adding Yamagata finally suspended his order. "In fact, the Japanese government rejected the demands of incorporating the islands raised by other Okinawa governors in the 1890s," Tadayoshi said, "However, the thing changed in 1894 when Japan waged the Sino-Japanese War and Japan believed that it will defeat China." "Japan 'stole'the islands during the Sino-Japanese war and the government did not announce the move neither to Japanese people nor the international community," the professor said. Tadayoshi also said that the Japanese government only conducted a six-hour survey in October 1894 over the islands, rather than what the Foreign Ministry claimed in its statement that from 1885, surveys of the islands "had been thoroughly conducted by the Government of Japan through the agencies of Okinawa Prefecture and by way of other methods." The professor said that in an attempt to allege there are no territorial disputes between Japan and China over the islands, the ministry declassified historical references but withheld some facts concerning the consensus reached by the two countries' leaders in the 1970s. Tadayoshi also said that the findings about Nishimura is something new and quite newsworthy but no Japanese newspapers wrote any stories about it. "They used silence to 'kill'dissent, " he added. "My study is on the basis of materials unveiled by the Japanese side and I believe that no one can refute my conclusion by using existed references. If new documents were released or found, I would like to review my points," the professor said. Tadayoshi also hoped that Japan and China could communicate over the issue and map out rules to prevent unexpected accidents from occurring near the disputed islands. "China has made its own efforts towards reaching the goal," the professor added.

Singapore to widen its RMB liquidity pool (By WANG XIAOTIAN) Singapore's central bank governor says the island state plans to widen its liquidity pool of the Chinese currency as part of extended efforts to turn itself into a major offshore yuan market. Ravi Menon said the country is also developing hedging instruments as part of these efforts. "The critical factors that will determine how well Singapore develops as an RMB hub are liquidity and a range of hedging products," said Menon, managing director of the Monetary Authority of Singapore, the central bank and financial regulatory authority. Singapore holds 100 billion yuan ($16.3 billion) in renminbi deposits and Menon expects the total to rise. "The deposits will grow at a stronger pace over time, facilitated by the launch of the Industrial and Commercial Bank of China's Singapore RMB clearing facilities in May. "With more liquidity, financial institutions will offer a wider range of RMB products and services to better meet the financing, investment and risk management needs of the market," he told China Daily. Hong Kong, the largest offshore RMB center, which accounts for 70 percent of overseas yuan deposits, had deposits of 698.5 billion yuan up to May, according to the Hong Kong Monetary Authority. Taiwan is catching up quickly, and yuan deposits there might increase to 100 billion to 150 billion yuan by the end of the year from 66 billion yuan now, according to a report by Standard Chartered Bank. Menon said offshore RMB liquidity in Singapore should be interchangeable with RMB liquidity in other offshore centers. "This will help ensure that surplus liquidity in one center can be channeled to meet the demand in another, thereby improving the efficiency of the overall RMB market. "While there will no doubt be some competition among the major offshore RMB clearing centers, such as Hong Kong, London and Singapore, they will also play complementary roles in developing the offshore RMB market." These initiatives will reduce the likelihood of liquidity strains in the offshore market when expectations that the yuan will depreciate run high, he said. The appointment of offshore RMB clearing banks in Taiwan and Singapore has reduced liquidity friction by enlarging the liquidity pipeline between the Chinese mainland and the offshore RMB market. The establishment of RMB liquidity facilities in Hong Kong and Singapore means that "backstop facilities" can be provided should liquidity strains occur. Menon said the Monetary Authority of Singapore has broadened the scope to provide RMB liquidity for market stability and will soon be widening the types of collateral that will be accepted. The Singapore Exchange is ready to quote, trade, clear and settle RMB-denominated securities, Menon said. Last week, the Monetary Authority of Singapore allowed local banks to settle yuan trades at onshore exchange rates through the ICBC yuan clearing facilities in Singapore. Previously, trade settlement at the onshore rate was available only at branches of the Bank of China in Hong Kong or Taipei or their agent banks. An executive at the Singapore branch of a State-owned Chinese bank said local banks are gradually moving their RMB clearing business back to Singapore from Hong Kong. "More policy guidance is needed to encourage wider acceptance of the currency in Singapore. For instance, by allowing Chinese enterprises to use RMB assets as collateral when they make a tender," he said. Beng Hong Lee, head of China FICC trading and structuring and product management for offshore RMB at Deutsche Bank, said: "Singapore is becoming an important RMB offshore market. You may see more direct trading of RMB assets soon." According to data released by the Society for Worldwide Interbank Financial Telecommunication, Singapore is the largest "corridor" for use of RMB letters of credit after Hong Kong. In terms of RMB payment value, it is consistently among the top two offshore centers outside Hong Kong. A letter of credit is a document issued by a financial institution, or a similar party, assuring payment to a seller of goods and/or services provided certain documents have been presented to the bank. Menon said, "As use of the RMB expands over time in the region and beyond, there will be room for more than one offshore RMB center. Each center will have its own niche and strength." He said Singapore's strength as an offshore RMB hub is its status as a regional trading hub and an international financial center. In February, it joined Hong Kong, Taiwan and Macao in having a yuan clearing bank. One month later, it doubled the size of its currency-swap arrangement with China to 300 billion yuan. In May, the Monetary Authority of Singapore opened its first representative office in Asia in Beijing — the third overseas after London and New York. Within the first month of starting RMB clearing services in Singapore, HSBC, Standard Chartered Bank, DBS Bank and United Overseas Bank issued 2.5 billion yuan in offshore RMB bonds, or "Lion City Bonds". Yuan clearing business in Singapore in the first month exceeded 60 billion yuan since ICBC began to offer the service on May 27. "As regional corporations engage in RMB invoicing and fundraising activities, we expect to see stronger growth in RMB-denominated transactions, bond issuance and equity listings," Menon said. "Offshore demand for RMB in Singapore is driven by cross-border trading and portfolio diversification needs rather than expectations of RMB appreciation. "Ultimately, a stable and thriving Chinese economy is the best foundation on which to further the use of the RMB in this region and globally."

Pew Poll: China will top US (By By Chen Weihua in Washington chenweihua@chinadailyusa.com) Despite China's economic slowdown and challenges on multiple fronts, there is widespread belief globally that its economic power continues to grow and China will ultimately replace the United States as the world's dominant superpower, according to a Pew Center survey released on Thursday. The results, based on a survey of 37,635 people in 39 countries from March 2 to May 1 this year, reflect largely the views of Pew's survey two years ago. In 23 of the 39 nations, majorities or pluralities say China either already has replaced or eventually will replace the US as the top superpower. The report says this view is more prevalent now than it was in 2008 when the same question was asked. Today, majorities or pluralities in only six countries believe China will never supplant the US. Perceptions about the economic balance of power in the world have been shifting since the global financial crisis started in 2008. In surveys of 20 nations in both 2008 and 2013, the median percentage naming the US as the world's leading economic power has declined from 47 percent to 41 percent, while the median percentage putting China in the top spot has jumped from 20 percent to 34 percent. Some of the US's closest allies in Europe have a firm belief in China's growing economic might, according to the Pew report. For example, 53 percent in Britain said China is the leading economy, while 33 percent name the US. In Germany, 59 percent say of China occupies the top place, while only 19 percent think the US is the global economic leader. While more people believe China's economic power is growing, many see the US as the leading economy today, the report said. This is consistent with other statistics, such as from the International Monetary Fund, which show that the US economy was nearly twice the size of China's in 2012. Even in many countries where the US is still seen as the top economic power, most believe China will someday become the leading overall superpower, according to the Pew survey. Meanwhile, two thirds of the Chinese believe their country either already has or someday will supplant the US, according to the report. Americans are divided, with 47 percent saying that China has or will replace the US and 47 percent saying this will never happen. That is a significant shift of US public opinion from 2008 when only 36 percent said China would become the top global power and 54 percent said China would never replace the US. The survey also found that the overall global attitudes toward the US are positive, especially among Europeans. But since the poll was conducted before the breakout of Edward Snowden case, it didn't show whether revelations by the former technical contractor for the US National Security Agency (NSA) of top-secret U.S. mass surveillance programs have any effect on Europeans. US trouble with the Muslim world is reflected in the survey, where the US gets mostly unfavorable reviews. An overwhelming majority in Egypt (81 percent), Jordan (85 percent), Palestinian territory (79 percent) and Turkey (70 percent) have negative views of the US. Among the regions surveyed, people in the Middle East also express the lowest level of confidence in US President Barack Obama. Overall, the confidence in Obama is still high but declining. In China, it has declined from 62 percent in 2009 to 31 percent this year. The survey also reveals that in most parts of the world, many people think the US acts in its own self-interest in global affairs, ignoring other countries. Majorities throughout nearly all the European and Middle Eastern nations polled say the US doesn't consider the interests of countries like theirs when making foreign policy decisions. In most of the nations polled, the majorities oppose the US drone campaign against militant leaders and organizations. Meanwhile, China's favorability remains largely unchanged since 2007. The majorities in countries of Indonesia, Pakistan, Malaysia and Australia have a favorable view of China. In South Korea, the favorability has come down slightly from 52 percent in 2007 to 46 percent. In the Philippines, which has territorial disputes with China, the favorability rate is still 48 percent, while perceptions in Japan about China are largely negative. Only 8 percent have favorable views of China. China's favorability rate is also high in the African countries of Kenya, Senegal, Nigeria, Ghana and Uganda and European nations of Greece and Russia. Overall, 72 percent in Africa, 58 percent in Latin America, 45 percent in Middle East and 43 percent in Europe view China favorably, the report says. In the US, China's favorability rate drops to 37 percent from 42 percent in 2007. Half or more of those surveyed see China as more of a partner for their country than as an enemy. Comparatively in the US, 20 percent call China a partner, 18 percent say enemy and 58 percent say neither. The report says China's scientific and technological advances are the most widely appreciated aspect of its influence in both Africa (75 percent) and Latin America (72 percent). The report also shows that China's greatest global asset in the future may be its appeal among young adults. In the US, 57 percent aged 18-29 view China positively, compared with 27 percent among people aged 50 and older. "In 16 of the 38 nations surveyed, younger people are significantly more likely than older people to look favorably on China," the report says.

Hong Kong*:  July 20 2013

'Wild Swans' author Jung Chang lauds Hong Kong's freedom (By Oliver Chou oliver.chou@scmp.com) Writer Jung Chang is always happy to court controversy with her work and welcomes the chance to talk to Chinese readers in Hong Kong - Hong Kong has the freedom to accommodate new perspectives in a way no other place in China can, asserts internationally acclaimed biographer Jung Chang. And the author of the autobiographic Wild Swans believes in providing those new perspectives. "I wouldn't dream of writing something that is not controversial," she said, prior to her first appearance at the Hong Kong Book Fair today. "I want to discover new things and look at things from a new angle, using historical documents." Chang's second book, Mao: The Unknown Story, was based on new, declassified Russian archival materials concerning Mao Zedong . It was co-authored by her husband Jon Halliday, an historian specialising in Russia. "It was a riveting experience for both of us as we discovered so many new things about Mao over a period of 12 years," the 61-year old London-based author said. She admitted their findings upset some people, including academics, but added: "I dare say none has pointed out any factual error in our book since it was published in 2005." "After Wild Swans, Mao obviously became my next subject because he dominated my early life and I had many unanswered questions about him," she said. "As it turned out, Mao was a bad man but a good subject." In much the same way, Mao inspired Chang to write her next book, the biography of Cixi, the Empress Dowager of the late Qing Dynasty. Chang says The Concubine Who Launched Modern China , due out in October, is set to overturn "received wisdom that she was a diehard conservative and despot who opposed reform". "My interest in Cixi came from my grandmother's bound feet, a practice which at first I thought was outlawed by Mao thanks to the party education, but later found out it was the empress' edict," she said. "Bear in mind, too, Mao was born in 1893, meaning he spent his childhood and youth under Cixi's reign. I was amazed at how Mao as a peasant lad could enjoy such extraordinary freedom and opportunity, something I did not have in my time." She hoped the new book, which concerns an older historical figure, would fare better on the mainland than her previous publications, which are banned. "Even when I visit my elderly mother in Sichuan province, I can't talk about my books in public," she said. "So I am delighted to have the opportunity to have a dialogue with readers in Hong Kong, including those coming from the mainland. "I am so happy Hong Kong is separate from China in this sense, and, to a large extent, it has kept a lot of its freedom. I don't know what I'd do without Hong Kong," she laughed.

Strokes of young genius (July 19) (By SCMP) Looking at the world through the eyes of a child offers the chance to see the joy in what has become jaded to the eye of an adult. The Hong Kong Promotion of Young Artists Foundation's International Children Painting Competition does just that. The competition attracted 11,543 entries from 52 countries. The top 30 were awarded medals. As part of the competition, next month 20 young local artists will join 60 from around the world in an on-site competition to sketch the city's landmarks. The exercise seems to have achieved its goal of encouraging creativity and global harmony. (Above) Cheung Hiu-nam, 12, captured the shoe-beating ceremony under a flyover.

Departing US consul fires sarcastic shots at media over Snowden saga (By Phila Siu phila.siu@scmp.com) Stephen Young 'thanks' Beijing-friendly press for its objective coverage of the Snowden saga - Stephen Young addresses journalists at the Foreign Correspondents' Club yesterday. Departing US consul general Stephen Young, kept busy by whistle-blower Edward Snowden's surprise stopover in Hong Kong, fired some sarcastic parting shots at the media yesterday. But he said he believed the damaged trust between the United States and Hong Kong could be repaired and pointed to encouraging signs of emerging universal suffrage. At a media event before he departs for the US next week, Young was asked by a journalist from the Beijing-loyal Ta Kung Pao when the US government would reply on whether it had been hacking into the city's computers. "Well, I thank you for all of your objective reporting at Ta Kung Pao, first of all. And if you don't get the sarcasm, it's there," Young replied. "I do wish you'd be more objective. But I know you have your master in Beijing." Another journalist asked how the diplomat felt about protests by pro-democracy activists and Snowden supporters who said they no longer saw the US as a symbol of democracy. "Actually that was a plot by us," he joked. "You see, as Ta Kung Pao regularly reports, along with Wen Wei Po and others, we actually fund and direct the pan-democrats so we have them coming to demonstrate outside our consulate to throw people off the scent." After answering several questions from an i-Cable journalist, Young said that anyone who asked only a single question would get an "extra credit". And when a South China Morning Post journalist identified himself and said he wanted to ask two questions, Young said: "You just lost your credit." The Post had an exclusive interview with Snowden last month in which he claimed the US government had been hacking into computers in Hong Kong for years. Sarcastic remarks aside, Young said he had a generally optimistic view of Hong Kong's future and believed that the damaged trust between the US and Hong Kong could be restored. He said Snowden had made a lot of allegations, some of which seemed to be "self-serving to gain sympathy", and he did not think the US needed to apologise to anyone for someone who had violated his country's trust. On universal suffrage in 2017, Young said he was encouraged by the central government liaison office's decision to have lunch with lawmakers, as well as Chief Executive Leung Chun-ying's plan to have dinner with people including the pan-democrats. Asked if he supported the Occupy Central movement, he said he backed moves towards genuine universal suffrage but such moves should stay within the law. The Snowden saga had no direct connection to the bill that would add Hong Kong to the US visa-waiver scheme, Young said.

US consul says his country doesn't owe anyone an apology in Snowden affair (By Lai Ying-kit and Phila Siu) Hong Kong still waiting for US reply on Snowden hacking allegations, says security chief - US consul Stephen Young said at the Foreign Correspondents' Club in Central on Thursday the Snowden affair had damaged trust between the US and Hong Kong. Outgoing US consul in Hong Kong Stephen Young said on Thursday the US did not owe any country an apology in relation to the alleged hacking activities disclosed by whistle-blower Edward Snowden. But Young did say the United States government would address queries made by Hong Kong officials on the issue in its own time and manner. "But I don’t think we owe an apology to anyone," he said when speaking at the Foreign Correspondents' Club in Central on Thursday afternoon. “Because I think the real root of the problem here is we have somebody [Snowden] who violated his trust with the United States and chose Hong Kong as a place to demonstrate that.” He also said that Snowden had made a lot of allegations and many seemed to be self-serving in an attempt to garner sympathy for himself. Young did say that the Snowden saga had damaged the trust between Hong Kong and the US but he believed it could be restored. "I wouldn’t be leaving here with the generally optimistic view of Hong Kong if I thought that the damaged trust couldn’t be restored." Earlier on Thursday, Secretary for Security Lai Tung-kwok told Hong Kong lawmakers that Hong Kong was still waiting for a reply from the United States on claims made by Snowden that US agencies had hacked into the city’s computers. Lai was speaking at a Legislative Council meeting to discuss the revelations made last month by the American whistle-blower and ex-CIA worker. “The Security Bureau wrote to the US on June 22 to seek an explanation. We are looking forward to a comprehensive and thorough clarification for Hongkongers as soon as possible,” Lai said in an opening speech. Lai said that with regard to the Snowdon case, his allegations of US hacking into Hong Kong’s computer systems was the top concern of the city’s lawmakers and people. He also said the city had facilities to guard against cyberattacks and had invested in the research and development of new internet security technology. Snowden told the South China Morning Post in mid-June – soon after fleeing his home country – that Washington had been hacking into mainland China and Hong Kong computer systems for years. One target in the city, he said, was the hub for Hong Kong’s internet traffic located on the Chinese University of Hong Kong’s campus in Sha Tin. Snowden, who is wanted by Washington for leaking details of the US intelligence surveillance programmes, is now seeking temporary asylum in Russia after spending more than three weeks in a Moscow airport transit lounge trying to find a country that would grant him asylum.

CY Leung ally continues criticism of Hong Kong's use of fiscal reserves (By Lai Ying-kit yingkit.lai@scmp.com) Ronnie Chan, a property tycoon and chief executive supporter, said on Thursday the city's fiscal reserves should be used for long-term development. Hang Lung Group chairman Ronnie Chan Chi-chung on Thursday continued his attack on the way the Hong Kong government has managed its financial reserves, calling its cash handouts of two years ago "unwise". At a forum on Tuesday, Chan accused Financial Secretary John Tsang Chun-wah of being a “big sinner” for sitting on the city’s huge fiscal reserves and not spending the money properly to cater to Hong Kong’s needs. Tsang on Wednesday hit back and said he welcomed people’s monitoring and criticism of his actions but hoped “people could give concrete suggestions”. On Thursday, Chan singled out the HK$6,000 cash handouts – announced by Tsang in his 2011 budget — as an example, saying it was a “waste” and would lead Hong Kong down the path to a socialist system. “To hand out cash is not a wise thing, especially [to do it] indiscriminately,” he said. “Just think about it: is it a good policy when Mr Li Ka-shing and Mr Lee Shau-kee receive HK$6,000? It is ridiculous,” he said. Chan said the handouts would fuel a rise of populism, which he described as a “very dangerous thing” in any society and something the city should be careful about. “Once you start giving, there is an expectation to get cash year after year,” he said. “That shows you are already heading down the socialistic path of Western Europe. Look at Western Europe today. They are in terrible financial condition for that precise reason.” In 2011, for the first time in Hong Kong’s fiscal policy history, Tsang announced in his revised budget a HK$6,000 cash handout for some six million people. He had initially proposed injecting money into their retirement fund accounts but that triggered a lot of criticism. Chan, a supporter of Chief Executive Leung Chun-ying, said the government should have invested more of its money in medical and education facilities to develop Hong Kong into a medical and education hub for South China. He said the HK$200 billion spent on handouts and other concessions over the past two years were the equivalent of 30 Hong Kong Universities of Science and Technology or 30 Queen Mary Hospitals, which would have better helped the city’s long-term development.

Hong Kong home prices could fall 45pc: Midland-controlled agent (By Sandy Li and Paggie Leung) HK Property forecasts that taxes, higher interest rates may spark a major plunge in the market - The average interest rate on a mortgage over the last 23 years has been about 6.2 per cent per annum. Home prices could fall as much as 45 per cent over the next three to five years amid higher property taxes, rising interest rates and a bleak outlook for commercial property, says one real estate agent. Hong Kong Property, controlled by Midland Holdings, the city's only listed real estate agent, made the bearish forecast yesterday. "The property market has been severely hurt with sales volumes declining sharply after the introduction of the extra stamp duties," said Jeffrey Ng Chong-yip, senior executive director at Hong Kong Property. The city will enter an era of higher interest rates once the US Federal Reserve's curbs its stimulus, Ng added. Over the past 23 years, Hong Kong's mortgage rate has averaged 6.2 per cent, with an affordability ratio of 45.7 per cent. The measure is the ratio of mortgage instalment payments to household income. If mortgage rates increase from their current 2.3 per cent to 6 per cent, Ng said home prices would have to drop 27 per cent in order to maintain an affordability ratio of 45.7 per cent. With the government stepping up measures to cool the market, Ng said average monthly transactions in the secondary market could drop to 4,500, a level close to that during Sars in 2003. "In the worst scenario, home prices will drop by as much as 45 per cent," he said. The more than 10,000 people who bought homes at peak prices last year risk falling into negative equity, he said. Meanwhile, property consultancy Cushman & Wakefield forecast growth in rent for grade A offices in Hong Kong to slow to 0.5 per cent in the second half, from 1.4 per cent in the first half. Grade A office take-up would shrink to 1.2 million square feet in the second half from 2.1 million sq ft in the first six months of this year, the firm predicted. It also said rents in Central would bottom out toward the end of the year or early next year, after declining 3.5 per cent in the second half of this year. Prime grade A offices will drop about 4 per cent in the second half, it forecast. "Transactions will involve mainly small- and medium-sized companies which want smaller spaces of about 4,000 to 6,000 sq ft only," the firm's head of commercial properties, Gary Fok Cho-ping, said. Michele Woo Wing-sze, Cushman & Wakefield's head of retail, said retail rents had already peaked. Retailers had become more cautious in the last few months, with fewer new leases in prime locations and higher vacancies in secondary locations. Thousands of property agents marched to government headquarters at Tamar in Admiralty earlier this month to urge the government to withdraw property market measures designed to curb soaring prices.

 China*:  July 20  2013

Japanese museum returns mahjong sets to China (Mandy Zuo mandy.zuo@scmp.com) World's largest mahjong museum to send sets back to China, including one used by Puyi - A mahjong set on display in Japan's museum in Chiba. A mahjong museum in a prefecture near Tokyo has decided to return to China a huge collection of mahjong sets, including one used by the last Chinese emperor, Puyi, the World Mahjong Organisation (WMO) said online yesterday. The cultural relics will be transferred to Beijing, where the organisation is headquartered, from the museum in Japan's Chiba prefecture. Besides Puyi's set, which China considers a national treasure, the batch also includes mahjong pieces made of jade, silver or bone, as well as those that once belonged to famous historical figures such as the late Peking opera star Mei Lanfang and famed 20th century ink painter Zhang Daqian, said Yao Xiaolei, assistant to the WMO's secretary-general. "They are all of very high cultural value, and it is difficult to say which piece is worth more money," Yao told the Post by phone yesterday. "We're still considering how to deal with them." The return of the mahjong items was an unfulfilled wish of the late former board chairman of a publishing company that owns the museum. As the museum's entire collection will be transferred to Beijing, the WMO will establish an institution in the museum's place to promote mahjong, according to an agreement reached between the museum and the WMO. The decision by Chiba's mahjong museum - the biggest and oldest of its kind in the world - will strengthen co-operation between the two countries in the study and heritage of the mahjong culture, the WMO said. "This decision will also help boost the mahjong culture in a healthy and scientific way," it said. "It is an important push for cross-cultural communications, as well as for the sustainable development of competitive intelligence-oriented activities, expos, leisure tourism and mahjong equipment." The West China City Daily reported that the museum previously intended to hold an auction in Beijing, with an opening bid of about 120 million yuan (HK$150 million) for more than 30,000 items, but the auction was cancelled for unknown reasons. Established in 2005, the WMO is a non-profit organisation dedicated to training and competition involving the Chinese game. It was set up by mahjong organisations in China, Japan, the US, Germany, France, Denmark, the Netherlands and Hungary.

Foreign NGO registration rules eased (By HU YONGQI, LI YINGQING, YANG YAO) Requirements for institutions will be lowered under reform - International NGOs will find it much easier to become registered in China, as registration approval power has been handed over by the Ministry of Civil Affairs to provincial civil affairs authorities. The move is part of the reforms the ministry has initiated to make NGO operations in China easier. Other measures include preferential taxation, financial support for domestic organizations and a new management system that will loosen the requirements for international NGOs operating in China, said Wang Jianjun, director of the non-governmental organizations department under the Ministry of Civil Affairs. He was speaking at a forum on Thursday in Kunming, capital of Yunnan province. As of the end of last year, 499,000 NGOs had registered with civil affairs authorities at different levels. They employ more than 12 million people, according to Li Liguo, minister of civil affairs. Under the new framework, international NGOs are allowed to register with provincial civil affairs authorities instead of applying to the ministry as before, said Wang. "The requirements for social organizations will be lowered when they register." As early as 2006, the provincial government in Yunnan launched a trial to open its arms to international NGOs. Each of the institutions recorded with the provincial government will be given an ID number and receive help on taxation registration, residence permits for foreign employees and foreign exchange accounts, according to Qin Guangrong, Party chief of Yunnan. Thirty-nine international NGOs have been included on the provincial government's records and they are running 268 charity programs, Qin said. Under Yunnan's pilot system, the heads of international NGOs routinely meet the officials in charge. "The trial mechanism is unique and will have some significance in the national reform of social organizations," Qin said. As a border province with about 10 million poverty-stricken people, Yunnan is a hotspot for NGOs, the Party chief said. More than 100 international NGOs are helping locals in Yunnan, and there is an urgent need to establish a sound management system, Qin said. An official working for the provincial government's inter-national affairs office, who declined to be named, said Yunnan's pilot program gives international NGOs a legal identity. "International nonprofit organizations are no longer regarded as demons and they will contribute to local development as long as they run their projects based on local laws," the official said. Considering the local conditions in Yunnan, the 39 international NGOs mostly focus on health, education and poverty alleviation, he said. "One obvious difference is that an NGO that is on the records is able to advertise in newspapers and on television to recruit workers. ... However, it was impossible before," the official added. Wang Zhenyao, director of the China Philanthropy Research Institute at Beijing Normal University, said international NGOs have long been regarded by many as a threat to the government and had difficulty in registration. "Now the Ministry of Civil Affairs has given the power to the provincial level. It is a big step forward and will facilitate the work of NGOs," Wang said. Deng Fei, who started the "Free Lunch for Children in Rural China" program, said the reform "will definitely give confidence to us in the philanthropic enterprises". Wang Ming, president of the Nongovernmental Organization Research Institute at Tsinghua University, said Yunnan's way of dealing with international NGOs could be seen as an important trial for the nationwide reform. "Other provinces and regions could learn from Yunnan to better manage international charities and NGOs," Wang said. A spokeswoman for the China program of Save the Children, a charity based in Britain, said, "I can see some progress and a more friendly environment for international NGOs." Like most other international NGOs, Save the Children had been registered as a business entity under the State Administration for Industry and Commerce before recently being granted legal status as an NGO. The spokeswoman said that being registered as an NGO helps better manage the organization when considering project planning and preferential taxation. "We would wish to see simpler procedures for registration in the new regulations," she said. However, not all the NGOs are as lucky as Save the Children. Greenpeace, the international environmental organization that entered China in 2002, can only register as an international corporation, as most other NGOs do. Yong Rong, the organization's media officer in Beijng, said the major obstacle for being registered is that it is hard to find a supervising department as required. She said Greenpeace carried out projects that involved several ministries. "All these ministries could supervise us, but none were willing to do so," said Yong. She hopes the new regulation will make registration easier. Wang Chao, chief operating officer at the World Wildlife Fund, said that allowing provincial authorities to oversee registration and supervision will help NGOs to better carry out projects in different provinces.

China will replace America as the leading superpower, global attitudes survey finds (By Joanna Chiu joanna.chiu@scmp.com) Public's view of China not favourable, Pew survey finds - Chinese President Xi Jinping (left) pictured with Belarusian President Alexander Lukashenko on July 16, 2013. China will replace America as the leading superpower, according to an international global attitudes survey released on Thursday, even though just half of the nations polled view China favourably. And only one in every four nations thinks China respects the personal freedom of its people. In comparison, 95 per cent of nations think the US government respects its citizens’ personal freedoms in the survey which was conducted before Edward Snowden's surveillance revelations were made public. These are among the major findings of the Pew Research Centre’s Global Attitudes Project, which conducted surveys in 39 countries among 37,653 respondents from March 2 to May 1, 2013. It is the first study to gauge public responses to China to such a large scale. “It would appear that the treatment of personal freedom is a very strong indicator of favourability, and that’s a data point the Chinese government has to think about,” said Bruce Stokes, director of the Global Attitudes project. Global perceptions about the balance of power have shifted since the financial crisis in 2008, with Pew surveys showing that more people now think China either already has or will eventually become the world’s dominant power. Even in America, nearly half of respondents said China has or will replace the U.S. as the top global power. Stokes said China’s rise could be a factor in its low favourability ratings: “When you’re considered the biggest guy on the block, you may not be liked,” he said. The numbers of Chinese and Americans who hold positive views of the other country have plunged in the past two years. In Pew global survey results from two years ago, 51 per cent of Americans expressed a positive view of China compared with 37 per cent now. Similarly, 58 per cent of Chinese had a favourable opinion of America in 2010 while only 40 per cent do today. Xu Guoqi, a Sino-foreign relations expert at the University of Hong Kong and author of Olympic Dreams, said that China’s global image suffers from a lack of direction in its foreign policy. “The big problem with Chinese foreign policy is that it lacks long term thinking of [American] policies in the 19th and 20th centuries. China does not even have clearly defined national interests. For example, nobody today in Beijing can answer the following question: Whose interest is more important, the Communist Party's or national interest? What will the government do if there is clash between party's interest and national interest?” Unsurprisingly, the Japanese have the lowest regard for China by a wide margin, with only 5 per cent expressing a positive view of China. The feeling is mutual. Only 4 per cent of Chinese see Japan favourably.

Sansha city issues ID cards & resident permits - The newly created Sansha city in the South China Sea issued its first identity cards and residence permits on Wednesday.

Hainan auto show kicks off - The 2013 China Hainan International Automotive Exhibition was opened on Thursday, attracting 100 automobile manufacturers.

Hong Kong*:  July 19 2013

Beijing liaison chief hints at screening of CE candidates (By Joshua But and Emily Tsang) Beijing liaison chief tells lawmakers that universal suffrage in 2017 could also see mechanism to 'sieve' hopefuls to protect national sovereignty - Zhang Xiaoming delivers his speech. Zhang Xiaoming receives a book and a framed poem from Leung Kwok-hung. Lawmaker Lee Cheuk-yan presents Zhang with petition letters. Beijing's top man in Hong Kong has dropped the clearest hint yet that a screening mechanism could play a role in selecting future chief executives. Zhang Xiaoming, director of the central government's liaison office in Hong Kong, also said that national sovereignty and security must be protected as the city achieves universal suffrage by 2017. During a lunch with 50 lawmakers on his unprecedented visit to the Legislative Council, described by one as "cordial on the surface", Zhang delivered strong messages in a friendly and sometimes jocular tone. But outside the building later he took a tougher line, slamming the Occupy Central civil disobedience campaign, which he said would be a disaster with "lasting consequences" for Hong Kong. He told lawmakers: "There is no doubt of the central government's position - and sincerity - to support Hong Kong achieving universal suffrage. "[But] the methods must follow the actual situation of Hong Kong, which means it is not a country. It is by no means an unreasonable demand that national sovereignty, national safety and the rights of the central government must be well protected." Radical lawmakers were on their best behaviour - there were no objects thrown or slogans chanted. "Long Hair" Leung Kwok-hung gave Zhang a book on the Communist Party's pledge for democracy during its struggle against the Kuomintang in the 1940s, while People Power's Albert Chan Wai-yip and Raymond Chan Chi-chuen offered another book entitled Don't Want to be a Chinese in My Next Life. The three then left the dining hall after presenting their gifts. Zhang used another gift - a sieve given by lawmaker Frederick Fung Kin-kee - as a metaphor to illustrate the advantages of a screening process. "What is the sin of a sieve?" he asked. "It was our ancestors' wisdom that invented the sieve. Otherwise how can we sift fine grains from coarse grains? We cannot simply deny that a sieve has its function." Labour Party lawmaker Lee Cheuk-yan said the meeting was "cordial on the surface" but there was "a lot of tough talk" on universal suffrage. "The hint of a screening process also touches a nerve as it gives a very bad message that universal suffrage in 2017 will not be a genuine one that reflects the people's will," Lee said. Civic Party leader Alan Leong Kah-kit believed Zhang was not serious with his metaphor. "The most effective sieve would be one that let millions of voters sift the candidates that they do not prefer," he said. Beijing-loyalist Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, played down the metaphor. "I do not think it has anything to do with electoral reform," he said. Nineteen of the 27 pan-democratic lawmakers attended, while Zhang brought 11 colleagues from the liaison office.

Hong Kong keeps innovation lead in Asia (By Bien Perez in Hong Kong) Best known for its banking and trading prowess, Hong Kong is one of the world’s most innovative markets, according to a new report. Despite lingering weakness in the economy, Hong Kong has retained its position in the top-10 global rankings of leading markets for innovation. The city also sits alongside China, Korea, Japan, Singapore and Malaysia as the top markets for innovation in Asia. The findings from the sixth edition of the Global Innovation Index (GII), co-published by Cornell University, INSEAD and the World Intellectual Property Organization, was unveiled on Wednesday at an event hosted by Huawei Technologies in Shenzhen. The GII report is a relative measure of the innovation capability of 142 economies worldwide. It looks at a range of criteria, including institutions, human capital and research, infrastructure and knowledge and technology outputs. “Innovation is a key factor in a country’s international competitiveness and is becoming a rallying symbol for progress and reform around the world,” said Bruno Lanvin, the report’s co-editor and executive director of INSEAD’s European Competitiveness Initiative. Hong Kong and Singapore ranked 7th and 8th, respectively this year’s GII ranking. Hong Kong was second in the innovation input sub-index and third in business sophistication. China is second worldwide in the categories of knowledge and technology outputs, behind Switzerland. Hong Kong was first in the category of high-tech imports as a proportion of total imports. The city also ranked fifth in the creative outputs sub-index.

No strain in the Leung-Tsang relationship, says CE (By Lai Ying-kit yingkit.lai@scmp.com) Financial Secretary John Tsang Chun-wah (left) and Chief Executive Leung Chun-ying. Chief Executive Leung Chun-ying on Wednesday denied a claim he was at odds over issues with Financial Secretary John Tsang Chun-wah, saying instead they worked well together. The claim was made by a Leung ally, Hang Lung Properties chairman Ronnie Chan Chi-chung at a forum on Tuesday. At the forum, Chan said Tsang was “a big sinner” for allowing Hong Kong to sit on huge fiscal reserves without spending them appropriately and said he was at odds with the chief executive. Leung said on Wednesday his one-year partnership with Tsang was good. “The financial secretary and I share the same values, and we work very smoothly together,” he said, noting that they were now preparing the next policy address and budget. Tsang, who was on a visit to Guangzhou on Wednesday, also responded to Chan’s comments. “It is sad to hear this,” he said when asked to comment on the “big sinner” accusation. “We welcome criticism, but I also hope people can give some concrete suggestions,” he added. Tsang also directly denied that he failed to spend Hong Kong’s reserves appropriately, noting that over the past six years while he has been financial secretary Hong Kong’s expenditures had increased 80 per cent. “If you do the math, you will get a double-digit increase for each year,” he said. “This is not easy to achieve for any developed economy,” he said. On his relationship with Leung, Tsang said: “We meet every day. How could it be strained?” Last month, there were rumours of Leung also having a strained relationship with another of his top ministers. Former chief secretary Anson Chan Fang On-sang speculated that current Chief Secretary Carrie Lam Cheng Yuet-ngor might quit as she was dissatisfied with her role in the government. But Lam rejected speculation that she might quit and, like Tsang, denied there was any strain in the relationship.

Hong Kong fair aims to appeal to big demand for e-books (By Rachel Butt rachel.butt@scmp.com) Revenue from Chinese e-magazines has tripled in the last years. The annual Hong Kong Book Fair opens in Wan Chai on Wednesday – with suppliers keen to tap into the growing appetite for e-books and e-magazines among younger readers. Non-publishers and tablet brands are now joining the e-book craze – as digital book purchasing platforms and reading devices become increasingly popular with the touchscreen generation in Hong Kong and mainland China. This year at the book fair, Acer Taiwan will showcase its e-magazine system, Zinio - with the company keen to promote the merger of magazine content and electronic platforms to Hong Kong readers. “The tablet market has reached a mature stage as tablets and reading devices are increasingly affordable to the mass,” said Albert Hsu, a senior manager at Acer. “We want Hong Kong consumers to experience how convenient it is to read on screens.” Zinio, an American-based distribution service for digital magazines, had been collaborating with Acer for 10 years. The company's revenue doubled due to the growing popularity of tablets in July last year, compared with in 2011. Some 75 per cent of its sales orders were from iPad and Android users. Last year, Chinese e-magazines generated revenue of nearly HK$13 million - triple 2011's revenue of HK$3.1 million. As a paid-only service, Zinio uploads the newest issues of magazines a day before the actual copy comes out, and charges 30 per cent less than the retail price of the latter. “Although Zinio charges a little more than other e-magazine providers, our updated content and efficiency appeals to readers above 40 years old,” Hsu said. “This segment has a higher buying power than younger readers,” he said. Sino United Publishing will also launch a new online book purchasing platform, SuperBookCity, in the hope of expanding its e-book’s market share in the local publishing industry. “We can’t only rely on the traditional reading model,” said Terence Leung, general manager of Sino United. “With the supply from mainstream publishers such as Joint Publishing and Golden Age, our platform will provide over 1,000,000 e-books and print books to readers.” Leung explained that their cloud service allows readers to read content in different systems – be it Android, iOS or Windows – without having to pay every time. Sino is part of the 21 exhibitors who will participate in the book fair’s e-Books and e-Learning Resources Zone. According to the Hong Kong Trade Development Council, more than 1,000 local e-books were published in 2011, and the e-book reading platform launched by the HKTDC boasted more than 18,000 downloads since the end of June. “We saw a 40 per cent sales growth on our Kindle products last year compared with 2011,” said Raven Chan, sales manager of Emotions Technology, which started distributing Kindle for Hong Kong two years ago. The company is looking to enter the China market despite the prevalence of copyright infringement and growing competition from local tablet producers. “Mainland brands like Han Wok and Dang Dang.com are competing on price, but Amazon is not targeting cheap products, which makes Kindle less competitive,” Chan said. Dang Dang.com is one of the largest digital library provider in China, and its recent free e-books downloads service sparked much criticism among book publishers due to copyright concerns. Depending on each reading device, users typically download legal e-book copies through its official website. However, Kindle’s source of e-books is solely from Amazon China, which provides only three million books in Chinese. Users also have to pay for the majority of the content, which makes way for companies like Dang Dang to capitalise on this market. Currently, Dang Dang’s “Dou Can 2” provides more than 10 million digital books for download. In regard to growing concerns over copyright, Leung said the company had collaborated with The Hong Kong Applied Science and Technology Research Institute to implement a digital rights management system for SuperBookCity. “This protects our publishers as readers download the content, and this will also be applied to the Chinese market.” China’s e-publishing scene is heating up, with the industry’s value reached 133.7 billion yuan (HK$168.13 billion) in 2011 and a growing number of traditional publishers going digital. “China e-publishing is potentially a significant market,” said Amy Lau of the Swindon Publishing, which offered e-books reading platforms since March last year. “The production cost is lower, and there is practically no transportation cost.” An unnamed source within China Telecom’s E-surfing Reading subsidiary told the Marbridge Daily that the company will be releasing a touchscreen e-reader device soon. The “Tianyue” device, which will be made by OBook, will be priced at 849 yuan. Earlier this week, Chinese e-reader maker Shanda Cloudary announced in a public release that it has raised about US$110 million (HK$855 million) from Goldman Sachs and Singapore’s sovereign wealth fund, Temasek Holdings. Cloudary filed for an initial public offering (IPO) in the United States more than two years ago, but delayed the share sale because of the volatile market conditions. The book fair, organised by the HKTDC, will run until next Tuesday at the Convention and Exhibition Centre.

Asia demand lifts art market (By Lin Qi linqi@chinadaily.com.cm) Asian buyers accounted for nearly one-quarter of all bidders at Christie's salerooms, with a 15 percent growth in sale registration. The surging appeal of art worldwide keeps attracting established and new collectors, helping Christie's achieve record first-half sales of 2.4 billion pounds ($3.68 billion), up 9 percent year-on-year. During the period, the auction house received bidders from 128 countries, 10 percent of whom were new to auctions. There was strong demand from Asia and China particularly. Asian buyers accounted for nearly one-quarter of all bidders at the firm's global salerooms, with a 15 percent growth in sale registration. The number of Chinese mainland bidders increased 32 percent in Hong Kong and 21 percent in London. The figures provide some encouragement for the slowing Chinese art market, which lost its top rank to the United States last year after two years of phenomenal results. A global art market monitor, the European Fine Art Foundation, said in its 2012 report that the Chinese mainland had a market share of 25 percent, dropping from 30 percent in 2011. The main reasons for the slowdown in the mainland were decreased demand, a reduction of high-quality and high-priced items on the market and the withdrawal of art funds and other investors. "Visits in Asia have grown from last year and seem to be returning to the level that it had experienced prior to last year," said Christie's chief executive officer Steven Murphy in an exclusive phone interview with China Daily. Murphy added that he sees a broad opportunity being built in the Asian market overall, and the Chinese mainland market particularly. Christie's made a breakthrough in enhancing its presence in China in April, when it obtained a license to operate independently on the mainland. Its major rival, Sotheby's, established a joint venture with the State-owned Beijing Gehua Art Co last September. Christie's announced its debut auction in Shanghai, set for September, though it hasn't revealed any details. It is widely speculated that wine, watches, jewelry and contemporary art will be on offer. He said: "We will operate Christie's Shanghai as we operate in Hong Kong, London and New York, with all the things we do, from lectures, to auctions, exhibitions and educational programs." Neither Christie's or Sotheby's sales in the mainland will include cultural relics, which often fetch mind-boggling prices. Murphy said they will operate within whatever laws that the government has laid down, but they also are prepared to do more if rules are changed. "In the meantime, there is plenty to do serving clients in China with contemporary art, Western art, jewelry, watches and wine. Our goal is to build a long-term relationship with many Chinese clients around China," he added. The company will host an inaugural auction in Mumbai in December, making it the only international auction house to conduct sales in India. The expansion of Christie's to Asian markets is not only geographical but also digital. Its online services have been well-received among Chinese collectors. It will hold almost 60 online exclusive auctions this year, including the first two online-only sales of Chinese works of art throughout July. Also, its real-time online bidding platform attracted a large number of Chinese buyers in the first six months of this year. "The hallmark of Christie's strategy is to build the capability to serve both new and existing clients wherever they are, from auction to private sales to online," Murphy said.

 China*:  July 19 2013

China's foreign direct investment (FDI) in June surged 20.12 percent from a year earlier to $14.39 billion, the Ministry of Commerce (MOC) said on Wednesday. The June FDI data did not include overseas fund influx in the banking, securities and insurance sectors, according to MOC. In the first half of 2013, China's FDI totaled $61.98 billion, up 4.9 percent year on year.

Bar street heaven for expats, hell for locals (By Zhou Wenting The 40 bars along Yongkang Road have become popular watering holes for expats in Shanghai, but residents complain that the noise is making their lives unbearable. Expats enjoy a night out on Yongkang Road. Although their licenses stipulate that bars should close at 10 pm, many owners ignore the regulations and stay open much later. Nightlife noise tests residents' tolerance, reports Zhou Wenting in Shanghai. At 9 pm on July 4, a scorching summer day, more than 1,000 Westerners packed into a 5-meter-wide, tree-lined street chatting and laughing as they sipped drinks on Yongkang Road in Shanghai's Xuhui district. The 50-meter-long street, a popular haunt for expatriates and located in the former French concession, is bounded on both sides by old, three-story residential buildings, the first floors of which have been converted into about 40 bars. However, this is proving to be a headache for the locals. The buildings have poor sound insulation and those living on the upper floors have complained about the noise levels for the past year. Some have become so exasperated that they have emptied buckets of water onto the crowds below in an attempt to disperse them. "Entertainment and nightlife are important components of successful cities and conflict between different communities is a natural consequence of a great, rising city that's not only a center for business, but also for fun and culture," said J. T. Singh, a Canadian "urban explorer and city identity expert" who has lived in Shanghai for six months. The city is home to nearly 150,000 foreign permanent residents, a number that seems certain to increase, and some experts believe the problems of integration are like to become fraught unless entertainment districts are specifically designed to minimize conflict between the groups or the locals and expats reach some sort of compromise. Joshua Miller works for a design company in Shanghai. The young Briton said he comes to Yongkang Road regularly after work to grab a beer and talk with friends. "We love this old street. There are traditional grocery stores and shoe shops here and we don't need to dress up like we would if we were going to fancy bars on the Bund. It's very Shanghainese here, people feel comfortable and relaxed," he said. The presence of 200 French nationals in Ming Yuan Century City on Middle Fuxing Road, a high-class neighborhood nearby, inspired five compatriots to open Yongkang Road's first bar, Le Cafe des Stagiaires, in November 2011. Bar street heaven for expats, hell for locals - An influx of foreigners followed and many opened businesses. "We have managers from Australia, France, Italy, Belgium and the United States, Around 90 percent of the bars were opened by foreigners," said Chi Zhihui, general manager of Shanghai Paifeng Yongkang Business Management Co, which works to attract businesses to the area. The revelry usually begins at around 6 pm. As more people arrive, they spill out onto the street, occupying the tables and chairs placed outside each bar. "People come to have a few beers, meet their friends and enjoy a chat. They feel at home here," said Benjamin Blaise, a partner at Le Cafe des Stagiaires. The voices of the patrons were drowned out by the music, forcing them to speak more loudly. Up above, most of the second- and third-floor windows were closed and the ceiling fans were working flat out. Statistics from the local neighborhood committee show that Yongkang Road has more than 5,300 residents - roughly 1,500 of them are aged 60 or older, while 37 are 90 or older. Dozens of mopeds lined both sides of the street, leaving barely enough room for cars to squeeze through. The locals said there used to be two lanes of traffic, but the road is now often blocked by the revelers and their mopeds and residents are driven to distraction by the repeated blaring of car horns. Two inspectors from the neighborhood committee who were patrolling the road said their job is to put the mopeds in orderly rows and to ask people to move when vehicles try to pass. However, their remit does not involve noise pollution or control. The noise continues until midnight most evenings, according to residents, although Chi said the bar licenses stipulate a closing time of 10 pm.

2nd bridge spanning across Hangzhou Bay to be opened (By Xinhua) Photo taken on July 16, 2013 shows the completed Jiashao Bridge which connects Jiaxing and Shaoxing in East China's Zhejiang province. As the second cross-sea bridge spanning across the Hangzhou Bay, the Jiashao Bridge has passed the quality examination and is expected to be opened to traffic on July 19. It will halve the travel time from Shaoxing to East China's Shanghai. 

China's US T-bill holdings hit record in May (By Zhang Yuwei in New York yuweizhang@chinadailyusa.com) America's recovery and continuing woes in Europe cited as reason - China, the biggest creditor to the United States, increased its holdings of US Treasury bonds by 2 percent in May to $1.32 trillion, even as foreign demand for the bonds fell for a second consecutive month, according to the US Treasury. China had increased its holdings of US bonds by 1.6 percent in April, which was revised higher after an initially 0.4 percent drop. Japan, the second-largest buyer, trimmed its holdings 0.2 percent to $1.11 trillion in May. Experts say that the recovering US economy and the continuing European sovereign debt crisis contributed to China's increased purchase of US debt. Guo Feng, a senior economist with Washington-based Institute of International Finance, said that "an improving economy in the US, coupled with the anticipation of the Fed 'tapering' of bond purchases" led to the purchases by foreign investors, including China. Guo predicted that the US will likely post its smallest annual deficit since the financial crisis began in 2008. "In fact, China has been a large and stable source of demand for US Treasuries, which has contributed to its low and stable yields in the past years," Guo said. "Given the recovery in the US and sluggish economic growth in Europe, I expect China to continue to buy US Treasuries in the coming months," he added. US residents increased their holdings of long-term foreign securities, with net purchases of $27.2 billion, while foreign investors decreased their holdings by $39.2 billion, said the Treasury report. The sum total in May of all net foreign acquisitions of long-term securities, short-term US securities, and banking flows was a monthly net of $56.4 billion, said the Treasury Department. Net foreign private inflows were $46.6 billion, and net foreign official inflows were $10 billion. Sohpii Weng, an economist for global research at Standard Chartered Bank in New York, said that the yield on 10-year Treasury notes surged by 49.9 basis points in May, as many speculate on the Federal Reserve's move on "tapering" off its $85 billion-a-month bond-purchase program, or the so called quantitative easing 3. "However, current levels may remain attractive to central banks, which normally have longer-term investment strategies compared to most private investors," said Weng. "Considering that China remains the US' second-biggest trading partner, in context of a US dollar-positive environment with the Federal Reserve expected to start reducing QE later this year, dollar assets like US Treasuries are likely to remain targets for central banks, including China," said Weng. "Emerging-market central banks have appeared to stay defensive in the second quarter, focusing on boosting US dollar and selected Asia excluding Japan allocations amid China's slowdown and given the Fed's tapering prospects," she added. Markets didn't react drastically on Monday when China posted its second quarter growth rate of 7.5 percent - 0.2 percent lower than the first quarter. On Wednesday, Federal Reserve's chief Ben Bernanke will give his semi-annual testimony before Congress, where he is expected to reinforce his previous remarks on "tapering".

Hong Kong*:  July 18 2013

Blind student’s HKDSE results speak volumes for tenacity (By Joyee Chan, Jason Cheng and Johnny Ta) Blind student who reads braille with her lips among high achievers - Tsang Tsz-kwan demonstrates the study technique that saw her star in the HKDSE exams. Tsang Tsz-kwan excelled in this year's Diploma of Secondary Education exams. The student at Ying Wa Girls' College bagged 5** in Chinese, English and liberal studies, 5* in English and Chinese literature and a four in maths. Her results may not compare with those of the nine top-scoring students with seven 5** marks, but then Tsang, 20, has been blind from infancy and hearing-impaired since Primary One. Making her task even more difficult is a lack of sensitivity in her fingers, which means she reads braille with her lips. She could have been exempted from the Chinese and English listening tests, but decided to do them. "I have to accept I'm disadvantaged, but I decided to take the challenge whatever the results as I think the most important thing is the courage to face the challenge," Tsang said. It paid off: she got a four in Chinese listening and 5* in English listening. Tsang wants to study translation at Chinese University of Hong Kong. Most top students are from traditional elite schools. Queen's College in Causeway Bay had two students achieving seven 5**. St Paul's Co-Educational College and Good Hope School each had one student with seven 5**, one of whom received a 5** for mathematics extended, the highest possible score. Two, however, came from low-income families, including Terry Tsz Cho-ho, a student at the Hong Kong Federation of Youth Groups Lee Shau Kee College in Tin Shui Wai. Tsz, who lives on a public housing estate and whose father is a truck driver, hopes his success can inspire other students in the district. "I don't think Tin Shui Wai is a city of sadness," he said of the name attached to the town because of its high rates of unemployment and suicide. "In fact it has a friendly spirit." Tsz has applied to the University of Hong Kong's medical school and wants to be a surgeon. Another top scorer is Tsang Yee-wai, from the CCC Heep Woh College. "My success belongs not only to me, but also to my family, my teachers and my classmates," said the 18-year-old.

Top scorers shy away from Occupy Central (By Shirley Zhao and Staff Reporters - South China Morning Post) Most either oppose the democracy movement or say they've been too busy to find out about it - Top of the class: Erica Wong with her mum Vickie Hui Suk-ching. Terry Tsz. Most of the nine top performers in this year's secondary education examination oppose or do not know much about the Occupy Central movement. "I won't participate in Occupy Central because I heard from my friends that this movement is illegal," said Angel Tsui Yan-kei, 18, the top scorer at Good Hope School. She scored straight 5** for her seven subjects. I won't participate in Occupy Central because I heard from my friends that this movement is illegal. I don't want to be involved in something I don't entirely understand "I don't want to be involved in something I don't entirely understand." The organisers of the Occupy Central movement are planning to hold a mass rally in Central next July 1 to bring the area to a standstill, but details of the civil disobedience protest are still under discussion. "I hope we can have universal suffrage, but any activity that will disrupt Hong Kong's economic activities is unacceptable," said Tsang Ka-hing, 18, from Queen's College. He obtained the school's highest score in his seven subjects. "I don't think I will participate in Occupy Central, because I'll be busy with my schoolwork by then." Four other top scorers from different schools were unwilling to comment on the topic, saying they did not understand the event. One confirmed they would not participate in the protest.

Beijing's top official in Hong Kong hints at screening process for CE candidates (By Lai Ying-kit yingkit.lai@scmp.com) Zhang Xiaoming, director of the cental government’s liaison office in Hong Kong, speaks to lawmakers at a lunch on Tuesday. Lawmakers and members to the central government's liaison office pose for a photo in the Legislative Council before their lunch on Tuesday. A screening process for chief executive candidates will be needed when universal suffrage is introduced in Hong Kong, the central government’s top official in the city hinted on Tuesday. Zhang Xiaoming, the director of the Beijing government’s liaison office, hinted at the possibility of a screening process towards the end of his opening speech at an unprecedented lunch with some 60 Hong Kong lawmakers at the Legislative Council in Admiralty. The lunch is the first time mainland officials have met with lawmakers from all shades of the political spectrum at a formal Legco function. After discussing Hong Kong’s universal suffrage, Zhang brought up the subject of a sieve that he said he had recently received as a gift, and in what was widely perceived as an allusion to the screening of candidates in a chief executive election with universal suffrage, he shared with those in attendance what he saw as the good values of the sieve. “The sieve is a product of our ancestors’ wisdom. There is nothing sinister about it,” he said. “We cannot deny its function.” “Without the sieve, how can we pick the good seeds from the bad ones?” Earlier on in the speech, Zhang said that Beijing was "sincere" on universal suffrage and that it should be in a form that matches with the city’s “actual situation”, complying with decisions made earlier by the central government and with the Basic Law provisions. Zhang spent almost half of his speech on the subject of universal suffrage, although at the beginning he said the issue was not the main item on the day’s agenda. He also said the liaison office would like to make more friends among lawmakers and promote communication with them, such as organising more study tours to the mainland for Legco. After the meeting, pan-democrats said they were disappointed with the hint dropped by Zhang that the chief executive election would need a screening process for candidates. Labour Party chairman Lee Chuek-yan said Zhang’s allusion sents a very bad message to Hong Kong people. “With a screening process, there will not be genuine universal suffrage,” Lee said. Civic Party leader Alan Leong Kar-kit said he would take the allusion made by Zhang as part of a causal chat made during a socialising event. But he stressed that a chief executive election with screening would not help resolve deeply-rooted conflicts in the city. “The best screening process is a vote by several million registered voters in Hong Kong to screen out candidates they do not want,” Leong said. But the city’s largest pro-government and pro-Beijing party said people did not need to link Zhang’s remarks on the sieve to the chief executive election. Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said Zhang had received a prop sieve earlier at the lunch from a legislator and therefore drew his comments from this. “I would see it as humour,” Tam said. “I didn’t feel he was seriously addressing [the issue of screening candidates].” At a media session after the lunch, Zhang also said the central government “firmly objected” to the Occupy Central movement – a campaign by Hong Kong moderate democrats to mobilise 10,000 people to block roads in Central next July to demand “genuine” universal suffrage. “No matter what beautiful words are used to package it. Illegal is illegal,” he said. “If someone is allowed to challenge Hong Kong’s law for political demands, this will create endless trouble and harm young people,” Zhang said.

Smithfield’s China bidders plan Hong Kong IPO after deal: sources (By Reuters in Sinapore) A Hong Kong IPO for a merged Shuanghui-Smithfiled group would allow it to trade in a market that would place a higher valuation on the stock than the US or other exchanges. China’s Shuanghui International, which has agreed to buy US pork producer Smithfield Foods for US$4.7 billion (HK$36.46), plans to list the combined company in Hong Kong after completing the takeover, people with knowledge of the matter said. A Hong Kong IPO, valued at around US$4 billion, would allow the merged group to trade in a market that would place a higher valuation on the stock than the US or other exchanges, the sources said. Hong Kong is a far bigger and more international stock market than Shenzhen, the Chinese exchange where Shuanghui’s main publicly traded subsidiary is listed. A Hong Kong listing would also offer an ideal exit route for Shuanghui’s private equity investors, which includes Goldman Sachs and New Horizons, when they decide to sell their holdings, according to the people familiar with the matter. New Horizons is the private equity firm founded by Winston Wen, the son of China’s ex-Premier Wen Jiabao. Shuanghui could also use the proceeds to pay down some of the debt, people familiar said. Bank of China and Morgan Stanley have combined to provide US$7 billion of loans to finance Shuanghui International’s record deal to buy the US pork producer. The total value of the Chinese company’s record agreement was US$7.1 billion, including net debt. The Smithfield deal has yet to close, the sources cautioned, and plans on what happens after the takeover would only be finalised upon the completion of the deal. Hong Kong stock exchange rules require one year of ownership before a merged entity can list. Shuanghui could not immediately be reached for comment. Virginia-based Smithfield is the world’s biggest hog producer and a major exporter to China. Smithfield was under pressure from its top shareholder to break up the company when it announced, on May 30, the Shuanghui takeover offer. US politicians immediately expressed concern about a Chinese company buying a Virginia food producer, though Shuanghui has promised to keep the Smithfield operation intact. The deal, the largest ever by a Chinese company into the United States, would allow Shuanghui to directly sell Smithfield pork products across China to meet the country’s huge demand for the product. Should Shuanghui complete the transaction, Smithfield would be de-listed from the New York Stock Exchange. The people familiar with the matter said the combined Smithfield-Shuanghui operation is being valued at around US$20 billion, meaning an IPO of around 20 per cent of the group would be worth around US$4 billion. The main rationale behind a Hong Kong IPO is higher value the merged entity would command, the people familiar said. Smithfield Foods trades at 12.7 times forward 12-month earnings, far below an average 16.8 times for the US-listed food products companies, according to data from Thomson Reuters StarMine. Similar companies in Hong Kong trade at 18.2 times, the data show. Shuanghui International is an offshore holding company, whose main asset is a 73.26 per cent stake held directly and indirectly in Shenzhen-listed Henan Shuanghui Investment & Development, China’s largest meat processing company. Henan Shuanghui had a market value of US$15.3 billion based on Monday’s close. Singapore state investor Temasek Holdings is also an investor in Shuanghui. Shuanghui’s acquisition of Smithfield, which has more than 46,000 employees in 25 states and four countries, faces a few more steps before it becomes final, including the need to smooth over political concerns that it would hurt US food safety, and raise prices for American consumers. Smithfield President and chief executive Larry Pope last week faced questions from US senators concerned about the long-term impact of the deal, and told them that the firm was not going to change.

 China*:  July 18 2013

Photo taken on July 14, 2013 shows the first generator unit in Xiluodu hydropower station, which is located on the lower reach of Jinsha River between Leibo county of Sichuan Province and Yongshan county of Yunnan Province, both in southwest China. The first generator unit "13F" went into formal operation on Monday after a three-day trial. The hydropower plant will be the second largest one ranking only second to the Three Gorges when all of its 18 units go into operation in 2014.

Hong Kong*:  July 17 2013

Why is it so hard to find cheap air tickets in Hong Kong? (By Tiffany Ap tiffany.ap@scmp.com) Don't be deceived by the headlines - Hong Kong lags far behind the rest of Asia in offering discount travel. You can blame the city's airport - “For sure, one of the best things about living in Singapore is how easy it is to get a cheap flight,” says Alessandra Chu, a Hongkonger who moved to Singapore three years ago for work as a graphic designer. In February, Chu found a deal to go to Australia’s Gold Coast flying Scoot airline for HK$3,300. She says her new home’s strength as a budget travel hub lets her take holidays she could not afford had she stayed in Hong Kong. “They say Hong Kong is Asia’s world city but in terms of inexpensive flights, then Singapore or even Kuala Lumpur or Bangkok trumps it by a long shot,” she says. If you followed the recent headlines, you might believe that Hong Kong is a kind of budget-travel mecca. Last week, Hong Kong Express Airways announced plans to turn into a low-cost carrier, promising a 30 per cent discount on the cheapest fares in the market. This follows Jetstar’s decision to start operating out of the city later this year. The Jetstar service will open up more discount Hong Kong flights to mainland China, Japan and Southeast Asia. Hong Kong Express will offer cheap flights to mainland China and Malaysia. Elsewhere, AirAsia, the dominant budget airline serving Hong Kong, earlier in the month listed its long-haul subsidiary AirAsia X, raising funds for expansion. But don’t be fooled. Budget airlines have a tough time in Hong Kong, which is why many local travellers find this service patchy. The discount airlines only serve a handful of destinations out of Hong Kong. Hong Kong’s problem can be summed up thus: no secondary airport. If you fly into this city, you have to use Hong Kong International Airport, which involves expensive landing fees. Moreover, the airport does not give any discount on landing fees to budget airlines, unlike, for example, Singapore. As a result, Hong Kong has lagged far behind cities such as Singapore and Kuala Lumpur. With no secondary airport, airlines are faced with expensive landing fees at Chek Lap Kok and competition for slots is tight. Boyong Liu, a Jefferies aviation analyst, says the penetration of low-cost carriers in Hong Kong is 5 per cent, compared to 40 per cent in Singapore. “Low-cost carriers have a very high cost base [in Hong Kong] than if they use other airports as hubs. Kuala Lumpur and Singapore are a lot more supportive and provide lower fees for low-cost carriers,” says Liu. While landing and parking fees usually comprise no more than 10 per cent of an airline’s costs, Vinay Bhaskara of consultancy Aspire Aviation says: “We are talking about a business that has tiny profit margins so even a few per cent can affect the bottom line.” Bhaskara also says Hong Kong has a travel mix that skews heavily towards business travellers. Moreover, Cathay Pacific Airways is a formidable contender. “They’ve done a very good job of using Dragonair to offer reasonable pricing on regional, leisure-heavy routes that you’d typically see low-cost carriers picking up,” he says. “[If you are a budget carrier] when you come into Hong Kong, you know you’re going to come up against this 800-pound gorilla. They are very willing to price aggressively.” Cathay Pacific caused a stir in October last year when it started offering “fanfares” – cheap promotional flights that go on sale every Tuesday. Destinations as far away as Paris, Chicago and Vancouver are a fraction of what they usually cost and the most popular fares sell out within minutes. A trip to Milan is advertised at HK$2,790, Taipei at HK$890 and Yangon is HK$1,290. Liu says: “Hong Kong Express and Jetstar Hong Kong both have Chinese backgrounds so it is reasonable for them to test low-cost carriers in Hong Kong. But overall, I still think it is a difficult market for the foreseeable future.” Already, plans for Jetstar seem to have stalled. The launch date has been pushed back several times and it looks like it may not meet its deadline for this year. It also reduced the number of Airbus A320 planes it will fly to two instead of the three it declared at the outset. It brings back not too distant memories of the difficulties experienced by Oasis Hong Kong Airlines, a budget carrier that operated out of Hong Kong before going bankrupt in 2008. “I think they were not a low-cost airline,” says Kathleen Tan, Expedia Asia chief executive. “A true low-cost airline focuses on really low cost using the internet model. Oasis used distribution channels like travel agents [instead of the internet] and hired a lot of airline staff from full-service carriers so the pay was high.” Moreover, Oasis offered a long-haul service (to Vancouver and London), which does not suit the budget model. Fuel costs are a big component of the expense of flying long distances. All airlines pay about the same for fuel, which means the more fuel consumed, the less room the budget airlines have to discount the prices of their competitors. Oasis had another big disadvantage. It was based in Hong Kong.

Incoming West Kowloon museum curator vows to be 'politically incorrect' (By Vivienne Chow vivienne.chow@scmp.com) Incoming museum supremo vows to push back against those who would neuter provocative art - Doryun Chong brings heavyweight experience to his job in West Kowloon, and says even 'dangerous' art has a place there. Censorship has no place in at ideas places like venues such as museums, which should stimulate people to think for themselves, says a top New York curator who is due to join Hong Kong’s West Kowloon Cultural District’s visual culture museum. Korean-born Doryun Chong, currently an associate curator at the Museum of Modern Art (MoMA) in New York, who will join M+ as chief curator, and says he will not succumb to pressure from politicians warning the visual culture museum not to confuse art and politics. A museum should be a place where a variety of ideas can be provoked and discussed, even ideas that are perceived as dangerous. Art is not just pleasure for your eyes. Your conscience changes through experiencing art] “If I were to say yes, [M+] should withdraw the offer,” said the award-winning 40-year-old curator, in response to much criticised remarks by pro-Beijing lawmaker Chan Kam-lam ‘s at the Legislative Council. “A museum should be a place where a variety of ideas can be provoked and discussed, even ideas that are perceived as dangerous,” he said. “Art is not just pleasure for your eyes. Your conscience changes through experiencing art].” Chong’s appointment as M+’s chief curator was announced yesterday, after a search to fill the position that has taken nearly three years.Rumour had it that Museum of Contemporary Art Tokyo’s chief curator, Yuko Hasegawa, formerly a former board member of the West Kowloon Cultural District, had once been tipped for the job. Hong Kong talents are simply out of the question as few have had prolonged experience of working at world-class cultural institutions or museums. A “talented” curator, according to The New Yorker, Chong moved to the US when he was 18 and studied art history at the University of California at Berkeley. He took a post at the Asian Art Museum of San Francisco in 1999 and worked at the Walker Art Centre’s visual arts department in Minneapolis for six years before moving to MoMA. He also co-ordinated the South Korean Pavilion at the Venice Biennale in 2001. Chong has dealt with Asian contemporary art constantly throughout his career in the US, including the acclaimed exhibition “Tokyo 1955-1970: A New Avant-Garde” at MoMA last year. Mainland artist Song Dong mentioned Chong in his “36 Calendars” exhibition earlier this year, saying that Chong he knew a lot of Chinese characters and praising him for his interpretation of the work of French-Chinese avant-garde artist Huang Yong-ping, which earned him the inaugural Independent Vision Award from art body Independent Curators International in 2010. Chong said the vision behind M+ was in line with his own practice. “[It] is meant to be an … international and cosmopolitan institution, while never losing sight of its rootedness,” he said. “I think of the region and all the countries in different realities, Korea, Taiwan, Hong Kong or China in comparative sense, the connections and the differences.” Despite working at the painting and sculpture department at MoMA, Chong said he was receptive towards various forms of visual culture ranging from visual arts to performance and moving image. In response to localism criticisms against West Kowloon appointments, Chong said he was “not completely ignorant” about Hong Kong. As a matter of fact, he grew up with Hong Kong popular culture in the 1980s, particularly Hong Kong cinema because of the South Korean internal conflicts with cultural imports from America, Japan and communism. “Hong Kong cinema was this vision of popular culture, an advanced culture,” said Chong, who liked a range of films from John Woo’s A Better Tomorrow to Wong Kar-wai’s early films and Infernal Affairs. Chong will take up the position in the second half of September. He said familiarising himself with the community and the public will be his priority.

'Strategic' new town Hung Shui Kiu picked as data hub (By Joyce Ng joyce.ng@scmp.com) With 60,000 homes, Hung Shui Kiu site is also earmarked as logistics and technology base, but 1,400 village households will have to be cleared - Blocks in Tin Shui Wai across from land designated for a new town in Hung Shui Kiu, where 60,000 homes are planned. An 826-hectare plain bordering Tin Shui Wai has been earmarked for a "strategic" new town that will yield 60,000 homes, serve as a logistics hub and connect Hong Kong with Shenzhen. But the project, at Hung Shui Kiu in the northwest New Territories, is expected to encounter similar opposition to that facing another newly announced scheme in the northeast as about 1,400 village households will have to be displaced. We think Hung Shui Kiu has a strategic role to play in Hong Kong's development. It will be a major source of the city's mid-term housing supply. It is also close to Qianhai - "We think Hung Shui Kiu has a strategic role to play in Hong Kong's development. It will be a major source of the city's mid-term housing supply," a Development Bureau official said when releasing the blueprint yesterday. "It is also close to Qianhai," he said, referring to the mainland special economic zone in Shenzhen. The blueprint, now up for a second round of public consultation, divides Hung Shui Kiu into several theme areas, including a 62-hectare site for logistics facilities and a 10-hectare site for information technology including data centre uses. The town will yield 60,000 flats, half of them public housing, with the first batch ready in 2024. The number of flats is almost the same as the dual-town project being planned in Fanling North and Kwu Tung North in the northeast New Territories, that now faces vehement opposition from villagers and activists. It is also equivalent to five times the number of flats in Taikoo Shing. A quarter of Hung Shui Kiu is now used as open-air storage for cargo containers. The official said multi-storey blocks would be built on the logistics area to save space and provide a range of services. The future town will have a new West Rail station to connect it to the city centre and a road to link with the Kong Sham Western Highway that leads to Shenzhen. Areas around the railway station will be for commercial use with building heights up to 40 storeys. The official said compensation would be an issue before the land was ready for development. While 20 indigenous villages would be preserved, five out of the nine non-indigenous villages would be cleared. "We have tried to keep as many villages as possible. But the five are located in the future town centre. We need to strike a balance," the official said. A preliminary survey found 1,400 squatter huts in those five villages, but the exact number of residents is not known yet. Albert Lai Kwong-tak, of the Professional Commons lobby group, said it was a good concept to develop the town into a logistics centre that would give residents jobs, but the government should also come up with an economic policy to match the land available. He called for timely compensation for villagers.

Hong Kong to lift controls on baby formula: expert (By Jin Zhu) A dairy industry expert said on Sunday that Hong Kong is likely to lift its monthslong restriction on baby formula exports in October as scheduled. Wang Dingmian, former vice-chairman of the Guangdong Dairy Industry Association, said lifting the ban is in the interest of both Hong Kong businesses and Chinese mainland residents. "Hong Kong probably will lift the limit soon, and one of the major reasons is that the ban has triggered concern from the mainland that it is a form of discrimination," Wang said. The Hong Kong Special Administrative Region's government also needs to consider the interests of the city's milk dealers, whose businesses have suffered over the past few months because of the limit, he said. Ko Wing-man, Hong Kong's secretary for food and health, said on Saturday that the government will determine in October whether milk suppliers can ensure an adequate supply for Hong Kong residents. Ko was quoted by Xinhua News Agency as saying that if milk suppliers can show they can meet the city's need, the Hong Kong government will abolish the restriction on milk powder purchases. The restriction, which went into effect on March 1, bans people 16 and older from carrying more than two cans of infant milk formula, or 1.8 kilograms in total, out of Hong Kong without prior approval. Offenders face a fine of up to HK$500,000 ($64,444) and two years in jail, it said. The restriction came after many Hong Kong residents expressed outrage this year when mainland travelers bought up large amounts of baby formula, making supplies in the city scarce. Hong Kong formula is sought after by mainland residents who have been worried about food safety since the melamine-tainted milk scandal in 2008. At least six children died from drinking powdered milk laced with melamine, an industrial chemical added to milk to give misleadingly high protein readings. In the first two days of the ban in March, 45 people, including both Hong Kong and mainland residents and one foreign-passport holder, were detained, and more than 178 tins of milk powder were seized, according to the Hong Kong Security Bureau. Hong Kong's milk powder supply has been stable since the government launched the baby formula export limit, Ko said. The government has set up a committee to work with industry insiders and people in other related sectors to improve the local supply chain of milk powder products, he added. Ko said in late March that the government will consider abolishing restrictions on milk powder exports only if milk suppliers could improve the resupply system, add reordering services at retail stores, allow the public to order formula in small pharmacies, add to supplies, and ensure sufficient manpower in the milk-powder industry to cope with the demand. "The government's test will focus on how to ensure Hong Kong residents can buy such products whenever they need them, especially during peak demand, such as around Chinese New Year and Golden Week holidays, when many mainland shoppers stream into Hong Kong," said Wang, the dairy industry expert.

Reproduction of 'Sunflowers' displayed in Hong Kong (China Daily) Shoppers walk down stairs featuring a five-metre-high reproduction of Vincent van Gogh's signature painting "Sunflowers", at the entrance to Ocean Terminal in Hong Kong July 15, 2013. A premium three-dimensional reproduction of works of Van Gogh, the RELIEVO collection, approved by the curators of the Van Gogh Museum in Amsterdam, is on display at a gallery inside Harbour City shopping mall attached to the terminal. Axel Ruger (L), director of the Van Gogh Museum, and Vincent Willem van Gogh, the great-grandson of Vincent van Gogh's brother Theo van Gogh, pose in front of stairs featuring a five-metre-high reproduction of Vincent van Gogh's signature painting "Sunflowers", at the entrance to Ocean Terminal in Hong Kong July 15, 2013. A premium three-dimensional reproduction of works of Van Gogh, the RELIEVO collection, approved by the curators of the Van Gogh Museum in Amsterdam, is on display at a gallery inside Harbour City shopping mall attached to the terminal. 

 China*:  July 17 2013

Low-cost Chinese airlines target expansion in Taiwan (By Ralph Jennings in Taipei) Budget airlines see opportunity for expansion in Taiwan, where demand for flights to the mainland is strong and airfares are high - Spring Airlines expects traffic between Taiwan and the mainland to become double that of China-South Korea routes. Two mainland budget airlines have expressed interest in starting flights to and from Taiwan, a welcome first for the island where businesspeople complain of high fares owing to strong demand for major routes. Spring Airlines and Juneyao Airlines, both discount carriers based in Shanghai, aim to begin flying to Taiwan, a boom market for mainland carriers since 2008 when the first scheduled direct flights began transporting eager investors and tourists, aviation officials in Taiwan say. Airfares could drop from the average Shanghai-Taiwan round-trip price of NT$15,000 (HK$3,859) to less than NT$10,000, analysts say. Budget carriers in China normally charge 30 per cent less than the market rate because they do not provide food, entertainment or duty-free shopping during flights. "They would have a market here," said Tina Chen, an aviation analyst with SinoPac Securities in Taipei. "The most common passengers are businesspeople, and they are most concerned with safety and being on time." Taiwan and the mainland, after six decades of political hostilities, set aside their differences in 2008 and for the first time began allowing each other's airlines to operate regular direct flights en masse, sparing businesspeople costly stopovers in Hong Kong or Macau. Those direct flights, which now total 616 a week, have also brought millions of mainland tourists to Taiwan following a separate agreement signed in 2008. But Taiwan lacks a budget airline, which is not unusual for China, where discount carriers account for less than 10 per cent of all flights, said Eric Lin, a transport analyst with UBS Securities in Hong Kong. Low-cost carriers account for about 20 per cent of flights in Asia as a whole. Hong Kong also lags in offering discount seats and Hong Kong Express aims to reposition itself as a low-cost carrier by September. Meanwhile, three investors, including Qantas and China Eastern Airlines, are applying to start a new discount carrier called Jetstar Hong Kong. Qantas expects to receive approval by the end of the year. In Taiwan, passengers complain of cross-strait airfares equal to those for destinations twice as far away. Demand for travel to the mainland's top-tier cities, such as Beijing, Shanghai and Guangzhou, allows airlines to keep fares high. Despite periodic increases in the number of flights, newer ones do not ease demand because they often connect Taiwan with mainland cities that are less popular with businesspeople and are smaller markets for outbound tourism. "Demand has been there for decades. Everyone wants to fly direct, but the supply is not enough," Lin said. "Newly added flights are to secondary cities, however, so demand remains high." Mainland aviation authorities tightly regulate fares for domestic, state airlines like Air China, China Eastern and China Southern. In Taiwan, local airlines' normal fares have long been considered affordable, limiting demand for discount services. Nine-year-old Spring Airlines, known for flight attendants dressed as maids and butlers, has Taiwan on its radar as it sees traffic to and from the mainland doubling that of China-South Korea routes, said airline spokesman Zhang Wuan. "Cross-strait, for airlines, is a big market," Zhang said. "We have a lot of expectations for Taiwan." Zhang declined to estimate his airline's mainland-Taiwan airfares or say when it would formally apply to start flights. Juneyao Airlines could not be reached for comment. Expect a few bumps, analysts warn. While Taiwanese businesspeople and backpackers might choose a mainland discount airline, Chen said, conservative mainstream Taiwanese travellers would be more likely to use a trusted domestic airline despite higher prices. The Taipei Airlines Association would not say whether local airlines would oppose entry by a low-cost mainland carrier. But the island's Civil Aeronautics Administration has indicated a likely all-clear. "If they applied, we wouldn't oppose it," an administration spokesman said.

China sends experimental orbiter into space (Xinhua) China successfully sent the experimental orbiter into space on Monday, the Jiuquan Satellite Launch Center has announced.

Japan seeks to 'nationalize' islands (By By ZHANG YUNBI) With an Upper House election looming this weekend, the Japanese cabinet plans to strengthen territorial claims on hundreds of remote islands in the East China Sea, observers said. Tokyo will "nationalize" some islands that have no private owners shortly after a survey of islands is completed in 2014, leading Japanese newspaper Yomiuri Shimbun quoted an unnamed government source as saying on Monday. The Japanese government plans to establish a task force to research the ownership and names of around 400 islands, a move described by Agence France-Presse as an attempt to bolster Japan's territorial claims. The latest move is designed to establish more reference points in territorial waters, and if the islands' ownership is unclear, the government will officially name and nationalize them, the newspaper reported. Wu Hui, an international law expert at the University of International Relations in Beijing, said if part of these islands falls into the scope of territorial disputes, other countries may lodge serious protests. "Moreover, a unilateral move to nationalize islands will raise questions over the legitimacy of such a move." China-Japan relations were greatly damaged after Tokyo illegally nationalized part of China's Diaoyu Islands in the East China Sea in September. As far as Tokyo is concerned, nationalizing controversial remote islands is part of legislative preparations for further claims, Wu said. The island survey was announced shortly after the Japanese defense authorities indicated that they may "guard and retake" remote islands, analysts said. The Japanese Defense Ministry is proposing "boosting the marine functions of the Self-Defense Forces" in its interim report for a planned revision of the country's long-term defense policy, Japan's Kyodo News Agency reported on Sunday. The move underscores the importance attached by the ministry to strengthening the Self-Defense Forces' ability to defend remote islands, Kyodo said. Li Guoqiang, deputy director of the Center for Chinese Borderland History and Geography at the Chinese Academy of Social Sciences, said, "Tokyo is now attempting greater control of maritime areas in order to give it an advantage in territorial disputes. "Japan is seeking to be a political and military power with its moves on maritime disputes and its so-called measures to secure maritime interests," Li said. In mid-June, the Japanese armed forces participated in a joint military drill with the US Army, which involved the simulated retaking an airport occupied by an "enemy". These moves highlight Tokyo's "desperation" to defend and retake remote islands at an early date, said major Japanese newspaper Asahi Shimbun. Japanese Prime Minister Shinzo Abe is expected to visit Okinawa Prefecture in the southwest of the country on Tuesday. The trip seems to demonstrate his determination to enhance the defense of remote islands amid the flaring up of tension with China, Japan's Sankei Shimbun newspaper said. "It is rare for a prime minister to visit remote islands during an election campaign," Japan's Jiji Press News Agency commented.

Hong Kong*:  July 16 2013

Exco member asks if one man, one vote applies (By Stuart Lau and Phila Siu) But pro-democracy leader insists it does, calling for more discussion to find right path for 2017 - Four executive councillors weighed in on the democracy debate over the weekend, with one questioning whether "one man, one vote" should apply to the 2017 poll for the city's top job. The remark, from Jeffrey Lam Kin-fung, drew immediate criticism from University of Hong Kong law professor Benny Tai Yiu-ting, one of the organisers of Occupy Central, a movement to demand full democracy. But Tai called on Beijing to sit down with both sides of politics to find the right electoral path for the city. Universal suffrage in the 2017 chief executive election was guaranteed in 2007 by Beijing. Lam's remarks come two days before Beijing's liaison office chief Zhang Xiaoming is due to appear at an unprecedented lunch with Legco members. Speaking on an RTHK programme yesterday, Lam, also a Business and Professionals Alliance lawmaker, said: "Changes are needed. But does it necessarily have to be your proposal? … The most important thing is that it is a step forward. "A lot of people are saying that it is not universal suffrage if it is not 'one person, one vote'. I don't want to argue [but] it is not 'one person, one vote' in the United States," Lam said, adding this was also not the case in Britain and Germany. As to whether it should be "one person, one vote" or expanding the existing system, he said it should be discussed. But Tai disagreed, saying the United Nations rules required all voters to have equal participation in a poll for it to be universal suffrage. He added: "Everyone, including the pan-democrats, [should] have further discussions with the pro-establishment camp and Beijing." And in response to Exco member Bernard Chan's suggestion on Saturday that the consultation begin within six months, Tai said that could mean a proposal might be on the table by July next year - when Occupy Central will take to the streets if it is not satisfied with the plan. Also on Saturday, Exco member Fanny Law Fan Chiu-fun said a proposal from the Alliance for True Democracy "extended the Basic Law too far". The alliance was seeking nomination by petition, which would allow any candidate who garnered signatures from 2 per cent of eligible voters to be endorsed by the nominating committee to run for office. Yesterday, Tai defended the plan, saying the Basic Law had "great scope for interpretation". Meanwhile, Starry Lee Wai-king, of the Democratic Alliance for the Betterment and Progress of Hong Kong, warned yesterday of the "great social repercussions" should the government fail to deliver universal suffrage. Separately, Basic Law Institute chairman Alan Hoo also put forward their proposal for 2017.

Fears golf will suffer if Fanling course is redeveloped for housing in Hong Kong (By Alvin Sallay alvin.sallay@scmp.com) Golf leaders say if the land in the New Territories is redeveloped for housing, the sport - and the Hong Kong Open tournament - will suffer - The Hong Kong Golf Club's site at Fanling is a three-course, 170-hectare facility. The Old Course at Fanling was created in 1911. Local golf may have a bleak future and the Hong Kong Open professional tournament is at risk if the courses at Fanling are lost to new-town development, say leaders of the sport in the city. William Chung Pui-lam, president of the Hong Kong Golf Association, said growth of the game - recently made an Olympic sport - would suffer if the Hong Kong Golf Club's three-course, 170-hectare facility at Fanling were lost to housing. "Any disruption would certainly have a detrimental effect [on the development of the game in Hong Kong]," he said. Chung is the first senior golf official to comment on suggestions that the club's land in the northeastern New Territories be redeveloped for housing. Chung, a member of the club, was last month re-elected for a second stint as president of the association. He refused to comment on the future of the open, but said support from golf clubs was vital for the growth of the game. The Hong Kong Golf Club has refused to comment, but will address the issue at a committee meeting on Monday. "We are currently reviewing all the information and will be making a formal statement soon," said general manager Keith Williams. Members said the future of the Fanling site was a "very sensitive issue", a "huge concern" and potentially "a devastating blow". Golf commentator Dominique Boulet, a former Hong Kong representative and a member of the club for almost 30 years, said: "If we lost the Hong Kong Golf Club, I'm not sure I would live here any more." One club member questioned the government's motives, saying: "There are other tracts of land available." He said he hoped "cooler heads will prevail". Another long-time golfer said: "It would be a devastating blow to the Hong Kong Open if we lost the Hong Kong Golf Club. This tournament is the oldest open in Asia to have been played continuously at one venue [Fanling] … just imagine if we lost it." The club's lease on the Fanling site expires in 2020, but the government can reclaim the land by giving 12 months' notice. The club was founded in 1889 in Happy Valley and the Old Course was created in Fanling in 1911. It is the second-oldest course in the world outside Britain, after the Royal Calcutta Golf Club's course in India. Reports that a compromise could be reached in which the Hong Kong Golf Club would give up a section of Fanling - most likely the Old Course - have not been confirmed. "I have not heard anything about giving up one of the courses as a compromise," Chung said. There are 90 golfers in Hong Kong's international team who use the courses at Fanling to train and play. Hong Kong coach Brad Schadewitz said: "We need more golf facilities and not less. If we lose the facilities at Fanling, it will have a major impact on the game. "This is the case in any sport, but more so in golf, simply because there are so few courses." The association has around 16,000 members on a handicap, and there are thousands more who don't have a handicap but play the game. Hong Kong has four private golf clubs - the Hong Kong Golf Club, the Clearwater Bay Golf & Country Club, the Discovery Bay Golf Club and the Shek O Golf & Country Club. There is one public course at Kau Sai Chau, off Sai Kung. Hong Kong has 688 hectares of golf courses, less than half of Singapore's 1,500 hectares, which are spread over 18 courses.

Hong Kong singer, 11, wins top prize at prestigious competition in Wales (By Lana Lam lana.lam@scmp.com) Ella Ng takes solo prize at Eisteddfod in Wales where stars including Pavarotti performed - Ella Ng, who won top prize at a singing competition in Wales that has helped to launch the careers of many international stars over the years. An 11-year-old singer from Hong Kong has wowed the judges at a prestigious singing competition in Wales - the same contest that launched the career of late opera superstar Luciano Pavarotti. Ella Ng won the solo vocal category for under-12s with her performance of the hymn A Clare Benediction by John Rutter. Italian tenor Pavarotti was 19 when he entered the Llangollen International Musical Eisteddfod in 1955 and sang with his father in the male choir, which won its section that year. "I joked to my dad and said, 'Next time, you're coming with me so I can follow in Pavarotti's footsteps,'" Ng said yesterday, just hours after returning from Wales. Ng's mother, Flora, accompanied her to the festival, but her father, Mat, wasn't able to attend due to work commitments. After Ng's winning performance, members of the audience asked her for her autograph and she met a woman who said she had been moved to tears by her voice. "It made me feel very special when she said that to me, because I didn't think I could do that yet," Ng said. Others who have gone on to global stardom after appearing at the Eisteddfod include Placido Domingo, Kiri Te Kanawa, José Carreras, Katherine Jenkins, Elaine Paige, Michael Ball and Montserrat Caballé. Ng very nearly missed her spot in the finals, because she found out about the renowned competition only the day before entries closed. Competitors must send a recording of a performance to the judges, who select finalists to perform at the festival. So with just hours to learn a new song and record it, Ng and her vocal teacher of seven years, Jeffie Leung, mastered A Clare Benediction. "She sings with passion and is very expressive," Leung said, adding that on stage, the youngster exuded confidence beyond her years. Ng, currently studying in Australia, said that during her performance in Wales, her mother was more nervous than she was. "For me, it's not scary on stage because I'm focused on enjoying the song," she said. "But my mum, who was watching me, was nervous for me. "I feel happy and relaxed on stage, and I love performing because I can show the audience something and give them a feeling." Brian Hughes, one of the festival judges and former choirmaster and head of opera at the Royal Northern College of Music in Manchester, said Ng's control of her voice made her performance stand out. "She is very musical and I would just hope she keeps away from pop music and concentrates on the classical," he said. That won't be much of a problem for Ng, who says she rarely listens to pop and that musicals and melodies are her passion. "I just have a better feeling about classical music and the style means I can do more with my voice," she said. Ng added that despite classical music's reputation as an art form for older people, it was for all ages. "There are different kinds of classical music and some songs can be great for babies, actually," she said.

 China*:  July 16 2013

China naval fleet seen sailing through Soya Strait off northern Japan (By Agence France-Presse in Tokyo) Chinese naval ships join in drills with Russian warships at Peter the Great Bay, Russia, on July 9. A Chinese naval fleet was on Sunday spotted sailing for the first time through an international strait between northern Japan and Russia’s far east, the Japanese defence ministry said. The two missile destroyers, two frigates and a supply ship passed through the Soya Strait from the Sea of Japan to the Sea of Okhotsk early on Sunday, the ministry said. The channel, also known as La Perouse, separates the Russian island of Sakhalin and the northernmost Japanese island of Hokkaido. Commanders of Chinese naval fleet take part in joint exercises with Russian ships on July 9. The five ships took part in joint naval exercises with Russia from July 5-12 off Vladivostok. Two other Chinese naval ships which also took part in the drills were seen moving into the East China Sea on Saturday. The purpose of the Chinese fleet’s passage through the Soya Strait is not known, Kyodo news agency quoted a ministry official as saying. On Saturday a fleet of 16 Russian naval ships was seen moving through the Soya Strait into the Sea of Okhotsk, the ministry said. China and Russia held the joint naval exercises – their second such drill – amid regional concerns about China’s growing maritime power. Tensions have been growing over China’s island disputes with Japan and other neighbours. Chinese government surveillance ships have frequently approached the Tokyo-controlled Senkaku islands in the East China Sea, which are also claimed by China as the Diaoyus, since Japan nationalised some of them last September. Chinese army chief of general staff General Fang Fenghui earlier said the joint drills were “not targeting any third party”, according to the official Chinese Xinhua news agency.

Villagers angry at losing Jiangmen uranium plant deal (Minnie Chan in Jiangmen minnie.chan@scmp.com) Residents who stood to gain from relocation, compensation for processing plant project angry that protesters in Jiangmen won the day - Villagers in Heshan's Lianzhu, the village that was planned to move out for giving way for the controversial uranium processing plant, said they are disappointed with the scrap decision. Far from the jubilant crowds in downtown Jiangmen, the decision to cancel a proposed uranium-processing plant was met with dismay in the remote farming village of Lianzhu. Villagers there, who were slated to be compensated and relocated to make way for the 37 billion yuan (HK$46.4 billion) facility, suddenly found their hopes for a better life dashed. "I can't believe that we have had nothing again," one elderly villager told the Sunday Morning Post yesterday. "I almost got all the [relocation] money, but now we have to hand all of it back." Just a week ago, villagers had expressed optimism over the proposed China National Nuclear Corporation project. Some 160 villages from 48 households had signed an agreement to participate in the local government's relocation plan. The 229-hectare plant would have affected 13 villages, with Lianzhu providing most of the key land. Apart from an up-front payment of 220,000 yuan to be distributed among the families, villagers were expected to receive construction subsidies and farmland compensation and be moved to a new site the same size as their current village near their town government headquarters. "It's a good deal for all the villagers," said an official from Zhishan town, which overseas the village. "The compensation plan had been made between the county government and 12 representatives for the 160 villagers." Many villagers said they could not understand the opposition from protesters in Jiangmen, about 30 kilometres away. Some thought the protesters were exaggerating the risks. "[They] do not understand the details of the uranium-processing plant very well," one villager said. "It's a pity that our government was forced to give up such a good project." In Jiangmen, however, protesters said the villagers were too focused on the compensation to see the downside. "They are just farmers; they do not have enough knowledge and awareness about nuclear crises," said Wu Bocheng, who took part in Friday's protest rallies. "The villagers just care about how much compensation they will receive. They don't have any long-term planning and social responsibilities, but we do." However, Tsai Wen-chin, a Taiwanese businessman who signed a 50-year lease with the local government for 20 hectares of Lianzhu farmland in 1998, was indifferent about the outcome. "My lease still has 35 years and I can keep on growing fruit trees, raise pigs and fish." In April, the Jiangmen municipal government announced an industrial zone was set up in Heshan, without providing details. Residents only realised the project's nature on July 4, after the authorities posted a 10-day public consultation statement.

Lou cautions of risks linked to Fed's plan (By JOSEPH BORIS) China's Finance Minister Lou Jiwei cautioned the US Federal Reserve to beware of risks to the global financial system after the Fed said that it may quit its quantitative easing policy. Lou said that China supports the plan but takes no position on when it should be implemented. Chinese Vice-Premier Wang Yang (left) and US Secretary of the Treasury Jack Lew wait for a roundtable meeting during the 5th China-US Strategic and Economic Dialogue at the US Department of the Treasury on Thursday in Washington. "We support the considerations of the Fed of its QE exit, but we should pay high attention to the impact of the policy on the international financial system and properly handle the timing, tempo and intensity of its QE monetary-policy exit while guarding against the possible financial risks," Lou told reporters on Thursday during the fifth China-US Strategic and Economic Dialogue in Washington. "The monetary policy of the United States does not exert impact only on itself, but also has a spillover effect on the global economy," he said. The minister said China's leadership supports plans by the Fed to end its bond-buying policy known as quantitative easing, or QE, as conditions allow. He also expressed Beijing's view that although the Fed will abandon the QE policy "sooner or later", the Chinese government would find it difficult "to make a specific comment" on the timing. "But if measured by the unemployment rate (in the US), which is 7.6 percent, probably it is an earlier exit," Lou said. He pointed out that developing economies would likely be worst hit by volatility once the policy winds down. Economists said that slower growth, exchange-rate volatility and tighter credit conditions may be caused by investors directing capital to US markets in anticipation of bigger returns from interest-rate increases. "The impact on China will not be very serious," Lou said, explaining that risk from a QE pullback is limited because China's capital account — the difference between inbound and outbound spending flows — "has not been fully liberalized" and remains largely regulated. Fed Chairman Ben Bernanke, who during this week's S&ED met with Chinese central bank officials, told a conference of US economists on Wednesday that QE was here to stay for the foreseeable future. He said a "highly accommodative monetary policy for the foreseeable future" would be needed even after the US unemployment rate reaches 6.5 percent. On Thursday, Yi Gang, vice-governor of the People's Bank of China, reiterated Lou's reassurances about the limited impact on China if the Fed ends its loose-monetary policy. "We are fully prepared for these kind of risks. China has abundant liquidity and a high reserve-requirement ratio (for banks' short-term lending), so we have an adequate buffer to tackle such challenges," Yi said. "We will take necessary measures to ensure that there is sufficient liquidity in the money market and to maintain stability."

Hong Kong*:  July 15 2013

Travel industry set to mine big data (By Jamie Carter life@scmp.com) Can the ideal holiday be created by a database? Every time you book a flight online, review a hotel, or use an ATM, you're leaving a digital footprint. That's potential gold dust to a travel industry on the cusp of using big data to create personalised and intuitive itineraries that react to live events. "Imagine being able to plan and search for travel door to door, with data such as how busy the airport is and the weather factored into that planning process," says Thomas Davenport, professor in analytics at Harvard Business School and author of a new report called "Big Data in the Travel Industry". That scenario could be five years away, but such ideas are already taking flight. British Airways has a Know Me programme that gives flight attendants access to Google Images of passengers, plus their flying history and preferences. Travel search site Kayak offers a predictive view of the change in the price of a flight over a seven-day window, while Hipmunk ranks flight search results in an "agony index", and hotels in an "ecstasy index". "For flights, the system is able to look at new criteria such as stopovers needed, how frequently the flight is late, and so on, to predict how much agony you might need to endure," Davenport says. Travel technology group Amadeus - which processes about a third of all global travel transactions and commissioned the report - now offers "extreme search", which replaces the traditional reliance on origin and destination, adding factors such as average temperature at the time of the planned trip. Tell the website that you'd like to go somewhere in August where the temperature is over 30 degrees Celsius, that has golf courses, and it can find you options and remember your preferences for next time. The system is already being used by Brazilian airline TAM, which gets a tenth of its bookings this way. "It's really the dramatic rise of data generated online in web clicks or social media sites, and the information from an ever larger number of sensors connected to the internet that has accelerated things rapidly," Davenport says. The trend towards using big data in the travel industry could dovetail with the development of the so-called Internet of Things, where all devices, gadgets and systems will communicate with each other. But not everyone thinks that big data is the way forward. "The ubiquitous 'inspire me' button on so many websites means that operators can influence travellers and manipulate them much more easily," says Christina Carr, director at Norman Carr Safaris in Zambia's Luangwa Valley. Carr thinks that, although convenient and time-saving, the big data approach risks commoditising travel and removing original thought and innovation. "The experience is the essence of what we do, and this is hard to quantify or package," she says. Carr prefers to spend time and resources visiting travel agents and tour operators. She invites them to visit the safari camps, to encourage word of mouth and personal recommendations. "There is no technology that can deliver the primeval shiver that goes down one's spine when face to face with a lion on a walking safari," she says. Fear, surprise and danger are unlikely to be on anyone's website wish list. But that's often the stuff of our favourite holiday memories.

Rule of law is Hong Kong's trump card as Shanghai develops free-trade zone (South China Morning Post Editorial) The State Council this month endorsed Shanghai's plan to open the mainland's first free-trade zone as a testing ground for reforms that would free up cross-border commodity and capital flows. The rule of law is fundamental to Hong Kong's success. The latest steps taken to help Shanghai fulfil its ambition of becoming a global financial centre serve to reinforce the importance to our city's future of the rule of law. The State Council this month endorsed Shanghai's plan to open the mainland's first free-trade zone as a testing ground for reforms that would free up cross-border commodity and capital flows - until now one of Hong Kong's main contributions to the national economy. The government is expected soon to unveil policies covering areas from financial services to transport. Until now, Shanghai's ambition has led to more talk than action. However, the new leadership under President Xi Jinping is seen as being more reformist and supportive of Shanghai's growth as a global hub. After a meeting chaired by Premier Li Keqiang , the council said the Shanghai zone would be a snapshot of an "upgraded Chinese economy" - in other words a pioneer of reforms needed to sustain healthy economic growth. Initially, officials said later, Shanghai would expand its existing bonded areas until they formed a large free-trade territory set for financial liberalisation. Li is also reported to have approved a plan to allow foreign banks to set up subsidiaries in the free trade zone, and to have signed off on a plan to allow foreign commodities exchanges to set up their own futures delivery warehouses there, which would save costs for domestic commodities buyers. This is good news for HKEx and its new subsidiary London Metal Exchange. Otherwise, the Shanghai zone poses a real, if not imminent threat to Hong Kong's position as a leading financial centre. However, while there may be positives in the plan for a range of businesses, there is still something missing that is to Hong Kong's advantage - the rule of law and the certainty of contract enforcement. The mainland has no legal system comparable with ours. Hong Kong cannot, of course, sit back and rely on this advantage to retain its competitiveness. Its renowned capacity for innovation and adaptation, a can-do ethic and hard work will also be called upon. Shanghai officials are said to be taking a long view and have started drawing up a blueprint for the city's development between next year and 2049. This is a chance for Hong Kong to consider what other competitive strengths and advantages are worth consolidating in the next decade or two to help defend the city's position.

PCCW enabled US intelligence agencies to gain access to data (By Stuart Lau stuart.lau@scmp.com) Carrier operated by Hong Kong telecom provider and Australia's Telstra stored information for the American government - Hong Kong's main telecom provider PCCW enabled US intelligence agencies to gain access to huge volumes of electronic communications for a decade through Asia's largest intercontinental carrier, which it operates with an Australian counterpart. The involvement of PCCW - owned by Richard Li Tzar-kai, son of Asia's richest man, Li Ka-shing - emerged as Australian media reported yesterday that Australian telecom giant Telstra, together with PCCW, signed an agreement with US authorities requiring Telstra to route all communications that involved a US point of contact through a secure storage facility on US soil. The local enterprise said the obligations did not affect Hong Kong customers. According to the Australian reports, the data stored for the US government includes the content of e-mails, online messages and phone calls. The agreement also makes it incumbent on Reach - the jointly owned telecommunications carrier - not to allow data and communications of interest to be destroyed. Reach and Telstra were required to "take all reasonable measures" to prevent use of their infrastructure for surveillance by a foreign government, the reports said. The contract does not authorise the company or law enforcement agencies to undertake actual surveillance. But under the deed, Telstra must preserve and "have the ability to provide in the United States" the following: "Wire" or electronic communications involving any customers who make any form of communication with someone in the United States; "Transactional data" and "call associated data" relating to such communications; "Subscriber information"; and "Billing records". PCCW negotiated with Telstra to launch Reach, which became the largest carrier of intercontinental telecommunications in Asia. The venture's assets included not just the fibre-optic cables, but also "landing points" and licences around the world. When Reach sought a cable licence from the US Federal Communications Commission, the US Department of Justice and Federal Bureau of Investigation insisted that the binding agreement be signed by Reach, Telstra and PCCW. The 2001 contract was prompted by Telstra's decision to expand into Asia by taking control of hundreds of kilometres of undersea telecommunications cables, according to the report. In 2011, Telstra and PCCW restructured their partnership, giving Telstra control of most of Reach's undersea cables. The restructuring most likely would have triggered a requirement to renegotiate the security deed with the US government. In an e-mailed response, PCCW, on behalf of HKT, said: "HKT's US-based operations have an obligation under the terms of their licence to respond to appropriate inquiries made by US law enforcement agencies. These obligations do not extend to HKT's non-US-based operations, including our operations in Hong Kong nor our customers in Hong Kong. "Likewise the Reach security agreement's obligations are focused on US-based customer data and do not extend to HKT's non-US customers," PCCW said. Reach's Hong Kong office is at Hermes House in Tsim Sha Tsui. The office number could not be reached last night. Hong Kong's Companies Registry shows that Reach's directors include Larm Kang-fong and Lew Lai-yan.

 China*:  July 15 2013

China exports slide highlights yuan's strengthening versus Asian currencies (By Reuters in Shanghai) Slide in exports raises doubts about recent strengthening of the yuan - China's bet that it could reap the benefits of a more powerful yuan without paying a price in competitiveness is looking increasingly risky. An unexpected slump in exports in June marked the latest worrying sign of a slowdown in the world's second-biggest economy and raised the prospect that regulators may be forced to drag the yuan back down after a massive rally this year. Unfortunately for policymakers, while a weaker yuan might improve the price of Chinese goods sold abroad, it will not be the cure-all for exporters. Other factors are driving up production costs at Chinese companies and undermining their competitiveness abroad. Still, economic reformers at the People's Bank of China will come under pressure to use exchange rate manipulation to stave off a potentially destabilising round of factory lay-offs. Liu Ligang, an economist at ANZ bank in Hong Kong, said some sort of adjustment, including pushing the currency lower, was likely since policymakers were behind the curve in dealing with a longer downturn in exports demand than expected. "PBOC policy needs to be corrected according to the changed external environment," he said. While the yuan has only risen 1.5 per cent against the US dollar so far this year, it has posted significant appreciation against other Asian currencies, Liu said. "If you look at the renminbi crosses against the yen, Asian currencies, the Korean won, you see gains of 10 to 20 per cent. It is the crosses that are so worrisome because China has to compete with Asean economies … We may see more lay-offs by Chinese manufacturing as a result." The currency factor could have a particular impact on China's heavy equipment and shipbuilding sectors, which compete with Japanese and Korean products. The vulnerability of some Chinese companies was underlined by China Rongsheng Heavy Industries Group, China's largest private shipbuilder, which appealed for financial help from the Chinese government and big shareholders yesterday. Chinese export figures have been on a roller-coaster ride in 2013, and the currency has played an outsized role. Officials blamed a strong performance in exports earlier this year on speculative inflows of currency disguised as exports, a manoeuvre to get around capital controls. Exports in June declined 3.1 per cent from a year earlier, surprising a market that had expected 4 per cent growth. But Bank of America Merrill Lynch economists Zhi Xiaojia and Lu Ting said June's fall was due in part to possible manipulation by Chinese customs. "Customs might have had to deflate trade data in June to neutralise previous over-reporting," they wrote in a research note.

Students and teachers of Jiangshan Middle School board a bus at Capital International Airport in Beijing, capital of China, July 13, 2013. A total of 31 students and teachers who were held up in the U.S. by the crash of Asiana Airlines Flight 214 at San Francisco International Airport returned to China on Saturday. Two Chinese girls were immediately killed during the crash on June 6. Another girl died on June 12 after succumbing to injuries.

Hong Kong*:  July 14 2013

Where to go for the best Hong Kong ladies' night deals (By Claire HuiBonHoa claire.huibonhoa@scmp.com) Party-goers at the Beijing Club, which, at 12,000 sq ft and on three floors, is the biggest club in the city. Hong Kong must really love its ladies because, contrary to popular belief, ladies' night is not just once a week. Whether women are looking for a place to chill after work or somewhere to let their hair down and get hammered they will most likely find one on a regular weekday that offers discounts and deals. One way to find them is through an app such as Openbar, a database of about 700 bars which detects ones in the user's vicinity with happy hours and ladies' night promotions. The app not only includes details on deals and price comparisons but delayed live photos from the bars, a Facebook friend locator and exclusive offers. Here are five spots that regularly toast to women with great deals and offers: 
Soiree - Soiree is for the ladies who just want a relaxed night in an intimate setting, and not a scene for pick-ups. Decked out with a darkly lit interior, black leather couches and gold-framed mirrors, this elegant bar has a vast selection of vintage champagnes, wine, cocktails and caviar. On some nights, live jazz performances add to the entertainment value. On Tuesdays, ladies can enjoy free daiquiris from 6pm to 9pm. Its signature Soiree Sensations cocktails include rosemary lemon grass, chilli-infused vodka or daiquiris decorated with chocolate rims. Strawberries dipped in chocolate are also a must. 19 Elgin Street, SoHo, tel: 2857 2808 
Carnegie's Bar & Restaurant - A tame pub during the day, but a rowdy bar at night, Carnegie's has long been infamous for its ladies' night. The selling point is the laid-back ambience and crowd. With women and the occasional brave man dancing on the bar top by midnight, the partying must go on no matter how late it gets. On Wednesdays, ladies are entitled to free-flow champagne from 9pm. It serves an array of fun drinks such as jello shots, Maltesers vodka shots and absinthe. This pub attracts a younger crowd and is mainly a place for anyone looking for a little carefree fun. No one is going to judge if you go a little wild here. We've spotted some older groovers, but generally it's a mix of male expats and locals, from 18 to 30s. 53-55 Lockhart Road, Wan Chai, tel: 2866 6289, carnegies.net/hongkong
Beijing Club - This club is a good venue for dressing up and dancing the stress away without getting too rowdy. With a total of 12,000 sq ft spread over three floors, each with its own bar and dance area, Beijing Club is the biggest in Hong Kong. Decorated with gold-plated bathrooms and crystal ceilings, it's a popular hub for crazy but more refined parties. Ladies' night is on Mondays and Tuesdays with free entry and unlimited standard drinks all night for women.
It showcases a range of music from hip hop to house, and has been host to many noted DJs such as The Disco Fries and DJ Starjack. Put on your most comfortable high heels, ladies, because this club will make you dance the night away. This night draws well-heeled men from about 20 to 40. 2/F, 3F, 5/F Wellington Plaza, 2- 8 Wellington Street, Central, t el: 2526 8298, beijingclub.com.hk 
Pure Bar and Restaurant - The venue's motto, "Living well begins with eating well", could equally read "drinking well". Relaxed and spacious, it's a great place to grab a drink and munch on a snack from the health-conscious international menu. Pure shows its ladies some appreciation with free Sea Breezes, vodka mixers and champagne from 9pm to midnight on Thursdays. So whether you want to wind down after work, enjoy a Sea Breeze with your healthy dinner or just happen to be in the area on a Thursday night, let Pure pamper you with free drinks. This night tends to draw largely expat men aged 20 to 40. 3/F Kinwick Centre, 32 Hollywood Road, Central, tel: 2970 3366
Catalunya - This restaurant and bar is the comfort zone for some of Hong Kong's rich and famous for a reason. Catalunya is a contemporary Spanish tapas restaurant that dazzles with authentic Catalan recipes, a little elBulli magic, Spanish wines, unconventional cocktails and a beautifully modern interior. From August 14, it will host a 6pm-till-close ladies' night on Wednesdays. With a two for one deal on all signature cocktails, wine and standard mixed drinks, Catalunya is looking to be a haven for the girls' night out crowd - sans the men. The goal for Catalunya's event is to "create a new ladies' night experience, one where sophisticated women can catch up with friends or network with like-minded ladies over cocktails", says Caryn Yap, its director of public relations. Unit 2, G/F Guardian House Morrison Hill, 32 Oi Kwan Road Wan Chai, tel: 2866 7900, catalunya.hk

Dim Sum: A tradition that's anything but dim (By Xenia Chan and Hedy Bok) In this latest episode of our Uniquely Hong Kong series, a leading dim sum chef explains how tough it is to learn to prepare and cook the dishes, and why it remains as popular as ever - Chef and founder of Tim Ho Wan, one of Hong Kong’s most popular dim sum restaurants, Mak Gui-pui - “Making dim sum isn’t easy," says chef Mak Gui-pui. “There are many factors that can influence the taste. Take barbecued pork buns - even the weather can affect the outcome,” he adds. He is talking about how higher external temperatures can hasten the process of fermentation, making it easier for baked goods to turn sour in hot weather. As the founder of Tim Ho Wan, one of Hong Kong’s most popular dim sum restaurants, Mak, 50, knows what he's talking about. “Yum cha”, or “dim sum” brunch is the most popular and well-known form of Cantonese cuisine. Eating dim sum is usually a happy and boisterous occasion, when family and friends gather to sip tea and eat a great variety of dishes. These are usually exotic snacks served in bamboo containers or on small plates. The great popularity of the southern Chinese cuisine is a source of pride for many Hong Kongers, but also an expression of their unique cultural identity. Mak says going to “dim sum” remains an important ritual for people. Raised in a family in which everyone worked in restaurants, Mak believes the cuisine is a vital part of Chinese culture. He says it brings people together. “A dim sum meal is friendly and casual. For generations, it’s been a tradition for families to go to yum cha on holidays. There’s a sense of sharing and camaraderie that comes with the food,” adds Mak. In Chinese, “dim sum” literally means “a light touch on the heart”, which is an ideal way to describe the small, delicious sweet or savoury dishes. “Yum cha” means “drink tea” and the two expressions are used interchangeably. The most well-known dim sum is Guangdong’s, although dim sum is common across China, often using different ingredients from each region. Common dishes include cha siu bao (or pork-filled buns), haa gaau (shrimp dumplings), siu mai (pork dumplings), fung jaau (chicken feet), haam sui gok (Deep-fried rice dumpling with pork) and many more. These “little eats” are not unique to Cantonese cuisine. Shanghai has xiao long bao (steamed pork dumplings), and there is chao shou (Sichuan wontons) in Sichuan. What sets Cantonese dim sums apart though, is its extraordinary variety of dishes and the list keeps growing. The finer points of making dim sum take years to learn, which is why it is important to have a demanding “sifu” [“master”), explains Mak. “A good sifu is one who teaches you to be exact, and he has to reprimand you a lot,’’ he explains. “The more he yells, the better you become. And, of course, you have to be very dedicated, and have a heart for this craft.” Mak, like many of his peers, is skilled in the different areas of dim sum - frying, steaming, creating the fillings, making dough wrappings for dumplings, and making rice noodle rolls. “I would master one thing,” he recalls fondly, “And then I’d have start back at the bottom to learn the next thing.” Tourists came to my restaurant asking specifically for chicken feet. They probably find it exotic. And once they tried it, ha! You should see the look on their faces! The experience has taught Mak to treat his students the same demanding way. “I’m just as hard and exacting as my sifus. If I don’t demand a lot, they will never learn.” He says that he has learned different styles as well. “Some sifus, like smooth and soft textures. Others want firm and chewy. But they are all demanding,” he laughs. “My own standards are: you can’t be slack, it has to be neat and tidy, have the correct shape, and you can’t leave sloppy dough that stick on bamboo containers.” “Bamboo containers are absolutely necessary; you have to allow the food room to breathe. Each piece is about handiwork - thick is easy, but thin is exact. You really have to have an eye for this sort of thing.” The ritual of dim sum has seen some changes over the years. Originally a snack to go with morning tea gatherings, it has become popular meal for lunch and dinner as well. “Traditional tea houses have given way to bigger, brighter and cleaner restaurants. You can even have business luncheons in dim sum restaurants now. It’s gotten fancier and more presentable.” Concerns about high levels of cholesterol in dishes like pig-liver dumplings have made them less popular. Vegetarian dim sum is more common. “But generally things remain the same,” Mak says, “Except for those people who keep changing things. I’m not against innovation, it’s just that Cantonese dim sum has to be either cold or hot, according to the nature of the ingredient. You can’t fry a watermelon!” Mak says one thing has not changed: the preferences of foreign customers. “Tourists came to my restaurant asking specifically for chicken feet. They probably find it exotic. And once they tried it, ha! You should see the look on their faces! Although we Cantonese might love eating livers, intestines and so on, you know that stuff isn’t for everyone,” the dim sum chef adds.

Laying the groundwork before a day at the races (Lo Wei wei.lo@scmp.com) Behind the perfect grass of the Jockey Club's racecourses is a team of people who put in hours of back-breaking work to make it just right - Jeff Cheng (on the tractor), who maintains the Happy Valley racecourse turf, thrives on seeing the audience enjoy themselves during the races. On the morning after a race night at Happy Valley, the stands are empty and the horses are resting in their stables, but the track is anything but deserted. Wearing large hats and sitting on little stools, clusters of people tend to the turf, filling the holes divot by divot and helping to fulfil Deng Xiaoping's famous pre-handover pledge to Hong Kong that the "horses will keep racing". These are the track attendants who ensure the grass is healthy and the turf's texture just right for the horses' hooves in time for the next meeting. "Each horse has four legs, so you can imagine how many holes there are," says Jeff Cheng Wai-tat, 34, one of 21 full-time track attendants at the Jockey Club's Happy Valley racecourse. Another 12 part-time workers help out with regular maintenance. The work on the 5.4-hectare track of 1,450 metres is done by hand rather than machine, because the position, shape and size of each hole is different. "When we recruit new staff, we always emphasise to them that the work is very boring and tough," says Pako Ip Pak-chung, the track's executive manager, who heads the team. "They have to keep bending their backs to plant grass on the track, but it is a very important job." It is difficult to recruit people for the job, and the turnover rate among newcomers is high. Some leave in less than a month. The club also has to compete with the construction industry for workers as it requires more or less the same skills, Ip says. The track attendants, with 47 other casual workers, are also on duty during race meets, raking and smoothing the turf during the short breaks between races. Then, early the next morning, the task begins of filling each hole with sand, planting new grass and watering it, which usually takes a few days, depending on the weather. On other days, the attendants trim the grass with mowers, use rollers to flatten the sand and punch holes in it using a tractor. All this work is done to soften the soil so that it does not hurt the horses' hooves. Lau Wai-fong, 50, is the only full-time female track attendant at Happy Valley, although several work part-time to take advantage of a flexible schedule that fits in with their family lives. A 15-year veteran on the job, Lau says she enjoys working as part of a team. "I'm used to the environment here. Sometimes we chat while we plant the grass. We get along well," she says. A former gardener at the club, Lau was transferred to work on the tracks after six years. She was delighted to learn different skills, such as operating machinery. Cheng says his satisfaction comes from seeing the race audience enjoying themselves during the events. "I'm a simple person. When I see people cheering in the auditorium, I feel as if they're cheering for me. That's my motivation," he says. Although he has watched many races in his eight years of work at the club, the competitive atmosphere still makes him excited and nervous. Another member of the team, Chan Kim-sing, 36, says the most challenging aspect of the work is the unpredictable weather. Heavy rain can create big holes in the track. He remembers a day when a water pipe burst at the Sha Tin track, causing an especially big hole the day before an international competition. "I got a call from home to get back and help fix the hole, which was about a metre square," he recalls. I made 200 turf bricks that day - the most I had ever done in a day." Ip explains that sand - which has been used as a culture medium to grow the turf since the 1980s - has a high drainage rate that helps it to adapt to Hong Kong's rainy climate, but it also has poor strength and stability. Once, 223 millimetres of rain fell on a race-day morning, but the good drainage meant the races could be held. "Not many people in the world would contemplate racing in such weather, but we could," Ip says. The attendants plant one species of grass for summer and another for winter that adapts better to the weather. Extra work is required during the transitional months. New grass is imported from Guangdong, then maintained at the Sha Tin racecourse nursery before it is planted. "Growing turf on this kind of medium is not easy, but it has a good usability under all weather conditions," says Ip. "The implications of losing a race meeting would be more significant than the cost of maintaining the track."

Diaoyus row threatens to turn Chinese wedding firm to marriage from hell (By Amy Li chunxiao.li@scmp.com0 Okinawa a dream wedding setting for many Chinese, but Diaoyus friction threatens to turn a Sino-Japanese joint venture into a marriage from hell - Sino-Japanese tension has spilled over into anger and street protests on both sides. But the dispute, which centres on the Diaoyu Islands, administered by Tokyo, which calls them the Senkakus, but fervently claimed by Beijing as well as Taipei, threatens the chances of a joint venture between Chinese and Japanese wedding firms having a fairy-tale ending. Dream Studio had hoped to cash in by bringing Chinese couples to the picturesque southern Japanese island of Okinawa either for their wedding or their honeymoon, but tensions over the East China Sea have threatened to turn the joint venture into a marriage from hell. The company saw as many as 60 per cent of reservations by mainland Chinese clients cancelled last summer as tensions escalated between Beijing and Tokyo. While business is slowly picking up, it is far from certain that this will prove to be a case of happily ever after. Co-owner Zhang Mengya, a native of Suzhou , Jiangsu province, said the setback had forced the company to rethink its global strategy. If relations between the two countries soured again, she said, the only Okinawa-based wedding company that targets mainland Chinese would have no choice but to cast its net somewhere else. "We are thinking about opening offices in Hawaii and Guam," she said. "And we will go after people who will be less likely to be influenced by Chinese politics." Launched in June last year, Dream Studio serves Japan's domestic market and Chinese speakers on the Chinese mainland and in Hong Kong and Taiwan. It is a joint venture of Zhang's Suzhou wedding service and Watabe Wedding, an industry heavyweight in Japan. Destination weddings are growing increasingly popular among China's couples, with spending on weddings reaching 600 billion yuan (HK$758 billion) a year, said Yang Se, chief executive of the Beijing-based IdoIdo wedding service. While there are no statistics on the amount they spend on overseas weddings, many believe the figure is high. Zhang hoped to tap into China's booming wedding tourism industry by partnering with Watabe, her business plan took an unexpected turn last summer, when anti-Japan protests swept China and Japan's government nationalised three of the disputed islets after buying them from their private owners. The row escalated after a Hong Kong-based group of activists sailed to the resource-rich islands in defiance of Japanese coastguard patrols. The escalation of the row prompted often violent protests in mainland China and a shift against Japanese products. Japanese lawmakers and nationalists responded with their own voyage to the islands, and Japanese and Chinese patrol ships later came face to face near the islands. Nationalistic coverage in the mainland media did little to ease the concerns of Dream Studio's customers. "The Chinese were scared and worried about their safety if they travel to Japan," Zhang said. Many even asked her if she herself had been attacked by Japanese during the tumultuous months of August and September. "I told them residents of the island lived a peaceful life despite disputes with China, and physical attacks against Chinese nationals were a hard thing even to imagine," Zhang said. But Chinese media reports on the Diaoyu Islands dispute, some more inflammatory than others, had convinced many that Japan was no longer a safe destination. In fact, Okinawa island, controlled by the US until it was returned to Japan in 1972, remains a controversial topic for China. The Communist Party's mouthpiece, People's Daily, recently ran an article in which two Chinese academics challenged Japan's sovereignty over the Ryukyu chain of islands, which includes Okinawa. Besides the territorial dispute, many believe Japan's complicated visa requirements might also have thwarted Chinese couples. Even if couples were able to obtain visas, the application process could be a hassle for relatives and guests, Yang said. Phuket and Bali ranked higher than Okinawa as wedding destinations for Chinese nationals because they were allowed to apply for visas on arrival, Yang said. Domestically, couples have been flocking to Sanya on tropical Hainan Island , where Taiwanese actress Barbie Hsu and Wang Xiaofei, heir to a restaurant empire on the mainland, famously tied the knot in 2011. For Zhang, business may have dropped among mainland clients, but a steady stream of customers from Hong Kong and Taiwan has helped keep Dream Studio afloat. Many who went to Okinawa for wedding photos and honeymoons told Zhang that it was cheaper to get married on Okinawa than at home. Ashley Chan, a Hong Kong native, signed up with Dream Studio for a four-day resort wedding in July last year. She was immediately impressed by the customised photo shoot and wedding service. The couple had also paid about the same - HK$20,000 - to have another set of wedding photos taken in Hong Kong. But Chan said the Okinawa photos came out better because of the beautiful scenery and the photographers' refined techniques. "It's just better value for the money," Chan said. A basic package offered by Dream Studio started at HK$10,000 and went up to HK$20,000 or more, Zhang said. With better business, Dream Studio now employs four Chinese and two Japanese photographers. But it wasn't always that way. During difficult times last year, Okinawa's community helped out. Zhang said officials who had invited her to the island three years ago referred much-needed business to her stagnant operation. The government even asked the studio to produce a tourism promotion video for Okinawa, which aired in Hong Kong and other cities. US soldiers on the nearby Marine Corps base also sought out Zhang after learning of her wedding photo services. Dream Studio has also built a reputation among Japanese couples, who now make up 50 per cent of its business, boosting Zhang's confidence about surviving another crisis. With business from mainland China finally starting to look up this year, Zhang urged compatriots to consult travel warnings from the government, instead of relying on rumours and newspaper reports. Believing the worst was over, Zhang said she was optimistic that Dream Studio would thrive happily ever after.

 China*:  July 14 2013

Foreign game console ban to be lifted (By SHEN JINGTING) Companies would have to register in Shanghai's FTZ for eligibility - Sources from China's Ministry of Culture confirmed on Thursday that the country is about to allow foreign game console companies to sell products in China if they register in Shanghai's new free trade zone, but denied lifting a decade-long ban on the video game hardware market in the country anytime soon. An attendee plays the Xbox One game LocoCycle at the E3 (Electronic Entertainment Expo) in Los Angeles on June 12. Major game console vendors across the world made several attempts but failed to find a way to enter the Chinese mainland market officially. Two officials from the ministry confirmed the accuracy of a South China Morning Post report. The story, which was published on Wednesday, quoted sources that if foreign companies agreed to register in the new free trade zone in Shanghai, they would be allowed to promote and sell their products on the Chinese mainland. But before they start selling, foreign gaming companies have to seek approval for specific products from related regulators because the Chinese government wants to make sure the content is not too violent or politically sensitive, the SCMP report said. "The detailed information (on foreign game console companies' entry into China) is incorporated in the policy package for Shanghai's free trade zone," an official with the Ministry of Culture told China Daily on condition of anonymity However, the Chinese government has yet to officially release the complete documents. On July 3, the State Council, China's cabinet, approved Shanghai's free trade zone. It will cover 28 square kilometers and act as an experiment for deepening reform and opening-up. "We will track the progress made in this Shanghai pilot program. No one doubts that Shanghai's performance will determine our future moves," the ministry source said. The source denied the Shanghai trial is a hint about the lifting of China's ban on video game hardware. "The ban is still effective," the source pointed out. Because of fears of the potential harm to the physical and mental development of the young, seven Chinese ministries collectively banned the manufacture, sale and import of game consoles in China in 2000. Major game console vendors across the world, including Microsoft Corp, Nintendo Co and Sony Corp, made several attempts but failed to find a way to enter the Chinese mainland market officially. In a January interview with China Daily, an official from the Ministry of Culture disclosed the Chinese government was reviewing the policy and had held discussions with other ministries on the possibility of opening up the game console market. Because the game console ban was issued by seven ministries, China needs to seek approval from all parties to lift it, which will take time, according to some industry insiders. "The testing of the water in Shanghai is of course an example of major progress made by those ministries," the source said. Microsoft did not respond to China Daily's interview requests by deadline on Thursday. The paper failed to reach Sony and Nintendo's news departments on the same day. Xue Yongfeng, an analyst with Beijing-based research firm Analysys International, said all major game console suppliers are keen to lobby China to open up its market. "The global game console market has experienced flat growth in recent years. Manufacturers are desperate to find some new revenue drivers — and China, of course, has emerged as a major target," Xue said. However, the long ban has forced Chinese game players to shift to online games. "There is a limited number of hardcore game console players in China. I think, the player figure is a mere 1 million or so," Xue pointed out.

China and the United States on Thursday sought to set the tone for the model of a new type of major power relationship as officials continued with their annual Strategic and Economic Dialogue.

3rd Chinese girl dies of injures in Asiana air crash (Xinhua) Asiana Airlines Boeing 777 is engulfed in smoke on the tarmac after a crash landing at San Francisco International Airport in California, July 6, 2013, in this file handout photo provided by passenger Eugene Anthony Rah, released to Reuters on July 8, 2013. Asiana Airlines flight attendant Kim Ji-yeon (L) stands near a runway with rescued passengers after Flight 214 crash-landed at San Francisco International Airport in California, July 6, 2013, in this file handout photo provided by passenger Eugene Anthony Rah released to Reuters on July 8, 2013. A Chinese girl died in hospital on Friday, becoming the third fatality in the crash of an Asiana Airlines jet at San Francisco airport last Saturday, doctors and Chinese officials said. The child, who died on Friday morning, had been in critical condition, according to a statement from two doctors at San Francisco General Hospital. The girl was a Chinese national, according to the Chinese consulate in San Francisco. The crash landing of the Boeing 777 also killed two Chinese teenage girls and injured more than 180 other people. The two victims who died on Saturday were visiting the United States to attend summer camp with a group of schoolmates. Both fell out of the plane during the crash and one was run over by a fire truck rushing to the scene, the San Francisco Police Department said on Friday, although it was unclear whether she was still alive at the time. The coroner in San Mateo County, where the airport is located, has said he will release the girls' autopsies results in about two weeks. The bulk of injured passengers were taken to San Francisco General Hospital and to Stanford Hospital & Clinics. San Francisco General, which originally received 67 patients, still has six, including two in critical condition. Their injuries include spinal cord injuries, traumatic brain injuries, abdominal injuries, internal bleeding, road rash and fractures, the hospital said. Stanford still has one patient, who is in serious condition, according to a spokesman. It treated 55 patients from the crash. A handful of patients remain at other area hospitals, including one at St Francis and one at St Mary's.

Hong Kong*:  July 13 2013

Luxury label agrees to hair-raising record IFC rent (By Sandy Li sandy.li@scmp.com) Paying HK$1,200 per square foot, French brand Alexandre Zouari Paris renews lease at record rate, with more rises tipped at the mall - The Alexandre Zouari Paris store tempts high-end shoppers at IFC Mall with a product line-up that includes hair brushes costing more than HK$400. A French hair accessories luxury brand has agreed to pay HK$1,200 per square foot a month when its lease comes up for renewal at the high-end IFC Mall in Central, setting a record for the shopping arcade in the core business district. Under the new lease, Alexandre Zouari Paris will pay a monthly rent of HK$480,000 for its 400 square foot shop at the mall, owned by a consortium led by Sun Hung Kai Properties. The accessories brand has been operating on the first level of the mall for more than six years. "It is a record for the mall," said Karim Azar, general manager for retail leasing at International Finance Centre Management, which handles the mall's leases. The French brand broke the previous record set late last year by a cosmetics retailer with its HK$1,000 per square foot a month. Joe Lin, senior director of retail services at CBRE, said he believed the high-rent deals being cut by IFC were not only a record for Central but are also close to the levels commanded by shopping centres in Causeway Bay, the city's most expensive retail district. "The mall's rent still has potential to grow because of limited supply in Central. IFC is also popular among tai-tais because of its parking spaces and easy accessibility," he said. The IFC complex, which comprises the mall, two office towers and a Four Seasons hotel, has 1,340 parking spaces. With growing demand for retail space, Palace IFC Cinema and restaurants have been forced to downsize or be edged out by luxury brands. The mall has raised rents by up to 40 per cent as leases come up for renewal this year. In line with Sun Hung Kai Properties' plan to revamp the trade mix of its joint-venture retail arcade, Palace IFC Cinema - which opened in the mall 10 years ago - will reduce its size by 3,500 sq ft to 11,500 sq ft following a recent lease renewal. "Given the cinema is located adjacent to the most expensive shop, Alexandre Zouari Paris, we will divide the additional 3,500 sq ft into four retail shops. It will attract more shoppers here once we increase the number of proper retail shops," Azar said. Illustrating the cash-flow appeal of high-end stores, Alexandre Zouari Paris' product range includes women's hair brushes costing more than HK$400. To make way for more retail shops, Azar said the mall planned to reduce the number of restaurants from 41 in 2005 to 27 by the end of this year. Among those that will have to leave shortly are G Bar and fashionable dining restaurant H One on the fourth level, both of which have been at IFC since 2005. Lane Crawford, which offers the largest assortment of luxury brands in the region, will take over the 10,000 sq ft vacated by these two outlets. It currently leases 82,000 sq ft at the mall. Lin expects restaurants to move to buildings in Wellington Street and Stanley Street that offer rents of about HK$30 per square foot. "Cinemas will gradually retreat to shopping malls located in the secondary locations such as Tseung Kwan O as they can hardly compete with luxury brands that have the ability to pay big bucks for prime locations," Lin said. Azar said IFC Mall recorded total sales of more than HK$10 billion last year, up 15 per cent from the previous year. "We have a long waiting list of potential tenants wanting to move in. So, we will not renew those tenants whose sales have been underperforming," he said.

Macau hacking attacks traced to Hong Kong and the United States (Lana Lam lana.lam@scmp.com South China Morning Post) Police say city and the US were origin of attacks on official e-mail accounts, forcing authorities in enclave to 'mobilise all efforts' to protect data - The e-mail accounts of several government departments in Macau were hacked last week in attacks that police said originated in Hong Kong and the US. Macau Chief Executive Fernando Chui Sai-on said yesterday the government was "highly concerned" about the unauthorised access to 34 e-mail accounts run by the city's main telecommunications operator CTM. Police launched a criminal probe and traced the internet protocol (IP) addresses of the attacks to Hong Kong and the US. The news comes at a time of heightened concern over global cyberspying activities, especially those by the US National Security Agency after the leaks by whistle-blower Edward Snowden. CTM confirmed the attacks but said: "So far, there is no trace of loss or risk to customers' personal data." Chui said the e-mail accounts reportedly hacked "included those of some government departments", but he would not detail how many or if they included his own e-mail account. A government spokesman told the South China Morning Post: "We can't provide more information because investigations by the Judiciary Police are currently taking place." He said the government had "mobilised all efforts to ensure the network security of public departments, commercial institutions and the general population". Chui said the Bureau of Telecommunications Regulation had requested internet service providers to review their network security. The Office of Personal Data Protection said it would "pay high attention" to possible hacking activities on its networks. CTM said it was on high alert in light of "recent media reports that the computer networks in some countries and regions were under cyberattack", a clear reference to Snowden's leaks. Former CIA analyst Snowden, 30, is on the run from US authorities, who have filed espionage charges against him. Venezuela, Bolivia and Nicaragua have offered him political asylum, but he is believed to still be in the transit area of Moscow's Sheremetyevo airport after leaving Hong Kong on June 23. The US consulate declined to comment on the Macau matter or confirm if it had received a letter from the data protection office asking if Macau had been targeted by secret NSA internet surveillance programmes. A Macau government spokesman said the letter was sent on July 3 but no reply had been received. Meanwhile, the chairman of the Legislative Council's security panel, Ip Kwok-him, has asked House Committee chairman Andrew Leung Kwan-yuen to write to the US government for an explanation of claims by Snowden that computers in Hong Kong were hacked by US government spies.

Chief secretary takes case for landfill expansion to Tuen Mun councillors (By Lai Ying-kit yingkit.lai@scmp.com) Chief Secretary Carrie Lam (left) and Secretary for the Environment Wong Kam-sing take questions at a Tuen Mun district council meeting on Thursday. Chief Secretary Carrie Lam Cheng Yuet-ngor on Thursday met Tuen Mun district councillors in a last-ditch effort by the government to rally support for a controversial landfill extension plan. In her opening speech to the councillors, Lam said the government would not withdraw the proposal and would table it to the Legislative Council for a funding approval on Friday as planned. The proposal, which involves the launch of a feasibility study on extension plans for the Tuen Mun landfill, is at risk of being voted down. Lam, the city’s second highest official, made an appearance at the local council meeting after many usually pro-government lawmakers made it clear they would oppose the plan, including rural leader Lau Wong-fat. Lau is chairman of the Tuen Mun district council and a big landowner, with plots in Lung Kwu Tan village next to the Tuen Mun landfill. I hope that councillors acknowledge our commitment to responding to residents’ needs - The local councillors object to the extension saying the district is home to many noxious facilities and residents have long been affected by odours and other nuisances. Lam outlined several deal sweeteners to the district councillors, including widening a road to the landfill, providing funding to build a bridge across the Tuen Mun River, and removing a crematorium from current plans for the area. She also promised councillors the government would speed up other improvements works that had been delayed over the years. “I hope that councillors acknowledge our commitment to responding to residents’ needs,” she said. But Tuen Mun councillors criticised Lam and Secretary for the Environment Wong Kam-sing, who was also at the meeting, for ignoring them until they needed support on this project. At the end of the meeting, the council passed a motion, by 30 to 1, urging legislators to reject the government’s funding request for the proposal at Friday’s Legco meeting and ensure that government officials consult residents before re-tabling it. We find it unacceptable that the government has not consulted us properly - “We are not saying we are opposed to any landfill plan. We find it unacceptable that the government has not consulted us properly. Officials must negotiate with us,” Lau said after the meeting. Lau, who will also scrutinise the proposal in Legco on Friday, said filibustering was not necessarily the best way to deal with their opposition to the proposal. “It would not be helpful to spend 30 hours on discussion. The best thing for the government to do is withdraw the proposal. It will only take 15 minutes,” he said. Also on Thursday, about 50 Tuen Mun residents staged a hunger strike outside the Legislative Council in Admiralty to demand the government withdraw the extension proposal.

Leung rejects calls for early consultation on universal suffrage (By Lai Ying-kit and Joshua But) Chief Executive Leung Chun-ying on Thursday brushed aside calls for an early consultation on universal suffrage for the 2017 chief executive elections. Speaking at a Legislative Council question and answer session, Leung said an early public consultation would not make any difference to when universal suffrage was introduced in Hong Kong. He said his priority was resolving more pressing issues - such as the Tuen Mun landfill extension plan. “You wouldn’t have the chief executive election one year earlier even if we brought forward the consultation by one year,” he said. “We need to have priorities.” Universal suffrage was the most contentious issue discussed during Thursday’s session. It comes a few days after the annual July 1 protest, when tens of thousands of Hong Kong people marched to demand democratic elections in 2017. Asked about the protesters’ demands, Leung said his government must strictly comply with the Basic Law and the National Peoples’ Congress Standing Committee’s decisions on the issue. “We will have universal suffrage in 2017,” he added. Christopher Cheung Wah-fung, a legislator for the brokerage industry, asked the chief executive whether the police could cope with future Occupy Central campaign protests. He asked Leung whether the People’s Liberation Army troops might need to be deployed to help. Leung replied that he had full confidence in the Hong Kong police handling future protests professionally. Also at Thursday's session, People Power lawmaker Chan Chi-chuen, who has been on hunger strike for 10 days to demand the chief executive resign, had to be rushed to hospital. Chan had collapsed while heckling Leung. Earlier, Chan and three other radical lawmakers rose from their seats in the Legco to shout slogans and interrupt Leung’s speech. People Power law maker Albert Chan Wai-yip tried to throw a placard at Leung. The placard landed close to the chief executive, who turned his body to one side. Albert Chan, pro-democracy lawmaker Wong Yuk-man, and League of Social Democrats lawmaker ‘‘Long Hair’’ Leung Kwok-hung, were also expelled from the session after shouting slogans. At the meeting, Leung also addressed other controversial topics including the Northeast New Territories development plans, the Tuen Mun landfill extension plan and his government’s performance. The chief executive then took the opportunity to encourage legislators’ support for the Tuen Mun landfill extension plan - which his government might be forced to withdraw after strong opposition. The proposal will be tabled in Legco for funding approval.

 China*:  July 13 2013

China tells US there is ‘unprecedented freedom’ in Tibet, Xinjiang (By Agence France-Presse in Washington) State Councilor of China Yang Jiechi (left), Vice-Premier of China Wang Yang (centre) and US Treasury Secretary Jack Lew (right). Yang said China's Tibetan and Uighur minorities enjoyed happiness and “unprecedented” freedom. China said on Thursday that its Tibetan and Uighur minorities enjoyed happiness and “unprecedented” freedom as it hit back at US criticism by urging Washington to examine its own record. “China has made important progress on human rights. People in various regions in China including Xinjiang and Tibet are enjoying happier lives and they are enjoying unprecedented freedoms,” State Councilor Yang Jiechi said in a joint press appearance after two days of US-China talks. “We hope the United States will improve its own human rights situation on the basis of mutual respect and non-intervention in each other’s internal affairs,” he said. The US State Department in its annual human rights report said that conditions had deteriorated in Tibetan areas and Xinjiang. More than 110 Tibetans have set themselves alight since 2009 to protest what they see as China’s harsh rule. Overseas groups said Chinese forces opened fire Saturday on Tibetans who celebrated the birthday of their exiled spiritual leader, the Dalai Lama. Xinjiang, a vast northwestern region of China, has seen periodic unrest as the largely Muslim Uighur community complains of discrimination and a lack of rights at the hands of members of China’s majority Han community. Deputy Secretary of State William Burns said that the United States spoke out about the treatment of Tibetans and Uighurs as the two countries held wide-ranging annual talks, the Strategic and Economic Dialogue. “The goal of this conversation was to emphasise the importance of human rights to our bilateral relationship,” Burns said at the joint press appearance. “We firmly believe that respect for universal rights and fundamental freedoms will make China more peaceful, more prosperous and ultimately more secure,” he said. Burns was filling in for Secretary of State John Kerry, who officials said raised human rights among other issues during the first day of talks before he returned to Boston where his wife has been hospitalized.

US, China conclude fifth round of strategic talks (By Xinhua) The United States and China concluded their fifth round of annual Strategic and Economic Dialogue (S&ED) on Thursday. US Treasury Secretary Jack Lew, who co-chaired the dialogue, said in the closing session that the dialogue built on the agreements made by Chinese President Xi Jinping and his US counterpart Barack Obama at a summit in California last month. Lew highlighted progress made in discussions concerning economic cooperation, energy, finance and cyber issues. China's Vice Premier Wang Yang, one of the two Chinese co- chairs of the dialogue, also noted progress made on investment and trade issues. Wang said senior officials from both sides have familiarized with each other and deepened mutual understanding, adding the S&ED can become an important platform in building a new type of major power relationship between the two countries.

Tianjin asks to be 2nd free trade zone (By Zhao Yinan in Tianjin) Tianjin - a port city in North China with a population of more than 14 million - may become the country's second pilot free trade zone, after Shanghai received approval last week. Zhang Aiguo, director of the Administrative Committee of the Dongjiang Free Trade Port Zone, said the Tianjin municipal government submitted its proposal to the State Council, or China's cabinet, in May to turn the bonded area of Dongjiang, located in the Binhai New Area on the city's eastern coast, into a free trade zone to boost the city's logistics business. The zone, which will cover an area of about 40 square kilometers, will be built on reclaimed land, and will have an investment of up to 60 billion yuan ($9.8 billion), Zhang said. Construction will be finished in five years. He said the proposal has won "in principle" support from the State Council and is now soliciting opinions from the departments under the State Council. On July 3, an executive meeting of the State Council agreed to set up a free trade zone in Shanghai, which will cover 28 sq km and finish construction in a decade. The State Council said in a statement that it hopes that the pilot project in Shanghai will serve as a reference to other places. Although he didn't reveal more details in the proposal, Zhang said that Tianjin's draft plan for the free trade zone includes transit visa-free policies for foreign visitors, hoping to add incentives to invest in Dongjiang, which is also a port for cruise liners. The visa-free policy is expected to result in more hotel bookings and shopping in both Dongjiang and in the downtown area, he said. Yu Rumin, chairman of Tianjin Port Holdings Co Ltd, said in March that the construction of a free trade zone will be one of the best ways to push forward the opening-up policy in China. Yu's company is responsible for the construction of a second reclaimed island in Dongjiang for the free trade zone, after an area with about 30 sq km on a first island in Dongjiang has been developed. Tianjin - a city seen as an engine in North China to drive the country's economy after Shenzhen and Shanghai - has long been eyeing a free trade zone as a way to transform itself from a city of traditional heavy industry to a logistics hub. The State Council said in 2008 that Dongjiang was allowed to make exploratory moves to set up a free trade zone when "the conditions are right". Last year, Tianjin port's cargo throughput reached 477 million tons, ranking it the fourth in the world, and its container throughput stood at 12.3 million standard containers, ranking it 11th globally. Tian Lihui, a professor at Nankai University in Tianjin, said that the city's plan for a free trade zone differs from that of Shanghai and is a bid to stand out from the numerous harbor cities on China's east coastline. "The city should make use of its traditional advantage, which is its connection with inland provinces, as well as recent favorable policies related to ship registrations and finance leasing," Tian said. A free trade zone is only possible if the area has a relatively large level of shipping capability, a field in which Tianjin has made progress recently, he said. Tianjin has just lowered its requirements for ship registrations, allowing international cargo carriers to get more tax refunds if they register their vessels at Dongjiang port. "The move is expected to increase the number of cargo carriers registered in the area and to boost the regional shipping trade," Tian said.

Chinese and Russian naval forces participating in the "Joint Sea-2013" drills wrapped up three days of maneuvers here Wednesday (By China Daily) The two sides practiced maritime search and rescue in the morning and later had a live-fire exercise involving air, sea-level and underwater targets. The maneuvers, which started Monday, culminated at 15:10 local time (0410 GMT) in a joint naval parade performed by 13 warships from both countries and three aircraft. During the previous two days, the two navies conducted a range of drills, including air-defense, maritime replenishment, countering submarine threats, joint escort, and rescuing of hijacked ships. The two navies held an open day on the ships ahead of the drills. Seven vessels from China's North Sea Fleet and South Sea Fleet and 12 vessels from Russia's Pacific Fleet took part in the week-long exercises. Three fixed-wing aircraft, five ship-borne helicopters and two special operations detachments also participated.

China investigates GSK executives for bribery (By Xinhua) Some senior executives of multinational pharmaceutical company GlaxoSmithKline (China) Investment Co Ltd (GSK) have been placed under criminal investigation for suspected bribery and tax-related violations, Chinese police said Thursday. Police have questioned some of the suspects, according to a statement issued by the Ministry of Public Security. The company is suspected of offering bribes to government officials, medical associations, hospitals and doctors in its operations in China, the statement said. It is also suspected of being involved in some tax-related crimes, according to the ministry. The statement said police have obtained evidence regarding the suspected offenses.

Sino-US talks 'help build trust' (By CHEN WEIHUA in Washington, ZHANG YUWEI in New York and CHENG GUANGJIN in Beijing) Dialogue vital to achieving new type of major country ties, says vice-premier - Chinese and US officials stressed the importance of cooperation and putting aside differences as the two countries began the fifth round of the China-US Strategic and Economic Dialogue on Wednesday. US Vice-President Joe Biden said the dialogue is essential to bilateral relations and called for more trust to be built between the two countries. From left: State Councilor Yang Jiechi, US Secretary of State John Kerry, Vice-Premier Wang Yang and US Secretary of the Treasury Jack Lew at the opening of the China-US Strategic and Economic Dialogue in Washington on Wednesday. "We don't have to agree on everything — we have to trust," he said in his address at the opening of the event in Washington, adding that competition is good and cooperation is essential. Biden and the dialogue's four co-chairmen, Vice-Premier Wang Yang, State Councilor Yang Jiechi, US Secretary of State John Kerry and Secretary of the Treasury Jack Lew, all emphasized the importance of boosting cooperation and also managing differences. Wang said the summit between President Xi Jinping and US President Barack Obama a month ago reached important consensus and has pointed a clear direction for the two countries to build a new type of major relationship. "This round of dialogue is to turn the important consensus reached by the two heads of state into concrete achievements and to inject solid content into building a new type of major country relationship," Wang said. He said China is willing to talk and listen to different opinions and accept the correct ones, adding that much of the dialogue it has had with the US and other countries has boosted the country's progress. But he said Beijing will not accept "those voices that shake China's fundamental system and harm its national interest". Danny Russel, confirmed by the Senate on Tuesday as the new US assistant secretary for East Asian and Pacific affairs, was among many senior US officials in the audience. The public schedules of senior State Department officials showed most of them are involved in the dialogue. In an article in The Wall Street Journal on Wednesday, Vice-Premier Wang wrote, "A bright future awaits China-US relations if we join hands and work together." Wang did not shy away from differences, such as views on the trade imbalance, the protection of intellectual property rights, US restrictions on high-tech exports to China and Chinese investment in the US. "The only way to resolve such disagreements is to enhance communication, deepen mutual understanding and promote mutual trust," Wang wrote. Guan Qingyou, assistant dean of the Minsheng Securities Research Institute, said that in the article Wang raised concerns by China and the United States toward each other. Officials from both sides held extensive talks on Monday and Tuesday on a number of issues before Wang and Yang arrived at Andrews Air Force Base in Maryland on Tuesday, accompanied by a large Chinese delegation. A bilateral working group on cybersecurity met for the first time on Monday, while the third China-US Strategic Security Dialogue, chaired by Vice-Minister of Foreign Affairs Zhang Yesui and US Deputy Secretary of State William Burns, was held on Tuesday. This brought senior civilian and military officials from the two countries together for discussions on sensitive security issues. On Thursday, the two sides will continue talks on strategic and economic issues, while business leaders from the two countries meet for a roundtable discussion in the morning. Growing economic and trade ties between China and the US have long been regarded as a pillar of relations between the world's two largest economies, which are also each other's second-largest trading partner. Two-way trade approached $500 billion last year. China is one of the fastest-growing export markets for the US, which is also seeing increased direct investment from China. On Wednesday, The Washington Post published an article by State Councilor Yang in which he described Sino-US cooperation as an anchor for world peace and stability. "China's development poses no threat to any other country," Yang wrote, adding that the country's pursuit of development will increase mutually beneficial cooperation with the US and other countries. Tao Wenzhao, a US studies expert at the Chinese Academy of Social Sciences, said the dialogue is the most important platform among more than 90 China-US cooperation mechanisms. Key areas of cooperation for the two countries will be announced at a joint news conference late on Thursday afternoon. Last year, some 50 areas were on the list. This year, the list will be substantially longer, according to Chinese officials.

S&ED talks hit harmonious note (By Chen Weihua in Washington chenweihua@chinadailyusa.com) US Secretary of State John Kerry listens as China's Vice-Premier Wang Yang delivers his opening remarks at the 5th annual China-US Strategic and Economic Dialogue in Washington on Wednesday. The Dean Acheson Auditorium at the State Department in Washington was packed on Wednesday morning with senior Chinese and US officials as the two governments began round five of the China-US Strategic and Economic Dialogue (S&ED). US Vice-President Joe Biden kicked-off the opening session by expressing his condolences over the two Chinese students killed in the crash landing of Asiana Airlines Flight 214 last Saturday at the San Francisco International Airport. Biden then described the S&ED as "essential" to bilateral relations, saying the two countries needed to build more trust between their peoples and governments. "We don't have to agree on everything, but you have to trust," he said. Biden said the bilateral relationship will continue to be a mix of competition and cooperation. "Competition can be good for both of us and cooperation is essential," said Biden, who first visited China in 1986 as a young Senator. Biden was followed by remarks from the four co-chairs - Chinese Vice-Premier Wang Yang, State Councilor Yang Jiechi, US Secretary of State John Kerry and Secretary of Treasury Jack Lew - all of whom stressed the importance of expanding cooperation and managing differences. Wang said the summit between President Xi Jinping and President Barack Obama a month ago reached important consensus and pointed a clear direction for the two countries to build a new type of major country relationship. "This round of dialogue is to turn the important consensus reached by the two heads of state into concrete achievements and to inject solid content into building the new type of major country relationship," said Wang, whose last trip to the US was 10 years ago. The vice-premier said China is willing to discuss and listen to different voices and accept the correct ones, adding that many of the dialogues China has had with the US and other countries have benefitted the country's progress. But he said that China will not accept those dialogues that intend to shake the country's fundamental system and harm its national interest. State Councilor Yang said he hoped to further increase mutual understanding with the US. "At this round of S&ED, we hope to expand and deepen practical cooperation with the US side," he said. Addressing issues of wide concern in the US, Yang, an ambassador to the US 10 years ago, said China will stay committed to reform and opening up, stick to the path of peaceful development and be a responsible player contributing to the building of the international system. He expressed his satisfaction at the third Strategic Security Dialogue held on Tuesday, as well as the work done by the climate change working group and the cyber working group, both of which are new features to this year's dialogue. Kerry, whose wife, Teresa, had taken ill on Sunday, was emotional in thanking people for their concerns over his wife's health. He said while the S&ED is about cooperation on shared interest, it is also about addressing differences, speaking candidly about them, and trying to find ways to manage them. "We will never agree on everything and we will have candid conversation on those issues where we don't see eye-to-eye, because that is absolutely the best way to constructively manage our differences and increase understanding," said Kerry, expressing his concern that there is a lack of understanding in China about the US' rebalancing to Asia strategy, which many Chinese see as a containment policy. Danny Russel, who was confirmed by the Senate on Tuesday as assistant secretary for East Asian and Pacific Affairs, was among many senior US officials in the audience in the opening session. They also include about a dozen cabinet level officials from each side and military leaders such as Wang Guanzhong, deputy chief of the Headquarters of the General Staff of the People's Liberation Army, and Samuel Locklear III, commander of the Pacific Command. The four co-chairs attended two small-scale talks Wednesday on climate change and energy security, in which the two countries announced five new initiatives to reduce carbon emissions and air pollution. "There is renewed momentum between the US and China on climate change. Bilateral efforts between these two countries are essential, and this collaboration can inject additional vigor in tackling climate change around the world," said Jennifer Morgan, director of the climate and energy program of World Resources Institute. A wide range of issues was discussed Wednesday afternoon on the strategic and economic tracks, which will continue on Thursday. In a conference call on Wednesday afternoon, US administration officials described the first-day talks as "candid" and "on a cooperative tone". Officials also noted the sense of humor and easy, confident style of Vice-Premier Wang.

Hong Kong*:  July 12 2013

Chinese cities tap Hong Kong's Facebook know-how to launch global face (By Amy Li chunxiao.li@scmp.com) When Chengdu launched its Facebook page last year - the first Chinese city to build an official presence on the platform banned on the mainland - the provincial capital of Sichuan looked to Hong Kong for help. Guru Online, a homegrown Hong Kong agency, convinced leaders of the inland city to prioritise social media in their global campaign to draw tourists and investors. “We told Chengdu, Facebook is the most cost-effective platform because of its traffic and loyal users,” said Alan Yip, chief executive at Guru. Chengdu was seeking a wider audience even though it was already pulling creative muscles promoting itself. Besides running two official Weibo accounts, the city also managed to invite the crew of Kung Fu Panda 2 - who had not seen a real panda - to visit the city and meet the black-and-white bears in 2008. This was later widely reported by Chinese media. The crew apparently enjoyed their stay so much that they incorporated into the Hollywood blockbuster the city's famous dandan noodles, mapo dofu dish and landmark Qingchen mountain. But running a Facebook page would be a new challenge. The social media site, Twitter and other popular platforms used worldwide remain banned on mainland China. Very few people inside the city's information office had a Facebook account at the time. In the months leading up to the city's Facebook launch, officials brainstormed with their Hong Kong partners to plan how to market the city to an international audience - one that knows Chengdu only as the "hometown of pandas". Guru and Chengdu agreed on an ambitious plan that involved a regularly updated Facebook page and Twitter account, as well as an English-language website to serve the city's visitors and expatriate community. Chengdu's information office even required its staff to create their own Facebook and Twitter accounts to hone their skills, according to a source familiar with the matter. The city purchased VPNs for employees to bypass the Great Firewall to access the sites. Chengdu is among a growing number of Chinese cities vying to promote themselves in an increasingly flat world. The city hosted the Fortune Global Forum last month and allowed journalists and Fortune 500 business professionals access to Facebook and Twitter, but only momentarily. Many cities are tapping into Hong Kong's social media expertise. “Demand for globalisation is huge on the mainland,” Yip said. “ Be it second-tier cities seeking investors or state-owned companies undergoing transformations - that’s where we can help.” Chengdu’s experiments with social media have been largely successful. One year after its creation, its Facebook page has more than 125,000 “likes”. Its Facebook app, Spicy Panda, a game introducing the city's local snacks, has been played more 16,000 times as of July. The city made headlines with the much-anticipated opening of the New Century Global Centre, the world's largest free-standing building, a picture of which was posted on Facebook on July 5. One year after Chengdu's foray into Mark Zuckerberg’s online kingdom, Beijing and Hangzhou have launched their own official Facebook pages. Several Chinese cities also placed advertisement on the world's largest social networking site, which is reported to be “secretly planning” to open a Beijing office to expand its advetising sales arm . When Nanjing, host of the 2013 Asian Youth Games, grappled with the challenge of connecting with their young audience, Guru advised Jiangsu's capital to consider creative options with Facebook. “Young people live online now,” said Zou Lei, spokesman of Nanjing’s Asian Youth Games next month. “We realised we had to adapt to their ways if we wanted to reach them.” Nanjing ended up taking its Facebook followers on a virtual torch relay to 44 Asian countries. In the relay, mascot Yuanyuan would “arrive” in a certain country, wear local attire and greet its followers in the local language. A real torch will be passed in Nanjing in August. The virtual relay, held from May 8 to June 20, attracted 156,600 participants from 80 Asian cities - mostly young sport enthusiasts, Zou said. The results greatly impressed the organisers. Terrence Wong, managing director at Wan Chai-based Trinity Financial Communications, said he too had seen a rise in the number of mainland clients who turn to Facebook or weibo to reach a wider audience. But Wong said social media is hardly a cure-all. “Social media campaigns work better for clients seeking to promote a certain brand, like clothes manufacturers and cellphone makers,” Wong said. "Financial firms are much more conservative." But when mainland folks want to kick their campaigns up a notch to Facebook or Twitter, Yip said their best bet was the creative minds in Hong Kong, who are in a "unique" postition to help. “This means great opportunities for Hong Kong,” Yip said. To best serve his mainland clients aspiring for an international presence, Yip has made a point of hiring people who “understand both the east and the west", in which he believes Hong Kong excells. "That's why we hire three kinds of people at Guru," Yip said. "HongKongers, mainland professionals educated in Hong Kong and expats born and raised overseas."

 China*:  July 12 2013

China trade outlook worsens, as exports drop abruptly for first time in 17 months (By Reuters in Beijing) China’s trade outlook is deteriorating as exporters lose confidence in the face of weak external demand, rising labour costs and a stronger yuan currency, the customs department said on Wednesday. The comments came after China’s exports fell 3.1 per cent in June from a year earlier, the first decline since January last year and well below market expectations, reinforcing signs of a economic slowdown in the world’s second-largest economy. Economists had expected exports to grow 4.0 per cent and imports to rise 8.0 per cent last month. The downbeat trade data follow the government’s crackdown on the use of fake export shipment documents to close a loophole for short-term money inflows which had exaggerated China’s export performance. China’s exports to the United States – the country’s biggest export market – fell 5.4 per cent in June from a year earlier, while exports to the European Union dropped 8.3 per cent, according to the customs. “The surprisingly weak June exports show China’s economy is facing increasing downward pressure on lacklustre external demand,” said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai. “Exports are facing challenges in the second half of this year. The appreciation of US dollar and the Chinese government’s recent crackdown on speculative trade activities also put pressure on exports.” China had a trade surplus of US$27.1 billion in June, the customs administration said in a news briefing, largely in line with US$27.0 billion expected by economists. Customs spokesman Zheng Yuesheng said June’s trade figures may more accurately reflect the true picture of China’s export performance after the government began a crackdown on an exporters’ practice of booking speculative inflows as trade deals, which had inflated export figures earlier this year. “Exports in the third quarter look grim,” said Zheng, noting that 49.2 per cent of respondents in the bureau’s monthly survey for June saw a drop in the value of new export orders and 43.8 per cent were not optimistic about their exports in the next two to three months. The survey also found that 69.1 per cent of the exporters complained about rising costs overall, 70.5 per cent noted rising labour costs and 59.8 per cent complained about a rising yuan hurting their businesses. China’s trade data are volatile and distorted by speculative capital flows across the country’s border. Doubts about the accuracy of the figures have abated slightly since the customs office and top foreign exchange regulator launched a campaign in May to crack down on fake export claims. China’s reform-minded new leaders have shown a great tolerance of slower growth, although they still need to avoid widespread job losses that could threaten social stability. Economists expect annual growth in China to slow down to 7.5 per cent in the April-June period, with no recovery in sight yet, testing the top leaders’ resolve to tolerate a slowdown in the short run while pressing ahead with efforts to revamp its economy for the long-term good.

Chinese delegation arrives for fifth China-U.S. S&ED - A Chinese delegation arrived in Washington Tuesday for the fifth China-U.S. Strategic and Economic Dialogue (S&ED), which will start Wednesday. Strategic and economic dialogue bids to piece together the Sino-US jigsaw (By Teddy Ng teddy.ng@scmp.com) Piecing together the world's two major powers start annual talks today, but a whole new cast of negotiators on both sides will face a series of problematic issues - Talks between China and the United States that start today will offer a new cast of diplomats and economic chiefs on both sides of the Pacific their first real chance to address major policy issues concerning the two powers. The annual strategic and economic dialogue has, in its five years, become an important venue for managing what is arguably the world's most crucial bilateral relationship. In a sign of the importance the United States gives to the relationship, US Vice-President Joe Biden will open the summit. But this year's talks in Washington have an added significance, observers say, because they come on the heels of leadership reshuffles in both capitals, with new officials in all the top diplomatic and economic posts. Adding to the complexity is the issue of cybersecurity, which was a source of growing tension even before former National Security Agency contractor Edward Snowden disclosed US snooping on China while in Hong Kong last month. There are increased concerns about an economic slowdown in China, as well as a commitment to forge a "new type of relationship between major powers" - a vaguely defined concept stressed when presidents Xi Jinping and Barack Obama met in California last month. "Officials from both sides need to find ways to implement the concept in concrete and practical issues, and use this concept as a guiding principle to tackle bilateral disputes," said Jia Qingguo , a US affairs expert at Peking University. Leading the Chinese delegation are Vice-Premier Wang Yang , who is responsible for trade and economic matters, and State Councillor Yang Jiechi , China's top diplomat. The US delegation will be led by Secretary of State John Kerry and Treasury Secretary Jacob "Jack" Lew. Kerry and Lew are the US chairs of the talks, although officials said the former's schedule was still being determined after his wife, Teresa Heinz Kerry, was admitted to hospital for an apparent seizure. Kerry was with his wife yesterday after her condition was upgraded from "critical" to "fair". In a commentary in The Washington Post yesterday, Yang said it was important for the two nations to "blaze a new trail that is different from the traditional path of conflict and confrontation between great powers". He said the main task of the dialogue was to implement the agreement reached between the two presidents, with concrete outcomes expected. Observers expect the officials to take more time to build a working rapport, even though they have had initial encounters. "We have four new leaders co-convening this, and they do not have the same set of interests and scope of authority as their predecessors," said Dr Kenneth Lieberthal, a senior fellow of the Brookings Institution's John L. Thornton China Centre. Their predecessors "met several times during the year in various combinations and there were no surprises when they dealt with each other personally at the strategic and economic dialogue," Lieberthal said. Of the two Chinese officials, Yang has more familiarity with US affairs, since he previously served as foreign minister. But his personal dealings with Kerry have been limited. Wang has most recently served as party secretary to Guangdong and is a newcomer to international diplomacy. In contrast, his predecessor, Wang Qishan , had deep personal ties with US officials. Wang Qishan knew former US treasury secretary Henry Paulson from the latter's tenure as chief of Goldman Sachs. He was so well acquainted with the family of Lew's predecessor, Timothy Geithner, he reportedly sent birthday gifts to the ex-treasury chief's father. Such familiarity may have helped Wang Qishan appear frank and decisive in his dealings with the US. He once gave an interview on US television in which he criticised the average American's view of China as "simple" and disclosed he sometimes called the State Department to explain Beijing's position on issues. "The two Wangs have quite different backgrounds," said Dr June Teufel Dreyer, a political professor at the University of Miami. She said Wang Yang's relative inexperience with diplomacy meant he would probably be "very cautious in what he does and says". Professor Su Hao , of China Foreign Affairs University, expected Wang Yang would refrain from hardline remarks. Previous strategic dialogues were dominated by US calls for faster currency reform in China and demands on both sides for greater access to each other's markets. Those issues will still be on the agenda this year, but are unlikely to become the main focus, as China's trade and current account surpluses were below their 2007 peaks last year. The economic portion of the talks would focus on the slowing growth of the Chinese economy, said Pang Zhongying , an international relations professor at Renmin University. The purchasing managers' index for the services industry dropped to 53.9 in June from 54.3 in May, according to the National Bureau of Statistics. The slowdown has fuelled concerns that those who invest in emerging markets are facing growing risks. The simultaneous recovery of the US economy may change perceptions that Washington needs Beijing to fix its economic problems, Pang said. "This is a complicated situation that will add to the uncertainty of how the dialogue will run and the tone of officials engaged," Pang said. "Wang Yang is expected to tell his US counterparts that China has the capability to restructure its economy." But Su said the current economic situation may put China in a better position to deflect US calls for Beijing to take more responsibility in global affairs. "China can tell the US that it has to fix its internal problems first as it is having difficulties," he said. Discussions are also likely to touch on Beijing's territorial disputes with US allies, including Japan, Taiwan and the Philippines, said Dreyer. The US will urge Beijing to put pressure on Pyongyang to halt its nuclear programme. A US official said Kerry "feels deeply" about human rights in China and would raise issues including the status of ethnic minorities. The meetings also come soon after Snowden's disclosures and the Hong Kong government's subsequent decision to allow the fugitive American to leave. White House Press Secretary Jay Carney called the move a "setback" for Washington's efforts to build mutual trust with China. But observers from both countries said the incident would not seriously affect the talks because Beijing wants to steer clear of the case. The issue of cybersecurity will nevertheless be on the agenda. Asked at a press briefing if Snowden's disclosures would influence the talks, Assistant Foreign Minister Zheng Zeguang said only: "The information released by the media shows once again that China is among the victims of cyberattacks." Lieberthal said Snowden's revelations gave Beijing an opportunity to "muddy the waters" in the discussion. In turn, Washington would probably continue to stress that it has not engaged in commercial espionage - something Beijing has been accused of.

Hong Kong*:  July 11 2013

Fanling Golf Club ending HK$30m upgrade as land debate rages (By Joyce Ng and Enoch Yiu) A general view of the club house of Fanling Golf Course where the government has plan to redevelop it for residential use. The Fanling golf club embroiled in a New Territories redevelopment debate is nearing the end of a HK$30 million project to renovate its facilities and improve the irrigation of its golf courses. It had also planned to renovate its clubhouse this year - but now its future may hang in the balance after development ideas were floated that might see the place ploughed up for housing. On Friday, the government indicated the Fanling facilities would be part of a new-town study next year. The club has not responded to inquiries from the South China Morning Post. The club set aside HK$30 million in 2011 for renovation and construction works, its annual report last year showed. That included renovating and returfing the driving range and installing a new irrigation system in all three 18-hole courses. "This, as all past captains know, is the best way to keep the membership happy," then captain Peter Reed wrote. The club completed the irrigation network in September, the report showed. It awarded a tender in January for remedial works to a dangerous slope located along Fan Kam Road. This year, its plans are to start roof works and mechanical and engineering works, and the first phase of clubhouse renovation. The club, which manages golf courses in Fanling and Deep Water Bay, has 2,501 members. Last year it received HK$76 million in members' subscriptions and recorded an operating surplus of HK$6.2 million. Corporate membership fees are said to exceed HK$10 million on the second-hand market. A full member told the Post he had waited 20 years for a membership, eventually paying almost HK$500,000. For the sake of Hong Kong as an international financial centre, we should keep golfing facilities, as foreign businesspeople working here would find it strange if there was not a decent golf course - "For the sake of Hong Kong as an international financial centre, we should keep golfing facilities, as foreign businesspeople working here would find it strange if there was not a decent golf course," he said. "A golf course is not just a sports venue, but a place for the who's who in town to meet and discuss business." A part-time member also expressed support for the course. "We need world-class sports and cultural activities to attract the best working talent," he said.

Girls' school's plan to switch to the direct subsidy scheme divides parents - A top girls' school's plan to switch to the direct subsidy scheme has divided parents and alumni and increased worries the scheme favours education for the rich, write Linda Yeung and Elaine Yau - Legislator Regina Ip Lau Shuk-yee is a former student, as is former Executive Councillor Rosanna Wong Yick-ming and actress Sandra Ng Kwan-yu. St Stephen's Girls' College boasts a long list of famous alumni. But the government-funded school has been drawing attention recently for another reason - its application to switch to the direct subsidy scheme (DSS). The proposal has stirred controversy as never before in the school's 100-year history, dividing parents and alumni. While some staged protests against the move, others wrote to legislators in support of the plan. The DSS was introduced in 1991 to inject diversity into the local education system. It gives schools autonomy in management, and some independence in setting fees and curriculum, while receiving a subsidy for each student who is enrolled. But in recent years, a steady stream of top government schools making the switch - St Paul's Co-educational College, and Diocesan Boys' and Diocesan Girls' schools among them - has roused growing concern that the trend will widen inequality in educational opportunities. School fees are certainly higher among elite DSS schools: DBS, for example, now charges HK$40,000 for its primary section and HK$38,000 for its secondary section each year (HK$62,000 for its International Baccalaureate stream). St Stephen's Girls is proposing annual fees of HK$35,000 for its secondary students and HK$30,000 for its primary intake. DSS schools are obliged to set aside at least 10 per cent of fees received for scholarships and fee remission. But as a critical 2010 Auditor's Report found, several schools failed to do so; one college instead invested HK$71 million in equities and other instruments. DSS schools have since improved transparency and placed details of relief assistance on their websites. But that has done little reassure people like Joy Liu Shuk-wah, a member of an alumni group opposed to the switch. Liu argues that the move would impede the school's mission to provide education to students regardless of family background and financial status. "It provides more choice for rich families but not for the poor," she says. The switch would largely limit the pool of students to those from more affluent backgrounds. Some school-sponsoring organisations such as the Society of Jesus, which runs Wah Yan College, Kowloon, are determined to keep their school public. "We need to cater to students from all socio-economic backgrounds, including the grass roots," says Wah Yan principal John Kang Tan. "The fee remission strategies may not cover all needy students. There is also the psychological barrier among parents who may not want to apply after hearing the title DSS," he says. Professor Chou Kee-lee of the Hong Kong Institute of Education, concedes students on assistance may feel stigmatised. But while he found a widening gap in educational attainment among youths from rich and poor families in a recent study, Chou says DSS schools give better-off students a choice: "You cannot deny schools the right to switch." For the elite Heep Yunn School, joining DSS last year gave it the financial means to sustain activities that it takes pride in, from sports and debate to visual arts, after years of struggle. It also allocated 30 per cent of its fee income for scholarships and remissions, keeping the same ratio of assisted students. "Our school makes no distinction between students of different socio-economic backgrounds," says principal Dave Lee Chun-hung. "We enable all our students to take part in personal growth training or exchange programmes." St Stephen's Girls says the switch will enable it to strengthen its curriculum and staff. "We can also use the additional resources to augment smaller teaching units. For example, we now hire nine extra teachers with our own resources. This is unsustainable financially," its council said in an e-mail reply. The council argues that a major challenge for many Hong Kong schools is they lack the autonomy to devise programmes that can adequately prepare students for the 21st century. "The skills that children need for their future change very rapidly. Therefore, schools need to adapt their programmes in a more timely manner. Schools also need to design more personalised teaching approaches ... which best suit the needs of students." To maintain a diverse student body, St Stephen's Girls has pledged to set aside 20 per cent of its fee income for remission and scholarships, and adopt a "blind" admissions policy. "We are determined to ensure that no girls will lose the chance to join us because of the fee," its council says. Its fees will also remain unchanged for the first five years of the switch. St Stephen's Girls is also keen to gain control over admissions. Under the DSS, it can opt out of the central allocation system for school places, which has made for unpredictable numbers of pupils advancing from its kindergarten and primary sections. In the wake of an outcry over fairness of the DSS, Secretary for Education Eddie Ng Hak-kim has defended the system. He has said that more than 30 per cent of DSS schools charge annual fees of below HK$5,000; five junior secondary schools are even free. Education Bureau figures show 26 schools (42.6 per cent) of the 61 secondary schools in the DSS system charges fees of HK$20,000 or more each year, with 15 setting fees at HK$30,000 or above. But Professor Tsang Wing-kwong, an education researcher at Chinese University, says it is misleading to look at overall figures. Speaking on RTHK's Letter to Hong Kong, he says focus should be on the 12 elite traditional subsidised schools that joined DSS since 2002. Tsang says DSS schools can be divided into four types: leftist schools like Pui Kiu Middle School; private schools like Delia Memorial School that joined DSS soon after its launch, and which charge relatively cheaper fees; schools established after 2000 like Po Leung Kuk Ngan Po Ling College; and traditional subsidised schools that made the switch more recently. It is the fourth type that is exacerbating inequity, he says. To attract more schools to DSS, the government relaxed funding requirements in 2001. Previously, tuition in DSS schools could not exceed the subsidy amount by two-thirds. The new policy permits tuition to be set at a maximum of two and one-third of the subsidy. With annual subsidy for a DSS student averaging about HK$40,000, that means a school can raise tuition to HK$100,000. The legislator for the education sector, Yip Kin-yuen, says another factor for elite subsidised schools making the switch is to exercise full control over intake. "Students were divided into five bands before. This has shrunk to three, which means students' abilities can vary greatly. By going DSS, those schools can decide solely on students' performance in interviews. A grass roots student without access to many extracurricular activities will certainly lose out to kids from well-off families who have joined lots of programmes." The Education Bureau concedes there is some inherent bias. The reason many schools fail to use funds set aside to support needy students may be "that relatively more students coming from affluent families perform better in interviews, making them more likely to be accepted by DSS schools", officials told legislators. Other figures also point to how the DSS system widens inequality in education. About one third of DSS secondary schools set aside part of their intake to include students placed under the central allocation, but none comprise elite schools. While DSS schools account for 12.3 per cent of total places, Yip says a closer look at key districts where more elite schools made the switch show how access to top schools is squeezed for poorer students. He cites Central and Western District, where there are 564 DSS places at the primary level, accounting for 4.4 per cent of the total. Coupled with private and international schools, the non-public sector makes up 41 per cent of primary places in the district. Similarly, 2,896 DSS secondary school places in the district account for 22 per cent of the total. But together, the non-public sector makes up 39 per cent of secondary school places in Central and Western. This is much higher than the overall average for the non-public education sector, which is 18 per cent for secondary and 21 per cent for primary places. What this means is a wealthier parent living elsewhere can send his child to a DSS school in Central and Western, but this additional option is at the expense of grass roots families in the district. "The trend is that the paid education sector in Hong Kong gets bigger and bigger while the free public sector keeps shrinking," Yip says. To improve equality, he suggests the Education Bureau should consider requiring DSS schools to set aside a number of places for central allocation. "If DSS were wholly private, the public wouldn't care about how they were run, but they get lots of taxpayers' money every year," Yip says. (HK$2.9 billion was allocated for the DSS sector in the 2011/12 budget.) "The government should adjust the funding model. DSS schools get autonomy over student intake and more money to build better campuses. "Instead of creating an unfair advantage for the DSS sector, the government should boost quality for all."

Thief tricks Peninsula hotel into opening room safe, walks off with HK$50K (By Clifford Lo clifford.lo@scmp.com) Peninsula staff unwittingly help fake guest carry out HK$50,000 theft - A thief who pretended to be a guest at the luxury Peninsula hotel coolly tricked staff into opening a safe and escaped with HK$50,000 in foreign currency and valuables, police revealed. The man, a foreigner, approached the front desk of the hotel in Salisbury Road, Tsim Sha Tsui, at about 4am on Sunday, claiming to have lost his room key. The room number he gave was occupied by a French businessman, whose name and birth date he gave as proof of identity. The real guest and his wife were in bed in the room at the time. "Speaking in English, he told hotel staff that he had lost his room key and demanded another one," a police officer said. After obtaining the spare key, the man apparently waited until the couple went out on Sunday afternoon before letting himself into their room. "He then telephoned the front desk from the room saying he had forgotten the password of the safe and asked for assistance to open it," the officer said. He greeted hotel staff wearing a pair of slippers, a blue T-shirt and jeans and they helped him open the safe. After the staff left, the robber emptied the safe and escaped with £3,000 (HK$34,650), a laptop computer worth about HK$15,000, and several bank cards. The break-in was discovered when the 47-year-old Frenchman and his wife returned at about 9pm. Police were called in at about 11.45pm. After viewing footage from surveillance cameras, police said they were looking for a 1.77m-tall non-Asian man. Detectives suspect the intruder is from South America. Director of public relations at The Peninsula, Olivia Toth, said she was unable to comment while police were investigating. A senior officer said the hotel industry would be informed of the case.

Asiana flight attendant put out fires, helped passengers despite broken tailbone (By Associated Press in San Francisco) Flight attendant and cabin manager Lee Yoon-hye speaks to the media on Sunday. The evacuation of Asiana Flight 214 began badly. Even before the mangled jetliner began filling with smoke, two evacuation slides on the doors inflated inside the cabin instead of outside, pinning two flight attendants to the floor. Cabin manager Lee Yoon-hye, apparently the last person to leave the burning plane, said crew members deflated the slides with axes to rescue their colleagues, one of whom seemed to be choking beneath the weight of a slide. Lee described several dramatic moments in the remarkable evacuation that saved 305 of the 307 people on the plane that crashed Saturday while landing in San Francisco. One flight attendant, Kim Ji-yeon, 30, put a scared and injured elementary schoolboy on her back and slid down a slide, said Lee, in the first comments by a crew member since the crash of the Boeing 777. A pilot helped another injured flight attendant off the plane after the passengers escaped. Lee herself worked to put out fires and usher passengers to safety despite a broken tailbone that kept her standing throughout a news briefing with mostly South Korean reporters at a San Francisco hotel. She said she didn’t know how badly she was hurt until a doctor at a San Francisco hospital later treated her. It was still unclear whether the pilot’s inexperience with the aircraft and airport played a role, and officials were also investigating whether the airport’s or plane’s equipment could have malfunctioned. Aviation and airline officials said although the pilot has flown a Boeing 777 nine times – for a modest 43 hours in total – it was the first time he was landing that wide-bodied jet into San Francisco. Investigators have said he had realised he was flying too slow and too low, and tried to abort the landing and go back up in the air, but he failed. Lee, 40, who has nearly 20 years’ experience with Asiana, said she knew seconds before impact that something was wrong with the plane. “Right before touchdown, I felt like the plane was trying to take off. I was thinking, ‘What’s happening?’ and then I felt a bang,” Lee said. “That bang felt harder than a normal landing. It was a very big shock. Afterward, there was another shock and the plane swayed to the right and to the left.” Lee said that after the captain ordered an evacuation, she knew what to do. “I wasn’t really thinking, but my body started carrying out the steps needed for an evacuation,” Lee said. “I was only thinking about rescuing the next passenger.” When Lee saw that the plane was burning after the crash, she was calm. “I was only thinking that I should put it out quickly. I didn’t have time to feel that this fire was going to hurt me,” she said. There were 12 flight attendants, including Lee, on the plane. Ten were South Korean nationals, Asiana said, and two were Thai nationals who were seriously hurt. Lee said she was the last person off the plane and that she tried to approach the back of the aircraft before she left to double-check that no one was left inside. But when she moved to the back of the plane, a cloud of black, toxic smoke made it impossible. “It looked like the ceiling had fallen down,” she said. San Mateo County Coroner Robert Foucrault said two people killed in the crash – both teenage students from China – were found outside the jetliner. More than a third of the people onboard didn’t require the hospital, and only a small number were critically injured. The San Francisco fire chief, Joanne Hayes-White, praised Lee, whom she talked to after the evacuation. “She was so composed I thought she had come from the terminal,” Hayes-White told reporters in a clip posted to YouTube. “She wanted to make sure that everyone was off. ... She was a hero.”

Cross-strait tennis partners 'forced' to talk politics (By Amy Li chunxiao.li@scmp.com) 'I don't accept the claim that Taiwan is a country,' Peng Shuai said - Peng Shuai (right) of mainland China and Hsieh Su-wei of Taipei celebrate their win at Wimbledon on Saturday. Have the triumphant Peng Shuai and Hsieh Su-wei really forged a tennis partnership that bridges the gap between mainland China and Taiwan, as many have claimed? The new grand-slam title winners were finally forced to confront the elephant in the room at a press conference after they beat Australian duo Ashleigh Barty and Casey Dellacqua at Wimbledon on Saturday. And when they did, the divide was apparent. When a Japanese reporter asked Taiwan’s Hsieh what it means to win a grand slam for “her country” as a “Taiwanese” person, their conversation was interrupted by Peng, reported Chinese media. “I am sorry, but I am still sitting here,” she said, raising her hand, “and I don’t accept the claim that Taiwan is a ‘country’.” “Tennis is only a sport, and we don’t intend to get involved in politics,” she added. Peng - who is from Xiangtan in Hunan province, the birthplace of Mao Zedong - also said she and Hsieh would not broach the topic in private. “I’ve liked being called ‘strait combination’ from the very beginning,” Peng said, referring to the popular title the Chinese media coined for the doubles pair. Peng's comment was met with mixed reaction on China’s blogosphere. While some applauded her for being “patriotic”, others criticised her for embarrassing her partner in front of a room of reporters. “[If Peng won’t recognise Taiwan as a country], why would Hsieh accept that Taiwan is a province of China?” one microblogger said. “Why would Peng make a political speech if she intends to be left out of politics?" wrote Taiwanese blogger "A Q". Taiwan’s pro-mainland China Times, however, urged the two sides to forgo differences and produce more successful “strait combinations” in business co-operations and even political negotiations. The tennis champions’ dilemma may be resolved much sooner. Hsieh is considering giving up her Taiwanese citizenship to represent the mainland, so she can receive a much bigger sponsorship deal, according to Agence France-Presse. In a telephone interview, Hsieh’s father reportedly said: "It is not that we don't love Taiwan... we have no choice”.

 China*:  July 11 2013

Legality of study tour questioned after San Francisco crash (By Daniel Ren in Jiangshan ren.wei@scmp.com) School officials deny responsibility after deaths of students at San Francisco airport - Ye Mengyuan (left) and Wang Linjia. New questions emerged yesterday over the legality of the summer study tour programme that the two Chinese students who died in Saturday's airliner crash in San Francisco were attending. The victims, Ye Mengyuan, 16, and Wang Linjia, 17, were among pupils from Jiangshan High School travelling to the United States aboard Asiana Flight 214 when it crash-landed. The girls and many of the 141 Chinese passengers on board where participants in study tour groups. Yesterday, officials at the school in Zhejiang province sought to play down their role in the study trip to California, which was organised by the Boyue consultancy. Zheng Liming, a deputy principal for Jiangshan High School, said the school was responsible only for introducing pupils to the programme. He said all contracts were between the participants and Boyue and the school saw none of the money. But in April last year, the Ministry of Education, the Tourism Administration and other state-level authorities ruled only schools, education authorities and official organisations such as the Communist Youth League could organise such trips. The main organisers could sign contracts with qualified travel agencies to arrange services such as air ticket booking and accommodation. According to these rules, a consultancy would not be eligible to be an organiser. Boyue could not be reached for comment yesterday. In the wake of the Asiana crash, provincial education authorities in Zhejiang and elsewhere have suspended study tours and ordered all primary and secondary schools to review whether their tour programmes comply with government requirements. A government official in Jiangshan, who declined to be identified, said yesterday that officials were focused on problems directly related to the accident and that investigations into the summer tours were not a top priority. "Officials are more concerned about how to seek compensations for the victims," he said. Jiangshan High School started sending pupils on trips to the US in 2006. A two-week tour focused on language studies and cultural immersion costs each student about 30,000 yuan (HK$36,900). Pupils said they were stunned by the deaths of their classmates. "Everyone felt sad and shocked," said one pupil, Zhou Xiaoxiao. "No one believed the tragedy could have happened." 

US reaction in Asia 'out of proportion', says China envoy (By Teddy Ng teddy.ng@scmp.com South China Morning Post) US military build-up in the region is out of proportion to any real threat, says China's ambassador on eve of bilateral talks http://www.youtube.com/watch?v=y5trp4iv4LI  Ambassador Cui Tiankai says regional tensions and cybersecurity will top agenda of talks. The US military presence in the Asia-Pacific region is out of proportion to the security threat facing the region, China's top envoy to Washington said on the eve of high-level talks between the countries that start today. In a interview with CNN International's Christiane Amanpour, Cui Tiankai said threats in Asia-Pacific centred around North Korea's nuclear programme. But he said the United States should not use the issue to boost its military presence throughout the region. "I don't think the US should overreact to such a threat," Cui said, adding that the strengthening of US military alliances were "not quite in proportion to the real threat", so people in the region had reason to question Washington's intentions. The interview aired ahead of the Sino-US strategic and economic dialogue in Washington, in which top officials will discuss issues, including regional security, that were a source of friction between the two powers. During the talks, the US is expected to urge Beijing to exert pressure on Pyongyang to halt its nuclear programme. Cui said denuclearisation of the Korean peninsula was a national security concern for Beijing. But he argued that maintaining regional stability would be defeated if sides resorted to armed conflict. Cui also sounded dubious about Washington's claims that it has not taken sides in Beijing and Tokyo's dispute over the Diaoyu islands, which Japan calls the Senkakus, in the East China Sea. US officials have said they consider the islands part of the territory covered under its defence pact with Japan. "It's not a matter of whether I believe them or not. It's a matter of how the US would really stick to this position of taking no side," he said. "Sometimes, when the US is talking to us, they say one thing; and when they are talking to Japan, they say another. So what is the real position of the US? We must wait and see." Presidents Xi Jinping and Barack Obama vowed last month to avoid confrontation and build a "new type of relationship" between an emerging power and an established one. Cybersecurity was on the agenda when lower-level officials held their first meeting on Monday. The topic is likely to surface in higher-level talks. Cui said Beijing would seek "some clarification" about allegations by former National Security Agency contractor Edward Snowden that the US had hacked Chinese computer systems. He stressed that the central government had adhered to the "one country, two systems" principle and had not interfered in Hong Kong's decision to allow the US fugitive to leave the city. "It is a matter between Mr Snowden and the US government," Cui said. "It's none of our business." Observers said Cui's remarks showed the extent of Beijing's frustration over Washington's pivot towards Asia as it winds down its military involvement in the Middle East and Afghanistan. Wang Fan , a professor at Beijing Foreign Affairs University, said officials would only be able to discuss solutions if they admitted there were problems. Professor Jia Xiudong , from the China Institute of International Studies, said that China welcomed economic co-operation with the US in the region, but "a [greater] military presence will only make the Sino-US relationship more complicated". http://www.youtube.com/watch?feature=player_detailpage&v=y5trp4iv4LI 

Chinese naval vessels conduct exercises in waters near Shantou - Undated photos show China's navel vessels taking part in a training session in waters near Shantou, south China's Guangdong Province in recent days.

Fortune list sees 95 Chinese companies (By Zheng Yangpeng) A total of 95 Chinese companies have made it onto the list of Fortune 500 companies compiled by Fortune magazine, with combined gross revenue of $5.2 trillion, or 17 percent of the Fortune 500's total revenue. The list, ranked by companies' gross revenue, showed that in 2012, China Petrochemical Corp (Sinopec Group) had the largest revenue of $428.17 billion among all Chinese companies. China National Petroleum Corp was close behind, with annual revenue of $408.6 billion. Sinopec Group ranked fourth and China National Petroleum ranked fifth on the global list, each up by one spot from the previous year. Globally, Royal Dutch Shell Plc is the largest company in terms of annual revenue, with $481.7 billion. Wal-Mart Stores Inc and Exxon Mobil Corp took the second and third spots. Besides ten Taiwan or Hong Kong-headquartered corporations, there are 85 Chinese mainland-headquartered companies, mostly State-owned Enterprises. Most are concentrated in the energy, resources, banking and telecommunication sectors. In a note accompanying the list, Fortune's Chinese website pointed out there are both positive and worrying aspects in the Chinese listings. Besides the dominant share of SOEs and the underdeveloped service sector, the note said profits are unequally distributed among all listed Chinese companies. The nine top commercial banks account for 55.2 percent of all Chinese mainland companies' profits. The note also said Chinese companies' high-leverage ratios are a source of concern. In China, non-financial companies' average leverage ratio is 4.42 while that of their counterparts in United States is 2.79.

Victims' families arrive in SF (By Zhang Qidong, Chang Jun and Yu Wei in San Francisco kellyzhang@chinadailyusa.com) Chinese Consul General in San Francisco Yuan Nansheng visits a Chinese who was injured in the Asiana 214 flight crash at a hospital in San Francisco on Monday. Family members of the two Chinese victims of Saturday's Asiana crash arrived in San Francisco from Jiangshan, Zhejiang province on Monday night, while many of the injured in the crash were still undergoing treatment. Chinese Consul General in San Francisco Yuan Nansheng met the family members from China at the airport. At a news conference held Monday afternoon in San Jose after meeting with the surviving Jiangshan students, Yuan offered condolences to the two Chinese students who were killed in the crash and said he will discuss how to handle arrangements with the victims' family members. "Up to now our work is really about confirming and checking the information of Chinese nationals and providing rescue assistance to them," Yuan said. "From tomorrow on, our work will be more focused on handling the aftermath." Yuan and his team visited five Chinese survivors in San Francisco General Hospital on Monday morning, where they were being treated for injuries. "One student was undergoing surgery when I went there and I spoke with the doctor," Yuan said. "I was told that the student was still in very serious condition. I will keep a very close eye on that student's progress," adding that another student was recovering and had been transferred from ICU to an ordinary patient room. Wang Chuan, a press officer of the Chinese Consulate, said three students remain in critical condition and two others are being treated for injuries at the hospital. "It is a very difficult time for the families of the victims, we will try our best to comfort them and see how we can help better," Wang said. The Zhejiang students have decided to return to their home after they met with the delegation members tonight. The Shanxi student group, meanwhile, has decided to stay in the US and finish their planned tour and summer program. Chris Baron, director of finance of the West Valley Christian School, which was supposed to receive the 35 students from Zhejiang province, told China Daily that this was their first China-specific program during their 15 years of hosting international students. "Previously we were mainly hosting students from Korea," said Baron, adding that this tragedy wouldn't dampen Chinese parents' enthusiasm for sending their children to the US for educational opportunities, including enhancing their English skills through various on- and off-campus activities. Baron said her school is planning to welcome their second Chinese student group in early August. "There will be 25 high school-age students coming over to experience a different culture," she said, declining to identify the agency that sponsored the student group from China. Asiana Airlines flight 214 crashed while landing at San Francisco International Airport on Saturday. The crash left two dead and 182 injured. The two girls killed in the crash were among a group of 30 students and five teachers from Jiangshan Middle School who were traveling to the US to attend a summer camp. The National Transportation Safety Board and its Korean counterparts are focusing their investigation into the crash on the airliner's pilots, NTSB chairman Deborah Hersman said in a news conference on Monday. When asked whether pilot error may have played a part, Hersman said "nothing has been ruled out. We will not speculate and will not draw conclusions" until more information is known about what happened. The pilot is a 17-year veteran of Asiana Air. An investigation into the crash began with the arrival of the NTSB team on the scene on Sunday, and the final report may not come for up to two years, according to South Korea's Aviation Policy Bureau. According to Hersman, the aircraft was flying well below its target speed and was "approaching a stall" moments prior to impact. Hersman said that data from the recording device onboard the plane indicated that the crew received a call to increase speed seven seconds before the crash.

More Chinese firms investing in the US (By Li Jiabao lijiabao@chinadaily.com.cn) Despite technical and political obstacles, Chinese business investment in the United States will keep growing fast in the near future, experts said. "Chinese investment in the US will surely increase fast and the momentum will not be blocked," Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce, said on Monday. He added that the huge US market has advanced technology and management, providing tremendous opportunities for Chinese investors in terms of mergers and acquisitions as well as setting up plants through greenfield investments. Huo added that Chinese investment in the country will benefit both sides. Chinese figures showed that the country's total investment in the US surged to $9.3 billion in 2012 from $1.88 billion in 2007, while US figures said that the cumulative investment jumped from $3.4 billion to $22.8 billion in the same period, Zhao Weiping, Chinese Consul General to Chicago, said in late April. Zhao added that in addition to the attractiveness of the market and technology, the US also has low costs for utilities and land use, and that Chinese investment in the US will keep growing, which will enhance the investors' competitiveness. Meanwhile, the US is advancing its SelectUSA initiative to lure foreign investment, while the Chinese government is encouraging domestic companies to invest abroad, including in the US, he added. "In the future, Chinese investment projects in the US will depend greatly on whether the US can create a more favorable environment," Zhao said. "The US should have a strategic vision for welcoming Chinese investment and avoid politicizing normal transactions. In addition, governmental communications should be strengthened to reduce mistrust." In recent years, Chinese investment in the US was affected by some negative factors, including the US frequent politicizing of Chinese spending and blocking transactions for so-called "national security" reasons, which is China's greatest concern, according to Zhao. After Chinese meat giant Shuanghui International Holdings Ltd proposed in late May to buy Smithfield Foods Inc, the world's largest pork producer, some US senators urged the Obama administration to consider whether the proposed $4.7 billion deal - the biggest takeover of a US company by a Chinese firm ever - posed a threat to the US food supply that could justify blocking it. "Some obstacles are technical, such as the ban on foreign ownership of agricultural land in the Shuanghui case. But many other hurdles come from the US' protection of its sensitive sectors, including telecom and energy companies, with national security excuses," Huo said. "As Chinese investment in the US keeps growing, the hurdles will also keep emerging." China and the US will hold the fifth Strategic and Economic Dialogue, or S&ED, on Wednesday and Thursday in Washington. The Chinese ambassador to the US, Cui Tiankai, said in a Monday news conference that the bilateral investment pact will be a very important topic for the upcoming talks. "Chinese investors have shown great enthusiasm in investing in the US and their investments will bring win-win results. But they were confronted with political obstacles, rather than economic ones. Both sides should make pragmatic efforts to eliminate these obstacles as soon as possible," Cui said. China and the US officially launched the negotiations on a bilateral investment treaty in 2008. The ninth round of talks was concluded in early June.

Hong Kong*:  July 10 2013

Beijing's top man in unprecedented Hong Kong lunch with Legco members (By Tony Cheung and Lo Wei - South China Morning Post) Liaison office chief said to be ready to 'tackle all questions' at unique event as pan-democrats prepare to voice demands on universal suffrage - Legco president Jasper Tsang Yok-sing says a planned lunch meeting between lawmakers and liaison office officials will be an informal one. Central government liaison office director Zhang Xiaoming. Beijing's top official in Hong Kong, Zhang Xiaoming, is ready to "tackle all questions" at a lunch with the entire Legislative Council - and pan-democrats vowed to voice their strong demand for universal suffrage. The unprecedented occasion, revealed yesterday, will be the first time the central government's liaison office has sat down with lawmakers from all shades of the political spectrum since the 1997 handover. It is understood that Zhang, a Basic Law expert who took over as director of the liaison office at the end of last year, is prepared to talk with the pan-democrats on sensitive issues - as Beijing has come to realise the importance of expressing its views directly. A source familiar with the arrangement said: "Zhang is ready to take whatever questions are raised from the lawmakers." The source said that as well as lunch, to be held in the dining room of the new Legco offices next Tuesday, Zhang will tour the building. "He will take the opportunity to get to know more about Legco's operations and lawmakers," the source added. While pan-democrats were busy planning what to say, Legco president Jasper Tsang Yok-sing stressed that it is a social gathering - not an occasion for a serious debate on political reform. He said there would be no specific topics for discussion over lunch. "As for lawmakers who wish to express their opinion to officials of the liaison office, such as handing over petition letters, I believe we all understand that we should respect each other," he said. "I am not worried that there will be any chaotic scenes." Tsang, who extended the invitation to Zhang last week, said the head table will include legislators from all major political parties, both pro-establishment and pan-democratic. Labour Party chairman Lee Cheuk-yan said he hoped the lunch would lead to better communication, especially on political reform. He called for Zhang to refute remarks made by National People's Congress Law Committee chairman, Qiao Xiaoyang, in March that the city's chief executive must not confront the central government. Qiao's remarks gave rise to concerns that an electoral "screening" mechanism could be imposed to block potential pro-democracy candidates. Lee also planned to submit petitions to Zhang calling for accountability for the 1989 Tiananmen Square crackdown. Radical League of Social Democrats lawmaker "Long Hair" Leung Kwok-hung will call for the release of Nobel peace laureate Liu Xiaobo, who was jailed in December 2009. Democratic Party chairwoman Emily Lau Wai-hing said she would tell Zhang that Hongkongers hoped universal suffrage could be achieved as soon as possible, and the liaison office should stop "meddling" in the city's internal affairs. Chinese University political scientist Ma Ngok said while the lunch showed Zhang was a relatively open official, it could further reduce Chief Executive Leung Chun-ying's authority. "As the administration is unwilling to start a consultation on political reform, [Beijing's representatives] have to contact the lawmakers directly," Ma said.

Rita Fan: Beijing won't be forced into suffrage (By Joshua But and Stuart Lau - South China Morning Post) Loyalist Rita Fan warns against Occupy protest after Benny Tai argues democracy can work - Rita Fan Hsu Lai-tai shares her views the Occupy Central Movement with students of Heep Yunn School. The central leadership would not allow itself to be forced into introducing universal suffrage that met international standards, a Hong Kong member of the nation's top legislature has warned. And the Occupy Central civil disobedience action would only end up being an act of "self-mutilation" on the city, said Rita Fan Hsu Lai-tai, a member of the National People's Congress Standing Committee. Fan's words came on the heels of a speech by Benny Tai Yiu-ting, one of Occupy Central's core organisers, at the same secondary school in Ma Tau Wai. Tai was on his first visit to schools to talk about the movement for democracy. "Today, Beijing is full of confidence and is determined to walk its own way [politically]," she told about 400 pupils yesterday. "I cannot see Beijing accepting the western style of democracy, or universal core values, and deeming it suitable to be applied to any place in China." She also said a recent proposal for the 2017 chief executive election - which suggests an aspiring candidate who clinches the support of 100,000 voters can contest under universal suffrage - could hardly be in line with the Basic Law and the NPC stance. Fan issued the warning in the afternoon at Heep Yunn School in Ma Tau Wai, hours after Tai, a University of Hong Kong law professor, spoke at the school. Tai initiated the idea to gather 10,000 protesters to jam roads in Central by July next year as a last resort in the drive for democracy. Ahead of his speech, pro-establishment group Voice of Loving Hong Kong distributed leaflets outside the school against Tai promoting the civil disobedience campaign to pupils. Fan said the stakes were not high enough to force a change of stance in the central leadership and described the Occupy campaign as "self-mutilation". "Occupy Central - as a threat - is not the appropriate way," she said. Tai said he believed state leaders were sincere about allowing universal suffrage in the city. "There is room for a universal suffrage proposal to meet both the requirements of the Basic Law and international standards," he told about 500 pupils. The movement would not accept pupils aged below 18 to join acts of civil disobedience, he said, but they could take part in "deliberation days" to discuss Occupy Central or as volunteers. After the speeches, some pupils expressed support for the campaign but none pledged to join. Secretary for Education Eddie Ng Hak-kim, when asked about Tai's appearance at Heep Yunn, said his bureau "especially reminded schools again" not to take any initiative in arranging potentially illegal activities. The school stated its political neutrality, saying both speeches were organised as part of liberal studies.

Hong Kong teenager's script to be made into a Hollywood movie (By Danny Lee danny.lee@scmp.com) Sixteen-year-old's idea, based on his school experiences, set to hit cinema screens in 2014 - Schoolboy Jeremy Lin with Alan Tam. When 16-year-old Jeremy Lin Chong-rang started writing a comedy based on his experiences in school, he did not expect Hollywood to pick up his script and turn it into a 90-minute film. "I'm just some kid who wrote something and then they wanted to make it into a movie," said the Year 11 Chinese International School pupil. Lin first pitched his idea to Los Angeles-based screenwriter and investor Fabienne Wen Pao-kuen at a film workshop last year. She encouraged him to produce a full-length script, which he did over the Lunar New Year. Impressed, Wen brought the script to Hollywood's attention, which then started a bidding war among movie executives to produce the film. Studio Best Medicine Production won. Angel Gracia, who directed the 2011 romantic comedy From Prada to Nada, takes the reins as director for the film. Brion Hambel and Paul Jenson, who together produced the 2011 comedy Natural Selection, are on the production team. Even Canto-pop star Alan Tam Wing-lun was roped in as executive producer after Lin tracked him down to ask for his help and mentoring in the film. "He showed me the script and I took it home to read … I told him if he had enough funds, he should go ahead," said Tam. Lin will join the team in Los Angeles for filming, which begins next month. The movie, called Senior Project, may well make him one of the world's youngest screenwriters. Aimed at teenagers, Senior Project is based on the critically acclaimed 1980s coming-of-age comedy The Breakfast Club. Lin's plot - which includes elements resembling his own experiences in school - revolves around five high-school students, including a gay teenager who lies about his sexuality and a student who tries to keep up with the appearances of being rich. Lin said he believed movie executives enjoyed the absurdity of his script because the characters' experiences were relatable. To improve the film's on-screen quality, the teen has launched a campaign under Kickstarter - a funding platform for creative projects - to boost the film's US$750,000 budget. Lin has raised HK$560,000 in donations so far. He hopes to bring that to HK$1.9 million before the campaign ends in two weeks. Lin and his team plan to launch Senior Project next summer and to hold its premiere in Hong Kong. Ted Faunce, Chinese International School's headmaster, said: "I am proud of Jeremy and of the innovative, can-do spirit that we cultivate at the school. It is exciting to be part of a school where 'Jeremy Lin' stories abound."

'Empty' truck yields 1.13m illegal cigarettes (By Phila Siu phila.siu@scmp.com) Tobacco seized from secret compartment of container truck after it crossed border - Customs officers busted an illegal tobacco syndicate on Saturday, seizing about 1.13 million cigarettes from an "empty" container truck after it crossed the border. The tobacco had been hidden in a fake compartment. Four men, aged 31 to 55, were arrested - three Hongkongers and one from South Asia. The Customs and Excise Department said it was the first time officers had discovered tobacco being smuggled this way. Walter Mak Hoi-wan, head of customs' revenue and general investigation bureau, said customs officers followed the truck from the border to a cargo unloading area in Man Kam To at about 2pm on Saturday. "The truck was supposedly empty … but our officers watched several men walking into the false compartment to move the boxes of cigarettes. It was then that the officers made their move and arrested them," Mak said. He said there was a false wall at the end of the container, which was actually a door leading to the a compartment measuring 320 sq ft. It concealed 88 boxes of illegal cigarettes with an estimated value of about HK$3 million. The duties would have been worth about HK$2 million. Customs seized a total of 28 million illegal cigarettes last year, and 15.1 million have so far been confiscated this year. Mak added that after customs stepped up its efforts against the illegal trade on the streets, some sellers were now taking phone orders. The department set up a task force in May last year to crack down on the syndicates that sell contraband cigarettes. Former police officer Robin Jolly, of Hong Kong United Against Illicit Tobacco, said earlier that the illegal trade had not been targeted at the source, and that the crackdown could be made easier if customs and police worked together. In response yesterday, Mak said customs had indeed been focusing on the source of the trade, and that customs and the police had been sharing intelligence on this. Separately, Deanna Cheung Kin-wah, chairwoman of the Coalition on Tobacco Affairs, said the illegal trade was costing the industry about 20 to 40 per cent of its revenue.

 China*:  July 10 2013

France rolls out red carpet for Chinese (By Li Xiang - China Daily) French President Francois Hollande greets Liu Chuanzhi, founder of Chinese PC maker Lenovo Group, who led the visiting delegation of the China Entrepreneur Club at the Elysee Palace. Top mainland business team sees bright spots amid Europe's economic gloom - No foreign business delegation was ever offered such a high-profile reception at the Elysee Palace as a group of Chinese entrepreneurs received recently. French President Francois Hollande rolled out the red carpet for the first time for a group of 40 of China's wealthiest entrepreneurs who were on a week-long visit to France to explore business opportunities. The VIP treatment was no surprise given the delegation's economic clout. It comprised members of the China Entrepreneur Club, an influential private association whose member companies have combined revenues in excess of 2 trillion yuan ($326 billion), or about 4 percent of China's GDP. The entrepreneurs included Liu Chuanzhi, founder of China's largest PC maker Lenovo Group, Cao Guowei, chairman and CEO of Sina.com, Yu Minhong, president of New Oriental Education & Technology Group, and Guo Guangchang, chairman of the Fosun Group. The arrival of Chinese entrepreneurs was seen as timely in France as the country is fighting an uphill battle against recession and an unemployment rate that has reached a 14-year high of 10.8 percent. The visit also took place amid the trade dispute between China and Europe over solar panel exports that many feared could trigger a much wider trade war between two of the world's biggest trading blocs. In a speech to the visiting entrepreneurs, Hollande reiterated France's willingness to attract more Chinese investment, which could help improve the French job market and enable its companies to expand in the global market. "I want to create all the conditions to ensure Chinese companies can invest more in Europe, and particularly in France," he said. China was the eighth-largest foreign investor in France last year, with 31 investment projects creating 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), according to Invest in France Agency, a government body that facilitates foreign investment in the country. To balance investment and trade relations with China, Hollande mentioned several areas, including food, health and urban development, where China and France could increase cooperation. "Europe needs China for its own growth and China needs Europe to develop its business and to gain access to the technology of tomorrow," Hollande said. "The current rebalancing of Chinese growth in favor of domestic demand, and measures taken to increase the flexibility of its foreign exchange system, are in the interests of both China and Europe." The Chinese business leaders agreed with these views and said they hoped their visit to France could help to create substantial business partnerships. "Chinese entrepreneurs are interested in areas that are closely related to Chinese markets and consumers, such as retail, healthcare, agriculture and consumer products," said Lenovo's Liu, the head of the business delegation. "We must find the sectors that our two countries have complementary advantages in. We are not capable of simply buying up an asset in France and waiting for its value to appreciate." Huang Nubo, the chairman of Beijing Zhongkun Investment Group, says he is looking for French partners to manage his company's scenic real estate. The Chinese developer stirred controversy in Europe recently with his multimillion-dollar proposal to buy property in Iceland and develop it into a tourism resort. "France is a country with extensive service resources and this is what China needs the most," he said at a breakfast meeting with French entrepreneurs. "So I believe we can find a lot of opportunities in this area." Wang Wenjing, CEO of Yonyou Software Co Ltd, also says that there is "a great deal of unexplored potential" in France industrial and agricultural sectors that could provide the basis for future cooperation between China and France. During their visit, the Chinese entrepreneurs also met French Foreign Minister Laurent Fabius, Vice-President of the French Senate Jean-Pierre Raffarin and executives from French corporate giants, including Schneider Electric, the Dassault Group, BNP Paribas and luxury fashion house Chanel. Emmanuel Limido, president of France Emerging Enterprises, an organization that promotes two-way investment for French companies in international markets, especially in emerging markets, said that firm actions are needed to boost investment between France and China. "We already had political understanding at the highest level on both sides," he said. "Now we need to get the companies to start talking and working directly with one another." Peter Mandelson, former trade commissioner of the European Union, reassured the Chinese entrepreneurs that Europe is not in decline, and that China and Europe should be optimistic about future collaboration. "Europe has gone through serious external shocks from which it is recovering. But that does not mean economic depression," he said. He notes that governments should continue to provide open and stable markets in Europe, while China should address state domination of its economic growth and give private enterprises more space and freedom to develop. However, not everyone in the Chinese delegation shared the optimistic views about Europe's economic prospects. Xu Xiaonian, a senior economist at China's Europe International Business School, said that Europe's economy will continue to be in recession and that thorough structural reforms are needed to emerge from the current crisis. "During our meetings in France, the officials and business leaders avoided talking about the key problems of the labor market and the welfare system," Xu says. "In fact, the real problem is not the enterprises themselves. It is the business environment that has hindered economic recovery." He notes that the current business environment in France does not allow more innovative companies to emerge due to high taxes and rigid labor laws. Xu says that the French government must cut company taxes and initiate substantial reforms in its welfare system to make the country more attractive to foreign investors.

Relatives of Chinese victims in Asiana jet crash head for U.S. - Two Chinese passengers Wang Linjia and Ye Mengyuan were killed in a crash landing of an Asiana Airlines Boeing 777 at San Francisco airport on Saturday morning. Teen girls killed in Asiana crash in US were student leaders, close friends (By Associated Press in Beijing and San Francisco) Also a US coroner is conducting an autopsy to determine whether Wang Linjia or Ye Mengyuan was run over and killed by an emergency vehicle - The two Chinese teenagers who died in an Asiana Airlines plane crash in San Francisco were student leaders who excelled in their studies and in the arts – one was a calligrapher and the other a pianist. Wang Linjia, 16, and Ye Mengyuan, 17, were students at Jiangshan Middle School in eastern China who were travelling on a summer camp programme organised by the school to visit universities in California, state media reported on Monday. The group included 29 students and four teachers from four schools in the city of Jiangshan. They were to visit Silicon Valley, Stanford University and University of California’s campuses in Los Angeles and Berkeley as part of an English-language programme, according to the Youth Times, an official newspaper in Zhejiang province. Wang was class representative for three years and teachers and schoolmates described her as excelling in physics and being good at calligraphy and drawing, according to the paper. The newspaper said a reporter visited the girl’s family at a hotel and that Wang’s mother was sitting on a bed, crying silently while her father was sitting in a chair with a blank expression. Wang’s next-door neighbour, a woman surnamed Xia, described Wang as being quiet, courteous and diligent. “She was very keen to learn, every time she came home she would be studying, very rarely did she go out and play,” Xia was quoted as saying. She said Wang’s father proudly displayed her calligraphy and art pieces on the walls of his office. The other victim, Ye, also was a top student who excelled in litreature and was talented with the piano, singing and gymnastics. The Youth Times said Ye had recently won a national gymnastics competition and routinely received honours at the school’s annual speech contests. The two girls were classmates from four years ago and became close friends, the paper said. The girls posted their last messages on their microblog accounts on Thursday and Friday. “Perhaps time can dilute the coffee in the cup, and can polish the outlines of memory,” Wang said on Friday. Her final message was simply the word “go”. Of the 291 passengers onboard, 141 were Chinese. At least 70 Chinese students and teachers were on the plane heading to summer camps, according to education authorities in China. Struck on the runway? A US coroner said on Sunday that his office was conducting an autopsy to determine whether Wang or Ye was run over and killed by an emergency vehicle. San Mateo County Coroner Robert Foucrault said San Francisco Fire Department officials notified him and his staff at the crash site that one of the victims might have been struck on the runway. “We were made aware of the possibility at the scene that day,” Foucrault said, adding that he did not get a thorough look at the victims on Saturday to know if they had external injuries. One of the bodies was found on the runway near where the plane’s tail broke off upon impact, he said. The other was found on the left side of the aircraft about nine metres away from where the Boeing 777 came to rest after it skidded down the tarmac and not far from an emergency slide. Debris from an Asiana Airlines Boeing 777 plane is seen on a runway. San Francisco Fire Chief Joanne Hayes-White had told the San Francisco Chronicle on Sunday that the girl found on the side of the airplane had injuries consistent with having been run over. “As it possibly could have happened, based on the injuries sustained, it could have been one of our vehicles that added to the injuries, or another vehicle,” she said. “That could have been something that happened in the chaos. It will be part of our investigation.” Foucrault said the autopsy, which he expects to be completed by Monday, will involve determining whether the girl’s death was caused by injuries from the crash or “a secondary incident”. The teenagers’ families are expected to arrive in San Francisco on Monday, and they will receive the autopsy results before they are made public, he said. The coroner said both girls were pronounced dead at the airport.

Chinese navy vessels leave for joint naval drills from Vladivostok, Russia, July 8. China and Russia started on Monday the joint naval drills off the coast of Russia's Far East.

Hong Kong*:  July 9 2013

Trans-fat found in mainland China milk formula brands (By Emily Tsang, Lo Wei and Celine Sun) Laboratory tests commissioned by Post show three popular mainland infant milk brands contain levels of potentially harmful substances - Infant formula sold in a Beijing supermarket. Hong Kong has not set limits for the trans-fat content of baby formula but is considering it. Three popular mainland milk powder brands contain trans-fat that experts say could lead to heart disease and should be avoided by infants, a laboratory test commissioned by the South China Morning Post has found. The tests found that the three brands - Beingmate's Baby Club, Synutra's Super infant formula, and Yili's Gold infant formula - each contain between 0.4 and 0.6 grams of trans-fat (trans-fatty acids) per 100 grams of milk powder. But no trans-fat is indicated on the packaging. Mainland law does not require labels on baby formula to state the trans-fat content. The levels of trans-fat in the formula fall within mainland and international safety standards. One of the brands - Synutra's Super infant formula stage 1 - was also found to contain twice as much sodium as the packaging says it does, although the level was within international safety standards. The tests found trans-fat in the Beingmate and Synutra formula at a level of 0.4 grams per 100 grams and in the Yili formula at a level of 0.6 grams. None of the brands is sold in Hong Kong. Two popular overseas formula brands, made by Mead Johnson and Wyeth's, were also tested. Both products, sold in Hong Kong and the mainland, were found to contain no trans-fat. The Codex Alimentarius Commission, the international food standards-setting authority, caps the limit of trans-fat in infant formula at no more than 3 per cent of total fatty acids - a standard adopted by the mainland. Hong Kong has not set limits for the trans-fat content of baby formula, but has said it is considering adopting the same Codex limit. The United States Food and Drug Administration says trans-fat should not exceed 0.5 grams per serving of food. The World Health Organisation recommends that, for an adult, trans-fat should be limited to not more than one or two grams per day. Although the trans-fat level found in the mainland formula brands was within international limits, local experts warned that parents should make an informed choice and avoid feeding their infants the substance. "It is always safer to keep the consumption level of trans-fat to a minimum, especially among infants," said William Chui Chun-ming, president of the Society of Hospital Pharmacists. "Formula is their only source of nutrients, and drinking it all day means their intake could be high." Chinese University paediatrics professor Ellis Hon Kam-lun explained that if trans-fat made up too much of an infant's intake of fat, it may affect brain and eye development. Long-term over-consumption of trans-fat can lead to heart and circulatory diseases. Chiu said trans-fat can occur naturally in food, or emerge when food is processed. For the test, the Post bought five cans of infant formula on the mainland - the three mainland brands and two overseas brands; and bought two cans of the two overseas brands in Hong Kong for comparison. They were taken to a certified laboratory and tested for their levels of energy, the seven nutrients specified for labelling, and melamine. None of the samples was found to contain melamine, an industrial chemical used to adulterate substandard milk on the mainland. Melamine-adulterated formula killed at least six babies and made 300,000 ill in 2008. A spokeswoman for Beingmate said it had never added anything to its milk formula in breach of mainland regulations. The two other companies did not reply to the Post's questions.

Hong Kong singer Sandy Lam wins top music awards at Taiwan's Golden Melody Awards (By Agence France-Presse in Taipei) Veteran Hong Kong singer Sandy Lam won top honours at the Golden Melody Awards for Asia’s best Mandarin chart music in Taipei on Saturday. Lam, who was absent from the ceremony in Taipei Arena, was crowned best female singer for her environment-themed album Gaia, named after the goddess of earth in Greek mythology. “I want to thank the judges ... all my teachers and every single musician I have met. I have learnt so much from them,” Lam said in a statement read by the album’s producer Chang Shilei, who accepted the award on her behalf. The 47-year-old saw off Taiwan’s pop diva Jolin Tsai and fellow Hongkongers Ellen Joyce Loo and Gloria Tang to win her first Golden Melody best singer title. Lam’s album dominated the race for prizes with six nominations and picked up the coveted best album award, as well as best producer and best arrangement. Taiwan’s rocker Jam Hsiao, who rose to fame after attending a local talent show, beat strong rivals – Taiwan’s pop prince Jay Chou and Hong Kong’s Khalil Fong – to win best male singer for his album It’s All About Love. In a highlight of the ceremony, Hsiao accepted his award from singing stars Jay Chou and Jolin Tsai, formerly one of the island’s top celebrity couples, dubbed “Double J” by the media. “I am so excited. I feel so cool. I want to thank all my friends who have always supported me,” a visibly nervous Hsiao told the cheering crowd. Tsai, who had four nominations, walked away with the song of the year award for The Great Artist from her hit dance music album Muse. “I want to thank all the fans who supported the song. I didn’t expect it to be this popular,” she said. Singers, songwriters and composers from Taiwan, the mainland and Hong Kong competed in more than 20 categories at the 24th edition of the awards.

Companies look to block hackers (By Lana Lam lana.lam@scmp.com) Coden Hau, sales director for Trend Micro in Hong Kong. Businesses are seeking help to defend against computer hacking, amid heightened fears of attacks in Hong Kong in the wake of revelations by US national security whistle-blower Edward Snowden. Trend Micro, a Tokyo-based security software company with offices locally, said it received 30 inquiries in the past month, compared with about 15 per quarter previously. Last month, Snowden - a former contractor for the US National Security Agency - exposed a number of cybersurveillance programmes run by the NSA. He claimed computers and "network backbones" in Hong Kong and on the mainland had been targeted. "Because of Snowden, more users are aware of hacking and looking for solutions," said Coden Hau, sales director for Trend Micro in Hong Kong. "The whole Snowden case serves a good lesson for all corporations, as a lot of them did not know they were being targeted before the disclosure. Now they are aware of the risk and are looking for ways to counter that." Sales of software to protect against security issues such as an "advanced persistent threat" rose 30 per cent in the last quarter, Hau said. Sherwin Wong, technical sales director for security provider CA Technologies, said that as cyberattacks became more sophisticated, businesses were concerned about areas of emerging vulnerability, such as the prevalence of the smartphone in the workplace, and cloud computing.

Tiny Macau remakes gambling world and Las Vegas (By Associated Press in Las Vegas) The centre of the gambling world has shifted 16 time zones away to a tiny spit of land on the southern tip of East Asia: Macau. An hour’s ferry ride from Hong Kong, it is the only place in China where casino gambling is legal. Each month, 2.5 million tourists flood the glitzy boomtown to try their luck in neon-drenched casinos that collect more winnings than the entire US gambling industry. The exploding ranks of the Chinese nouveau riche sip tea and speak in hushed tones as they play at baccarat, a fast-moving game where gamblers are dealt two cards and predict whether they will beat the banker. The textile factories that stood shoulder to shoulder with small-time gambling halls as recently as the early 2000s have given way to hulking American-run enterprises larger than anything found in the states. The gangs, prostitutes and money-launderers that once operated openly in this town half the size of Manhattan have at least receded from public eye. The Macau market is now larger than the entire US gaming market - “It was a swamp,” said Sheldon Adelson, chief executive of Las Vegas Sands, as he looked back on his early, risky venture in the forgotten colonial outpost. “They wanted to change the face of Macau from the gambling dens to that of conventions and resorts,” he added during recent testimony, flashing a jack-o-lantern grin and boasting that it would have taken a genius to imagine the profits that he could reap there. Macau now powers three of the four largest American casino companies. Sands, Wynn Resorts and MGM Resorts International rode out the recession thanks to the gambling appetite of a region where notions of luck and fate are baked into the culture, and there is no religious taboo on games of chance. But as US corporations have remade Macau, Macau has remade them. The town’s criminal undercurrent has resurrected the spectre of corruption the industry worked for so long to escape. MGM has lost its license to operate in Atlantic City, while Sands and Wynn are under federal investigation for violations of a touchstone anti-corporate bribery law. The quest for Asian riches is changing Las Vegas as well. Casino bosses are tweaking their flagship casinos to look and operate more like Macau-style properties. As they succeed, hints of organised crime are returning to Sin City, this time in the form of Chinese gangs. But the moguls are undeterred, increasing their investment at every opportunity. “This industry is supply driven, like the movie Field of Dreams: ‘Build it and they will come.’ I believe that,” said Adelson, racing ahead of his attorney on the witness stand in Las Vegas, where his company is being investigated for bribing Macau lawmakers and collaborating with the Chinese mafia. “Nobody wanted it. Everybody thought that I was crazy.” At 79 and greatly enriched now by his growing field of five Macau casinos, the diminutive GOP super donor adopted a professorial tone and explained that in 2003, Macau officials gave him a plot of land far from what passed at the time for a main drag. They encouraged him to fill in the surrounding bay. “I thought, ‘Do they want us to fail?’” Adelson asked, patting the ring of brown hair arranged across his round head. When China reassumed sovereignty of Macau from Portugal in 1999 and abolished a longstanding gambling monopoly, US companies rushed in to try their luck. Since then, annual revenue in the former backwater has grown tenfold, stacking up to US$38 billion; four times that of Las Vegas and Atlantic City combined. Wynn Las Vegas now makes nearly three quarters of its profits in Macau. CEO Steve Wynn, dubbed the “King of Las Vegas” for his role in shaping the contours of the Strip, stirred a minor scandal in 2010 when he said he might ditch Sin City and move his corporate headquarters to China. Sands, which owns the Venetian and Palazzo on the Las Vegas Strip, earns two thirds of its revenue in Macau. Adelson’s first casino opening there caused a stampede that ripped doors off their hinges. He now describes Sands as “an Asian company with a presence in Las Vegas and the US”. When regulatory troubles forced MGM Resorts to pick between Macau and New Jersey, the choice was obvious. “The Macau market is now larger than the entire US gaming market. Unfortunately for Atlantic City, it’s gone the other way. It’s smaller now than when we entered it. The fortunes of the two couldn’t be more different,” MGM CEO Jim Murren said. Macau is in the midst of one of the greatest gambling booms the world has ever known. To rival it, Las Vegas would have to attract six times as many visitors; essentially every man, woman and child in America. But like early Las Vegas, Macau has a long history of ties to crime syndicates, in this case sinister brotherhoods that first came into being on the mainland more than a century ago called triads. The magnate who controlled gambling in Macau for four decades, Stanly Ho, did little to discourage gang warfare on the peninsula. Sleepy town squares became incongruous backdrops for machine-gun shoot-outs, bombings and even assassinations of top-level government officials. In the late 1990s, a senior police official tried to reassure tourists by saying that Macau had “professional killers who don’t miss their targets”. The history and regulations governing the enclave continue to make it tricky for modern casinos to avoid gangs, illegal money transfers, and at least the appearance of bribery. “There are some countries where you either have to pay to play and break the law, or you have to not do business there. I think the jury’s still out on Macau,” said Steve Norton, an Atlantic City veteran who now runs a casino consulting firm in Indiana. Adelson himself seemed to confirm this point on the stand this spring, when he casually mentioned that Sands had forgone a partnership with a successful Hong Kong-based casino operator because of a disagreement about organised crime. “They had expressed their judgment that they were going to do business with either reputed, or-- triad people, and we couldn’t do that,” Adelson said, sipping from an oversized coffee cup. Local policies are partly to blame. China bans its citizens from transferring more than US$50,000 off the mainland each year; a pittance at many high roller tables, and nowhere near enough to account for the towers of chips that change hands in Macau. It also bans casinos from pursuing gambling debts. Partly as a result, a thriving junket system has sprung up, with supercharged travel agents whisking VIPs to the gambling tables, lending them money, and then settling up on the mainland. Junket operators sometimes work on commission, but more often assume management of a private VIP room. Casinos provide the gleaming marble facilities, dealers, and chips in return for a cut of the profits. Two-thirds of Macau gambling revenue is won from baccarat played in VIP rooms. The informal banking and debt collection system provides a veil and an impetus for criminal activity, according to experts and diplomatic cables. Junkets “allegedly work closely with organised crime groups in mainland China to identify customers and collect debts” and “work directly with Macau casinos to buy gaming chips at discounted rates, allowing players to avoid identification”, according to a memo posted by Wikileaks. The memo, which was apparently sent from the American Consulate in Hong Kong in 2009, continues: “Government efforts to regulate junket operators in Macau have been aimed at limiting competition, rather than combating illicit activities.” Operating off the books, junkets pay out winnings in Hong Kong dollars, which players can then funnel to another location. As a result, Macau is seen as a conduit for money flowing out of China, with wealthy individuals and corrupt officials suspected of moving funds abroad. At least 15 government officials have been executed for pillaging public funds and taking the money to Macau. The enclave has also seen a spate of killings and kidnappings associated with debt collection, including one grisly case last year in which two men were stabbed to death in their four-star hotel room, discovered by a friend who had come to give lend them the money they needed. And while many of the approximately 200 junkets active in Macau are law-abiding, some have documented ties to organised crime. The case of Cheung Chi-tai, a major investor in the publically traded junket operator Neptune Group, is a prime example. In 2011, a Hong Kong appeals court judgment said Cheung was a “triad leader” who ordered the death of a casino dealer at Sands Macau. He had previously been identified as high-ranking gang figure in a 1992 US Senate report on Asian organised crime. A witness testified that Cheung was “the person in charge” of one of the VIP rooms at the Sands Macau, the oldest of the Adelson’s Macau casinos. He wasn’t charged in the case, but a subordinate was sentenced for conspiracy to commit murder. “There’s no way you can do business over there without having allegations made against you, most of them are untrue,” said Bill Weidner, who was president of Sands until 2008. Casino bosses are now working to lure their Macau customers to Las Vegas, in part because Nevada imposes one fifth of China’s 39 per cent tax on winnings. The biggest casinos on the Strip have imported baccarat, now Nevada’s biggest moneymaker, Asian pop sensations and Chinese delicacies. They’ve outfitting their hallways in red, and set up Macau-style VIP rooms that employ junkets and cater to high rollers. “The Las Vegas casinos are adopting that new Macau look, trying to appeal to the high-end Asian gambler. They can make a lot more money from a big gambler here,” said David Schwarz, director of the Centre for Gaming Research at the University of Nevada Las Vegas. Asian visitors now account for 9 per cent of tourists to the desert metropolis, up from 2 per cent in 2008. And the Strip is preparing to welcome its first Asian-owned casino; a US$5 billion Chinese-themed extravaganza called Resorts World, complete with pandas and pagodas. But some of the crime associated with Chinese gambling halls may be migrating to the Strip as well. Last year, the Treasury’s Financial Crimes Enforcement Network warned casinos to monitor junkets operators and report “all available information” on any suspicious activity. Sands reportedly allowed a junket operator named as a triad member in the 1992 Congressional report to move a US$100,000 gambling credit from Las Vegas to one of its Macau casinos. Las Vegas is also beginning to see occasional outbursts of triad violence. In March, 26 year-old Xiao Ye Bai began serving a life term for stabbing a man to death in a crowded karaoke bar near the Strip. Prosecutors said Bai was a martial-arts trained enforcer for the Taiwan-based triad United Bamboo, sent to collect a US$10,000 gambling debt. Unlike some other states, Las Vegas allows junket operators to work in casinos without the full background checks required for virtually every other employee, from blackjack dealers to CEOs. Some of Hong Kong operators licensed in Nevada have been found unsuitable by other jurisdictions, including Singapore. Steve Vickers, who spent 18 years in the Royal Hong Kong Police Force and commanded the its criminal intelligence bureau, believes that nearly all junkets that cater to Chinese tourists must tangle with organised crime. “You won’t find the triad names listed as the junket operators, but they are behind it, because who is it that can reach into China and enforce the debts, move the money? Only one kind of person can do that,” he said. Authorities in Nevada, New Jersey and Washington DC are investigating all three of the US companies with properties in Macau. New Jersey regulators objected when MGM teamed up with Stanley Ho’s daughter, Pansy, because of the senior Ho’s triad links. The state found the partnership “unsuitable” in a blistering 2010 report, and forced MGM to sell its stake in the Borgata casino in Atlantic City. MGM and the family of Pansy Ho deny the allegations. Nevada, where casino revenue provides about half of the state’s general fund, examined the MGM partnership and found it acceptable. Mississippi and Michigan also approved. This year, New Jersey allowed MGM to re-apply for a license. Wynn is under investigation for donating US$135 million to the University of Macau in 2011. A former board member says the payment was a bribe and a violation of the Foreign Corrupt Practice Act. In a footnote in a March legal filing, US prosecutors revealed they were looking into the donation, but did not elaborate. Established in 1977 as part of a series of reforms intended to restore the nation’s standing after the Watergate scandal, the Foreign Corrupt Practice Act bars US companies from paying off officials to win business, though it makes an exception for small administrative payments that do not confer unfair advantage. The Department of Justice has recently stepped up its enforcement of the act. As the business world becomes more globalized and other countries adopt similar laws, US companies can no longer argue that enforcing the ban gives an edge to rivals. In recent years, the act has been used to take on the pharmaceutical company Pfizer (for payments to foreign doctors), Rupert Murdoch’s News Corp (for paying British police officers for information) and Wal-Mart (for an ongoing Mexican bribery scandal). The law was most famously deployed in the “bananagate” scandal, in which a US fruit company was charged with bribing the Honduran president for favourable tax rates. The uproar ultimately precipitated a government overthrow. But Macau regulators draw fewer bright lines around corporate gift-giving than their American counterparts, according to I. Nelson Rose, a professor at Whittier Law School in California who writes a blog called Gambling and the Law. What might look like a bribe on American soil is a routine part of the culture in Macau, he said. Wynn says it acted properly. Nevada regulators looked into the donation before the federal investigation was made public and found no wrongdoing. A long list of agencies, including the Department of Justice, the Securities and Exchange Commission and the FBI, are investigating Sands. Those inquiries stem from a 2010 lawsuit brought by former Sands executive Steve Jacobs. In an ongoing wrongful termination suit, Jacobs says Sands’ China subsidiary allowed triad boss to run one of the company’s VIP rooms, tacitly condoned prostitution, and made inappropriate payments to a Macau lawmaker, among other “outrageous” misdeeds. Sands has denied all claims, but recently said in a Securities and Exchange Commission filing that an internal audit had found possible breaches of the Foreign Corrupt Practice Act. The law contains two parts: it prohibits bribing a foreign official to win patronage and it requires that public companies file proper financial statements and maintain a system of internal controls. Sands admitted to likely violations of the second, more bureaucratic, provision. “There were likely violations of the books and records and internal controls provisions of the FCPA,” the company said in an annual report filed in March. In April, the auditor for Sands’ China subsidiary resigned. Both Sands and Wynn are facing related lawsuits from individual shareholders who claim mismanagement has damaged the company. It sounds bad. But is it? Probably not, according to Fitch ratings analyst Michael Paladino. At worst, the companies could get fined. “They can handle that,” he said. He noted that the largest fine paid in modern corporate history – imposed on German engineering giant Siemans AG for bribery – amounted to about US$1 billion. That’s equivalent to one month’s profits for Sands. Justice Department spokesman Michael Passman declined to comment. Wall Street seems to share Paladino’s confidence. Not one analyst or investor raised the issue of corruption charges during recent conference calls held by the three companies to discuss earnings. “For the average person going to a casino, they’re not going to stop going because the company that owns the facility is implicated in some kind of corruption scandal,” said Peggy Holloway, vice president and senior credit officer at Moody’s. States also have the power to impose fines, and can revoke licences. Nevada regulations prohibit casino companies from doing anything anywhere in the world that could “reflect discredit upon the State of Nevada or the gaming industry”. Similar statutes exist in New Jersey, Pennsylvania, Mississippi, Michigan, Illinois and Connecticut, where the companies with properties in Macau operate. In the 1980s, these rules helped push out the mob bosses that had taken refuge in the casino industry and usher in its modern corporate era, though the FBI and other federal agencies did the heavy lifting. A congressional report issued in 1999 found that American gambling was finally free from the taint of organised crime. That was the same year China opened Macau to US investment. State regulators have so far refrained from public action, preferring to stay out of federal investigations until a conclusion is reached, Nevada Gaming Board Chairman AG Burnett said. But that does not mean they are sitting idle. “I think there’s an impression out there that the control board doesn’t hammer companies, but the truth is that a lot of what goes on is dialogue between the board and the companies that the public doesn’t necessarily see,” he said. While the regulators occasionally file complaints for egregious violations – for instance, the Palms hotel-casino paid a US$1 million fine this winter for abetting prostitution and drug dealing – they prefer to handle things quietly, partly of concern for the industry they police. “When you’re dealing with a publicly traded company, the sheer fact of an investigation being made public may be damaging. And if at the end of the day if we find that there’s no violation, then unfortunately, we may have harmed the company,” Burnett said. “It increases our ability to work with the companies more fluidly and have more of a dialogue. While we work against the industry sometimes, it’s helpful if we can work with them.” Conventional wisdom is that no casinos will lose their licenses over the Macau allegations, even if they prove true. And in any case, Sands, Wynn and MGM have already put their China operations into subsidiaries which could eventually be spun off entirely. “If I were one of these operators, I might start tallying up how much my US operations are worth and how much my Macau operations are worth and thinking about moving,” said Vickers, the former intelligence officer, who now consults about risk management in Hong Kong. The balance of power between casinos and regulators has shifted as gambling companies have achieved their own version of outsourcing, according to Rose, the professor. “Macau forced the casinos to see that they could become like other large US corporations; set up their plants and operations in other nations and make far more than they can being stuck just in Las Vegas,” he said, speaking from his hotel room near Macau University, where he teaches a summer course. It helps that public officials aren’t exactly clamouring for justice. Among the ranks of the unconcerned is former Las Vegas mayor Oscar Goodman, who famously demanded an apology from Barack Obama after the president cautioned against blowing “a bunch of cash in Vegas when you’re trying to save for college”. Sitting in the living room of his five-bedroom home among dozens of bobble head dolls cast in his image, Goodman, whose wife is now mayor, said he doesn’t worry about Macau because Americans are not paying attention to the murky allegations there. “If it brought discredit to us, of course I would become concerned, defensive, and try to rectify the station. But the average person could care less about this,” he said, straightening his pinstripe suit, an affectation left over from his days as a nationally-famous mob lawyer. “You ask people who Sheldon Adelson is, if 10 out of 50 recognise the name, I’d be surprised. If they associated him with the Venetian and the Palazzo, I’d be even more surprised. People are busy.” Of course, within the industry, Adelson is an object of fascination. As the casino titan sat in a courtroom among a phalanx of employees, security and family members this spring, a former rival was following along from his home 500 miles to the north in Reno, Nevada’s second, shabbier gambling town. While Wynn, MGM and Sands have taken off, the industry’s’ fourth major player, Caesars Entertainment International, has been left behind. China issued a finite number gambling licenses in the early 2000s, and Caesars did not apply for fear of upsetting domestic regulators. The company’s former head now calls that an overcautious mistake. Phil Satre, who was CEO in 2003, when Caesars was called Harrah’s Entertainment, said that at the time, the gambling industry had at last gained a legitimacy and mundane familiarity that was unthinkable in the 1980s. Many executives thought American regulators wouldn’t countenance any dalliances with criminal elements in Asia. “There are some things that still have to play out, but when I look back and think about the opportunity to go back in Macau, I’d probably take a different posture,” he said.

Property agents march against cooling measures, stamp tax (By Agence France-Presse in Hong Kong) Property agents protest outside government headquarters in Tamar on Sunday. Thousands of real estate agents took to Hong Kong’s streets Sunday in protest at government efforts to curb soaring property prices, saying new transaction taxes and other measures are threatening their business. The alliance, supported by industry leaders Centaline Property Agency and Midland Realty as well as associations representing smaller agencies, called on the government to scrap the Special Stamp Duty and the Buyer Stamp Duty. “There are 37,000 agents in Hong Kong and there were only 3,000 transactions last month,” said Raymond Ho, a spokesman for the rally organisers. “The policies have frozen the market. A lot of small property agent firms will close in the future,” he told news agency AFP. Organisers said 23,000 joined the rally while police put the turnout at 5,500. Protesters chanting slogans marched through Causeway Bay from Victoria Park before assembling at government headquarters at Tamar. Home prices in the crowded city have risen by 120 per cent since 2008, and by more than 30 per cent from their previous peak in 1997. A 900-square-foot apartment in the middle-market Tai Koo Shing estate sold for more than HK$10 million (US$1.29m) last year, after being priced at about HK$3 million in 2003. Officials say the measures to cool the market, in the form of extra stamp duties on some purchases, are aimed at stemming short-term speculative inflows. They have so far had little effect in driving down prices but sales have dropped off dramatically. Agents said developers needed time to get used to the new rules. They said they expected sales to continue to be slow in the coming months. Sales of offices, shops and industrial properties have also declined. Shih Wing-ching, co-founder of Centaline Property, who joined the rally, said the cooling measures hindered property owners from freely selling their investments since the stamp duties discourage potential buyers. Ho said 90 per cent of property agents received no commissions last month and the number of transactions dropped by 70 per cent since the cooling measures were introduced. Total property transactions, including residences, offices, shops and car parks, fell 12.7 per cent month on month in June to 4,616, according to Land Registry figures. The year-on-year decline was 45 per cent. Housing minister Anthony Cheung Bing-leung stressed on Friday the measures were exceptional, in an apparent attempt to appease growing hostile sentiment from the business sector. “We still feel that the market could be volatile, so we have to be very careful about any bubble risk,” Cheung told reporters. “These measures are exceptional measures under exceptional circumstances.”

 China*:  July 9 2013

 

China mourns students from Zhejiang school killed in San Francisco air crash (By Agence France-Presse and Stephen Chen) Chinese passengers give accounts of final moments of Asiana Airlines flight that crashed at San Francisco airport and burst into flames - China was in mourning yesterday for two teenage girls killed when a South Korean passenger jet crashed at San Francisco airport. Many reached out to their families, only too aware of the impact of the loss of an only child. With the girls the only fatalities in the crash, shocked survivors told of the flight's final moments and of their narrow escape from injury or worse. "When the crash happened we felt we were done for. Equipment and everything was falling on our heads," a teacher from northern Shanxi province told CCTV. But, she added, "none of us were seriously injured". Chinese nationals made up 141 of the 291 passengers aboard the Asiana Airlines Boeing 777, which burst into flames after it landed short of the runway. Of those on board, 182 were injured. The two girls killed were Ye Mengyuan and Wang Linjia, both 16-year-old students at Jiangshan Middle School in eastern China, China Central Television said, citing a fax from the airline to the Jiangshan city government. They were part of a group of 30 students and four teachers from the highly competitive school in Zhejiang .Two other school groups were also on the plane. Twenty-two students and teachers were from Taiyuan Number Five Secondary School in Shanxi, while 14 were from Taiyuan Foreign Language School. CCTV urged survivors and their loved ones to post information on the online messaging system We Chat so they could find one another. Xu Da, a Chinese passenger on board the plane - which originated in Shanghai and picked up passengers in South Korea before heading to the United States - described the dramatic incident to CCTV. "I noticed the plane was flying quite low when landing, and as it was just about to land the plane suddenly accelerated and the nose started to rise," he said. "But at the time the plane was flying extremely low already. I felt a shock. The oxygen masks fell down and a bad smell began to spread throughout the plane. I could also see sparks in the front part of the plane." Once the plane landed the cabin was a "mess", the back of the plane had a large hole and the galley there had disappeared, he wrote on Sina Weibo. Another student passenger described a dark and uncomfortable scene after the crash. "There was dust everywhere and it was very dark. The air smelled horrible. Foam was gushing in and outside the jet," he told the microblog service Tencent Weibo in an online interview. "To be honest the first thing I thought about was to look for my glasses." Xu and his wife quickly collected their belongings - some of which had been strewn about - and rushed out of a makeshift exit at the back of the airliner. "I saw light at the back of the plane. We pulled our child and rushed there, finding most of the galley was gone. We got out from a huge, perfectly round hole." "I feel very fortunate," he wrote. Social media users also offered condolences for the two girls killed on board. "In a country of families with mostly single children, how can the parents take this?" wrote one on Sina Weibo, referring to China's one-child policy. "Life is supposed to have just started for them," said another user. Li Nan, a resident in Beijing's Xicheng district, said that she cancelled a weekly party with friends yesterday because everyone felt sad for the students who were killed. "I couldn't sleep after watching the news on TV late last night. I dare not imagine how big a blow it would be to [the students'] parents," she said.

Peng and Hsieh win Wimbledon women's doubles title (By China Daily) Peng Shuai and Hsieh Su-wei won their first Grand Slam title with a 7-6 (1), 6-1 victory Saturday over Australian duo Ashleigh Barty and Casey Dellacqua in the women's doubles final at Wimbledon. Peng Shuai of China (R) and Hsieh Su-Wei of Chinese Taipei kiss their winners trophies after defeating Ashleigh Barty of Australia and Casey Dellacqua of Australia in their women's doubles final tennis match at the Wimbledon Tennis Championships, in London July 6, 2013. Peng gave China its first doubles title at a major in seven years. The eighth-seeded Peng and Hsieh, who did not face a seeded team until the final, started playing together in 2008, when they won their first 11 matches. They now have six titles together. The 12th-seeded Dellacqua and Barty were bidding to become the first all-Australian team to win the women's title at the All England Club since 1978. 

141 Chinese in San Francisco air crash (By ZHANG QIDONG and CHANG JUN in San Francisco, and ZHANG YUWEI in NEW YORK) 2 Chinese dead in San Francisco air crash - Asiana Airline Flight 214 from Seoul, South Korea crashed at 11:30 am on July 6 in San Francisco Airport. Two victims are both Chinese nationals. - Boeing makes condolences over flight accident - Airport landing system off when jet crashed - Most Chinese students in crash accounted for. Two dead in Asiana plane crash are Chinese citizens, identified as teenage girls (By Reuters in San Francisco and staff) Ye Mengyuan and Wang Linjia, both 16, were students at Jiangshan Middle School in China's eastern Zhejiang province - An Asiana Airlines Boeing 777 with 307 people on board crashed and burst into flames as it landed at San Francisco International Airport on Saturday after a flight from Seoul, killing two people and sending more than 180 to local hospitals. The president of the South Korean airliner Asiana, Yoon Young-doo, confirmed at a press conference in Seoul on Sunday that the two people killed were teenage girls, born in 1996 and 1997, and Chinese nationals. They had been seated at the rear of the aircraft, according to government officials in Seoul and Asiana. China Central Television (CCTV) said Sunday evening that the two victims were students at Jiangshan Middle School in China's eastern Zhejiang province. It cited a fax from Asiana Airlines to the Jiangshan city government. The two students were identified as Ye Mengyuan and Wang Linjia, both 16-years-old. Yoon also said the fatal crash was not caused by mechanical failure. “For now, we acknowledge that there were no problems caused by the 777-200 plane or [its] engines,” Yoon said at the company headquarters. Witnesses of the crash said the tail of the plane appeared to hit the approach area of the runway, which juts out into San Francisco Bay, as it came in for landing. The tail came off and the aircraft appeared to bounce violently, scattering a trail of debris, before coming to rest on the tarmac. Pictures taken by survivors immediately after the crash showed passengers emerging from the wrecked plane and hurrying away. TV footage later showed the fuselage of the Boeing 777 blackened by fire and the interior apparently gutted. There was no immediate indication of the cause of the accident, and federal officials were travelling from Washington to investigate. One survivor said the pilot seemed to be trying to gain altitude just before crash. Asiana Airlines said the flight, which had originated in Shanghai, had carried 291 passengers and 16 crew members. Most were Chinese, Korean and U.S. nationals. Asiana Airlines said the passengers included 141 Chinese, 77 South Koreans, 61 US citizens and one Japanese citizen. It did not give the nationality of the others. Among the Chinese nationals, there were 70 students and teachers on the plane, Xinhua news agency reported. Thirty of the students are from Shanxi province, others were from east China's Zhejiang province, local authorities confirmed. The students and teachers were going to the US for summer camp, Xinhua said. All but two of the students have been confirmed safe. One teacher had minor injuries, the Shanxi provincial education department said. Dale Carnes, assistant deputy chief of the San Francisco Fire Department Chief, said two people were killed in the crash, and 49 were transported immediately to area hospitals with serious injuries. Another 132 people were later taken to hospitals with moderate and minor injuries. Five people were in critical condition at San Francisco General Hospital, according to spokeswoman Rachael Kagan. She said a total of 52 people were treated for burns, fractures and internal injuries. Three people were in critical condition at Stanford Hospital. The crash was the first-ever fatal accident involving the Boeing 777, a popular long-range jet that has been in service since 1995. It was the first fatal commercial airline accident in the United States since a regional plane operated by Colgan Air crashed in New York in 2009. San Francisco International Airport, a major West Coast hub and gateway to Asia, was shut down for several hours after the crash and flights were diverted to Los Angeles, Seattle, Oakland and San Jose. By late afternoon two runways had reopened even as scores of safety workers scoured the airfield for debris. Survivor Benjamin Levy told a local NBC station by phone that he believed the plane had been coming in too low. “I know the airport pretty well, so I realised the guy was a bit too low, too fast, and somehow he was not going to hit the runway on time, so he was too low ... he put some gas and tried to go up again,” he said. “But it was too late, so we hit the runway pretty bad, and then we started going up in the air again, and then landed again, pretty hard,” Levy said. He said he opened an emergency door and ushered people out. “We got pretty much everyone in the back section of the plane out,” he said. “When we got out there was some smoke. There was no fire then, the fire came afterward.” A San Francisco airport spokesman said that a component of the facility’s instrument landing system that tracks an incoming airplane’s glide path has been out of service in recent weeks and was not operational on Saturday. Pilots and air safety experts said the glide path technology was far from essential for a safe landing in good weather. But Chesley “Sully” Sullenberger, a retired pilot and safety consultant who gained fame for landing a plane safely in the Hudson River in 2009, said investigators would certainly be looking into the issue. “The pilots would have had to rely solely on visual cues to fly the proper glide path to the runway, and not have had available to them the electronic information that they typically have even in good weather at most major airports,” he told the local CBS News affiliate. A British Airways 777-200ER crash-landed a few yards short of a runway at London’s Heathrow Airport in 2008. All on board survived. Investigators blamed the crash on fuel blockages caused by ice particles formed during the long flight from Beijing - a finding that led to changes in the design of the Rolls-Royce engines used on some 777s. The Asiana 777-200ER that crashed in San Francisco on Saturday was powered by engines from Pratt & Whitney, a subsidiary of United Technologies. The two people killed in a crash landing of a South Korean passenger plane at San Francisco airport were Chinese nationals, the Chinese Consulate General here confirmed Saturday night. A total of 141 Chinese citizens were among the 291 passengers aboard the Boeing 777-200, which originated in Shanghai and picked up passengers in South Korea before heading to San Francisco. Some 182 people were injured and have been sent to nine hospitals near the airport. Forty-eight people remain in serious condition, San Francisco Mayor Ed Lee told reporters Saturday night. South Korea's Transportation Ministry said Sunday that the two killed in the crash landing were identified to be Chinese women. A spokesman of Asiana Airlines, which was operating the ill-fated flight, has said the two killed were passengers seated at the back of the plane. South Korean Transportation Ministry said the plane's tail hit the runway and the aircraft veered to the left off the runway. Meanwhile, the Asiana Airlines denied on Sunday that the accident was caused by mechanical failure. "For now, we acknowledge that there were no problems caused by the 777-200 plane or (its) engines," Yoon Young-doo, the president and CEO of the South Korean No.2 flag carrier, told reporters on Sunday. "We purchased this airplane in March 2006 ... currently we understand that there are no engine or mechanical problems," he said. But Yoon declined to say whether the crash was due to an error by the pilot or air traffic controllers at San Francisco. An FBI agent said at the same news briefing that there were no indications that terrorism was involved in the air crash. All flights in and out of the San Francisco International Airport were canceled temporarily. They were diverted to Los Angeles International Airport. The United States and South Korean governments, Asiana Airlines and Boeing, the maker of the aircraft, will be working together to probe the incident.

Hong Kong*:  July 8 2013

Hong Kong anglers reel in 226kg Pacific blue marlin in South China Sea (Danny Lee danny.lee@scmp.com) A Pacific blue marlin reeled in by six Hong Kong men may be among the biggest caught locally - A group of Hong Kong anglers with their prize catch of a 226kg Pacific blue marlin. A 3.6-metre-long, 226kg Pacific blue marlin reeled in by six amateur deep-sea anglers south of Hong Kong has been described as a "once in a lifetime'' catch by an expert. It may be among the biggest of the species ever caught in the South China Sea. The fish took six Hong Kong-based hedge fund traders 3½ hours to reel in aboard their boat, Warbird, 65 nautical miles due south of Aberdeen. Kim Stuart of the Mandarin Sports Fishing Club said there had been no reports of a blue marlin catch in local waters for at least 15 years. The team of fishermen, skippered by David Tuthill, 31, caught it last Sunday in perfect weather conditions near the Dongsha Islands. "It was a constant team effort between the driver of the boat, the angler and the team helping around you," said Tuthill of the battle to get the fish on board. He said he could not have landed the marlin without the help of his fellow fishermen Brad Ainslie, 35, Greg Moore, 31, Andrew Bazarian, 41, Dan Shepherd, 31 and Carl Vine, 36. The fish had died by the time they landed it, Ainslie said. Australia-based billfish expert Dr Julian Pepperell, author of Fishes of the Open Ocean, confirmed from photo evidence that the financiers had hooked a blue marlin, and described it as a once-in-a-lifetime catch. Like its Atlantic cousin, the Pacific blue marlin is "phenomenally powerful" and puts up "incredible fights", he said. "On a number of occasions they will die fighting all the way through." Dr Pepperell said the catch was all the more unusual because the fish was outside its favoured habitat in cooler, less deep waters. Stuart, a 26-year veteran of the Hong Kong fishing community said: "It's extremely rare. They generally prowl 48 degrees north [of Hong Kong] and 48 degrees south so to be this far north is quite a way out of it's normal range ," he said. Stuart believes the catch could help boost interest in fishing in Hong Kong. According to figures provided by the International Game Fishing Association, the marlin would have been worth US$10,000. The world record for a blue marlin was last set in 1982 when a couple caught a 4.9-metre, 624kg fish off Hawaii.

Foreign labour needed in Hong Kong to keep wages down: industry (By Anita Lam anita.lam@scmp.com) Business chief says more overseas labour is required for low-skilled jobs like dish washing - Stanley Lau represents the business community. The new chairman of the Federation of Hong Kong Industries says the government should consider opening certain job sectors to foreign labour because a persistent labour shortage risks driving up wages and prices. Stanley Lau Chin-ho, who succeeded Roy Chung Chi-ping as federation chairman yesterday, said sectors in need of imported labour included dish washing, construction work and day care for the elderly. Lau's comment came a day after Chief Executive Leung Chun-ying said that Hong Kong's workforce would begin to shrink in 2018. Lau, also a non-official member of the Economic Development Commission that was set up by the chief executive to discuss economic issues, said the business sector generally agreed with the push to import more labour. "Nowadays, you can pay HK$40 an hour and you still cannot find a dishwasher," he said. "Of course, the union would say pay HK$50 or HK$60 then, but when that happens the restaurant would probably charge HK$80 for a bun." Labour shortages were not just confined to low-skilled jobs, he said, with the medical sector also complaining of a lack of nurses and doctors. On another contentious issue, the setting of standard work hours, the largest local representative of manufacturers said no law should be passed to establish a benchmark unless the labour shortage problem eased. "What if we want to hire a second worker to collaborate with the first one who can no longer work long hours? Where do we find the extra hands?" Lau said. Unions criticised the employers for linking the two issues. Meanwhile, the federation said many of its members that used to be based in Guangdong were moving their manufacturing businesses to other parts of the mainland including Hunan, Sichuan, Jiangxi and Guangxi provinces, taking advantage of incentives offered by local governments. Those firms' success came as others that had failed to transform and upgrade their products were left behind in Guangdong to struggle with falling orders and shrinking profit margins. Lau said he expected Hong Kong exports would grow by a high single-digit figure this year, despite slowing economic growth on the mainland and in other emerging economies.

Sun Hung Kai plan for residential towers sent back by Town Planning Board (By Joyce Ng joyce.ng@scmp.com) Residential project in North Point differs so much from original brief that public outcry forces officials to send the plans back to developer - Artist impression of the development in North Point. The Town Planning Board has asked a developer to improve the design of a residential project on a prime waterfront site. Critics said the 10 towers look like a "fat wall" that would block wind flow, while planning officials described it as "distinct and interesting". Board members are concerned that the Sun Hung Kai Properties project on the site of the former North Point estate features towers that are too close together, some just 5.2 metres apart. It differs widely from a 2009 brief by the Planning Department that called for four, taller towers with wider spaces between them. Several residents' groups and political parties presented a petition yesterday morning before the board met. Board spokesman Edward Lo Wai-ming said members decided to defer making a decision on the project. "Members considered there was room for improving the visual permeability and widening the two 5.2 metre gaps between buildings, and they asked the Planning Department to work out a solution with the developer," he said. Sun Hung Kai submitted the project to the board in February after buying the 29,280 sq m site for HK$6.91 billion last year. It plans to build 10 blocks of eight to 18 storeys, yielding 710 flats. It is also required to provide 6,800 sq m of public open space. During the meeting, senior town planner Irene Lai Wai-shan told the board the scheme complied with the government's building design guidelines. "The project will have a special outlook in the area. The differing [building] heights carry a sense of superiority," Lai said. She cited the department's view that the "curvilinear arrangement" created a "distinct and interesting" form, and that the developer's proposal was better than the department's original concept as it created a large unified public open space. The developer had conducted an air-flow assessment and found its design satisfactory. Board member Laurence Li Lu-jen asked why the developer - just a day before the meeting - had explained why it built 10 towers instead of four. Lai replied the department was not aware of public concerns about the site layout until media reports last week and it then asked the developer to elaborate. The 2009 scheme was only "indicative", she said. In a letter, the developer said it needed 10 towers because non-opening windows had to be used for the facade facing the noisy Island Eastern Corridor. This meant it had to build only two flats on each floor in four of the buildings, so bedrooms and living rooms could have the opening windows to the south. To meet the minimum requirement for 700 flats, it had to build more blocks. Sun Hung Kai Properties said last night that it respected the board's decision, adding there might have been a "misunderstanding" among green groups and residents. "It is a balanced option and has gone beyond government requirements in facilitating air ventilation and noise reduction," a spokeswoman said.

 China*:  July 8 2013

BRICS emerging economies to expand co-operation on internet security (By Adrian Wan adrian.wan@scmp.com) The cybersnooping saga pushes the major emerging economies, including China, to reduce reliance on American technology - Edward's Snowden's revelations about US cybersnooping appear to be pushing its rivals closer together as China and other major emerging economies agree to expand co-operation on internet security. The consensus to emerge from a meeting of senior security officials from the BRICS countries - Brazil, Russia, India, China and South Africa - shows a broad desire to carve out their own turf in cyberspace and reduce reliance on American technology. The meeting came just weeks after Snowden, a former US National Security Agency contractor, disclosed to the South China Morning Post details of US cyberspying efforts in China, including hacking into the systems of Tsinghua University and Chinese telecommunications firms. "The bloc of developing countries have been getting closer and closer on the issue of cyber and information security, especially now that it seems to be clear that the US is a threat to them in these areas," said Professor Liu Deliang , head of the Asia-Pacific Institute for Cyber Law Studies at Beijing Normal University. "Countries like China, Russia and India obviously feel how the internet is currently run is unsafe for their development and they must get together and guard against the US," Liu said. Snowden's claims have bolstered fears that reliance on equipment and software made by US-based companies, like Cisco or Microsoft, represent a security threat to China because they could provide the US government with a back door into critical Chinese systems. Tensions between the two countries were already running high over hacking, amid claims that People's Liberation Army hackers had infiltrated numerous private US companies, including The New York Times. Cybersecurity was a main topic of discussion at President Xi Jinping's and US President Barack Obama's summit last month, which ended just before Snowden made his claims about US cyberspying in China. The cybersecurity consensus was announced by public security tsar Meng Jianzhu after the gathering of BRICS security officials in Vladivostok, Russia, according to Xinhua. Meng, who is also secretary of the State Council's political and legislative affairs committee, said the international community should work together to combat cybercrime and speed up the implementation of information security regulations. Jin Canrong, the associate dean of Renmin University's School of International Relations, said the consensus on cybersecurity at the BRICS forum shows its desire to become "a power-wielding" group. "Every country wants to be safe from attacks and surveillance," Jin said. "But now the US seems to be the biggest common threat to them." The bloc is already collaborating on the BRICS cable, a US$1.5 billion marine fibre optic cable linking the BRICS countries and the US with 21 countries in Africa. It is due to begin service in mid-2015. The BRICS discussions may strengthen Beijing's position ahead of the Sino-US strategic and economic dialogue in Washington this week.

China, Switzerland ink free trade agreement (Xinhua) Chinese Commerce Minister Gao Hucheng (R) and Swiss Federal Councillor Johann Schneider-Ammann shake hands after signing a free trade agreement between China and Switzerland in Beijing, capital of China, July 6, 2013. China and Switzerland on Saturday signed a free trade agreement (FTA) in Beijing, capping over two years of negotiations and legal processes. The pact was signed between Chinese Commerce Minister Gao Hucheng and Swiss Federal Councillor Johann Schneider-Ammann. It is the first free trade pact inked between China and a country in continental Europe. Gao described the FTA as a comprehensive, high-quality and mutually beneficial agreement at a news conference held after the signing. Once the FTA goes into effect, as much as 99.7 percent of Chinese exports to Switzerland will be immediately exempted from tariffs, while 84.2 percent of Swiss exports to China will eventually receive zero tariff. The scope of tariff reductions under the deal, which will cover 99.99 percent of Swiss exports to China and 96.5 percent of Chinese exports to Switzerland, exceeded the 90-percent level of an average FTA, Gao said. The deal is also expected to facilitate industrial cooperation between both countries and set new rules in the areas of environment, labor, intellectual property and government procurement, according to Gao. Schneider-Ammann, head of the Swiss Federal Department of Economic Affairs, said the FTA will inject vitality into bilateral economic and trade ties. Under the deal, Swiss enterprises' access to the Chinese market will be better protected on the basis of existing laws, said Schneider-Ammann. The two sides also noted that before the just-signed FTA can go into effect, some domestic procedures in both countries will need to be completed. Statistics show that the bilateral trade volume between China and Switzerland reached 26.31 billion U.S. dollars in 2012. The figure for the first five months of this year surged to 22.89 billion U.S. dollars, 114.2 percent higher than the same period last year. China is Switzerland's largest trading partner in Asia, while Switzerland is China's eighth-largest trading partner in Europe, according to official Chinese data.

Taxi booking apps that allow tips banned in Shanghai (China Daily) Taxi drivers in Shanghai will be banned from picking up passengers through taxi booking apps that allow tips, according to a new regulation issued by the city's transport authority. The taxi booking service management regulation, recently released by the Shanghai Transport and Port Administration, said the service provided by third-party taxi booking apps should be integrated with those of the taxi companies' dispatch centers, the Shanghai Morning Post reported on Friday. Smartphone apps that allow users to offer tips to drivers and bargain for rides are becoming increasingly popular in big cities such as Beijing and Shanghai, where it's difficult to get taxis during rush hours. The regulation also urges taxi booking app developers to cooperate with taxi companies, but the city's major taxi companies like Qiangsheng and Dazhong have not yet received any requests from the app developers, said the report. The city has about 50,000 cabs, about 67 percent of which are in the booking and dispatching system. City call centers handle 57,600 taxi-booking services on average per day, the administration said.

Navy drill furthers ties (By By ZHAO SHENGNAN and PU ZHENDONG in Vladivostok, Russia) The PLA navy's guided missile destroyer Shenyang arrives at Vladivostok in Russia on Friday, to participate in the "Joint Sea 2013" China-Russia joint naval drill. A Chinese naval task force arrived in Vladivostok on Friday to join Russia for the largest-ever naval drill in the region. Chief naval directors from both nations stressed that the drill was not "targeting any third party" but was designed to better safeguard the two countries' interests and tackle common challenges. Faced with "similar maritime threats", the two sides aimed to strengthen maritime security, said Ding Yiping, deputy commander of the navy of the Chinese People's Liberation Army. The drills, titled "Joint Sea 2013", will last until July 12, "We've repeated several times that the drills are not targeted at any third party, and some people's speculation about the exercises only shows their lack of confidence," said Ding, China's chief director in the exercise, at a welcoming ceremony held by Russia's Pacific Fleet at the Golden Horn Bay. Calling the arrival of the Chinese fleet "historic", Deputy Chief of the Russian Navy Main Staff Leonid Sukhanov said the naval drill will further the two nations' ties. "We are able to meet any aggression and challenges on the sea," Sukhanov said. As Russia's chief director, he also joined the first China-Russia naval drill held last year in the Yellow Sea. This month's naval exercise will be held in Peter the Great Bay near Vladivostok and marks the first time that the Chinese navy has participated in a drill in the Sea of Japan. It is also its largest-ever naval drill abroad with a foreign partner, Ding said. "This is just the beginning, and definitely not the last one," he said. Officials and observers said the naval drill signals a strengthening of Sino-Russian military trust and coordination. It may also set precedence for future joint drills on a regular basis. The Chinese navy dispatched three new types of shipborne helicopters, a special operations detachment as well as warships from its North Sea Fleet and the South Sea Fleet that include four destroyers, two guided missile frigates and a supply ship. Eleven warships, including the flagship of Russia's Pacific Fleet, the Slava-class guided missile cruiser Varyag, a submarine and three aircraft from the Russian navy will participate in the drill, which will focus on joint maritime air defense, joint escorts and maritime search and rescue operations. During the eight days, both navies will work together to direct and command the drill, Ding said. They will also take live ammunition exercises, and stage a number of sporting competitions and culture performances, said Yang Junfei, commander of the Chinese fleet.

Hong Kong*:  July 7 2013

As more Chinese men get facials, Hong Kong firms see an opening (By Rachel Butt rachel.butt@scmp.com) Hong Kong-owned toy and clothing manufacturers have been abandoning mainland production bases recently but two mainland service industries - beauty and catering - are looking up for Hong Kong operators. Recent research by the Trade Development Council (TDC) found that although men living in mainland cities and Hong Kong are grooming themselves more, they are often reluctant to seek professional services at beauty parlours. "Even if treatments are carried out in different rooms, some female customers feel their security and privacy are being compromised," TDC economist Alice Tsang said, suggesting that Hong Kong-owned beauty parlours design treatment rooms with clearly separate areas for male and female clients, to address privacy concerns. Mence, a Hong Kong-based male-only skincare and body toning service centre, has been operating in the mainland since 2004, with parlours in Guangzhou and Beijing. Each of its Hong Kong customers spends an average of HK$10,000 on a treatment, which takes two months to complete. "We saw sales growth of 5 per cent at our Hong Kong branches last year," said Mence Tsoi, the owner of the company. "Although our sales on the mainland are catching up with Hong Kong, we need to see if there's a new investor who is interested in opening more branches in China." The Ministry of Commerce predicts revenue from the mainland beauty sector will grow 15 per cent a year and reach 770 billion yuan (HK$974 billion) in 2015. The TDC also sees the mainland catering industry as a lucrative prospect. The sector's revenue hit 2.3 trillion yuan last year. "We encourage Hong Kong brands to enter the mainland market by upping food quality control and focusing more on high-end ambience," TDC economist Wing Chu said, adding that Hong Kong caterers were perceived as reliable.

Car chase ends with police drawing guns, arresting pair in Fo Tan (By Clifford Lo clifford.lo@scmp.com) Pair suspected of planning a robbery as number plates found in unregistered car after pursuit - Two policemen drew their guns to stop a car when its driver tried to ram them after a four-kilometre car chase yesterday. The 33-year-old driver of the two-door Lexus was arrested for dangerous driving, driving with his licence disqualified and without third-party insurance and driving an unlicensed vehicle. The chase began on the Tsing Sha Highway in Tai Wai at 12.15pm, when a new automatic number plate recognition camera on an unmarked police car scanned the car's number plate and found its licence had expired. Police officers sounded a siren and ordered the vehicle's driver to pull over, but he ignored their command and sped off, the police said. Four traffic officers gave chase in a police car. The white Lexus led them at high speed into the Fo Tan industrial area. A senior police officer said the car had been clocked travelling at more than 100km/h in 70km/h speed zones during the pursuit. "In an effort to evade police in the industrial area, the car kept switching lanes, crossed double white lines and travelled on the wrong side of the road on several streets," he said. "A number of vehicles had to brake heavily to avoid colliding with the car." The 10-minute chase ended when the Lexus entered a cul-de-sac. The police blocked the road with their car, but the driver kept looking for an escape. When police approached the car, the driver accelerated in an apparent attempt to hit two traffic policemen, according to Chief Inspector Tam Kan-lun of Sha Tin police station. The two officers - a Western inspector and a local constable - were just a metre away from the car at the time. "To protect their own safety, the two colleagues drew their guns and aimed at the car," Tam said. "It immediately stopped." Police then arrested the driver. His girlfriend, 24, was also in the vehicle. No one was injured. Tam said there was no evidence the man was driving under the influence of illegal drugs. He also passed a breathalyser test. Officers found four number plates in the car. One of them did not belong to either of the pair. Police also arrested them on suspicion of preparing for a robbery. The driver was released on bail and must report to police later this month.

Revised new town plan for New Territories unveiled (By Olga Wong, Joyce Ng and Ada Lee) Government insists new plan took demands of residents into consideration but still has to fend off claims of collusion with developers - Residents of Kwu Tung, Ta Kwu Ling and North Fanling watch a live TV broadcast as Secretary for Development Paul Chan reads out the results of the North East New Territories New Development Areas Planning and Engineering Study. The government has introduced significant changes to its HK$120 billion new town project in the northeast New Territories that it says are designed to heed demands from affected residents and developers. But the plans, under which one of the three proposed towns will be postponed while density of the others is increased, failed to impress villagers who threatened to occupy the Hong Kong Golf Club course at Fanling if they are displaced. The revision is the third version of a proposal put forward in 2008. Officials were also fending off allegations of collusion with developers after giving them a partner role in providing private flats in the new towns. Postponed is a planned town in the Ping Che-Ta Kwu Ling area, which will now be considered as part of a separate study. The number of flats in the towns in Kwu Tung and Fanling North will rise by 28 per cent to 60,700 for 174,900 people on 333 hectares - a third of the size of Tuen Mun. The proportion of public flats rises to 60 per cent. Announcing the changes yesterday, Secretary for Development Paul Chan Mo-po said the new towns belonged to Hongkongers and sales of the private flats might be restricted to them in future. "The plan was revised in the interest of the public. We did consider the possibility of facing a legal challenge but we are not afraid of it," Chan said. Referring to the developers' role, he said: "The developments are still led by the government … there are merits [in partnering with developers]. I will leave it to the public to judge whether there's collusion." Developers had threatened a judicial review against the original plan where the government would have resumed all the land they had spent years acquiring and auctioned it. The government will now only resume private sites zoned for infrastructure, community facilities and public flats. Records show that some plots owned by Henderson Land in Kwu Tung could be resumed for building a hospital and some owned by New World Development in Fanling for education. Developers can build their own projects on land zoned for private flats and commercial use subject to conditions, including paying compensation. "We will resume the developers' land if they fail to acquire all the developable land before the deadline," director of Lands Bernadette Linn Hon-ho said. "This means that if developers do not offer enough compensation and residents refuse to leave, their projects could fall apart." Former lawmaker Lee Wing-tat, who now runs Land Watch, said the selective land exchange would lead to a "monopoly by big developers". But lawmaker Tony Tse Wai-chuen said it was a "balanced" option that would enable the government to speed up housing supply. 
THE MAJOR CHANGES
Postpone development plan for Ping Che and Ta Kwu Ling
Total number of flats will increase by 28 per cent and population will increase by a third
Increase the proportion of public flats, including subsidised flats, from less than half to 60 per cent
Allow developers to build private flats on their own land under certain conditions
Government will resume private land that has been zoned for infrastructure and public housing
Tenants living in squatters or farm houses for 10 years or more will get compensation
Eligible affected residents can be rehoused in public flats in the same districts
Private flats may be designated for Hongkongers only
34 hectares of fallow agricultural land has been identified in Kwu Tung South for affected farmers

Forger Peter Chan gets 12 years in jail, called 'insidious, greedy, shameless' (By Austin Chiu austin.chiu@scmp.com) Peter Chan Chun-chuen, described by a judge as insidious, shameless and extremely greedy, was jailed on Friday for 12 years for forging a will purportedly left by late billionaire Nina Wang Kung Yu-sum. The 53-year-old former fung shui practitioner, previously known as Tony Chan, was on Thursday found guilty of forgery and using a false instrument. In handing down the sentence, Mr Justice Andrew Macrae said he intended to adopt the maximum sentence of 14 years as a starting point but reduced it by two years for different factors including the quick manner Chan's lawyer conducted the criminal trial. The judge also ordered Chan to pay an estimated cost of HK$2 million incurred by the prosecution during a preliminary inquiry requested by Chan, which the judge said was wholly unwarranted. Macrae also called Chan shameless for abusing Wang's trust and a charlatan. He said the scheme was nasty and insidious because Chan would have taken the legacy that Wang had intended for her charitable organisation. Chan looked dazed as he heard the sentence while his wife Tam Miu-ching, his brother Ricky Chan Chun-kwok and his daughter Polly Lon Pui-chun were calm. Before the hearing started, Chan fought to hold back his tears in the dock. Commenting on the sentence, Police chief inspector Siu Wai-sing of the commercial crime bureau said the 12-year term was reasonable and would have a deterrent effect. “We are very pleased about the result. It shows Hong Kong has a sound judicial system. It also sends out the positive signal that deception will not be tolerated,” he said. Siu, who was in charge of the investigation, also criticised Chan for engaging in delaying tactics in court. “[Chan] made changes to his legal team five times and once applied to conduct DNA tests overseas. The judge said all were attempts to delay court proceedings,” Siu said. After learning Chan’s sentence, his family members were surrounded by reporters asking for their comments as they tried to leave the court. They were forced back into the court building before leaving separately. They did not give any comment.

Freeman Lo takes a byte out of political apathy (By Johnny Tam johnny.tam@scmp.com) The multimedia designer's videos - celebrations of HK that also take aim at its leaders - have been viewed hundreds of thousands of times - Freeman Lo's first video, which he made long before the advent of YouTube, attracted 300,000 downloads. In the difficult days of Sars, Freeman Lo Wing-cheung decided Hong Kong people needed cheering up. His remedy, a video evoking the city's can-do spirit, was an instant hit, getting 300,000 downloads within a few days of being uploaded to his website. That's not difficult these days with high-speed connections and social media to share such efforts. But a decade ago when Lo made Below the Lion Rock, 6th Anniversary of Handover Edition, people were surfing the net with clunky 56K dial-up connections, and Facebook hadn't even been heard of. "My server was down many times because of such heavy traffic at that time," the multimedia designer said. Lo, 46, joined the industry in 2000 and started his website, www.rebuildhk.com in April 2003. "Everyone was feeling down at that time," he said. "Even though the business of my multimedia production company was seriously affected, I believed we should face it positively, so I decided to remind everyone that we'd been through so many difficulties before and could also overcome this." Drawing its title from the RTHK series named for the famed landmark in the Kowloon Hills, the 2.22-minute video showed how Hong Kong grew from a small fishing village to an international financial centre. It also featured the 1989 Tiananmen crackdown which weakened the confidence of Hongkongers in Beijing, the moment of the handover in 1997, and the battle against the severe acute respiratory syndrome. The theme song, Below The Lion Rock also came from the RTHK series, broadcast at different times between 1974 and 2006. Lo says his video acted as a "wake-up call" that may have helped trigger the city's biggest protest since the handover - the 500,000-strong July 1 march by residents disappointed in the government's performance and angered by the proposed enactment of the Article 23 national security law. "No one knew what to do to express their feelings," he said. "My video was a wake-up call for them to realise they had to stand up and say something. And it proved Hong Kong people have the ability to rationally voice what they want." Lo has been seen as an online convenor of political movements ever since, with productions increasing to more than 30 clips over the years. Another popular one was Folk Guy's Always With You, a parody of the 10th anniversary handover anthem Just Because You Are Here . Lo's slick music video poking fun at the government was viewed more than 600,000 times in a month after it was posted on YouTube in late May 2007. Again, it helped to get people out into the streets for the July 1 march. To keep up the tradition, Lo has spent weeks producing a new video for this year's July 1 march on Monday. The clip, about three minutes long, explores deep-rooted problems such as the widening wealth gap, which Lo says is "tearing the city apart". "We have had three chief executives since the handover, but each successor did worse than the one he was replacing," Lo said. "Many important issues which should have been addressed have been hidden in the agenda." Lo said the video reviewed the evolution of Hong Kong in the 10 years after the 2003 July 1 march, which surprised the world by attracting a large turnout of demonstrators who carried out the protest peacefully. The video features two songs - Below the Lion Rock and Converge Every Beam of Light, a theme song of the concert organised by RTHK in 1990 to strengthen and unite Hongkongers who were suffering from loss of faith in the Communist Party after the Tiananmen crackdown and uncertainty about the future. Lo also made a video in 2004 featuring the latter song. His latest video was posted on his website last night and was immediately shared on Facebook. But Lo is uncertain whether the clip will be as well-received as his previous ones. "Society has changed," he said. "There's too much information bombarding people every day, so they get bored with things easily." Commenting on the controversial and now-shelved bill to amend the copyright law, Lo said that if it returned as law, online production of all kinds would suffer a decline. "People nowadays make parody videos, rewrite lyrics, or redo songs for almost every issue in society or in their daily lives. The bill will limit creativity," he said. "Creativity means people are able to clearly pass their points of view to others. It doesn't necessarily mean their views or ways of expression are 100 per cent new."

 China*:  July 7 2013

China, Pakistan ink transport pact (By LI XIAOKUN and ZHANG YUNBI) Premier Li Keqiang with Pakistan's Prime Minister Nawaz Sharif and Punjab Chief Minister Shahbaz Sharif (left) ahead of a signing ceremony at the Great Hall of the People in Beijing on Friday. Huge project to boost business ties between the two nations - China and Pakistan signed an agreement on Friday on the blueprint for a huge transport project linking northwestern China to the Arabian Sea. Observers said the project, named the "China-Pakistan economic corridor", will open a new route for China's goods and energy. It will also give a strong boost to Pakistan's economy and help maintain security there, they said. The broad agreement was among eight pacts signed after a meeting at the Great Hall of the People between Premier Li Keqiang and Pakistani Prime Minister Nawaz Sharif. The cost of the economic corridor project is not known at this stage. "Our two countries can closely link China's Western Development Strategy with Pakistan's development strategy of reviving its economy," Li told Sharif at their meeting. "This will also deepen regional cooperation in South Asia and benefit people of the two countries and the region." The transport link is described as a "long-term plan'' to connect Kashgar in the Xinjiang Uygur autonomous region to the southwestern Pakistani port of Gwadar, more than 2,000 km away across a mountainous area. Sharif said before the visit that he would focus on economic topics during his trip, with the corridor topping the agenda. He told Chinese reporters the corridor will "change the fate" of the region. "Now that the management of Gwadar (port operations) has been handed over to China, we expect that Gwadar is ready to become a very important economic hub and an important Arabian Sea port," he said. China Overseas Holding Ltd took over operational control of Pakistan's important Gwadar deep-water port from Singapore's PSA International earlier this year. Gwadar is close to the Pakistan-Iran border and the Strait of Hormuz, through which much of the Gulf region's oil exports are bound by ship for overseas markets. Sharif said the economic corridor will boost bilateral trade considerably and offer opportunities for businesses in both countries. In talks with Sharif on Thursday, President Xi Jinping referred to his guest as "an old friend and a good brother". He said strengthening strategic cooperation with Islamabad is a priority for Beijing's foreign policy. Wen Fude, vice-president of the Chinese Association for South Asian Studies, said the corridor will provide another strategic choice for China's transport sector. It will also stimulate infrastructure construction in Pakistan, Wen said, adding that increased bilateral trade brought by the corridor will help Islamabad to cut its huge trade deficit with Beijing. "Beijing is helping Pakistan to produce blood by itself, instead of donating blood through assistance," Wen said. Another agreement signed on Friday covers the laying of a fiber optic cable from the Chinese border into Pakistan that will boost Pakistan's access to international communications networks. Sharif, previously elected prime minister in 1990 and 1997, has been a frequent visitor to China and believes China is Pakistan's "most reliable friend". He is making the first stop on his first foreign trip since being elected in May. Sharif met Li during Li's visit to Pakistan in late May, before Sharif was formally sworn in. At the start of his meeting with Li on Friday, Sharif said the warm welcome he received reminded him of the saying "Our friendship is higher than the Himalayas and deeper than the deepest sea in the world, and sweeter than honey." Li and Sharif agreed to upgrade the China-Pakistan free trade area and deepen anti-terror cooperation. Sharif promised that Pakistan will do its best to protect Chinese citizens in the country. Two Chinese were killed in Pakistan-administered Kashmir by Taliban terrorists on June 23. The prime minister enjoyed a subway trip in Beijing on Thursday afternoon and he planned to take a bullet train to Shanghai on Friday. He told China Daily that he is "very much looking forward to" introducing Chinese trains to his country. The main objective of the ride is to explore the possibility of having similar high-speed trains in Pakistan, he said. "It is going to be a tremendous experience," he said. He is also scheduled to meet the leaders of many major Chinese enterprises, especially in the infrastructure construction and energy sectors. Hu Shisheng, a researcher on South Asian studies at the China Institutes of Contemporary International Relations, said infrastructure construction and energy scarcity are the two biggest problems for Pakistan's economy. "China and Pakistan have enjoyed very strong political and military ties. Now they are building up in the economic field," Hu said, adding that economic issues are the theme of Sharif's political agenda.

China-Pakistan friendship ‘sweeter than honey’, says Sharif (By Agence France-Presse in Beijing) Chinese staff members raise the Pakistani flag before a welcome ceremony in Beijing. Pakistan’s Prime Minister Nawaz Sharif on Friday told his Chinese counterpart Li Keqiang their countries’ relationship was “sweeter than honey”, during a visit to Beijing with economic ties at the top of the agenda. Pakistan and China are close diplomatic and military allies and Sharif, who is on his first foreign trip since his May election, is looking to secure infrastructure projects to tackle a chronic energy crisis and economic malaise in his country. At the Great Hall of the People in the Chinese capital, Sharif said his welcome “reminds me of the saying, our friendship is higher than the Himalayas and deeper than the deepest sea in the world, and sweeter than honey”. Li told him: “I greatly appreciate your great warmth and deep affection for the people of China.” The Chinese premier was the first foreign leader to visit Pakistan after Sharif’s victory at the polls. Beijing has been involved with the upgrade of the Karakoram Highway as part of a proposed economic corridor between the two countries. Earlier this year China took control of Pakistan’s Gwadar port, giving it access to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world’s traded oil. China-Pakistan trade last year reached US$12 billion and is targeted to rise to US$15 billion in the next two to three years. On Thursday, Sharif held talks with Chinese President Xi Jinping, amid concerns in his country over weak growth, inflation and power cuts of up to 20 hours a day. Xi, who referred to Sharif as an old friend and a good brother, said strengthening strategic co-operation with Islamabad was a priority for China’s diplomacy, the state-run broadcaster China Central Television reported. Sharif said his country welcomed Chinese investment and would work to create a friendly environment for it.

China becomes world's 2nd largest retail market - China's retail market is booming. The nation has become the world's second largest retail market as its retail trade volume doubled to 21 trillion yuan (US$3.44 trillion) in 2012, from 10.8 trillion (US$1.77 trillion) in 2008, according to the latest data released by the Ministry of Commerce on Thursday.

Retail industry to see steady growth - Despite China's slowing economic growth, the retail industry in the world's second-largest economy will maintain sustainable growth in the medium and long term, commerce officials said on Thursday.

Hainan Airlines gets first of 10 Dreamliners - Hainan Airlines, China's fourth largest airline, was delivered the first of ten Boeing 787 Dreamliners on Thursday, according to the airline and the Boeing Company.

Laurence Xu Haute Couture Fall Winter 2013/2014 fashion show - Models present creations by Chinese designer Laurence Xu as part of his Haute Couture Fall Winter 2013/2014 fashion show in Paris, France, July 4, 2013.

China more 'normal' than 'exotic', new book shows (By Kelly Chung Dawson in New York kdawson@chinadailyusa.com) When UC-Irvine and China scholar Jeff Wasserstrom's handbook China in the 21st century: What Everyone Needs to Know was published in 2010, the after effects of the 2008 Olympics were still being felt, even as the Shanghai Expo loomed. The importance of such "mega events" seemed an important part of the China narrative. Three years later, Wasserstrom has released an updated version of the book, and the significance of such events - and the narrative itself - has already morphed. The sections on mega events have been streamlined, others expanded and a number of new subjects feature prominently. "If China keeps changing this quickly, there might be a need for another update in a few years," Wasserstrom told China Daily. "It seems likely now that China's relations with the US will only become more complicated, and understanding China in a nuanced way will become more and more important each year." Wasserstrom, who is part of the team that edits the popular blog China Beat, recruited Maura Elizabeth Cunningham, a fellow editor and visiting scholar at the Shanghai Academy of Social Sciences, to work on the second edition. Presented in a question-and-answer format, the book attempts to explain China's history, culture and what factors might affect its future. Many of the questions included in the book were asked of Wasserstrom during his book tour for the earlier edition. The questions include: How did dynasties interact with foreign countries? Is China truly an atheist state? What does the digital divide mean in China? And will China become the world's dominant economic power? Some of the book's answers draw on straightforward historical accounts of China's past, while others require Wasserstrom and Cunningham to make predictions and analyze facets of Chinese culture that reflect a particular point of view - as most historians do, he notes. But if the answers reflect the personal opinions of two well-versed China experts, the book does its best to steer clear of prevalent media narratives, Wasserstrom said. "The books and stories that get the broadest public attention are often either too fearful or too hopeful in their view of China," he said. "One misconception plays into the idea that China is the opposite of America, while the other narrative falls into the fantasy that China is on the verge of Americanizing itself. I wanted to avoid taking the stance of either a so-called 'China Basher' or a 'Panda Hugger'. Those views are too simplistic." He cited the 2010 book When China Rules the World, which capitalized on a title meant to stoke "sinophobia," but in content actually played to a sense of "sinomania". Western readers are rarely exposed to a middle-ground view, despite that almost every story in the Western media now includes a China angle, Wasserstrom said. "We hope that someone who reads China in the 21st Century will come away from it understanding more about where China has been and why we can't predict where it might be going, and why offering a simple sound bite about China rising or falling isn't possible," Cunningham said. "And while American readers might come to the book thinking of China as an alien country on the other side of the world, I hope that by the time they finish it, they see that China and the United States have a surprising amount in common." The urge to compare and contrast the countries can be useful, Wasserstrom said. The two countries self-identify as resisting imperialism while exerting influence over other parts of the world; both countries frequently stand apart from the rest of the world on international issues. Culturally, Chinese and Americans love a good rags-to-riches story, he said. But any attempt to classify a country can lead to the kinds of misunderstandings that have occurred when people have tried to group China with central and eastern European former communist countries. "Comparisons can be a great tool, but when you put China in a category chances are you're missing major things you wouldn't see if you thought about it in a different comparative frame," he said. Western readers often pay most attention to the stories that corroborate their existing beliefs about China, a natural human impulse, he said. One such case is the widespread American assumption that sex-selective abortions are not only encouraged by the Chinese government but sanctioned by law. While female infanticide is arguably a byproduct of the one child policy, this assumption is inaccurate, he said. Wasserstrom, who writes a lot of op-ed pieces, is particularly interested in comparisons that will make Western readers uncomfortable, he said. He has argued that the history of China and Tibet is easily compared to Hawaii and the US, and Andrew Jackson's appearance on US currency is an example of how a culture can celebrate or admire a person not for their bad deeds but for their overall contributions to a culture. (Jackson, seventh president of the US, was responsible for the forced relocation of thousands of Native Americans in the 1800s.) "There's a fantasy in the US about 'Big Bad China' versus 'the good Chinese people', and often when we read things that don't fit in with our own narratives, we ignore them," he said. "Misinformation is accepted because it comforts us and fits our preconceptions." Above all, he hopes that Western readers will come away from the book with the simple understanding that China is "normal", he said. "It's a normal country filled with normal people going through extraordinary times, and yet living lives and facing challenges any one of us here in the US would relate to. It's better to think of China that way than to think of it as exotic or alien." 

Missouri govt's veto won't stop Smithfield deal (By Chen Jia in San Francisco chenjia@chinadailyusa.com) Chinese pork manufacturer Shuanghui and America's largest pork producer Smithfield remain committed to their potential acquisition deal, despite Missouri Governor Jay Nixon's veto Tuesday of two bills that would have allowed foreign ownership of the state's farmland. "I read the news talking about acquisition setbacks, but I think people should also note that Smithfield said that Missouri governor's veto will not create any obstacles to the acquisition plan," Liu Jintao, the vice-general manager of Shuanghui Group, said in a statement posted on his Chinese blog on Thursday. The proposed acquisition of America's largest pork producer Smithfield would be the biggest Chinese takeover deal of a US company. On May 29, Shuanghui International and Smithfield jointly announced their merger agreement - Shuanghui will acquire all of Smithfield's outstanding shares and its debt valued at $7.1 billion. For the acquisition, Shuanghui has received loans of $7.9 billion from the Bank of China and Morgan Stanley. Bank of China will use the assets and property of both sides as collateral for its $4 billion loan to Shuanghui. Shuanghui will solve Smithfield's debt with the $3.9 billion loan from Morgan Stanley. It is supposed to use $750 million in revolving credit instruments, a $1.65 billion term loan and a $1.5 billion bridge loan. On Tuesday, Governor Nixon vetoed Senate Bill 9, which includes a provision that eliminates the existing ban on foreign ownership of Missouri agricultural land. As an amendment, the provision earlier had been rejected by a legislative committee despite opposition from leading agricultural groups, according to the governor's office. "Not only was this provision inserted into the bill without a public hearing, it was done so after the provision was rejected by at least one legislative committee on agriculture, as well as publicly opposed by leading Missouri agricultural groups," Nixon said in a statement on Tuesday. Hao Junbo, an international merger and acquisition law expert, told China National Radio on Thursday that Shuanghui could take other measures to realize its target even though the state law will not allow foreign company purchasing of agricultural land. Nixon vetoed the bill and destroyed an opportunity to cancel the ban, but it doesn't mean the opportunity will be gone forever, Hao said. He said Nixon's attitude would not result in the acquisition failure and there are other ways to go through the legal procedure for the two companies, such as leasing. The state government doesn't have the right to stop the deal between Shuanghui and Smithfield, he said. It also reported a Missouri council staff said that state lawmakers still have a chance to overturn Nixon's veto in September. Hao said the real challenge for the acquisition is to get approval from the Committee on Foreign Investment in the US. In recent years, Chinese enterprise acquisitions of US companies have suffered many setbacks because of denials by that committee. In 2010, Huawei lost its acquisition bid for a US company because it was called a security risk by US politicians. In 2012, Trinity Group's acquisition of four wind power projects in the US also failed for similar reasons.

Chinese fleet arrives in Vladivostok for drills (By Xinhua) Destroyer Shenyang (right) of the Chinese People's Liberation Army (PLA) Navy is anchored in Vladivostok, Russia, July 5, 2013. Chinese fleet consisting of seven naval vessels arrived in Vladivostok on Friday to participate in Sino-Russian joint naval drills scheduled for July 5 to 12 at the sea area and airspace of the Peter the Great Gulf in the Sea of Japan. A fleet of Chinese warships arrived in Russia's Far Eastern port of Vladivostok on Friday to participate in a week-long joint naval drill. Addressing a welcoming ceremony at a naval port of Russia's Pacific Fleet, Leonid Sukhanov, deputy chief of staff of the Russian Navy, said the drill, dubbed "Joint Sea 2013," is one of the largest joint military maneuvers in the region. The drill is aimed at enhancing the two navies' capability in coordinating maritime defense operations, he added. Ding Yiping, deputy commander of the Chinese Navy, said it is the first time for the two navies to stage joint military exercises in waters near Russia's Peter the Great Bay. After a similar drill last year, the two sides would coordinate better, he said. A total of 19 vessels, eight planes and two teams of special forces from the two countries will participate in the exercises on July 5-12. The maneuvers will focus on joint maritime air defense, joint escorts and marine search and rescue operations. In 2012, the two navies conducted a joint drill in the Yellow Sea.

Hong Kong*:  July 6 2013

Double hotel rooms [from currenly 67,000 hotels rooms] needed in 10 years to accommodate ‘enormous’ rise in visitors (By Lai Ying-kit yingkit.lai@scmp.com) (From left to right) Gregory So Kam-leung, Secretary for Commerce and Economic Development, Chief Executive Leung Chun-ying and Trade Development Council chairman Jack So Chak-kwong talk to the press after a meeting of the Economic Development Commission on Thursday. Hong Kong needs to double its number of hotel rooms to accommodate an increase in tourists in the coming 10 years, a member of a government commission studying the city’s economic development said on Thursday. Jack So Chak-kwong, a member of the Economic Development Commission, said the city would see an “enormous” rise in the number of visitors in the coming decade. The projection was based on the opening of the Hong Kong-Zhuhai-Macau bridge and possible expansion of the Individual Travel Scheme to more mainland cities, So said. The bridge is still under construction and is expected to be opened in 2016. So made the remarks after commission members met for the second time since it was formed on Thursday. The commission, announced in Chief Executive Leung Chun-ying’s policy address, will make recommendations to the government on strategy and policy to enhance economic development and to identify and support growth industries. So, who chairs a working group on convention, exhibition industries and tourism under the commission, said the city would also have to build new attractions to occupy the expected increased number of visitors. This would pose a challenge given a lack of land, So said, but there were some sites available in Kai Tak and Lantau. He said commission members would look into whether they would be suitable for new hotels and tourist spots.

Peter Chan guilty of forgery (By South China Morning Post) A High Court jury has found Peter Chan Chun-chuen guilty of forging the will of late tycoon Nina Wang Kung Yu-sum and using it in a drawn-out probate battle with the Chinachem Charitable Foundation, which Wang established.

The tricky business of trading places, thanks to Hong Kong-mainland Cepa deal (By Denise Tsang, Celine Sun, Peggy Sito and Kanis Li) [The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is an economic agreement between the government of Hong Kong and the Central People's Government of the People's Republic of China. Signed on June 29, 2003, it is a free trade agreement that allows qualifying products, companies and residents of Hong Kong preferential access to the mainland Chinese market] 10 years on, a two-part series looks at the impact of Cepa, a deal aimed at fostering economic ties between Hong Kong and the mainland - Customers crowd a Chow Tai Fook store in Tsim Sha Tsui. Hang Seng executive director of global banking Andrew Fung. President of Hong Kong Brand for China Market Association Andy Lee. Centaline's Shih Wing-ching. A decade ago, Causeway Bay was a tourist hot spot with a thriving array of boutiques, wonton noodle shops and decades-old bakeries amid the glitzy shopping malls. Shoppers who were not speaking Cantonese were likely to be conversing in Japanese or English. Today, the language most often heard is Putonghua. Mainland tourists predominate, pulling wheeled suitcases and splashing their stacks of money on gold ornaments, diamond rings, Rolex watches, Gucci handbags, baby formula, cosmetics and electronics. The sweeping changes in Causeway Bay are one of the most visible signs of the effects of the Closer Economic Partnership Arrangement (Cepa), a free-trade agreement between the central government and Hong Kong signed a decade ago this month. The deal, agreed in the wake of the severe acute respiratory syndrome outbreak that left Hong Kong on its knees, was intended to pry open the expanding mainland market for Hong Kong businesses. As part of the agreement, which has since been expanded, mainlanders from some regions were able to travel to the city individually, rather than in tour groups. Hong Kong banks have been able to set up branches across the border and law firms establish representative offices. Hong Kong accounting firms and telecommunications services providers will be allowed to operate in the new border district, Qianhai, on a trial basis. "Overall, Cepa has been helpful to Hong Kong," Hong Kong Brand for China Market Association chairman Andy Lee Chi-hung said. "It injected much-needed life into the city when Sars nearly [floored] the economy." Mainlanders and their luxury booty have transformed the face of shopping districts such as Tsim Sha Tsui. Photo: Bloomberg - Lee was among the first wave of Hong Kong entrepreneurs who made use of Cepa, setting up his ladieswear firm Cocolulu in Shenzhen. The retailing business ballooned to a 40-outlet chain in southern and eastern provinces by 2008. Such was his success that he started the association three years ago to offer free advice to entrepreneurs looking to break into the robust mainland consumer market. "Cepa has since dramatically modified the ways Hong Kong investors make forays into the mainland market," Lee said. Hong Kong companies are allowed to set up wholly owned retail businesses to compete on an equal footing with private mainland enterprises in Guangdong, which was impossible before Cepa." But Cepa has its critics. Many Hongkongers say the trade pact and the influx of mainland visitors it prompted has led to social tension, with mainlanders competing with locals for everything from baby milk to flats and maternity services in hospitals. Analysts say the undoubted winners are the city's landlords. Luxury home prices are almost quadruple their pre-Cepa levels, and rents for prime spots in Causeway Bay and Tsim Sha Tsui have increased almost three times, according to property consultant CBRE. The sky-high rents squeezed many smaller businesses, including wonton noodles shops and boutiques out of Causeway Bay. They lost out to bigger players such as jewellery chains Chow Tai Fook and Chow Sang Sang. Chow Tai Fook, controlled by property tycoon Cheng Yu-tung, has doubled the number of stores in Hong Kong to 80. According to the latest government figures, about six out of 10 mainland visitors over the past decade came through the individual travel scheme, or 90 million visits by people from the 50 cities where the scheme is now in effect. Many solo travellers come from neighbouring cities such as Shenzhen and Guangzhou for day trips or weekend shopping. The retail sector has been the main beneficiary, with analysts estimating more than one-third of local retailers' revenue comes from mainland visitors. Their visits have also left hotels packed. Cathy You, a Beijing-based full-time mother of a five-year-old girl, visits Hong Kong twice a year on average. "I come for shopping and eating, and Disneyland," said You, 36. "I am a fan of big brands, so Hong Kong is really a paradise for me to shop for clothing, handbags and shoes." You recalled her last trip to the city in December, when she and her husband spent HK$60,000 on a Chanel handbag, a Hermes leather belt and several tops. They also bought family and friends some dried food and patent drugs as gifts. "People believe what's from Hong Kong is safer and of a better quality," she said. But while the property market at home has boomed, local property agents are having little luck across the border. "Cepa does not provide any significant help," said Shih Wing-ching, founder of Centaline Property Agency. "Property is a localised market. Even though we have the licences, we cannot compete with mainland agents." He said Centaline had expanded rapidly on the mainland, but not because of Cepa. "Most of the company's agents are mainlanders, who know the market well," Shih said. The mainland and Hong Kong now recognise the qualifications of each other's real estate appraisers and surveyors. But Hong Kong surveyors are not allowed to take on mainland jobs unless they are employed by mainland appraisers. But the mainland appraisers are not as popular as international surveying firms. Hong Kong banks have seen more pros than cons in Cepa, which allows them to set up "cross-location" sub-branches in Guangdong. The capital requirement for a sub-branch is 10 million yuan (HK$12.54 million), or 10 per cent of the requirement for a full branch. Bankers said the measure helped the banks branch out across the border, raise their brand awareness and paved the way for more business opportunities if the mainland's capital account is liberalised. "All foreign players [including Hong Kong-based banks] on the mainland are small," said Andrew Fung, executive director and head of global banking and markets at Hang Seng Bank. "We can't compete with the big four state-owned banks directly." Cepa enabled more interaction between banks in the city and customers across the boarder, he said. Another banker called for further relaxation in the mainland's capital account so that firms could invest freely without geographical barriers. "This would bring a lot more money flows," he said.

 China*:  July 6 2013

Nestle, Danone to cut Chinese infant milk prices amid probe (By Reuters in Hong Kong) Imported milk powder sold at a supermarket in Beijing. Swiss food company Nestle and French rival Danone are cutting the price of infant formula milk in China after Beijing launched an investigation into possible price-fixing and anti-competitive behaviour in the sector. Wyeth Nutrition, which Nestle bought last year, said on Wednesday it had been co-operating with a probe by China’s National Development and Reform Commission (NDRC) and was responding by cutting prices and improving sales and marketing practices. Danone said in an e-mail that its Dumex business had also been co-operating with the NDRC and was preparing a price-cut proposal whose details would be disclosed later. Both companies, along with Mead Johnson Nutrition and Abbott Laboratories, said on Tuesday they were being investigated by the NDRC. Analysts see the probe as possibly part of a broader Chinese plan to boost consumption of local infant milk products. Mothers turned away from Chinese milk powder in 2008 when infant formula tainted with the industrial compound melamine killed at least six babies and made thousands sick with kidney stones. China has since made efforts to crack down on persistent food safety problems that have included chemical-laced pork and infant milk contaminated with cancer-causing agents. “Wyeth Nutrition decided to implement a price reduction of key products from July 8 through next year. The average reduction will be at 11 per cent with the biggest single product price reduction at 20 per cent,” it said without giving more details. The company said it would not raise prices on any new products over the next year. Analysts said the investigation could result in fines and tougher rules governing imports into an infant milk market set to grow to US$25 billion by 2017. The firms could face fines ranging from 1 per cent to 10 per cent of their annual sales, the state-run Xinhua news agency quoted experts as saying. “It is part of the whole idea of a consolidation process,” said Renee Tai, a Hong Kong-based analyst at regional brokerage UOB Kay Hian. “It is pointing the same direction of supporting local producers, making it difficult for importers.” Some Chinese infant formula companies have started forming partnerships with foreign firms to try to boost brand recognition and gain technical know-how. Foreign brands may also soon have to rely on their Chinese partners if they want greater access to the Chinese market. The Chinese government has expressed an interest in bringing the supply chain under the control of Chinese firms as part of its goal of reducing the number of local infant formula producers to 10 from more than 200 within two years. The Ministry of Industry and Information Technology said in June that the integration of the milk powder industry was expected to involve 10 large companies with revenues exceeding 2 billion yuan (HK$2.5 billion) in two years, according to the China Daily. “They have to boost local consumption before they can proceed with the consolidation more smoothly,” said one retail analyst at a regional brokerage, who was not authorised to speak to the media. As part of this consolidation, China Mengniu Dairy signed a second takeover deal in a month in June to buy Carlyle-backed Yashili International in a deal worth about HK$12.5 billion as part of a plan to expand its milk powder business. Domestic milk powder brands want to appeal to the rapidly growing middle-class, which can afford the pricier baby formulas made by their international rivals. At supermarkets in big cities like Shanghai, a 900-gram tin of infant formula made by an international firm costs between 175 yuan and 275 yuan, compared to about 100 yuan for domestic milk powder in lower-tier cities in China. Milk producers boasting foreign ingredients have raised prices to the same range as global brands in an effort to distinguish themselves from the local crowd. On Wednesday, China’s official Communist Party mouthpiece, the People’s Daily, said foreign and local players were equal before the law but foreign brands should not raise prices often without regard to the law and abuse their competitive advantage. “From 2008, some foreign milk powder brands have increased their prices by up to 30 per cent, nearly double that of local milk powder brands,” an editorial said, adding if local brands raised standards and won trust, they could replace foreign brands as the favourites. Internet commentators on China’s Sina Weibo were not so sure. “This is practically forcing Chinese children to drink locally made milk,” said one Weibo user. “It’s really shameful that we can’t produce good milk and now we are preventing others from selling it.” But analysts said it would be surprising if the major brands took a hit on market share. “It is hard to believe that domestic challengers are going to take over from Danone and Nestle in the next couple of years,” Kepler Cheuvreux analyst Jon Cox said. “That is some time away because the issue is that consumers don’t trust the product rather than the absence of local competitors,” he said.

China watchdog to probe 60 firms over drug prices (By Agence France-Presse in Shanghai) Firms targeted in the NDRC investigation include Sino-foreign joint ventures with Britain’s GlaxoSmithKline, Germany’s Boehringer-Ingelheim and global healthcare firm MSD. China’s top economic planner is to investigate 60 pharmaceutical companies for excessive charges, including several joint ventures with foreign firms, state media reported on Thursday. The National Development and Reform Commission (NDRC), which is already investigating foreign baby producers over prices, will send teams to check wholesale prices and production costs of dozens of companies, the Securities Daily said. In a statement the NDRC said firms targeted in the investigation include Sino-foreign joint ventures with Britain’s GlaxoSmithKline, Germany’s Boehringer-Ingelheim and global healthcare firm MSD. The inquiry will also look at several Chinese companies, among them industry leader Sinopharm Group and Jiangsu Hengrui Medicine, which specialises in anti-tumour drugs. Chinese police are already investigating senior staff of GlaxoSmithKline in China for suspected “economic crimes” but it was unclear whether there was any connection between the two probes. The NDRC, which helps regulate prices in China, said the four-month survey aimed to “timely set and adjust drug prices”. Analysts said providing healthcare at affordable prices was a political platform of China’s ruling Communist Party. “There always has been a lot of pressure to make sure that common drugs are available at very cheap prices relative to what they would be sold for in a lot of Western markets,” said Ben Cavender of the China Market Research Group consultancy. It is also common practice for Chinese pharmaceutical firms to offer doctors and hospitals bribes to have their products used, industry officials say. State media reported on Tuesday that the NDRC had launched a probe of foreign baby formula makers for high prices resulting from a monopoly-like situation. The government agency declined to confirm the reports but companies targeted said they were co-operating. A unit of Swiss-based Nestle, Wyeth Nutrition, responded by slashing its baby formula prices in China by as much as 20 per cent, while France’s Danone said it planned to cut prices as well.

Shanghai gets go-ahead for free trade zone (By YU RAN and SHI JING) World-class logistics services to benefit business supply chains - The State Council approved Shanghai's free trade zone project on Wednesday, which will catapult the city to the forefront of global logistics centers. The project, occupying 28 square kilometers, will center around the Yangshan Deep Water Port and will take more than 10 years to build. When completed, the free trade zone will provide world-class transport and communications facilities and a tax-free environment for domestic and foreign enterprises as a major hub of their supply chains in Asia. The project was approved at a State Council meeting presided over by Premier Li Keqiang. Under the central government's guidance, the Shanghai municipal government will explore innovative methods of trade and investment management, facilitate trade and investment, and further open up the service industry. The central government also hopes the project can help advance reform and improve the standard of opening-up. The project, mapped out at the start of this year, is the first of its kind in China and is also one of Shanghai's major tasks for 2013. "The details of the free trade zone haven't been released yet. We will follow up with the guidelines from the central and municipal governments to build up a free trading platform," said Jian Danian, deputy director of the Shanghai Free Trade Zones Administration. Jian said the focus is on offering more convenience and efficiency for local trading companies with improved policies on foreign investment, international trading settlement and cross-border transactions. Han Jun, the Party secretary of COSCO Logistics (Shanghai) Heavy Haulage Co, said, "Shanghai is totally qualified as a free trade zone after attracting so many global companies to set up their regional and China head offices in the city. But the policies and operating system still need to be improved." Han said the logistics industry in Shanghai is relatively disorganized, as it is not regulated under certain management rules and sector standards, which urgently need to be improved to meet demand from multinational companies. Huo Jianguo, head of the Chinese Academy of International Trade and Economic Cooperation, said the free trade zone trial is a breakthrough in further promoting China's opening-up policy. Zhou Shijian, a senior trade expert from Tsinghua University, said the zone will promote foreign direct investment in the Yangtze River Delta region. He said the zone is located in the right area, as Shanghai is the nation's financial, economic and technological hub, and also home to a large number of multinationals. Li Yiming, chairman of Shanghai Zhengzhang Import and Export Co, said, "We're looking forward to having more direct cooperation and more convenient trading procedures with overseas business partners to design and manufacture high-end products." The company has its design and sales departments in Shanghai and production lines in inland provinces. Li said the zone will definitely help small and medium-sized enterprises struggling in the trading industry. Trade experts said such a project is of particular significance to China's industrial restructuring, which calls for the modernization of supply chain management with the emphasis on logistics. Shen Guilong, a professor of economics at Shanghai Academy of Social Sciences, said the zone will be a breakthrough for Shanghai to achieve a new round of rapid economic development. Shen said the zone will attract more global companies, especially from the service sector, to launch their Asia-Pacific operational offices or China headquarters in the city. The zone is expected to initiate a series of measures to offer more complete, convenient and transparent foreign trade services, including customs clearance and supervision policies, said Shen. It will include the Waigaoqiao Free Trade Zone, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone. Billy Mak, Hong Kong Baptist University associate professor of finance and decision sciences, said the zone might challenge Hong Kong's status as an offshore yuan financial hub. "If the Shanghai free trade zone creates more business in yuan trade financing, this would definitively deal a blow to Hong Kong's offshore yuan business," Mak said. Oswald Chan in Hong Kong and Ding Qingfen in Beijing contributed to this story.

Frankfurt joining race to become key yuan center (By Li Xiang and Fu Jing) Frankfurt, the German financial capital, is joining the race to become a major offshore yuan trading hub in Europe as local financial institutions push for a potential currency swap agreement between the European Central Bank and the People's Bank of China. Frankfurt Main Finance, a financial association that represents major German banks, is expecting the ECB to sign an 800 billion yuan ($130 billion) currency swap with Beijing, according to a Bloomberg report. But both the ECB and the PBOC declined to comment on the currency swap when contacted by China Daily. If the agreement becomes reality, it will dwarf the 200 billion yuan agreement signed by the Bank of England and the PBOC. "The fact that about 10 percent of Sino-German trade is handled in renminbi shows the opportunities for a yuan-trade center in Frankfurt," said Lutz Raettig, president of Frankfurt Main Finance. While some market observers said that liquidity is one of the main hurdles for Frankfurt to develop its yuan-trading market, Raettig said that trading risk and hedging costs will drop significantly if the swap agreement is reached, which could lead to significant yuan savings and could further boost trade between Germany and China. Raettig also emphasized the supportive role of Frankfurt in deepening Sino-German economic relations and noted that such close ties between the financial sector and industries are not found in other financial centers in Europe. Frankfurt, also home to the ECB, is facing off with rivals such as London, Paris and Zurich to win yuan business for German financial institutions and exporters as China has been keen to lift the global profile of its currency. "Frankfurt has a better chance to win as it is the ECB headquarters and Germany has the most outstanding trade and investment relations with China in Europe," said Stefan Strater, manager of the Frankfurt branch of Industrial and Commercial Bank of China. Strater said that while China needs to further liberalize its financial market to convince international investors of the value of its currency, a currency swap between the ECB and PBOC is the first step, which will significantly boost yuan business for banks in Germany. Yuan payments in Germany increased by 71 percent between April and May, the biggest increase in the top 20 countries in yuan payments, according to the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, which provides messaging services to banks. Germany is ranked No 8 in the world in terms of the value of yuan payments, excluding the Chinese mainland and Hong Kong. Paul De Grauwe, former adviser to the European Commission president, said it is natural for the European and Chinese central banks to negotiate a currency swap deal to inject liquidity into each other. "The ECB has done so with the US Federal Reserve. All these aim to help provide liquidity lines when necessary," said De Grauwe, professor of European political economy at the London School of Economics and Political Science. De Grauwe said the internationalization of the Chinese currency is heading in the right direction in the long run, but suggested that China should slow the pace in the short term. China is trying to contain its financial bubbles by tightening the credit supply, so it should slow the pace of yuan internationalization, he said. Frankfurt's push for a currency swap with China reflects the intensifying competition among major European financial centers to build an offshore yuan-trading center. London is so far the largest offshore yuan market in Europe with total deposits exceeding 100 billion yuan. Paris is catching up with its renminbi deposits reaching 10 billion yuan.

Hong Kong*:  July 5 2013

Swire Properties and Hong Kong Ferry thrive on new rules (By Sandy Li sandy.li@scmp.com) Swire Properties and Hong Kong Ferry studied the regulations to revise all marketing material - Potential buyers browse through the sales brochure of Hong Kong Ferry's Green Code residential project in Fanling. While their rivals have repeatedly complained against the government's tougher rules on new home sales, Swire Properties and Hong Kong Ferry have taken an entirely different tack. Instead of griping about the new regime, under which developers are required to specify the size of flats in terms of "saleable area" rather than "gross floor area", the two companies promptly revised their marketing materials to comply with the new rules. As the Residential Properties (First-hand Sales) Ordinance took effect on April 29, Swire's Dunbar Place in Ho Man Tin and Henderson Land Development's Green Code project in Fanling stuck out in the crowd, becoming the only two housing projects - out of about 60 - to offer flats for sale the very first day of the new regime. The reason why other developers adopted a holding pattern was understandable. Under the new rules, those found to be in violation are liable to imprisonment for up to seven years and a fine of up to HK$5 million. With most developers unclear about the new rule, they decided discretion was the better part of valour. Swire clearly thought otherwise. In a written reply to a query from the South China Morning Post, its general manager, residential, Adrian To, said the company had started making the necessary adjustments to market Dunbar Place from the moment the government laid down the new rules a few months earlier. "As it is a new ordinance with no precedent cases, we spent additional time to study all the relevant materials - from guidelines, drafted notes to frequently asked questions (FAQ) - in order to fully familiarise ourselves with the new rules and regulations," To said. "We worked closely with our legal advisers and with architects and surveyors throughout the process to ensure that all information in our sales materials were in line. We went the extra mile to make sure we got everything right. "But without any precedent cases, trust me when I say that our team burned the midnight oil on many occasions over the preparation period and worked extra hard to prepare the marketing materials. "It was a challenging exercise - the brochure we produced runs close to 80 pages and nearly 35,000 words. But the outcome speaks for itself - the documents were examined by the authorities and with a couple of minor adjustments were determined to have met the ordinance's requirements." To said the ordinance provided a new set of rules by which the industry had to play and that it affected developers as much as real estate agencies and buyers. "Any change requires time to adapt but in the long run, these rules should not make a major difference to our sales strategy or overall business operations," he said. Thomas Lam Tat-man, a general manager at Henderson Land, said marketing materials for Green Code, developed by subsidiary Hong Kong Ferry, had been aligned with the requirements of the new ordinance once it secured pre-sale consent from the government in March. "But at that time, the practice note [a government advisory on new rules] and FAQ hadn't been issued. So, we were constantly reviewing the contents in order to comply with the guidance," Lam said. The three big changes concern sales office, show flats and sales brochures. "Our sales department was divided into three teams, each responsible for one area and attending the workshop organised by the government. So we had to review our marketing materials as we learned more details from the workshops organised by the government to explain the new rules," Lam said. "We have been working overtime for months to make sure the new rules don't disrupt sales and we can make a smooth transition. We still have to work on the sales brochures of 20 more projects."

Hong Kong restaurateurs at breaking point amid labour 'intervention' (By Phila Siu phila.siu@scmp.com) Restaurateur says business is feeling the squeeze already and fears what more labour regulations could do to the industry. Simon Wong, Minimum Wage Commission member and head of the LHGroup, at The Banqueting House in MegaBox mall. Government intervention in the labour market is making it hard to run a restaurant business and more regulations will only make it tougher, says one of the city's leading restaurateurs. Simon Wong Kit-lung, executive director of the LHGroup his father founded about 40 years ago, said he supported the statutory minimum wage as it protected workers. He said some cleaners, for example, got as little as HK$5 an hour beforehand. But further measures would not be good for business, he said. "In the past few decades, because of the so-called 'small government, big market' vision, the government did little to influence the business environment," Wong said. "But in the last few years, I feel that this is changing. "The government is obviously rendering changes in the business environment with its policies, such as the statutory minimum wage." Wong's group has 10 restaurants, including The Banqueting House in Kowloon Bay's MegaBox mall, and he is managing director of the Kabushikigaisha chain of 16 Japanese restaurants. The 39-year-old businessman is also one of the 12 members of the Minimum Wage Commission, which reviews the lowest statutory pay rate - set at HK$28 an hour in May 2011 and raised to HK$30 in May this year. While some intervention was needed to prevent injustice in the workplace, he said, too much intervention, such as a standard working hours law and statutory paternity leave, would not be "ideal" for the city's business environment. "In some third-world countries, some people, including young people, are forced to work 18 hours a day. A standard working hours law is needed in those cases, but not in Hong Kong," Wong said. "And when France legislated standard working hours, it was because the unemployment rate was so high that the government wanted to split one job for two people," he added. In the 1980s and 1990s, Wong said, new restaurants could break even in their first half-year. But now it took about three years, if it happened at all. He quoted government figures as saying that 30 per cent of investments in Chinese restaurants barely break even, while 40 per cent have never broken even by the time the restaurants close down. That meant that only 30 per cent of people investing in Chinese restaurants could make a profit. Making it even harder, he said, restaurant rents had doubled in the past five years while the price of ingredients had risen 50 per cent in three years. Since the minimum wage law became effective in 2011, monthly pay for the job of pushing a dim sum trolley had risen from HK$4,000 to HK$7,000, he said. This had caused a ripple effect, with staff who had been making well over the minimum wage also demanding a raise. Salaries for waiting staff and managers had risen 15 per cent and 10 per cent, respectively. "And it is now very hard to hire restaurant staff," Wong added. "Some of us in the restaurant business have a WhatsApp group where we ask for help in recruitment if it is urgent. But everyone is saying they need help, too."

Occupy Central organisers come under fire as police receive complaints (By Lai Ying-kit yingkit.lai@scmp.com) A group of people led by Wong Yan-cheung filed complaints against the organisers of Occupy Central at the police headquarters in Wan Chai on Wednesday. Five people on Wednesday filed police complaints alleging that organisers of the Occupy Central movement were inciting other people to break the law. The complainants alleged that three key organisers – who are trying to mobilise people to join the campaign to block roads in Central to push for democracy – were hurting Hong Kong’s economy and upsetting law and order. The five, who claim to have no political affiliations, made a report to the police headquarters in Wan Chai, saying their aim was to prepare the city for the worst. “If I know that some people are planning to rob a jewellery shop, there is a need for me to report it the police,” one of the complainants said. He added that the police should take action if any participants of the campaign broke the law. The Occupy Central movement calls for at least 10,000 people to block traffic in Central in July next year if the government fails to deliver a proposal to introduce genuine universal suffrage for the 2017 chief executive election. One organiser, University of Hong Kong’s associate law professor Benny Tai Yiu-ting, has said the movement is intended as a non-violent protest to push for democracy. Two other key organisers are Reverend Chu Yiu-ming and Chan Kin-man, associate sociology professor of the Chinese University.

 

Big trouble in Little Korea: spiral of race hate grips Tokyo (By Julian Ryall in Tokyo) Tokyo residents say they are living in fear amid rising violence after Korean and Japanese leaders fuelled historic nationalist sentiments - Kim Dong-sun says she is often frightened to walk home after work, but particularly on Sundays - one of the busiest of the week in the Shin-Okubo district of central Tokyo, an area that has evolved into a community of Korean residents of Japan. It has also become a magnet in recent months for increasingly violent demonstrations by nationalist Japanese demanding that they leave. The loud chanting was bad enough, Kim says, when the demonstrators would shout "Kill Koreans" or "Send them to the gas chambers". But it is the violence that really scares her, especially as it is clearly escalating. On May 21, Hiroshi Akai was arrested for assaulting a 51-year-old man who had spoken out against the demonstrations. Akai, a former member of Japan's Self-Defence Forces who is now unemployed, told police that he had "accidentally bumped into" the other man. The police report states that Akai hurled himself at the victim and had to be hauled away by riot police who were monitoring the demonstration. During a recent protest march - which has become a weekly event - eight people were taken into custody by police. The scuffles began after anti-Korean protesters and more liberal groups - incensed at the "hate speech" being directed at the immigrant community - started spitting at each other, according to the authorities. The demonstrators, demanding that Koreans leave Japan, numbered around 200 while their opponents mustered about 350 people, police say. "I do feel scared when the demonstrators are here," says 37-year-old Kim, who works in a cosmetics store and is originally from Seoul. "I have to walk outside the shop sometimes and it's intimidating to see all these people arguing. "I came to Japan two years ago because I wanted to study animation and film, but also because I loved Japan as a nation," she said. "But I am so disappointed at these people. It's so unfair that they are doing this." Walk down the busy main thoroughfares of the colourful Shin-Okubo district and it is almost like being in Seoul or Busan. Restaurants advertise Korean staples such as cold noodle dishes, bibimbap in deep stone bowls and galbi beef ribs. The supermarket on the corner stocks a wide array of kimchee and imported seasonings, while the chiller at the rear contains cases of both Cass and Hite beer. Shops selling popular lines of cosmetics have larger-than-life posters of Korean actresses and pop stars. The narrow backstreets are a maze of more restaurants, bars, mom-and-pop stores, glitzy cosmetics shops and nail salons. On a peaceful day, the voices are in equal measure both Japanese and Korean. According to the Korean Chamber of Commerce and Industry in Japan, there are around 500 businesses in the Shin-Okubo district, which sprawls to the north of the bustling Shinjuku district of Tokyo. Of the total, around 350 are restaurants. Japan is home to an estimated 600,000 Koreans, with the vast majority the descendants of labourers brought to Japan during the years of its colonial rule of the Korean peninsula. Most still have links to South Korea; a smaller proportion swear allegiance to North Korea through Chongryon, the General Association of Korean Residents of Japan. Shin-Okubo began attracting the Korean community about 30 years ago, says Shin Sang-yoon, a director of the chamber of commerce, simply because it was then one of the cheapest areas of Tokyo. It is a similar story in the Tsuruhashi area of Osaka, while a high percentage of Koreans have also chosen to live in the Kannai district of Yokohama. "I would say we're a bit like Harlem is to New York," Shin says. "I came to Japan 25 years ago to study for a doctorate, but I changed my mind and ended up going into business." Now 47, he is settled in Japan with his Korean-born wife and their two children. And in all the years he has lived here, Shin says he has never seen such intolerance and hatred in the faces of the Japanese people who want the Korean community to disappear. From some of the protesters' chants, it appears they would be happy to see them exterminated. "We used to get some discrimination, I suppose, but there was nothing like this before, ever," said Shin, shaking his head. Things began to deteriorate when then South Korean president Lee Myung-bak visited the Dokdo Islands in August, during the waning days of his administration. The two rocky islets, approximately midway between the mainlands of both Japan and South Korea, are inhabited by an elderly Korean fisherman, his wife and a unit of armed South Korean police. And while the islands are effectively controlled by Seoul, Japan claims sovereignty over the territory and insists they be referred to as Takeshima. This bilateral row inevitably reignited arguments over the two nations' shared history, with South Korean groups again raising questions about what is taught in Japanese schools about the decades of Tokyo's brutal rule over the people of the peninsula and the use of "comfort women". That particular flame was fanned to new heights by Toru Hashimoto, the colourful and nationalist mayor of Osaka, who in May suggested that the women who provided sex to Imperial Japan's military in the early decades of the last century were not actually forced into the work. Hashimoto's political star has waned dramatically since that ill-judged comment and there are even suggestions that he will step down as leader of the Japan Restoration Party, which he only founded in September last year to serve as a rallying point for the right of the political spectrum. He seemed to have gathered a solid support base of like-minded individuals, however - a concern for immigrant communities. "It started off as small-scale stuff, a small group of people saying that we should 'go away'," Shin says. "But the groups have got bigger and they have banded together, so there are hundreds of them here every Sunday now. "And they're shouting 'kill Koreans' and chanting 'die, die, die'," he said. "It's unbelievable." Shin estimates that sales at his cosmetics shops throughout the district have fallen by around 50 per cent in the past year, primarily because people feel unsafe in Shin-Okubo and no longer come to the district. The protests are regularly spearheaded by a group that calls itself Zainichi Tokken wo Yurusanai Shimin no Kai, which is shortened to Zaitokukai and can be translated as the citizens' group that refuses to tolerate special privileges for Korean and Chinese residents of Japan. The group is headed by 41-year-old Makoto Sakurai - who was arrested at a recent demonstration and charged with criminal assault. In a statement on its website, Zaitokukai said Sakurai would deny the charges and claimed Japan faces a "do-or-die situation for our society". Zaitokukai followers claim that Korean and Chinese residents of Japan are taking advantage of the social security system to get rich and gain other special breaks. The group also alleges members of the communities conceal their true identity and nationality by taking a Japanese name as an "alias". Korean residents believe the epithets being aimed at them comprise "hate speech", and complain the authorities have done nothing to stop the protests and the police only intervene when violence breaks out. "The police are present every Sunday, but they don't stop them," says Shin. "Personally, I think they're probably a little sympathetic to the right-wingers." Japan became a party to the International Convention on the Elimination of All Forms of Racial Discrimination as far back as 1995, but the statute has languished and has not been implemented into law. In its report in January to the Committee on the Elimination of Racial Discrimination, which comes under the convention, the Japanese delegation stated that racial discrimination is not such a serious issue in Japan that legal measures are required. Shinzo Abe, the prime minister, has expressed concern about reports of racial abuse being bandied about and claimed that it runs counter to the traditional Japanese qualities of tolerance and harmony with others. Sadakazu Tanigaki, the minister of justice, has also recently condemned the repeated cases of "hate speech" that are being reported in the media, describing the trend as "very worrying". The media has also been weighing in with strongly worded editorials. "Although the constitution guarantees freedom of expression, participants in the demonstrations mistake this freedom for the right to say anything," The Japan Times stated in an editorial on June 5. "Their speech goes beyond acceptable limits and clearly constitutes hate speech. "Although freedom of expression must be upheld by all means, legal measures should be taken to restrict hate speech that threatens people," it added. "The police and local public safety commissions should use all available legal means to prevent demonstrations that clearly threaten ethnic groups." It called on the government to enact a law that expressly prohibits ethnic discrimination by specifically defining the kinds of actions that constitute discrimination and that would provide people "who suffer psychological damage from hate speech" to be able to file legal suits for compensation. Nothing, however, has been actually done to put a stop to it, the Korean community claims. "We're trying to think of ways that we can get past this problem," Shin says. "We have started a petition calling for peace and we are planning to have yellow balloons - another symbol of peace - outside every store on Sundays. We have to find a way to live together." But he fears the escalating violence could get worse. The young Korean men who live in the neighbourhood are growing ever more angry at the abuse that is being hurled at them and their families, Shin says. "Us older members of the community are speaking with them, telling them not to respond or to get violent," he says. But it could happen, he admits. And that would be a disaster.

 China*:  July 5 2013

China launches charm offensive at Asean security forum (By Bloomberg in Bangkok and Seoul) Beijing signals a more conciliatory approach with Asean in contrast to an aggressive push on sovereignty in the South China Sea in recent years - China's Wang Yi with Cambodia's Hor Namhong, India's Salman Khurshid and Russia's Sergey Lavrov in Brunei. China turned on the charm at a regional security meeting this week, signalling a change in tone as President Xi Jinping seeks to counter a US push for more influence in Asia. Beijing agreed during an Association of Southeast Asian Nations-hosted forum in Brunei to meet the 10-member group in September to develop rules to avoid conflict in waters marked by confrontations with nations such as Vietnam and the Philippines. China also expressed unity with the United States, South Korea and Japan to rid North Korea of nuclear weapons. Those policy stances may reflect a more conciliatory approach after China's aggressive assertion of sovereignty in the South China Sea in recent years prompted neighbours to boost security links with the US. China is vying for influence in Asia, while the US conducts a pivot toward the region and supports allies like the Philippines. "China has moved from the, 'Do little, engage little' form of engagement to, 'Do a lot, engage a lot," said Gary Li, a senior analyst at IHS Maritime in London. "The new dynamism signals a potential new era in Chinese relations with its neighbours, including Asean." Foreign Minister Wang Yi , attending his first Asean meeting since Xi took the presidency in March, said China and Asean were "like members of one big family". He pledged to upgrade an Asean-China trade agreement and push ahead with talks on a regional economic partnership. A year ago, China warned nations to avoid mentioning the territorial spats during Asean meetings and said it would begin talks on a code of conduct for the South China Sea only "when conditions are ripe". China may be taking a friendlier tone to isolate the Philippines over a dispute that has seen several stand-offs between Chinese and Philippine vessels. The Philippines has boosted defence ties with Japan and the Obama administration, which since 2011 sought to pivot toward Asia. China is "turning on a charm offensive to Asean as a whole, and at the same time making it clear that it is the Philippines that is making trouble", said Steve Tsang, director of the China Policy Institute at the University of Nottingham in Britain. Thai Foreign Minister Surapong Towijakchaikul, at a joint briefing with Wang on Sunday, called Asean's relationship with China strong and said it was "the pillar that underpins peace, security and prosperity in the region". Wang met representatives from India, Pakistan and Mongolia on the sidelines of the summit as well, pledging to advance co-operation, Xinhua reported. At the weekend, the Philippines said the presence of Chinese ships around two land features it claims in the South China Sea threatened maritime peace. Foreign Minister Albert del Rosario said Wang was looking to make a good impression at his first Asean meeting since China's leadership handover. "It's a new government - they've got to do that," he said. US Secretary of State John Kerry left behind marathon meetings with Israeli and Palestinian leaders to attend the Asean forum and reinforce America's commitment to Asia. "China knows that it is in an unfavourable position as the US, South Korea and Japan strengthen their alliance based on the North Korea nuclear issue," said Kim Han-kwon, director of the Centre for China Policy at the Asian Institute for Policy Studies in Seoul. China made "a strategic decision to counterbalance America's superior political and military influence over the region", Kim said. http://www.youtube.com/watch?v=e0D5qCwB5rw

Chinese fleet conducts formation exercise - A Chinese fleet of naval vessels, which is set to take part in Sino-Russian joint naval drills scheduled for July 5 to 12, conducts formation exercise, July 3, 2013.

China milk antitrust probe may be step towards consolidation (By Reuters in Hong Kong) China Mengniu Dairy signed a deal to buy Carlyle-backed Yashili International Holdings in June as part of a plan to expand its milk powder business. The decision by China’s top economic planner to investigate five leading foreign infant milk companies for suspected antitrust violations may be part of a broader plan to boost consumption of the local product, analysts said on Wednesday. Mothers turned away from Chinese milk powder in 2008 when infant formula tainted with the industrial compound melamine killed at least six babies and made thousands sick with kidney stones. China has since made efforts to crack down on persistent food safety problems that have included chemical-laced pork and infant milk contaminated with cancer-causing agents. Infant formula makers Nestle, Danone, Mead Johnson Nutrition and Abbott Laboratories said on Tuesday that they were being investigated by China’s National Development and Reform Commission for possible antitrust violations. Analysts said the investigation could result in fines and tougher rules governing imports into an infant milk market set to grow to US$25 billion by 2017. The firms could face fines ranging from 1 per cent to 10 per cent of their annual sales, the state-run Xinhua news agency quoted experts as saying. “It is part of the whole idea of a consolidation process,” said Renee Tai, a Hong Kong-based analyst at regional brokerage UOB Kay Hian. “It is pointing the same direction of supporting local producers, making it difficult for importers.” Some Chinese infant formula companies have started forming partnerships with foreign firms to try to boost brand recognition and gain technical know-how. “Since consumer confidence in the Chinese products is seen as improving, it can be a chance (for Beijing) to test if confidence in local brands can hold its own against the foreign competition,” Linus Yip, chief strategist at First Shanghai Securities. Foreign brands may also soon have to rely on their Chinese partners if they want greater access to the Chinese market. The Chinese government has expressed an interest in bringing the supply chain under the control of Chinese firms as part of its goal of reducing the number of local infant formula producers to 10 from more than 200 within two years. The Ministry of Industry and Information Technology said in June that integration of the milk powder industry was expected to involve 10 large companies with revenues exceeding 2 billion yuan (HK$2.53 hillion) in two years, according to the China Daily. “They have to boost local consumption before they can proceed with the consolidation more smoothly,” said one retail analyst at a regional brokerage, who was not authorised to speak to the media. As part of this consolidation, China Mengniu Dairy signed a second takeover deal in a month in June to buy Carlyle-backed Yashili International Holdings in a deal worth about HK$12.5 billion as part of a plan to expand its milk powder business. On Wednesday, China’s official Communist Party mouthpiece, the People’s Daily, said foreign and local players were equal before the law but that foreign brands should not raise prices frequently without regard to the law and abuse their competitive advantage. “From 2008, some foreign milk powder brands have increased their prices by up to 30 per cent, nearly double that of local milk powder brands,” said an editorial in the People’s Daily, adding that if local brands raised standards and won trust, they could replace foreign brands as the favourites. Internet commentators on China’s Sina Weibo were not so sure. “This is practically forcing Chinese children to drink locally made milk,” said one Weibo user. “It’s really shameful that we can’t produce good milk and now we are preventing others from selling it.”

Commentary: Double standards cripple global efforts against terrorism (Xinhua) Recent terror attacks in China's western region of Xinjiang have shocked the world, but some Western governments and media appear oddly unsympathetic and even suspicious of Beijing's firm hand against terrorism. The appalling deaths of 24 people, including 16 Uigurs and two police officers in Xinjiang's Shanshan County last Wednesday is a brutal reminder of the barbaric nature of terrorists, who advocate violence and random killing in defiance of all laws and humanity to achieve evil goals. It is not the first time the terrorist, extremist and separatist groups in Xinjiang colluded with foreign anti-China forces to launch bloody attacks to put fear into the people and disrupt China's unity and development. Some in the West, however, have turned a blind eye to the apparent acts of terror and instead pointed the finger at the Chinese government. Rather than condemn the terrorists, they have blamed Beijing's ethnic policies and even hinted at religious repression. Their unfair accusations are far from facts and feelings of Xinjiang residents. For decades, the Chinese government has channeled money, technology and talent into developing Xinjiang, while respecting the culture, language and religion of ethnic minorities. The Muslim Uigurs, in particular, enjoy favorable treatment and a much higher living standard than decades before. They desire a stable environment to pursue further prosperity and social well-being. The recent ferocious attacks against fellow citizens in Xinjiang have gone far beyond ethnic or religious conflicts. Such acts of violence cannot be tolerated in any country under the rule of law, and go against Islamic teaching, which stresses peace and the value of human lives. The mind-set of some Westerners stems in fact from their deep-rooted prejudice against China and a self-absorbed moral arrogance, which underpins their intervention in the internal affairs of another country. Western countries have been victims of terrorism themselves. They have beefed up anti-terror efforts since the 9/11 attacks in the United States, the Norway attacks, and the Boston Marathon bombing, to name a few, and joined hands to crack down on terrorism. The apparent double standards can only thwart global cooperation against terrorism. It not only puts the justice of anti-terror efforts in doubt, but also plays into the hands of the extremists and terrorists. Terrorism is a global enemy. No country can fight terrorism single-handedly. It requires a common standard and cooperation from other countries. By doing so, one should first of all abandon their biased view against China and stop providing cheap excuses for the Xinjiang terrorists, who could well have more blood on their hands if not deterred.

Hong Kong*:  July 4 2013

Advocates for open data in Hong Kong says citizens should have easier access to information (By Elizabeth Choi life@scmp.com) Advocates for open data in Hong Kong argue that giving citizens greater access to public information will lead to a better society. But it's not always easy to get hold of facts here, as Elizabeth Choi discovers - Among those contributing to the din at Delaney's pub in Wan Chai on a recent Thursday evening was group of about 20 people, discussing, of all things, data. They were members of Open Data Hong Kong (ODHK), a loose community of web programmers, journalists, academics, NGO employees, consultants and analysts who believe access to data by citizens can lead to a better society. While it's not a typical subject for a pub conversation, the use of public information and statistics has attracted considerable attention from the broader community in recent years. In retail, it has dramatically affected the way e-commerce sites anticipate supply and demand. In Hollywood, it was the storyline behind Moneyball, which shows the use of baseball statistics by the Oakland Athletics team in its 2002 Major League draft. In politics, it launched the career of American statistician Nate Silver who, during the 2008 presidential elections, correctly forecasted the winners of all 35 US Senate races. But for the people behind ODHK, the idea of open data is simply how to ensure engaged citizens can play a role in shaping public policy. "Open data is a subset of a larger topic, which is open government," says Douglas Bastien Wai-Chung, one of group's designated organisers and community manager for leading department store. Governments will ultimately decide on policy but that doesn't mean they should have a monopoly over policy development and analysis. "If government shared the knowledge that it has while trying to arrive at some of its solutions, it could tap into a much broader base that is perhaps even more skilled and more engaged," Bastien says. "Engaged citizens have better solutions." Although ODHK began meeting just three months ago, the seeds of the open data movement in Hong Kong were planted about four years ago, says knowledge management expert Waltraut Ritter, who founded Knowledge Dialogues, a think tank engaged in projects focused on innovation and intellectual capital. A former professor at Nanyang Technological University in Singapore, Ritter has been a keen observer of the evolving data scene in Hong Kong since her arrival in 1997. Open data came to international attention in 2008 when the Organisation for Economic Co-operation and Development signed the Seoul Declaration for the Future of the Internet Economy. Among other things, it maintained that members would "uphold the open, decentralised and dynamic nature of the internet" to enable its ongoing expansion and contribute to innovation, and ease of access. More than 30 countries, including Britain, Japan, South Korea and the US, were signatories. The Hong Kong government slowly began responding to the trend by hosting workshops the following year to foster business collaboration and create a marketplace of ideas. In 2011, the government launched Data.One, an online portal to "facilitate the wider dissemination of Public Sector Information (PSI) for value added reuse". Information provided on the site covers subjects such as charitable fundraising activities, water quality and weather data. The aim, it said, was to aid Hong Kong's development as a "knowledge-based society". At the same time, the government funded a HK$1 million marketing campaign to push open data into the start-up scene. Although several interesting apps were developed, including one that tracked the city's banyan trees, none were deemed "financially sustainable", Ritter says. However, several like-minded professionals went on to form ODHK. In mid-May, the group hosted Make.01, a two-day event which brought together students, journalists, programmers and designers to tackle problems such as MTR delays and food poisoning incidents. Using data culled from various sources, including Data.One, they developed websites, alert systems, infographics and apps to better inform the public. Even so, awareness of open data remains very low, Ritter says. "We need to do a lot more," she says. "Open data is not just some 'techy thing' for people to develop apps. It includes broader issues that affect the citizens in Hong Kong. "It's about how easy it is to get information that really affects our lives, and how information can empower a citizen - that's what we see in other cities." She cites examples like New York City Mayor Michael Bloomberg's special taskforce to address hundreds of thousands of complaints about illegal subdivision housing. By analysing massive data sets compiled from years of tax payments, complaint hotlines, utilities usage - information that had been largely untapped - a ragtag group of people, some with no background in analysis, was able to draw remarkably accurate conclusions about dangerous and illegally operated housing developments. Due to their work, housing inspection efficiency leapt from 13 per cent of cases addressed to 70 per cent. This is why Ritter is keen to ensure Hong Kong's open data movement is not an expat club. It's vital to have a good mix of people involved in gathering and analysing data because it will spill over into how policies are made. It's not always easy to get information in Hong Kong, whether it's vital or not. Often barriers stem from a bureaucratic mindset, says Darcy Christ, a systems designer at Hong Kong University's Journalism and Media Studies Centre (JMSC), who was on a Make.01 team that proposed a reporting system for information requests. Christ, who has been in Hong Kong for two years, was surprised to learn that a Code on Access to Information aside, the government has no formal policy on how the people can retrieve public information or how the government makes this data available. There is no centralised system for accessing information, nor is there any structure to enforce legal recourse if a request is not met, he says. Through his work on the JMSC, he has found that requests for information from the government often meet with vague and cursory responses. "They cite things like privacy law, they might allude to particular ordinances without specifically referencing [the section]," he says. "We're trying to raise the bar with this," Christ says, adding that the government has to take a more "top level" approach to ensure that information gets out. It's a sentiment shared by Bastien and Ritter, who says civil servants' often perfunctory attitude to information gathering reflects the government's tendency to "address demands without creating policy" . Christ's interest in freedom of information has also has led him to become an integral contributor to the JMSC's OpenGov project, a platform that provides resources and training in government transparency and accountability. Issues of transparency in governance and access to information are even more relevant in the wake of US whistleblower Edward Snowden's recent revelations about extensive surveillance by the National Security Agency. Still, open data advocates like Ritter and Christ are quick to point out the information they seek falls into very different categories from those released by Snowden or through WikiLeaks. Open data is defined by three criteria: it must be searchable and not hidden; it must be machine-readable, that is, it does not have to be scraped to be decipherable; and it cannot have limitations on usage - any individual can use open data and redistribute it. Yet "in many countries open data is [treated] more like a secret," Ritter says. Comparing the transparency in countries such as Sweden and Germany to the relative opacity in Singapore, she says there is no technical reason to hide information. "All the barriers are made by governments. The technology itself, the internet, is very open. The design of the World Wide Web is very open. The restrictions come from politics." Hong Kong could learn a great deal from countries such as Sweden, Germany and Britain that have embraced openness to data, Ritter says. "We have no oil, no agriculture, and no other economies. But we have the brains, so we must become a knowledge-based society" and knowledge comes from data. Openess often provokes fear in governments, especially in Asia, but Ritter hopes change their thinking. "Openness can really help you to develop," she says.

Watchdog defends police action during march (By Lai Ying-kit yingkit.lai@scmp.com) Protesters scuffle with police officers during Monday's July 1 march. The police watchdog said on Tuesday that the force had advised people in advance not to join the July 1 march from a congested location in Causeway Bay, where scuffle broke out during Monday’s rally. Independent Police Complaint Council secretary general Ricky Chu Man-kin defended police, saying that they had objected to protesters crossing the road or joining the march from outside the Sogo department store, and had warned that they would stop those trying to do so. Chu said the police’s stance was made clear during a meeting with march organisers before the protest. During the meeting, march organisers agreed that the location would be a congested area. “The police had said they would take resolute action to stop them,” he told RTHK. But despite the scuffle, Chu said police arrangements for Monday’s march were in general satisfactory. He also said the demonstration was held more smoothly compared with last year’s rally. Hundreds of thousands took to Hong Kong’s streets on Monday in the annual July 1 march, braving rain to demand universal suffrage and the resignation of Chief Executive Leung Chun-ying a year after he took office. March organisers accused the police of refusing to open up more lanes or trying to bar people from joining the protest. Police criticised marchers for jumping the queue. A group of marchers tried to cross into the eastbound lane of Hennessy Road near Sogo, about an hour into the march at 3.30pm, as protesters made slow progress. Police said some marchers also tried to join the protest there, rather than at the starting point in Victoria Park. The tension escalated as some angry protesters carried away a police barricade, and after a protester who was pushed against the barricade fell. Police removed several protesters.

 China*:  July 4 2013

'Positive' sign on free trade pact (By DING QINGFEN in Beijing and JOSEPH BORIS in New York) China is becoming 'positive' toward the US-led Asia- Pacific free trade agreement, saying it may join the Trans-Pacific Partnership, although it will take time to do so, according to sources at the Ministry of Commerce. 'China is still doing its research (on the TPP),' said a source close to the issue. Consensus has been reached on the importance of the free trade pact, a step forward from some time ago, when many people were opposed to the proposal, an official told China Daily on condition of anonymity. The US launched the TPP in 2010 in an attempt to strengthen trade relations with the Asia-Pacific region, and in April participating countries approved Japan joining the TPP talks. Eleven nations are involved, including Canada, Peru, Chile, Vietnam and New Zealand. The Obama administration hopes to conclude talks on the proposed pact by the end of the year, but many trade experts expect them to stretch into 2014. With Japan, the world's third-largest economy, on board, the final TPP pact will cover nearly 40 percent of global economic output and one-third of trade worldwide. Experts said the US sees the TPP as part of its economic rebalancing toward Asia, and also as a response to the growing power of China in Asia and the world. China has repeatedly said it will follow and observe the progress of the TPP, without making its position clear. But with some government officials recently saying they are willing to research the TPP, China's attitude seems to be changing. Tian Deyou, deputy director-general of the Department of American and Oceanian Affairs with the Ministry of Commerce, agreed. The Chinese government realizes it's time to change its mind on the matter, he said. In May, the US Under Secretary of Commerce for International Trade, Francisco J. Sanchez, said the United States would welcome China joining the TPP. In response, Shen Danyang, a spokesman for the Ministry of Commerce, said China will analyze the possibilities of joining the pact, and assess the pros and cons based on research and the principles of equality and mutual benefit. Hong Lei, a spokesman for the Ministry of Foreign Affairs, said China is open to all trade pacts that boost the integration and prosperity of the regional economy in Asia, including the TPP. But there is a long way to go before China could eventually join, as the pact would involve the core interests of many sectors including finance, foreign exchange and State-owned enterprises, Tian said. Arvind Subramanian, who researches trade issues at the Center for Global Development and the conservative Peterson Institute for International Economics in Washington, said: 'It's not clear to me that the US wants China in the TPP, at least during the negotiating phase, if the whole premise of this is asymmetric globalization. If China is in on the negotiations, they could sink because China's too big.' With the Doha round of talks under the framework of the World Trade Organization, which were launched more than 10 years ago, stalled, countries worldwide are pursuing new market openings through bilateral and regional trade pacts. The objective of the Doha round is to lower trade barriers around the world. Tian said the Doha stalemate has spurred the US to scramble for regional preferential trade pacts outside the WTO. Besides the TPP, the US has announced the launch of talks on the Transatlantic Trade and Investment Partnership with the 28-nation European Union, with the first round of negotiations due in early July. The two sides already have bilateral trade and investment worth nearly $5 trillion, the world's largest. US Vice-President Joe Biden has said the US expects to reshape global rules for trade and improve the rules and norms by advancing the proposed Asia-Pacific regional free trade agreement and another agreement with the EU. Against such a background, the unnamed source said: 'China has to reconsider its strategy, turning more positive about the TPP. Otherwise, it will get sidelined on the global trade rules.' Xue Rongjiu, vice-chairman of the China Society for WTO Studies, said: 'High levels of the Chinese government should show their resolution on joining the TPP, pressurizing ministries and local governments to make it happen. We have to break the barriers and break the vested interests.' Wu Jiahuang, another vice-chairman of the China Society for WTO Studies, said while China's new leadership is seeking further reform and opening-up, the TPP could be a breakthrough for the nation. 'The earlier we join, the more benefits we will enjoy.' Matthew Goodman, who was White House coordinator for the Asia-Pacific Economic Cooperation and the East Asia Summit forums during US President Barack Obama's first term, said: 'In a practical sense, it would be very difficult to incorporate China into the (TPP) negotiations at this stage. I don't think China, even if it expresses interest and seriously considers it, is going to be ready, willing and able to join.' US Trade Representative Demetrios Marantis said in an interview with CNBC that while the TPP seeks to eliminate trade barriers and require members to comply with a high standard of transparency, China has to meet the high standards if it wants to join the pact. The unnamed source from the Ministry of Commerce said: 'We know it's difficult, but the key point is we have to change minds and stick to opening-up to the world. Once we are determined on the TPP, everything else will be solved.' The source said ongoing talks on an investment treaty between China and the US will pave the way for China to join the TPP. 'The treaty touches on many sensitive and important issues, based on which talks on the TPP would be easier,' he said. China and the US began to negotiate on the investment treaty early in 1980, but the talks were suspended before being relaunched in 2008.

Daughter ordered to visit mother in first China neglect case under new law (By Agence France-Presse in Beijing) A new 'Elderly Rights Law' mandating that all grown children must visit their aging parents came into effect on Monday in China, drawing ridicule from tens of thousands of Chinese netizens. The daughter of a Chinese grandmother has been ordered to visit her at least once every two months, in the first case under a new law to protect the elderly, reports said on Tuesday. “Leaning on a cane” the woman, 77, “hobbled to the plaintiff’s seats” at a court in Wuxi, which heard the case against the daughter and her husband on Monday, the Wuxi Daily reported. The law, which came into effect on Monday, was enacted amid rising concerns that China’s rapid development has challenged its traditional extended family unit and created a spiralling number of “empty nest” homes. Reports of elderly people being neglected or mistreated by their children have shocked the country. The couple from Wuxi, in the eastern province of Jiangsu, had agreed to care for the woman, surnamed Chu, but had not visited since she went to live with her son following a family dispute, the report said. The People’s Court in Beitang district decided the couple should visit the mother at least once every two months, and on at least two of China’s national holidays, it added. It also said that the couple could be ordered to pay compensation if they did not visit. The Law on Protection of the Rights and Interests of the Elderly says family members should visit relatives who are aged over 60 “often” – but does not give a precise definition of the term. Experts have voiced concern that the new law will be difficult to enforce, while China’s huge army of web users ridiculed the regulation, with one labelling it an “insult to the nation”. More than 14 per cent of China’s population, or 194 million people, are aged over 60, according to the most recent figures from the National Bureau of Statistics. The United Nations estimates that by 2050, 30 per cent of Chinese will be 60 or over, up from 10 per cent in 2000 and compared with a worldwide average of 20 per cent.

Chinese fleet departs for Sino-Russian joint naval drills - Chinese naval personnel take part in a ceremony for the departure of a fleet in the port of Qingdao, east China's Shandong Province, July 1, 2013. A Chinese fleet consisting of seven naval vessels departed from east China's harbor city of Qingdao on Monday to participate in Sino-Russian joint naval drills scheduled for July 5 to 12. The eight-day maneuvers will focus on joint maritime air defense, joint escorts and marine search and rescue operations. http://www.youtube.com/watch?v=DpklQ_zAHaI China to join Russia in joint naval drills in Sea of Japan (By Minnie Chan minnie.chan@scmp.com) PLA's chief of general staff denies that exercises in Sea of Japan are aimed at any third party, despite tension with Tokyo over Diaoyu Islands. China will participate in its largest ever joint naval drills this week as it joins Russia for military exercises in the Sea of Japan. The drills, which analysts believe come in response to last month's live-fire exercises between the US and Japanese navies, are expected to begin on Friday and last eight days. The People's Liberation Army Daily reported yesterday that the PLA Navy and the Russian Pacific Fleet would stage its "Joint Sea-2013" exercises in the Sea of Japan's Peter the Great Gulf. The two militaries also plan to hold an anti-terrorism drill named "Peace Mission-2013" in the Russian city of Chelyabinsk from July 27 to August 15. The joint naval drills were announced by the PLA's chief of general staff, General Fang Fenghui and his Russian counterpart, Valery Gerasimov, at a press conference in Moscow, Xinhua reported. The announcement was made less than a week after the United States and Japan finished ship-to-shore exercises at a training range off the San Diego coast. China would send seven ships, four destroyers, two escort vessels and a supply ship to the upcoming manoeuvres, the largest number of PLA Navy vessels ever sent to participate in naval exercises with a foreign military force, the military's mouthpiece said. In all, 18 vessels, three planes, five carrier-based helicopters and two teams of special forces would participate in the drills, Xinhua said. The exercises come amid lingering tensions in the East China Sea, in which Beijing and Tokyo have conducted rival patrols near the disputed Diaoyu Islands, which are known as the Senkakus in Japan. The US-Japan drills simulated retaking a remote island. But Fang insisted the Sino-Russia joint drills were intended to strengthen ties between the two militaries and enhance their joint mission capability, rather than send a message to any third party, Xinhua reported. Shanghai-based military expert Ni Lexiong said such assurances were not convincing. "All military drills have imaginary enemies, otherwise it's just a game," Ni said. "For the US and Japan, their joint drills in San Diego targeted China. And the upcoming Sino-Russian exercises will obviously target Japan or even the US in response." Beijing-based naval expert Li Jie said Moscow hoped to use the joint drills to show off its military muscle and declare its navy "ready to return to the world arena". He noted that the Soviet navy was once the world's second-biggest maritime power."

Kerry hails China's denuclearization bid (By Chen Weihua in Washington chenweihua@chinadailyusa.com) US Secretary of State John Kerry meets with China's Foreign Minister Wang Yi at the ASEAN meeting in the International Conference Center in Bandar Seri Begawan, Brunei on Monday. Despite an unpleasant episode over former US National Security Agency contractor Edward Snowden, China and the US have continued to show their growing convergence when it comes to a nuclear free Korean Peninsula. US Secretary of State John Kerry praised on Monday China's efforts in pushing the Democratic People's Republic of Korea to abandon its nuclear weapons program. "All of us - all four of us - are absolutely united and absolutely firm in our insistence that the future, with respect to North Korea, must include denuclearization," Kerry said in Brunei after meeting with Chinese Foreign Minister Wang Yi for bilateral talks, and with Japanese Foreign Minister Fumio Kishida and Republic of Korea Foreign Minister Yun Byung-se for a trilateral meeting. "We have major, major issues with respect to North Korea, and China is cooperating with us with respect to that, and China has helped to make a difference," Kerry said ahead of the ASEAN (Association of Southeast Asian Nations) Region Forum, which opens in Brunei on Tuesday. Kerry said the US and China will continue to discuss the denuclearization issue in the Strategic and Economic Dialogue to be held in Washington on July 10-11. Also in Brunei, Chinese Foreign Minister Wang Yi called for an early resumption of the stalled Six-Party Talks after meeting his DPRK counterpart, Pak Ui-chun. "I just want to let you know that as chair of the Six-Party Talks, we will continue to encourage peaceful sentiment for dialogue," Wang said. Reiterating China's stance on the denuclearization of the Korean Peninsula, Wang said that he had noticed some positive changes there. He expressed the hope that all sides involved would work together towards the common goal and create conditions for bringing the Korean nuclear issue back on the track of dialogue. While all members of the Six-Party Talks, which include China, the US, Russia, Japan, the DPRK and the ROK, are attending the ASEAN Regional Forum, US, Japanese and ROK officials have so far not taken advantage of the opportunity to meet with their DPRK counterparts, as they had previously. The US, which accused the DPRK of repeatedly backtracking on deals in the past, has insisted that any talks must involve action by the DPRK to show it is moving toward denuclearization. The DPRK has indicated a willingness to hold talks in past weeks. It proposed high-level talks with the US two weeks ago on a peace treaty to formally end the Korean War. The suggestion came just a few days after the suspension of a planned meeting with the ROK due to disputes over protocol. The denuclearization of the Korean Peninsula was a major topic of discussion between Chinese President Xi Jinping and his US counterpart Barack Obama in Sunnylands, California, early last month. Richard Bush, director of the Center for Northeast Asian Policy Studies at the Brookings Institution, believes the DPRK is an area of convergence for the US and China on security issues. "I think the US and China are moving towards the same wavelength on how to deal with provocations from Pyongyang," Bush said. Scott Snyder, a senior fellow for Korean studies at the Council on Foreign Relations, believes China's clear statement on the denuclearization of the Korean Peninsula has bolstered the confidence of the Obama administration that the US and China might actually be able to cooperate in achieving a denuclearized peninsula. "And it has become the major concrete hope for better US-China relations that is most directly associated with the idea that the United States and China can forge a 'new type of great power relationship', in which both powers can cooperate to achieve 'win-win' results," Snyder wrote on the Brookings website. Tensions on the Korean Peninsula escalated after the DPRK conducted its third nuclear test on February 13. The exchanges of military postures and tough rhetoric in the following months between the DPRK, the ROK and the US have been followed by a flurry of diplomacy. Both John Kerry and Chairman of the Joint Chiefs of Staff General Martin Dempsey visited China in April to seek more support from China, while China sent Wu Dawei, its special envoy for Korean Peninsula affairs, to Washington. In the past weeks, the DPRK also sent senior envoys, including top military figure Choe Ryong-hae and First Deputy Foreign Minister Kim Kye-gwan, to Beijing. Meanwhile, ROK President Park Geun-hye, who speaks Chinese and is popular among the Chinese public, paid a high-profile visit to China last week, her first visit to an Asian nation since taking office in February. China has shown a noticeable shift in its policy this time by condemning the DPRK for the nuclear test and by endorsing sanctions at the UN Security Council. Several Chinese banks announced in May they were closing the accounts of the DPRK Trading Bank, which was believed to be involved in the country's nuclear program. China has emphasized both the stability and denuclearization of the Korean Peninsula as essential in the solution. It has been unwilling to consider cutting food and fuel supplies to the DPRK as leverage out of what Chinese diplomats call humanitarian concerns. Agencies contributed to this story.

Hong Kong*:  July 3 2013

Hong Kong urged to sharpen appeal for China listings (By Enoch Yiu enoch.yiu@scmp.com) Former stock exchange chief Charles Lee says competition from mainland bourses "helps us to improve". Hong Kong needs to offer cheaper and better listing services to prepare for the competition with stock exchanges across the border when Beijing finally unshackles the yuan, says the man who played a key role in getting the first mainland companies to float in the city two decades ago. Charles Lee Yeh-kwong, who as chairman of the erstwhile Stock Exchange of Hong Kong lobbied hard with then premier Zhu Rongji to allow mainland companies to list in the city as H shares in July 1993, said Hong Kong had been successful as a fundraising centre in the past two decades but would have to raise its game. "When China removes its capital controls and the yuan becomes freely convertible, for international investors, there would be no difference between Hong Kong and Shanghai or Shenzhen," Lee told the South China Morning Post. "If international investors are able to freely trade on the mainland, this would put Hong Kong in direct competition with the mainland stock exchanges." Lee said the city would need to be prepared for this challenge. "I don't worry about competition as it helps us to improve. When China fully opens up its markets, Hong Kong can still compete for mainland firms to list here if we can offer a cheaper and more professional services as well as better regulation," Lee said. "We need to show we can offer the best protection to investors because of our rule of law and good regulation. The Hong Kong stock exchange would need to continue its marketing efforts to get the major mainland firms to list here." Since Tsingtao Brewery listed in the city on July 15, 1993, there have been 176 H-share listings, raising a total of HK$1.52 trillion. H shares are stocks of companies incorporated on the mainland that are traded in Hong Kong. Including the so-called red chips - stocks of mainland companies incorporated outside the mainland and listed in Hong Kong - and privately owned enterprises, a total of 740 mainland companies have listed in Hong Kong so far, raising HK$3.51 trillion over the past 20 years. They now account for 57 per cent of the market capitalisation and 72 per cent of market turnover. Of the 50 constituent stocks in the Hang Seng Index, 27 are mainland companies. This heavy reliance on mainland firms worries analysts. Some have also aired concerns about small privately owned companies with governance problems. In addition, cross-border listings have raised regulatory concerns as it's impossible for the Securities and Futures Commission to investigate firms or directors based on the mainland. Lee, however, believes mainland firms would continue to play a vital role in the local market. "There are still many high-quality mainland companies that have yet to list," he said. "Some individual privately held firms may have had governance issues but that should not be the reason to bar all mainland firms from listing here. "It would be like banning people from driving to prevent accidents and ending up with no traffic at all."

Infertility is rising in Hong Kong, and the city lacks medical staff in the field (By Elaine Yau elaine.yau@scmp.com) Infertility is on the rise in the city but embryologists are in short supply, writes Elaine Yau - Dr Milton Leong says that Hong Kong lacks a uniform training system for embryologists. There's a lot of mystery and guesswork surrounding infertility, but one thing is for certain: Hong Kong needs more scientists and training in this medical field. One in six couples in the territory is infertile, compared to one in 10 two decades ago. Demand for infertility treatments is therefore high, but there's a lack of embryologists - scientists who study the development of embryos - to carry out the work. There are 50 embryologists in Hong Kong, spread across 11 assisted reproductive technology centres. That's 30 scientists short of the ideal figure. To plug the gap, Tung Wah College will launch a programme on embryology and reproductive medicine this September. It will cover basic reproductive biology, embryology, quality control and ethics, and assisted reproductive technologies. Dr Tony Chiu Tak-yu, visiting professor of embryology and assisted reproductive technology with the college's Department of Medical Science, says there should be on average one embryologist for every 150 laboratory cycles, according to the American Society of Reproductive Medicine's guidelines for human embryology and andrology laboratories. There were 11,631 reproductive technology procedures performed here in 2010, which means about 78 embryologists were needed. Dr Joseph Chan Woon-tong, deputy medical superintendent and head of the Department of Women's Health and Obstetrics at the Hong Kong Sanatorium and Hospital, says the role of embryologists in infertility treatments are often overlooked. "While egg collection is done by doctors, the rest of work is done by embryologists. They have to ensure the embryos grow properly in a controlled environment," Chan says. The Sanatorium, which has six embryologists, emphasises continual education to constantly improve their embryologists' knowledge. Foreign consultants are flown in to train the scientists, who get opportunities to train abroad. However, Hong Kong lacks a uniform training system for embryologists, according to Dr Milton Leong Ka-hong, former president of the Hong Kong Society for Reproductive Medicine. "Training is done mostly on a mentor basis, where a mentor takes on a trainee who gets on-the-job training at a reproductive technology centre," he says. Most embryologists in Hong Kong are science or medical science graduates who have not undergone proper embryology training in their undergraduate courses, Chiu says. The upcoming three-unit course at Tung Wah College will be offered to students in nursing and medical science. Those who complete it will have the chance to train for one year at a reproductive medicine centre. As a further contribution to infertility treatment, the college is going to conduct a study on combining Chinese and Western medicine to treat infertility. Two hundred infertile women will be recruited, says Professor Louis Chan Yik-si, honorary professor with the college's Department of Medical Science. Half the women will get Chinese medicine treatment for two months before Western artificial insemination treatment is offered; half will get only Western treatment. According to figures by the Council on Human Reproductive Technology, the overall on-going pregnancy rate for all IVF cycles is around 25.2 per cent. The low success rate often prompts people to try alternative therapy, such as traditional Chinese medicine. In a study published last year in the Journal of Integrative Medicine, researchers from Tel Aviv University's Sackler Faculty of Medicine found a significant increase in fertility when both herbal preparations and acupuncture, in combination with intrauterine insemination (IUI) infertility treatment were administered side-by-side. About 66 per cent of study participants who received combined treatments were able to conceive, compared with 39 per cent of the control group, who received no traditional Chinese medicine. Kam Yuen-ching, registered Chinese medicine practitioner with the college, says two months of taking Chinese medicine can help strengthen a woman's body. "In Chinese medicine theory, weak kidney and unsmooth flow of blood caused by stress and anxiety will affect implantation of embryos into the uterus, which is the most difficult part in infertility treatment," she says. "Chinese medicine can help them restore normal blood flow and strengthen the uterus." As couples are marrying later, infertility is a growing problem due to poorer ovulation in older women or low sperm quality in men. The success rate of artificial insemination decreases with a woman's age, says Louis Chan. For women above 30, the success rate is 30 per cent. For those aged over 40, the rate drops to 15 to 20 per cent. To boost the rate of conception, Hong Kong Sanatorium's IVF Centre has acquired a new embryo incubator that monitors embryo development round-the-clock. It is said to boast a 45 per cent success rate compared to 39 per cent for normal IVF. Called the EmbryoScope, the device provides the controlled environment of an incubator, but also features a time-lapse camera that captures embryo development every 20 minutes. This feature does away with the conventional incubation method in which embryos are taken out every other day for observation to track developmental progress during the three to five days they are in the lab, before being transferred back to the woman. This creates disturbances to the process. "With the new device, we can observe the embryo almost continuously without the need to take it out," says Chan. Continuous monitoring means scientists are able to identify optimal patterns of development or abnormalities in an embryo's growth that may be indicative of the embryo's future development. The reduced handling of the embryos may also contribute to improved embryo viability. One of the challenges for IVF scientists is predicting which embryo has the best chance of resulting in a pregnancy. "An average of 15 eggs can be retrieved from each patient," says Xia Ping, senior embryologist and scientific director at Sanatorium's IVF Centre lab. "The device allows us to know which embryos derive from the eggs with better quality and morphology."

Ceremony held to celebrate 16th anniversary of Hong Kong's return - Flag-raising ceremony held to celebrate the 16th anniversary of Hong Kong's return to the motherland,China, July 1, 2013.

PLA Garrison opens to public to mark 16th anniv. of HK's return - To mark 16th anniv. of HK's return to the motherland, Shek Kong and Sun Wai Barracks will open to public as part of celebrations.

 China*:  July 3 2013

Media blame US for stoking Xinjiang violence (By Agence France-Presse, Reuters and Associated Press in Urumqi and Beijing) The United States is encouraging “terrorism” in Xinjiang, Chinese state media said on Monday, also claiming separatists in the region – which has a large Uygur minority – had fought alongside Syrian rebels. Beijing denies the unrest in the vast region bordering Central Asia – which last week left at least 35 people dead – is due to ethnic tensions between Uygurs and China’s majority Han. It has vowed to crack down on “terrorist groups”, ordering military exercises ahead of Friday’s anniversary of major riots in 2009 that left around 200 dead. But rights groups for the mostly Muslim Uygurs blame unrest on economic inequality and religious repression, and Washington has raised concerns about discrimination. The People’s Daily, a mouthpiece for the ruling Communist Party, slammed the US government and media for what it said was its role in the violence. “For fear of a lack of chaos in China,” it said in a commentary, the US was “conspiring to direct the calamity of terrorist activities toward China”. “America’s double standards on the issue of countering terrorism is no different than incitement and indulgence ... How is this different than those who act as accomplices to terrorism?” it said. America’s double standards on the issue of countering terrorism is no different than incitement and indulgence ... How is this different than those who act as accomplices to terrorism It asked if the 9/11 attacks and Boston marathon bombings in April meant “America’s ethnic and religious policies also have problems”, while rejecting such linkages in China. “The violent terrorist incidents in Xinjiang are not an ethnic issue or a religious issue,” it said, calling the “massacres” of officials and bystanders “inhumane”. According to the official Xinhua news agency, “knife-wielding mobs” attacked police stations and other sites in the town of Lukqun last Wednesday before security personnel arrived and opened fire. At least 35 people were killed. Two days later, Xinhua said, more than 100 “terrorists” provoked “riots” in the prefecture of Hotan, attacking people “after gathering at local religious venues”. Last Friday a US State Department spokesman said it was “deeply concerned about ongoing reports of discrimination against and restrictions” on Uygurs in China. He said the US urged a “transparent investigation” but did not want to “draw broader conclusions” about the incidents. The Global Times accused members of the "East Turkestan" movement of being trained by Syrian opposition forces fighting the government of Bashar al-Assad before returning to Xinjiang to plot attacks. This appears to mark the first time Beijing has blamed a group in Syria and fits a common narrative of the government portraying Xinjiang's violence as coming from abroad. The Global Times, a tabloid owned by the People's Daily, said that some members of the "East Turkestan" faction had crossed from Turkey into Syria. They "participated in extremist, religious and terrorist organisations within the Syrian opposition forces and fought against the Syrian army", it said. "At the same time, these elements from 'East Turkestan' have identified candidates to sneak in to Chinese territory to plan and execute terrorist attacks." Authorities had arrested a 23-year-old "terrorist", known in Chinese as Maimaiti Aili, belonging to the East Turkestan Islamic Movement (ETIM), the report said, adding that he had taken part in the Syrian war. The Global Times quoted a statement from Maimaiti Aili as saying that the ETIM "specifically asked me to carry out sabotage activities in Xinjiang and enhance the 'struggle level'". The Uygur World Congress hit back at what it called China’s “distorting accusations”. “Uygurs live in an outdoor prison,” it said in an emailed statement, adding that their “resistance” had “nothing to do with terrorism”. On Saturday, large sections of the Xinjiang capital Urumqi were shut down as military vehicles took to the streets with at least 1,000 personnel from the People’s Armed Police, part of China’s armed forces responsible for law enforcement and internal security during peacetime. Beijing’s assertive presence on the ground comes ahead of the sensitive anniversary of riots between Uygurs and China’s ethnic majority Han four years ago. The Muslim fasting month of Ramadan is also expected to begin next week. In recent decades many Han Chinese have relocated to Xinjiang, which is rich in coal and gas, provoking friction. The two communities tend to live in separate neighbourhoods in Urumqi, and a greater security presence could be seen in the Uygur area on Monday. Paramilitary forces stood in clusters every 100 metres or so around the grand bazaar, and police vehicles drove by occasionally. Beijing denies repressing China’s ethnic minorities, who make up less than 10 per cent of the national population and enjoy some preferential policies.

High-speed rail across Yangtze River Delta starts operation - High-speed railway that stretches across China's Yangtze River Delta began officially put into operation on July 1.

Foreign minister makes ASEAN debut as tensions flare (By Li Xiaokun) Foreign Minister Wang Yi (right) listens to a member of his delegation during the 14th ASEAN Plus Three Foreign Ministers Meeting in Brunei's capital Bandar Seri Begawan on Sunday. The major regional forum will focus on trying to ease tensions in the South China Sea. Experts expect Foreign Minister Wang Yi to seek solutions to the South China Sea issue and upgrade the China-ASEAN FTA as he makes his debut at a series of ASEAN-related meetings that started on Sunday in Brunei. The South China Sea issue was raised by Philippine Foreign Minister Albert del Rosario on Sunday at the meeting of the Association of Southeast Asian Nations foreign ministers, when he criticized China's "increasing militarization" in the area. Tensions between neighbors have flared in past weeks over territorial disputes. Wang said on June 27 that the recent disputes concerning the South China Sea were not started by China. Another country illegally grounded a warship and constructed buildings on a reef within China's territorial sovereignty and brought bilateral disputes to the UN arbitral tribunal, which further complicated the situation, Wang said, referring to the Philippines. The minister said China has always remained open to discussions regarding the Code of Conduct in the South China Sea, adding that China and ASEAN member states agreed to adopt the COC on the basis of a consensus reached by all relevant parties. "This is a promise that China has made to the 10 ASEAN member states and will live up to," Wang said. The ASEAN Foreign Ministers' meeting in Phnom Penh last year failed to produce a joint statement as the Philippines pushed for content to be included on its territorial disputes with China. ASEAN leaders have since called for the centrality of ASEAN in regional cooperation to be respected. "Let's hope this time around we will have a more quiet meeting than we had last year," Indonesian Foreign Minister Marty Natalegawa told reporters on Saturday. Ruan Zongze, deputy head of the Institute of International Studies, said the top priority at the moment is to avoid escalating tensions over the South China Sea issue. "China has settled land border issues with 12 neighbors through negotiations, so we have the confidence to solve territorial disputes in the sea through talks," he said. Given that 2013 marks the 10th anniversary of the establishment of a strategic partnership between China and ASEAN, and that the new Chinese government has made relations with its neighbors a top priority of its foreign policy, Ruan said the ASEAN-related meetings are a good opportunity for China and ASEAN to enrich their ties. "For one thing, we should beef up exchanges and cooperation on security affairs to raise mutual trust." In another development, Ruan noted that Wang said in a recent speech that there is a need to upgrade the China-ASEAN free trade agreement.

Chinese, US deals will grow this year: study says (By By Zhang Yuwei in New York yuweizhang@chinadailyusa.com) As Chinese and US investors continue to make cross-border deals, transactions in entertainment, advertising and digital media sectors will see a potential rise in the next 12 months and beyond, says a new survey conducted among investors from both sides. The survey was of 100 corporate executives, investment bankers and private equity practitioners based in both countries with operations or experience with mergers and acquisitions transactions in entertainment, advertising and digital media industries. It was commissioned by the Los Angeles-based law firm Manatt, Phelps & Phillips LLP. "There is going to be substantial growth and we've seen a lot of activities flowing along that line, with most activities within China - the expansion of movie theaters and film groups and the extension of television production and digital media," said Lindsay Conner, a partner and co-chair of entertainment and media practice at Manatt. The US market attracts the growing number of Chinese investors in media and entertainment industries because of its advanced technology and storytelling techniques. "We are also seeing much greater interest from China coming in the US where the survey shows that the driver or motivation - first and foremost - is American technology and know-how," said Conner. "Many of the Chinese firms we work with feel that they could benefit from American storytelling techniques and American film technology so they could then use that to express Chinese themes and Chinese culture in a way that will not only be exciting for Chinese audiences but elsewhere around the world," he said. Chinese investment in the US reached some $6.5 billion last year, according to New York-based Rhodium Group that tracks overseas Chinese investment. The total investment volume reached $25.4 billion between 2000 and (first quarter of) 2013, with entertainment and real estate together reaching $4 billion. As US based companies and investors target entertainment, advertising and digital media opportunities in China, more than half of US-based respondents say they will most likely consider companies and assets valued at $250 million or less. US bidders, according to the survey, will not be acquiring controlling interests; however, due to Chinese law and regulatory obstacles, strategic partnerships and joint ventures are the structures most likely to be approved. "The motivation of the American investors is to get access to the Chinese market and to gain a foothold in China to present their work to Chinese audiences," said Conner, adding that the number one motivation of American investors going to China in entertainment and media industries is because China is the world's largest "under-tapped market" in those fields. China's media and entertainment market is estimated to have an annual growth rate of 17 percent between 2010 and 2015 - significantly outpacing economic growth - according to an Ernst & Young report. China has the second-largest film market in the world after the US and is on its way to surpassing the US box office by 2020. "Based on the pace of the theater building in China (currently after Japan) that it will become the No1 film market in the world within the next ten years," said Conner. The Manatt survey's results reflected some recent deals - including some mega ones - done by investors on both sides of the Pacific in entertainment industry. Last September, Dalian Wanda Group officially acquired AMC Entertainment, the second-largest US theater chain, for $2.6 billion, becoming the world's largest cinema owner. "It was a huge deal and very important by any standard," said Conner. Last October, Fox International Productions, a division of 20th Century Fox Film Corporation, and China's Bona Film Group formed multi-picture deal where the two companies will produce Chinese language films to distribute throughout China. Conner said these developments were a result of the announcement by Chinese President Xi Jinping - who then served as the vice-president - when he visited Los Angeles last February during his state visit that 34 foreign films from 20 will be shown every year in China. "I think the Chinese leadership wanted to send a message of a greater openness and willingness to have an exchange of the culture industries across the Pacific - it was a great way to make that announcement," said Conner. The survey also highlighted how investors from both sides watch for the political sentiment between the two largest economies to modify their investment decisions. Majorities from both sides expect the uncertain US-China political relationship to significantly impact deal making and investment activity. "It is not surprising that people from both sides would focus closely on the political relationship," said Conner. "If the relationship between the governments is good or improving, then investors feel there will be a greater willingness to allow cross-border investment," he added.

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. 

 *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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