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

Be sure to visit Hong Kong on your way TO/BACK from China http://www.chinadaily.com.cn/travel/visafree/ 

Hong Kong*:  Sept 1  2013

US diplomat’s comments on Hong Kong politics ‘upset’ Beijing, says report (By Tony Cheung tony.cheung@scmp.com) Report says Hart's pan-democrat poll remark and meetings with politicians led to warning - The new US consul general in Hong Kong was warned to steer clear of the city's political debate because Beijing was "extremely upset" by his remark that pan-democrats should be allowed to run for chief executive, a state-run newspaper says. The Global Times ran a commentary on its website yesterday quoting "a source close to the central government" as saying Beijing was also upset about Clifford Hart's frequent meetings with local politicians. A spokesman for the US consulate declined to confirm yesterday whether Hart had ever made a suggestion about pan-democrats' participation in the 2017 election. But he said Hart's meetings with government, business and political leaders "are the standard practice of diplomatic representatives of nations around the world … and they are important for building relationships, exchanging views, and opening lines of communication". The commentary came three days after Song Zhe, the Ministry of Foreign Affairs' commissioner in Hong Kong, met Hart and told him that US personnel in Hong Kong should "refuse to do anything that would hurt Hong Kong's prosperity and stability and the overall interests of China-US relations". This was seen as a warning after New People's Party chairwoman Regina Ip Lau Suk-yee said Hart had told her "he hoped that people from different backgrounds can run for the election in 2017" - echoing pan-democrats' call for a fair nomination system. Veteran China watcher Johnny Lau Yui-siu agreed that Hart's veiled support for the pan-democrats could have touched nerves in Beijing. He said Beijing might think that by showing its authority, it could "scare [Hart] off". "But what the US has been doing is really common in international relations - to stand on moral high ground and call for democracy as a universal value," he said. "So instead of hitting back, it would be wiser for Beijing to engage with the moderate democrats, and make friends with them instead of pushing them towards the US." Hart has met two of the three biggest pan-democratic parties - the Democratic Party and Labour Party. The pro-establishment Liberal Party and Democratic Alliance for the Betterment and Progress of Hong Kong are expected to meet him next month. Lau said Beijing might also be concerned about the US consulate's high-profile Facebook page. Last Saturday, Hart's office uploaded a picture of Martin Luther King with the question "what is your dream?" The post drew more than 650 comments in four days, including 450 that said "independence of Hong Kong". 

University ‘hotels’ may face bookings clampdown (By Shirley Zhao and Johnny Tam) Questions arise over legality of independent bookings of university guest house rooms, despite the practice being common abroad - The Chinese University's Yali Guest House is open to guests with referrals from departments and university members. A spokesman at the residence office said it had stopped accepting all outside reservations since May apart from bookings referred by departments. He said the university was currently reviewing its accommodation reservations policy. According to the Hotel and Guest house Accommodation Ordinance, property owners are operating a hotel or a guest house if they provide sleeping accommodation for a fee to anyone on their premises. They must obtain a licence before offering accommodation for periods of less than 28 consecutive days. The Home Affairs Department said operating an unlicensed hotel or guest house was a criminal offence and that an offender could be fined up to HK$200,000 and jailed for two years, plus a fine of HK$20,000 for each day during which the offence continued. But whether or not any particular case had breached the ordinance was subject to individual circumstances, it said. Lawyer Vitus Leung Wing-hang said that if the guests were really related to the referrers, the practice might not be a breach of the ordinance. But he added that it was easy for anyone to ask a random university member for a reference to get around the rule. "If anyone can ask for such a favour, it'll be like a hotel," said Leung. The Chinese University's Yali Guest house, which provides 36 rooms, has also been accommodating outside guests. On its website, rooms are priced from HK$490 to HK$650 a night. The university said the guest house was set up to provide non-profit accommodation for visitors on official exchanges, and that reservations could only be made with referrals by the departments concerned, although other university members could also book rooms. The University of Hong Kong said its Robert Black College, which has 60 rooms, accepted only bookings referred by university members, except for guest house staff. The guest house's website shows referrers can be students, alumni or staff. A spokesman said the institution received about 200 visiting scholars every day, so there would not be many rooms left for other guests. He said halls and residential colleges may also accept a small number of visitors not joining in any university activity over the summer. "This is a popular practice in universities around the world," he said. It was formerly disclosed that Baptist University's NTT International House reserved 30 per cent of its 164 rooms for outsiders referred by staff, students or alumni. The university has since changed its policy to accept reservations only from those referred by its departments. Education sector legislator Ip Kin-yuen said universities had had summer accommodation arrangements for a long time, but that visitors referred guests and not outsiders. He said institutions should make it clear in their reservation policies that the residence halls or guest houses were not for the public and that their managers should follow the rules strictly when processing applications and check-ins. The University of Science and Technology and Lingnan University both said all reservations for their rooms must be made through departments or offices that issue invitations. 

Bakeries step up as mooncake sales hit hard (By Xu Donghuan xu.donghuan@scmp.com) Mid-Autumn Festival promotions mean mooncakes, big business and fierce competition for bakeries. This year, the competition will be even harder - as the new administration under Xi Jinping continues to push its frugality campaign, leading to a loss of big orders. It also means bakeries are being more creative and cost-conscious to win over new customers. Mid-Autumn Festival promotions mean mooncakes, big business and fierce competition for bakeries. This year, the competition will be even harder - as the new administration under Xi Jinping continues to push its frugality campaign, leading to a loss of big orders. It also means bakeries are being more creative and cost-conscious to win over new customers. In Beijing, Daoxiangcun, a 120-year-old bakery, launched its first mooncakes on August 7. This is the beginning of autumn in the lunar calendar and in line with tradition. This year the bakery is offering 32 varieties of mooncake filling. Alongside traditional ones such as egg yolk, sweet bean paste and lotus seed paste, the bakery is also putting some more contemporary cakes on its shelves - Chinese yam, blueberry and sweet potato. It has also prepared miniature mooncakes with strawberry, coffee, prunes and beef. Chinese companies could order several thousand boxes. Now they are not allowed - But the bakery's biggest innovation this year is the launch of a new, so-called Beijing-style, mooncake, with a much thicker crust and far less filling than its Cantonese counterpart. Cost-conscious customers will be happy to know the bakery is moving away from fancy and expensive gift boxes to simple wrapping. Quanjude, the famous Peking duck restaurant, has been roasting poultry for nearly 150 years. Despite being a relative newcomer to the mooncake business, it has already found support for its unique varieties. Its most popular ones are filled with roast duck meat with fragrant Chinese onion or with five different nuts. Other fillings include bean paste with blueberry and lotus seed paste with hazelnut. Its gift packages cost no more than 200 yuan (HK$250), significantly less per order since the government's campaign. (The mooncakes will not be available at the Quanjude branch in Tsim Sha Tsui.) Most of Beijing's luxury hotels offer premium mooncakes. Sofitel Wanda Beijing has seven packages this season, many featuring a blend of Chinese and Western design and flavours. They include four tea flavoured offerings, one with the famous Yunnan Pu'er, a set of eight cakes filled with stuffings as diverse as rye with coffee paste and organic rice, as well as a cartoon box for children, which contains seven small mooncakes with sweeter fillings of fruit and cream cheese. Their most interesting offer is the ornate Opera Box, containing six mooncakes with light, fruit cream fillings. The top of the box is a wooden frame with a print of a French painting, which can be kept once the cakes are finished. Inside the box are six smaller, printed containers. "What we want to achieve here is to mix Chinese tradition with a French touch," says Thomas Jouan, from Sofitel Wanda Beijing. He says all the five-star hotels in Beijing have been hit hard by the government's frugality campaign. "We lost a lot of big customers. Before, some Chinese companies could order several thousand boxes. Now they are not allowed to spend money at five-star hotels," he says. "This year will be tough. Everybody in the hotel is a salesman for the mooncakes, including our general manager."

Closure order for To Kwa Wan tenement granted (By Lai Ying-kit yingkit.lai@scmp.com) The building at 51 Kai Ming Street in To Kwa Wan, which the Buildings Department says is structurally unsafe, has been ordered closed. The building at 51 Kai Ming Street in To Kwa Wan, which the Buildings Department says is structurally unsafe, has been ordered closed. The Buildings Department obtained a court order to close an unsafe tenement block in To Kwa Wan on Friday, but residents and shop owners at 51 Kai Ming Street are refusing to move out. The residents said they would not move out because a transit centre, arranged by the Housing Department, in Tuen Mun where they are suppose to move to was too far away from town. They are now meeting to discuss what course of action they may take. The Buildings Department wants to take concrete samples from the building and immediately reinforce its main structure and flat balconies, which have been declared structurally unsafe. Part of the street near the building was closed off by the police on Friday morning to make way for a possible forced eviction. Buildings Department officers posted a notice on a board saying that residents could return home to pick up their belongings on Saturday and Sunday. Earlier in District Court, lawyers for the Buildings Department said it had told residents in 2010 that the building needed to be investigated for safety reasons, but the residents had ignored the department’s request until two months ago due to the lack of funds needed to hire consultants and the absence of an owners’ corporation. In June, the department commissioned a consultant to inspect the building and found the conditions of the balconies were so poor they were unsuitable for living, the lawyers told the court. The safety of old tenement buildings in the city has become an increasingly serious concern even since a 55-year-old block in To Kwa Wan collapsed and killed four people in 2010. 

 China*:  Sept 1  2013

Paris has edge over London on visa policy for Chinese tourists (By Gonzalo Toca Rey and Toh Han Shih) Chinese tourists on the River Thames in London. "Let's be perfectly clear, this is a competition with London, this is a battle between cities." So said François Navarro, the Ile-de-France regional tourist authority's spokesman, to a British newspaper. And this time he is looking to avoid a Waterloo: Paris draws one million Chinese tourists annually, 10 times more than London. Julie Chappell, marketing director at London & Partners, the official promotional organisation for the British capital, acknowledges the charm of Paris, but adds "according to the latest Globe Shopper City Index, it is London that is the best city for shopping in Europe". Thus, Chappell elaborates, it's no wonder that the Chinese tourists spent "£140 million (HK$1.68 billion) just in 2012". They appreciate "our world-class attractions and hotels with Chinese cuisine, the Queen Elizabeth Olympic Park, the Westfield Stratford City shopping complex with Chinese-speaking concierges and the UK's largest casino". Walpole, a leading British luxury industry association, and others covet Paris' success, and are lobbying the UK government to ease visa restrictions for many Chinese visitors. Currently, a mainland Chinese tourist can travel through most of Europe with a visa obtained to enter France, but will need a separate one to enter the UK. "Getting a UK visa is not only cumbersome - another expense - but also not very convenient because it's valid for just one country," warns Jens Thraenhart, co-founder of Dragon Trail, a digital marketing agency which targets affluent Chinese consumers. Comite Colbert, the French rival of Walpole, has focused on a charm offensive in China since 2003. It has organised events including the Year of China in France and the Year of France in China, as well as holding a luxury exhibition in Shanghai and a festival in Hong Kong. The competition between Paris and London is also felt at street level. The London Luxury Quarter, a platform of 42 central London streets, is trying hard to reach out to wealthy Chinese by arranging press trips, taking visitors to their best spots and reinforcing its presence on weibo. London Luxury Quarter is offering Chinese tourists private tours of high-end shops that hold royal warrants, such as Penhaligon's and Fortnum & Mason, where a three-hour tour costs £365 for up to five guests, said Mark Henderson, chairman of London Luxury Quarter. Hotels and shops in the London Luxury Quarter now have Putonghua-speaking staff to cater for Chinese customers, Henderson said. "Bond Street will shortly be launching tailored guides for international visitors. These will soon be available in simplified Chinese for guests from China." Meanwhile, Paris' Tourism Board has launched a 'City Shopping Passport' and published a guide reminding Parisians that the luxury spending of the Chinese is crucial and that "a simple smile and hello in their language will satisfy them" and how "sensitive" they are to fine food and wine. And Parisian police have promised to deploy more officers to protect tourists against pickpockets after dozens of Chinese visitors suffered robberies this year.

Li avenges US Open defeat by Robson to reach last 16 (By Agence France-Presse in New York) http://www.youtube.com/watch?v=983StrmHTeY  Li Na celebrates a point over Laura Robson during their third-round tie at the US Open in New York. Chinese fifth seed Li Na advanced to the fourth round of the US Open on Friday, smacking 11 aces in a 6-2, 7-5 victory over British teen Laura Robson. Li avenged a third-round loss to Robson last year’s tournament and will next face either Japanese qualifier Kurumi Nara or Serbian ninth seed Jelena Jankovic for a berth in the quarter-finals. “I was really happy how I was hitting on the court,” Li said. “And I thought I served really well.” Connecting on 65 per cent of her first serves and winning all nine points when she came to the net, the 2011 French Open winner took control early and kept it most of the match. Li said that even her coach, former Justine Henin mentor Carlos Rodriguez, would have to say he liked her effort, even though she said he would have a different message for her during practice. “He would think I can come even more to the net,” she said. Li broke Robson to open the match and again in the fifth game on her way to capturing the first set after 29 minutes, aided by 15 Robson unforced errors. Robson broke for a 2-0 lead in the second set when Li sent a forehand wide but Li broke back in the fifth and again in the penultimate game for a victory that came after 81 minutes when Li swatted a second-serve ace. Robson, 19, failed to match her best Slam showings, which came last year when she made the last 16 by beating Li and in July at Wimbledon. In New York, she was the first British woman to be seeded at a Grand Slam since Jo Durie at the 1987 Australian Open. Li, 31, seeks her eighth career crown and second of the year after a home-soil title at Shenzhen. “I’m still young,” Li said. “I can do even more hard work.”

London and Paris compete to woo wealthy Chinese tourists (By Gonzalo Toca Rey) In battle of two cities, Paris draws way more of the mainland Chinese tourists shopping for luxury goods, but London is preferred for property - A shopper at a French fashion store in London's New Bond Street. Wealthy Chinese visitors are no mere hunters of brands but gatherers of luxury experience, a challenge for stores whether in London or Paris. London and Paris have been rivals for as long as anyone can remember. But there is a new front in the age-old conflict between western Europe's richest and chicest capitals: the hearts, minds and - most importantly - the wallets of Chinese tourists. The battle is fought out in a flurry of Chanel handbags and Burberry gloves - and the winner gains something much more valuable than mere prestige. French and British luxury firms are putting aside any concerns they have about the perceived lack of sophistication of Chinese tourists, not least because they account for "a third of their total sales in Europe", according to Yuval Atsmon, a partner at consultancy McKinsey in London, who previously worked in China. The main target for both capitals is the 11 per cent of Chinese tourists who, according to recent research by Hurun Report and ILTM Asia, take at least three overseas trips per year and spend more than US$10,000 on each holiday - excluding the cost of flights. Chinese spending in the West End of London was up 50 per cent in May last year on the year before, according to Jones Lang LaSalle research. At London's Heathrow Airport, Chinese shoppers account for less than 1 per cent of total traffic, yet are responsible for nearly a quarter of all sales of luxury goods, according to UK government data. The British capital has long experience of rolling out the red carper to mega-rich foreigners - making it a favourite for everyone from the oil-rich Arabs of the 1970s to the Russian oligarchs of more modern times. Boutique travel agency Hurlingham specialises in tailoring London visits for wealthy tourists, including Chinese officials. Managing director Andrew Barker says visitors will be met with a luxurious Mercedes-Benz limousine at the airport and enjoy private visits to top museums before settling down to exclusive fashion shows featuring "five to six well-known promising designers" as they settle back, sip champagne and decide what to buy. Among the first ports of call for most Chinese visitors is Harrods, the eminent Knightsbridge department store that has served royalty and nobility since 1834. "It appeals to their need to display status through a typically baroque British approach to luxury," says Susana Campuzano, director of the IE Business School's luxury programme and founder of the consulting firm Luxury Advise. However, they show little in common with the ostentatious, big-spending characters of Kevin Kwan's hit novel Crazy Rich Asians. In fact, Barker notes: "They are direct, price-sensitive consumers." A favourite with many of Barker's customers is Bicester Village, an outlet an hour's drive from London offering high-end clothing and accessories from brands such as Burberry or Bottega Veneta for one-fifth of the price in China. But try as it might, London's exclusive hotels, world-class shoemakers and fine, gourmet cuisine just aren't enough to compete with French savoir faire in the Chinese market. "Luxury was born in France," as Campuzano puts it. For Claudia D'Arpizio, a director responsible for luxury brands at consultancy Bain & Company, affluent Chinese love to surround themselves with "the best of the West" - and prefer to do so by experiencing the brands in the countries they come from. "They have also come to appreciate the expertise, service advice and sophistication of the staff at exclusive boutiques in Europe, who are better trained to explain to their clients the history of the brand," Atsmon says. The last five years have seen China's wealthy evolve from hunters of big brands to gatherers, who like to experience luxury. Campuzano says that means Chinese consumers now demand to know not just about the brand, but about the high standards involved in the design and crafting of its products. "Store salespeople should spend time with these clients explaining to them all they need to know in the more intimate environment of a private room, because if you rush them, you'll lose them all," Campazano warns. But how can London and Paris storeholders identify a wealthy Chinese customer who is eager to listen and has the deep pockets needed to buy? Campuzano, who advises luxury shops and department stores, underscores that "their staffs are skilled to sound potential clients out with appropriate questions before ushering them into a private VIP room". However, asking smart questions is not enough. High-end firms are busy digitising information on their best clients, which they could use to sound a red alert when a super-rich lady from Shanghai passes through the doors of one of their stores in Europe. Brands such as Chanel or Louis Vuitton have also partnered with top hotels in order to make them lead deep-pocketed visitors straight to their lavish shop windows. One area where Chinese would prefer to spend their money in London, rather than Paris, is in the housing market. London accounted for 80 per cent of all Chinese property investment in Europe over the past five years, according to a report by LaSalle and Real Capital Analytics. Buying prime property is sometimes used as a fast track to get a visa: the UK grants residency permits to Chinese owners with over 20 million yuan (HK$25 million) in net assets in the nation, provided that they also borrow 10 million yuan from a local bank. Hurlingham's Barker says he is more open to introducing Chinese clients to sellers of exclusive properties than a French agent might be. "They will find London's luxury far more accommodating than that of Paris," he says. Additional reporting by Toh Han Shih. 

Zhou Yongkang corruption probe likely to be ‘one-off’ (South China Morning Post) While inquiry into ex-security tsar has broken agreement protecting top officials, further moves against senior leaders are unlikely, say analysts - Zhou Yongkang with Xi Jinping at the NPC in March. The corruption probe into former public security tsar Zhou Yongkang will not lead to investigations of other top party leaders, even though it has broken a long-standing agreement protecting the most powerful officials from scrutiny, political analysts said. The move against Zhou - one of the nine members of the Politburo Standing Committee under former president Hu Jintao - was endorsed after intense discussion during the party's key annual meeting at Beidaihe in Hebei. The investigation of Zhou, first reported by the South China Morning Post yesterday, would represent the first time a current or former member of the Politburo's supreme Standing Committee has been probed for economic crimes. "If we apply the same criteria, even more senior officials should be investigated," said Li Xigen, an associate professor at the City University of Hong Kong. "But I don't believe the authorities are willing or able to launch another investigation of this scale." Other analysts agreed Zhou's case was a one-off. They said Zhou was being probed because he had become politically vulnerable and the signs of corruption were too strong to ignore. Zhang Lifan , a historian and political commentator, said: "From a [broader] political perspective, investigating Zhou will bring an end to the tacit agreement not to investigate a Politburo Standing Committee member [for corruption]. "This case will set an important precedent. There won't be any untouchable in the future political struggles." Some Standing Committee members have been purged and even prosecuted - especially during the Cultural Revolution - but their cases were related to ideology or management failings, not corruption. Zhang Ming , a professor of political science at Renmin University, said that top party leaders agreed not to initiate criminal investigations against each other after the Cultural Revolution. The move was designed to restore political stability and bring the warring factions back under a single banner. "This [case], if it is true, would break this tradition," Zhang said. "The future political struggle will become more intense." The probe of Zhou is bound to raise people's expectations about what could be in store for other top leaders facing questions about the sources of their family's wealth. The New York Times reported last year that the family of the then premier, Wen Jiabao , had accumulated a vast hidden fortune, a claim the Wen family has denied through lawyers. Jia Qinglin - who once ranked fourth in the power hierarchy - has been dogged by questions about corruption that happened under his watch as party secretary of Fujian . President Xi Jinping , who pledged to clean up corruption when he came to power, needs to score a big and early victory to galvanise his campaign. "Different camps must have their own reasons for bringing down Zhou," said Steve Tsang, head of the China Policy Institute at the University of Nottingham. "But one common ground shared by everyone is how much Zhou is disliked and how he lost respect among his colleagues - retired or sitting. I can see why Xi [Jinping] finds him an easy target," Tsang said. Tsang said even former president Jiang Zemin - the political patron of Zhou - wanted to distance himself from the unpopular security chief. He added: "[Jiang] does not want to be weakened by the Zhou case. He can take the moral high ground and let Zhou go. There is not a single compelling reason for him to defend Zhou." With another key Zhou ally, disgraced former Politburo member Bo Xilai , being tried for corruption last week, Zhou was left in the no-man's land of Chinese politics. "[By investigating Zhou], Xi will firmly establish himself as a powerful leader, not just a 'first among equals' like Hu Jintao," he said. A professor in Shanghai, who declined to be named, said: "Investigating Zhou is in line with Xi's character and his upbringing as a princeling" - referring to the president's confidence in his mandate to rule. Sources and analysts all said a case like this would take months to prepare and probably started well before the trial of Bo. But they said Beijing would not publicise Zhou's case with Bo's trial only just completed. "They will have to wait until Bo's case is firmly behind us, otherwise the political impact will be too great," said the professor in Shanghai. Tsang said Beijing needed to carefully evaluate all the possible reactions and would announce it only when it has the full confidence that everything will be under control. "To bring Zhou down as the biggest tiger, it would have to be a public affair. To maximise the impact, this [announcement] would be timed for a later date, after the public have fully taken on board the effect of Bo's trial," he said. Regardless of Zhou's fate, the probe will have wider implications. The Shanghai professor said: "It will trigger public anger over the injustice and wrongdoings in China's legal and law enforcement sector [which Zhou controlled for a decade]. It may trigger a bigger [than expected] reaction from the public."

New trademark law to curb infringements (By Xinhua) China's legislature on Friday passed a new trademark law to crack down on infringements and ensure a fair market for trademark holders. After three readings over the past two years, the revised law was passed at the bimonthly session of the Standing Committee of the National People's Congress (NPC), China's top legislature. The new law raised the compensation ceiling for a trademark infringement to 3 million yuan ($500,000), six times the previous limit. The revision was based on comments from lawmakers, experts and representatives of businesses and trademark agencies from China and abroad, said Wang Qing, an official with the the Legal Affairs Commission of the NPC Standing Committee. The new law added that trademark agencies are not allowed to accept entrustment if they know or should know that their clients are conducting a malicious registration or infringing on the trademark rights of others. Agencies violating the law will face fines and a bad credit record filed by industrial and commercial authorities. Those involved in serious cases will have their businesses suspended. The new law also offers protection for renowned trademarks, giving owners the right to ban others from registering their trademarks or using similar ones -- even if such brand names are not registered. But the words "renowned trademark" shall not be used in promotions or advertising. The draft also changed clauses regarding the examination period of applications for trademark registration to make it more efficient. China adopted its Trademark Law in 1982 and made amendments in 1993 and 2001. As of June this year, China held the world's largest number of registered trademarks and valid trademark registrations, at 8.17 million and 6.8 million respectively, according to latest official statistics.

Chinese Films in the US: Not a full house (By Wang Jun and Liu Yiyi) A poster in the lobby of AMC Atlantic Times Square Theater in Los Angeles advertises the Chinese-language movie The Grandmaster. More movies from China are released, but they aren't attracting Westerners, causing box-office receipts to tumble, report Wang Jun and Liu Yiyi from Los Angeles. Walk through the lobby of AMC Atlantic Times Square Theater in Los Angeles on a Friday night and you may wonder whether you are in China. Huge posters of Chinese movies are on the walls and at least one of its 14 theaters is full of young Chinese adults watching Chinese movies recently released on the big screen in China, such as The Rooftop, Tiny Times, Drug War and The Grandmaster. "This situation is hard to be imagined even three years ago," said Robert Lundberg, vice-president of China Lion Entertainment, a leading Chinese film distributor in the US. "There were only two or three Chinese movies released a year in certain locations three years ago. But now, there is always at least one Chinese-language film in theaters." Ironically, that audience is one of the major challenges facing movies made in China: There aren't Westerners there and it's causing box-office receipts to suffer. According to the statistics from EntGroup, revenue from Chinese films in the US fell to 860 Million yuan (about $140 million) in 2011 from about $200 million in 2010. International revenue for Chinese films declined to about $170 million in 2012 from about $330 million in 2011, according to Silver Paper: Report on International Spread of Chinese Movies 2012. "The audience was very different dating back to the '90s from today's Chinese movies," said Stanley Rosen, professor of political science at the University of Southern California. "Most of the audience for the films such as Crouching Tiger, Hidden Dragon were Americans, but for the movies today, very few Westerners go to see them. The main audiences of today's Chinese films are Chinese in the US, mainly Chinese students. The market for Chinese films became very limited outside the Chinese community. The Chinese films today are played only in a very limited number of theaters and last for a very short time." According to Box Office Mojo, in the US Crouching Tiger, Hidden Dragon was played in 2,027 theaters and Miramax's popular Chinese film Hero was played in 2,175 theaters. While two recent Chinese films Lost in Thailand and So Young were played in only 35 and three theaters respectively. 

Hong Kong*:  Aug 31  2013

K Wah International gloomy about Hong Kong property as it reports profit slump (By Yvonne Liu yvonne.liu@scmp.com) Firm says first-half sales fell 16pc to HK$3.31b and warns that city's home prices could fall 20pc because of government's cooling measures - K Wah International forecasts Hong Kong property prices to fall 10 per cent to 20 per cent if the government keeps its cooling measures in place. "Property prices will drop," the firm's chairman, Lui Che-woo, said yesterday while announcing half-year earnings that included a 16 per cent drop in revenue. "The government's cooling measures are aimed at lowering prices so that people can buy their own flats. But the cost of construction is rising. We hope the government releases more sites for sale, in order to lower land costs. It would help us to offset the impact of rising development costs." The company said its net profit plunged 69 per cent to HK$888 million in the first half as sales dropped to HK$3.31 billion. Executive director Alexander Lui Yiu-wah said he expected the luxury residential market to be "quiet" over the next two years. K Wah generated HK$3.1 billion from contracted sales in the first half, of which some HK$1.8 billion were booked in the period. The company plans to increase its investment property portfolio from 120,000 square metres to 200,000 sq m over the next three to five years. "Most of our luxury projects were released to the market in 2012 and only special flats are left," said Paddy Lui Wai-yu, another executive director. "The sites we bought recently are aimed at end-users. They could meet the market's needs." The firm will keep some of the flats at The Palace and Grand Summit, two residential projects in Shanghai, to develop into serviced apartments. The serviced apartment plan has a total floor area of 50,000 square metres. "We are aiming at generating higher recurring income by reserving parts of the properties in prime locations," she added. One of the firm's major investment properties is K Wah Centre in Shanghai. "Most of our luxury flats were sold last year. That caused the contribution from Hong Kong properties to drop this year. But we hope to launch a mass residential project in Tseung Kwan O and a luxury project at Grampian Road next year," Alexander Lui said, adding that the Tseung Kwan O project would have 400 to 500 flats. The developer plans to start selling flats in a new luxury project in Tai Po in the second half of the year. Paddy Lui said the company was optimistic about the mainland market for the second half. "Property sales have been strong, better than expected. We hope the growth can offset the impact of cooling measures on Hong Kong property sales." The company declared an interim dividend of five HK cents a share, the same as last year. Shares in K Wah International edged up 0.55 per cent to close at HK$3.66 yesterday. The Hang Seng Index rose 0.8 per cent.

Commerce ministry targets investment teams sent to Hong Kong, Macau (By Daniel Ren ren.wei@scmp.com) The Ministry of Commerce has pledged to rein in extravagance by local government delegations sent to Hong Kong and Macau to drum up investment, following a highly critical article about such trips in People's Daily. Yao Jian, a ministry spokesman, told a press conference that Beijing was aware of the overblown nature of business delegations visiting Hong Kong and Macau, pointing out that some local governments had overstated the number of participants and the value of deals signed during their promotional activities. They were desperate to get a big number of foreign businesspeople attending the events and re-signed agreements which had previously been sealed to shore up the total transaction value - "They were desperate to get a big number of foreign businesspeople attending the events and re-signed agreements which had previously been sealed to shore up the total transaction value," Yao said, according to a statement on the ministry's website. "The phenomenon reflects a severe level of artificiality and extravagance." He added that the ministry would do its utmost to avoid wasting public funds. His remarks followed the flagship newspaper's harsh criticism on Monday of investment delegations travelling to Hong Kong. This was the first time that a Communist Party mouthpiece had fired a salvo at such investment-promotion practices. People'sDaily also said anti-graft officials would investigate and punish those who outrageously wasted money on trips, because their behaviour tainted the government's image. Over the past three decades, Beijing has encouraged local governments to look outward to attract foreign investment. Foreign direct investment is a key economic indicator used to gauge officials' performance, and dozens of delegations from local governments flock to Hong Kong every year to seek such investments. Yao admitted that the delegations played a positive role in spurring the nation's economic growth and creating jobs. But he added: "As superficiality and lavish spending characterised such investment promotion activities, it is necessary to enhance oversight of the practices." The People's Daily article and the remarks by Yao were fresh signs that the central leadership is stepping up efforts to cut down on extravagance. Previously, investment junkets were believed to be immune from the campaign against official extravagance. The People's Daily said business delegations stayed in five-star hotels and invited businessmen to expensive restaurants, spending as much as 1,000 yuan (HK$1,260) per head for a breakfast meeting. It is also an open secret that government officials on these delegations snap up luxury items for their own use during the trips. Yao said the ministry was drawing up guidelines governing investment delegations that would require local governments to focus on foreign-funded projects to ensure that funds were used properly.

It’s true, Hong Kong’s a better place to live than five years ago, report says (By Jennifer Ngo jennifer.ngo@scmp.com) Hong Kong appears to have become a better place to live compared to five years ago, an international think tank says in its annual report on 140 cities. Worldwide, the city is ranked 31st in the latest "liveability" ratings - up 10 places from 2008, despite the world becoming a less habitable place in general, the Economist Intelligence Unit (EIU) said. Hong Kong scored full marks for education, compared with 83.3 out of 100 for Singapore, which was up two places to 52. However, City University economist Chan Yan-chong sounded a note of caution, pointing out that the report reflected only the opinions of English speakers. Each of the 140 cities rated were given a score out of 100 for each category, based on the judgment of the EIU's in-house analysts and in-city contributors. That meant the rankings relied on the perceptions of the unit's own analysts instead of being survey-based, Chan said. EIU economist Edward Bell said the ranking "is geared towards the challenges for somebody not from that city to live there; what they would be anticipating and looking forward to if they move there". He added: "Ratings reflect specific improvements in the quality [of living], or the deterioration in other cities." The report considered more than 30 factors broadly grouped under stability, health care, culture and environment, education and infrastructure. Melbourne, Australia, ranked first, with Vienna second and Vancouver third. Hong Kong scored higher than Singapore in four of the five categories. The city scored 92 for overall liveability, while Singapore scored 88.7. "There is no objectivity [when comparing cities]; it always depends on who you ask," Chan said. Both places scored 87.5 for health care. Chan said Singapore's health care had been developed as an industry, so basic medical services and hospital beds were much more expensive than Hong Kong, which had one of the cheapest public medical services in the world. Chan said pupils in Singapore were known for good exam grades; however, they were under more pressure than those in Hong Kong as they had four public exams - two in primary school and two in secondary school - before they even entered university.

Chinese shoppers set to become world leaders online (Reuters in Shanghai) China’s e-commerce market is expected to leapfrog that of the United States this year to become the world’s largest by total customer spending, management consultancy firm Bain & Company says, and could account for half of all Chinese retail spending within a decade. The change in shopping habits comes as almost half of the country’s 1.3 billion population now have direct access to the internet, and of that number nearly 80 per cent own smart phones or tablets. China’s e-commerce market has grown at an average rate of 71 per cent from 2009 to last year, versus 13 per cent in America, and its total size is expected to reach 3.3 trillion yuan (HK$4.18 trillion) by 2015, Bain & Company said in a report released on Wednesday. Total spending by Chinese consumers on online shopping reached US$212.4 billion last year, compared to US$228.7 billion in the US, the report said. Chinese companies with retail outlets have had to realign their sales strategies to compete with online rivals who threaten to undercut them in an increasingly competitive market long dominated by e-commerce company Alibaba Group, and others like 360Buy Jingdong. “It’s a massive change. It just means you need to be on the web, whether you like it or not,” said Serge Hoffmann, a partner at Bain and co-author of the report. “Whether you’re an online player or an offline player, you need to have a meaningful, credible presence on the web.” While still a small portion of total revenues, the growth of online sales is far outpacing offline sales growth. Haier Electronics Group, which operates an online stall on Alibaba’s business-to-consumer site Tmall.com, saw its e-commerce revenue jump almost 500 per cent to 633 million yuan, or two per cent of its total revenue, in the first half of this year, from 106 million yuan in the same period last year. Its total revenue grew 10.2 per cent. Suning Commerce Group saw its e-commerce business rise to 10.6 billion yuan in the first half of this year, an increase of 101 per cent on the same period last year. Soon retail companies may have to take a leap of faith, shutting their bricks and mortar outlets to reduce overhead costs and hope that customers will turn to their online stores, said Nicholas Studholme-Wilson, a senior analyst at Sun Hung Kai Financial in Hong Kong. Alibaba, whose Taobao customer-to-customer website is the world’s 10th most visited according to web monitor Alexa, predicts e-commerce will account for half of all Chinese retail spending in 10 years, from six per cent now. “Proliferation of smart devices mean everybody is connected at all times, that’s one of the key drivers for this,” said Studholme-Wilson. “Another problem you’ve got in China is that retail is so damn expensive. Land costs and labour costs are all really hurting margins. Whereas it’s actually very easy to set up a shop on Tmall and your costs are massively reduced,” he said. Infrastructure obstacles. Logistics, however, pose a major obstacle to e-commerce development, and Alibaba is now working with Chinese logistics firms to improve nationwide infrastructure and delivery networks, said Shih. Gome Electrical Appliances, whose online revenue now accounts for five to six per cent of its total earnings of 27 billion yuan, is changing its retail strategy to accommodate the new wave of online customers. The firm closed a total of 35 stores in the first half of this year, said Helen Song, a spokeswoman for Gome. Now the company plans to continue moving away from its physical business to better supply China’s rapidly changing consumer habits.

Tycoon Li Ka-shing still paying down HKU's medical school donation (By Lai Ying-kit yingkit.lai@scmp.com) Hong Kong’s richest man Li Ka-shing is still paying down the HK$1 billion donation he promised to the University of Hong Kong’s medical school eight years ago, the institution’s vice chancellor said on Wednesday. HKU’s medical faculty in 2005 was renamed as the Li Ka-shing Faculty of Medicine in recognition of the property tycoon’s promised donation. Speaking at a media session during the university’s inauguration ceremony, vice chancellor Tsui Lap-chee said the university had not yet received the entire donation, which was being paid in instalments. Tsui declined to reveal how much Li had already paid, saying this was part of an agreement with the businessman. “Mr Li has not renegaded on his promise with us and has continuously donated to us,” Tsui said. Legislator Kwok Ka-ki, a HKU medical school alumnus who had opposed the renaming medical school, said he was shocked to learn the university had not received the full donation after eight years. He said in doing so Li had disappointed other alumni and teachers. Li, 85, ranks as the eighth richest person on the 2013 Forbes’ world billionaires list with an estimated wealth of US$31 billion (HK$241.8 billion). 

US diplomat warned to avoid Hong Kong's political reform debate (By Tony Cheung tony.cheung@scmp.com) Beijing’s top diplomat in Hong Kong warned the American consul general to stay out of the city’s debate on constitutional development and refrain from doing anything that could harm Sino-US relations. Song Zhe, the commissioner of the Ministry of Foreign Affairs in Hong Kong, made the remarks on Tuesday less than a month after the new United States Consul General Clifford Hart said that he looked forward to Hongkongers’ move toward “genuine democratic suffrage”. The Chinese commissioner’s office reported on its website on Tuesday that during a meeting with Hart on the same day, Song briefed him on “the successful implementation of the ‘one country, two systems’ policy in Hong Kong and stated the central government’s position on relevant issues.” “Song emphasised that the development of the political system in Hong Kong is an internal affair. Foreign governments and officials should not interfere. The Chinese side is firmly against the interference in Hong Kong’s affairs by any outside forces that disregard the Basic Law and the relevant decisions made by the standing committee of the National People’s Congress. “[Song] hoped that US representatives and personnel in Hong Kong respect the ‘one country, two systems’ [framework and] … refuse to use any excuses to conduct undue activities … that would hurt Hong Kong’s prosperity and stability, and the overall interests of China-US relations.” This is the third time in four months that the foreign ministry’s representative has hit back at the United States’ most senior diplomat in the city. On May 16 and July 19, a spokesman from Song’s office said that no foreign government or official should “make reckless comments" about constitutional development here. This came after Hart’s predecessor Stephen Young said preparations to engage all parties in discussions on electoral reform should begin as early as possible. Hart, a Putonghua-speaking diplomat with 30 years’ experience, including five postings in China, arrived in Hong Kong last month to replace Young, who left the post in June. In his arrival statement on July 31, Hart said he felt honoured to “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”. On Wednesday, in response to Song’s statements, a spokesman for the US consulate said that the United States’ long-standing policy toward Hong Kong was unchanged. “[We] look forward to Hong Kong’s continued progress toward genuine universal suffrage … in accordance with the Basic Law … and the aspirations of the Hong Kong people,” he said. One of the new consul general’s top priorities is expected to involve the rebuilding of trust between US legal authorities and Hong Kong law enforcement officials following the strains that developed over the departure of whistle-blower Edward Snowden from Hong Kong in June. Snowden was allowed to leave the city despite Washington’s request that he be detained on espionage charges and extradited back to the US.

 

US diplomat warned to avoid Hong Kong's political reform debate (By Tony Cheung tony.cheung@scmp.com) Beijing’s top diplomat in Hong Kong warned the American consul general to stay out of the city’s debate on constitutional development and refrain from doing anything that could harm Sino-US relations. Song Zhe, the commissioner of the Ministry of Foreign Affairs in Hong Kong, made the remarks on Tuesday less than a month after the new United States Consul General Clifford Hart said that he looked forward to Hongkongers’ move toward “genuine democratic suffrage”. The Chinese commissioner’s office reported on its website on Tuesday that during a meeting with Hart on the same day, Song briefed him on “the successful implementation of the ‘one country, two systems’ policy in Hong Kong and stated the central government’s position on relevant issues.” “Song emphasised that the development of the political system in Hong Kong is an internal affair. Foreign governments and officials should not interfere. The Chinese side is firmly against the interference in Hong Kong’s affairs by any outside forces that disregard the Basic Law and the relevant decisions made by the standing committee of the National People’s Congress. “[Song] hoped that US representatives and personnel in Hong Kong respect the ‘one country, two systems’ [framework and] … refuse to use any excuses to conduct undue activities … that would hurt Hong Kong’s prosperity and stability, and the overall interests of China-US relations.” This is the third time in four months that the foreign ministry’s representative has hit back at the United States’ most senior diplomat in the city. On May 16 and July 19, a spokesman from Song’s office said that no foreign government or official should “make reckless comments" about constitutional development here. This came after Hart’s predecessor Stephen Young said preparations to engage all parties in discussions on electoral reform should begin as early as possible. Hart, a Putonghua-speaking diplomat with 30 years’ experience, including five postings in China, arrived in Hong Kong last month to replace Young, who left the post in June. In his arrival statement on July 31, Hart said he felt honoured to “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”. On Wednesday, in response to Song’s statements, a spokesman for the US consulate said that the United States’ long-standing policy toward Hong Kong was unchanged. “[We] look forward to Hong Kong’s continued progress toward genuine universal suffrage … in accordance with the Basic Law … and the aspirations of the Hong Kong people,” he said. One of the new consul general’s top priorities is expected to involve the rebuilding of trust between US legal authorities and Hong Kong law enforcement officials following the strains that developed over the departure of whistle-blower Edward Snowden from Hong Kong in June. Snowden was allowed to leave the city despite Washington’s request that he be detained on espionage charges and extradited back to the US.

Hong Kong ‘drug mule’ held at Beijing airport in record cocaine seizure (By Patrick Boehler patrick.boehler@scmp.com) Customs seized 24.6kg of cocaine headed for Hong Kong - A 63-year old man has been detained in Beijing in what authorities have called one of the most brazen attempts to smuggle drugs through the Chinese capital’s airport and into Hong Kong. Police say the Hong Kong resident, identified only by his last name Huang, or "Wong" in Cantonese, attempted to smuggle 24.6kg of cocaine from Brazil to Hong Kong on Tuesday last week, according to a report in the Beijing Times this Thursday. The report said it was the largest amount of cocaine ever seized by customs officers at the airport. The Hongkonger, who identified himself as a gem trader, said he had been offered HK$30,000 and free flights by a friend for bringing two suitcases from Brazil. He told police he did not know he was transporting narcotics, according to the report. The man had left Brazil’s largest city, Sao Paolo, for the Spanish capital Madrid, where he transferred to a flight to the Chinese capital. He was supposed to continue his journey to Hong Kong from Beijing. His capture comes after a series of large drug busts at Chek Lap Kok airport in Hong Kong. Over the last weeks, at least six people have been arrested for attempting to smuggle large amounts of narcotics into the city. On August 13, a 35-year-old Hong Kong traveller and a 22-year-old Russian woman were separately arrested by Hong Kong police for smuggling a total of 60kg of cocaine from Brazil. Both had used the same route Wong had intended using. Transit luggage is generally not inspected at Beijing’s main airport, the deputy head of the airport’s customs office, Sun Minghui, told the Times. Earlier drug busts had alerted Beijing customs to the smuggling route, he said, and allowed them to focus on passengers coming from Latin American destinations. If prosecuted and convicted, Wong could face the death penality. Hong Kong’s maximum penalty for drug trafficking is life imprisonment and a fine of up to HK$5 million. The amount of narcotics smuggled into Hong Kong has increased considerably since 2011. Last year, customs seized narcotics worth HK$1.02 billion, an increase of 413 per cent compared to the previous year, according to statistics by the Customs and Excise Department.

 China*:  Aug 31  2013

Zheng says ‘sorry’ for ousting Venus from US Open (By Associated Press in New York) http://www.youtube.com/watch?v=0T9gTymomjg Chinese defeats seven-time grand slam winner in a contest lasting just over three hours, the fifth-longest women's match at US Open since 1970 - "I'm sorry guys," China's Zheng Jie told the Flushing Meadows crowd after stunning home favourite Venus Williams - and perhaps ending the two-time champion's US Open career. Zheng dumped out the seven-time grand slam winner 6-3, 2-6, 7-6 (7-5) after an epic match lasting just over three hours, tied for the fifth-longest women's match since 1970 at the tournament. At 33, and slowed down in the past couple of years by an auto-immune disease that saps energy, and hampered much of this season by a bad back, Williams was asked what the future holds for her at the US Open. In one breath, Williams brushed aside the unspoken reference to retirement, saying: "I definitely want to come back for the atmosphere." And in the next, she added: "I mean, next year's Open is so far away right now." Defeat to the 56th-ranked Zheng was the third year in a row that Williams is out after two rounds. "If I didn't think I had anything in the tank, I wouldn't be here," said Williams, who was ranked No 1 in 2002 and is currently 60th. "I feel like I do, and that's why I'm here." The American acquitted herself well for stretches, erasing deficits over and over again, until she simply ran out of solutions against Zheng. "I just kept trying to fight today," Williams said. The third set alone lasted 1½ hours. "I was like, 'Wow, this is a marathon'," Williams said. Near the finish line, she faltered. On the final two points, Williams missed a volley, then a return. She wound up with 44 unforced errors in all, half on forehands, in part because Zheng kept scrambling along the baseline to get to balls and block them back, making Williams hit extra shots. During her on-court interview, Zheng addressed the partisan crowd that was raucously pulling for Williams in Louis Armstrong Stadium, apologising then adding: "She is a very good player but I wanted to win also." Every point Williams won, it seemed, drew clapping and screaming from on-their-feet spectators. "I love that. I wish I could play some more for that," Williams said. "I want to come back here just for that, at this point." Zheng led 4-1 in the tiebreaker, before Williams made one last stand. But at 5-5, Williams put a backhand volley into the net as she lost her footing. "I should have made the shot," Williams said. "I was just rushing." That gave Zheng her first match point, and Williams' backhand return missed, ending her stay in the singles draw as Zheng jumped for joy in triumph. "Today is a tough match for me. Unbelievable I can beat her," Zheng said. "The second set I lost my concentration and she played so great. The final set we were fighting each other. I think this is very good for me and will help me for the next match." Zheng now plays Spanish 18th seed Carla Suarez Navarro. Williams hasn't been ranked in the top 10 in 2½ years. The last time she made it beyond the third round at a major tournament was a fourth-round appearance at Wimbledon in 2011. At the 2011 US Open, Williams withdrew before her second-round match, announcing she had Sjogren's syndrome, an illness that causes joint pain and fatigue. "I feel like it's definitely affected my game, but I'm working on it," she added. "I'm a fighter."

China snubs Philippine president over visit to Nanning expo (By Raissa Robles in Manila and Teddy Ng) President urged to visit China at more conducive time; trade minister to go instead - China has asked Philippine President Benigno Aquino to postpone a visit next week for the opening of a trade fair, Manila said yesterday, an unprecedented snub by Beijing as relations sour over territorial disputes in the South China Sea. "China's request was for the president to visit China at a more conducive time," Department of Foreign Affairs spokesman Raul Hernandez told the South China Morning Post in reply to whether Aquino had been specifically asked to drop his China visit. Hernandez said Chinese Foreign Minister Wang Yi relayed the request to Foreign Secretary Albert del Rosario on Wednesday night, hours after President Aquino himself announced his trip to Nanning to head the delegation to the China-Asean Expo, where the Philippines is this year's "country of honour". Trade Secretary Gregory Domingo will represent the president at the September 3-6 event, said Hernandez, who was among Asean foreign ministers in Beijing for a meeting with the Chinese foreign minister. China's Foreign Ministry told Reuters it had never invited Aquino in the first place. In a statement to the Post, the Foreign Ministry added: "The Philippines should work with China to remove difficulties and disturbances, and make concrete efforts for resuming the healthy and stable development of the Sino-Philippine relationship." Hernandez said: "The president has decided not to proceed to CAEXPO taking into consideration China's request … On the part of the Philippines, we will continue to abide by our principled position that bilateral relations can advance despite differences." The president announced his China trip at the start of a speech at his office in Malacanang Palace. "I will leave at 5am, I will return at 5pm [because] we don't want to overstay our welcome there," he said. Du Jifeng , an expert in Southeast Asian affairs at the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, said it was rare for Beijing to reject visits by foreign leaders. "It indicates that Beijing is increasingly frustrated with Manila," Du said. Professor Su Hao , of China Foreign Affairs University, said: "Beijing gave a high reception to Aquino two years ago, and the two nations signed many deals. But Aquino put up tough rhetoric against China as soon as he was back home."

Visa issues for foreigners resolved in new policy (By CAO YIN) Foreigners' original visas will remain valid when they intend to extend their stay in China starting in September, Beijing's exit-entry administration said on Thursday. Currently, if foreign nationals want to prolong their stays in the country, their original visas, whether expired or not, must be canceled, according to the administration under the Beijing Municipal Public Security Bureau. "It was inconvenient and became the main target of most foreigners' complaints," said Chen Yan, a police officer who processes foreigners' visas. That problem will be resolved when a revised regulation on exit-entry management for foreigners takes effect on Sept 1. Under the regulation, if foreigners apply to lengthen their stay in the country with unexpired visas, they can apply for a stay-time extension, "which means they can continue to use the old visas," she explained. "The original visas will remain valid, and the original entry time will not be affected," she said. Also, foreigners should submit their passports and be given a receipt as they apply for extensions, changes and replacements of residence visas. Exit-entry administrations will hand their cases within 15 working days. The administration will print foreigners' photos on the receipt, helping other departments confirm applicants' identities. "The receipt will remain valid while police officers process the application," she said. Chen added that enforcement of the new policy may be similar across the country, but the workload in big cities will increase. But she said that where the receipt can be used and its effectiveness need further review, "since the matter not only concerns exit-entry administrations, but also other ministries, such as transportation departments," she said. Henry Manner, a citizen of Finland who runs a business in Tianjin, said he doesn't think the coming regulation will create much inconvenience for him. "Everyone knows, the faster the better. But if you make plans in advance, it won't affect you much," he said. To better solve foreign applicants' issues, the administration in the capital has provided weekly training sessions since July, said Liu Xiaozheng, an office worker at the authority's foreign visa department. "We have posted changes in the coming regulation in English on electronic screens of our administration's hall, and dispatched more police officers to do consultant services," she said. In addition, the administration's official micro blog will be online starting Sept 1 on Sina Weibo, China's equivalent to Twitter, giving explanations of the new policy and answering questions from foreigners, said Yang Yang, an employee of the administration. Three police officers, who can interact with netizens in English, will be responsible for maintaining the micro blog, called Beijing Exit-Entry Police, from 9 am to 6 pm on weekdays, she said. "I hope the micro blog will feature various languages in the near future so more foreign applicants can be served," she added.

China will not ‘shy away’ from South China Sea row, says foreign minister (By Agence France-Presse in Beijing) Chinese Foreign Minister Wang Yi addresses the opening session of the Asean-China Foreign Ministers meeting at the Diaoyutai State Guesthouse in Beijing on Thursday. Beijing will “not shy away from problems” in disputed Asian waters, its foreign minister said on Thursday at a meeting between China and Southeast Asian countries. China claims nearly all the South China Sea, even waters approaching the coasts of neighbouring countries, several of them members of the Association of Southeast Asian Nations (Asean), and has been increasingly assertive in promoting its claims. The sea is strategically important, with several vital shipping routes passing through it, and is believed to be rich in resources. At a meeting with Asean foreign ministers in the Chinese capital, Wang Yi said: “We did not shy away from problems that exist. “Currently the South China Sea situation is stable and when we look at other places in world, we should dearly cherish it.” Asean has been trying for more than a decade to secure agreement from China on a legally binding code of conduct. China has refused to upgrade a 2002 “declaration of conduct” into a legally binding code, wary of giving any concessions that may weaken its claim and preferring instead to negotiate individually with each country. Further meetings on the issue are planned for next month and in December. Thai Foreign Minister Surapong Tovichakchaikul said Asean looked forward to “constructive and substantive” discussions with China.

China warns against Syria attacks as US and Britain debate air strikes (By Agencies in Beijing) China says military intervention in the crisis would only worsen turmoil in Middle East - Chinese state media warned the West against strikes on Syria on Thursday as momentum mounted for President Bashar al-Assad’s regime to be punished over an alleged chemical weapons attack. In an editorial headed “No excuse for strikes”, the state-run China Daily said the US and its Western allies were “acting as judge, jury and executioner”. “Any military intervention into Syria would have dire consequences for regional security and violate the norms governing international relations,” it said, adding such a move “will only exacerbate the crisis and could have unforeseen and unwelcome consequences”. Making a comparison with the war in Iraq, it said the international community should not allow “itself to be led by the nose by US intelligence, which after all was responsible for claiming Saddam Hussein had weapons of mass destruction”. The foreign ministry has advised any Chinese citizens in Syria to leave as soon as possible, and recent media reports from China's First Financial Daily have revealed that Chinese entrepreneurs and businessmen working in Syria have begun pulling out of the country. A spokesperson for the Chinese embassy in Syria surnamed Feng told First Financial Daily reporters that major Chinese-funded enterprises remaining in Syria were few, and most would "soon withdaw or reduce staff". In New York, Britain pushed the other four veto-holding members of the UN Security Council to authorise military action against Syrian President Bashar al-Assad to protect Syrian civilians - a move certain to be blocked by Russia and, probably, China. The meeting ended without a decision. President Barack Obama said on Wednesday he had not yet signed off on a plan to strike Syria, although his administration is working with allies including the UK and France, which also have aircraft and ships armed with cruise missiles, to reach agreement on limited action against Syria after concluding that Assad's regime used chemical weapons against civilians. Political uproar in London, meanwhile, cast doubt on whether Britain will join American military action to punish President Bashar al-Assad’s regime for a chemical weapons attack, should the response take place before next week. China is a veto-wielding permanent member of the UN Security Council, but the US has already said a proposed UN resolution that could have given an assault a legal foundation was going nowhere, blaming Russia. The United States and its allies say a UN veto would not stop them. Western diplomats called the proposed resolution a manoeuvre to isolate Moscow and rally a coalition behind air strikes. In an unsigned commentary, the Global Times, which is close to the ruling Communist Party, added that Washington lacked “a clear political end goal”. “Citing ‘moral obscenity’ as an excuse to gear up for military action seems rash and hasty,” it said. If strikes do take place, it added that “it is necessary for Russia and Iran to consider providing direct military aid” to Assad’s government. Beijing has called for a “cautious” approach to the crisis, with Foreign Minister Wang Yi backing a UN investigation to “find out the truth as soon as possible”. All parties “should avoid interfering in the investigation work or prejudging the results of the probes”, he told the official Xinhua news agency Wednesday. Beijing has said that it opposes intervention in other countries’ internal affairs and has previously attempted to block moves leading to military action in overseas conflict. China’s foreign minister urged restraint in the growing tensions over Syria, saying any military intervention in the crisis would only worsen turmoil in the Middle East. President Barack Obama vowed on Wednesday that the Syrian government would face “international consequences” for last week’s deadly chemical attack, but made clear any military response would be limited to avoid dragging the United States into another war in the Middle East. Chinese Foreign Minister Wang Yi said military action would not help, but also repeated that China opposed anyone using chemical weapons. “A political resolution has, from the very beginning, been the only way out for the Syrian issue,” Wang said in a statement on the ministry’s website. There should be no rush to prejudge the findings of a UN team currently in Syria to investigate the claims chemical weapons were used. “China calls on all sides to exercise restraint and remain calm,” Wang said. Moscow and Beijing have both vetoed previous Western efforts to impose UN penalties on Assad, although China has been keen to show it is not taking sides and has urged the Syrian government to talk to the opposition.

Chinese passengers anger airline staff by refusing to hand over in-flight tableware (By Chris Luo chris.luo@scmp.com) Media said a group of Chinese tourists attempted to keep the steel tableware provided by airline crew when they were on an airplane. In the latest controversy involving Chinese tourists - a group of mainland travellers have upset Singapore Airlines staff by refusing to hand over 30 sets of stainless steel tableware during a recent flight, Chinese media reported. It was only after repeated warnings from a tour guide that these passengers agreed to hand them back to flight attendants. The Chinese passengers were on a tour of Singapore, Malaysia, and Thailand. While onboard the Singapore Airlines flight, they had intended to keep the stainless steel knives and forks provided during a meal, the Qianjiang Evening News reported on Tuesday. The report cited a tourist guide - but did not say exactly when the incident occurred. It said the tourists were mainly from a small town in Zhejiang province. The flight attendants told the tourists the stainless steel tableware could not be kept because it was going to be re-used - unlike plastic disposable items. But the tourists refused to hand them over. The tourists explained that relatives who had flown with Singapore Airlines in the past told them they could keep the tableware, the report said. The astonished flight attendants then asked a Chinese tour guide for help. The affair finally ended when the guide told the tourists they were hurting China’s image abroad. “Stop hurting the reputation of Chinese people,’’ he said. The travellers then handed back the tableware, the report said. The incident follows a number of reports this year on bad behaviour overseas by Chinese travellers. This includes a widely reported incident where a Chinese boy carved his name on a 3,000-year old precious relic during a trip to Egypt. This prompted China’s deputy-premier Wang Yang to state publicly that Chinese tourists should improve their behaviour overseas. He said such bad behaviour included Chinese tourists speaking loudly in public, carving characters on ancient relics, and disobeying pedestrian traffic signs. Last year, US shopping website LivingSocial sponsored a poll which ranked the Chinese at second place, after Americans, as the “world’s worst tourists”. Some 15 per cent of respondents said Chinese tourists were the most obnoxious in the world.

Hong Kong*:  Aug 30  2013

Fanny Law opposes arbitrary screening for chief executive race in 2017 (By Gary Cheung gary.cheung@scmp.com) Executive councillor Fanny Law would like to see three candidates running for chief executive in 2017 under ‘one man, one vote’ system - Chief executive candidates who hold different views to Beijing should not be arbitrarily screened out of the election, an adviser to Chief Executive Leung Chun-ying says. Fanny Law Fan Chiu-fun, an executive councillor who was director of Leung's transitional office after he was elected last year, said she favoured a three-horse race when the "one man, one vote" system is introduced for the 2017 election. She told the South China Morning Post: "It would be practically impossible to screen out some candidates arbitrarily." In March, the chairman of the National People's Congress Law Committee, Qiao Xiaoyang , said the chief executive must not be confrontational towards the central government. Pan-democrats saw Qiao's comment as the clearest hint yet that a screening mechanism would be set up to bar candidates deemed unacceptable to Beijing from running in 2017. Law said many pan-democratic politicians were not confrontational towards Beijing. She said the nominating committee should assess the calibre of candidates based on criteria such as competence, public acceptance and ties with Beijing, before short-listing candidates for a one man, one vote ballot. Candidates should pledge allegiance to Beijing when they sought nominations for the race, she said. Last week, fellow executive councillor Regina Ip Lau Suk-yee told the Post that dividends brought by universal suffrage, such as a stronger mandate for the chief executive, would be lost if the electoral or nominating method was rigged to rule out certain candidates. Article 45 of the Basic Law calls for a "broadly representative" nominating committee to propose chief executive candidates for election "in accordance with democratic procedures". Law said she preferred having three candidates put forward by the nominating committee. "If there are more than three, it would be difficult for voters to understand their platforms," she said. Law agreed that Civic Party legislator Ronny Tong Ka-wah's proposal to let voters rank their choices for a leader, instead of picking the winner via a simple majority, was a feasible option. Under such a system, voters rank the candidates in order of preference. The person who secures more than half the votes wins; otherwise, the one with the fewest ballots is eliminated. The votes from the eliminated candidate are then added to the voters' second choices. This allocation process continues until one person receives more than half the votes. "It can guarantee the election of the most acceptable candidate," Law said. She agreed with a proposal to set up a platform comprising representatives from various sectors, similar to the Basic Law Consultative Committee in the 1980s, to forge consensus on political reform before the start of a public consultation.

Man sentenced to five weeks in jail after trying to intimidate police 男子試圖恐嚇香港警察被判入獄五週 (By Stuart Lau stuart.lau@scmp.com South China Morning Post) Gary Cheung Man-yui was sentenced in Tuen Mun Court on Tuesday for resisting a police officer acting in the execution of his duty. A construction worker who assembled a crowd in an effort to outnumber police officers looking into possible triad activities has been jailed for five weeks for resisting a police officer acting in the execution of his duty. The magistrate, while sentencing Gary Cheung Man-yui, who had a previous record of claiming to be a triad member – called for the public to respect the police. “Everybody ought to show respect for law enforcement officers,” Deputy Magistrate Tsoi Shun-cheong said in Tuen Mun Court on Tuesday. “No one is allowed to provoke or obstruct officers during their legitimate execution of duties. “If the legitimate execution of duties [by police officers] is subject to obstruction, the social peace and the lives and property of citizens would be at stake.” Tsoi’s plea comes amid an increasingly sharp split in public opinion over police practices. Earlier, Cheung, 28, had pleaded not guilty to one count of resisting a police officer acting in the execution of his duty. His conviction on the count on Tuesday marked his twelfth conviction, all part of a ciminal record that includes assault on a police officer, robbery and claiming to be a member of a triad society. The latest offence took place in February at 6am in Yuen Long, when Cheung refused to co-operate with two plain-clothes officers who suspected him and eight teenagers – one holding a 60cm-long knife – of ill intent. Cheung made a phone call to assemble a bigger crowd, forced the officers into car lanes and shouted using foul language, the court heard. He softened his tone only when armed police reinforcements arrived. Defence lawyers said Cheung was under the influence of alcohol and suffered “a sudden loss of control”. He was “reckless” and “remorseful”, the court heard in a background report. In June, co-defendant Lee Man-tai was sentenced to two months in jail after he pleaded guilty to two counts of assaulting police. He admitted pushing an officer in the chest and punching his arm, while attacking another in the face and lips. Lee swore at a magistrate, who immediately jailed him for one month, a sentence that was waived when he apologised.

Wharf profit slips 27pc despite visiting Rubber Duck (By SCMP Staffs) Wharf says the visiting giant Rubber Duck installation created ‘a media frenzy’. A giant rubber duck lifted pedestrian traffic at Harbour City, but wasn’t enough to stem a 27 per cent fall in interim net profit to HK$17.2 billion at The Wharf, which blamed the lower earnings on a fall in gains from property revaluations and a lack of one-off accounting gains. “The giant rubber duck float on Hong Kong’s Victoria Harbour, together with installations of rubber duck displays, attracted phenomenal foot traffic from locals and tourists alike, and created an international media frenzy,” the group said in a filing. Revenue at Harbour City, a major beneficiary from the increased foot traffic generated from the Rubber Duck, rose 15 per cent to HK$3.51 billion during the six months to June 30, and operating profit rose 12 per cent to HK$4.21 billion. But the group also said total revenue fell 18 per cent to HK$14.9 billion, which was “principally due to lower recognition of property sales both in Hong Kong and the mainland, but partly compensated by the double-digit increase in investment property revenue.” The company, whose activities span property, hotels, transport and warehousing, said revenue from its Hong Kong investment property portfolio rose 10 per cent to HK$4.82 billion, underpinned by robust retail sales and stable office rental reversions, particularly in areas like Harbour City and Times Square. In China, rental revenue was up 12 per cent to HK$536 million, benefiting from rising revenues from Shanghai Wheelock Square and Chengdu Times Outlet although renovations at Shanghai Times Square caused a temporary loss of revenue. Its hotel revenue rose by six per cent to HK$689 million, sustained by higher room rates, although its Gateway Hotel operation was also affected by renovation work. Logistics revenue rose three per cent to HK$1.56 billion, largely reflecting higher throughput in Hong Kong and in China by Modern Terminals, where the slowdown among major western markets acted as a brake on revenue. Global trade flows “continued to be blighted by the ongoing weakness of the United States and European economies”, the group said and Modern Terminals’ consolidated revenue increased to HK$1.50 billion but operating profit fell by 20 per cent to HK$456 million, it said, adding that this was largely due to one-off costs in Hong Kong caused by Kwai Tsing labour unrest. On a geographical basis, its total Hong Kong revenue fell 16.9 per cent to HK$8.68 billion, and China revenue was down 20.6 per cent to HK$6.19 billion. Its operating profit in Hong Kong fell 16.1 per cent to HK$4.90 billion, and its China operating profit slipped 51.3 per cent to HK$1.16 billion.

Career first, children later: Taiwanese women put their eggs on ice (By Reuters in Hsinchu) Women in Taiwan are increasingly opting to freeze their eggs at fertility clinics as they postpone marriage and motherhood - An employee extracts eggs in a lab at the e-Stork Reproductive Centre in Hsinchu. Caught between traditional expectations and career pressures, working women in Taiwan are increasingly opting to freeze their eggs at fertility clinics as they postpone marriage and motherhood. Women play a big part in Taiwan’s workforce, trailing only New Zealand and Australia for female employment among 14 countries in Asia, a recent report by MasterCard showed. A slowdown in the economy has made job security an even more pressing priority. That has been a factor in pushing the East Asian country’s average marriage age to 30 these days from 24 in the 1980s and in driving the interest in egg freezing. “I was not sure when my ovaries would start degenerating but I was sure that I would probably marry late and I was sure that I wanted to become a mother,” said Linn Kuo, 34, who chose to freeze her eggs three years ago. Kuo, a manager at Cisco System Taiwan, has a well-paid job that allows her to work from home. While her career has had a smooth trajectory, Kuo said she has not been as lucky in her love-life. After her mother died, she realised the importance of having the support of children in later life. “I already had my conclusion,” she said. “So I did some research and decided to freeze my eggs.” Lai Hsing-hua, the clinic director at e-Stork Reproduction Centre in the city of Hsinchu, said he realised the need for egg-freezing services when many patients asked for egg donors after a late marriage. “We thought if they had frozen their eggs earlier, maybe they wouldn’t need to use donated eggs,” he said. “That’s why we combined in-vitro fertilisation with the idea of prevention - prevent them from using others’ eggs after their fertility has deteriorated.” The clinic now gets more than 100 phone calls a month asking about egg freezing. Five years ago, it did just 20 of the procedures. It handled more than 70 cases in 2011, more than 50 last year and already more than 40 in the first six months of this year. The technology has matured and the embryo now has a high survival rate with egg freezing, Lai said. The service costs around 80,000 Taiwan dollars (HK$20,710) and the whole process of retrieving the egg takes about 20 minutes. Chen Fen-ling, a professor of social work at National Taipei University, said societal pressures were causing women to delay marrying and starting a family. “Married women are like candles burning at both ends,” she said. “We say that women work two jobs. They make money with a daytime job but, when they go back home, they take care of their children and parents-in-law. This pressure often makes women hesitate when making the decision about marriage.” Those realities about career, marriage and motherhood are reflected in a woefully low birthrate. Taiwan is tied with Hong Kong in third-last place globally in terms of the average number of children born per woman, just above Macau and Singapore, the CIA World Factbook says.

Hospital chief defends suspension of top surgeon (By Lai Ying-kit yingkit.lai@scmp.com) Dr Fung Hong, chief executive of Prince of Wales Hospital. A hospital chief on Tuesday defended the decision to suspend a veteran heart surgeon over concerns about his operating technique, saying the hospital could not afford to risk the health of any new patients. Dr Fung Hong, chief executive of Prince of Wales Hospital, said 11 serious complications occurred in patients on whom Professor Yu Cheuk-man operated last year. The operations were all considered high-risk. Four of the 11 patients eventually died, Fung told local radio. The 11 cases in a row with technical problems made us really worried. “The 11 cases in a row with technical problems made us really worried,” he said. “We couldn’t afford to see [more such cases],” Fung said. Fung also said Yu, a former head of cardiology of the hospital, had not fully trained for two types of high-risk operations he performed, but instead approved himself to perform them. Yu has 23 years of experience and is also assistant dean of Chinese University’s faculty of medicine. Fung said Yu’s suspension came after seven other doctors in an unprecedented move complained about the standard of operations performed by Yu. He rejected their claims saying they were part of a “power struggle” among doctors. But “there are real concerns about his operations,” Fung said. An investigation is being carried out by local and foreign experts who will look into Yu’s operational standards and work records, including surgical data. Yu earlier said the handling of the complaints levelled against him deviated severely from usual hospital and international practice, and it was improper to suspend him before any investigation was completed. He said the mortality rate of his patients cited earlier by the hospital was misleading.

Mainland firms snap up Hong Kong assets (By Oswald Chan oswald@chinadailyhk.com) Hong Kong has seen an expansion of investment and acquisitions in sectors such as retail, property and banking, reports Oswald Chan. While some Hong Kong-based blue-chip companies are selling their local business assets, a spate of mainland enterprises are expanding into the city's retail, property and banking sectors in search of business diversification. Mainland-based retail and beer conglomerate China Resources Enterprise Ltd confirmed it has submitted a bid for ParknShop, tycoon Li Ka-shing's Hong Kong supermarket chain, at a "reasonable price". CRE said it may partner with United Kingdom-based Tesco PLC on the purchase. Mainland-based retail and beer conglomerate China Resources Enterprise Ltd confirmed at a July 21 news conference that it has submitted a bid for tycoon Li Ka-shing's Hong Kong supermarket chain at a "reasonable price". CRE Chief Financial Officer Frank Lai added that CRE may partner with United Kingdom-based grocery chain Tesco PLC to bid for Hutchison Whampoa's ParknShop supermarket chain. CRE said that it may raise debt and does not rule out selling "non-core" assets to fund the ParknShop purchase. The sale of the local supermarket grocery chain will fetch an estimated $3 billion to $4 billion. In the property sector, mainland property developers have become more aggressive when bidding for land parcels in Hong Kong since 2012. China Overseas Land and Investment Ltd successfully grabbed two land parcels in the Kai Tak region, whereas the Hong Kong government specified that property developers can sell the residential flats built on those two parcels only to Hong Kong permanent residents. Mainland flagship property developer China Vanke Co, in cooperation with Hong Kong blue-chip developer New World Development, also successfully bid for a land parcel in Tsuen Wan early this year. Vanke said that its interests in the Tsuen Wan parcel will be injected into its locally listed subsidiary, Vanke Property Overseas. In the banking sector, mainland business conglomerate Yuexiu Property Co Ltd was reported as one of the bidders for the Hong Kong-based Chong Hing Bank. The mainland companies are seizing the opportunities to "go out" since the financial crisis of 2008. Externally, developed and developing economies have a huge demand for overseas capital, making overseas enterprises more receptive to Chinese acquisitions. Internally, the need to acquire markets, resources, technologies and brands as well as to slash costs require Chinese enterprises to "go out" on a larger scale. However, the overseas expansion trajectory is never easy. External challenges stem from rising overseas investment protectionism and increasing global investment market risks. Internal challenges emerge from mainland enterprises' scarcity of international management experience, inadequate assessment of the global investment environment, and a lack of international talent. Due to the numerous obstacles the mainland faces when expanding overseas, mainland companies may now find Hong Kong to be an attractive springboard. According to China CITIC Bank International Ltd, Hong Kong plays the irreplaceable role of providing a bridge for "going out" Chinese firms. This is because Hong Kong practices a high degree of openness and freedom in its investment policies, and has low capital controls, low taxes and a wealth of professional-services talent. "The mainland enterprises should further leverage off this bridging role of Hong Kong for their large-scale ‘going-out'," China CITIC Bank International Chief Economist Liao Qun said. "Meanwhile, Hong Kong should enhance its role as the bridge, steer clear of negative elements that are unfavorable to the city's economic development, and become more open, free and efficient," Liao added. Daniel Poon, the Hong Kong Trade Development Council's principal economist, also was optimistic about the benefit of Hong Kong to mainland businesses. "With elegant historical juxtaposition, Hong Kong has moved from being solely a gateway for foreign investment in China to also being a springboard for China's investment in the rest of the world," he said. Many foreign investment enterprises are still large State-owned enterprises from the mainland, but the number of private enterprises is steadily increasing. The Hong Kong government said the mainland was the most important source of direct investment in Hong Kong. The majority of the stock of investment was related to service industries, including investment and holding, real estate, professional and business services; banking; and import/export, wholesale and retail trades. The HKTDC figure shows that the mainland's cumulative investment in Hong Kong amounted to $261.5 billion at the end of 2011, accounting for 61.6 percent of the mainland's total outward FDI. Because of the international business environment of Hong Kong, the city is a highly attractive market for foreign direct investment. Hong Kong's global FDI inflows ranked third in 2012 ($75 billion), after the United States ($167.6 billion) and the Chinese mainland ($121.1 billion), according to the UNCTAD World Investment Report 2013. The mainland is poised for further overseas business expansion in the future as the country's enterprises still have a huge appetite for overseas technology, management skills and brand acquisitions. According to China CITIC Bank International, the mainland's outbound FDI will have a compound annual growth rate of over 20 percent in the next five years, subsequently reaching more than $200 billion in 2017.

 China*:  Aug 30  2013

The Bo Xilai playbook (By Richard Harris) Richard Harris says Bo Xilai's performance in court was that of a consummate politician who understood attack was his best defence, and gave his all to discredit testimony against him - The Bo Xilai trial saw the most effective public defence by a politician of his actions since US president Bill Clinton faced a grand jury over the Monica Lewinsky scandal, casually sipping a diet Coke. Bo, like Clinton a highly experienced and intelligent politician, used every trick in the book, being alternately charming, selfish and ruthless - all basic lessons from the Senior Politician's Manual 101. Whether Bo is innocent or guilty is irrelevant; his spirited defence is a lesson in how to get out of a scrape, one that worked for elder statesman Clinton. The transcript details from the Jinan court may have been edited but they show enough of the raw politics to impress Machiavelli, if not a grand jury. The first rule of politics is that attack is the best form of defence; discredit the opposition. The prime prosecution evidence against Bo appeared to be witness-based and by attacking their independence and credibility, Bo sought to embarrass a lazy prosecution. He said the testimony of his wife, Gu Kailai, was "comical and ridiculous", described her as "mentally unstable", and questioned the "word of a convicted murderer". Xu Ming, a businessman close to him in Liaoning and who was alleged to have provided the family with gifts and foreign trips, was cross-examined by Bo himself. The court transcript described it as "confrontational" and Bo distanced himself, reasonably well, from most of the gifts, including a US$3.2 million French villa allegedly given to his family. Bo dismissed the testimony of Wang Zhenggang, a high official in the Liaoning provincial government, as "contradictory and irrational". The now wheelchair-bound Wang Lijun, his former police chief who was very close to Gu and the man who ran to the US consulate for cover when the Neil Haywood "suicide" turned out to be murder, was described as an "abominable liar", "two-faced" and "a man without morals". But the best invective was reserved for his lifelong friend Tang Xiaolin, who was described in such un-court-like language as a "crazy dog" and an "ugly person who sold his soul". A key politician's rule is to create distance between oneself and the guilty parties. Politicians are good at cosying up to success stories, such as sportsmen or astronauts and even better at distancing themselves from losers. So Bo testified that he had rarely met his wife since 2007. He admitted to an affair around 1999, after which Gu spent a lot of time abroad. He also claimed that Gu's business activities were not known to him, saying that Xu was "not his friend but hers". Separating two allies through the "divide and rule" tactic is another defence strategy to confuse witness evidence. Bo admitted slapping police chief Wang (Wang's testimony was that he was punched hard) because he was supportive of Gu and thought Wang was setting her up. Taking on an element of righteous anger is a good way of collecting sympathy for oneself at the expense of others. Perhaps the fundamental tool in the politician's armour is the ability to say, "I don't know". Former US senator Howard Baker defined this politician's rule during the investigation of the Watergate break-in as, "what did he know and when did he know it". There are several reports that Bo did not allow mobile phones around him, which encourages claims of ignorance; former president Richard Nixon, by contrast, recorded his conversations and was unable to deny some conversations. Bo used this tactic as a blanket defence against the family's apparent wealth by testifying that "Gu Kailai's income situation was very good", the implication being that she didn't need him. She had five law firm branch offices, and scholarships covering their son's education. "What reason did I have to worry about them enduring any hardship?" The amnesia defence of "I can't remember" is another oft-used weapon in the politician's arsenal and was used by Bo, who claimed in court that he didn't recall anything about his son, Bo Guagua's , US$130,000 African trip, which was allegedly covered by Xu. Bo also couldn't remember the gifts or much about the French villa. A good politician is respectful of authority. Attack must be balanced with an element of self-reflection or contrition. Providing generous compliments, or playing to the gallery, allows for a useful break in the tension. More than once, Bo complimented the prosecution, while in the same breath saying that he had no case to answer. Bo mentioned early in the trial the good physical treatment he had been given by investigators of the Central Commission for Discipline Inspection. He admitted "mistakes", on behalf of protecting his family, but said that he had done nothing criminal. He tugged at the heartstrings by saying that he was under mental pressure regarding his confessions - after having been offered "incentives". Good politicians praise those in authority, while attacking and passing the blame on to the vulnerable or already discredited. In politics, the heady mixture of power and money is attractive to many. But because of that, one is surrounded by enemies. Conflicts of interest and lapses of judgment leave politicians exposed to blackmail and accusations of abuse of power. Bo used his exceptional ability to take on the court with a shrewd knowledge of the tactics open to a politician on the defensive. His spirited defence shows an experienced politician at the top of his intellectual powers, albeit at the bottom of his political ones. Illuminating and entertaining as it was, it is unlikely to sway the judges. Richard Harris is chief executive of Port Shelter Investment Management and a former UK Conservative Party candidate, 1996-97. richardharris@portshelter.com

Top party meeting called as Bo Xilai trial ends (By Teddy Ng teddy.ng@scmp.com) Politburo's announcement of Central Committee meeting in November comes day after conclusion of dramatic Bo Xilai hearing - The Communist Party announced yesterday it will hold a keynote meeting in November to discuss deepening reforms, a day after wrapping up the trial against disgraced former Politburo member Bo Xilai. The decision to hold the third plenary session of the party's Central Committee in November was made at a Politburo meeting chaired by party general secretary Xi Jinping. During the meeting, party leaders vowed to further combat corruption and called for unity both inside and outside the party to push ahead with reforms. The third plenum is likely to indicate the new leadership's economic agenda for the next decade amid slowing growth. It will also give an indication of Xi's ability to make his mark on party policy. A statement issued after the Politburo meeting said deeper reforms were necessary to tackle the challenges facing the country and for sustainable economic development. It called for a thorough understanding of the difficulties of implementing reforms. Xi intends to end the heavy reliance on exports, credit and investment and move towards more consumer-driven growth. A statement released after the meeting said: "The reform and opening up can only be continued. It will never end." The third plenum of each party session has often been considered a major turning point in modern political history. The most famous such session was in 1978, when the second generation of leaders, led by Deng Xiaoping, turned against Maoist doctrine and made a commitment to market-oriented economic reform that eventually transformed the nation into the world's second largest economy. Deng Yuwen, a former deputy editor with Study Times, a key publication run by the Central Party School, said: "With the conclusion of the trial against Bo, the party leaders believe they should move ahead and tackle other important issues." But Deng said the plenary session was usually held in October. Postponing it to November may indicate that party leaders had still not reached consensus on key issues. The Politburo meeting approved a five-year plan to stamp out corruption and vowed that the campaign was an important political mission of the party. "Corruption is still very common, and the soil for breeding corruption is still here," the post-meeting statement said, adding that all cadres - regardless of rank - would be targeted. The meeting also approved a document on the reform of local governments and was briefed on preparations for a pilot free-trade zone in Shanghai. Former Chongqing party secretary Bo was charged with corruption and abuse of power at his sensational trial, which ended on Monday.

China sees no basis for talks with Japan over islands dispute (By Reuters in Beijing) A Japan Coast Guard boat and vessel sail as one of the disputed islands is pictured in the background, in the East China Sea. China sees no reason to conduct talks with Japan over their dispute about ownership of a group of uninhabited islands in the East China Sea, Chinese deputy foreign minister Li Baodong said on Tuesday. Li said Japan’s call for high-level talks was not genuine, but merely grandstanding. “A meeting between leaders is not simply for the sake of shaking hands and taking pictures, but to resolve problems,” said Li, speaking to reporters ahead of President Xi Jinping’s attendance at the G20 summit next week. “If Japan wants to arrange a meeting to resolve problems, they should stop with the empty talk and doing stuff for show.” Relations between the world’s second- and third-largest economies have been strained for months, largely because of the spat over the islands, known as the Senkaku in Japan and the Diaoyu in China. Japanese Prime Minister Shinzo Abe is keen to improve relations and has called for high-level dialogue with China, although he has rejected any conditions on talks and China has shown no inclination to even want talks. Moves by certain Japanese politicians to deny the country’s wartime past also do not help, he added. “Under these conditions, how can we organise the kind of leaders summit that Japan wants?” Li said. China reacted with fury earlier this month after Japan’s Abe sent an offering to a shrine for war dead, which also honours war criminals, while cabinet members visited it in person. China suffered under Japanese rule, with parts of the country occupied from the 1930s. Japanese leaders have apologised in the past but many in China doubt the sincerity of the apologies, partly because of contradictory remarks by politicians. “What Japan has to do now is show vision and courage, properly face up to history and take a proper attitude and real actions to get rid of the obstacles which exist for the healthy development of bilateral ties,” Li said.

China joins world anti-tax fraud effort (By Zhang Yuwei in New York yuweizhang@chinadailyusa.com) China will sign the tax assistance convention with the Organization for Economic Cooperation and Development (OECD) on Tuesday, becoming the last of the Group of 20 economies to join the major international tax convention. Chinese tax chief Wang Jun is scheduled to sign the convention in Paris on Tuesday, and it will become effective after three full calendar months following the day of ratification. The convention - entitled Multilateral Convention on Mutual Administrative Assistance in Tax Matters - provides a framework for administrative cooperation between more than 50 developed and developing countries in assessing and collecting taxes, with a focus on preventing tax avoidance and evasion. China's joining the group in ratifying the convention means the world's second-largest economy will participate "in global efforts to combat tax avoidance and evasion by cooperating with other states in the assessment and collection of taxes", according to OECD. Once the convention is in force in respect to China, the Chinese tax authorities will be able to ask their counterparts from the signatory countries for use of their records and vice versa. Steven Zhang, managing director at Fund Tax Services LLC in New York, said China's joining the group is "part of a global trend". "China's accession to the convention would increase the efficiency of Chinese tax authorities in combating potential tax avoidance and evasion by foreigners and foreign companies," said Zhang. Tax avoidance was also a priority set by global leaders, including the leaders from the G20 economies, to address the causes of the 2008 financial crisis and to help fight corruption - one of the major issues China's new leadership has shown resolve and confidence to tackle. Tax evasion and avoidance will be one of the main topics under discussion at the G20 summit in St Petersburg on Sept 5-6. "Governments worldwide are introducing legislation and standards to require taxpayers to provide greater transparency in their tax reporting and are stepping up cooperation in fighting tax avoidance across different jurisdictions," said Zhang. "Mounting pressure from governments and regulators has put management of global tax risk at the forefront of business and investment decisions," he added. Global Financial Integrity, a Washington-based non-profit research and advocacy organization, said the Chinese economy hemorrhaged $3.79 trillion in illicit financial outflows from 2000 through 2011. Of the roughly $2.83 trillion that flowed illicitly out of China from 2005 to 2011, they said, $595.8 billion wound up as cash deposits or financial assets - such as stocks, bonds, mutual funds, and derivatives -in tax havens. Figures released by China's State Administration of Taxation last month showed that anti-tax evasion efforts by the Chinese government generated an additional income of some $5.7 billion last year, nearly 30 times the amount in 2008. The convention was jointly developed by the OECD and the Council of Europe in 1988. In 2009, the agreement was updated to bring it into line with international standards on the exchange of information for tax purposes, and to open it for countries that were not members of the OECD or the Council of Europe to sign up for. More than 50 countries have either become signatories or have stated their intention to do so since the amendment of the convention.

Hong Kong*:  Aug 29  2013

MTR underlying profit rises 5.1pc, to beat market target (By Anita Lam Anita.lam@scmp.com) Rail operator cites sharp rise in rental income and boost in passenger numbers, with analysts likely to revise full-year profit forecasts - MTR Corp beat market expectations to post a 5.1 per cent rise in underlying profit of HK$4.25 billion for the first half on a jump in rental income and passenger numbers. Analysts, who were expecting the company to post lower profit because of weakening property development earnings, may revise their forecasts for full-year profit. Their focus is likely to shift to the rail operator's recurrent income and organic growth. With cash demand peaking next year as the group's five rail projects enter their final stages, the group said its net debt-equity ratio, which edged up 0.6 percentage point to 11.6 per cent, would continue to climb. Financial director Stephen Law said the group would not need to raise capital in the equity market. "Our cash flow remains strong and our borrowing cost is as low as 3.5 per cent," Law said. "We have room to raise our debt-equity ratio." Revenue from station advertising and shop leases in stations and MTR malls all saw double-digit growth in the six months to June. A sharp jump in rents for the duty-free shops at Lo Wu and Hung Hom stations from a recent renewal of contracts helped drive up station retail income by 40 per cent to HK$1.45 billion, offsetting a 14.7 per cent drop in profit from property development. Passenger numbers rose 3.6 per cent year on year on its rail and bus services, bringing total trips to 883.1 million in the first half. MTR's local rail lines posted a slightly higher increase than its cross-border services. While property development made up more than half of earnings in 2010, its contribution has declined in the past two years amid property cooling measures. MTR is expected to see record traffic growth from 2015 when five of its new rail projects - including a cross-border link that connects Hong Kong to the national high-speed rail network - come on stream. The company has just won a 2.08 billion yuan (HK$2.6 billion) development contract for a site above Beiyunhe station on Tianjin Metro Line 6. The site will house a residential-commercial complex. But analysts worry the company's rapid expansion on the mainland through its successful rail-plus-property model could expose it to greater financial risks. MTR will pay an interim dividend of 25 HK cents per share. Its shares closed 0.53 per cent higher at HK$28.55 yesterday.

Tenants in industrial building subdivided flats will get one-off subsidy (By Ng Kang-chung kc.ng@scmp.com) Needy families will now get one-off allowance after earlier being rejected on legal grounds - A Society for Community Organisation protest before the Commission on Poverty meeting demands subsidies for people living in industrial buildings. About 5,000 needy families living in illegally converted subdivided units in factory buildings can expect a one-off allowance of up to HK$10,000 under a policy U-turn that in effect asks officers to turn a blind eye to the unlawful alterations. The scheme was endorsed at a Commission on Poverty meeting yesterday where members were briefed on how a possible legal loophole could be used to make those tenants, who are otherwise denied, eligible for the living allowance, to be distributed under the government's Community Care Fund. They had earlier been deemed ineligible because people are not allowed to live in industrial buildings. But commission members in general were convinced that the U-turn was in line with the spirit of the fund, which is to help needy people who are not receiving public assistance or living in public rental housing. Chief Secretary Carrie Lam Cheng Yuet-ngor, who chairs the commission, maintained there was no question of an amnesty. "Fund officers will advise those families to find another place to move if it is found that they may be living in [illegally converted subdivided flats in industrial buildings]," Lam said. She maintained inspection and prosecution by the Buildings Department would continue. The cash allowance scheme will give needy families in inadequate housing payments of HK$3,500 to HK$10,000. It was endorsed by the commission last month but those in illegally converted industrial buildings were excluded because of legal concerns. Pressure groups argued this was unfair. "Even if the flats are illegally converted, the one who should be held responsible is the landlord, not his tenants," commission member and Community Care Fund task force chairman Dr Law Chi-kwong said. "So, we are convinced that the tenants should also be eligible for the allowance." But Polytechnic University political scientist Dr Chung Kim-wah argued that it could give a confusing message to the public. "On the one hand the government says it will not tolerate illegal building alterations. On the other hand it is giving money to those living there." Chung hoped the government would work out a long-term policy to regulate subdivided flats. There is no legal definition of a subdivided flat. Commonly it is used to describe cases where one flat is partitioned into two or more self-contained cubicles. Many of them are illegally converted. They are popular with needy families, especially those who are not eligible for public rental housing. Public concern arose after a fire in a Mong Kok building in November 2011 killed nine people. It had been subdivided into tiny rental dwellings.

 China*:  Aug 29  2013

Oil company executive latest to be investigated for graft (By Raymond Li raymond.li@scmp.com) Wang Yongchun, a vice president of state-owned China National Petroleum Corporation, is under investigation for corruption. Wang Yongchun, a deputy general manager of China National Petroleum Corporation (CNPC), is being investigated for "gross violation of party discipline", Xinhua reported yesterday citing the Central Discipline Inspection Commission, the Communist Party's top graft-busting body. The investigation targeting Wang, 53, who is also the general manager of Daqing Oilfield Company, is the latest of a slew of scandals to dog CNPC, the country's largest oil and gas company. The brief Xinhua report gave no details of the allegations against Wang. CNPC has yet to comment on the investigation of him for violating party discipline, usually a euphemism for corruption, but he was still ranked the number three deputy general manager on the firm's website. Wang spent nearly three decades in CNPC subsidiaries in the northeast before he was made one of the company's deputy general managers in April 2011. In November 2012 he was elected an alternate member of the party's Central Committee. CNPC was once a power base for Zhou Yongkang , a former member of the Standing Committee of the party's Politburo. The 71-year old Zhou, a party hardliner, rose through the ranks of the petroleum industry before becoming party secretary and general manager of CNPC in 1996. He retired last year. Several of Zhou's subordinates and former aides have been implicated in corruption or placed under Communist Party disciplinary investigation in Sichuan , another of Zhou's power bases. This has led to speculation that Zhou could become a target for the anti-corruption drive launched under the leadership of President Xi Jinping . Li Chuncheng, a former deputy party secretary in Sichuan, became the first senior official targeted in the anti-graft drive when the 56-year-old was placed under investigation for breaching party discipline in December 2012. Guo Yongxiang, a former deputy governor and chairman of the Sichuan Federation of Literary and Art circles, a non-governmental organisation, was taken into custody months later. In one of the more recent scandals hurting CNPC, Ling Shengjun, former general manager of the company's Dalian branch, was sacked over three major fires at the branch since July 2010. Wang became the latest senior official in the mainland's state-owned corporate sector to be investigated. Earlier this month, Xu Long was removed as general manager of China Mobile's Guangdong branch after being taken away by disciplinary officials for alleged violations of discipline. Xu is among about a dozen top executives at the telecoms giant investigated since former deputy chairman Zhang Chunjiang was sacked in December 2009 for corruption.

Hong Kong*:  Aug 28  2013

New lines put MTR cash levels under strain (By Anita Lam anita.lam@scmp.com) In the next two years, rail operator will have to shoulder expenses of up to HK$52.8b while waiting for fund flows from property projects - MTR's new rail projects are expected to strain the firm's cash position over the next two years, with a dearth of profit from property sales over the past 18 months compounding its predicament. Four analysts contacted by the South China Morning Post ahead of the company's interim results announcement today said they expected the underlying profit of the city's sole rail operator to fall between 3.5 per cent and 6.4 per cent to less than HK$4 billion in the first half. Meanwhile, the median estimate of 12 analysts polled by Bloomberg forecast the group's full-year earnings to decline 17.85 per cent year on year. While profit growth from the local transport business and its related commercial and rental income were expected to remain solid, the group's new lines - likely to boost the network's capacity by 25 per cent - will only begin contributing to MTR from early 2015. In the next two years, the group will have to shoulder expenses of up to HK$52.8 billion as the amount of works peak for its five new rail projects. "The group may risk heightening its net debt to equity ratio again like in 2007, if it needs to seek project financing or bank loans to bridge the funding gap," said Kenny Tang Sing-hing, general manager of securities and asset management of AMTD Financial planning. The group worked over the years to bring down its gearing ratio to 10.9 per cent last year from a high of 46.5 per cent before its merger with the Kowloon Canton Railway in 2007. Capital expenditure amounted to HK$11.13 billion last year, while the cash balance stood at HK$18.6 billion last December. Credit Suisse expected that pre-sales of flats would begin this year at two MTR developments - Lohas Park Phase 3 and Austin Station. But while they will provide the market a total of 2,224 flats, Benjamin Lo of Nomura Securities said sales proceeds from these projects might be booked as late as the second half of next year. "Lohas Park should receive its occupation permit next year, but Austin Station could wait a little longer," Lo said. While the outlook for this year remained dim, MTR is set to enter a new growth era in 2015 when four of its new domestic lines come into full service - two of them will include property development rights. The group has also been working hard to replicate its "rail plus property model" on the mainland. This month it won a site above the Beiyunhe station on Tianjin Metro Line 6. Together with its development above the Longhua station of Shenzhen Metro Line 4 and another project in Foshan still under negotiation, there will be three rail projects on the mainland using the model. Outside China, the group is also bidding on five projects in London and Sydney. Deputy chief executive Lincoln Leong has conceded the mainland will fuel the company's growth. "Before the merger, the total length of MTR's network was 91km, but our rail network in Beijing alone measures 63.4km, and that is just one city," he said. Twelve of the 15 analysts polled by Bloomberg posted an average target price of HK$31.97 for the company's shares in the next 12 months. Its shares rose 0.3 per cent to HK$28.40 on Friday.

Leung Chun-ying 'wrong choice' as Hong Kong's CE, says James Tien (By Joshua But joshua.but@scmp.com) Criticism by Liberal Party leader highlights split in pro-establishment camp over the chief executive's dismal job performance ratings - Chief Executive Leung Chun-ying is doing a worse job than his predecessors and the city will "go nowhere but down" if he continues to govern as he has in recent months, says Liberal Party leader James Tien Pei-chun. In a public outburst that underlined the rift in the pro-establishment camp, Tien also said Leung was the "wrong choice" for the top job. He added that the city would have been better off had rival candidate Henry Tang Ying-yen been elected in March last year. Tien supported Tang in his campaign. His remarks come amid repeated calls from Beijing for unity. But Tien blamed Leung for division within the camp. He also called for the formation of a coalition to help improve governance. "The so-called Leung camp is very small," he told ATV's Newsline yesterday. "Only a few executive councillors are from his camp. I don't think the ministers are all in the same boat … if you ask the lawmakers from the pro-establishment camp, I'm sure the majority will say 'I am not from the Leung camp'. "To be the chief executive, you have to accommodate more people in your camp, to share your power and authority from either the functional constituency or directly elected lawmakers," he added. "But he is not uniting the people of Hong Kong." Tien said the pro-establishment camp was not kept informed about what the government planned to do, and Leung's administration did not co-operate with Legco or its allies. "We represent a big group of people in Hong Kong. But we have no means of expressing our views on behalf of our voters," he said. Asked how he would rate Leung's performance, Tien said Tung Chee-hwa and Donald Tsang Yam-kuen - the two chief executives elected since the handover in 1997 - were "definitely" better than Leung. "He was the wrong choice. Tang was not a good choice, either. We hoped C.Y. would do better." Leung's approval rating plunged to a record low of 45.7 points out of 100 in a July poll. Tien was not confident Leung would see out his term. "I hope he can last but I am not confident that he will - just look at [his rating]," he said. "If Hong Kong is to go four more years under Leung's leadership as it stands, I think it will be pretty sad. Hong Kong will go nowhere but down." But Tien insisted he would not run for the top job himself in 2017. "I will be 70 and I think we need a leader, hopefully in his 50s, who is on the up," he said. Beijing officials, including Wang Guangya , director of the State Council's Hong Kong and Macau Affairs Office, have called for unity and support for Leung. ["I hope] the camp can unite and increase its fighting strength and influence," Wang said in March.

 China*:  Aug 28  2013

Joint sea drill shows improved relations (By China Daily) The navies of China and the United States conducted their second joint counter-piracy exercise in the Gulf of Aden on Sunday. This sign of improved Sino-US military relations followed the return of Defense Minister Chang Wanquan from a visit to Washington last week. Chinese and US soldiers participate in the counter-piracy exercise on the missile destroyer "Harbin" of Chinese navy in the Gulf of Aden, Aug 25, 2013. The Chinese and US navies conducted a joint counter-piracy exercise in the Gulf of Aden on Saturday and Sunday. The Chinese naval contingent was taking part in escort missions before the two-day exercise, which started on Saturday. It was the 14th Chinese naval contingent to be deployed to the Gulf of Aden. Missile-equipped destroyers, supply ships, ship-based helicopters and task forces from both sides took part in the drill. Among them was the US navy’s escort destroyer USS Mason. The joint exercise for the first time included joint operations by special task forces and helicopter surveillance on maritime targets during the night. The joint exercise was aimed at strengthening exchanges and cooperation between the two militaries on the maintenance of safety of international waters, a Chinese officer said. In September last year, China and the US conducted their first joint anti-piracy drill, which lasted for five hours in the Gulf of Aden. China has also agreed to participate in the 2014 Rim of the Pacific Exercise, in a sign of its willingness to improve military ties that were often disrupted by US weapons sales to Taiwan.

Singapore PM starts official visit to China (By China Daily) Singapore's Prime Minister Lee Hsien Loong (R) and China's Premier Li Keqiang inspect honor guards during a welcome ceremony outside the Great Hall of the People in Beijing, Aug 26, 2013. 

Hong Kong*:  Aug 27  2013

Alibaba in stand-off with HKEx over Hong Kong IPO (By Ray Chan and Enoch Yiu) Hong Kong regulators will not grant exemptions to the share sale even as the internet giant threatens to turn to NY over management control plan - Jack Ma and the management own 10.4 per cent of Alibaba. Hong Kong stock market regulators will not grant any special exemptions to ensure a local share listing for mainland e-commerce giant Alibaba Group, sources with direct knowledge of the discussions told the South China Morning Post. Alibaba has piled pressure on Hong Kong Exchanges and Clearing (HKEx), which has seen share listings fall 28 per cent in the first half of 2013 from a year ago, by threatening to take the potentially US$15 billion deal to New York unless a controversial plan to cement management control in founder Jack Ma Yun's hands is accepted. If we want to introduce a dual shareholders structure, we would need to first do a public consultation, but at the moment we have no plan to do so. US listing rules allow a dual share structure that could grant Ma and Alibaba management the control they crave. Hong Kong rules do not. "There will be no exceptions," a top official at the Securities and Futures Commission (SFC), the ultimate approver of share listings in Hong Kong, told the Post on condition of anonymity. A source close to Alibaba said the firm neither wanted nor required a dual class structure. Instead, it is proposing to use existing rules on board-level appointments to allow the firm's senior management to maintain a partnership structure to nominate a majority of board candidates, on whom shareholders would then be allowed to vote. "The company is not asking the exchange to do anything special for it," said the source, who declined to be identified. "This solution would leave all shareholder rights intact." The internet giant, which is expected to list its shares before the end of this year, has more than 20 partners including Ma, his co-founders and senior executives. Ma and the management team own a combined 10.4 per cent stake in Alibaba. Japan's SoftBank and US internet giant Yahoo, which own more than 60 per cent of the firm's share, are not included in the partnership programme, which was established in 2009. A senior source at HKEx told the Post that the exchange would consider a scheme that did not seek to curtail the voting rights of shareholders. "At present, the major shareholders or management always have the right to nominate directors, which will be subject to shareholders' approval. As long as Alibaba could suggest that its nomination process would not affect shareholder protections, HKEx would consider it," the HKEx source said. Under Hong Kong's regulation, the SFC has the right to reject any listing applications and a source with the regulator told the Post that there would be no exemptions. Charles Li Xiaojia, the chief executive of HKEx, said after the results announcement of the exchange last week that the exchange put shareholder protection as its priority. "If we want to introduce a dual shareholders structure, we would need to first do a public consultation, but at the moment we have no plan to do so," Li said. "We would approve any listing application that has shareholder protection as its priority. Other markets may have different ways to do it and we would consider their practices, but at the end of the day, we would not sacrifice shareholder protection."

 China*:  Aug 27  2013

Chengdu visa-free policy to lure more tourists (By Huang Zhiling) A demonstration of face-changing skills during a Sichuan opera performance at the Temple of the Marquis of Wu in Chengdu. Performers change one mask to another in the blink of an eye, using secret techniques known only to themselves. Zhangyi is excited that his hometown, Chengdu, Sichuan province, will become the fourth Chinese city after Beijing, Shanghai and Guangzhou to adopt a 72-hour visa-free policy. "I'm sure it will bring more overseas tourists to Chengdu," said Zhu, deputy curator of the Jinsha Site Museum. The policy, which will go into effect on Sept 1, will allow transit passengers from 45 countries who have valid visas and a flight ticket to a third country to stay up to 72 hours in Chengdu and cities and counties under its administration, according to the city government. Those who overstay their visit may be fined, detained or deported from the country, said Chen Yongzhi, deputy chief of Sichuan Armed Police Frontier Corps. When the policy is implemented, Chengdu will be the first city in an inland region of China to adopt the visa-free plan. With a population of more than 14 million, the provincial capital of Sichuan received 122 million tourists last year. Around 1.6 million came from abroad, according to government figures. Tourists have frequently visited the Jinsha Site Museum, located next to the archaeological site of the same name, since it opened in 2007. "Each year, about 1.2 million people visit our museum. But it is regrettable that fewer than 100,000 are from overseas," Zhu said. In comparison, Hangzhou, the capital of Zhejiang province with a population of 8.8 million, received more than 3.3 million overseas tourists in 2012. Robert Barsby, a British hotelier in Chengdu, said the visa-free policy will enhance the city's international image. He said it would be convenient for international business travelers to visit the city or access it in transit. Shuangliu International Airport in Chengdu, the fourth largest in China in terms of passenger traffic, has 22 direct flights to 16 countries and regions around the world. The number of people passing through China via the airport is expected to surpass 2.3 million at the end of this year. Luo Xiaohu, an officer with the Sichuan Armed Police Frontier Corps, said a major reason why Chengdu was chosen as the first city in an inland region to adopt the visa-free policy is because it has more international flights than any other city in central and western China. Several foreign general managers at international five-star hotels in the city said they believe the policy may boost the hospitality industry, which has been sluggish since the country's new leadership discouraged government officials from extravagant galas and events this year. Through the first half of this year, six international five-star hotels in the city, including Shangri-La, Regal Master and the Kempinski, lost 60 million yuan ($9.77 million) in room bookings, compared with the same period last year, said Barsby, general manager of the Regal Master Hotel in Chengdu, who has lived in China for almost 20 years. 
Suggested itinerary - Must-see sights during 72 hours in Chengdu:
Day 1
• Chengdu Research Base of Giant Panda Breeding
On any given day, more foreigners might be found at the center in the northern suburbs of Chengdu than in the entire city.
"Each year, 300,000 foreign tourists visit our base," said Pu Anning, chief of the center's general office.
The base was established in a mountainous area in March 1987 with six sick and hungry pandas. It currently has 121 pandas.
The bamboo forests make the base an ideal site for a half-day visit, which starts at 7:30 am when pandas usually stay outside their dens, eating bamboo and frolicking.
• Temple of the Marquis of Wu
In the afternoon, history buffs can visit the site built for Zhuge Liang (AD 181-234), prime minister of the Shu Kingdom during the Three Kingdoms period (AD 220-280) and now the personification of loyalty and wisdom in China.
The temple is the most widely known of about 100 ancient sites in China related to the Three Kingdoms period.
Statues of civil officials and generals of the Shu Kingdom, most of whom are household names in Chinese culture, are on display at the museum.
• Jinli Street
After visiting the temple, tourists can stroll this nearby street built in the traditional Chinese architectural style. It offers a variety of local snacks ranging from noodles to dumplings priced from 5 yuan to 10 yuan.
Day 2
• Jinsha Site Museum
On Feb 8, 2001, workers at an apartment construction site in Jinsha in western Chengdu found pieces of ivory and jade in a pile of mud.
Since then, archaeologists have excavated more than 5,000 relics, including items of gold, jade, bronze and stoneware, as well as a metric ton of intact elephant tusks.
Many of the relics are on display in the Jinsha Site Museum.
• Du Fu Thatched Cottage Museum
Upon entering the gardenlike museum near Jinsha, visitors stand on what is considered sacred land in historical Chinese literature.
The museum is dedicated to Du Fu (AD 712-770), a poet who lived in the transitional period coinciding with the decline of the Tang Dynasty (AD 618-907).
Du, who experienced a great deal of hardship, used poems to record social ills, national conflict and chaos caused by war and daily suffering.
About 240 of his 1,400-plus poems Chinese people read today were written in Chengdu when he lived in the thatched cottage for nearly four years.
Near the northern entrance of the museum is a restaurant serving the famous spicy dish of mapo tofu, first served in 1862.
Day 3
• Dujiangyan
For the third and final day, visitors can visit this city under the administration of Chengdu.
The Dujiangyan Irrigation Project is the world's only preserved water conservation project that doesn't have a dam. The project was included in the UNESCO's World Cultural Heritage List in 2000.

The hidden reefs in China-US relations (By Chen Weihua) US Defense Secretary Chuck Hagel and an honor guard welcome China's Minister of National Defense Chang Wanquan at the Pentagon in Washington. While China and the US seek to elevate their military ties, some old stumbling blocks still stand in the way and new issues keep rising, Chen Weihua reports from Washington. When Chinese Defense Minister Chang Wanquan was greeted with a smile and a warm handshake from his US counterpart, Chuck Hagel, along with an honor guard and marching band outside the Pentagon entrance facing the Washington Monument across the Potomac River, the mood did not mirror the rivalry between the two militaries that has often appeared in the press. Rather, it felt more like a welcome of a friendly ally. Their talk on Monday, which was originally scheduled for 90 minutes, was extended by another one and one-half hours because, as one aide later said, the two new defense chiefs felt they had so much to talk about. At a news press conference after the meeting, the two both expressed a strong willingness to increase military exchanges and cooperation to reflect the spirit of the Sunnylands summit, referring to the meeting in early June between President Xi Jinping and President Barack Obama in California when they vowed to defy the historical precedents of clashes between an existing super power and a rising power. Chang summarized the talks by referring to a "five-point consensus" agreed to by the two sides at the meeting: that a bilateral military tie is an important part of relations between the two nations; a boosting of high-level visits by both countries; that both sides shoulder a heavy responsibility in ensuring peace and stability in the Asia-Pacific region; cooperation in non-traditional areas such as humanitarian assistance and cooperation in military archives. Hagel said he "enthusiastically accepted" Chang's invitation to visit China next year. In addition, other senior military leaders from both sides will also exchange visits. The Chinese People's Liberation Army (PLA) will for the first time participate in the 2014 Rim of the Pacific Exercise, the world's largest naval exercise, in Hawaii. However, for the Chinese, the warming-up of a bilateral military relationship may not sail smoothly if some hidden rocks are not removed. Taiwan sales - Guan Youfei, director of the foreign affairs office of the Ministry of Defense, said the Chinese have expressed deep concern over three major stumbling blocks: US arms sales to Taiwan, air and naval surveillance off the Chinese coast and a host of US laws that bar military cooperation and exchange with China. To Chinese on the mainland, the continuous and expanding US arms sales to Taiwan is simply unacceptable, especially as the relationship across the straits has turned better than ever since 2008 when Ma Ying-jeou became the leader in Taiwan. While the US sold arms amounting to only a few billion dollars in the first of the past three decades, the last two decades saw sales balloon to $27 billion from $19 billion, according to Guan. China announced it was suspending military contacts with in the wake of the US arms sales to Taiwan in 2010 and 2011.

Hong Kong*:  Aug 23 - 26  2013

Democrats apologise for Cathay junket (By Tony Cheung and Joshua But) It wasn’t appropriate for lawmakers to accept the free trip, says party’s central committee, and chief Emily Lau says sorry to the public - Eight lawmakers across the political spectrum were among this group on the trip to France. The Democratic Party considers its lawmakers' acceptance of Cathay Pacific's free trip to France as inappropriate and has apologised to the public. Its central committee said last night that the party had a guideline which stated that committee members and councillors should not accept any overly generous offers. If this happened to Leung Chun-ying or [the development minister] Paul Chan Mo-po, they would certainly have been given a hard time - It had yet to decide on any follow-up action, said party chairwoman Emily Lau Wai-hing, who made the apology. Some of the lawmakers who went on the junket yesterday meanwhile promised to remain "unbiased" in doing their job. They gave this vow after confirming that during the six-day trip Cathay management had reiterated its opposition to potential rival Jetstar Hong Kong's bid for an air operator's licence. Four out of the eight holidaying lawmakers had yet to declare their interests on the Legislative Council's website yesterday. Some lawmakers were also found to have deviated from Cathay's itinerary, which was mainly to the Airbus plant in Toulouse. Elizabeth Quat, of the Democratic Alliance for the Betterment and Progress of Hong Kong, went to Frankfurt with her husband about a week before the tour and insurance sector representative Chan Kin-por went to Britain with his wife on business before joining the group in France. Democrats Albert Ho Chun-yan, James To Kun-sun and their wives also flew to Paris last Thursday, a day earlier than the scheduled visit. Cathay Pacific paid for the Chans' detours to London and Quat's flight to Frankfurt, but it was unsure whether Quat paid for her flights to join her colleagues in France. All eight lawmakers travelled with a family member, either a spouse or child. They were criticised because there could be a potential conflict of interest. Executive Council member Cheng Yiu-tong was also among the delegates, but he could not be reached for comment yesterday. The Liberal Party's Felix Chung Kwok-pan confirmed that while they were in Toulouse, a Cathay director reiterated the company's stance against an application by Jetstar, a low-cost airline venture between Shun Tak Holdings, Qantas Airways and China Eastern Airlines, for an air operator's licence. Cathay believed a new licence should go to a local company, it was understood. "We knew these issues before the journey, so it won't affect our judgment," Chung said. Albert Ho also said that "the authority to [approve air operator's] licences lies solely with the government". He said lawmakers would not be giving Cathay any favours just because they were treated by the company. Cathay Pacific said in a statement that for years, it had been the airline's practice to invite guests on aircraft delivery trips and new destination launches. "New airline licence applications go through the government, not Legco," it said. Some Hongkongers were not satisfied with the lawmakers' explanation. On RTHK's phone-in programme Talkabout, a caller criticised the three pan-democratic delegates for having double standards. "If this happened to Leung Chun-ying or [the development minister] Paul Chan Mo-po, they would certainly have been given a hard time," he said.

 China*:  Aug 23 - 26  2013

Defiant Bo Xilai claims he was coerced into graft confession (By Keith Zhai in Jinan, Shandong keith.zhai@scmp.com) Former Chongqing party chief dominates first day of biggest political trial in decades, saying he was forced into false corruption confession - Bo Xilai is flanked by two guards as he is charged at Jinan Intermediate People's Court with the eyes of the world upon him. Bo Xilai put up a vigorous defence yesterday against corruption charges against him in China's biggest political trial in decades, saying he was coerced into making a false confession to graft investigators. The disgraced princeling - once considered the country's most powerful rising politician - was making his first public appearance in 18 months. His dramatic downfall and the magnitude of the case made yesterday's trial a global event with reporters from around the world flocking to the city of Jinan in Shandong. Bo, 64, in an open-necked white shirt and casual black trousers, looked tired and his hair was a little greyer around the temples. But the flamboyant former Politburo member and Chongqing party boss had lost none of his flair, strongly contesting charges that through wife Gu Kailai and son Bo Guagua he had amassed more than 20 million yuan (HK$25 million) in bribes and illicit assets. While the trial was not broadcast live, the court released frequent and detailed updates through its official microblogs. Bo was accused of bribery, embezzlement and abuse of power. Unlike his jailed wife, who quickly admitted murdering British businessman Neil Heywood, Bo opposed the pre-trial confession he gave to the investigators. He said he was pressurised by the graft officials, who asked him leading questions to extract a confession against his will. "I'm not a perfect man and I'm not always strong-willed," Bo said in a transcript released by Jinan Intermediate People's Court. "But I want to speak out the truth of my charges." Prosecutors focused on the allegations against Bo during his time as the leader in Dalian. They rolled out testimony from Bo's former business associates Tang Xiaolin and Xu Ming and his wife Gu. All three said Bo accepted bribes or told them to divert public money into his personal accounts. Bo dismissed the accusations with disdain. He called Tang a "lying mad dog" and said Gu's testimony was "comical and ridiculous". Bo admitted he and Gu had grown apart since 2007. But the disgraced politician reserved the worst of his wrath for Xu, the Dalian businessman thought to be his "money man". Bo showered Xu with sharp questions during the crossexamination session. The court official in the after-trial press conference described the exchange as "confrontational". Bo dominated the trial and almost appeared to be enjoying what could be his last public show. Some observers were surprised by how the hearing differed from other well-choreographed public trials. But a person with direct knowledge of the case said it showed the new leadership was prepared to take a hard stance. "As long as the case can be concluded before the meeting of the third plenum of the Central Committee, it will be a good ending for the leaders," he said. Five of Bo's family members - including his brother Bo Xiyong and elder son Li Wangzhi - attended the trial. But his younger son Bo Guagua did not appear.His elder son Li gave a statement to the Post last night, saying he was proud of his father. "He faced tremendous pressure but he still held up to his belief. History will prove the truth," he said. The trial continues today.

Chengdu visa-free policy to lure more tourists (By Huang Zhiling) Zhu Zhangyi is excited that his hometown, Chengdu, Sichuan province, will become the fourth Chinese city after Beijing, Shanghai and Guangzhou to adopt a 72-hour visa-free policy. "I'm sure it will bring more overseas tourists to Chengdu," said Zhu, deputy curator of the Jinsha Site Museum. The policy, which will go into effect on Sept 1, will allow transit passengers from 45 countries who have valid visas and a flight ticket to a third country to stay up to 72 hours in Chengdu and cities and counties under its administration, according to the city government. Those who overstay their visit may be fined, detained or deported from the country, said Chen Yongzhi, deputy chief of Sichuan Armed Police Frontier Corps. When the policy is implemented, Chengdu will be the first city in an inland region of China to adopt the visa-free plan. With a population of more than 14 million, the provincial capital of Sichuan received 122 million tourists last year. Around 1.6 million came from abroad, according to government figures. Tourists have frequently visited the Jinsha Site Museum, located next to the archaeological site of the same name, since it opened in 2007. "Each year, about 1.2 million people visit our museum. But it is regrettable that fewer than 100,000 are from overseas," Zhu said. In comparison, Hangzhou, the capital of Zhejiang province with a population of 8.8 million, received more than 3.3 million overseas tourists in 2012. Robert Barsby, a British hotelier in Chengdu, said the visa-free policy will enhance the city's international image. He said it would be convenient for international business travelers to visit the city or access it in transit. Shuangliu International Airport in Chengdu, the fourth largest in China in terms of passenger traffic, has 22 direct flights to 16 countries and regions around the world. The number of people passing through China via the airport is expected to surpass 2.3 million at the end of this year. Luo Xiaohu, an officer with the Sichuan Armed Police Frontier Corps, said a major reason why Chengdu was chosen as the first city in an inland region to adopt the visa-free policy is because it has more international flights than any other city in central and western China. Several foreign general managers at international five-star hotels in the city said they believe the policy may boost the hospitality industry, which has been sluggish since the country's new leadership discouraged government officials from extravagant galas and events this year. Through the first half of this year, six international five-star hotels in the city, including Shangri-La, Regal Master and the Kempinski, lost 60 million yuan ($9.77 million) in room bookings, compared with the same period last year, said Barsby, general manager of the Regal Master Hotel in Chengdu, who has lived in China for almost 20 years.

US senator's comments draw fire (By ZHANG YUNBI) Ex-presidential hopeful McCain calls Diaoyu Islands 'Japanese' Beijing on Thursday denounced remarks of US Senator John McCain as "irresponsible" after he said China's Diaoyu Islands are "Japanese territory". The Republican lawmaker is "muddying the waters" at a time when tensions over the islands standoff between China and Japan are running high, and he is making trouble for Washington on the issue, observers said. McCain said in Tokyo on Wednesday that "the Chinese are violating fundamental rights that Japan has" to the islands. Nations feeling increasingly threatened by China's maritime presence "need to act in closer coordination with each other", the said. Foreign Ministry spokesman Hong Lei rebutted such comments. "The Diaoyu Islands have been China's territory since ancient times, and any individual's attempt to deny the facts will be in vain," he told China Daily on Thursday. "We urge the US lawmaker to stop making irresponsible remarks and avoid further complicating related issues and the regional situation." Ruan Zongze, vice-president of the China Institute of International Studies, said McCain is "not entitled" to speak on behalf of the US government and his remarks will embarrass Washington. Kyodo commented that McCain's remarks deviate from the official US stance that the United States does not take a position on the sovereignty of the islands. "Washington previously has clarified its position in this regard, and seems to have no plan to change its vagueness on it," Ruan said. On Wednesday, McCain called on Japanese Prime Minister Shinzo Abe, Defense Minister Itsunori Onodera and Foreign Minister Fumio Kishida to boost the US-Japanese alliance. When meeting with Onodera, McCain said he is confident that his colleagues in the US Senate support Japan's position on the islands, Jiji Press news agency reported. Onodera said Tokyo plans to continue its surveillance of Chinese government ship patrols around the Diaoyu Islands. Da Zhigang, a Japanese studies researcher at Heilongjiang Provincial Academy of Social Sciences, said McCain is trying to "please some of the Japanese and attract more of the media limelight". Such US politicians are "not expecting either a peaceful resolution of the islands dispute or a stable Asia-Pacific region", he said. McCain also voiced support for the Japanese Cabinet's plan to revise their country's pacifist Constitution, a move aimed at lifting restrictions on Japan's armed forces. Some of Tokyo's policymakers have been trying to deny the country's militarist past in World War II, and Japan is seeking an assertive military buildup, which has "worried international players, including the US", said Xu Dunxin, former vice-minister of foreign affairs. "If someday Japan goes off the peaceful path, I think even the US, its traditional ally, will not allow that to happen," said Xu, who also served as Chinese ambassador to Japan. McCain's remarks are sending a motivating signal to radical Japanese right-wing forces, and also "totally missing the bigger picture of the Sino-US relationship", Ruan said. The Sino-Japanese relationship was greatly strained after the Japanese government unilaterally announced the "nationalization" of the Diaoyu Islands in September.

Hong Kong*:  Aug 19 - 22  2013

Ho Lok-sang: voice of the 'silent majority' (By Stuart Lau stuart.lau@scmp.com) Lingnan University's Professor Ho Lok-sang has gone from idealistic student to defender of the political status quo - The pursuit of universal suffrage is subordinate to the rule of law, says a group of new opponents to Occupy Central, the civil disobedience movement planned for next summer in an attempt to force the government's hand on political reform. For the main advocate of this belief - Professor Ho Lok-sang, director of Lingnan University's centre for public policy studies - the social injustices facing Hong Kong are not sufficient to justify such a large-scale protest. "Hong Kong is not a tyranny; we do not have something like an oppression of minority groups," says Ho, one of six convenors of the newly formed anti-Occupy Central group Silent Majority for Hong Kong. "We have substantial equality of rights in Hong Kong, which should not be sacrificed in a fight for equal electoral rights. Our level of justice is significantly better than that of many other places, so the pursuit of democracy - though not ideal at present - is not a pressing issue." The group, which organisers claim has been joined by more than 40 academics and professionals, recently stole the media spotlight in the debate over Occupy Central. Just 10 days after its official formation, it has already raised the temperature of the debate, most prominently when the key convenor, journalist-turned-PR manager Robert Chow Yung, described Occupy Central as "evil" and his own causes as "good" while exchanging fire on a radio programme with Benny Tai Yiu-ting, the University of Hong Kong legal scholar planning the movement that is fraying the nerves of Beijing officials. But even Ho says he is uncomfortable hearing Chow's "provocative" remarks. "What he said unnecessarily created enemies for our group," says the 63-year-old economics scholar. "That makes people feel we are confrontational." Ho says his intention is straightforward: to object to Occupy Central, nothing more. He also says he is aware some of his views may appear contradictory. "I believe in constitutionalism on the mainland but I do not oppose its one-party rule. I do not, however, support Charter 08," Ho says, referring to the manifesto put forward by jailed Nobel Peace laureate Liu Xiaobo for political reform on the mainland. "I wrote 20 years ago that I supported the functional constituency system in the Legislative Council. But now, I think its function to use professional knowledge for Hong Kong's overall well-being does not exist." Ho says he would have been willing to support Tai and his group if they had dropped their civil disobedience plan and resorted to milder measures to make their arguments. "I have told [Occupy Central's] Chan Kin-man that I would maybe join a signature campaign if they organised one," Ho says, adding that it would be a "useful alternative" to make Beijing listen to Hongkongers' views. Chan, a sociology professor at Chinese University, along with Tai and Reverend Chu Yiu-ming, were the trio that came up with the idea for Occupy Central. Another limelight-grabbing moment for Silent Majority came when it splashed out on full-page adverts in 11 Chinese-language newspapers in Hong Kong last week, urging what it believed to be the city's "silent majority" to speak up against Tai's plan. The expensive and high-profile move was widely seen as sponsored and organised by Beijing officials, but Ho says the group's major source of funding is businessmen, whom he has not named. "One thing we are trying to avoid is that a single businessman gives us most of the funds." Among the six convenors of Silent Majority, Chow and Ho have been the most vocal. The four others are Chinese University political scientist Dr Chang Chak-yan; Liberal Party member Fung Ka-pun; Peter Wong Kwok-keung, the chairman and chief executive of construction firm Kum Shing Group and a local delegate to the Chinese People's Political Consultative Conference; and Spencer Li Wing-kwai, the head of an innovation and technology association. As a student, Ho attended classes at HKU's Pok Fu Lam campus - where Tai currently teaches. He later went on to work for the Ontario government for four years after finishing postgraduate studies in Canada. "Forty years ago when I entered university, I hoped to seek an answer to society and to politics - I hoped to look for an ideal world," Ho says. Four decades on, he now feels more content. "I think Hong Kong is quite desirable," he says.
Ho Lok-sang
Education 
1972-1981 Bachelor of Social Sciences, University of Hong Kong. Master of Arts and PhD, University of Toronto
Career
1979-83 Economist, Ontario treasury ministry; research officer, Ontario Economic Council
1993-95 Senior lecturer in economics at Chinese University of Hong Kong
1995-present Professor of economics and director of centre for public policy studies, Lingnan University
2013 Co-convenor, Silent Majority for Hong Kong

 China*:  Aug 19 - 22  2013

Bo Xilai to go on trial on corruption and power abuse charges (By Keith Zhai keith.zhai@scmp.com) Disgraced politician will face court in Jinan, Shandong province, to answer allegations of bribery, embezzlement and abuse of power - The long-awaited trial of disgraced Politburo member Bo Xilai will open on Thursday in the capital of Shandong province, Xinhua reported yesterday. Bo, whose downfall last year was China's most explosive political scandal in decades, will stand trial in the Intermediate People's Court in Jinan for alleged bribery, embezzlement and abuse of power. "The open trial will start at 8.30am on August 22 at its 5th courtroom," Xinhua said, quoting the court announcement. It was not clear whether Gu Kailai, Bo's lawyer wife who received a suspended death sentence over the murder of Briton Neil Heywood, would testify. "It cannot be ruled out that Gu will testify at the hearing," said a legal source with direct knowledge of the case, adding the family members of both Bo and Gu would possibly attend the trial. The source said the trial was likely to last longer than one day. Another source with close ties to the Bo family said that Bo, who has been in detention since April last year, gave authorities a list of five family members he would like to attend his trial. They are elder brother Bo Xiyong; son Li Wangzhi from his first marriage; younger sister Bo Xiaoying; and younger brothers Bo Xicheng and Bo Xining. Gu Wangjiang, Gu Kailai's sister, is also likely to attend the hearing after the authorities rejected the request of their mother Fan Chengxiu to appear in the courtroom, said the source. The source, a lawyer who has known Bo's family for years, said the abuse of power charge the former Chongqing party chief faced related to his sacking of his former right-hand man, Chongqing police chief Wang Lijun, without Ministry of Public Security approval. A mainland media source said the charge also related to his attempt to cover up his wife's murder case. Wang, who was removed from his post in February, fled to the US consulate in Chengdu days after his removal where he reportedly revealed key evidence in Heywood's murder. The other charges mainly refer to Bo taking roughly 20 million yuan (HK$25.3 million) in bribes, including a villa in Cannes, France, worth about 15 million yuan bought by Xu Ming, a businessman who is now in custody over his ties to Bo. Bo is also accused of embezzling about five million yuan when governing Dalian, Liaoning province, in the 1990s. Given the amounts involved, Bo might receive a relatively lenient sentence, legal expert Guo Daohui said. "Bo won't end up too badly," said Guo, comparing the sum to the amount of money involved in the case of former railways minister Liu Zhijun. Liu was given a suspended death sentence for abusing his office and accepting bribes and gifts worth 64.6 million yuan.

Hong Kong*:  Aug 18  2013

Hongkonger takes top job at Cathay (By Charlotte So charlotte.so@scmp.co) Cathay Pacific Airways will again have a Hong Kong-born chief executive in March when Ivan Chu Kwok-leung takes up the position. It has been seven years since the top job at the city's biggest airline was last filled by a Hongkonger. Chu, 51, is also one of the youngest Cathay chiefs ever. Chu joined the airline as a management trainee in 1984 after graduating from the University of Hong Kong. He has been chief operating officer since 2011. Chief executive John Slosar will succeed Christopher Pratt, 57, who will retire in March as chairman of the carrier and its parent, Swire Pacific, as well as John Swire & Sons (HK) and Swire Properties. The easygoing and media-friendly Chu was the public face of Cathay when the airline encountered occasional, severe service disruptions while he was director of service delivery before 2011. Slosar, 57, joined the Swire Group in 1980 and was appointed managing director of Hong Kong Aircraft Engineering in 1996. From 1998 to 2007, he was managing director of Swire Beverages. He was named chief operating officer of Cathay in 2007, and then chief executive in 2011. Slosar told the South China Morning Post that one similarity between running a fast-moving consumer goods business and an airline was creating an urge in the customer to return. He pioneered the premium economy class in Cathay and executed the plan to replace the infamous business-class seats in a fishbone layout with the award-winning new business-class seats. Pratt joined the Swire Group in 1978 and has been chairman in Hong Kong since February 2006. His retirement had been rumoured in the company for a while, and it had been speculated that Slosar was the front runner to succeed him.

Pan-democrats should run for top job, says Fred Ma (By Tony Cheung and Gary Cheung) Ex-minister Fred Ma insists city must move forward rather than be distracted by matters such as teacher's verbal abuse of police - Beijing should let pan-democrats run for chief executive in the 2017 race, said former commerce minister Frederick Ma Si-hang in a rare, wide-ranging interview with the South China Morning Post. Ma also voiced his opposition to the Occupy Central movement, and said he believed Chief Executive Leung Chun-ying could overcome his present difficulties. Ma, who left the government five years ago for health reasons, remains the man for all seasons in the city's politics, able to move easily between the divergent political camps. He has rarely spoken publicly since leaving office, but talked to the Post this week on various hot political issues. The soft-spoken community leader stressed the need for Hong Kong to move forward from the present political controversies and focus on important issues that can help the city regain its competitive edge. Too much energy, he said, had been spent on trivial issues that distracted the city from bigger goals. He pointed to the recent controversy triggered by primary school teacher Alpais Lam Wai-sze's profanity- laced outburst at police officers. Some criticised what they saw as a high-handed approach by Leung in handling the incident. Ma said he could well understand why Leung took a strong stance against the teacher. Ma said that despite the tense political environment, he was confident Leung would "pull through", even suggesting tongue-in-cheek that he would challenge his friends to a bet on the outcome. Ma said effective political reform could act like "medicine to cure" the present political climate. Barring pan-democrats from running in the next election would only weaken the effectiveness of reform, he argued. "After all … [Democrat] Albert Ho Chun-yan was allowed to run [last year]," he said. "So if we don't [allow] it to happen again this time, it would be going backwards, and the [electoral system] will face more challenges. We can't … walk backwards [because] it will make the medicine less effective. "The central government doesn't need to be too worried," Ma added, "because I believe Hongkongers are sensible. They wouldn't choose someone who could harm the city's relationship with the [central government]." Ma said he was against University of Hong Kong law professor Benny Tai Yiu-ting's Occupy Central, which calls for at least 10,000 people to block roads in Central next July as a last push for democracy. "I can understand [the organisers'] frustrations because they have been fighting for so many years," Ma said. "But they should also remember that fighting for democracy is a very long process … so you cannot say 'Hey, I have been fighting for 20 years, and that's enough. I'm going to the extreme.' That's not quite right." Ma said he recalled the hard times his family endured in the 1967 riots that claimed 51 lives. He said he could still remember the acrid smell of tear gas, and the fear of people during curfew. "Having seen [what happened in 1967], we are very fearful of chaos in the city," Ma said, though he stressed that he did not mean Occupy Central would necessarily lead to riots. "Everyone wants democracy because everyone wants to participate."

Business leaders say Hong Kong must act quicker in face of change (By Jeanny Yu and Ray Chan) Hong Kong's role as the gateway to and from the mainland could be at risk unless the city becomes more socially inclusive and acts more decisively to capitalise on shifting business trends. "The way things are shaping up in Hong Kong I think it is going to be a very difficult time ahead," Vincent Lo Hong-shui, chairman of Shui On Land, told an audience of business leaders assembled by the South China Morning Post as part of its 'Redefining Hong Kong' seminar series. Lo said Hong Kong should do better at spotting the business opportunity presented by mainland tourists who come to spend in the city, rather than make them feel unwelcome. "Why do we want to chase our Chinese customers away from Hong Kong? Why would we want to do that? I just don't understand it," Lo said. Lo, the man behind Shanghai's famous Xintiandi entertainment development, said looming capacity constraints at Hong Kong's airport and a lack of "joined up" thinking about shopping potential around the Hong Kong-Zhuhai-Macau bridge project meant opportunities would be missed to sell to the growing number of mainland tourists coming to Hong Kong. "I'm sure there are many ways that we can add facilities to attract these people that are actually going to help our economy." Lo's sentiments were echoed by Albert Ng, Greater China managing partner at Ernst & Young. "Hong Kong needs to get better at social inclusion," Ng said. John Slosar, Cathay Pacific chief executive, said Hong Kong's historic strength in connecting international banking, trade, logistics and tourism would help ensure a profitable future - but only with hard work. "The world is changing and we have to change with it," Slosar said. Professor Chan Ka-keung, Secretary for Financial Services and the Treasury, said Hong Kong's status as a gateway had changed throughout history and that such change must continue to be embraced. "We should not be afraid of China's opening up, or of competition from Chinese cities - or any city," he said.

 China*:  Aug 18  2013

Visitors from China targeted in wiretapping by US spy agency (By Lana Lam lana.lam@scmp.com) Rise in wiretapping of mobile phones during arrivals for Lunar New Year last year revealed - A surge in Chinese visitors to the United States during Lunar New Year celebrations last year offers a clue to the scale of American spies' wiretapping of citizens in China. According to a report on privacy breaches by the US National Security Agency, leaked by whistle-blower Edward Snowden and published by The Washington Po st yesterday, an 11 per cent rise in "roamer" incidents in the first quarter of last year may have been caused by the annual Chinese holiday. These incidents are when a "valid foreign target" whose mobile phone is being wiretapped without a warrant lands on American soil. The target becomes active in the US when they land and an individual warrant is needed to continue the wiretap, or else it would be a breach of US laws which protect the communications of Americans and others while they are in the country. The report, which tracked accidental and deliberate breaches, said that the rise in roamer incidents between January and March last year "may be attributed to an increase in Chinese travel to visit friends and family for the Lunar New Year holiday". The classified audit was part of a number of wider leaks made by Snowden in June this year which exposed the domestic and global reach of the NSA's cyberspying programmes. Snowden further claimed, after he broke cover in Hong Kong, that US spies had been hacking into computers and mobile phones in Hong Kong and mainland China for years. The audit separated the violations into two categories: those in breach of the Foreign Intelligence Surveillance Act and those that flouted Executive Order 12333, which gives more power to spy agencies. In the 12 months to March 2012, the NSA broke privacy rules or overstepped its legal authority 2,776 times through the unauthorised collection, storage and access to, or distribution of, legally protected communications, The Washington Post reported. The NSA did not deny the report but rather offered a more positive interpretation. It said it had rigorous procedures in place to review any breaches of privacy and that most of the errors were inadvertent and due to technical glitches. "NSA's foreign intelligence collection activities are continually audited and overseen internally and externally," the agency said in a statement. Meanwhile, the Hong Kong government said US officials had still not responded to a letter sent in June which sought answers to Snowden's claims that US spies had hacked the city's computers. Macau officials are also waiting for a response to a letter demanding answers over hacking claims, which was sent to the US consulate on July 3.

Lessons for Chinese deal-makers in America (By Howard Chao) Howard Chao says Chinese investment is largely being welcomed in the US, despite a few high-profile cases that may suggest otherwise, and companies can ease marketaccess by avoiding pitfalls to deal-making - The investment community has long awaited the growing wave of direct investment by China into the United States. Now, finally, despite continuing challenges, the US is swimming in Chinese capital. The Rhodium Group calculates that total Chinese direct investment in the US last year was US$6.5 billion, the highest ever, and the first half of this year has already seen US$4.7 billion of investment. Nevertheless, there is a lot of room to grow - the Ministry of Commerce estimates that Chinese outbound direct investment reached US$45.6 billion in non-financial sectors for the first half of this year, up 29 per cent year on year. There continues to be a feeling prevalent within Chinese circles that the US is hostile to Chinese investment. The first big wave of China's outbound investing was focused on natural resource and commodities plays. But, with the downturn in China's export economy and the related cooling of world commodities markets, such investments are less important. Today, a more urgent motivation to invest offshore is China's need to diversify its foreign reserve holdings. Most of its reserves are tied up in US Treasuries and other government-backed securities, but as the Federal Reserve has made clear, interest rates will eventually go up and China stands to suffer massive principal losses on its bond holdings. Hence, it needs to diversify. What should those other assets be? The rational choice is for China to allocate more investments to the US, still by far the world's largest and strongest economy. US property markets are recovering, gross domestic product growth is back, employment is improving and US innovation continues to outpace the rest of the world. Yet there is still a feeling prevalent within Chinese business and government circles that the US is hostile to Chinese investment. How big is this problem? Certainly, there have been several unfortunate cases where US government actions or public opinion caused a Chinese investor to pull out. Notable early cases include aborted transactions by China National Offshore Oil Corporation and Huawei. Last October, the US House of Representatives' Intelligence Committee labelled Huawei and ZTE national security threats. And Ralls Corporation, owned by the Chinese founders of Sany Corporation, was ordered by the US president, on the advice of the US Committee on Foreign Investment in the United States, to dismantle and vacate wind farm sites in Oregon. The apparent reason was the proximity to restricted airspace at a naval weapons systems training facility. Proximity to sensitive military facilities seems to be a common theme of recent transactions that encountered difficulties. When CNOOC acquired the Canadian company Nexen, with its substantial holdings offshore from the US Gulf coast, a very lengthy review by the federal foreign investment committee reportedly resulted in stringent mitigation measures, apparently because of the proximity of the assets to sensitive military installations. Yet the attention that these few transactions receive tends to obscure the fact that the rapidly rising volume of Chinese investments has generally attracted little adverse congressional comment, public reaction or difficulties with the foreign investment committee. Critics protested at Wanxiang's acquisition of battery company A123, but the Obama administration cleared the deal. Similarly, the foreign investment committee cleared BGI-Shenzhen's acquisition of gene-sequencing technology company Complete Genomics. And while the current proposal by Shuanghui to acquire Smithfield has prompted a few members of Congress to raise claims of threats to food supply and safety, public reaction seems muted. Most business sectors in the US are completely open to foreign investment. In most cases, the US government can only disapprove an investment if it raises national security concerns, or if there are antitrust concerns. While in Washington there may be mixed signals, US local governments and companies eagerly seek Chinese capital. Chinese investment spurs the demand for goods and services, creates tax revenues and, most importantly, supports new jobs that are sorely needed by US workers. What are the lessons so far learned as China expands its footprint in the US? There are many. First, there is a natural suspicion of state-owned enterprises as the primary vehicles for Chinese direct investment in the US. There is a belief by many that Chinese state-owned firms are merely agents of their government and thus may make non-commercial decisions at the direction of Beijing. This is reflected in the fact that all notifications involving state-owned-enterprise buyers (not just Chinese ones) to the US foreign investment committee must generally undergo a second-level investigation and thus are subjected to a higher level of scrutiny than transactions involving purely private buyers. Thus, China needs to encourage more of its private enterprises to make investments in the US. Second, greenfield projects are easier to do than acquisitions of existing American companies. These projects create new jobs, while purchases of existing companies arguably only move control to foreigners, something which is easier to attack. Under current US law, greenfield investments generally would not be subject to a security review. Of course, Chinese companies need to pay attention to the court of public opinion too. Highly negative media reactions can end a deal because no foreign investor wants to fight public sentiment. Thus, it is important for Chinese investors to work with public relations specialists before announcing an investment. The US offers Chinese investors a multitude of attractive US companies in non-sensitive sectors, including real estate, clean technology, health care, food, agriculture, basic manufacturing, retailing and consumer products. We are in the difficult preliminary phase of the bilateral investment relationship, but things should get better. Chinese companies need to learn more about deal-making in the US, complete some deals, and let the news get out about how they are contributing to the US economy. Then, Chinese direct investment in the US will become more "normalised". Eventually, a new bilateral investment treaty, which the two plan to negotiate, may also help smooth the way to a less contentious investment relationship. Howard Chao is of counsel and senior Asia adviser to O'Melveny & Myers LLP, an international law firm

US urged to share with China (By CHEN WEIHUA) Former US president Bill Clinton said the United States must attempt to create a future it can share with China instead of pursuing a "zero-sum game", especially in Africa. Clinton's comments came during a trip with his daughter to Africa to visit projects supported by the Clinton Foundation this week. Former US president Bill Clinton, second from left, and his daughter Chelsea, left, accompanied by South Africa Health Minister Aaron Motsoaledi, second from right, are welcomed by traditional dancers during their visit to the Roamotse Clinic in Hammerskraal, Pretoria West, South Africa, on Aug 7. Bill and Chelsea Clinton are on a tour of Africa to oversee the work of various charities. While Clinton praised the work done by the US government and private foundations to build healthcare infrastructure in Africa, he said the US is falling behind China in helping the continent foster basic economic growth. "I don't believe we spend enough money on basic economic growth initiatives. So I won't argue that the Chinese are going to get a lot of goodwill," said Clinton to the British Broadcasting Corporation early this week in Zanzibar, Tanzania. China has funded many infrastructure projects in Africa in recent years, building roads, railways, bridges, stadiums and power plants. According to a report by US-based AidData, China sent $75 billion in official aid to Africa between 2000 and 2011, which is comparable to the amount of US aid to the continent over the same period. "I don't necessarily think it's a bad thing for America if African countries appreciate both what we try to do to help their kids stay alive and what the Chinese do to give them better infrastructures and I think that we've got to try to create a future that we can share with the Chinese, not one where everything is a zero-sum game," said Clinton, who will turn 67 on Monday. A conference about African infrastructure held last month in Johannesburg called on China and other countries to invest in the continent's infrastructure. A World Bank report showed that Africa each year lacks at least $93 billion necessary to build infrastructure. As the first African-American president of the US, Barack Obama has been criticized for not paying enough attention to Africa. Critics say he must take great leaps to compete with the African Growth and Opportunity Act that Clinton established and the Emergency Plan for AIDS Relief created by former US president George W. Bush. "But I do think that he cares about Africa and I'll be surprised if he doesn't spend quite a bit of time on (the continent) in his last three years," Clinton said of Obama. Weeks after taking office in March, Chinese President Xi Jinping said China strongly supports building infrastructure in Africa during his tour of three African nations. Zhang Jun, head of the international economic affairs department at the Foreign Ministry, said building infrastructure in Africa is a high priority for China. China has provided assistance in 184 infrastructure projects in Africa since the 1950s, Zhang said. He added that nearly 90 percent of loans China issued to Africa were used in infrastructure projects. China loaned $5 billion to the continent in 2006 and $10 billion in 2009. China replaced the US four years ago as Africa's largest trade partner. Bilateral trade approached $200 billion last year, from only $10 billion in 2000. Anthony Carroll, vice-president of Manchester Trade who has more than 20 years of experience working in Africa, said China's enormous amount of investments has played an important role in the continent. "Chinese investments and loan assistance has gone into areas that the US has vacated for 15 and 20 years. (China's) large infrastructure projects and long-term vision that (it brings) to projects I think has also helped Africa grow," Carroll said in May. "(China) also brings with (it) a development experience which is more relevant to many of the African economies." He also said China understands many of the challenges Africa faces. Patricia Aidam, a researcher at University of Ghana, said China is doing great work in Africa. She said the nation's no-strings-attached loans are beneficial because not all African countries can meet the loan conditions set by Western countries.

China trims US Treasury holdings in June (By Michael Barris and Chen Jia) China reduced its holdings of United States Treasury securities in June while retaining its lead over Japan as Washington's largest foreign creditor, figures from the US Department of the Treasury show. Overall, total foreign holdings of US Treasuries dropped for the third straight month. China trimmed its holdings 1.7 percent to $1.28 trillion, while Japan, the second-largest buyer of US debt, cut its holdings by 1.8 percent to $1.08 trillion, according to the monthly Treasury International Capital report. John Praveen, chief investment strategist at Prudential International Investments Advisers LLC, gave several possible reasons for the $21.5 billion drop from May to June in China's purchases of US government securities. Among those reasons: China might want to defer purchases until yields rise with an improvement in the US economy. Mei Xinyu, a senior researcher with the Ministry of Commerce, said that compared with other international currencies, the US dollar is relatively stable, so it's hard to modify China's investment mix. Praveen said: "There is a general expectation that Treasury yields are headed up. So why buy now when we can buy when Treasury yields go up to 3.5 percent or 4 percent over the next couple of months?" He added that the reduction in China's purchases of US securities could mean that Beijing's resources are shrinking, amid its transition to an economy driven by consumption rather than investments and exports. "If you're not an export-driven economy and you are more of a consumer-driven economy, your exports will come down, your imports will increase, so your current account deficit will come down," Praveen said. "So they have less money to invest. It may be part of that overall strategy, of reducing how much money they put into the US Treasury market." Praveen said China's reduction in Treasury buying might also reflect a desire to diversify its holdings. On Thursday, a drop in US Treasuries pushed yields on 10- and 30-year securities to the highest level since August 2011. Xu Hongcai, a senior financial researcher at the China Center for International Economic Exchange, said: "It is urgently necessary to diversify the investment in US Treasury bonds, as the … reduction of asset purchasing will drag down the bonds' value." 

Hong Kong*:  Aug 17  2013

Revival of Hong Kong's tong lau buildings hits many hurdles (Bernice Chan bernice.chan@scmp.com) Tenement houses have the character and charm that high-rises lack, but desperately need legal protection - Architect professor Lee Ho-yin cites the Lui Seng Chun building (in background) as a good example of a shophouse updated for modern use. Swedish designer Helen Lindman has wrought an impressive transformation of the Sheung Wan tenement building that she bought three years ago. Previously a dingy, dimly lit, six-storey walk-up, 11 Upper Station has been turned into a stylish, bright and airy residential block, comprising two duplexes and a top-floor suite. The extensive renovations took a year to complete. Now finished, both duplexes have been rented to tenants attracted to the district by the mushrooming independent cafes and quirky shops turning it into a hip hangout. We have to change people's thinking so that [renewal projects] do not just cater to big developers. Although their HK$79,000 monthly rental seems pricey for a tong lau, Lindman says the renovated space offers an appealing alternative to soulless high-rise apartments. "There is definitely a demand from expats," she says. "I came to Hong Kong in 2004 and fell in love with the city's tong lau. I feel it is important to maintain them as part of Hong Kong's heritage, but they are becoming harder to find. It is too easy to bring in the bulldozer and build another high-rise. My ongoing vision is to preserve these buildings; not as monuments, but as live-in homes, reviving them, helping to revitalise the living communities in which they are set." While Hong Kong's first tong lau emerged in the late 19th century, most were built after the mid-1950s to house a wave of post-war mainland migrants. But in Hong Kong few of these buildings remain, unlike in Macau and Singapore, which have preserved entire streets, even neighbourhoods, featuring this distinctive period architecture. Several factors conspire against their survival, not least the absence of a comprehensive conservation policy, and banking rules that make financing of tong lau purchases - and their revival - more difficult than for other properties. Only a handful of people have both the enthusiasm and means to revitalise the city's surviving tong lau. Most of those who do, such as Lindman and American advertising executive Dare Koslow, are expatriates. "Westerners seem to appreciate the unique architectural style of tong lau," says Katty Law Ngar-ning, convenor of the Central and Western Concern Group. "But many Hong Kong people don't know how to preserve old buildings and would rather build a new 40-floor high-rise. They are only thinking of profit. Foreigners want to preserve things and put a lot of loving care into it." A living room at 11 Upper Station in Sheung Wan. Sitting in a small coffee shop in Tai Ping Shan Street, just steps away from 11 Upper Station, the conservation activist says the neighbourhood appeals because it maintains a sense of community. The area was among the first to be settled by Chinese immigrants during the early 1850s and its network of small back and side streets is largely unaltered. Residents and business owners (which are mostly small enterprises) tend to know each other. And renovating tong lau to update facilities is one way to preserve the urban fabric, Law says. Ten years ago the neighbourhood around Tai Ping Shan Street was quite rundown, occupied mainly by car repair and woodwork shops. "Now you're seeing galleries, cafes and bars," she says. Lee Ho Yin, an assistant architecture professor at the University of Hong Kong, says the biggest difficulty in saving tong lau from being demolished to make way for high-rises, or from being ruined through neglect, is that most are private properties; there is little the government can do to make landlords save the buildings. "It isn't sustainable to buy tong lau for conservation because they are designed for regular use; they are not monuments of quality, nor do they [individually] have significant architectural or historical value." Helen Lindman - Lindman, who bought the Upper Station Street property in 2010 for HK$27 million, was fortunate to have financial help from her banker husband. But for many people loan restrictions present a significant challenge to revitalisation ventures. For residential properties worth more than HK$10 million that are not purchased for self use, the Monetary Authority requires banks to lend no more than 50 per cent of the total value. However, institutions issuing tong lau mortgages to personal buyers will provide loans of up to 70 per cent on the condition that the sum be repaid by the time the building is 60 years old. So someone who takes out a loan for a 54-year-old tong lau has six years to pay up. Lee, who is also director of the architectural conservation programme at HKU, says tong lau should be updated for use. An excellent example is Lui Seng Chun, a heritage shophouse in Sham Shui Po that reopened last year after a HK$28 million facelift; its upper floors are now taken up by a traditional Chinese medicine centre operated by Baptist University, with a herbal tea shop on the ground level. "When you enhance the value of the building through use, it adds heritage value to the building," Lee says. "However, the Hong Kong development approach is high land property prices and big development ... The demolition of street blocks may give Hong Kong people the impression of development, but it is only one kind [of change]. Sars in 2003 created opportunities for [alternative] developments [when property prices crashed]." He cites entrepreneurs Alan Lo Yeung-kit and Darrin Woo, whose design and development firm Blake's bought and modernised several tong lau properties, including TwoTwoSix on Hollywood Road. "These developments don't involve demolition," Lee says. "We have to change people's thinking so that [renewal projects] do not just cater to big developers." One way to retain tong lau is to restrict developments in certain areas. Not only will this moderate building prices, but also help retain the neighbourhood feel. Lee reckons what Hong Kong needs is an army of micro developers, such as Koslow and Blake's, which seized the opportunity to buy up tong lau when property prices plunged during the Sars outbreak and fixed them up for resale or rent. "Since the late 1970s, the policy has been geared towards big developers," he says. "But now people are seeing how big development can be destructive and it has evolved into a political and social issue." Critics such as Katty Law blame the Urban Renewal Authority for doing little to conserve period buildings in its revitalising of older districts, but the statutory body says this is not its mandate. The URA is "tasked to adopt redevelopment and rehabilitation as its core businesses under the Urban Renewal Strategy promulgated in 2011", its external relations department says in an e-mail. Law says the problem is the URA doesn't have a conservation mindset - it's just focused on profit-making. The URA's first attempt at revitalising tong lau was the former Woo Cheong Pawn Shop on Johnston Road, which reopened in 2007 after six years' restoration work. "However, it turned into high-end restaurants causing major price increases in the neighbourhood, and now almost all the local shops have changed," Lee says. "The use of such buildings needs to be carefully considered, because now it only benefits a few people." Similarly, Lee Tung Street, the small Wan Chai lane that was known for its wedding card shops, has also been obliterated. Lee believes that Hong Kong needs a fundamental change in its planning system. Well-developed cities have conservation policies under planning departments so there is controlled development. In Lee's native Singapore, policy makers introduced a conservation master plan about 30 years ago to preserve historic districts, such as Chinatown - a policy prompted in part by falling tourism numbers attributed to loss of local character in the drive to build a modern metropolis. "[Singapore] used the power of the planning authority to designate certain areas as conservation areas so they can restrict how much can be built. Hong Kong is one of the few places with a laissez-faire approach, which only benefits a few." Planning approval processes were not introduced in Hong Kong until the 1990s, he adds. But the 2007 policy address by the then chief executive Donald Tsang Yam-kuen, which devoted eight paragraphs to heritage conservation, was a sign of growing concern about the issue. "You need a strong government to do this [conservation]." Nevertheless, Lee is optimistic for the future. "You are seeing property developers balanced by the voice of the people. There is hope for change by raising awareness and education. It all takes time. Hong Kong society is reaching maturity and things are starting to change." The shift in attitude is reflected in increased numbers of postgraduate students taking up conservation courses and growing calls among young people for more culture along with environmental rights and universal rights. "They are willing to make less money, but have more benefits to society. This is a major change in societal values."

Man with air gun gets eight years in jail for robbing lawyer (By Austin Chiu austin.chiu@scmp.com) Justice Andrew Chan rejected robber Huang Shuai’s claim he was inspired by the Hong Kong film Life Without Principle to lie in wait in the car park hoping that he would be rewarded after helping someone being robbed. A mainland man who robbed a law firm partner of HK$2,000 in an Admiralty car park with an air gun was jailed for eight years on Wednesday. In the Court of First Instance, Huang Shuai, 23, pleaded guilty to robbing solicitor Simon Yung Yun-sang, 54, a partner of King & Wood Mallesons at 9.10am on December 17. Yung, a brother-in-law of columnist and connoisseur Li Shun-yan, was opening the door of his Porche at a car park on Rodney Street when Huang fired at his car, according to the prosecutor Lenny Sin-tsing. The defendant came with preparation from mainland to commit the offence ... the money was not for filling his stomach. When Yung turned his head around, he found Huang, who was wearing a face mask, already sitting next to him. Huang had a gun in one hand pointed at Yung and in the other hand held a cartridge, the court heard. Fearfully, Yung gave Huang his wallet. Huang took HK$2,000 from it. At this point, a friend of Yung, who was not identified in court, walked past. The friend blocked the car door in an attempt to stop Huang from escaping. But the friend backed down when he saw the gun, and Huang then fled. Two days later, Huang was stopped and searched by police in a Tsim Sha Tsui street. An air gun, which he told police he had bought for HK$600, and a knife were found on him. He also had a letter addressed to the Hong Kong police, which he said he had planned to show to them to demonstrated his remorse when he gave himself up. Mr Justice Andrew Chan Hing-wai said that even though the robbery involved a small sum of money, Huang’s crime was made more serious as he used a fake gun and fired it to scare the victim. The judge adopted 12 years’ imprisonment as the starting point in accordance with case precedent, then reduced the sentence by a third in recognition of Huang’s guilty plea. The court heard also that Huang, who was visiting Hong Kong on a two-way travel permit, was in debt because of gambling. The judge rejected Huang’s claim that he was inspired by Hong Kong film Life Without Principle to lie in wait in the car park hoping he would be rewarded when he offered help to someone being robbed. “The defendant came with preparation from mainland to commit the offence. He spent the money quickly after the incident. It is clear that money was not for filling his stomach,” the judge said.

 China*:  Aug 17  2013

Crime Against Humanity: Japanese attend assembly to mourn Nanjing Massacre victims (By Xinhua) Delegates from Japan attend an assembly to mourn for victims in the tragic Nanjing Massacre at the Memorial Hall of the Victims in Nanjing Massacre by Japanese Invaders in Nanjing, capital of East China's Jiangsu province, Aug 15, 2013. Thursday marked the 68th anniversary of the Japanese declaration of unconditional surrender and the victory day of both Chinese people's anti-Japanese war and the world's anti-Fascist war.

Li Na advances to 3rd round at Cincinnati Open (By China Daily) Li Na of China hits a return to Lauren Davis of the US during their women's singles match at the Cincinnati Open tennis tournament in Cincinnati, Ohio August 14, 2013. 

China will overtake US as world's No 1 consumer: study (By By Zhang Yuwei yuweizhang@chinadailyusa.com) Even with the ongoing slowdown of China's economic growth, the world's No 2 economy is expected to overtake the US to become the world's largest consumer market in the next five years, according to a new report by Standard & Poor's (S&P). The report - entitled Financial Risks Are Rising as Retail and Consumer Product Companies Step up their Spending Spree - pointed out that in 2012, total retail sales of consumer goods in China grew 14.3 percent to about $3.29 trillion, compared with $4.35 trillion in the more mature market of the US. China's retail and consumer product industries are refining their growth strategies by looking outside of the domestic market for growth opportunities. Overseas acquisitions, says the report, are attractive options for Chinese consumer companies to improve product quality, increase differentiation, and acquire better brands. The most recent example is the offer by China's largest meat producer, Shuanghui International Holdings Ltd, to purchase Virginia-based Smithfield Foods Inc, the world's largest pork processor, for $7.1 billion, including a mix of debt and $4.7 billion in cash. The Shuanghui-Smithfield deal is currently being reviewed - for a second time - by the Committee on Foreign Investment in the United States. If it gets approved, it will become the largest takeover of a US firm by a Chinese buyer. Shuanghui and Smithfield seem to form a perfect fit. "For many Western companies we rate - Yum Brands, Gap, General Motors, the German luxury automakers - Chinese consumer demand is already an important part of their business strategies," said Robert E. Schulz, managing director of S&P's Ratings Services in New York. Part of that strategy incorporates the interest of Chinese consumers in foreign brands, said Schulz, who manages the US retail team. "So the ability of the domestic Chinese retailers to sell to the local consumer and compete with foreign brands is already a major factor in the competitive landscape," he said. "As the Chinese economy grows and the base of consumers with disposable income increases, selling locally should remain an attractive but competitive proposition for Chinese retailers." Chinese investment in the US rocketed to $6.7 billion last year (compared to $1 billion in 2008), according to research firm Rhodium Group, which tracks Chinese overseas investment. In the first quarter of this year alone, Chinese companies spent $2.2 billion for eight acquisitions and nine Greenfield projects in the US, according to Rhodium. Big transactions included Chinese auto-part firm Wanxiang's $257 million purchase of the bankrupt Massachusetts-based battery maker A123 Systems. Wanxiang America - which now employees about 6,000 people across the US - does several merger and acquisition deals in the US to expand its business and brand recognition, said Ni Pin, president for the company's US operation. "M&A is an important part of our business strategy here in the US," said Ni. The S&P report says that M&A activities can strengthen business risk profiles and bring Chinese companies closer to peers in more mature markets. Chinese firms' expansion takes place beyond the world's (current) largest consumer market. Bright Food (Group) Co Ltd acquired UK-based cereal maker Weetabix Food Co in 2012 and Manassen Food Australia in 2011 to expand its product offerings and widen its access to international markets. China's retail and consumer product companies have sufficient financial resources to satisfy their growth appetites, according to the report. "Many are sitting on huge piles of cash and have limited borrowings. They also have good access to the capital markets as a funding source. But the risks of overly ambitious takeovers are high," said the report. While further expansion by Chinese consumer and retailers will grow, the track record for "organic international expansion" in overseas markets is mixed, noted S&P's Schulz. "Some restaurants and some apparel retailers have been moderately successful with organic growth in China," said Schulz. "There has not been a large amount of cross border M&A in retail that we know of. Knowledge of the local customer is so very critical." Despite some big deals made by Chinese firms in the overseas markets including in the US, the portfolio of industries is still small or limited mostly because retail is a local business and not all brands travel successfully to other markets, noted Schulz. "There are probably more successful global fashion brands than restaurants, and even fewer global supermarket operators," said Schulz. "So whether it is a Chinese retailer or a European retailer electing to expand into a new overseas market, the challenges are not few - supply chain, critical mass, and local consumer preferences are just few to consider." Chinese brands also face the challenge of competing with well-established foreign brands, which often have gained strong brand appeal and are backed by solid financial resources as well as a global network, said Schulz. "They will remain strong competitors in the global markets, and will likely become increasingly competitive in the Chinese local market," he said.

Hong Kong*:  Aug 16  2013

Good times ending for Hong Kong's retail landlords as rents fall (By Rachel Butt property.post@scmp.com) Rents are dropping for city's prime retail properties as big-spending mainland tourists look beyond Asia for their shopping sprees - Canton Road in Tsim Sha Tsui has resisted a recent trend that has seen rents in shopping districts fall up to 15 per cent. The boom times for landlords of prime retail properties appear to be over as they weigh the costs of sticking with high asking rentals against the risk of rising vacancy rates. In On Lan Street in Central, a narrow alleyway that has become home to upscale boutiques, the landlord of a store now occupied by luxury French shoe and bag designer Christian Louboutin initially asked for HK$400,000 a month, but settled for HK$320,000 a month rather than risk losing the tenant. Nearby, the landlord of space rented by Dsquared2 slashed the rent from HK$1.1 million to HK$800,000 before the designer brand agreed to move in. After two years of explosive growth, rental increases in core shopping areas began moderating in the third quarter of last year, and falling in some prime locations, according to Savills Research & Consultancy. "Asking rents of prime street shops, with the exception of Canton Road, have come down by 10 to 15 per cent across the board since the end of 2012," said Susan Maclennan, a director at Savills. "The only rental growth seen within prime shopping districts are those in third-tier streets, which are considered the fringe." The fall in rents comes as more big-spending mainland tourists opt to go to Europe for their shopping sprees rather than come to Hong Kong, and slowing growth in China weighs on regional economies. LVMH, the French luxury group, reported growth in global sales of 6 per cent, to €13.7 billion (HK$141.2 billion), for the first half of the year, versus 26 per cent growth in the first half of last year. Chief financial officer Jean-Jacques Guiony highlighted "flattish demand" in China during the last nine to 10 months, and said shopper numbers were waning in most shopping malls as well. But in contrast to lacklustre retail spending at home, spending by Chinese on outbound travel surged by 40 per cent to US$102 billion last year from 2011, data from the United Nations World Tourism Organisation shows. There was a potential risk for the Hong Kong retail market if the shopping style of mainland spenders changed, said Helen Mak, senior director of retail services at Colliers International. More affluent mainland tourists nowadays prefer to travel to Western countries instead of Hong Kong. Other market watchers said retail property prices were likely to decline, given waning demand for space and slowing rental growth. "Rents are holding firm because price corrections in the value of retail property are likely to happen before rents drop," said head of retail for Jones Lang LaSalle, Tom Gaffney. Rents for high street shops would rise by more than 5 per cent this year, Gaffney forecast, as some landlords clung to the hope of finding cash-rich tenants to backfill their empty spaces. For prime shopping districts such as Central, Causeway Bay, Tsim Sha Tsui, and Mong Kok, the vacancy rate for street-front shops is currently about six per cent, compared to only 0.71 per cent in prime shopping malls, according to Jones Lang LaSalle. Property agents put the rate at 10 per cent, and say vacancies are on the rise owing to a mismatch between high asking rents and what the market can digest. "The rent of shops in first-tier streets will drop by 10 to 12 per cent in the coming year as landlords realise market conditions aren't as bright," Wong said. The forecast decline will come in the wake of a 70 per cent rise in rents since 2008.

Li & Fung 'past worst' in turnaround push (By Anita Lam anita.lam@scmp.com) Chairman William Fung says the global trader is looking to a recovery in core US business by year-end after suffering 69pc fall in first-half profit - William Fung, at the results presentation yesterday, faces a challenge in putting across a positive message to investors. Li & Fung, the world's largest supplier of goods to global retailers including Wal-Mart and Target, insisted the worst was behind it as it posted a 69 per cent drop in first-half net profit and said it remained hopeful of a recovery in its core US business by the end of this year. Net profit of US$96 million for the six months to June 30 was well below market consensus forecasts of US$106.3 million, but the firm pointed to a 1 per cent rise in interim core operating profit to US$223 million as a sign of underlying improvement, along with a 4 per cent rise in total margin to US$1.37 billion. "Following a disappointing year in 2012, we believe the worst is behind us, and we are on track to recovery in 2013," chairman William Fung Kwok-lun said in the results statement. Investors remain to be convinced, having sold the company's stock steadily this year, wiping 23 per cent off its market value by yesterday's close, when the shares ended the session at HK$10.54. The blue chip Hang Seng Index has fallen just 0.5 per cent over the same period. Li & Fung reported interim net profit of US$312 million a year ago, which included a non-cash gain of US$198 million on the write-back of contingent considerations. Excluding such non-cash gains, profit attributable to shareholders fell by 15 per cent for this year's first half, the company said. The big drag on the company's business remains the lacklustre performance of the United States, where the clothes-to-furniture sourcing powerhouse generates about 60 per cent of its sales. It has been restructuring operations there, centralising merchandising, planning and integrating back-office functions in an effort to slash costs and boost efficiency. "Management is focused on making a turnaround by the end of 2013," the results statement said of the US business, while acknowledging the still challenging trading conditions in its single largest market. The firm said global economic conditions remained tough, although the price environment had stabilised compared with last year, with the price deflation trend becoming more subdued through the course of this year. "Our business continues to demonstrate a stable performance amidst an uncertain macroeconomic environment, especially in Europe," it said. Europe accounts for about 18 per cent of Li & Fung's turnover. Li & Fung has been guiding investors to expect core operating profits for this year at US$880 million, of which more than three-quarters are expected to come in the second half, analysts said before the results were announced. The company said the evolution of its business meant the second-half skew would become even greater. The increased scale of the wholesale and distribution business, combined with seasonal effects of back-to-school and holiday buying patterns would further compress orders, lead times and shipments, it said. "We expect the proportion of sales and earnings recorded in the second half of the year to continue to increase in the future," the statement said.

Report on teacher's clash with police to be 'factual and impartial' (By Tanna Chong and Gary Cheung) Alpais Lam and her school unlikely to face serious consequences for Mong Kok melee as government seeks to put fuss to bed - The Education Bureau will complete a confidential report on a teacher's verbal abuse of police officers before the new school year starts in two weeks, as the government is eager to end the row that has divided public opinion, administration sources say. A source familiar with the case said the authorities would not ask the primary school in Fanling that employs teacher Alpais Lam Wai-sze to take further action before the report was completed. The upcoming report would be "factual and impartial", the source said. Another source said the report was meant for the government's internal use only and would not be made public. Its conclusions were unlikely to lead to "any significant consequences" for the teacher or the school, the Pui Ling School of the Precious Blood, he said. The bureau had not summoned anyone from the school for a hearing to help put together the report, the source said. "We do not want the school to feel any external pressure," he added. Lam has so far faced no disciplinary action and is not expected to be deregistered as a teacher, as such punishment would apply only if a criminal offence had been committed. The report was ordered by Chief Executive Leung Chun-ying on Sunday in response to controversy triggered by a video clip showing Lam shouting abuse at police officers over their handling of a dispute between Falun Gong supporters and opponents in Mong Kok last month. What looked like a simple case escalated into a heated debate, with some blaming the teacher for setting a bad example while others supported her and accused the police of not being impartial. Ten days ago, hundreds of people from both sides rallied in a pedestrianised zone in Mong Kok, leading to a stand-off that degenerated into a melee. Leung's ordering of a report on Lam only raised tensions. Some people accused him of overreacting and suspected the report would be used to punish the teacher. Police unions, however, supported the move. A person close to Leung said the chief executive had taken a tough stance over the case because he did not want to be perceived as weak or easily giving in under pressure. "Leung and his government would be seen as weak if he did not tackle the controversy head-on," said the person. "To maintain [effective] governance, he has no choice but to back the police to the hilt." By ordering a report on Lam, Leung had shown support for a police force increasingly frustrated by the bad press it has received. The chief executive, whose father was a police officer, said on Sunday that the force had defended public order in a "fair, neutral and unbiased" manner. Leung's gesture was welcomed by members of the force. Junior Police Officers' Association chairman Chan Cho-kwong said yesterday: "We welcome Leung's remarks. We cannot comment further but the frontline officers fully acknowledge the necessary political neutrality." Another police union member said Leung's move was positively received within the force. "It boosted morale, which has been seriously affected in recent months by the swearing incident and the pay issue," he said, referring to a pay rise announced in June which police unions called an "insult".

 China*:  Aug 16  2013

PetroChina poised to dominate Iraqi oil (By DU JUAN) Possible deals said to be in the works with Exxon Mobil, Russia's Lukoil - PetroChina Co, China's largest oil explorer, may join with United States-based energy giant Exxon Mobil Corp to co-develop the West Qurna oilfield in Iraq, which would make the Chinese company the biggest single foreign investor in the Iraqi oil industry. An industry source close to the company confirmed to China Daily that the two companies are holding talks, but added: "It is not a good time now to release the details of the ongoing talks." PetroChina workers check gas supply facilities at an oil and gas field in Hotan, in the Xinjiang Uygur autonomous region. The company is reported to be in talks with Lukoil, a Russian oil producer, to jointly develop the West Qurna-2 project in Iraq. The company has also been reported to be holding talks with Lukoil OAO Holdings, Russia's second-biggest oil producer, over joint development of the stalled West Qurna-2 project, which is now operated by Lukoil. The West Qurna field has the potential to produce more than 5 million barrels of oil per day, enough to rival the Ghawar field in Saudi Arabia, the world's largest producing field. The oilfield also plays a vital role in realizing Baghdad's ambitious plan to boost its oil production to 12 million barrels per day by 2017 from about 3 million bpd at present. It was rumored last year that Exxon Mobil might sell its stake in the $50 billion project. Baghdad was displeased by the company's move to sign contracts with the semi-autonomous Kurdistan region, which is deemed illegal by the central government of Iraq. However, the US oil giant later committed itself to further investment in the project. If a deal materializes, it will not be the first instance of cooperation between the two huge energy players. Exxon Mobil signed a separate deal with PetroChina last month to conduct a joint study of the Changdong tight gas block in the Ordos basin in northern China. The agreement was considered a big move by a foreign investor in China's unconventional gas sector. Regarding a potential deal involving West Qurna-2, the source declined to give more information. However, Lukoil Chief Executive Vagit Alekperov has said the company prefers an Asian player to replace Norwegian oil company Statoil ASA, which sold its 18.75 percent stake last year. West Qurna-2 is expected to produce 500,000 bpd in 2014. Gao Jian, an oil analyst at Sublime China Information, a Chinese commodity consultancy, said the possible deal will increase the domestic crude supply (in Iraq) for a short period, because oil companies usually sell their products on overseas markets instead of transporting them back home. "In the long run, it will be beneficial for the company's assets and revenue," he said. "However, (PetroChina) has to solve the first problem, which is to reach the production target set by the Iraqi government, before it can be in total charge of the resource." According to the General Administration of Customs, China's dependency on energy imports has consistently risen. Crude oil imports expanded 1.4 percent year-on-year to 164 million metric tons in the first seven months of 2013. Gasoline imports increased 6.6 percent to 24.85 million tons. In 2007, the company won exploration rights to Iraq's southern oilfield, Ahdeb, for $3 billion. The next year, it joined with BP Plc to gain exploration rights to Rumaila, the biggest oilfield of Iraq, for $15 billion. PetroChina is also the operator of the Halfaya field. Iraq's oil industry has made a remarkable recovery since international oil majors returned to the war-torn country in 2009. Iraq overtook Iran in 2012 to become the second-largest oil producer in the Organization of Petroleum Exporting Countries.

Opportunities abound in clean technology (By DU JUAN) State's support for new environmental initiatives promotes emerging sectors - China's investment in renewable energy will bring vast opportunities and challenges for the country's overall development, a senior official said at a recent high-level summit. Xie Zhenhua, vice-chairman of the National Development and Reform Commission, said investments in renewable energy will hit 1.8 trillion yuan ($294 billion) during the 12th Five-Year Plan (2011-15). He said the government also plans to spend another 2.3 trillion yuan on energy conservation and reducing harmful emissions to boost the green economy. "China has carried out a series of policies to cope with climate change, and we have achieved some success after several years of effort," said Xie during the Caring for Climate China Summit held by Global Compact Network China in Beijing in late July. According to the commission, the national energy consumption per unit of gross domestic product was reduced by 3.4 percent and carbon emissions were also reduced compared to the same period last year. From 2006 to 2012, China's energy consumption per GDP was reduced by 23.6 percent, which is equal to a reduction of 1.8 billion metric tons of carbon emissions, Xie said. He said China's economic development, which heavily depends on high energy consumption and high levels of emissions, has not changed yet, and the country's emissions per capita are still higher than the global average. China has made a commitment to the world that it will reduce its carbon emissions per unit GDP by 40 to 45 percent by 2020 compared to the 2005 level and raise its non-fossil energy consumption percentage to 15 percent of the primary energy mixture. "In every five-year plan, we have outlined specific targets for energy conservation and emissions reduction," he said. Wang Xiaokun, an energy analyst with Sublime China Information Co, a Chinese commodities consultancy, said the new investment plans will bring increasing opportunities in nuclear, wind and hydrological power. She said the investment will also go to such clean energy power generation projects and subsidies for power plants. "The government encourages low-carbon projects, which also bring business opportunities to the suppliers for such projects," Wang said. "For instance, the equipment manufacturers for power plants and grids will benefit from the policy." Although China and the European Union reached an agreement on solar panel exports to Europe last month, the domestic market still faces an overcapacity of about 10 gigawatts, she said. "The investment in distributed solar power generation projects may increase while the demand for traditional fuels, such as coal and natural gas will decrease in the long run," said Wang. "China has the resources and technological potential to develop renewable energy on a larger scale, which will be beneficial for society and economic development in the future," Wang said. In 2012, the annual growth rate of global energy consumption was 1.8 percent, which is much lower than the average level — 2.6 percent —in China in the past 10 years, according to an industry report. The BP Energy Outlook released in early July said renewable energy accounted for 4.7 percent of global power generation, a record high in history. Another report titled China's Long-Term Energy Plan found that by 2050, renewable energy, excluding hydropower, will account for between 17 and 34 percent of the national energy demand. Ban Ki-moon, secretary-general of the United Nations, said China has benefited the global economy and promoted socially sustainable development through its contributions to the Global Compact, a UN initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies. In addition to the increasing investment in renewable energy to reduce fossil fuel consumption, China has also made great efforts to encourage energy-saving industries. One example is Sinopec Group, Asia's largest refiner, which announced in July that it will invest about 22.6 billion yuan to upgrade its current production equipment and operations to protect the environment and realize green development. Other companies are also encouraged to build green buildings, apply green technologies and save energy during production. Fu Chengyu, president of the company, said enterprises should pay increasing attention to social and environmental benefits and not concentrate solely on gaining profits. "Companies can make profits and protect the environment at the same time through responsible investments and production," he said. The company's biofuel research for aircraft as well as development of technology for carbon capture and utilization has been put into many applications, which has promoted clean energy use and emissions reduction.

Hong Kong*:  Aug 15  2013

New hospital hungry for medical talent (By Emily Tsang and Lo Wei) University of Hong Kong's private venture will offer cutting-edge technology and design, but needs the manpower to make it all work. Vacancies for more than 150 doctors and 800 nurses will open up in Aberdeen when a private hospital run by the University of Hong Kong is completed in 2017. In addition, the university's Li Ka-Shing Faculty of Medicine is seeking recruits to join two other key projects - an HKU-Shenzhen hospital that has begun operations across the border, and the expansion of the public Queen Mary Hospital in Pok Fu Lam. Manpower will be of the utmost concern in the projects, said the new dean of medicine, Professor Gabriel Leung. "Human capital and talent is one of the areas we have to look at, along with the hardware investment," Leung said at his first meeting with the media after succeeding Professor Lee Sum-ping on August 1. Leung has a new deputy, associate dean of human capital Professor David Wong Sai-hung, whose position was created in this new five-year term to tackle a brain drain faced by the HKU medical faculty. Wong cited anaesthesiology and the accident and emergency units as among specialist fields that were suffering more severe staff shortages. The recruitment drive - for teaching professors, medical researchers and frontline doctors, among other professionals - had begun both locally and overseas, he said. Recruiters were on the hunt for specialists in the United States and Britain, though Wong said one of the difficulties of taking the talent search abroad was the limited pool of people who could speak Cantonese. A new plan would allow former professors who had left for private hospitals to work part time at HKU so that they could continue their research or hospital teaching, he said. The city's 11 public hospitals are already short of at least 200 doctors. The understaffing will not begin to ease until 2015, when the number of graduate doctors will increase from the existing 250 a year to about 400. Wong expected the 500-bed Gleneagles Hong Kong Hospital in Wong Chuk Hang, near Aberdeen, to be a major employer of medical practitioners in the next few years. HKU will run the clinical services at Gleneagles, with the management run by Singapore's Parkway Pantai Limited and local firm NWS Holdings. Construction will start next year and Gleneagles is expected to be running in 2017. The hospital's layout was being designed, said Professor Law Wai-lun, the associate dean responsible for clinical affairs. It would be a modern design that grouped outpatient services together. Chinese medical outpatient services would also be provided. Law said the intensive care unit and surgical wards would be located on the same floor. Operating theatres would feature advanced equipment for performing complicated ocedures. More than half of all services would be provided at standard package prices, Leung said. Some private hospitals charge mostly on a per-item basis. "Gleneagles will not be a hospital serving only the rich," Leung said. "It will offer a midway choice for the middle class, who do not want to use public services but find current private health care too expensive."

Writer Yukio Wani battles Japan's denial of wartime brutality (By Andrea Chen andrea.chen@scmp.com) Yukio Wani's writing gave voice to Hongkongers' suffering under occupation; he continues to fight moves to play down Japan's wartime brutality - Japanese troops at a memorial service to Japanese soldiers who died taking Hong Kong held at the former cricket club in Chater Road. Japanese troops in a parade to mark their occupation. History is written by the victors, or so the saying goes. But in Japan, where right-wing pressure to erase the country's past aggression from school textbooks and popular history has grown in recent years, the opposite could be said. The ugly side of the country's second world war history has been played down and the voices of its victims have been silenced. But the threat of censorship isn't putting off author Yukio Wani, who is determined to give a voice to Hongkongers who lived under Japanese rule for three years and eight months. He has spent more than a decade interviewing eyewitnesses and studying documents to shed light on the city's darkest era for his book Silent Years. Last month, he launched the Chinese-language translation of the book, extensively updated from the 1996 Japanese version, at the Hong Kong Book Fair. The publication could not have come at a more significant time. It was just before Prime Minister Shinzo Abe's Liberal Democratic Party won a decisive victory in upper house elections. The result raised the spectre of more moves to sanitise history books by a party that has hinted at pulling back from the country's pacifist post-war constitution. "A true patriot should not turn a blind eye to the ugly moments in the nation's history," said Wani, the grandson of a Japanese colonel who was stationed in Guangdong during the war. He devoted a new chapter for the Chinese edition of Silent Years to looking at the right-wing influence on Japan's school textbooks, a phenomenon that has been on the rise since the 1990s. Wani said that when he started his career as a history teacher in the 1980s, there were no attempts to sugarcoat Japan's aggression towards its neighbours in the Asia-Pacific region. Indeed, in 1982 the Ministry of Education, which screens all textbooks for use in schools in Japan, made an addition to the screening mechanism known as the neighbouring countries clause. The clause banned textbook publishers from replacing the word "aggression" with a less charged term or from dismissing the Nanking Massacre as the result of anything other than the actions of Japanese soldiers. Like many Japanese after the second world war, Wani studied history from a particular textbook written by prominent scholars from the University of Tokyo, which offered a fair and balanced view of Japan's wartime history. The book, published by Yamakawa, was used in about 80 per cent of Japanese schools and was used as a reference by the country's exam board. Wani said it was from the textbook that he first learned about the occupation of Hong Kong. By the time he left his school job in the early 90s, the warts-and-all teaching of Japan's wartime history remained in vogue. He was inspired to write his book by his work with an organisation fighting for compensation for Hongkongers who lost their savings when they were forced to exchange their Hong Kong dollars for Japanese military currency that later proved worthless. It brought him into contact with people who lived through the occupation. "Hong Kong was one of the most popular tourist destinations for Japanese people, but they didn't really know the story behind the city," he recalled. His research showed many of the sights popular with Japanese tourists had a grim wartime history. Wan Chai, for example, was home to many brothels staffed by "comfort women" - wartime sex slaves - while Stanley was the location of an internment camp and wartime hospital where many civilians died. As he completed the first draft in 1995, Wani expected a rise in interest and intense media coverage to mark the 50th anniversary of the end of the war. But to his surprise, most mainstream media stayed silent. "Half a century had passed and there were fewer and fewer journalists who had experienced the war and understood its cruelty," he wrote in the postscript to his book. A year later, as his book was being published, Japanese right-wingers turned their fire on the popular Yamakawa textbook. They accused it of being "masochistic" for its criticism of the country's wartime behaviour. "They [right-wing history scholars] criticised the textbook for teaching the young generation about the Nanking Massacre and comfort women - the ugliest side of the nation, as they defined it," he said. A group of history scholars, led by the University of Tokyo's Professor Fujioka Nobukatsu, called for the removal of the "masochistic" content from the history textbook. Later that year, the professor established the Japanese Society for History Textbook Reform, which aimed to write a new history textbook inspiring pupils to "revitalise the nation". The group's rewriting of history went as far as to redefine the the war not as one of invasion or colonisation, but of self-defence. "Boasting of the glorious victories in the past shows nothing but a nation's lack of self-confidence," Wani said. "Indulging in the booming bubble economy, Japanese people forgot to reflect on its past and think of the civilians who were suffering under their combat boots." Unfortunately, the objections of people like Wani drew little attention from mainstream media. Soon, the pressure from the radicals forced Tokyo schools to stop using one textbook, published by Jikkyo Shuppan, which was known for detailing Japan's wartime activities. The new textbook published by the right-wing scholars in 2002 ended up with a surprisingly low market share. The book contained so many inaccuracies that the screening council required the authors to make more than 100 corrections. Yet the public attitude to the country's wartime atrocities has continued to change. "It was a collective effort of the media, popular culture, right-wing politicians and even the internet," Wani said. Self-censorship by educators under pressure from the hard right remains one of his key concerns. History textbooks with large market share have either cut out references to sexual slavery or kept a brief explanation without using the controversial term "comfort women". The college exam board has steered away from setting questions about the second world war to avoid controversy, Wani says. "The rise of the right-wing is leading the Japanese society to a dead end," Wani said. "It will be dangerous if people who have lost confidence in the present look back to the country's powerful army during the wartime for comfort." Despite the changing attitude, Wani's books on Hong Kong have been well received at home, with both the first and second editions selling out. Since then, more witnesses have written to him and offered valuable historical documents. "The more I wrote, the more pieces of the history [of the occupation] I found," Wani said. After his short visit to Hong Kong, Wani turned his attention to researching the history of Zhuhai Airport, which was the hub of Japan's airborne operations in the Pearl River Delta during the war. He plans to publish a new research paper on the occupation by the end of the year.

Tirade about pregnancy check at Hong Kong border goes viral (By Chris Luo chris.luo@scmp.com) A screen grab of Yuan Li's weibo post. An irate Chinese Wall Street Journal editor who was crossing the Hong Kong border when immigration department officials took her into a room and asked if she was pregnant called the encounter discriminatory in a microblog post, which instantly went viral at the weekend. “Although I understand that the staff was only carrying out their duties, I was still very furious,” wrote Yuan Li, editor of WSJ/Dow Jones’ Chinese service who also oversees the Chinese-language website of WSJ. “I felt I was discriminated against for having a PRC passport.” “We are citizens from a country with the world’s second-largest GDP, yet we are asked for visas wherever we go. We are restricted when it comes to baby formula, and now also when it comes to giving birth in Hong Kong. To whom should we complain for such treatment?” she wrote in a Weibo post on Saturday that had been shared more than 30,000 times by Tuesday. The Hong Kong Immigration Department on Tuesday told the South China Morning Post that such measures are in line with government policy and by no means a discrimination. The authority said it had refused 2,773 pregnant mainland women who did meet the conditions to enter Hong Kong this year, as of July. The Hong Kong government has been facing pressure from locals to tighten checks on expectant mainland mothers who try to enter Hong Kong to give birth so their children will gain right of abode. Yuan’s blog post had more than 16,000 comments as of Tuesday, many of them suggesting that mainland residents ask themselves why cross-border tensions have increased. “If the rights and dignity of [Chinese] citizens can't even be guaranteed within our own borders, don't even think of respect when overseas,” columnist Lian Peng said. Another called for compatriots to be more self-reflective, pointing out that ill-behaving Chinese tourists have provoked such discrimination against Chinese people. “Rude behaviour will draw repulsion no matter where you are from,” one blogger wrote. Others put the blame on inconsiderate expectant mothers. “To those pregnant women who attempt to sneak into Hong Kong, please be considerate — your conduct has brought shame to all mainland women,” a user by the name of “angry egg yolk” said. On Monday, Yuan declined to comment on her Weibo post when reached by telephone by the Post. 

 China*:  Aug 15  2013

Gold still glitters in China (By Wei Tian and Wu Yiyao in Shanghai) In the first half of this year, China's gold purchase surged by 54 percent year-on-year to 706.36 metric tons, according to the China Gold Association. China's gold consumption rocketed by 54 percent in the first half of 2013 despite a bearish market globally, putting the country on track to become the top bullion consumer this year. The China Gold Association said on Monday the country's first-half gold consumption reached 706.36 metric tons, up 53.7 percent year-on-year. Growth accelerated from the 26 percent recorded in the first quarter. Purchases in 2012 were 832 tons for the entire year. More than 70 percent of first-half consumption depended on imports because the gold output of China, the world's largest bullion producer, was only 192.82 tons in the first six months, 8.9 percent more than a year before. Net imports into the Chinese mainland more than doubled in the first half to 493 tons, from about 239 tons a year ago, according to Bloomberg calculations based on Hong Kong customs data. The strong growth this year was mainly supported by a surge in gold-bar and jewelry purchases, which gained 87 percent and 44 percent respectively, the China Gold Association said. The two together accounted for more than 90 percent of the total gold consumption in the first half. But in the meantime, industrial use shrank by 1.6 percent.

Rare earth alliance to fight Japan's patent barrier (By DU JUAN) A dozen Chinese rare earth companies have formed an industrial alliance to sue Japan’s Hitachi Metals for holding invalid patents and infringing patent rights of Chinese companies. The legal process could start in early September in the United States and China. At the center of the dispute is something called a neodymium iron boron magnet, a major product that accounts for half of rare earth consumption. The alloy magnet, mainly composed of neodymium, iron, boron and other microelements, is used in manufacturing motors, audio speakers, headphones, cordless tools and computer hard drives. In August 2012, Hitachi Metals asked the US International Trade Commission to stop the sales of such products and their downstream products that did not have a patent license in the country. Three Chinese companies involved in the case finally reconciled with Hitachi Metals on May 14 by paying a sum of money to gain the patent license. But Sun Baoyu, president of Shenyang General Magnetic Co and head of the coalition, said Hitachi Metals no longer has any right to claim the patents. One of Hitachi Metals’ patents expired in 2003, and another will expire in 2014. But the company has extended its expiration date to 2029. He said the Japanese company’s patent extension, which he thinks is invalid, has hindered the market expansion of Chinese rare earth manufacturers. “Hitachi Metals’ action has severely affected China’s rare earth industry, especially for the exports of China’s downstream rare earth products,” Sun said. “Meanwhile, Hitachi Metals has infringed upon patents of some Chinese companies,” he said, without elaborating. Zhao Hu, lawyer and partner of Beijing’s Eastbright Law Firm, said Hitachi Metals’ patent extension blocks technological progress. “Based on Chinese law, no patent extension is allowed. All patents expire after 20 years. Internationally, patent extension can happen based only on reasonable, effective and strong causes,” which Zhao thinks do not apply in Hitachi Metals’ case. According to Sun, eight Chinese rare earth companies have gained patent licenses from Hitachi Metals. However, there are about 200 companies producing such magnets in China. Of those, five have annual production capacities of 3,000 metric tons, and about 20 have capacities of 1,000 tons to 3,000 tons. Hitachi Metals is dominant in the rare earth sector, with more than 100 patents in the United States, about 300 in China and 600 in Japan. This means a large portion of Chinese products containing the magnets cannot be exported because they don’t have patent licenses, said Sun. And Hitachi Metals will not sell its patent rights, he said. Gao Yunhu, chief of the Rare Earth Office under the Ministry of Industry and Information Technology, said the government will provide assistance to the Chinese companies if asked. At present, China produces about 80,000 tons of the magnets each year, and about a quarter of the products have patent licenses enabling them to be sold abroad. About 30,000 to 40,000 tons of such products are used domestically. Without a patent license, “our foreign clients will not buy our products”, Sun said. “We respect the intellectual property rights. But what Hitachi Metals has done is to set up trade barriers,” he said. So far, each member company of the alliance has paid $1.5 million to cover possible costs of the lawsuits. Chinese and US legal teams will act on behalf of the Chinese companies in the courts of the two countries. 

Li Ning stages comeback (By GAO CHANGXIN) Chinese sportswear firm holds positive outlook as excess inventory drops - Distressed Chinese sportswear maker Li Ning Co Ltd is on track for a turnaround as a three-year makeover plan initiated last year starts to pay off, company officials said. Cash flow has improved, inventories have been pared and accounts receivable have fallen, amid a restructuring that focuses on improving distribution efficiency and brightening the company's brand image. Li Ning, which is backed by US private equity firm TPG Capital LP, expects its annual loss to narrow this year. Kim Jin Goon, a partner at TPG who was hired as Li Ning's executive director and vice-chairman last year, said on Monday that the worst is behind the company and further benefits will emerge from money invested during the makeover. "For the full year of 2013, we expect the company's operating cash flow will continue to improve, along with our distributors'profitability," Chairman Li Ning, an Olympic gymnastics legend, said in a statement. Li Ning shares fell victim to profit-taking on Monday, sliding about 5.9 percent to HK$4.92 (63 US cents). The price was less than one-sixth of its 2010 peak of about HK$32. Li said the company has no imminent need to raise funds to finance its transformation. In January 2012, TPG bought 561 million yuan ($91.8 million) of Li Ning's convertible debt. The bonds, if converted, would give TPG a stake of about 12 percent in the sportswear maker. China's sports apparel market has been struggling as a result of inventory mismanagement and excessive expansion after the 2008 Beijing Olympics. According to Bloomberg, the nation's six biggest sportswear companies opened a combined 12,300 stores between 2008 and 2011, an average of 11 per day, expecting higher demand after the Olympics. But the industry found that demand didn't keep pace with its growth. Last week, ANTA Sports Products Ltd said first-half profit sank 18.7 percent and cash flow contracted by 34.6 percent. Kim said although Li Ning's inventory position has improved, the industry's inventory level is still high on average, and more time is needed to resolve the problem. Li Ning's first-half loss of 184 million yuan was less than expected. Three analysts surveyed by Thomson Reuters had forecast a 241 million yuan loss. Excluding one-time spending on the makeover, the company reported earnings of 58 million yuan before interest, tax and amortization expenses. The total number of stores was 6,024 as of June 30, compared with 8,255 at the end of 2011. Inventory levels dropped about 30 percent year-on-year. The inventory turnover ratio fell to less than seven months from nine months at the end of 2011. Same-store sales at its direct-sale stores grew 9 percent in the first half. The partnership with National Basketball Association star Dwayne Wade has boosted brand recognition and product sales, the company said. Wade-branded shoes will hit the United States market over the next few months. Li Ning also stepped up digital marketing this year to appeal to younger people.

Ties with Kenya 'not just about resources' (By Li Lianxing in Masai Mara, Kenya) President hopes to learn from China, promote tourism - The strong relationship between China and Kenya is based on a wide range of partnerships rather than mineral or natural resources, Kenyan President Uhuru Kenyatta said, adding that it could be a model for China-Africa relations. "There has been a major accusation that China is only interested in exploiting the mineral resources of the African continent. But China and Kenya have a strong and robust relationship, and it's not based on mineral resources exploitation, but based on investment, manufacturing and infrastructure development," Kenyatta told China Daily in an exclusive interview before his first state visit outside Africa after taking office in April. Kenyatta is scheduled to visit China from Aug 18 to 23, Foreign Ministry spokesman Hong Lei said on Monday. "There are indeed many other areas where we have seen a great deal of benefits from our relationship with China, and also there are some areas we need to strengthen, as we know China is slowly becoming one of our largest investment and development partners," Kenyatta said. He also said China is critical to Kenya's trade and investment, and he will cement the already good ties with China during his visit. Trade volume between the two countries reached $2.84 billion last year, up 55 percent from 2010, according to the Ministry of Commerce. "We also want to get firsthand development experience from China, which is the source of success as the second-largest economy," Kenyatta added. Both countries embraced new leadership this year, and Kenyatta said he and Chinese leaders are facing common challenges. "China and Kenya should jointly drive the international agenda and play a bigger role in the international platform to represent developing countries." "We have a lot in common in history and could learn from each other," he said. Kenyatta said his country has a lot to learn from China, especially the model of economic growth, which has been based on the development of infrastructure, manufacturing and fully utilizing the potential of youth. "We have rapidly and incredibly growing economic muscles, and Kenya could learn from that particular model," he said, adding that Kenya has become an economic service hub for the Eastern African Community, an organization comprised of five nations. He also expects his visit to further expand cooperation in tourism marketing, as well as encourage more Chinese manufacturers to set up plants in his country. He said he wants to diversify his country's tourism market to attract more Chinese. About 41,000 Chinese tourists visited Kenya last year, an increase of 10.4 percent compared with 2011, according to the Kenyan Ministry of Tourism. "Traditionally our tourism was looking toward Western Europe and the United States. But we are now really moving very fast to diversify our products," he said. "As we continue to encourage the visits from traditional markets, we also recognize the growing importance of China, India, South Africa and Brazil, as Kenya's tourism resources are something they were not familiar with previously." The country has prepared to welcome more Chinese to travel to Kenya and Africa, Kenyatta added. "We have a number of programs running in the universities training people to speak Mandarin," he said. He said Kenya provides not only wildlife — traditionally known as the major part of Kenyan tourism — but also a rich cultural heritage for international visitors. He said Kenya and other East African Community member countries are trying to offer one-stop visas to attract international tourists. "We have taken action and had discussions with our partners in the EAC on the prospects of developing a one-tourism visa that could enable tourists who are applying to go to Kenya to also go to Rwanda, Uganda and other eastern African countries," said Kenyatta. "We are hoping that it could be realized very soon," he said, adding that the visa could be issued as early as next year.

Hong Kong*:  Aug 14  2013

Cinda close to applying for HK listing: sources (By Ray Chan) Cinda was set up under the auspices of the People’s Bank of China in the late 1990s to deal with an estimated 1.4 trillion yuan worth of bad assets amassed by mainland banks. Cinda Asset Management, one of China’s big four state-owned debt clearing agencies, is expected to apply for a Hong Kong listing next month after running a weekend beauty parade to talk to potential underwriters, sources told the South China Morning Post. The size of Cinda’s initial public offering (IPO) is not yet finalised but bankers expect the Beijing-headquartered asset manager to raise US$2.5-US$3 billion from its Hong Kong listing. People with direct knowledge of the planned issue predict strong competition for the role of underwriter, but declined to be identified because they were not authorised to speak in public. Cinda, set up in the late 1990s to remove an estimated 1.4 trillion yuan worth of bad assets amassed by mainland banks, has shortlisted four investment banks – Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, and UBS. “The offering of Cinda is expected to take place in Hong Kong in fourth quarter and the application submission, such as the preliminary investor base, financial forecast, and valuations, will be ready in September,” said a Beijing-based banker who is handling the transaction. The bankers said Cinda’s multi-billion-dollar listing had drawn strong early interest, and had already attracted strategic investors due to its business’s “counter-cyclical” nature at a time when growth in the world’s second-biggest economy is slowing. “The Cinda IPO could be up and running ahead of the long-awaited listing of China Everbright Bank and Huishang Bank, both of which are under mounting capital pressure,” said another senior banker in Hong Kong. China’s second quarter GDP climbed 7.5 per cent in line with market expectations, but it was down from 7.7 per cent growth in the first three months after decades of blistering growth in the world’s most populous country. The size of Cinda’s planned US$2.5-US$3 billion worth share sale is important for deal-hungry bankers who have suffered from choppy market conditions, with investors reluctant to put money into new share offerings after a string of poor after-listing performances. The equity raising will be relatively swift, given that Cinda has already attracted significant investments from pre-IPO and strategic buyers, including a consortium of deal-savvy foreign investors that includes UBS, Standard Chartered, Carlyle Group and Boyu Capital, a well-connected private-equity firm co-founded by former Ping An president Louis Cheung and Mary Ma, who served as a partner at TPG Capital and chief financial officer of Lenovo. Jiang Zhicheng, the grandson of former Chinese state head Jiang Zemin is also a Hong Kong-based partner in Boyu. The South China Morning Post reported in March this year that the Carlyle Group and Boyu Capital both made indirect investments to take minority stakes in Cinda. Under a complex transaction with Hong Kong-based private equity firm Citic Capital, Boyu obtained part of Citic’s Cinda stake. In March last year, UBS, Standard Chartered, and Citic Capital invested a total of 5.4 billion yuan for an 8.5 per cent stake in Cinda, and their strategic investment talk had begun as early as December 2011. In 2005 and 2006, foreign banks and private equity firms poured billions into Chinese financial institutions before they went public. The investment was largely welcomed by the Chinese as the big global banks raised the profile of the Chinese companies which also benefited from working with global banks in such areas as credit, markets and operational risk management.

Half of Hongkongers oppose Occupy Central's campaign for universal suffrage (By Victor Zheng, Fanny M. Cheung, and Po-san Wan) Victor Zheng, Fanny Cheung and Po-san Wan assess the findings of a survey on the Occupy Central campaign, which reflect concerns that its disruptive actions might inflame social conflicts - Benny Tai Yiu-ting’s Occupy Central campaign has provoked heated discussions among the local community. Supporters of the movement are confident the campaign will aid the struggle for universal suffrage, and even enhance civil society in Hong Kong and raise awareness of the rule of law. (In Tai’s words, rise from “needing to adhere to the law” to “achieving righteousness with the law”.) Opponents, however, feel that the campaign undermines the rule of law and could even shake the economic and financial foundations of Hong Kong. But how does the Hong Kong public assess the possible benefits and dangers of the campaign? A telephone survey of 1,004 people conducted by the Hong Kong Institute of Asia-Pacific Studies at the Chinese University, from May 30 to June 5 this year, before the movement’s first deliberation day, may shed some light on the question. Firstly, do Hong Kong people support the campaign? Nearly half of those surveyed said they did not support the campaign or were strongly opposed to it, while 77.5 per cent of people said they would not or probably would not take part in it. About a quarter said they supported or strongly supported the campaign, while only a 7.3 per cent said they would or probably would take part it in. In general, the younger, the more educated, and the higher the household income of the respondent, the greater the proportion expressing support. As well, a majority of people surveyed were pessimistic both about the campaign’s ability to forge consensus, and about its ability to get the central government to accept a universal suffrage plan put forward by the campaigners. Some 67.1 per cent said the campaign definitely would not or would not be able to come up with a plan for the election of the chief executive through universal suffrage with which the majority of Hong Kong people can agree, while only 7.9 per cent of them believed it would. Similarly, an overwhelming 75.7 per cent of people said the campaign would not be able to get the central government to accept the campaigners’ plan, while only 3.7 per cent believed it would. Related to this, nearly 60 per cent of people surveyed thought the campaign would have a negative effect on the city’s relations with the mainland, while 9.5 per cent said it would have a positive effect. But on the question of whether the campaign could unite the city’s pro-democracy forces, opinion was more divided. Some 38.2 per cent of people believed it would not, while 31.9 per cent said it would. The campaign’s planned act of civil disobedience – and the disruption it could cause – has also roused debate. It can be said that, although a comparatively large number of respondents felt that the campaign would undermine Hong Kong’s economic and business environment, they did not constitute more than half, while those who believed that the campaign would not do so, comprised over 30 per cent. Clearly, there are some definite divergences in the public’s views on this issue. Similarly, although a relatively large number of respondents thought that the Occupy Central campaign would pose a threat to the rule of law in Hong Kong, more than 30 per cent held the opposite view, showing that people’s views on the matter are by no means uni-dimensional. It is worth noting that although nearly 60 per cent of the respondents felt that the campaign would exacerbate social conflicts, and more than 20 per cent thought that it would not. And while 53.1 per cent of people believed that future democratic campaigns would become more radical if Occupy Central, with its advocacy of non-violence, were to fail, 11.4 per cent predicted they would not. Precisely because Hong Kong people have quite diverse political stances and socio-economic backgrounds, and sometimes very different perceptions of social issues, adopting a direct, explosive kind of approach in an attempt to reach a consensus is obviously quite a departure from a culture emphasising negotiation and the avoidance of direct confrontation, which characterised Hong Kong society in the past. Such an approach would also inevitably raise the concern in some people that it is easy to “misfire”, exacerbating the emotions of the opponents and resulting in a greater-than-anticipated adverse effect or impact. This is probably why the abovementioned majority of respondents gave a relatively low assessment of the positive effects of the campaign, but a relatively high assessment of its negative effects. In the survey, those who indicated they would take part in the campaign or said they probably would or probably would not take part (38.5 per cent of all respondents) were further asked if they would act to block traffic in Central. Among them, 56.6 per cent said they would definitely or probably not participate, while 9.9 per cent said they would definitely or probably participate. A rough projection based on these percentages alone suggests that there should be no difficultly attracting about 10,000 participants, the goal set by the campaign’s proponents. But while many Hong Kong people said they would not take part in the campaign, a sizeable number of them also appeared to support others’ right to do so. When asked how the government should deal with a traffic block, more than 40 per cent of those surveyed felt that the scene should be cleared as soon as possible, while more than 30 per cent took the opposite view. It would appear that, on this issue, the SAR government is caught between a rock and a hard place. Whatever their views of Occupy Central, the vast majority of people were aware of the campaign. However, contrary to recent commentary about the politicisation of Hong Kong youth, a significantly larger proportion of young people than older people said they had not heard of Occupy Central. Judging from the findings, it seems that most of the respondents are very cautious, even though the proponents of the campaign repeatedly stress the idea of “occupying Central” through the “non-violent” approach of “love and peace”. This may imply that they are worried about the potentially huge risks that it poses to society. It is not only the central and SAR governments that will have to seriously address this political problem; it is even more compelling for all sectors of the community to give the issue serious consideration. And if the campaign really does develop to the point where 10,000 people block the main roads of Central, “paralysing Hong Kong’s political and economic centre”, based on the results of the survey, we can conclude that many Hong Kong people believe social conflicts would be exacerbated, while very high social risk might also be posed. Of course, the campaign might, in the end, raise Hong Kong people’s consciousness of civil society and the rule of law, but no clear or accurate predictions can be made at present. Victor Zheng is the associate director of the Centre for Social and Political Development Studies, Hong Kong Institute of Asia-Pacific Studies, the Chinese University of Hong Kong. Fanny M. Cheung is the pro-vice-chancellor of the Chinese University and director of the Hong Kong Institute of Asia-Pacific Studies, while Po-san Wan is a research officer at the institute

 China*:  Aug 14  2013

Cashing in on health scares, China online food sales boom (By Dominique Patton in Beijing) On August 3, 2013, the world's biggest diary exporter Fonterra said a bacteria, Clostridium botulinum, which can cause botulism and affects muscles, had contaminated 40 tonnes of its whey protein, most of which was sold to manufacturers to make their own products, including milk powder. A day later, China banned all milk powder imports from New Zealand. Hong Kong recalled 80,000 cans of Cow & Gate baby formula. Other companies that were affected include Shanghai Yanjiu; Dumex Baby Food, a Danone brand; Wahaha Health Food and Wahaha Import & Export; Coca-Cola (China) and Abbott. The bird flu outbreak sparked a surge in organic poultry. Chinese people are becoming increasingly concerned about where their food comes from. Chinese consumers are responding to a powerful new marketing tactic that plays to a widespread fear of food contamination - the promise of safe groceries sold online. Pledging produce direct from the farm, vendors have found food is becoming one of the fastest-growing segments of Internet retailing as they cash in on scares from cadmium-tainted rice to recycled cooking oil. The trend is adding momentum to a Chinese online retail boom driven by a rapidly expanding middle class, with companies such as COFCO and Shunfeng Express betting that a decent slice of a 1.3 billion population will pay for the peace of mind they say their services offer. “I think people are willing to pay a higher premium than in the West. In other markets, like the UK, food e-commerce is about convenience. Here, there’s going to be a higher quality and safety premium,” said Chen Yougang, a partner at consultancy McKinsey. But convincing some sceptical Chinese consumers on food quality will remain a battle. Shanghai-based Zhang Lei expressed doubt on the credentials of some products being touted as organic. “Everyone knows that in China organic is not the real thing,” said the mother of one. Nonetheless, total online sales of fresh produce in China could rocket to 40 billion yuan (HK$50.3 billion) in five years from about 11.5 billion yuan this year, said Zhou Wen Quan, a senior analyst at Beijing Orient Agribusiness Consulting. Research firm Euromonitor has more modest expectations, but still sees growth comfortably beating major overseas markets. It looks at volumes rather than values of online purchases of fresh food, with the Chinese market expected to grow by around 8 per cent by 2017 from 664 million tonnes this year, compared to US growth of about 5 per cent from 77 million tonnes. So far, most food sold on China’s largest online shopping sites such as Yihaodian, majority owned by Wal-Mart, and Jingdong Mall has been packaged items or fruit with a relatively long shelf-life. But a wave of new businesses are focusing on fresh and premium produce, using the Internet to target higher-income consumers than supermarkets, which typically serve a broader customer base, analysts say. “The vegetables are really fresh,” said Beijing resident Lei Na, who shops on websites such as Womai.com, owned by China’s top food processor and trader COFCO. “Supermarket food doesn’t look that fresh, especially if you only get there in the evening.” Shunfeng Express, China’s largest delivery company, last year launched Shunfeng First Choice offering a range of food to around 500,000 consumers. About 70 per cent are imported products such as wine and milk powder, but it also sells local seafood, meat and vegetables. “We go directly to the farms to pick the produce, and then using our own logistics, deliver straight to the consumer. So from the tree to the consumer’s dining table, we’ll remove all the sectors in between,” said Yang Jun, director of sales and marketing. Persuading customers they can meet promises on food safety is crucial for online retailers. “If I’m busy I use websites. But if I have time, I prefer to drive to the supermarket and choose vegetables myself,” said Zhang in Shanghai. But vendors say that cutting out middlemen increases freshness and makes food more traceable, while packaging barcodes that can be read by smartphones help consumers verify the origin of items. And companies go to some lengths to describe their products online. Customers looking at free-range chickens on the Benlai Shenghuo website, a last year start-up whose name roughly translates as ‘original life’, get details on the breed they are selecting and its diet, along with photos of the birds wandering on farms. Online customer reviews and ratings are also key in convincing potential buyers of quality, said Chen Liang, a senior research expert at Alibaba, owner of China’s biggest online marketplace Taobao. With its 10 million users per minute, Taobao has ridden the e-commerce boom in China, with its customers moving from non-essential items such as books and electronics to clothes and recently food. Its sales of meat, seafood, fruit and vegetables grew 42 per cent last year to nearly 1.3 billion yuan. “Before, people thought the Internet wasn’t suitable for selling clothes. But now it’s the most suitable channel. I think food will follow this trend,” Chen said. Another major challenge facing e-commerce food firms is the cost of developing nationwide cold chain logistics, with McKinsey’s Chen suggesting players work together to connect suppliers with a network of cold storage facilities. But with food scandals hitting Chinese shoppers thick and fast - products from the world’s largest dairy exporter Fonterra have just been recalled from Chinese shelves - firms are confident they can overcome hurdles in the market. “During the bird flu outbreak, our chicken sales exploded,” said Steve Liang, founder of Shanghai-based online retailer Fields, referring to a jump in sales after a new strain of the virus discovered in February that killed over 40 people in China and Taiwan.

Construction of SW China's Shilin tunnel underway (By Xinhua) Workers construct the Shilin tunnel of the Yungui railway, a railway linking Kunming of Yunnan province and Nanning of Guangxi Zhuang Autonomous Region, in Shilin County, southwest China's Yunnan province, Aug. 11, 2013. The underway Shilin tunnel, designed to have a length of 18,208 meters, is expected to be finished by the end of 2013. 

China-US tourism gets a boost (By Chen Jia in San Francisco chenjia@chinadailyusa.com) In a move to encourage increased international visitation to the US and to grow America's share of the global travel market, the National Tour Association (NTA) will host a China Market Forum in Hawaii next week. "The prominent travel agents from China are on their way, as well as leading US experts," said Bob Rouse, spokesman for the NTA, which represents package-tour operators in the US and Canada. The forum comes after a series of initiatives this year, which aims to bring millions of new international visitors - and the billions of dollars they spend - to the US, creating tens of thousands of new American jobs. Earlier this year, the Obama Administration and representatives of the US travel and tourism industry launched a campaign called Brand USA that included China as a key target of their $150 million marketing fund promoting the US as the top travel destination in the world. After establishing offices in Beijing and Shanghai earlier, Brand USA launched anintegrated campaign which includes consumer marketing, social media and a Chinese-language website, available in mobile and PC versions, on Aug 7. "The website and social media (specific to the Chinese market including Sina Weibo, Tencent and YouKu) work together to engage travelers, distribute influencer content and connect with users regardless of their preferred platform," said Camila Clark, marketing communications director of Brand USA. This gives Brand USA the ability to reach consumers through a cohesive marketing program and in turn provide highly qualified users and value to our travel partners in China and globally, she said. She said the number of Chinese visitors to the US has been increasing rapidly, and even more visitors hope to explore the "roads less traveled" in coming years. "The new website, which is not simply a translation of the English website, includes practical information on US destinations, opportunities to join promotional activities, receive special offers and earn rewards for their engagement while integrating with the social media function," she said, Users may upload stories and photos of their US trips to win a variety of prizes, she added. In 2011, China ranked No 9 in terms of international arrivals to the US and in 2012 it jumped to No 7. By the end of 2013 it will be vying closely for the No 5 spot with Germany and Brazil, according to the latest data from Brand USA. "We also enhanced our Chinese website to include a daily posting on Weibo (China's Twitter) with a different theme each day," said Angela Jackson, media relations director of the San Francisco Travel Association. The association's Shanghai Office has been working with five top tour operators in Shanghai on special itineraries for attracting more Chinese travelers to California during the 2013 Spring Festival, she said. Helen Tsui, the director of international tourism for the association's Asia-Pacific department, saidthat "repeat Chinese visitors nowseek more in-depth tours to gain a deeper understanding of the destination, and their strong interest in buying luxury brands and vitamins has not changed". First time Chinese visitors to the US usually try to cover as many cities as possible, spending only one day in San Francisco. So repeat Chinese visitors like to spend three to four days to really experience the different neighborhoods of our city.

NYU Shanghai college opens doors (By China Daily) Students registering at the temporary facilities of the new NYU Shanghai University in China on Sunday. It's permanent campus is expected to be ready next year. New York University Shanghai, the first Sino-American higher-education institute, officially started operation on Sunday with the arrival of almost 300 students, as American universities are trying to find new ways to access millions of Chinese students. Among the students, 150 are from China and 145 from other parts of the world, including 100 from the US. Faculty members, with quite a few from New York and the US, also arrived at the temporary campus of NYU Shanghai. The new permanent campus - still under construction in Shanghai's financial center in Pudong - is expected to be operational by next year. Yu Lizhong, former president of East China Normal University and now president of NYU Shanghai, told the students on their arrival that he hoped to make history with this school in China. While there are hundreds of joint programs between Chinese and foreign universities in China, NYU Shanghai was the first full-fledged university with an American background. It is also the third global campus of NYU after its home in New York City and its second campus in Abu Dhabi. NYU Shanghai's Chinese partner is East China Normal University in Shanghai, a prestigious institution in China with a history dating back to Saint John's University founded by the US Episcopal Church there in 1925. Qualified foreign universities can conduct joint programs with Chinese partners, but the requirements are strict and the application process can grind on for years. European and Australian universities, which were more adventurous and patient, started programs in China years ago and already have a few established success stories, such as the University of Nottingham Ningbo and Xi'an Jiaotong Liverpool University. US universities began to apply in the recent years. NYU applied in 2011 and the Shanghai campus was approved last year. Duke University also got approval to start a university in Kunshan, a center of electronics manufacturing near Shanghai. Chinese families who have saved for years for their children's education and want to send them overseas for an international education have become favored customers for universities in the UK, Australia, Canada and the US. According to the Institute of International Education, 194,029 Chinese students were enrolled in American universities in the 2011-12 academic year, the No 1 origin of international students, almost twice India's representation, the No 2 source of foreign students to the US. While many vice-provosts of US universities or even high schools go to China to attract students, some universities are looking for ways to set up campuses in China so students don't need to go overseas to get the caliber of education they're looking for. This year, NYU Shanghai was only allowed to admit students from 10 provincial regions in China and 3,000 applicants competed for 150 positions. In 2014, it will be able to admit students from all 31 provincial regions on the Chinese mainland. The 145 international students from more than 40 countries and regions were also selected out of 3,000 applicants. The annual tuition for international students is similar to NYU's standard in the US - $44,800. Chinese students pay significantly lower at 100,000 yuan ($16,000), but it is much higher than the standard tuition of 5,000 yuan for most of undergraduates at East China Normal University. With China's economic growth and increasing importance in the world, many American students also showed strong interest in the Shanghai campus. A student from Florida, who was only identified as Sara, told the Shanghai Evening Post that she likes the cultural diversity at NYU Shanghai. "In American universities, there is also diversity, but the proportion may be 20 percent. In Shanghai it may be 75 percent and I can interact with many students from Asia," Sara said, adding that she wants to study economics and she believes the experience in Shanghai will be a big plus. While foreign students are often assigned to live in a separate environment from local students in campus in other universities in China, Chinese and international students live in the same dormitory so that they become totally immersed in a cross-cultural environment. Students pay 800 to 1,800 yuan each a month to share a two- or three-person dormitory room.

Hong Kong*:  Aug 13  2013

China liquidations keep Hong Kong professionals busy (By Enoch Yiu enoch.yiu@scmp.com) Twenty years after mainland firms began listing in Hong Kong, it is no surprise to see a growing number of cross-border liquidations, from which some Hong Kong professionals are making a tidy living. "As long as a liquidator knows the tricks and trade secrets of how to get things done in China, he can arrange asset sales and bring the money out of the mainland to pay creditors or shareholders," said Alan Tang Chung-wah, a partner and head of specialist advisory services in the Hong Kong office of mainland accounting firm ShineWing. "I have done that for 30 years and still do it every day." ShineWing has handled many cross-border liquidation cases and Tang, a Hong Kong-based accountant, has specialised in mainland-related bankruptcy cases for 30 years. His clients include Hong Kong and foreign investors who set up joint ventures or subsidiaries on the mainland, as well as collapsed Hong Kong-listed mainland firms. While many people assumed companies sought to be wound up because they could not repay their debts, Tang said this was not always the case. "Besides financial troubles, many companies apply to be wound up because shareholders have disputes among themselves and seek to liquidate the company to divide its assets," he said. Last month, the Securities and Futures Commission applied to wind up Hong Kong-listed mainland firm China Metal Recycling because it alleged the company had issued a misleading listing prospectus in 2009 and continued to maintain the false information. The Court of First Instance appointed provisional liquidators to investigate its books and records and take control of the company. On the mainland, Tang said, he would need to go to local courts to apply to take over the mainland assets of a company as required by the country's bankruptcy law. Each local court would decide individually on the release of assets located in their city, and to attach the assets of a company with operations in 10 mainland cities would require applying to 10 local courts. "In theory, it is the court that decides how to divide the assets of the company. But in reality it is the local governments and other local business partners who make the decision as the court takes their views seriously," Tang said. The key to retrieving assets from the mainland is therefore to convince the local governments and local business partners that it is a good idea to deal with liquidators. "Many local officials and business partners are reasonable. As long as the liquidators can present them with a valid asset sales plan or a debt restructuring plan that can help to maintain the business and jobs for the local people, they co-operate with us," Tang said. "In one case, a mainland business partner said he had waited for a long time for me to arrive, because only after the liquidators sign off on all the paper work can a business continue to operate and get its money out of the banks," he said.

Chief Executive Leung backs police over Mong Kok melee (By Emily Tsang emily.tsang@scmp.com) Chief executive insists officers were provoked as he addresses public forum, and also says Exco members who quit deserve apologies - Secretary for Security Lai Tung-kwok (left), Secretary for Home Affairs Tsang Tak-sing, Chief Executive Leung Chun-ying, Chairman of Yuen Long District Council Leung Che-cheung and Mak Chun-yu, district officer of Yuen Long. Chief Executive Leung Chun-ying defended the police and hit back at critics of his administration yesterday at a meeting in Tin Shui Wai, the new town known as the "City of Sadness". He also took the opportunity to attack the pan-democrats' filibustering in Legco. Leung started his speech by expressing support for the police handling of the melee in Mong Kok on August 4, when groups clashed over teacher Alpais Lam Wai-sze's verbal attack on officers the previous month. "We could not tolerate the small group of people who used the opportunity … to express their personal dissatisfaction with our police force," he said. In a rare move, he also announced he had ordered the education chief to submit a report on the Lam case. Leung said: "I stress that the police force who carried out their duty to defend public order was fair, neutral, unbiased and acting in accordance with the law. "As we can see on internet videos, there were protesters there who provoked the police in different ways … The Hong Kong police exercised forbearance, while enforcing the law." Leung reiterated that former Executive Council members Franklin Lam Fan-keung and Barry Cheung Chun-yuen deserved apologies from the people that reported them to the Independent Commission Against Corruption over possible conflicts of interest. Lam, who was accused of profiting from inside information by selling two flats ahead of the introduction of new stamp duties, resigned this month, hours after the Department of Justice said it had insufficient evidence to prosecute him. The ICAC also said it would not follow up on the Cheung case without further evidence. He quit all his public posts in May when his failed Hong Kong Mercantile Exchange came under criminal investigation, which is ongoing. Leung said: "After the ICAC cleared Lam, not one person - including those who reported him or the political parties who stirred up the incident - said sorry to Lam, publicly or privately. "The people who reported Cheung, too, did not apologise to him." Leung stressed that the ICAC should not be used as "a political tool" and pointed out the government had now reviewed its conflict-of-interest guidelines for ministers. The Democratic Party's chief executive, Lam Cheuk-ting, a former anti-graft investigator, said Leung's call to apologise was an "outrageous joke". He said that the chief executive should not put pressure on ICAC or deter the public from reporting any suspicious case to the graft-buster.

 China*:  Aug 13  2013

Flower cakes catch tourists' attention in Yunnan (By Guo Anfei and Li Yingqing) It used to be ham, wild mushrooms and pu'er tea, but not any more. Visitors from Yunnan are now taking home roses, in cakes. Guo Anfei and Li Yingqing report from Kunming. Supermarkets in the cities stock aisles and aisles of the product, and special booths at the new airport in Kunming sell this and nothing else. The same is happening in other major tourist destinations in the province such as Dali and Lijiang. The flower cakes have definitely caught the attention of tourists coming to Yunnan, but it is a relatively new seduction. It did not take a Eureka moment to spark the trend, but some believe that it took some push to get it going. "The flower cake has been around for more than 20 years, but they had been mostly eaten locally. "Traditionally, people in Yunnan looked at roses as food and flower cakes were eaten at breakfast and as snacks," says Zhang Chao, general manager of Yunnan Jiahua Food, currently one of the biggest producers of these rose pastries. "In 2007, we mapped out the commercial production of flower cakes, took a new look at the product and its packaging and presentation. We also looked at advertising, and creating franchises." It was a fortuitous move that quickly brought visible returns. The first franchise store opened in July 2010 and the shop sold 130,000 yuan ($21,203) that first day, breaking a record in the baking industry in China. Zhang says the sale of these pastries has increased by 50 percent year on year since 2008. In 2012, Jiahua's total sales of rose pastries reached 15 million yuan, or about a third of the company's total revenue. Currently, Yunnan Jiahua Food has 3,000 mu (200 hectares) of land cultivating roses that are edible. A third of the production base lies in Lufeng county, Chuxiong Yi autonomous prefecture, and the rest is located in Malong county, Qujin city. Together, the Jiahua plantations produce 1,200 metric tons of roses that are used in the pastries.

Hong Kong*:  Aug 12  2013

War of words rages over fate of the rule of law in Hong Kong (By Tony Cheung tony.cheung@scmp.com) Silent Majority takes self-inflicted blow as it slugs it out against Occupy Central - Ho Lok-sang (left) and Chan Kin-man face off over civil protests during a debate on RTHK yesterday. It was round 2 yesterday in the battle between Occupy Central and Silent Majority for Hong Kong, and this time the challenger appeared to suffer some self-inflicted damage. A rift became apparent within Silent Majority, the group launched last week to counter Occupy Central's campaign for civil disobedience in pursuit of universal suffrage in 2017. Ho Lok-sang, professor of public policy at Lingnan University and one of the six convenors of the new group, said he disagreed with former radio host and fellow convenor Robert Chow Yung's suggestion that their group represented "good" while Occupy Central represented "evil". Silent Majority wants to win the backing of at least 100,000 people for a peaceful campaign to protect what it says are the city's interests. In a second radio debate, this time on RTHK yesterday, Chinese University sociology professor Chan Kin-man, of Occupy Central, insisted his group's plan would not hurt the rule of law. "It is only an extraordinary measure for extraordinary times, because I believe that if the next political reform fails, it will be very difficult to govern Hong Kong," he said. Chan called the planned protest a "self-sacrifice" to alert society to a critical situation. Ho countered: "I am worried every time I hear 'extraordinary measure for extraordinary times'. "If we backslide gradually on the spirit of the rule of law, some people might think that as long as they stand for justice, they can do something illegal." Ho said it was important to prevent people from abusing their freedoms in a way that would infringe on other's rights. Chan again said that civil disobedience was a last resort. It would not be a major disturbance to ordinary people's lives as it would take police only about a day to remove everyone blocking the streets. Its effect on the rule of law was far less worrying than a society that had lost its ability to determine the meaning of universal suffrage, he said. In a forum in Sha Tin yesterday afternoon, Chan said that to avoid the Occupy Central protest ending in clashes, the group would be holding workshops with psychologists and social workers to teach participants how not to be provoked by opposing protesters.

Hong Kong police watchdog chief warns of breakdown between police and public (By Olga Wong olga.wong@scmp.com) Watchdog chief says controversy over rival protests reflects mistrust in the government - The chairman of the police watchdog has warned of a possible breakdown in the relationship between the public and the force, blaming mistrust in the government which he says has reached a critical point. Jat Sew-tong, a senior barrister and part-time High Court judge, called on the police to urgently review the force's guidelines on what events frontline officers can and cannot take part in. His comments follow a rally in support of the police last Sunday at which a senior officer spoke to the crowd. A group opposed to the rally invaded the stage, delaying its start, and there were scuffles between the two groups. The rival protests were a reaction to a video posted online of a teacher abusing police for the way they handled a dispute between the Falun Gong spiritual movement and the Youth Care Association. Sunday's events in Mong Kok sparked debate throughout last week. "The relationship between the public and police has reached a dangerous level," Jat said. "Why did a teacher swear at an officer? Does the incident [at last Sunday's rally] reveal a deeper conflict? Why did the rally happen? Is it because stress within the police force has exploded? What the frontline officers are facing is a reflection of public mistrust of the government." Jat's remarks, on the television programme On the Record, came as the number of complaints to police against retiring superintendent Gregory Lau Tat-keung's participation in Sunday's rally reached 600. Jat said that the police watchdog, the Independent Police Complaints Council, received more than 60 complaints over a comment by its secretary general, Ricky Chu Man-kin, on Wednesday that the pro-police rally had been political in nature. The police issued a report reaching the opposite conclusion. Jat said whether or not the rally was political was irrelevant, since police regulations say officers must avoid activities which could give the impression that their impartiality in executing the law would be affected. He said the general orders should be made clearer. Democratic Party lawmaker James To Kun-sun said little could be done to regain public trust until the government gained credibility. "It's almost unavoidable for officers to be caught between the public and the government," he said. Last night, a police spokesman said the force would review the general orders regularly.

 China*:  Aug 12  2013

Islands dispute hammers attitudes (By Li Xiaokun) Chinese and Japanese views toward each other hit 9-year low, poll finds - The impasse between Beijing and Tokyo over the Diaoyu Islands has badly hurt the attitude of both peoples toward their neighbor, with nine out of 10 saying they dislike the other nation, a recent survey has found. Results of the survey, co-sponsored by China Daily and the Japanese nonprofit think tank Genron NPO, are the worst in almost a decade. They are even worse than in 2005, when Japan's then-prime minister Junichiro Koizumi repeatedly visited the Yasukuni Shrine honoring Japan's war dead, including war criminals from World War II. Despite this mutual aversion, 72 percent of Chinese and 74 percent of Japanese see ties as "important". Corresponding figures in Chinese and Japanese intellectual groups reached 80 percent and 92 percent. Without a breakthrough in relations, "similar surveys will find people's emotions hitting a new low in the future", said Lyu Yaodong, head of Japanese diplomacy studies at the Chinese Academy of Social Sciences. With the Japanese government continuing to deny the existence of a dispute over the Diaoyu Islands, there will be little hope for a summit between the two to break the ice, observers said. The two countries had agreed to put aside issues surrounding the islands as Beijing and Tokyo focused on warming up their political and economic ties over the past four decades. But recent Japanese governments have sought to change the status quo and deny the existence of a dispute, which angered China. The findings show that 92.8 percent of Chinese surveyed hold a negative attitude toward Japan, 28 percentage points higher than last year. Similarly, 90.1 percent of ordinary Japanese have negative feelings toward China, in contrast to 84.3 percent last year. Hu Jiping, director of the Institute of Japanese Studies at the China Institutes of Contemporary International Relations, said the neighbors are in urgent need of negotiations to break the ice and stop relations getting worse. "It is impractical to expect the territorial dispute to be solved completely. We can only agree on provisional arrangements at the moment," Hu said. The annual China Daily/Genron NPO poll elicits responses from all sections of society. This year, the poll, conducted in June and July, included 1,540 Chinese in Beijing, Shanghai, Chengdu, Shenyang and Xi'an, 200 of the social elite from around the country and 802 university students and teachers at five top Beijing universities. In Japan, 1,000 adults and 805 intellectuals, mostly with experience of China, were interviewed. The attitudes of intellectuals in both nations are more moderate, with 52.8 percent of the Chinese group and 36.3 percent of the Japanese seeing each other in a positive way. The biggest reason for the negative attitude is the Diaoyu Islands, with 53.2 percent of ordinary Japanese choosing it in the multiple-choice question. The number of Chinese dissatisfied over the issue has nearly doubled, from 39.8 percent last year to 77.6 percent this year. The second major reason for Chinese dislike of Japan is that "Japan has not sincerely apologized for its aggression against China". That corresponds with the second reason for Japanese dislike of China: "Chinese criticism of Japan over historical issues". When asked about Japan, the most common first thought among Chinese is now the Diaoyu Islands, overtaking "electronic products". The most common answer among Japanese toward China is still Chinese food, although one-third chose the Diaoyu Islands issue and another third chose air pollution. To solve the Diaoyu Islands issue, most Japanese chose negotiations and international arbitration. But a majority of the well-educated Japanese said the priority should be avoiding accidental military conflicts, and almost half chose "putting aside disputes and seeking common development of the disputed area". On the Chinese side, more than half of the respondents support "consolidating Chinese control (over the disputed area) to guard the territory", while the second most supported choice was "having Japan admit the existence of the territorial dispute through diplomatic efforts". Despite strong Chinese demand for holding onto the islands, nearly half of the Japanese surveyed said there will be no military conflict between China and Japan in the sea. But in China, more than a third said "there will be military conflict in the future". China and Japan have not held a summit since tensions escalated in mid 2012. "We can see a strong demand from the Japanese for negotiations, but the biggest problem in arranging a summit lies with the Japanese government, as Tokyo denies the existence of the territorial dispute," said Hu, from the China Institutes of Contemporary International Relations. "In that case, there will be little possibility for a summit, as such a meeting will be meaningless."

Tea farms wither amid heatwaves in E China (By Xinhua) A prolonged drought and the persisting heatwaves have affected tea production in East China's Zhejiang province, one of the country's major tea plantation areas, agricultural authorities said on Friday. The drought has hit 27,000 hectares of tea gardens across the province, said the Zhejiang Provincial Agricultural Department. Tea farms in Hangzhou, Huzhou and Lishui cities were worst affected. In the plantation area of Longjing tea near the West Lake in Hangzhou, swathes of tea trees have withered because of drought, which will have a drastic impact on the output of the popular tea, according to the department. From early July to Friday, the average rainfall has been only 58 mm in the province, down over 70 percent from the same period last year. Zhejiang has recorded about 40 days of high temperatures. In Tonglu county, Hangzhou, some 40 hectares of tea farms have withered due to recent prolonged high temperatures of around 40 degrees Celsius. It is estimated that tea output in the county will fall by 70 percent, according to local authorities. "The persisting drought has greatly affected white tea production here," said Lai Jianhong, an official of the Anji County Agricultural Bureau. More than 3,000 hectares of tea farms in Anji county have been affected by the extreme weather, with half suffering serious losses, said Lai. The drought has affected many parts of East, Central and South China, causing great losses to crops and bringing drinking water shortages to millions of people.

Hong Kong*:  Aug 11  2013

Lending growth to slow as liquidity returns to China, says HKMA (By Kanis Li kanis.li@scmp.com) Fewer mainland firms to tap funds in Hong Kong as liquidity returns to normal across border - After meetings with 20 banks, the Hong Kong Monetary Authority, which was concerned about the rapid loan growth in the first half of this year, now expects credit expansion to slow as bankers say fewer mainland companies may need urgent loans from them. In June, loans grew at the highest rate since January 2011. They were mainly to big companies, and many involved revolving credit and syndication facilities, a spokesman for the monetary authority said yesterday. The monetary authority did not elaborate on what kind of "big firms" borrowed most heavily, but some senior bankers said mainland companies accounted for most of the rapid loan growth, especially in June. Many companies had difficulty securing loans from lenders on the mainland because of tightening liquidity there. The findings came from on-site checks and meetings with 20 banks that the monetary authority, worried about asset quality, conducted to ensure sufficient risk management was in place. These banks accounted for more than 90 per cent of the new loans in June. Benjamin Hung Pi-cheng, Standard Chartered's Hong Kong chief executive, said on Thursday he expected fewer mainland firms to seek loans in the city compared with June. As liquidity on the mainland returns to normal levels, the easing of demand for credit would help to mitigate banks' risks associated with mainland exposure amid weakening economic growth. Loans grew 3.3 per cent in June from May, after climbing 1.7 per cent from April, mainly in US dollars. The loan-deposit ratio, in US dollars, rose to 85 per cent from 80 per cent in May, the monetary authority spokesman said. He said 40 to 50 financial firms had taken out loans amounting to HK$133 billion from the city's banks. They were mainly subsidiaries of big firms and provided no retail lending services.

From hellhole to centre of excellence (By Jeanette Wang jeanette.wang@scmp.com) Hong Kong is today one of the healthiest places on earth and a leader in medical research - but it's been a long, tough road to get there - "Not all the wealth of the East would have lured us thither." This was what friends of British vice-consul Henry Charles Sirr told him in the 1840s, when the scourge known as "Hong Kong fever" was engulfing the territory, its settlers and new colonists. In 1843, an estimated 24 per cent of the British garrison in Hong Kong and 105 European residents died of the fever. Sirr, in his book China and the Chinese, published in 1849, called Hong Kong "the most unhealthy spot in China". If Sirr and his friends had lived to see today, they would likely be both shocked and proud. Hong Kong is now not only one of the healthiest places in the world - judging by its life expectancy and low infant mortality rates - but also a significant contributor to global developments in medical care and research. "Hong Kong is a world leader in many areas of high-end medical research," says Professor Irene Ng Oi-lin, head of the department of pathology at Hong Kong University's Li Ka Shing Faculty of Medicine. The "recent and remarkable achievements" that Ng highlights include pioneering research into emerging infectious diseases such as avian influenza (H5N1 in 1997 and this year's H7N9), swine flu and the Sars coronavirus, in terms of pathogenesis, clinical features, diagnostic tests, virus ecology, transmissions and treatment. Hong Kong has also made notable contributions in the areas of spinal surgery, in-vitro fertilisation, endocrinology and transplantation. The city is also among the leaders in research on, and treatment of, diseases like lupus nephritis, a kidney disorder; leukaemia; liver cancer; nasopharyngeal cancer, which develops in the back of the throat; and hepatitis B. The latter two diseases are of particular significance because of their higher incidence rates in this part of the world. Research findings of Hong Kong-based scientists on the blood disorder thalassaemia, viral hepatitis and nasopharyngeal cancer were chosen as the city's top medical breakthroughs by Emeritus Professor Rosie Young Tse-tse, honorary clinical professor at the Li Ka Shing Faculty of Medicine's department of medicine. "Among the many achievements in medicine in Hong Kong, I have chosen three which have the greatest impact on the health of Chinese in this part of the world," she says. "The research findings and the translation of these findings into clinical practice have enabled us to prevent these diseases from occurring or to treat them successfully. I hope that these horrible diseases will disappear completely in Hong Kong in the foreseeable future." Looking ahead, the territory is poised to become a biotechnology centre following the launch of the Hong Kong Institute of Biotechnology in June 2010. Researchers there are now reportedly engaged in an unparalleled DNA sequencing project. The institute is the Hong Kong arm of China's leading genomics company the Beijing Genomics Institute (BGI), which has the same research capacity as the top three laboratories in the United States. Most recently, on July 1, HKU, in collaboration with non-profit organisation Asian Cancer Research Group and BGI, reported new evidence on the genetic basis of a common form of liver cancer, hepatocellular carcinoma, one of the most deadly cancers worldwide. Published in the journal Genome Research, the study surveyed 88 patients in Hong Kong to better understand the molecular basis of the cancer and provide new clues to improving the diagnosis and treatment of liver cancer in the future. Evidently, Hong Kong's medical research and standards of health care have come a long way since Sirr's days, but ironically this progress perhaps has the past to thank. The city's experience of dealing with infectious diseases have built up a strong body of expertise at its two medical schools - one at HKU, which opened in 1887, and a school at Chinese University that began operating in 1982. Hong Kong was still on a par with some of the world's poorest economies in terms of its health profile up until 1941. In 1968, it was instrumental in containing the H3N2 virus, which was termed "Hong Kong flu" by the World Health Organisation in recognition of its discovery at the Government Virus Unit at Queen Mary Hospital. Following the July outbreak that year, other outbreaks were reported around the world. About 15 per cent of the Hong Kong population were affected, but fortunately the symptoms were mild and the death rate low. "The early discovery of the Hong Kong flu virus may have been instrumental in preventing a much deadlier pandemic," say the authors of the book Plague, Sars, and the Story of Medicine in Hong Kong. When the bird flu virus H5N1 emerged as a threat in 1997, HKU microbiologists played a pivotal role in identifying it. A similar situation was seen when Sars was first detected in Hong Kong in March 2003. The HKU medical team was the first to identify the Sars coronavirus, which was critical in the fight against the pandemic. Similar viruses in civet cats and Chinese horseshoe bats were also discovered, enriching the understanding of the origin of the disease. This year, with the emergence of the H7N9 avian influenza virus, Hong Kong scientists have again been at the forefront of research. According to HKU, the university is the second-highest cited institution globally for research on avian influenza, and is one of the WHO's eight H5N1 reference laboratories. A benchmark of Hong Kong's success is the quality of the publications that carry the city's research findings, including top medical and scientific journals such as Science, Nature, the New England Journal of Medicine and The Lancet, among others. "As a clinician-scientist in Hong Kong," Ng says, "I hope and am confident we will see more medical breakthroughs from our medical community in the near future for patients in need."
A CENTURY OF GETTING BETTER
1907
The Hong Kong College of Medicine for Chinese, founded in 1887, is renamed the Hong Kong College of Medicine. It was established to train Chinese people in Western medicine and to deal with outbreaks of diseases such as cholera, smallpox and typhoid. One of its most illustrious first graduates was Dr Sun Yat-sen. The college became the medical faculty at the University of Hong Kong in 1911.
1951
HKU orthopaedic surgeons gain a worldwide reputation by pioneering the anterior approach for surgical treatment of spinal tuberculosis, a procedure dubbed "the Hong Kong Operation".
1996
Hong Kong surgeons are the first to conduct an adult-to-adult right-lobe, live-donor liver transplant - providing a new option in the face of a severe shortage of deceased donor organs.
1997
The bird flu virus H5N1 was detected in Hong Kong and HKU microbiologists played a crucial role in identifying the virus, thanks to the medical faculty's development of expertise in influenza since the 1960s.
2000
The world's first intervertebral disc transplant is carried out by HKU jointly with the Navy General Hospital in Beijing after 10 years of research. Compared to conventional treatment (removal of the disc and fusion of the spinal segment), this approach opened a new horizon for treatment of many spinal disorders without sacrificing spinal mobility.
2003
HKU discovers the Sars coronavirus - a milestone in the fight against the disease.
2008
Chinese University revolutionises the method of checking foetus health through a non-invasive prenatal diagnostic test. This approach is based on the discovery of circulating foetal nucleic acids in the plasma of pregnant women.
2010
HKU develops an oral preparation of arsenic trioxide - the first patented prescription drug developed entirely in Hong Kong - to treat acute promyelocytic leukaemia. It is poised to become the standard formulation globally. HKU's hepatology team also revolutionised the treatment of chronic hepatitis B by pioneering the first oral antiviral therapy that has been shown to provide potent viral suppression, reversing liver fibrosis and reducing the risk of liver cancer.
2012
Researchers from the University of Science and Technology discover the protein Pax3/7BP, which plays an influential role in skeletal muscle stem cells. This could lead to more effective stem-cell treatments for various muscle diseases, including muscular dystrophy. Another team from the university discover the signalling mechanisms in brain development, identifying a protein called a2-chimaerin as a key regulator of neuronal migration and brain function.

Lee Shau-kee confident of reaching deal with Housing Society about land transfer (By Emily Tsang and Shirley Zhao) Lee Shau-kee in talks with Housing Society on land transfer; he dismisses bid by farmer to stay - Tycoon Lee Shau-kee is confident of reaching a deal within three months with the Housing Society to donate farmland in Yuen Long to provide cheap homes for sale. The chairman of Henderson Land also said the threat of a lawsuit by a farmer, who has lived on the site for 20 years and claims ownership through adverse possession, was only a "minor problem". "They [the farmer] may demand some compensation," Lee said. "If they like to farm, it is OK to give them [another] piece of farmland to farm." Lee has said he wants to help young people, priced out of the market, get on the property ladder. But his critics suspect ulterior motives in the land offer. They say infrastructure for the new flats, paid for by the taxpayer, would boost his other property assets in the area. Lee turned to the Housing Society after the government declined his offer of the 63,500 square foot site on Shap Pat Heung Road. He wanted to build more than 1,000 homes, each of 300 square feet, that could be sold to young people for about HK$1 million. Lee agreed that the society would decide who should get the housing. Under Lee's revised plan, the flats would cost about HK$1.2 million. He believed "the deal [with the Housing Society] could be made in one or two months, or at most two or three months". But Chan Wai-ming, owner of Tin Heung Garden, a 60,000 sq ft farm in Ma Tin Pok village, says his plot is on the site. Chan said he had been farming the land since 1999 without paying rent and lived there with six family members. A lawyer had suggested he could claim the land through adverse possession. This allows a squatter to obtain the right to land by occupying it long enough to extinguish the original owner's title. But a Henderson spokesman believed the claim was not valid. He said the company had received rent from a tenant, who sublet the farmland to Chan. Chan said he would not accept the offer of another plot and home elsewhere because his plants might suffer. "I have over 10,000 plants growing here and I grow different species in different seasons," he said. "Why should the government move them to another place, like dumping them in a landfill? "I hope Mr Lee can spare our farm so we can eat," said Chan.

 China*:  Aug 11  2013

Sign of a dangerous obsession (By Xinhua & China Daily) Japan's new warship evokes the most aggressive period of the country's imperial past and displays its growing militarism - Sign of a dangerous obsession While Japanese people prayed for peace on Tuesday to commemorate the 68th anniversary of the atomic bombing of Hiroshima during World War II, the Shinzo Abe administration was noisily reawakening some of the ghosts of Japan's militarist past. It held a high-profile ceremony to unveil a new helicopter carrier called Izumo, which is named after a cruiser used as a flagship during Japan's war of aggression against China in the 1930s. The Abe administration has claimed the clash of the dates was just "a coincidence", which prompted Agence France Presse to comment that it was indeed "an unfortunate coincidence". But on top of this coincidence and the provocative choice of name, the Japanese government is playing with words and trying to call a stag a horse. Japanese officials are calling the ship, which is the country's biggest warship since World War II, a destroyer rather an aircraft carrier and say it will not be used to launch military jets. However, the 250-meter ship has a flat top, which functions as a flight deck like an aircraft carrier. And even though it does not have a catapult or "ski-jump" ramp for launching fighters, it could easily carry vertical take-off aircraft, or with only slight modifications combat aircraft such as the F-35B. In fact, the vessel is only 13 meters shorter than the French aircraft carrier Charles de Gaulle, and its standard and load displacements are far bigger than those of the light carriers of some countries. Despite the attempts to deny what it is, the truth in front of our eyes is indisputable and reveals itself clearly before the mirror of history. Naming the ship Izumo represents a clear evocation of the most aggressive period of Japan's imperial past, and the association strengthens the impression that Japan is moving full steam ahead toward militarization. The war-obsessed Japanese militarists' fetish for warships at the start of the last century prompted the country to build more than 20 carriers and giant battleships. These vessels became the catalysts for their imperialist aggression, which dragged the innocent Japanese people into the abyss and inflicted tremendous pain on Japan's Asian neighbors. Japan is currently limited to self-defense and is banned from operating in overseas combat zones under the Constitution adopted after its surrender at the end of World War II. But Abe and his supporters want to change this, and they are already laying the groundwork. A defense paper released in July called for an increase in the country's military capabilities and a more assertive role in regional security to meet what it called the growing threats from China and the Democratic People's Republic of Korea. And Abe supporter Ichiro Komatsu is now heading the bureau that provides legal advice to the cabinet, signaling that Abe now has changes to the Constitution firmly in his sights. From Abe's rejections of the historical facts about Japan's past aggression to his proposal to change Japan's pacifist Constitution, the words and actions of the administration have become increasingly dangerous, and there is no sign of it attempting to get back on the right track. Deputy Prime Minister Taro Aso, who attended the launch ceremony for the Izumo in Kanagawa prefecture, even said Japan could "learn the technique" Nazi Germany used to change the Weimar constitution. Instead of resigning as other Japanese parties demanded, Aso attended the warship's launch ceremony. The words and actions of Abe and his supporters have stirred strong indignation and protest in neighboring countries and also evoked the condemnation of the international community. An editorial published in the French newspaper Le Monde advised Abe not to cross the line and called his remarks denying Japan's past aggression "unforgivable". Recently, United States' officials have also expressed their concerns about the militaristic stance Abe has taken. The atomic bomb dropped on Hiroshima 68 years ago is estimated to have killed about 140,000 of Hiroshima's 350,000 population, including those who died later from radiation. Many others suffered from long-term sickness and disability. The Abe administration has commemorated the dead and injured in a way that has shocked the world. The Abe administration should never forget the so-called military exploits of the original Izumo were built upon the millions of skeletons of those who died as a result of Japan's military ambitions. The ship itself was sunk by a US air attack on July 24, 1945. It should have been left in the past along with Japanese fascism.

Hong Kong*:  Aug 10  2013

Pro-police rally in Mong Kok not political, force says (By Samuel Chan samuel.chan@scmp.com) Mong Kok event was not an activity bound by rules that govern officers’ behaviour, police say in a row over the presence of a retiring officer - Retiring police superintendant Gregory Lau Tat-keun gives a speech at Sunday's pro-policy rally in Mong Kok. A pro-police rally that descended into chaos in Mong Kok on Sunday was not a political event, the police force has concluded. In a statement yesterday, it also empathised with what frontline officers had to put up with in discharging their duties. The police respect people's right of expression, and at the same time, expect people would grant their respect and support to the frontline police officers - Separately, Chief Executive Leung Chun-ying and Chief Secretary Carrie Lam Cheng Yuet-ngor voiced their support for the force. The police statement came after a retiring superintendent took part in the rally, held after a teacher was filmed hurling abuse at officers on July 14. But the police definition of what constituted a political rally, which was repeated at a meeting between the senior management and four police associations, met with reservations from members of the Independent Police Complaints Council (IPCC). In its statement, the force said that as officers on pre-retirement leave were not authorised to discharge constabulary duties, their views and deeds in general would not interfere with the impartial discharge of police duties. An officer shall not take part in political activities, which include lending support to or joining in the political activities of a political organisation, and speaking publicly on matters of a political nature other than in the course of official duties, it said. Based on the information available, the force considered the rally was not a political activity restricted by the general orders that governed officers' behaviour. "The police respect people's right of expression, and at the same time, expect people would grant their respect and support to the frontline police officers," it said. "The force management understands the frontline officers' sentiments of being insulted by abusive languages in the course of discharging duties, and believe many people share the same sentiments." Leung said the police would take "resolute and effective actions" according to law against people who deliberately obstructed officers. Lam said she understood how frontline officers felt as her niece was a police inspector. Alpais Lam Wai-sze, the teacher who sparked the Mong Kok rally, said she did not understand why the police did not regard it as political. IPCC secretary general Ricky Chu Man-kin had earlier said the rally was of a political nature, and yesterday council member Eric Cheung Tat-ming said he had reservations about the police decision. Legislator Albert Chan Wai-yip, who was among protesters against the rally, said the definition "distorts the common understanding of a political event". By last night, the force said it had received 590 complaints over the officer who spoke at the rally.

New anti-Occupy Central group aims to speak up for silent majority (By Tony Cheung tony.cheung@scmp.com) While Occupy Central aims to cause gridlock in streets, new group aims for support of 100,000 for peaceful campaign to protect city's interests - The six convenors of Silent Majority for Hong Kong at the group's launch yesterday (from left): Spencer Li, Peter Wong, Ho Lok-sang, Chang Chak-yan, Fung Ka-pun and broadcaster Robert Chow Yung, who said they would welcome a discussion with Occupy Central. A new group launched yesterday to counter the pro-democracy Occupy Central movement says it wants to win the backing of at least 100,000 Hongkongers for a peaceful campaign to protect the city's interests. Silent Majority for Hong Kong, formed by more than 40 academics and professionals, is keen to distinguish itself from pro-government groups after scuffles broke out between hundreds of supporters of an outspoken teacher and her detractors in Mong Kok on Sunday. They oppose University of Hong Kong law professor Benny Tai Yiu-ting's call for at least 10,000 people to block roads in Central next July as a last resort in the pursuit of democracy. Six convenors lead the group: former RTHK radio host Robert Chow Yung; Chinese University political scientist Dr Chang Chak-yan; Lingnan University public policy professor Ho Lok-sang; Liberal Party member Fung Ka-pun; Peter Wong Kwok-keung, chairman and CEO of constructor Kum Shing Group and a local delegate to the Chinese People's Political Consultative Conference; and Spencer Li Wing-kwai, head of an innovation and technology association. Questioning Tai's proposition that his civil disobedience plan will be "strictly non-violent", Chow said: "Don't believe what people tell you - watch their deeds. There are only 28,000 police officers in Hong Kong. What would happen [when at least 10,000 occupy Central]? "Does Mr Tai have a monopoly to say if he doesn't get his way, then everyone in Hong Kong should suffer? "We want the rest of Hong Kong to come out with us and tell Mr Tai, 'Stop it, please'. Or at least we can minimise its scale, so it won't jeopardise public safety and the economy." Chow emphasised they were in favour of electing the city's next leader in 2017 by universal suffrage, but the details should be discussed by Hongkongers. The group has raised more than HK$1 million so far, mainly among themselves, and will canvass for support on the internet and by collecting signatures. It plans to run full-page adverts in newspapers next Tuesday. "We also welcome a discussion with the [organisers] of Occupy Central," Chow said. On Sunday, the Parents' Association of Hong Kong and Hong Kong Action staged a rally against a teacher who was seen shouting foul language at police officers. But the event escalated into a political row, with pro-democracy protesters storming a stage and waving the colonial flag. Last month, Occupy Central condemned the Caring Hong Kong Power group for rowdy scenes at a public forum. Patrick Ko Tat-pun, convenor of the pro-government Voice of Loving Hong Kong, said he might consider working with Chow's group. But Chow said that while his group welcomed people with different political backgrounds, they were determined to do things peacefully. "We don't have any connections [with pro-government bodies]. We do things separately," Chow said. "We want to talk sensibly and peacefully." Tai could not be reached for comment yesterday.

 China*:  Aug 10  2013

Switching tactics in ambitious new move (By Shen Jingting Xinhua) Huawei Technologies Co Ltd unveiled on Thursday a series of switch products, which the company hopes will add sales momentum to its enterprise network products. Chinese telecoms giant Huawei Technologies Co Ltd showed its ambition to become a leader, rather than a follower, in the network business field for corporate clients it recently entered by introducing a new line of switches on Thursday. The Shenzhen-based company unveiled the Huawei S12700 series of switch products that introduce software-defined network architecture into campus networks for the first time in the industry. At a Beijing news briefing. Huawei said the S12700 switch will hit the market in September and start large-scale commercial use in November. William Xu, chief executive officer of Huawei's Enterprise Business Group, said the new product holds technological advantages over rivals and will add momentum to sales of Huawei's enterprise network products for years to come. "The S12700 switch shows the industry direction in building campus networks," Xu said. The technology it contains supports diversified trends in business environments, including cloud computing, 'bring your own device' and big data-related analytics, he added. Huawei's move directly challenges dominant members of the sector, such as US-based Cisco Systems Inc, in the enterprise network equipment business. "Cisco undoubtedly takes the lion's share in the global switch market but Huawei is quite aggressive and is aiming high to become a leader in future," said Zhao Hailin, an analyst with research firm IHS iSuppli. Unlike Huawei's traditional business with telecom carriers, where industry standards are set by certain global organizations, the industry standards in the enterprise network gear market are established by those who develop the most advanced products, Zhao added. "In the past, Huawei acted like a follower because it was a newcomer in the enterprise business. Now, the company has sent a signal that it wants to lead the industry," Zhao said. Cisco had a 58.8 percent share of the market for switches, which connect computer networks, in the first quarter compared with Huawei's 2 percent, according to data from IDC and Bloomberg. Huawei officially expanded into the enterprise business and consumer-related smartphone manufacturing in 2011, after the traditional telecom gear market got relatively saturated. Huawei's enterprise business department has about 20,000 staff now, rising sharply from just a few hundred two years ago. It bought a 49 percent stake in a joint venture with Symantec Corp for $530 million last year, in the hope of bolstering its corporate-security solutions capability. "Now we have moved into a fast traffic lane," Xu said at the Beijing event. He expects Huawei's enterprise business revenue to increase 40 percent this year to about 2.7 billion U.S. dollars. By 2017, the company aims to increase the segment's revenue to more than 10 billion U.S. dollars. "We are quite confident about meeting that target," Xu said. Huawei's network business for corporate clients is still small. In 2012, the business generated 1.9 billion U.S. dollars in revenue, up 26 percent from a year earlier and accounting for 5 percent of Huawei's overall group revenue. By contrast, 73 percent of the company's revenue came from its telecom equipment business, while its smartphone business accounted for about 22 percent. However, Huawei hopes its sales from its enterprise business will account for 15 percent of the total revenue by 2017. Its share of the telecoms equipment business is expected to drop to 60 percent by then, from 73 percent in 2012.

Cards make paying global tuition easier (By Yu Wei in San Francisco yuwei12@chinadailyusa.com) Li Mo, an incoming Chinese graduate student at UC-Riverside, is likely be offered the new option of paying tuition in RMB for the upcoming billing cycle through a new program between China UnionPay, a banking card association in China, and peerTransfer, a provider of global payment solutions for the education industry. China UnionPay recently announced a new partnership with peerTransfer that allows Chinese students to pay their tuitions in their home currency online in more than 300 American universities, including BU, MIT and Cornell. "I just heard about this great news," Li said. "It could make my life much easier if I could pay tuition and living expenses in Chinese currency online. I only hope that my university is on the list." Li, a Beijing native who earned a master's degree at Kent State, learned the hard way how difficult paying global tuition can be. "I used to use a local US bank to pay my tuition and because that bank was small, the money that my parents sent had to go through intermediary banks that took fees out before it finally arrived," Li explained, adding that the fees could be expensive. The new partnership between peerTransfer and China UnionPay will enable students like Li to save time and money by offering them a local currency payment and a simple online experience. Here's how it works: when a student China UnionPay card holder logs into peertransfer.com, they enter the name of the receivable school and the amount of money due in foreign currencies. All the fees are paid in RMB automatically with no conversion fee. About 194,029 Chinese students were enrolled in US schools for the 2011-12 academic year, a 23 percent jump from the previous year and holding the spot as the top source of international students on US campuses for the third year in a row, according to the Open Doors report. Shanghai-based UnionPay was established in 2002 as a bankcard association in China and has since forged partnerships with 400 financial institutions all over the world, expanding its global acceptance network along the way to 141 countries and regions outside China. "As it grows internationally, China UnionPay is starting to want to have more international focus," said David Robertson, publisher of the Nilson Report. Robertson said making it easier for people to pay online in their local currency "is part of a trend in payments that is also tied to the ability of someone in China to pay in local currency for goods from international merchants. "This ability to pay colleague tuition in local currency is a little variation on that practice of allowing international commerce to occur in the buyer's local currency," Robertson explained. However, he thinks there is still growth that needs to occur to make UnionPay a true competitor to Visa and Mastercard, given that the UnionPay card acceptance network is about one third size of Visa and MasterCard's networks. "China UnionPay has a massive domestic card base and it has grown significantly, however, it is issued outside the Chinese mainland in only a handful markets, and Visa and MasterCard are issued in more than 200 countries and territories," Robertson said. "UnionPay has only been in the business for 11 years. We have to give it time before it becomes a true competitor," he added.

Beijing rejects protest over patrol (By Li Xiaokun) Tokyo objects to Chinese Coast Guard presence in waters off Diaoyu Islands - Beijing rejected a protest from Tokyo on Thursday over Chinese ships patrolling near the Diaoyu Islands, as four Chinese vessels made their longest stay in the area since tensions flared over the islands in September. Japan said three Chinese coast guard vessels entered the waters on Wednesday morning and another joined them in the evening. Beijing rejects protest over patrol - One of the four vessels left the area on Wednesday evening, but was soon replaced by another ship, the Japanese coast guard said. The ships withdrew at about noon on Thursday. This stay was "much longer" than one of 14 hours made by Chinese vessels on Feb 4 and "set a new record", according to Japan's Kyodo News Agency. Japan's Chief Cabinet Secretary Yoshihide Suga said at a news conference on Thursday that Japan had summoned an envoy from the Chinese embassy early in the day to protest strongly and demand that the ships leave immediately. However, the Chinese embassy in Japan said on its website that at the meeting acting Ambassador Han Zhiqiang protested strongly "about Japanese right-wingers entering Chinese territorial waters". Han demanded that all Japanese ships should leave the waters immediately and that similar incidents should be prevented, the embassy said. The Chinese ships turned back Japanese vessels during their stay. A Japanese Foreign Ministry spokesman told Agence France-Presse, "The Chinese side argued its ... position and said it could not accept Japan's protest." Huang Dahui, head of the Center for East Asia Studies at Beijing-based Renmin University of China, said, "The move can be seen as a response to Japan's recent muscle-flexing, including the unveiling of Japan's biggest warship since World War II." On Tuesday, Beijing voiced strong criticism after Japan unveiled this vessel - a $1.2 billion helicopter carrier. Tensions flared in autumn last year when Japan illegally "nationalized" part of the Diaoyu Islands. For months, aircraft and ships from both countries patrolled the Diaoyu Islands. Huang added, "Tokyo claimed it wanted to seek a summit with Beijing to ease the tensions, but on the other hand it has flexed its muscles and is lobbying other countries to jointly counter China." Tokyo is considering a possible overhaul of the pacifist Constitution imposed on Japan after World War II, irritating Japan's neighbors, who suffered during the conflict. Japanese Prime Minister Shinzo Abe has sent several advisers to Beijing in recent months, but rejected any conditions for talks, while China has denied that discussions on a possible summit are taking place. Huang said: "As Japan continues to deny the existence of the territorial dispute over the Diaoyu Islands, it is impossible for the two countries to have a summit at the moment. "And Beijing has to prove its right to the islands, as well as the existence of the territorial issue, in this way," he added, referring to the patrols by Chinese ships. It is also possible that Beijing is expressing its dissatisfaction toward Tokyo's "double-faced approach", he said. If the impasse continues, China will continue to strengthen its presence around the islands, Huang said. "As there is no chance of talks, we have to speak with strength." Both sides will show restraint if there is the prospect of talks, he said. Huo Jiangang, a researcher on Japanese studies with the China Institutes of Contemporary International Relations, said the Chinese vessels' stay at the islands was not driven by any particular reason. "It is Chinese territory, so there is nothing special about Chinese ships staying there," he said.

Hong Kong*:  Aug 9  2013

China’s sportswear industry poised to end losing streak (By Donny Kwok in Hong Kong) China’s home-grown sportswear industry is finally showing signs of recovery after nearly two years of massive oversupply, and industry watchers are betting that ANTA Sports Products will be first out of the blocks. Chinese and foreign sportwear companies were wrong-footed after the 2008 Beijing Olympics failed to bring a surge in demand for their products. China’s home-grown sportswear industry is finally showing signs of recovery after nearly two years of massive oversupply, and industry watchers are betting that ANTA Sports Products will be first out of the blocks. ANTA, the country’s largest sportswear company by market capitalisation, cheered investors on Tuesday when it said the value of its order book grew for the first time in six quarters and its earnings beat expectations. “The dawn is coming. We expect to see a turnaround story next year, while more clues will be seen in the second half,” said Elyse Wang, retail analyst at Haitong Research based in China’s southern boomtown of Shenzhen. China’s six largest sportswear companies went on an expansion spree after Beijing hosted the 2008 Olympic Games, counting on the event to spark fresh interest in sports and sportswear. They opened a combined total of about 12,300 stores in China between 2008 and 2011 - an average of 11 per day. Demand failed to live up to those lofty expectations, and they were forced to shut about 4,700 outlets last year, averaging nearly 13 closures a day. Foreign rivals such as Nike and Adidas were also caught in the downdraft, posting disappointing sales and closing stores. The combined inventory for China’s big domestic players peaked at 4.3 billion yuan (HK$5.4 billion) at the end of 2011, triple the 1.5 billion yuan in stockpiles at the end of 2008, according to Thomson Reuters data. They purged stockpiles last year, whittling that figure down to 3.8 billion yuan. ANTA’s average inventory days - a measure of how long it takes to sell the goods - swelled to 102.5 in mid-last year from 44.1 at the end of December 2008. Soothing comments from ANTA helped push up its share price about 5 per cent on Wednesday, adding to gains across the sector over the past few weeks on hopes the industry has hit bottom. “The worst period for the company has already passed,” ANTA Chairman Ding Shizhong said on Tuesday, although he acknowledged the sector still faced uncertainty due to inventory issues. Other executives said ANTA’s inventory levels had returned to “normal” and the firm was confident it would be the first to emerge from the trough. Its first-half inventory eased to 575.8 million yuan, down from 627.9 million yuan a year earlier. The company aims to trim its store network to 7,600-7,700 by the end of this year, down from 8,075 a year earlier. It had 8,764 stores at its peak at end-June 2011. “Any turnaround story will be early next year. If there is any chance to see a turnaround, ANTA will be the one to come out first,” said Renee Tai, an analyst at UOB Kay Hian. Since 2008, ANTA’s China market share has increased to 5.8 per cent from 5.3 per cent, according to Euromonitor, outperforming Nike, Adidas and Li Ning which all posted declines. Nike still leads with about 12 per cent of the market. Eight out of the 19 analysts covering ANTA have raised their earnings forecasts for the company over the past month, with average EPS forecast for this year up 5 per cent over the same period, suggesting sentiment is turning around sharply. Signs of a turnaround come just two months after Nike disappointed investors by posting sluggish orders in China, a market many foreign companies see as a growth engine at a time of sluggish demand in Europe. Nike’s orders for delivery between June and November - known as futures orders - rose 3 per cent in China, but were up a more robust 8 per cent globally. Following a model pioneered by Nike, China’s big domestic companies have committed tens of millions of dollars to sign famous US basketball stars such as Dwayne Wade and Kevin Garnett to shoe contracts that have yet to pay big dividends. In July, Miami Heat’s Wade visited China for the first time since signing a multi-million dollar contract with Li Ning, proclaiming to hundreds of fans that he believed in the brand. He may have to do more to convince market watchers. Li Ning is seeing considerable earnings downgrades. The last five revisions - all since June - have been cuts and the stock ranks among the lowest in Asia in terms of relative valuation versus peers, according to Thomson Reuters StarMine data. Li Ning, named after its Olympic champion founder and also backed by Singapore sovereign fund GIC, has a market value of US$897 million, lagging ANTA’s US$3.3 billion. While some analysts are optimistic an industry turnaround is in sight, others are more cautious. “I would say the overall environment is stablising,” said Steve Chow, analyst at Sunwah Kingsway Group Research. “I don’t expect to see a V-shape or a U-shape recovery after consolidation, but an L-shape instead.”

Former development chief Mak Chai-kwong gets 8 months jail for housing fraud (By Lai Ying-kit yingkit.lai@scmp.com) Former development minister Mak Chai-kwong was sentenced on Thursday to jail for eight months, suspended for two years, over his role in a housing subsidy fraud that ended his ministerial career.

 China*:  Aug 9  2013

China helps out energy-starved Pakistan (By ZHANG YUNBI) China Daily continues its coverage from neighboring countries in an effort to provide insight into topics relevant to China. In the third part of our Pakistan series, we explore Chinese efforts to alleviate Pakistan's energy thirst and improve its infrastructure. With an ongoing energy shortage affecting nearly every household in Pakistan, several Chinese power companies and institutes are working closely with the nation's government to take advantage of its natural resources and increase electricity production. The Shanghai Marine Diesel Engine Research Institute recently agreed to help build a power plant in Pakistan to convert the byproduct of processing sugarcane into electricity. The goal is for the plant to provide an annual capacity of 960,000 mWh. Engineers of the Harbin Boiler Co test the steam generator developed for the Chashma Nuclear Power Plant in Pakistan. "The plant has the highest productivity among those of the same kind in the world," said Jin Donghan, head of the institute. "Pakistan is a country rich in sugarcane and turning that into electricity is a very cost-effective option for the country to find a way out of its shortage of energy." According to a May report by The New York Times, lights go out for at least 10 hours a day in major cities in Pakistan and up to 22 hours a day in rural areas. Finding a solution to the nation's energy crisis topped Prime Minister Nawaz Sharif's agenda during his visit to China from July 3 to 8. Chinese companies in Pakistan have also made strides to improve the nation's production in hydroelectricity. Xiong Lixin, vice-president of Sinohydro Corp Ltd, served nearly seven years ago as a project manager for the landmark Gomal Zam Dam in northern Pakistan to help build both the dam and a hydroelectric plant at the site. The dam also serves to help irrigate farmland and control flooding. Designed and built by Power Construction Corp of China, the plant successfully connected to the national grid on June 26. Xiong said what impressed him most during his time in Pakistan was the intelligence and diligence of the Chinese staff who worked hard to meet construction deadlines on the dam. With an installed capacity of 17,400 kW, the hydroelectric plant will provide energy to about 25,000 local households, while the dam will help the country avoid annual economic losses of $2.6 million due to flooding. Xiong said the dam is a symbol of China's leading construction technologies. Pakistani people called the project their national version of the Three Gorges Dam, a mega hydropower generation project along the Yangtze River. But in building power plants for the country, Chinese companies and contractors have faced numerous difficulties, including concerns about their security. "The Chinese staff members were brave because the location of the plant was close to Afghanistan and relatively dangerous. That intimidated many other foreign engineers," Xiong said. In October 2004, work on the dam came to a halt after unidentified militants kidnapped two Chinese engineers working on the project at the northwestern border of Pakistan.

China's innovation prowess looms large (By Chen Weihua in Washington chenweihua@chinadailyusa.com) The UK lags behind China and the US on investing in technology to drive innovation, according to a survey of business leaders across Britain. That was the view of 56 percent of the 275 executives in the latest survey by the consulting firm Accenture. "A tough economy over the past few years has led businesses to concentrate on cutting costs and improving employee productivity, making the focus on innovation insular," said Andrew Poppleton, managing director of Accenture's UK and Ireland technology group. In an Accenture survey two months ago of 500 executives and public sector leaders, more than two-thirds of those business leaders said China would reach or pull ahead of Europe in innovation by 2023. However, two-thirds of those polled also said European industry was still competitive internationally. Rebecca Fannin, founder and editor of Silicon Draon News, who has long followed innovation in China's industrial sector, told China Daily on Wednesday that she was not surprised that the UK is lagging behind China and the US in investing to drive innovation. "China has many government initiatives to support innovation while the US thrives on the entrepreneurial culture and startups to spark new technologies," said Fannin, author of the book Silicon Dragon & Startup Asia. Fannin said many UK venture investors have scaled back after the dotcom boom of the late 1990s and early 2000s. The US remains the leading venture market in the world, followed by China. China spent about 1 trillion yuan ($160 billion) in research and development in 2012, accounting for a little less than 2 percent of its gross domestic product. About 74 percent of that investment was made by businesses. As leaders of the second-largest economy vow to move to an innovation-driven society by 2020, the investment in GDP has increased 20 percent each year for the past six years. Huawei Technologies, for example, has often been regarded as a good example by analysts in and outside of China. The global provider of telecommunications equipment and service applied for more than 54,000 patents in 2012, including 14,000 filed outside of China. Of those applications, Huawei was granted 30,000 patents. In the same year, the company - whose investment in the US has often raised concern among some politicians for national security reasons - invested $4.8 billion in R&D. Another example is China's biomedical sector, which is rapidly transforming itself from a manufacturing base to an innovation hub by investing billions of dollars leading to innovations, according to a study by Lux Research, an independent research firm. ZDNet, a business technology news website, said in a report that technological innovation would shift toward China due to market opportunities, strong capital availability and government incentives for certain information technology segments. More and more multinational companies have set up R&D centers in China to tap into both the huge market potential and the abundant supply of graduate students in science and engineering. While PetroChina was the first Chinese company to enter the Top 100 of Booz & Co's Top 1000 Global Innovation List in 2012, the number of Chinese companies on the list has steadily grown to 47 from 40 in 2011 and 23 in 2010. The US is still leading China in total government and private-sector investment in R&D, with nearly a double amount. However, the White House Council of Advisors on Science and Technology warned that if the current trend continues, China may overtake over the US within a decade. Ann Lee, an adjunct professor at New York University, said China is still not taking a lead in disruptive technological breakthroughs. "[It is] getting closer because China is catching up in its understanding of current technologies and will eventually be in a position to contribute more to breakthrough technologies," said Lee, author of the book What the US Can Learn from China. A recent KPMG report surveying more than 800 global business leaders showed more people believe the US, rather China, will be the biggest innovation hub in the years to come. "China did not invent things such as high speed trains or drones, but if the Chinese keep up their R&D investments and learning curve, then they should lead at some point in the not too distant future," Lee told China Daily. "China can catch up if there is unwavering political support for real innovation and intolerance for those who lie about their innovative abilities and cut corners," Lee said.

Hong Kong*:  Aug 8  2013

Justice secretary extends lawsuit to Hong Kong reporters over 'double homicide' coverage (By Austin Chiu austin.chiu@scmp.com) One of two suspects in the Tai Kok Tsui killings in March. The writ referred to a "double homicide" case and both newspapers had an exclusive interview with one of the suspects. A lawsuit against two newspapers alleging contempt of court over coverage of a murder case took a new turn on Tuesday as Secretary for Justice Rimsky Yuen Kwok-keung asked the High Court to jail two reporters, in addition to the two editors said to be responsible. Yuen asked that reporter Luk Yu-ping and Law Yat-sing be sent to prison or be fined for contempt of court. Yuen is asking the court for permission to take the application. This came after the secretary on July 30 filed an application suing Apple Daily editor Cheung Kim-hung and Sharp Daily editor Li Pang-kay for their roles in the coverage of a “double homicide” case. According to the writ available on Tuesday, Yuen said the two reporters were guilty of contempt for “publishing, causing or permitting to be published or being responsible for or having played a significant role” in the publication of an article and a video. The court documents have not identified the articles published apart from saying they ran on March 20 and related to a “double homicide” case. Both newspapers had an exclusive interview with Henry Chau Hoi-leung, 29, who in March was accused with his friend, Tse Chun-Kei, 35, of murdering and dismembering his parents at Tse’s Tai Kok Tsui apartment. Chau was interviewed in Siu Lam Psychiatric Centre, where he had been remanded, and spoke freely and frankly about the case. Apple Daily also published a video on its website, the writs said. The writ also said that Mr Justice Jeremy Poon on July 31 granted leave to the secretary to make the application for committal against the editors and the two newspapers. The Department of Justice earlier said it took legal action to ensure that people would have a fair trial. A spokesman had said: “The government fully respects the freedom of the press. However, the Secretary for Justice at the same time has a duty to protect public interest, so as to ensure that everyone facing criminal prosecution will have a fair trial. “The [secretary] took the view that it is necessary to commence contempt of court proceedings … to protect the solemnity of the criminal justice system.” In 1998, Wong Yeung-ng, the former chief editor of Oriental Daily, was jailed for four months for contempt of court for publishing abusive articles and harassing a judge.

Second brand of Fonterra-linked baby milk formula recalled in Hong Kong (By Lai Ying-kit yingkit.lai@scmp.com) A recall notice for Karicare Gold+ Follow On Formula Stage 2 and other baby formula seen on a supermarket shelf in Wellington, New Zealand, last Sunday. Another baby milk formula company in Hong Kong on Tuesday ordered a precautionary recall of one of its products after it was linked to potentially contaminated ingredients provided by New Zealand dairy giant Fonterra. The latest recall involved all batches of Karicare Gold + Follow On Formula Stage 2, according to New Zealand Milk Powder (Hong Kong), the product’s distributor in the city. The product is for children aged six months to one year. The company said it was notified by the product’s manufacturer, Nutricia, to order a general precautionary recall of all of the product after one batch, not in Hong Kong, was found to have been potentially contaminated. “The recall is a precautionary one and there is no contamination or problem with our products [in Hong Kong],” a spokeswoman told local TV. It was not immediately known about how many of the products were affected. Hong Kong on Monday recalled some 80,000 tins of milk formula, all produced by Cow & Gate, after Fonterra reported bacterial contamination in three batches of its whey protein, a raw material for milk products, and food and drinks. The contaminant is clostridium botulinum, which can cause botulism. In serious cases, botulism can affect a person’s muscles, leading to respiratory failure. Secretary for Food and Health Dr Ko Wing-man said on Tuesday there was a need to step up random checks on milk formula in Hong Kong to see if more products were affected.

 China*:  Aug 8  2013

No one can contain China, scholar says amid territory rows (By Agence France-Presse in Beijing) The newly acquired frigate BRP Ramon Alcaraz sails into Subic Bay, as a stronger economy allows the Philippines to raise spending to counter China's growing assertiveness in disputed waters. No one can contain China’s rise, a leading Beijing foreign policy thinker said on Tuesday, warning Manila and Tokyo that they had been mistakenly emboldened by Washington in territorial disputes with his country. China is embroiled in a bitter row with Japan over disputed islands in the East China Sea, and also claims almost the whole of the South China Sea, where it has engaged in standoffs with Philippine forces. At the same time the Obama administration is engaged in a “pivot” to Asia. But Ruan Zongze, vice president and senior fellow at the China Institute of International Studies, said: “No one in this world will try to contain China and no one in this world is capable of containing China. “Since the United States has adopted this new strategy of returning to the Asia-Pacific region, some countries have made the wrong judgment that the US will encourage them to challenge the sovereignty and territorial integrity of China,” he added. “This is a misjudgment on their part.” Ruan, who has served as a diplomat in the United States and Britain, was speaking at an event organised by the All-China Journalists’ Association, a state organisation. The US has defence treaties with both Japan and the Philippines, and Ruan blamed Washington for emboldening them. It had sold weaponry to the Philippines following tensions between Beijing and Manila over a disputed shoal in the South China Sea, he said. “This has intentionally or unintentionally boosted the confidence of the Philippines to challenge China.” Regarding the East China Sea dispute, Ruan said: “The United States is very clearly aware that it is responsible for this conflict between China and Japan over the Diaoyu Island issue.” Ruan used the Chinese name for the islands. Japan, which administers the chain, calls them Senkaku. The US and China are the world’s top two economies and militaries, and their respective presidents Barack Obama and Xi Jinping held their first summit in California in June, seeking to establish a personal rapport as they manage relations. The best scenario was for the two countries to “enhance mutual understanding” and “accommodate ... each other’s core interests”, Ruan said.

Hong Kong*:  Aug 7  2013

Feisty parent is used to courting controversy (By Shirley Zhao and Jeffie Lam) Parent Leticia Lee See-yin is not shy about sharing her opinions about social issues and spoke at the pro-police rally. Outspoken parent Leticia Lee See-yin, who on Sunday said primary school teacher Alpais Lam Wai-sze had emotional problems and asked her to see a doctor, is no stranger to media attention. A long-time member of the Parents Association, Lee was one of the organisers of the protest against Lam, a teacher at Pui Ling School of the Precious Blood in Fanling who was seen in a video clip shouting at police officers over their handling of a dispute between the Falun Gong and the Youth Care Association. Lee said she got four calls during the protest threatening her life and went to Mong Kok Police Station yesterday afternoon to file a report. But this was not the first time she had received threatening messages, she said. At a concert in January, she said she had received many calls after she opposed a motion calling for public consultation on legislation to outlaw discrimination based on sexual orientation. She also wrote many articles on the website of anti-gay religious group the Society for Truth and Light. She said such legislation might make it illegal for schools - especially religious ones - to teach that homosexuality is wrong, as it would be seen as discriminatory. Having been actively involved in the Parents' Association since 2007, Lee has been involved in many controversial political issues. She was an adamant advocate of the highly controversial national education which was proposed last year but was later shelved due to heated public criticism. "If we back down on the [implementation of] moral and national education subject, I don't know what our society, our children will see themselves as in the future," she said at a pro-national education rally in October. "We are always Chinese. Our root is always China."

I have a right to speak, says retiring officer (By Samuel Chan Samuel.chan@scmp.com) Gregory Lau addresses the rally in Mong Kok. Police have received more than 300 complaints about his appearance. "I too have human rights, and I cannot exercise my rights if I am not allowed to speak my mind," former police superintendant Gregory Lau Tat-keung said yesterday. Lau was defending his address to a pro-police rally on Sunday after critics said he had no right to have done so as an officer on pre-retirement leave. The police force had received more than 300 complaints about Lau addressing the protest by last night. The emotionally charged rally in Mong Kok saw about 2,800 protesters exchanging insults over a teacher who yelled abuse at police at a rally a couple of weeks ago. Lau said as he was on pre-retirement leave after turning 55, it was not up to the Civil Service Bureau to decide if he could attend. But the bureau said yesterday that officers on pre-retirement leave generally were still subject to civil service regulations. However, the police force said an officer on pre-retirement leave who had handed in his warrant card was no longer on duty. It said the force would handle such cases according to established procedures. During his 36-year career, the former superintendent of Sham Shui Po district was known as a top negotiator. Last year, Lau was awarded the Hong Kong Humanity Award for having saved the lives of more than 200 people who were on the verge of committing suicide since he became a negotiator in 1990. Negotiation aside, Lau and his team solved the MTR arson attack case in Admiralty in 2004 in which 14 passengers were injured. His team launched an intensive hunt and tracked down the culprit within 38 hours. Regarding Sunday's rally, Lau said the fact that he saw "many many many" retired and off-duty officers show up reflected the mounting stress on frontline police officers. "This is not a declaration of war, but society needs to understand that the police force cannot exercise its duties unless it has the respect of the public," he said. Lau said he personally did not think there was need for a law at the moment to penalise those who insulted police.

Whistle-blower files ICAC complaint over alleged graft at China Resources Power (By Eric Ng eric.mpng@scmp.com) Mainland whistle-blower Li Jianjun has lodged complaints with Hong Kong's graft-busters and commercial crime investigators about alleged irregularities and corruption in a mining assets purchase by China Resources Power Holdings (CRP). He also made fresh allegations against former CRP chairman Song Lin and officials at the Shanxi Department of Land and Resources, saying the latter played a role in granting exploration rights illicitly in two mines to the assets' seller Shanxi Jinye Coal Coking Group. The rights were subsequently transferred to Hong Kong-listed CRP. "Song is allegedly involved in conspiring with a mainland tycoon and used illicit asset valuations to support a dodgy acquisition," Li said, adding he would submit documents, including a contract for the deal, related asset valuation reports and other information to the Independent Commission Against Corruption. Song is chairman of state-backed China Resources (Holdings), parent of CRP. The retail-to-energy giant is 187th on Fortune magazine's Global 500 list this year. It reports to the central government, making Song's post equivalent to a vice-minister's. After coming out of the ICAC's headquarters, Li said he was told to expect a response within 48 hours. He also separately lodged a complaint to the police commercial crime bureau. An ICAC spokesman would not comment on individual cases, but said it would follow up on any complaint received. Li, a former Shanxi investigative journalist, made the complaints on the sidelines of the first day of hearing of a lawsuit by six CRP minority shareholders. They allege that 20 former and current CRP directors failed in their fiduciary duties to protect shareholders' interest by causing CRP to buy two coal mines without valid exploration rights, and failed to cancel the deal and recover money from the seller. They claimed that official documents showed that the rights expired in 2007 and 2009, and therefore the seller, Shanxi Jinye Coal Coking Group had no right to sell them. They are seeking unspecified damages. CRP shares have fallen since the allegations emerged in March. Li claimed Jinye did not have proper rights to the mines before it sold them to CRP, since state-owned China United Coal Bed Methane had claimed rights on the mines after Jinye's rights expired. He claimed this was uncovered by a National Audit Office investigation. He also alleged that corrupt officials in the Shanxi Department of Land and Resources helped Jinye re-obtain the rights illegally, which were transferred to CRP on July 25. Calls to Jinye and the department went unanswered. Benjamin Yu, SC for CRP argued yesterday that since the assets were bought by a joint venture via an indirect subsidiary, by law only that venture could sue. "[CRP] doesn't seem to have any possible right for losses sustained by CR Taiyuan [the venture]." Mr Justice Andrew Chan Hing-wai seemed to take issue with this, saying funding of the venture partly came from a CRP subsidiary. Yu also said an audit and risk committee of four CRP independent non-executive directors and a non-executive director found no impropriety in the deal and was "consistent with [CRP's] strategy". Additional reporting by Danny Mok

 China*:  Aug 7  2013

Gas flows from Myanmar, but Beijing finds goodwill is another matter (By Kim Wall kim.wall@scmp.com) The Myanmar-China pipeline has been controversial since its inception and is a target of frequent demonstrations. Along much of the new 793-kilometre natural gas pipeline linking western China to the Bay of Bengal lie dozens of new schools and clinics. The facilities, built with more than US$20 million in Chinese development aid, are evidence of Beijing's new approach to Myanmar. Facing a Myanmese public increasing sceptical of its huge demands for natural resources, Beijing went out of its way to present itself as a friendly neighbour before gas started flowing through the pipeline last week. Xinhua praised the pipeline as a "mutually beneficial energy project" that "carries the goodwill of the people of China and Myanmar". Chinese officials have encouraged Chinese companies involved to improve transparency. The Chinese embassy in Yangon has put project updates on its Facebook page. But as China prepares to open an oil pipeline later this year, experts say Beijing should consider rethinking its strategy. Myanmese complain that many of the schools and clinics built along the pipeline route with Chinese aid are empty. Perceptions of China are as negative as ever. Beijing has found that there are limits to its "soft power". "China is very good at building things but getting endorsement locally is a different thing," said Alex Neill, a senior fellow at the International Institute of Strategic Studies. "Myanmar is a proud nation and doesn't want China to run the country." Neill said the Myanmese are not convinced by the standard Chinese rhetoric casting the pipeline as a "win-win". "Myanmar is wary of Chinese hegemony," Neill said. "And the leadership needs to listen closely to its people to make sure it is actually a win-win relationship." During Myanmar's years of diplomatic isolation, China's close relationship with its ruling junta enjoyed a virtual monopoly over the country's abundant natural resources. But as the country opens up to the world and expands democracy, China has increasingly found itself crowded out by new players. At the same time, the Myanmese have grown increasingly sceptical of China's intentions and less tolerant of their northern neighbours' demands. Myanmar's more democratic government has had to listen more closely to their complaints. In 2011, Myanmese President Thein Sein suspended work on the controversial Myitsone Dam on the Irrawaddy River after widespread protests, citing "the people's will". In recent months, China has redoubled its efforts to win over the Myanmese. In July, Chinese companies involved in megaprojects and the Chinese embassy in Yangon held a symposium to address public concerns over its investments in the country. The Myanmar-China pipeline has been controversial since its inception and is a target of frequent demonstrations. It runs through insurgent ethnic minority areas, has displaced farmers and fishermen and spurred widespread suspicion over whose pockets will ultimately get lined. The project is funded by six countries, however the China National Petroleum Corporation is responsible for 50.9 per cent of the investment. The 12 billion cubic metres expected to be exported annually will generate significant revenue for Myanmar, although critics argue energy resources are better spent domestically bolstering the Myanmar economy. Neill said large infrastructure projects can indeed bring two nations closer, but in this case, a pipeline is not ideal. Highways and rail links, for instance, are likely to increase movement of people across borders and contribute far more to integration. "China has a bad image in Myanmar," said Bernt Berger, head of the Asia Programme at the Institute for Security and Development Policy. "The common perception is that China is mainly interested in its own business operations. "So far, the people living alongside the pipeline have gained little from the project." Berger said. "People have been moved off their land but in most cases neither the land, nor the quality of housing, was suitable. Compensation was far below what people needed to rebuild their lives." Wong Aung, head of the Shwe Gas Movement, an organisation focused on raising awareness about the pipeline's social, economic and environmental impacts, said many Myanmese cannot comprehend why the government would export gas and oil to China. That is because only one in four Myanmese have electricity and most still use wood-burning cook stoves. "Anti-Chinese sentiment is widespread, which is why China must really find a way to deal with the Myanmese directly rather than through the regime. They need to consult and talk with people; the policy of engagement is positive, but it shouldn't be tied solely to a project but rather function as a long-term strategy," Wong said. Berger, who recently met Chinese diplomats in Myanmar, believes the charm offensive in unlikely to succeed and may even prove counterproductive. "Ironically, the renewed efforts might make things worse on the ground," he said, noting that many people are frustrated by what they see is a refusal by Chinese companies to engage in a direct dialogue. "As long as Chinese companies do not seek to alter that perception, things are unlikely to change."

 

Beijing tells Asean to be realistic in hopes for South China Sea code of conduct (By Joanna Chiu joanna.chiu@scmp.com) Foreign Minister Wang Yi says China is open to dialogue on proposed code of conduct, but parties should keep their expectations in check - Visiting Chinese Foreign Minister Wang Yi (left) shakes hands with Vietnamese Prime Minister Nguyen Tan Dung in Hanoi on Monday. Chinese Foreign Minister Wang Yi (left) shakes hands with his Vietnamese counterpart Pham Binh Minh in Hanoi, Vietnam, on Sunday. All parties with territorial disputes over the South China Sea should have "realistic expectations" and take "a gradual approach" to a proposed code of conduct aimed at defusing maritime tensions in the region, China's foreign minister said in Hanoi yesterday. Wang Yi , who wraps up a six-day visit to four South East Asian countries today, said Beijing was open to dialogue on a Code of Conduct for the South China Sea (CoC), but warned that patience would be needed. "Some countries are looking for a quick fix [to the disputes] and are hoping to thrash out a code in a day; this approach is neither realistic nor serious," Xinhua quoted Wang as saying yesterday. The CoC involved multiple national interests and as such required a "delicate and complex" negotiating process, Wang added. Analysts say Wang was referring to the Philippines's recent bid to take the maritime row to the United Nations in hope of solving it promptly. One analyst believed Beijing did not want Manila to go to the UN. "It would attract too much attention. China would prefer to bind South China Sea claimants into a bureaucratic process that it can control, exploiting Asean disunity," said Alex Neill, a Shangri-la dialogue senior fellow at the International Institute of Strategic Studies. Previous efforts to discuss the CoC failed because of "disturbances" from irrelevant parties, Wang said, in a thinly veiled message to the US, a long-term ally with the Philippines. "Instead of making disturbances, parties should make efforts that are conducive to the process so as to create the necessary conditions and atmosphere," Wang said. Wang stressed that any progress on the new framework would be dependent on countries following a confidence-building "declaration of conduct" agreed upon in 2002, which Beijing accuses Manila of violating. The Philippines and Vietnam have led criticism of what they consider increasingly assertive claims by China in the South China Sea. Top diplomats from both countries agreed last week in Manila to work closely to deal with their territorial disputes with Beijing. Vietnamese Foreign Minister Pham Binh Minh also said that Hanoi supported Manila's move to take the issue of South China Sea disputes to the International Tribunal for the Law of the Sea. "Wang is trying to head off any unity among Asean [the Association of Southeast Asian Nations] members against China ahead of the next Asean summit [in October]," Neill said. While China has been eager to smooth tensions with Vietnam, it has shunned Manila. In May, Wang visited Indonesia, Thailand, Singapore and Brunei in his first official visits since the former ambassador to Japan was appointed foreign minister. The just-concluded trip covers Vietnam, Malaysia, Thailand and Laos. Last month, Beijing blasted Manila for turning to the UN to seek arbitration over their maritime disputes, and accused the country of provoking tensions. "I could see why Wang would've wanted to refer to Manila [in his comments]," said Kerry Brown, professor of political science at the University of Sydney. "China would have lots of reasons to utterly resist the UN being dragged in, as they would argue this is an internal issue, and for the Philippines to try to use this as leverage would seem to them to be theatrical posturing,"

Fonterra says sorry for 'anxiety' (By Wang Shanshan and Jiang Xueqing in Beijing, and Zhou Wenting in Shanghai) Sales of affected products have taken a beating, report Wang Shanshan and Jiang Xueqing in Beijing, and Zhou Wenting in Shanghai. Fonterra Cooperative Group, the New Zealand-based company at the center of a milk powder safety scare, apologized on Monday and pledged that all the contaminated material would be brought under control within 48 hours. "We really regret the distress and anxiety which this issue could have caused," said Fonterra CEO Theo Spierings at a media briefing in Beijing. "We totally understand there is concern by parents and other consumers around the world. Parents have the right to know that infant nutrition and other dairy products are harmless and safe." Alarm bells started ringing on the weekend when Fonterra announced that tests conducted on July 31 had discovered the bacterium Clostridium botulinum in whey protein concentrate manufactured at its Hauptau plant in Waikato in May. Food manufacturers use the whey protein as a raw material in baby formula and sports drinks. ournalists don't want to let Theo Spierings go after the CEO of New Zealand dairy giant Fonterra held a news conference on its contaminated whey protein concentrate on Monday in Beijing. Chinese producers using the raw materials are recalling affected products. The bacterium can severely damage, and even destroy, the nervous system if ingested and can also trigger neural paralysis in infants under 12 months. However, the name of one of the companies that used the contaminated whey protein in its infant nutrition products remains unknown after the New Zealand-based dairy giant declined to identify the manufacturer concerned. Spierings said he was complying with the wishes of the company, which had requested not to be named. However, he insisted that the affected products are already under control. "One of the customers asked us not to mention its name, but we are in contact with them," said Spierings, who wouldn't say whether the company is Chinese or based overseas. Companies known to have used the contaminated whey protein include Dumex Baby Food Co, a subsidiary of Danone Group, China's largest beverage producer Hangzhou Wahaha Health Food Co and Hangzhou Wahaha Import and Export Co, and Coca-Cola Shanghai, which obtained the product from a local supplier, according to the China Food and Drug Administration. "We are working closely with Danone in order to be fully transparent. Dumex has reported a total of 12 batches of products that may contain the bacteria. Half of the products are still in the warehouse, while the other half has been recalled," Spierings said. More than 420 metric tons of Dumex baby formula produced with the tainted concentrate have been sold to consumers, according to the Shanghai Bureau of Quality and Technical Supervision.

Hong Kong*:  Aug 6 2013

Development chief Paul Chan sent to hospital after car crash (By Stuart Lau stuart.lau@scmp.com) Development minister Paul Chan Mo-po suffered minor injuries after his car was involved in an accident with a taxi near the Happy Valley racecourse on Sunday.

Ex-journalist to take China Resources 'corruption' files to Hong Kong investigators (By Wang Feng feng.wang@scmp.com) Former journalist Li Jianjun also has a personal stake riding on the graft case - Former investigative reporter Li Jianjun plans to make whistle-blowing a profitable business. An independent mainland investigator with ambitious plans to topple the chairman of one of the country’s largest state-owned conglomerates with corruption charges has announced he would visit Hong Kong’s top anti-graft bodies on Monday and turn over evidence on alleged mismanagement, negligence and corrupt activities involving dozens of senior corporate executives. Li Jianjun, 36, a chain-smoking former investigative reporter from the coal-rich province of Shanxi, held court in his hotel room in Hong Kong at the weekend as journalists continually rang his doorbell seeking interviews. Stacked on the floor of his bathroom and strewn on his hotel bed were large hardback folders filled with freshly printed documents. “Photograph anything you want,” said Li, lighting up another cigarette and gesturing at the documents. “These will all go to the ICAC and Commercial Crime Bureau,” he said, referring to the Independent Commission Against Corruption and the Hong Kong police unit dealing with commercial crimes. An ICAC press officer who declined to give his name said on Saturday that the commission could not comment on individual cases, but said Li was welcome to visit ICAC’s 24-hour report centre in North Point any time. For more than four months, Li had been airing accusations via the internet against Song Lin, 50, the chairman of China Resources (Holdings), a state conglomerate that employs almost half a million people and has estimated assets of nearly US$120 billion. The group was ranked No 187 on the Fortune 500 list of the world’s largest companies this year. Li has said Song was responsible for pushing through suspicious deals in which China Resources Power, one of the group’s Hong Kong-listed subsidiaries, purchased several coal mines in Shanxi for more than 10 billion yuan (HK$12.6 billion), times more than the mines’ real value. Although the accusations seemed to have had little impact in the first few months, they made national headlines when Wang Wenzhi, another investigative reporter working for a newspaper under the official Xinhua News Agency, unleashed similar allegations via his social media account last month. Li and Wang deny ever knowing or having worked with each other, but both have been basking in the media spotlight since state watchdogs including the National Audit Office in Beijing have started investigations into the case. China Resources (Holdings) has said that the allegations were “libellous and ungrounded in facts”, but that it welcomed the public to come forward with leads on potential misdeeds. Song, who has a central government rank equivalent to that of a deputy government minister, has declined to comment on the accusations, but told reporters last month that he was still working in his Hong Kong office and denied rumours he had fled the city. In dozens of media interviews, Li and Wang have said they have reliable sources well-informed of the allegedly illegal activities within China Resources and promised to unveil more “explosive” evidence as investigations in Beijing and Hong Kong progress. But unlike the Xinhua journalist, Li, who now calls himself a media consultant and investor, makes no secret about his personal stakes in releasing information on this particular case. He learned about the alleged corrupt deals behind the coal-mine sales while investigating some long-term “enemies”, powerful government officials and businessmen in his home province of Shanxi, who had financial interests in the mines, Li said. By bringing it to public attention, he wanted to “take down” key figures on both the selling and buying ends of the deal. “They must go down and go to jail. Only then could I feel safe, and I would be making a big service for public interests as well,” he said with a smile. Li said he had received multiple death threats while working in Beijing on the case, and managed to fend off several abduction attempts on him and his family members. Shanxi Jinye Coal and Coking Group, a local firm that was selling the mines to China Resources Power, could not be reached for comment. Li’s ambitions go far beyond meting justice. He said he was placing his next bet on Hong Kong’s rule of law to turn his investigative practice into a profitable business. He plans to set up a research and investment firm in the same model as Muddy Waters and Citron, shorting agencies that took overseas-listed Chinese companies by storm a few years ago by publishing negative reports on many of them and publicly shorting their stocks. “With my strong network of sources on the mainland, I can do a much better job than Muddy Waters or Citron Research,” he said. With almost a decade of muckraking reporting under his belt, Li seems to ooze confidence despite the fact that his upcoming meeting with ICAC would be his first time working with law enforcement in the special administrative region. The swashbuckling Shanxi native, who said he studied history at university and was fascinated with “the art of power politics throughout Chinese history”, made his name in the Chinese circle of hard-hitting investigative journalists with a series of reports exposing police corruption in his home province since the mid-2000s. “Song Lin isn’t even the first vice-ministerial level official I have taken on,” he said. Early this year, Yi Junqing, a senior Communist Party propaganda official, lost his job after a lengthy account written by a female researcher in his department appeared online, detailing an extramarital affair the two had had. Li said he was the first person to post the 100,000-word account online after stumbling upon it on the computer of a source. But all the original posts have since been deleted, and this claim could not be independently verified. Li Su, a partner at Beijing-based consulting firm Hejun Vanguard Group, which specialises in small shareholder litigation on the mainland, said he had worked with and supported Li on the case against China Resources Power. “This is clearly a typical case of illegal profiteering in the nationalisation process of Shanxi coal mining assets in the past years,” he told the South China Morning Post by phone. “I am convinced Li is right – the value of the coal mines has been grossly overestimated in the China Resources deal.” However, he said Li’s idea of starting a Hong Kong-based shorting agency exploiting the rampant corruption within Hong Kong-listed state firms might be far-fetched. “He is a dedicated man, very aggressive,” Li Su said. “But this is very difficult” due to the financial and legal expertise required to pull off shorting attacks in Hong Kong. Li Jianjun remained upbeat. “Money is not a problem. We have hired lawyers to take care of the legal stuff.” He said he had lined up financial backers willing to bankroll him for hundreds of millions of yuan on the new shorting venture. “There is never a lack of money or good intentions in today’s China,” he said. “What we are short of are capable and courageous men of action.”

Germany ends information-sharing with US (By Xinhua) Germany has cancelled a Cold War-era agreement on information-sharing with the United States and Britain as recent revelations about USonline spying put the government under increasing pressure and criticism, media reports said Saturday. German Foreign Minister Guido Westerwelle said in a statement Friday that the cancellation of the information-sharing agreements is a "necessary and proper consequence of the recent debate about protecting personal privacy". The British Foreign Office confirmed in a statement that the 1968 agreement had been stopped after a request from German government, adding that the pact "hasn't been used since at least 1990." Recent reports of widespread USspying have sparked outcry in privacy-sensitive Germany. Thousands of protesters braved the heat wave in late July and took to the streets across Germany against the USinternet surveillance in the country. The protestors also voiced support for fugitive whistleblower Edward Snowden who revealed that the USNational Security Agency (NSA) was monitoring phone calls and Internet data connections in Germany as well as spying on the headquarters of the European Union. As a result, less than half of the German people see the United States as a trustworthy partner in the aftermath of the reports, a recent poll has showed. Facing increasing political pressure, German Chancellor Angela Merkel has reiterated that "German laws must be abided by on German territory." She also said Germany is not a surveillance state. The German opposition parties have been criticizing Chancellor Merkel's coalition government over its handling of the United States' massive surveillance program in Germany, as the public outrage shows no signs of abating with the looming general elections in September. However, the spying scandal has not seemed to affect Merkel's popular status in Germany on the eve of general elections. A recent opinion poll by public broadcaster ZDF showed that 62 percent of respondents still support Merkel as the preferred chancellor. An opinion poll published on Thursday also indicated that Merkel's ruling coalition has scored 47 percent support, which is enough to win a parliamentary majority in the September 22 election.

 China*:  Aug 6  2013

China bans New Zealand milk powder imports on botulism scare (By Reuters in Wellington) China has halted imports of all milk powder from New Zealand and Australia, New Zealand’s trade minister said on Sunday, after bacteria that can cause botulism found in some dairy products raised food safety concerns that threatened its US$9.4 billion annual dairy trade. Global dairy giant Fonterra identified eight companies to which it had sold contaminated New Zealand-made whey protein concentrate, exported to China, Malaysia, Vietnam, Thailand and Saudi Arabia and used in products including infant milk powder. Nearly 90 per cent of China’s US$1.9 billion in milk powder imports last year originated in New Zealand and economists said a prolonged ban could produce a shortage of dairy products in China, including foreign-branded infant formula. Australia was caught up in the ban after some of the contaminated whey protein concentrate was exported there before being sent on to China and elsewhere. “The authorities in China, in my opinion absolutely appropriately, have stopped all imports of New Zealand milk powders from Australia and New Zealand,” New Zealand Trade Minister Tim Groser told Television New Zealand. While there was no official word of a ban from Chinese authorities, China’s consumer watchdog named four companies that had imported potentially contaminated products from Fonterra. In a statement on its website, the General Administration of Quality Supervision, Inspection and Quarantine identified the companies as Dumex Baby Food, a subsidiary of France’s Danone, two subsidiaries of Wahaha Group, one of the largest beverage manufacturers in China, and the state-owned Shanghai Sugar, Tobacco and Alcohol company. Fonterra, a big supplier of wholesale dairy ingredients to multinational food and beverage companies, also said that Coca Cola’s Chinese subsidiary and animal feed companies in New Zealand and Australia had also been affected. The State Food and Drug Administration (SFDA), in an announcement on its website, said it had told representatives from Hangzhou Wahaha, Dumex and Coca Cola China to stop sales of potentially contaminated products and recall any outstanding product lines with possible contamination as soon as possible. A Coca Cola spokeswoman said the company was preparing to recall select batches of its Minute Maid Pulpy Milky product line in China because it had used potentially contaminated whey protein, but added that because of the heat-treatment process it uses, there was no risk to consumers. “The recall is really a measure we are putting in place to reassure consumers, but because of our manufacturing process, our products are safe for consumption in any case,” Sharolyn Choy, Group Communications Director for Coca-Cola Pacific, said by telephone. She said only 25kg of the ingredient had been used out of 4,800kg received, but did not say how much end-product would be impacted by the recall. Some of China’s biggest food and beverage firms are said to be customers of Fonterra. Fonterra is a major supplier of bulk milk powder products used in infant formula in China but it had stayed out of the branded space after Chinese dairy company Sanlu, in which it had held a large stake, was found to have added melamine – often used in plastics – to bulk up formulas in 2008. More than six children died in the industry-wide scandal and hundreds became ill. Foreign-branded infant formula has since become a prized commodity in China. The latest scare coincided with global dairy prices hovering near record highs as supply struggles to keep up with growing demand from emerging countries. A ban on New Zealand products was seen pushing overall prices higher in the near term. Economists said domestically produced Chinese dairy supplies were at low levels and Beijing’s ban on imports from New Zealand and Australia would tighten supplies on the consumer market. “Domestic production in China has been fairly weak, so potentially there could be a shortage of product for a while,” ANZ economist Con Williams told Reuters. He said China would in the meantime likely turn to the United States and Europe. Other countries also were reportedly halting imports and ordering recalls of New Zealand-made dairy products. Russia suspended imports and circulation of Fonterra products, ITAR-TASS news agency said on Saturday, quoting consumer watchdog Rospotrebnadzor. Media reports said Thailand had ordered a recall of Fonterra products imported since May. In New Zealand, Nutricia, a division of Danone, recalled some types of infant formulas sold under the Karicare brand. The bacteria behind the latest scare, Clostridium Botulinum, is often found in soil. The Fonterra case was caused by a dirty pipe at a processing plant. It can cause botulism, a potentially fatal disease that affects the muscles and can cause respiratory problems. Infant botulism can attack the intestinal system. This is the second contamination issue involving Fonterra this year. In January, it found traces of dicyandiamde, a potentially toxic chemical, in some of its products.

Yi people celebrate torch festival with songs and dances - Torch festival was held in Chuxiong Yi Autonomous Prefecture, in which Yi people sang and danced in their colourful traditional clothing broidered by hands.

Hong Kong*:  Aug 5 2013

Edward Snowden and Sami al-Saadi cases 'show double standards' (By Lana Lam lana.lam@scmp.com) Activist contrasts Hong Kong's sticking to rules for NSA leaker with abrogation of them for dissident - Dissident Sami al-Saadi and ex-spy Edward Snowden. Both men were trapped in the same city, and both were hunted by the CIA while seeking a safe haven. Edward Snowden and Sami al-Saadi came to Hong Kong not knowing what awaited them. But their lives took very different paths once they set foot in Chep Lap Kok airport. Snowden, a former American spy, escaped the clutches of US justice because Hong Kong was a stickler for the absolute letter of the law. The national security leaker found safe passage to Moscow and avoided extradition to the United States. Libyan dissident Saadi was forced onto a secret rendition flight to his home country, along with his young family, with a flagrant disregard for due process. Saadi was delivered into the hands of late dictator Muammar Gaddafi, whose henchmen tortured him for years. While the global political backdrop to the cases was markedly different, the stark contrast in the way they were treated has led a global human rights campaigner to accuse Hong Kong of double standards. "The treatment of Edward Snowden highlights the mistreatment of Sami al-Saadi and it is damaging to Hong Kong's claims to fairness, due process and democracy," said Agnes Callamard, executive director of Article 19, a London-based human rights organisation that advocates freedom of expression and information. "Saadi was expelled from Hong Kong with no ability to defend himself or his family; all due process was violated. He could not fight back, so at a basic level he was losing before he started. It's a major human rights violation." Snowden arrived in Hong Kong on May 20 and left on a flight to the Russian capital 34 days later. In his wake he left explosive details of the US National Security Agency's electronic surveillance programmes in Hong Kong and the mainland. Justice officials said a US extradition request was incomplete because it did not provide Snowden's correct middle name or his passport number. Such details did not protect Saadi, who arrived in Hong Kong in March 2004 with his family en route to safe haven in Norway. He had spent most of his life in exile. Instead, Saadi - who the CIA suspected was a terrorist - and his family were detained for two weeks with no legal representation before being forced onto a flight to Tripoli, where he was immediately jailed and tortured. While Snowden's actions prompted wide-ranging debate about privacy and government accountability, there has been a chilling silence from all parties involved in the Saadi case. "It is with the most difficult cases that you judge democracy and test human rights protection and in this situation, the Hong Kong government failed completely and utterly," Callamard said. When Snowden was still in Hong Kong, Secretary for Security Lai Tung-kwok was asked if the government would offer him protection, to which Lai said: "Any person who considers his life to be at risk could seek help from the police." In the days following Snowden's departure, Secretary for Justice Rimsky Yuen Kwok-keung said extradition requests were handled according to the city's laws and unlawful or unfair treatment would not be allowed. But the authorities did little to protect Saadi or his family when the CIA and its British counterpart MI6 asked local authorities to handcuff them and bundle them onto an empty, darkened plane without saying where they were going. The Libyan's plight only came to light after CIA documents were found at the Tripoli offices of Gaddafi's intelligence chief, Musa Kusa, in August 2011 after the Libyan capital fell to rebels. They show the secret backroom dealings between Gaddafi's henchmen and US spies. They also show the Hong Kong authorities demanding assurances that Saadi and his family would be "treated humanely and in accordance with human rights standards". However, no government department will say if these assurances were given. "This case is quite horrendous and was made possible because freedom of information and expression and access to justice - the essential ingredients to human rights and accountability - are probably not strong enough in Hong Kong," Callamard said. Today, as Snowden settles into his new life in Russia, where he has been granted political asylum for a year, Saadi is still struggling to rebuild his life and that of his family in Libya.

Ho family: we're a victim of new-town plans (By Amy Nip and Cheung Chi-fai) The Wah Yan Hong Chemical Factory in Kwu Tong, which makes pesticides, was set up in the 70s and operates to this day. The latest family embroiled in a land row in the northeastern New Territories is a victim, instead of a beneficiary, of new-town development although it owns land in the area, one of its members says. The family of Henry Ho Kin-chung, erstwhile political assistant to Secretary for Development Paul Chan Mo-po, holds four lots of land along Ho Sheung Heung Road in Kwu Tung. Henry Ho resigned yesterday after his family's interests caught public attention. His uncle Ho Mun-jing was critical of suggestions that the family would benefit from the official development of Kwu Tung. Rather, the government's compensation - estimated to be HK$20 million - would hardly be enough for the family to rebuild a factory they established in the area in the 1970s, he said. "We bought the land and built the factory several decades ago," he said. "Compensation of HK$20 million would not allow us to rebuild the factory elsewhere. We are the biggest loser [in the new-town development]." The Ho family owns the land through its private company, Wah Yan Hong Chemical Factory. The pesticides production plant occupies part of the site and remains operational today. Ho Mun-jing and his younger brother, Michael Ho Man-sum - Henry Ho's father - used to own Wah Yan Hong. Michael Ho was diagnosed with cancer in 2006 and, together with his brother, transferred most of the shares to their children. Henry Ho got 48 per cent, while two of his cousins each had 25 per cent. Michael Ho and Ho Mun-jing each retained a 1 per cent share. In November, Henry Ho made preparations to assume the role of political assistant the following month. In order to separate his interests from his family's, he transferred all the shares owned by him and his father, who died last year, to his mother Amy Ho Leung Lai-ling, he said. Henry Ho never visited the factory, even after he became a shareholder, the uncle said. While the Ho family has kept a low profile over the years, the products they created and their adverts are among the city's most memorable. In a classic ad, a ninja tries to fight cockroaches with a sword. He is told not to use the sword but the pesticide Swirl-Wind. In another ad, a cabbie almost crashes his taxi because his feet are itchy. His passenger snaps at him, telling him to treat his athlete's foot using a spray, Afakin. Both ads ran on television for several decades, but stopped in recent years, Ho Mun-jing said. The factory also stopped producing the spray, but occasionally receives orders for "Indian magic oil" - long rumoured to be an aphrodisiac for men. Kwu Tung dwellers said the plant employed more than 10 workers. Every two days, a container truck would arrive, collecting finished goods, mainly pesticides and lighters, they said.

Leung defends Chan after resignation of assistant (By Joshua But and SCMP Staff Reporters) Chief executive says cases of Chan and Ho are different - Chief Executive Leung Chun-ying on Saturday defended Secretary for Development Paul Chan Mo-po over his conflict of interest row - after Chan’s political assistant Henry Ho Kin-chung resigned because of a similar controversy on Friday. Ho stepped down after failing to declare family’s stake in land on same Kwu Tung site as Chan - putting further pressure the development chief. But Leung said on Saturday the two cases were not the same. “The case of Ho is different from Chan’s. Chan has declared interests according to the guidelines after he took office,” Leung explained. “The Development Bureau and the civil service will stay united [on this],” he said. Both the families of Chan and Ho were found in the past two weeks to own plots of land in Kwu Tung, where the Northeastern New Territories development plan will take place. Chan has stayed on after the scandal, while Ho resigned after ownership of the land was revealed. Pan-democrats have urged Chan to step down while Executive Council member Regina Ip Lau Suk-yee said the government might consider setting up an independent commission to spearhead the development project. Leung did not elaborate on the controversy. He said the government would use the “best means possible” to implement the project. “The purpose is to ensure it will go forward as soon as possible,” added the chief executive. Earlier, media reports forced Paul Chan to admit that his wife was a shareholder of a company which owned a 18,000 sq ft farmland in Kwu Tung. Chan’s wife sold the interest to her younger brother in October after Chan realised the land would become part of a new town under the government’s re-development plans. Her brother now still holds the interest, but Chan said his wife’s family was planning to sell it in a bid to end the controversy. Chan repeatedly rejected calls to resign.

 China*:  Aug 5  2013

China services PMI improves, inflation creeping up (By Reuters in Beijing) Growth in China’s non-manufacturing sector picked up in July as Beijing’s recent support measures for small firms helped improve sentiment, though companies noted that inflation is picking up and pushing up costs, official data showed on Saturday. The government’s non-manufacturing purchasing managers’ index (PMI) rose to 54.1 last month from June’s 53.9, the National Bureau of Statistics (NBS) said in a statement. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing. The services sector index followed the bureau’s manufacturing PMI on Thursday, which showed China’s factory activity was slightly stronger than expected in July. The latest data “indicate the non-manufacturing sector is improving, with the new orders sub-index consistently staying above 50, setting a good foundation in terms of demand for a stable growth,” said Cai Jin, a vice head of the China Federation of Logistics and Purchasing, which compiles the index on behalf of the NBS. “In general, the index pointed to a good start of the economy in the second half. Although there are still challenges, China has the foundation and conditions to maintain stable economic development,” Cai added. The services industry accounted for 46 per cent of the Chinese economy last year, and overtook manufacturing as the biggest employer in 2011. China’s economic growth unexpectedly stumbled in the first half, as factory output and investment slowed. To prevent it from slipping too far, Beijing has announced a series of targeted fine-tuning measures to safeguard growth. The politburo, China’s top decision-making body, has pledged stable economic growth in the second half as it presses ahead with reforms and restructuring to make domestic consumption the main driver of economic growth. The government is betting on a developing services industry to absorb surplus workers to be laid off by the restructuring move. It has also announced several measures to support small firms, including scrapping business and value-added taxes for small firms, cutting red tape for importers and exporters, simplifying foreign exchange rules for the services industry and allowing small firms to issue more bonds. The central bank has also pledged to improve the financial environment for small companies, which employ tens of millions, promoting innovation in financial products and services to take into account the varying needs of small businesses. The PMI’s sub-index measuring new orders remained the same at 50.3 in July as it was in June, while the reading for new export orders rose to 53.1 compared with June’s 50.4. In a breakdown of sectors, growth in the tourism and telecom industries gained traction rapidly, raising the employment sub-index in the services sector to 53.0 in July, up from 50.0 in June. Although the headline figure for small non-manufacturing firms still remained below 50, the reading reversed falls in the past two months. The PMI also showed rising inflationary pressure, with the sub-index measuring input prices rising to 58.2 last month from June’s 55.0, while the reading for service charges increased to 52.4, the highest since May 2011. The input price in the official manufacturing PMI rose to 50.1 in July, ending its three-month-long contraction. The central bank also remained hawkish against price rises in its second-quarter monetary policy report released on Friday. “We must not be blindly optimistic about consumer price situation in the next phase. We must continue to guide and stabilize inflationary expectations,” it said. The NBS is scheduled to announce inflation data on Friday. China’s consumer inflation has remained benign so far this year at levels below the benchmark one-year deposit rate of 3.0 per cent. Beijing has set a target for full-year consumer inflation of 3.5 per cent this year. On the producer end, China has run factory-gate deflation since February last year.

PLA urged to reform, upgrade to fight hi-tech wars (By Minnie Chan minnie.chan@scmp.com) Academic says military must prepare to fight hi-tech wars in future, and he confirms that a senior officer faces corruption investigation - The Chinese military should spare no effort to wipe out corruption and initiate creative reforms to build a modern army capable of dealing with multiple challenges, a professor at the mainland's leading defence university says. Those challenges possibly include wars in the South and East China seas, he said. In a rare online interview on the People's Daily website coinciding with the People's Liberation Army's 68th anniversary on Tuesday, Senior Colonel Gong Fangbin, a professor at the PLA National Defence University, said the armed forces faced new challenges amid the rapid evolution of technology. He said the Edward Snowden case reflected the growing importance of cyberwarfare to global military competition. "If a war broke out in the South and East China seas, it would certainly not be the kind of battle [the PLA] has experienced in the past, but a hi-tech military operation," Gong said. It was also urgent for the army to carry out institutional reforms to bring it up to par with international standards, he said. Examples could be establishing fairer personnel policies that fostered and promoted talent; opening up the army's technological development to the private sector; and learning from developed countries how the army could enhance its fighting capabilities and prevent corruption. In response to the call for the military to be brought under state control, Gong said the PLA should always remain under the leadership of the Communist Party, which established it as a "political tool" to achieve the political goal of seizing power and maintaining the regime. However, Gong, 51, who served in three border conflicts after he joined the army in the 1980s, recognised today's PLA faced morale problems after 28 years of peace, as well as a lack of religious or other convictions. In a first public confirmation from the military, Gong said that former deputy chief of the PLA's General Logistics Department Lieutenant General Gu Junshan had been involved in corruption and other crimes. Gu, who oversaw military infrastructure and housing before he was promoted to be deputy department chief, is under investigation for allegedly selling PLA land to developers. Gong said Gu had severely damaged the army's public image. Caixin.com yesterday quoted mainland police sources as saying that Gu's younger brother, Gu Xianjun , and his brother-in-law Zhang Tao had been on the Public Security Bureau's most wanted list for corruption and bribery since April. Shanghai-based military expert Ni Lexiong said the tone of Gong's comments indicated that corruption was rife within the PLA. "The situation is dire enough to push a senior PLA official to speak publicly, which could be seen as a publicity measure to use public pressure to push the army to co-operate with Xi's anti- corruption campaign," Ni said, adding that Xi Jinping , chairman of the Central Military Commission, had already faced resistance to his military reforms. Macau-based military commentator Antony Wong Dong said Gong also wanted to show support for the military reforms put forward by Xi.

Beijing set to lure more visa-free transit tourists (By ZHENG XIN) Beijing has vowed to step up promotion of its 72-hour visa-free policy, aiming to attract more foreign transit tourists following a drop in arrivals for overnight stays in the past six months. About 2.14 million tourists visited the capital during the first half of the year, a 14.3 percent decline compared with the same period last year, according to the Beijing statistics department. "The city is considering further cooperation with Beijing Capital International Airport and Air China to come up with air ticket discounts, while building an alliance to attract more foreign transit tourists," Lu Yong, director of the Beijing Commission of Tourism Development, said at a conference. Beijing introduced the 72-hour visa-free policy for tourists from 45 countries on Jan 1, but it has not had the expected effect. The capital also saw year-on-year declines in inbound tourists in the first six months of 1989, 1998, 2003 and 2008, the commission said. The weak global economy has deterred many potential travelers from Japan and South Korea, with tourist arrivals from these two countries falling by 54.5 percent and 22.3 percent respectively in the first six months. In addition to a stronger yuan, which increases the cost for tourists to China, frequent air pollution also contributed to the poor inbound tourism performance in the first six months, Lu said. More importantly, Beijing, together with many other Chinese cities, is not providing services that meet international standards, meaning many potential travelers stay away. Jiang Yiyi, director of the China Tourism Academy's international tourism development institute, said cheaper air tickets are one of the main ways to attract many transit travelers. "Many tourists prefer transit stops, either due to a cheaper air ticket or the additional value this brings. Cheaper air tickets play a key role in attracting more foreign visitors," she said. Yang Jinsong, a professor specializing in international tourism at the academy, said Beijing should carry out a study on foreign tourists who benefit from the visa-free policy so that it can come up with tailor-made tourism products. "Many of the tour packages no longer meet foreign tourists' demands," he said. Further study is needed to find out whether transit visitors come to Beijing for business or pleasure, Yang added. Takahide Tanaka, director of a medical institute who lives in Tokyo, has been a frequent business traveler to Beijing, but said it has been gradually losing its appeal, with few tour choices offered in recent years. "Many of the tour packages in the city have remained unchanged for years," he said. "What's more, the devaluation of the yen and appreciation of the yuan have made traveling in China for Japanese people much more expensive." The capital invested 25.08 billion yuan ($4.08 billion) in the tourism industry in the first half of the year, accounting for 8.9 percent of its fixed asset investment. Tourism revenue in Beijing reached 175.98 billion yuan in the first six months, a 9.1 percent increase year-on-year, the commission said, with spending by tourists on meals and shopping reaching 91.73 billion yuan, a year-on-year increase of 11.9 percent. Revenue from domestic tourism in Beijing during the first six months reached 162.07 billion yuan, a year-on-year increase of 11.7 percent. Lu estimates that tourism revenue growth in the second half will be around 10 percent.

World's 2nd tallest building tops out in China (By China Daily) A construction crane lift the last piece of steel during the topping out ceremony at the Shanghai Tower, which is undergoing construction, at the financial district of Pudong in Shanghai August 3, 2013. The 632 metres (2,073 ft) high Shanghai Tower, which is scheduled to finish construction by the end of 2014, will be the tallest skyscraper in China and the second tallest in the world. A general view of Shanghai's financial district of Pudong is seen from the top of the Shanghai Tower, which is undergoing construction, August 3, 2013. The 632 metres (2,073 ft) high Shanghai Tower, which is scheduled to finish construction by the end of 2014, will be the tallest skyscraper in China and the second tallest in the world.

Hong Kong*:  Aug 4 2013

People must not be hijacked by these pro-democracy dissidents (By Lau Nai-keung) Lau Nai-keung says pro-democracy dissidents put own interests first - (Left to right) Ma Ngok, member of Alliance for True Democracy, Joseph Cheng Yu-shek, convenor of the alliance and Wong Chi-wai, member of the alliance attend a press conference on Chief Executive election proposals at Legislative Council, Tamar. In 2010, after the Democratic Party struck a deal with the central government's liaison office to let the constitutional reform bill pass, it was ostracised by the rest of the dissident camp. The party paid the price, losing members as well as seats. Now, suddenly, entering into direct dialogue with the central government has become the vogue, so much so that the dissidents are now organising the Occupy Central campaign to coerce the central government into coming to the bargaining table. The difference is that this time the Democratic Party cannot enjoy the privilege of monopolising the dialogue; it is now absorbed into part of the Alliance for True Democracy, which the central government must negotiate with. Problem is, this alliance does not speak for all dissidents and there are many proposals floating around. Whether members of the alliance, which is supposed to comprise 26 pan-democratic Legislative Council members, will vote en bloc for a compromise reform bill is still unclear. At the moment there does not seem to be a one-size-fits-all solution on the horizon. From a practical point of view, the central government will still have to target the Democratic Party as a bloc. There is no use scavenging votes from splintering political groups in Legco, as it is not cost-effective and, after all, totally unreliable, as demonstrated by the sad experience in 2007 when what originally appeared to be just short of one vote turned out to be a total flop. To get the bill on universal suffrage passed, the SAR government needs to secure five bloc votes from the dissident camp in the Legislative Council and they conveniently lie in the pocket of the Democratic Party. It would appear foolhardy for the Democrats to step forward to be hurt a second time in exactly the same situation. But the expectation to exercise the right of universal suffrage among the public is so high that striking a compromise with the central government the second time despite the previous political setback could be painted as an act of principle, and thus an act of bravery. The party might even go on to win a landslide victory in the district council elections in 2015 and Legislative Council election in 2016; who knows? This is politics. Alas, maverick is what our Democratic Party isn't. If they fail to secure the bloc vote of the Democratic Party, there are only two options left for the central and SAR governments. Either yield to dissidents' demands, or, as Benny Tai Yiu-ting et al threaten time and again, face another Tiananmen Square incident. The fatal shortfall of this ploy is that the dissidents see only two players in this game: them against the central government. Despite their demand for "genuine" universal suffrage, our dissidents never have the people in their hearts and minds. They see people as pawns on the chessboard. From their self-proclaimed moral high ground, our dissidents think that they are empowered to sacrifice our welfare at will to achieve their objective, which they insist should be good for us. The citizens of London can afford to wait several hundred years to enjoy a fully elected Greater London Authority, formed as recently as 2000. So why should Hong Kong citizens be hijacked by a bunch of second-class politicians and academics and forced to pay the high price of another Tiananmen Square incident just to create an electoral method to ensure dissidents must enjoy an entry ticket? How dare this alliance claim that they represent our wishes? You call this democracy? Last time such nonsense took place, it was called fascism. Though it is politically incorrect and therefore highly unpopular, I would remind our readers that Hitler was also popularly elected. Lau Nai-keung is a member of the Basic Law Committee of the NPC Standing Committee, and also a member of the Commission on Strategic Development.

Incinerator plans leave Lantau split (By Charley Lanyon charley.lanyon@scmp.com) A huge incinerator that will be visible from pristine South Lantau has enraged some residents. But with tourism booming and a third runway on the cards, other locals want development - It was a perfect day when a crowd gathered on Pui O Beach in South Lantau. The sun shone from a clear blue sky, and the gentle swell - ideal for novice surfers - provided a picturesque backdrop. Casual onlookers could have easily mistaken the gathering for a celebration, if not for the people shouting into megaphones. Sporting bright red "The Naked Islands Project" T-shirts, some protestors formed a circle while others carried a large model of an incinerator decorated with a skull and crossbones and belching dry ice from its stack. The July 22 gathering, known as "Motion in the Ocean", was based on a traditional Hawaiian surfer's funeral rite, and held to protest against plans for a massive waste incinerator off nearby Shek Kwu Chau. But for the residents and activists, a feeling of desperation hung in the air, with many believing the incinerator was the latest sign of growing pressure on South Lantau from the government and developers. It was as if they were symbolically mourning the death of Hong Kong's environment and their way of life on Lantau. Also joining the protest were activists from South Lantau's Living Islands Movement, a group that promotes the sustainable development of Hong Kong's islands with a focus on Lantau, established 10 years ago by Lantau resident Bob Bunker. The group sees the problem as a two-pronged attack - one from developers keen to take advantage of the growing number of tourists and residents on Lantau, the other from a government that sees relatively remote South Lantau as an ideal dumping ground for facilities and projects unpopular with residents in more populated areas. Bunker describes a decade spent protecting the area's environment from planned government projects, ranging from super prisons and drug rehabilitation centres to container ports. He says Lantau already shoulders an unfair share of Hong Kong's unpopular sites. "Radioactive waste is dumped on the Soko Islands, there is an explosives dump in Mui Wo and there are already seven prisons on Lantau," he says. But for Bunker, and other activists including The Naked Islands Project founders Lindsey Price and Michael Raper, the mega-incinerator is the most audacious government plan yet. Living Islands Movement's treasurer John Schofield speaks for them all when he says: "It's a travesty." If it goes ahead, the incinerator will be the largest of its kind in Hong Kong, at an estimated cost of more than HK$15 billion. It is being considered for a man-made island off Shek Kwu Chau, and will be visible from some of the most popular beaches in South Lantau. The area is also an important marine habitat for finless porpoises. It is expected to take eight years to build. The government, which says the incinerator will be state-of-the-art and environmentally friendly, sees it as an urgently needed solution to the city's waste crisis. Rainbow Wong Fuk-kan, Mui Wo's representative on the Islands Council, supports the incinerator. "Hong Kong needs a place to handle rubbish. And incinerator technology is now very hi-tech. It won't pollute the environment like incinerators from the past." He says half of his constituents support the incinerator. Environmentalists, however, claim the incinerator will pollute the air, and spoil one of Hong Kong's last pristine coastal areas. They believe the waste crisis can be better addressed through public education, with an emphasis on recycling, and argue that newer, less-polluting alternatives have not been fully considered. They believe their concerns are falling on deaf ears and claim the government's environmental assessments of the project are flawed and incomplete. Most of all, they feel confused and shocked that, with constant encroachment into Hong Kong's natural areas, the government would consider such a large waste-disposal project in sight of one of the city's most beautiful areas. On July 26, just days after the Motion in the Ocean event, the islanders suffered a defeat when the courts rejected all eight objections to the incinerator brought by neighbouring Cheung Chau residents. The government will now retable the project in the Legislative Council. But for activists on Lantau, the incinerator is just the latest addition to a growing list of projects which they feel are threatening their way of life. While the island has been largely spared from the development boom seen on Hong Kong Island and in Kowloon, things started to change in 1997 with the airport opening and a link connecting Lantau to Hong Kong Island. At first, development came slowly and the population influx was mostly limited to airport workers. But with developments such as the Ngong Ping 360 cable car and Disneyland, Lantau was transformed into a tourist spot in its own right. Development on Lantau has so far been dictated by a widely understood but unwritten rule: North Lantau, led by Tung Chung, would be open for development while South Lantau, with its natural beauty and important ecosystems, would be kept largely untouched. But now, with the Hong Kong-Zhuhai-Macau Bridge under construction, the island is bracing for an unprecedented influx of mainland tourists - and with it an influx in tourist dollars - fuelling fears that any agreement to leave South Lantau undeveloped will be ignored. Residents point to two newly proposed developments in Mui Wo as proof. Schofield says the developments - home-ownership scheme (HOS) flats earmarked for government land - will provide housing for 2,000 people, and that one will be 18 storeys high, making it by far the tallest building in the village. While the development is small by Hong Kong standards, residents say it will have a big impact on Mui Wo. The 2011 census recorded 5,485 people living in Mui Wo and the surrounding area, meaning the development would increase the population by about 40 per cent. Wong disputes these numbers. "The HOS will be low density and 13 or 14 storeys high. ... after it is built, it will only have 400 new households. So with one household having four people, there will just be around 1,000 new people at most in Mui Wo." But District Council documents seen by the South China Morning Post show the planned HOS developments would house 1,420 and 500 people, respectively. Residents also claim Mui Wo's infrastructure will not cope with the influx, saying schooling, waste services and parking in particular are already tight. They also claim their concerns are not being addressed by their representatives in the Islands District Council. When Schofield attended a District Council meeting, he was surprised to find the push to develop Mui Wo was coming from council members representing Tung Chung. Wong disputes this. "That North Lantau people dictate the development of South Lantau is not true; South Lantau people support development too, they just want slow development." Wong and Jeff Lam Yuet, the council member representing Tung Chung North, dispute claims the infrastructure in Mui Wo is inadequate. "There are enough government facilities: there is a government building, a market and a pool, but they don't have a big enough population. By building a home ownership scheme, or even public housing, they can fully utilise their resources and re-energise the community," Lam says. "Mui Wo has lots of infrastructure so there's no problem in accommodating 1,000 more people," says Wong. Tung Chung representatives, however, make no secret of their desire to see the development of South Lantau. "The whole of Lantau is one big community and South Lantau is in recession now ... [North Lantau] is under pressure from tourists. If we develop the south it can alleviate some of the pressure," says Lam. He sees big changes for Lantau: "With the third runway and terminal three coming soon, we want to make Tung Chung a hub connecting all of the attractions on Lantau. To make Lantau more attractive to tourists we must develop." Lam also supports opening the South Lantau Road to the public, which is currently open only to drivers - mostly residents - with special permits. However, many residents in the south feel permits are given too freely - the number has recently swollen to more than 10,000 - and that the system is insufficiently enforced. They fear opening the road will result in a massive increase in tourists and that South Lantau lacks the roads and parking to deal with it. Today, things are calm in Mui Wo. The buffalo still roam and the tourists visit on weekends. But the area's future is uncertain and local opinion is deeply divided. While Lam sees a golden age of tourism, Price and Raper say they and their two children will leave if the incinerator is built. Schofield has no plans to move, but has some choice words to describe development around the south of the island: "It stinks."

Hong Kong MTR may export its rail-property model to China (By Anita Lam anita.lam@scmp.com) Operator is in talks with Foshan and Guangzhou on a link based on rail-and-property approach - Overseas rail projects will generate more revenue than MTR's domestic operations by 2020 as the city's sole rail operator gears up for international expansion. MTR wants more overseas projects, especially on the mainland, where it is promoting its rail-and-property model as a solution to debt-laden railway businesses. While Shenzhen's Metro Line 4 is now the only railway that has adopted this model, MTR said it was discussing with the Foshan and Guangzhou governments the building of an inter-city link where building costs would be subsidised by developments along the route. Lincoln Leong, MTR's deputy chief executive, said there were more potential projects in the western and coastal regions of the mainland. As more mainland cities look to the property financing model as an alternative to heavily subsidised rail projects, fewer new rail projects in Hong Kong would use the model. That is because any new lines extending the old Kowloon-Canton Railway (KCR) network must stay in the hands of the government. The Northern Link and the Tuen Mun-Tsuen Wan Link now in the middle of public consultation, for example, will be funded and owned by the government, with MTR merely acting as a franchise operator. While franchise operations offer higher returns in percentage terms, they generate lower earnings than projects built and run by MTR. As the State Council is looking for more sustainable ways to finance rail development and Premier Li Keqiang told his cabinet last Wednesday that inter-city and suburban lines would be open to private investors, the mainland could be a source of growth for MTR. But Leong said Hong Kong would remain MTR's "bread and butter" market for a long time. "The ebitda [earnings before interest, tax, depreciation and amortisation] margin of our local rail-and-station commercial operations exceeds 50 per cent, while our overseas projects, usually awarded to us in the form of franchises, have a margin of 3 to 5 per cent," he said. Half of the 10 new rail projects planned for after 2015 - including the South Island Line (West) and the North Island Line - are not part of the old KCR network and can still remain under MTR's ownership. That said, the mainland is an important market for MTR, especially considering that the rail-and-property model has allowed the company to get hold of valuable land in prime locations. "On the mainland, most of the space above railway stations and depots is empty because it is not easy to put up a building there without expertise and know-how. That land will be wasted anyway if we don't use it," Leong said. "Now the government can use what we pay for the land to subsidise the railway's operation." Unlike in Hong Kong, where development rights along the line are awarded as part of a rail project, the two require separate bidding on the mainland, although bidding is said to be "tailor-made" for the operator. For Shenzhen Line 4, MTR receives an annual subsidy of 520 million yuan (HK$658 million) for the line's operation and maintenance like other rail projects in the country. But unlike current practice, it bears the loss if the subsidy and fare income fail to cover expenses. Analysts said separating the rail and property businesses would increase MTR's risk when such projects grew in number. "In Hong Kong, MTR contracts out the property projects to developers, which pay for the construction costs and bear most of the risk. But under the mainland model, MTR literally becomes the developer," said Cusson Leung of Credit Suisse. But he said it was natural for MTR to look for growth overseas, as he expected the firm's land bank in the city to be depleted by around 2020. While MTR's rail lines in London, Stockholm, Melbourne and the mainland contributed HK$35.7 billion, or 35.8 per cent, of revenue last year, they made up less than 6 per cent of the corporation's bottom line. Leong said mainland and overseas projects would soon make up a bigger portion of earnings, with six more lines being bid on.

 China*:  Aug 4  2013

Qingdao Port lures terminal operator Cosco Pacific (By Charlotte So and Anita Lam) Cosco Pacific in talks to buy a stake ahead of the port firm's listing in Hong Kong after China Merchants also expresses its interest earlier - Qingdao port's cargo tonnage rose 11 per cent in the first half. Container and terminal giant Cosco Pacific is looking to invest in Qingdao Port before the port operator goes public in Hong Kong next year. Cosco Pacific, which has two terminals in the port, said it intended to be the group's promoting shareholder before its listing. "We heard through informal channels that the company's going to be listed in Hong Kong," said Alex Chen Bin, general manager of the investor relations department at Cosco Pacific. "We are now in discussions, but nothing can be announced yet." The company is following in the footsteps of China Merchants Holdings (International), whose executive vice-chairman Li Jianhong said in June that it wanted to acquire a stake in Qingdao Port. A senior manager from China Merchants, which already has a joint venture with the port, said becoming a shareholder could further deepen co-operation. "Qingdao Port has a wide variety of cargo-handling capabilities, including iron ore, coal, fertilisers and paper. For terminals handling bulk cargo, a comprehensive logistics system with seamless connectivity is particularly important," said the manager, who asked not to be named. Qingdao Port, the mainland's biggest port for crude oil and iron-ore imports, was reported two months ago to be planning an initial public offering of up to US$300 million, but the amount is said to have risen to US$500 million since then. Joseph Chee, co-head of global capital market for Asia at UBS, said it was meaningless to speculate on the size six months before the intended listing as it could change drastically during the period. While shares in port operators are not exactly popular among investors, Guosen Securities analyst Zhou Junyang said Qingdao Port had an edge over its peers. "Its geographical location and water depth are more attractive than Tianjin Port, for example, and it is the country's biggest iron-ore port. I believe it could gain a better valuation," he said. Port stocks in Hong Kong are inactive compared with shares in other sectors. Shares in Dalian Port and Tianjin Port are near a five-year low. Qingdao Port had planned to list on the mainland since 2007, but it was forced to look elsewhere after regulators suspended IPOs there in October. The firm operates four port areas, which can handle the world's largest container ships, very large iron-ore carriers, very large crude carriers and bulk vessels for coal and agricultural goods. It processed 407 million tonnes of cargo last year, including 14.5 million 20-foot equivalent units (teu) of containers, the company's website said. In the first half of this year, the port's cargo tonnage jumped 11 per cent year on year to 230.5 million tonnes while container throughput grew 10.4 per cent to eight million teu.

Hong Kong*:  Aug 3 2013

Barrister Keith Yeung to be first Hong Kong Chinese chief prosecutor (By Austin Chiu and Patsy Moy) City's first Hong Kong Chinese chief prosecutor pledges to be fair and independent, and the man he'll succeed says he is 'highly respected' - Senior barrister Keith Yeung Kar-hung will be appointed the first Hong Kong Chinese director of public prosecutions next month. He takes over from the incumbent, Kevin Zervos. The appointment of the commercial litigation specialist met with mixed reactions. A veteran lawyer called into question Yeung's reported ties with rich and powerful businessmen. A former deputy High Court judge, Yeung, 48, vowed to be fair and impartial and uphold the rule of law. "The system of criminal prosecution is a vital aspect of the Hong Kong legal system. Its key objective is to uphold the rule of law," Yeung said in his first meeting with the media. "To achieve that we need an independent fair, impartial and open system of public prosecutions. "In discharging the duty of the director of public prosecutions, I will try my utmost. I will uphold the prosecutorial independence. I will handle all criminal prosecution in a fair and impartial manner. I will be guided by the public interest. I will uphold the rule of law," he said. Senior counsel Ronny Tong Ka-wah, a Civic Party lawmaker, expressed reservations about the appointment. He pointed to reports that Yeung had given legal advice to the Kwok brothers of Sun Hung Kai in the biggest corruption case in Hong Kong's history. "There is at least apparent conflict of interest. Justice must be seen to be done. People need to be convinced that the director of public prosecutions is independent and impartial," Tong said. Stephen Hung Wan-shun, vice-president of the Law Society and a criminal lawyer, welcomed the appointment. He said he believed that Yeung would make an appropriate declaration of interests. The Department of Justice said it was "not appropriate" for Yeung to disclose information about his clients in his private practice due to professional confidentiality. "[The department] has an established mechanism to ensure prosecution decisions and related issues are made in a just and fair manner and strictly in accordance with the law and the Statement of Prosecution Policy and Practice," it said. While Yeung is the first local Chinese to get the job, he is not the first Asian. Vietnam-born Peter Nguyen, a member of the ethnic-Chinese Hoa minority, was DPP from 1994 to 1997. Secretary for Justice Rimsky Yuen Kwok-keung dismissed any concern that recruiting from outside the Department of Justice would hurt morale. Zervos described Yeung as a lawyer who was "highly respected and widely regarded" in the legal profession for his "high integrity and honesty". Zervos is widely expected to be appointed a High Court judge. Asked about his next move, Zervos said it would be a "great honour" if he was appointed to the bench.

Li confident on developer's path (By Sandy Li sandy.li@scmp.com) The Cheung Kong chairman cites low debt ratio as boost for investment options after first-half earnings slide - Earnings at Cheung Kong, with its head office in Central, have been weighed down by the government's property cooling measures. Cheung Kong (Holdings), controlled by billionaire Li Ka-shing, says it will continue to pursue quality investments in Hong Kong and abroad. It reported a 30 per cent fall in first-half profit, excluding the contribution from Hutchison Whampoa. "With a low debt ratio, the Cheung Kong group is well placed to make steady progress in a constantly challenging market," Li, the company's chairman, said in the results announcement. Its net debt was about 5.6 per cent. Before Hutchison's contribution, the group's profit was HK$7.21 billion for the six months to June, down from HK$10.35 billion a year ago. Earnings were hurt by the government's property curbs. "The property division was below market expectations as no major property projects were booked in the first half," said Adrian Ngan, Citic Securities' executive director of property equities research. Hit by the depressed housing market and the cancellation of the controversial sale of HK$1.4 billion of hotel units at its Apex Horizon project in Kwai Chung, profit from property sales - including its share from joint ventures - fell 36.58 per cent to HK$3.83 billion in the first half, from HK$6.04 billion a year earlier. The sale of Apex Horizon was dropped in May after the Securities and Futures Commission found the deals breached the law as unauthorised investments. However, rental income jumped 8.24 per cent to HK$1.06 billion during the period, Analysts said deputy chairman Victor Li Tzar-kuoi, who chaired an analyst briefing, did not directly answer questions about whether the developer managed to meet this year sales target of up to HK$40 billion. "He (Victor Li) said the buyers' profiles had changed after the government introduced a string of cooling measures. Due to the policy risk, it is hard to predict the market outlook," an analyst said, referring to a sharp drop-off in mainland buyers and investors. Cheung Kong earlier said it aimed to sell more than 5,200 Hong Kong flats and 2,500 mainland units to raise between HK$35 billion and HK$40 billion from property sales this year, a record for the company. Victor Li revealed in the analyst briefing that the company had achieved HK$13 billion in sales from mainland properties so far. That compares with HK$24 billion in 2011. To boost its full-year earnings, Ngan expects Cheung Kong will dispose of more non-core assets or increase mainland property sales to offset the plunge in home sales in Hong Kong. On Tuesday, Cheung Kong announced it has agreed to sell a shopping mall in Tin Shui Wai for about HK$5.85 billion. "The profit to be realised from the sale will help to boost its balance sheet and it will be ready to book in the second half," Ngan said. After contributions from subsidiary Hutchison and a revaluation gain from its investment properties, Cheung Kong said its first-half net profit declined 13 per cent to HK$13.41 billion. Earnings per share for the first half fell 13 per cent to HK$5.79, from HK$6.65 last year. Turnover, excluding the contribution from Hutchison, dropped 17 per cent to HK$14.62 billion. Directors declared an interim dividend of 58 HK cents per share, up from 53 HK cents a year ago. Cheung Kong shares rose 2.38 per cent to close at HK$111.60 before the results announcement.

Hong Kong billionaire plans huge Australian casino (By Agence France-Presse in Sydney) A planned A$4.2 billion (HK$29.2 billion) tropical resort and casino in Australia would target the growing numbers of Chinese tourists. A Chinese billionaire has revealed plans for a A$4.2 billion (HK$29.2 billion) tropical resort and casino in Australia which he says will be a “man-made wonder of the world”. The Queensland state government confirmed on Friday that it has streamlined the approval process for Tony Fung’s Aquis project near Cairns, plans for which include a casino, nine luxury hotels with 3,750 rooms, and one of the world’s largest aquariums. “North Queensland is missing the man-made wonder of the world, which is presented in Aquis,” Fung’s Aquis Resort at the Great Barrier Reef said in its initial advice statement. Fung, from one of Hong Kong’s best-known banking families, said the resort would see North Queensland benefit from growing numbers of Asian tourists, particularly from China. “Facilities of the like of Aquis Resort at The Great Barrier Reef don’t only attract the Chinese mass-market middle-class, but also the big-spending, high-value, ever-expanding Chinese upper-class,” the statement said. Australian billionaire James Packer already has plans to bring lucrative Asian tourists Down Under to a casino and six-star hotel complex in Sydney he wants to build, but Aquis said its development would be “Australia’s only genuine, world-class, integrated resort”. It said it would be an inclusive facility -- “whether a local retiree or a Chinese billionaire, all will be welcomed, treated equally and feel special”. The planned project, to be 13 kilometres (eight miles) north of the Great Barrier Reef gateway city of Cairns in Yorkeys Knob, will include 1,200 apartments and 135 villas, high-end retail shopping, theatres, a 13-hectare reef lagoon, 18-hole golf course, a convention and exhibition centre and a 25,000-seat sports stadium. It is expected to create 9,300 construction jobs and 10,000 ongoing positions once operational in 2018, and supporters see it as a “game-changer” investment in the tropical region. “Tony Fung is keen to make sure it is done properly environmentally, socially, and to the benefit of the whole region,” chief executive of advocacy group Advance Cairns Mark Matthews told the Cairns Post newspaper. “This has not happened overnight, it is part of a broader investment confidence in the north.” But the development has alarmed some locals in Yorkeys Knob, with the community-elected “King of the Knob” Jim Cadman saying he will oppose the “steamroller” project which could threaten the environment and hurt local businesses. “Most people are incredulous,” he told the Australian Broadcasting Corporation. The state government Thursday gave Aquis “co-ordinated project” status, meaning all approvals -- including environment, social and licensing requirements -- will be handled in a coordinated way rather than separately by different departments. The next step will be for it to submit an environmental impact statement. It must also satisfy foreign investment regulations.

Barry Cheung, former executive councillor, sued for HK$40m in unpaid loans (By Lai Ying-kit yingkit.lai@scmp.com) Barry Cheung Chun-yuen resigned from Exco in May after police began investigating his commodity trading firm Hong Kong Mercantile Exchange. Former executive councillor Barry Cheung Chun-yuen is being sued over HK$40 million in unpaid loans by a listed company director. In a writ filed to the High Court on Friday, Leung Chee-hon demanded New Effort Holdings – owned by Cheung – to repay two HK$20 million loans, plus interest, owed to him. Leung, a non-executive director of Sunley Holdings, said the loans were borrowed in January and February, and that Cheung, as a guarantor for the loans, had to bear the liability if New Effort failed to repay. Cheung resigned from the Executive Council, which advises the chief executive on policy decisions, and other public duties in May after being investigated by police over his failed Hong Kong Mercantile Exchange. The HKMEx was a commodity trader founded by Cheung. It surrendered its trading licence to the financial watchdog in May amid questions over its financial position. The company is also being sued by its landlord Hong Kong Cyberport Management for over HK$6 million in office rent, management fees and other charges owed since March.

 China*:  Aug 3  2013

New home prices in China rise 7.9pc in year to July, says SouFun survey (By Bloomberg in Shanghai) New home prices on the mainland jumped in July by the most since December as buyers did not expect the government to tighten the property market further and push housing values lower. Prices surged 7.9 per cent last month from a year earlier, to 10,347 yuan (HK$13,096) per square metre, SouFun Holdings, the mainland's biggest real estate website owner, said after a survey of 100 cities. Prices began rising from a year earlier in December, when they climbed 0.03 per cent after a 0.46 per cent slide in November. Beijing would seek "stable and healthy" development of the property market, the government said after a meeting led by President Xi Jinping this week, prompting speculation that the government might relax property curbs. Former premier Wen Jiabao in March stepped up a three-year campaign to cool home prices, ordering the central bank to raise down-payment requirements for second mortgages in cities with excessive cost gains. "Demand from first-home buyers is still strong in the market, while the policy uncertainty has been dismissed as it's unlikely for the central government to issue a nationwide tightening policy," said Dai Fang, a Shanghai-based analyst at Zheshang Securities. "Local governments with big price gains may announce some city-level property policy though." With the increasing uncertainty about China's economy, the expectation for harsher property curbs was weakening, SouFun said in the statement. Home values in the southern business hub of Guangzhou soared 23 per cent from last year, while in Beijing they jumped 20 per cent, SouFun said. "Unlike the previous government, the new leadership seems to aim for long-term development of the property market by allowing the market to play a bigger role rather than using administrative orders," Shen Jian-guang, a Hong Kong-based economist at Mizuho Securities Asia, said before yesterday's releases. Smaller cities have already begun easing some of the policies designed to restrain price gains. Yancheng, in Jiangsu province, suspended limits on housing prices as supply of homes increased, People's Daily reported last week. The southern city of Dongguan, in Guangdong province, led month-on-month declines among the 100 cities in the SouFun survey, declining 1.7 per cent from June. "The housing price gap widened further between major and smaller cities," Jinsong Du, a Hong Kong-based property analyst at Credit Suisse Group, wrote in a note to clients yesterday. "This should continue to prevent the central government from implementing nationwide housing measures in the near term."

China sails through 'first island chain' (By Li Xiaokun) Passages show navy capable of patrolling waters far from home - The Chinese navy has fulfilled its long-held dream of breaking through the "first island chain blockade", and its vessels have gained access to the Pacific Ocean through various waterways along the route, military observers said on Thursday. They made the remarks in interviews with China Daily to mark the 86th anniversary of the founding of the People's Liberation Army. "The Chinese navy has the capability to cut the first island chain into several pieces," said Du Wenlong, a senior researcher at the PLA's Academy of Military Science. "Now the chain is fragmented." The "first island chain" refers to the first major archipelagos off the East Asian continental mainland, including the Japanese archipelago, Ryukyu Islands, China's Taiwan and the northern Philippines. In the 1950s, Washington came to regard the chain as an important barrier to contain China and other communist countries. The United States and allied countries installed a strong military presence and advanced weapons at bases along the line. The PLA's anniversary came four days after five Chinese warships finished a historic trip, during which the Chinese navy for the first time entered the Pacific through the Soya Strait, known in Russia as La Perouse Strait, between the Russian island of Sakhalin and the Japanese island of Hokkaido. The Chinese vessels passed through the strait to train in the West Pacific after a joint naval drill with Russia in the Japanese Sea. It was the first time the Chinese navy has conducted high-sea training right after a major drill, with no rest. On July 25, the ships crossed the Miyako Strait between Japan's Miyako and Okinawa islands on their return voyage to Qingdao, headquarters of the North China Sea Fleet. The move marks the first trip by the Chinese navy circumnavigating the Japanese archipelago. Japan sent frigates and aircraft to monitor the Chinese fleet at a short distance. Ministry of National Defense spokesman Geng Yansheng called for rational views on the training, adding that all countries have the right to navigate these waters and channels in the western Pacific Ocean. Wu Dahui, a military and international studies expert at Tsinghua University, said the Chinese vessels went through the Soya Strait six hours after 18 warships of the Pacific Fleet sailed there. Wu viewed it as proof of the growing capability and confidence of the Chinese navy. "So far, counting from the south to the north, the navy has crossed the first island chain through Bashi Channel, Miyako Strait, Osumi Strait, Tsugaru Strait, and now Soya Strait," said Du Wenlong from the Academy of Military Science. "It has crossed all the strongest parts on the chain." Du said the repeated passages show that the PLA navy is now capable of sending and supporting its warships to navigate and fight in channels far from the continent. Li Li, a researcher at the PLA's National Defense University, said going through the Soya Strait means much more than giving China new access to the Pacific. "Japan has been highly uneasy about the passage because the PLA navy usually enters the Pacific through waterways such as the Miyako Strait and the Osumi Strait, which are all in the South," she said. Despite the Chinese fleet's passage through the first island chain, Du Wenlong said the US-Japanese alliance can closely monitor the chain with naval and air forces. Ou Jianping, a senior expert at the National Defense University, said in an online discussion with military enthusiasts on July 26 that the Chinese navy must grow into a blue-water navy because almost all of the aggression against China in modern times came from the sea. China has marine territory of more than 3 million sq km, and 97 percent of its trade with other countries is transported by sea, Ou said. "We should view China as a maritime state." The Chinese navy has accumulated experience as a blue-water navy while protecting ships from around the globe in the pirate-plagued waters off Somalia, a task started in 2008 according to a UN resolution. Beijing has also commissioned its first aircraft carrier. President Xi Jinping vowed on Wednesday to protect China's maritime interests and be fully prepared for the complex issues in the region. He made the pledge while chairing a group study session of the Political Bureau of the Communist Party of China Central Committee to discuss a roadmap for China to become a maritime power. "We love peace and will remain on a path of peaceful development, but that doesn't mean giving up our rights, especially those involving the nation's core interests," Xi said. "China is growing into a global power and should have a navy that fits its status," said Wu Dahui from Tsinghua. "The further our navy can go, the further we can push out the security threats."

Hong Kong*:  Aug 2 2013

Franklin Lam cleared by ICAC, but resigns from Exco (By Lai Ying-kit yingkit.lai@scmp.com) Franklin Lam Fan-keung has been cleared by the Independent Commission Against Corruption of wrongdoing in his property sales — but he has resigned as an Executive Councillor. The government confirmed Lam’s resignation from its top policy advisory body shortly after the Department of Justice announced that it would not prosecute him over misconduct in public office. “The Chief Executive accepted his resignation with regret. He thanked Mr Lam for his contributions during his tenure,” the government said in a statement on Thursday afternoon. Lam, a property analyst, was appointed last July by Chief Executive Leung Chun-ying to the executive council, which advises the chief executive on policy making. Lam has been on indefinite leave of absence since November after being investigated by the ICAC. The investigation was launched to look into whether Lam had benefited from inside information when he sold two properties weeks before the government’s introduction of a buyers’ stamp duty on October 26. It also looked into whether his wife offered an advantage to a property agent for selling the flats above the bottom price they were on the marker for. Explaining the results of the ICAC investigation, Director of Public Prosecution Kevin Zervos said it found that Lam could not have obtained confidential information. He said Lam put the flats on sale last June, two months before senior government officials started discussing the stamp duty. “As stated to the ICAC by the Permanent Secretary for Transport and Housing, the proposal of the buyer’s stamp duty was first discussed at a meeting on August 23, 2012 and throughout the formulation of the new measures there was no consultation or discussion with any non-official member of Exco, including Mr Lam,” Zervos said. “There does not appear to be any other means by which Mr Lam may have received or come to know about the new measures and in any event could not have done so before late August 2012 when the measures were the subject of high-level discussions within government,” he said. As for the allegation of offering an advantage, Zervos said the payment of the extra commission was not concealed as it was entered into the property agency’s computer system. It was also permissible within the property agency for agents to receive a commission higher than 1 per cent of the transaction price but it was required by the agency that it be fully disclosed to the other party to the transaction. “It cannot be said to be a secret commission between the property agent and his or her principal,” Zervos said. Lam is among a number of top aides and principal officials in Leung’s government that have been embroiled in controversy since they took office last July. Barry Cheung Chun-yueng, who led Leung’s successful election last year, earlier resigned as an Exco member, and from his other public duties, after his failed Hong Kong Mercantile Exchange was investigated amid allegations of forgery.

Macau rakes in 20pc gain in July gaming revenues - Macau’s gambling revenues defied China’s economic slowdown and rose 20 per cent in July year-on-year, boosted by an increase in the number of Chinese visitors to the country’s only legal casino gambling hub as well as the size of their bets.

Hutchison first-half profit beats forecasts on solid overseas performance (By Reuters in Hong Kong) Li Ka-shing plans to exit the mature Hong Kong supermarket business to focus on investing in European infrastructure and telecom. Li Ka-shing's Hutchison Whampoa conglomerate on Thursday reported better-than-expected first-half profits, buoyed by a solid performance in European infrastructure and telecoms investments. Asia’s richest man, Li plans to exit the mature Hong Kong supermarket business to focus on investing in European infrastructure and telecom assets as global economic woes drive down prices, analysts said. "Whilst uncertainty will remain a challenge for the second half of 2013, major economies are showing signs of stabilisation and gradual recovery," Li said in a filing to the Hong Kong stock exchange. Hutchison said it would not hold a news conference after the earnings announcement. The company did not give a reason for the rare cancellation. Hutchison, which operates in more than 52 countries, said despite difficult conditions in many of the economies in which it operates, its overall business achieved solid growth with the exception of its joint venture Vodafone Hutchison Australia. In the first six months, the company posted an underlying profit of HK$12 billion (US$1.6 billion), up from a revised HK$9.71 billion a year earlier. The result, which excludes exceptional items and property valuations, beat the average forecast for an underlying profit of HK$10.9 billion in a Thomson Reuters poll of four analysts. Hutchison proposed an interim dividend of HK$0.60 per share, up from HK$0.55 in the same period last year. It was the first time the company has increased the interim dividend payout since 2011. As part of its efforts to focus on growing its core business, Hutchison said in mid-July it was conducting a strategic review of its Hong Kong supermarket chain, ParknShop, with an asking price of up to US$4 billion (HK$31 billion). Industry analysts expect Hutchison to move its focus to China’s health and beauty business, which was the highest earnings growth contributor in the company’s retail sector and accounted for about one-fourth of its EBITDA in 2012. Overseas infrastructure and telecommunications businesses were the major drivers behind the solid performance, a trend that is likely to persist for the rest of the year, analysts said. “Europe was a drag on investor sentiment on Hutch in 2012; thus, an improvement in European macro should translate to positive investor sentiment on the stock,” UBS said in a report before the earnings announcement. Hutchison’s unit, Cheung Kong Infrastructure, last week posted a 10 per cent rise in net profit and said it expected growth to continue, boosted by the operations of Power Assets and UK Power Networks. Analysts said a growing customer base in its telecom businesses in Britain and Austria also helped boost growth. Husky Energy, Canada’s No 3 integrated oil company which is controlled by Li, also reported a better-than-expected quarterly profit as production rose and the company realised higher prices. Separately, property conglomerate Cheung Kong, which holds a controlling stake in Hutchison, posted a 13 per cent fall in first-half net profit to HK$13.4 billion (US$1.73 billion) as cooling measures imposed since last October took a toll.

 China*:  Aug 2  2013

China's first lady Peng Liyuan makes Vanity Fair's best dressed list (By Amy Li chunxiao.li@scmp.com) Peng Liyuan smiles after arriving at the government airport Vnukovo II, outside Moscow in March. Seventy years after China’s Madame Chiang Kai-shek made it to the "best dressed women in wartime" list in 1943, it is now first lady Peng Liyuan's turn. The wife of President Xi Jinping has earned a coveted spot on the fashion magazine’s International Best Dressed list, cementing her status as the stylish first lady of China. She ranks with fashion icons Justin Timberlake, the Duchess of Cambridge, Victoria Beckham and American burlesque dancer Dita Von Teese. Peng is the only Chinese person to have made the list this year. Introduced as UN World Health Organisation goodwill ambassador for tuberculosis and HIV/Aids, Vanity Fair picked Peng’s black double-breasted, belted coat and handbag by Chinese fashion label Exception - worn during her trip to Russia - as her “notable ensemble of 2013”. Peng’s maiden overseas trip with Xi to Russia won her praise from people at home and abroad. Her choice of home-grown designer brands has been hailed as a boon for China's fashion industry. A microblogger compared Peng with Madame Chiang Kai-shek. "Although they are from different times, they posess similar charms," he wrote. Peng's appearance on the Vanity Fair list remained unreported by China's major news portals on Thursday, as the nation celebrates Army Day, marking the anniversary of the founding of the People's Liberation Army in 1927. Peng is one of China's most famous folk singers and holds the rank of major general in the People's Liberation Army.

High-end liquor sellers take a hit (By Wang Zhuoqiong wangzhuoqiong@chinadaily.com.cn) The revenue of Kweichow Moutai Co Ltd for the first six months of 2013 was 17.9 billion yuan ($2.9 billion), up 0.6 percent year-on-year. Kweichow Moutai Co Ltd - China's top liquor producer - has seen nearly flat growth in revenue in the first half of the year, hit by the government's campaign to crack down on lavish spending using public funds. The company said its revenue for the first six months of 2013 was 17.9 billion yuan ($2.9 billion), up 0.6 percent year-on-year, or 100 million yuan. The government's campaign has hit high-end liquor companies the most, industry insiders said. In the first four months of the year, liquor production volume was 3.81 million kiloliters, an increase of 6.9 percent year-on-year but down 10.36 percentage points compared with the same period last year. To boost sales, Moutai has slashed prices to attract more customers in the mid-range market. In mid-July, the company said it planned to reduce the prices of some products by up to 50 percent. But industry experts are not optimistic about the company's expansion plans in the mid-range market, where its distribution channels are not established well enough to compete with local brands. For years, Moutai has relied heavily on high-end group consumption and specialized stores to develop sales. To change its distribution channels, which used to target luxury spending, to aim at ordinary customers will take considerable time and effort, said Ma Fei, an industry consultant. Meanwhile, Moutai's peers are also posting lackluster results. Jiugui Liquor Co Ltd said its first-half revenue has seen a rapid decline, resulting in a nearly 90 percent drop in profits. Sichuan Tuopaishede Group said because of the government's austerity campaign and the restrictions on the sale of alcoholic drinks within the military, sales of its high-end products have fallen significantly, as has its net profit, which is expected to be down about 80 percent for the first half of the year. Another top liquor brand, Wuliangye Group, launched mid-range products priced between 200 and 500 yuan this month. The group is seeking a flattened distribution channel for all its products to reboot its profits, said Wang Chuancai, an industry consultant. Tang Qiao, chairman of Wuliangye Group, said it is changing its product structure that used to emphasize the sales of its high-end product lines, bringing in 70 percent of revenues. He said the sales target for this year has been lowered to about 30 billion yuan, only slightly higher than last year's 27.6 billion yuan. Tang said the days of demand exceeding supply are over. This year the inventory situation has forced them to change their strategy for development. Xie Ji, an analyst at the New Food Industry Institute, said with the decline in spending on luxury drinks and growth in public consumption of liquor, the two sides will eventually overlap in the product range priced between 100 and 300 yuan. The liquor products of this price range will make up half of the industry total sales in the future, he said. An increasing number of distributors who used to represent mid-range liquor brands have now shown strong interests in Wuliangye's new products, Xie said. But he added the evolution is far from over. After the tumult of contraction, stability in the market is only the first step. Dealing with overcapacity will be a major challenge, he added. For example, he said, there are about 2,000 liquor manufacturers nationwide. A number of small liquor producers are very likely to disappear.

Memorial a tribute to WWII 'comfort women' (By Chen Jia in San Francisco and Liu Yiyi in Glendale, California) Kim Bok-dong, a victim of the Japanese military during World War II, sits in the empty chair of the "comfort women" memorial during the unveiling ceremony in Glendale, California on Tuesday. The statue is a tribute to Asian comfort women who were forced into sexual slavery by Japanese troops. US monument wins praise despite objection from Japanese official - The US West Coast unveiled its first public memorial to World War II-era "comfort women", in Glendale, California, on Tuesday. The 499-kg statue of a woman in Korean dress sitting next to an empty chair has won high praise from both Korean-Americans and Chinese-Americans, who consider it a moving tribute to the tens of thousands of Asian women who were forced into sexual slavery by the Japanese military during the war. "We received thousands of protest e-mails, but history cannot be denied. This is a testament to the history and to the will of Korean people," city Councilwoman Laura Friedman said at the unveiling ceremony. "We are proud to be the first city on the West Coast to have the memorial. We care about the Korean population in the US," she said. "The comfort women were innocent victims of the war. The sexual abuse was horrible." City officials rejected an unexpected request from the Japanese consulate-general in Los Angeles days ago to not display the statue in a public park. A similar onslaught from Japanese lobbyists who tried to get a monument to comfort women removed in New Jersey took place last year. Peter Li, a professor emeritus at Rutgers University, said the recent actions by Japanese politicians reflect "a total rejection of any responsibility" by Tokyo for the establishment and administration of the comfort women system. "This is morally abhorrent," he said. "The Japanese government should unambiguously assume responsibility and admit its wrongdoing." No legislation officially apologizes for the enslavement of the comfort women or offers official governmental compensation for the victims, he said. Li said the Japanese are good at expressing their regrets for the suffering that occurred, but they do not assume responsibility, which is rightfully theirs. Also on Tuesday, three Chinese women in their 80s joined with 174 local supporters in Osaka, Japan, to request disciplinary action against Osaka Mayor Toru Hashimoto, whose recent remarks on comfort women seriously damaged their sense of dignity and caused them mental anguish, Xinhua News Agency reported. Li Xiumei, 86, a surviving Chinese comfort woman abducted by the Japanese military, and the two other women now live in Shanxi province. The Chinese victims said this Japanese mayor, though born in peacetime, has hurt them with his insensitive message that defends Japanese military aggression. According to the Global Alliance for Preserving the History of WW II in Asia, Japanese ultra-rightists voted down an official apology resolution in 1995 after then-prime minister Tomiichi Murayama of the Socialist Party made a personal apology to victims. Kathy Masaoka, co-chair of the Japanese-American organization Nikkei for Civil Rights and Redress, said: "What the Japanese military did in World War II also influenced Japanese-Americans' human rights and freedoms in the US. The Japanese government owes an apology to everyone who was a victim of what they did in the war." The apology was important, as the victims will finally be able to heal their deep wounds, she said, adding that learning from the past is the only way to move forward.

US schools get more Chinese teachers (By Yu Wei in San Francisco yuwei12@chinadailyusa.com) Language instructors headed for K-12 classrooms in 30 states - A group of 130 Chinese teachers is undergoing 10 days of intensive training at UCLA before heading off to teach Mandarin in kindergarten through 12th-grade classrooms across America. The teachers are part of the Chinese Guest Teacher Program, a collaboration between the College Board and China's Confucius Institute. Started in 2007, the program is intended to help US schools develop Chinese language and cultural studies programs. "We started with 30 teachers, and now the program is growing and growing. We have 130 new teachers this year," said Lisa Healy, associate director of Chinese Language and Culture Initiatives at the College Board. According to the board, this year at least 187 Chinese teachers will be at work in elementary, middle and high schools in 30 states, with the largest concentration in Ohio, Utah and North Carolina. Since 2007, almost 800 guest teachers have served in the program, reaching more than 100,000 students. Because most of the teachers will be assigned to small towns, in many cases they will be the only Chinese person in the entire community, Healy said. "they are really the pioneers of starting Chinese programs," she said. "In addition to teaching Chinese, they are also cultural ambassadors.' The demand for Chinese teachers is greater than the supply, Healy said. there are not many local American teachers who are certified to teach Chinese, she explained. "For instance, Arizona has only two certified teachers, as is the case in South Carolina and Louisiana." To be qualified as a visiting teacher, one must have at least three years teaching experience and go through a rigorous selection and training process before starting at the host schools. Each teacher's annual salary consists of $13,000 from the Confucius Institute and a salary from the hosting school commensurate with local teacher pay scales. The 10-day training session at UCLA includes three days of hands-on practice sessions teaching 170 elementary, middle and high school students. The Chinese teachers are already getting some positive feedback. "The parents keep telling me that they want their kids to do this every summer, even the whole year round, saying that they will ask their school district to start a Chinese program," Healy said. At the same time, teachers themselves are excited and motivated. "The kids are learning fast,' said Ma Zhi, a Chinese teacher who is headed to work in a school in Utah. Ma, who had never been to the US before, said students here were different from what he expected. "they are very creative and enthusiastic," he said. "I need to adjust my teaching techniques to fit their needs." For Ma, that means learning all about US toys. "I will use toys to interact with my students," he said.

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.

 *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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