TurboJet still waiting for ferry collision report Page 4
Investors plough cash into mainland debt, equity M
acau investors rushed into higherreturn mainland securities in the first half of this year as more yuandenominated products were offered here, says an authority on the subject. Locals are also anticipating appreciation in the value of China’s currency. Residents’ investment in outside securities amounted to 310.6 billion patacas (US$38.9 billion) at the end of June, 18.4 percent more than at the end of last year, the Monetary
Authority of Macau announced on Friday. Securities accounted for 129.6 billion patacas of the market value – 39.9 percent more than at the end of last year, according to the authority’s first-half Coordinated Portfolio Investment Survey. “The investment in renminbi-denominated instruments remains strong because investors are expecting better returns,” said Thomas L.K. Vong of the Monetary Authority’s research and statistics department. More on page 2
MOP 6.00 Year II
Number 426 Monday December 2, 2013
Editor-in-chief Tiago Azevedo
GDP picks up slightly in third quarter
Expect presales leap for Year of Horse: agent
April 19, 2013
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Housing prices rose for the third month in a row in October with a strong recovery in transaction volume, says the Financial Services Bureau. But “…it will only be in the second quarter next year that we can expect more available unfinished flats released in the market again,” Marco Wong Kwok Ki, district sales director of HKP Estate Agency (Macau) Ltd told Business Daily.
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Japan’s casino bill to boost Macau ties Japanese firms are overlooking opportunities in Macau but that might change as soon as the parliament approves a bill to regulate casinos in the country, said Hiroshi Takada, chairman of Japan’s Organisation for Small and Medium Enterprises and Regional Innovation. He was speaking on the sidelines of the Pan-Asia International Small Business Congress that took place in Macau last week. Page 5
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Ever since the Ao Man Long corruption scandal, the government has been very passive on urban planning issues, responding only to citizen pressure and often delaying approvals, says the vicepresident of Macau Institution of Engineers. Addy Chan Kuai Son told Business Daily the trial and imprisonment of Mr Ao, a former Secretary for Transport and Public Works, had created suspicion among the public and paranoia inside government departments. Pages 6&7
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December 2, 2013
Macau PwC resigns as Summit Ascent auditor Summit Ascent Holdings Ltd – described in filings as controlled by Macau casino developer Lawrence Ho Yau Lung and as a Russian casino scheme investor – states PricewaterhouseCoopers has resigned as company auditor with effect from Friday. Deloitte Touche Tohmatsu will take over. Summit said Deloitte already audits a key firm in which Summit bought a stake. It paid US$9.02 million for 46 percent of the entity, called Oriental Regent Ltd. That’s a holding company with 50 percent of First Gambling Company of the Far East LLC, which in turn has a gaming licence in Primorye, a Russian Far East province.
Macau people are getting more bang for their buck by investing in mainland securities
Investors ploughing money into mainland debt, equity Investment by Macau people in mainland securities rises by two-fifths as they look for higher returns Tiago Azevedo
acau investors rushed into higher-return mainland securities in the first half of this year as more yuan-denominated products were offered here, an authority on the subject says. Investment by Macau residents in securities outside the city amounted to 310.6 billion patacas (US$38.9 billion) at the end of June, 18.4 percent more than at the end of last year, the Monetary Authority of Macau announced on Friday. Securities accounted for 129.6 billion patacas of the market value of those investments, or 39.9 percent more than at the end of last year, according to the Monetary Authority’s first-half Coordinated Portfolio Investment Survey. “The investment in renminbidenominated instruments remains strong because investors are expecting better returns,” said Thomas L.K. Vong of the Monetary Authority’s research and statistics department. Mr Vong told Business Daily that investors were counting on the appreciation of the yuan. “There are now more investment opportunities in renminbi,” he said. This is because of efforts to turn the yuan into an international currency. The mainland regulators are trying to make the yuan a more suitable currency for investment. “There is now more acceptance for renminbi-denominated opportunities
here, and middlemen are also more eager to sell alternative products,” Mr Vong said. The Monetary Authority said Macau investment in securities in Hong Kong had amounted to 93.3 billion patacas at the end of June, 9.7 percent more than at the end of last year. But Macau investment in Hong Kong securities made up a smaller proportion of total investment in external securities.
Land of the tax-free The amount of Macau investment outside the city has set new records every year since the global financial crisis. But Macau residents have been shunning European and United States securities this year. Their investment in US securities amounted to 9.5 billion patacas at the end of June, more than at the end of last year but a smaller proportion of their total investment in external securities. Their investment in European securities amounted to 34.7 billion patacas, less than at the end of last year and a smaller proportion of their total investment in external securities. Investment by Macau residents in securities in low-tax Luxembourg amounted to 11.2 billion patacas, 31.1 percent more than at the end of last year. A greater proportion of Macau
investment in external securities – more than half – was in long-term debt at the end of June. The advent of the fiscal reserve in February last year has increased investment in external debt instruments. Macau investment in external longterm debt amounted to 159.4 billion patacas at the end of June, one-third more than at the end of last year. Investment in external shortterm debt amounted to 12.6 billion patacas, 11.6 percent more. Macau investment in external equities, including mutual funds and investment trusts, amounted to 138.6 billion patacas at the end of June. The Monetary Authority said this year it was considering putting
KEY POINTS More money being invested in yuan assets Middlemen eager to sell new products Fiscal reserve’s taste is for long-term debt
more capital from the fiscal reserve into yuan-denominated investment vehicles, in both the mainland and offshore yuan markets. The purpose is to get better returns than the fiscal reserve currently gets. Mr Vong said the fiscal reserve managers had a preference for longterm debt. “We don’t take too much risk in our investment,” he said. “This is the kind of instrument that institutional investors seek, while individual investors may go for riskier options,” he said. The fiscal reserve held 167.34 billion patacas at the end of September, according to the Official Gazette. Of the money in the fiscal reserve that is invested in long-term debt, 96.7 billion patacas was invested in mainland debt, and the next-biggest proportion was invested in Hong Kong debt. Mr Vong said the trend toward more investment in the mainland would probably be confirmed in the second half, as markets there were expected to rise on optimism about changes in policy announced last month. “We are investing more in renminbi-denominated instruments, but we have a limit under the current agreement,” he said. “But if the ceiling is changed we may invest more of the fiscal reserve in these products.”
December 2, 2013 April 19, 2013
Expect leap in presales for Year of Horse: agent
Keepin’ it surreal
More off-plan sales around Chinese New Year after project completions, govt approvals Stephanie Lai
ousing prices rose for the third month in a row in October with a strong recovery in transaction volume, according to data from the Financial Services Bureau. But the contribution made by offplan sales of new flats has diminished and will remain slight for the final month of this year says an estate agent. “It will only be in the second quarter next year that we can expect more available unfinished flats released in the market again, such as the later phases of One Oasis [in Coloane] and Pearl Horizon [in Areia Preta],” Marco Wong Kwok Ki, district sales director of HKP Estate Agency (Macau) Ltd told Business Daily. The average price of Macau housing was 80,412 patacas (US$10,070) per square metre in October, albeit from a small sample relative to other single-market jurisdictions such as neighbouring Hong Kong. The Macau pricing was seven percent more than in September and 10.5 percent higher
than the same period last year, says the bureau. The number of homes sold in October was up month-on-month. There were 793 transactions; 32 percent more than in September. Home transaction volume had contracted sequentially for five months from April to August this year. It coincided with some legislative changes to the operation of the local housing market – tighter controls from June onward regarding presales of new homes. Under the housing presales law, sales of flats off plan are legal only if the foundations of the development that will contain them are complete and each flat is registered with government. The sales of unfinished flats in October saw a drastic drop to 61 transactions compared to 721 in May. That month local developers and estate agents scrambled to sell offplan before the new system started. Meanwhile in October, the average price of an unfinished flat in was
108,667 patacas per square meter, 9.5 percent down from the May average. “…starting from September this year, the home market is very much driven up by the sales of second-hand homes instead of the unfinished flats,” said Mr Wong of HKP. “This trend will probably continue until the first quarter next year, as there are really not much [many] unfinished flats ready to be sold in this November and December,” he added. In October, the government recorded 732 sales of finished flats, 35 percent more than the previous month; while the average price for these flats stood at 76,456 patacas a square metre, 7.8 percent more than September. The estate agent reckoned that there would be more second-hand homes gradually released to the market by the first quarter next year. “Seeing that the home price has got more stabilised in the second half of this year, sellers may release more second-hand flats previously ‘locked up’ under the special stamp duty,” said Mr Wong.
Housing prices rose for the third month in a row
GDP picks up slightly in third quarter M
acau’s economy grew slightly faster in the third quarter, official data show, even though the government was forecasting a slowdown to singledigit growth.
The Statistics and Census Service on Friday the annual rate of gross domestic product growth rose to 10.5 percent in real terms in the third quarter. It was 10.2 percent in the second quarter. Third-quarter growth was spurred by exports of gaming services, which increased by 13.3 percent, and exports of other tourism services, which increased by 8.1 percent. Gaming revenue was 89.19 billion patacas (US$14.63 billion) in the third quarter, 19.6 percent more than a year earlier, according to the Gaming Inspection and Coordination Bureau.
Almost all sectors of the economy grew. But government investment plunged by more than half. The Statistics and Census Service said the plunge was due to the end of the works of the University of Macau’s campus on Hengqin Island. Private investment, which rose at an annual rate of 15.1 percent, was not enough to offset the public investment slump. This meant investment generally – one of the main engines of economic growth here – was flat, putting an end of three years of consecutive growth. V.Q.
acau needs a master plan to know what it needs,” says Addy Chan Kuai Son, vice president of Macau Institution of Engineers elsewhere in this edition. He’s not alone in that view. Casino executives, bankers, analysts and lawyers to whom this correspondent has spoken all say the same thing. That view may be rational, but is it even relevant for Macau? Unlike Singapore, Macau is not a country. It does not have national goals. But as with semi-autonomous regions elsewhere in the world, the local elite does appear to have some broad-brush aims. These might be described as keeping the permanent residents happy (or at least quiet); pleasing the central government; keeping the place self-sustaining and sustainable in order to attain the first two objectives and last but not least enabling the elite to keep on earning from their own local investments. But to tick those four boxes does one need to have a master plan? The idea of such a plan or series of master plans for key areas of the economy assumes that the community benefits from an orderly, systematic and transparent allocation of resources and public contracts. In a city where so often the sectoral interests of legislators and their associates seem to be conflated with the public good, a ‘master plan’ could seem dangerously prescriptive. A plan – once written – might actually have to be followed. Outsiders would also be free to challenge in the courts here any perceived deviations from the relevant policy. What’s the point for example of setting a public target for a particular public good or policy aim if you can award contracts – funded by the gazillions produced by gaming tax – to powerful superiors, friends or cronies on an ad hoc basis? Even better if the decision making process and reasoning can be kept confidential so that no one is able to challenge it. An argument commonly advanced for the limited strategic planning in this city is a scarcity of high quality administrators and civil servants – what’s known in the jargon as ‘human capital’. There’s been some evidence recently that simple competence of public servants might indeed be an issue. For the local watchdog the Commission Against Corruption to say last month that the current public bus system has been unlawful from its start in August 2011 raises a number of questions. Among them is why it took so long for the commission to say so. Another is what legal advice was the government given when it chose to sign service provider contracts with the three bus operators, rather than the public service concessions that the commission claimed was the only lawful route? Yet another is whether the government chose to follow or override the legal advice it received on the matter. Don’t hold your breath while waiting for the answers.
Unlike Singapore, Macau is not a country. It does not have national goals
December 2, 2013
Mystery object the focus of ferry collision inquiry The collision of a TurboJet ferry and a unidentified object left six passengers seriously injured Stephanie Lai
The ferry in Friday’s collision suffered little damage
riday’s collision of a TurboJet ferry bound from Hong Kong to Macau and a unidentified object in the water injured 85 passengers, six seriously. TurboJet told Business Daily that Hong Kong’s Marine Department was investigating, and was still trying to
find out what the ferry had hit. The collision heightened worry about maritime safety in the Pearl River Delta. A year ago Hong Kong’s most deadly maritime accident for over 40 years claimed 39 lives. The TurboJet double-decker
hydrofoil Madeira left Hong Kong for Macau at 1am on Friday. About 15 minutes into its voyage the Madeira and an unidentified object in the water collided, near Hei Ling Chau, an island just to the east of Lantau island. Some of the 105 passengers aboard
the ferry said the impact had hurled them from their seats. The collision injured nine crew and 76 passengers, of whom 51 are from Hong Kong, 16 from Macau and 18 from elsewhere. All were taken to hospitals in Hong Kong. Macau’s Marine and Water Bureau told Business Daily yesterday that the casualties from Macau had all been discharged from hospital and had returned to the city at the weekend. The bureau said two of the casualties from Macau had been seriously injured. A 51-year-old woman had suffered a broken kneecap and a 34-year-oldman had suffered injuries to his neck and right leg, it said. The bureau said the two seriously injured passengers from Macau had had further treatment at the Kiang Wu Hospital after returning to the city on Saturday. TurboJet manager Wong Man Chung told reporters on Friday that the Madeira had suffered little damage. Mr Wong said he did not believe the ferry had been going too fast at the time of the collision. TurboJet said in a written statement issued on Friday that the Madeira had undergone its annual inspection and maintenance in October. A spokesman for Shun Tak Holdings Ltd, which owns TurboJet, told Business Daily that the company had so far received no requests for compensation from passengers on the Madeira. Hong Kong-listed Shun Tak, controlled by the family of Macau casino tycoon Stanley Ho Hung Sun, carries about 10 million passengers a year between Hong Kong, Macau and other southern Chinese cities such as Shenzhen, according to the company’s website. Last December a TurboJet ferry and a buoy collided 15 minutes after the vessel had left Macau for Hong Kong. The collision injured 26 of the ferry’s passengers. With AFP
Paper loss for Studio City Finance MCE Finance net receivables US$263 mln in Q3 Melco Crown unit holding US$2.2 bln funds to build new Cotai casino resort
tudio City Finance Ltd, a unit of Macau casino developer Melco Crown Entertainment Ltd, says it made a net loss on paper of US$20.5 million (163.70 million patacas) in the third quarter of this year. The firm said it was “primarily due to our continuous development on Studio City, resulting [in] an overall increase in our operating costs as well as an increase in interest expenses, net and other finance costs”. That’s a reference to the
majority MCE-owned Studio City casino resort project being built on Cotai. Studio City Finance has issued US$825 million-worth of senior notes with an 8.50 percent coupon, due to mature in 2020 to help fund the resort’s construction. The project also has a term loan and revolving credit facility amounting to just under HK$10.85 billion (US$1.4 billion). As of September 30, Studio City Finance held restricted cash and cash
Studio City – due to open ‘mid-2015’
equivalents of approximately US$783 million, made up of net proceeds from the offering of Studio City notes and unspent cash from capital advanced by the immediate holding company, Studio City Holdings Ltd, a British Virgin Islands firm. Use of the money is restricted by covenant to the building of Studio City. The filing added Studio City is expected to open in “mid-2015”. Last week it was announced that construction work has begun for a fifth hotel tower at MCE’s City of Dreams casinoresort on Cotai. Bouygues Construction SA of France announced in a written statement last Monday that subsidiary Dragages Macau Ltd has been awarded a contract worth HK$3.68 billion to build a “a six-star luxury hotel” at City of Dreams. Bouygues said construction the 39-storey hotel, which would have about 151,000 square metres of floor space, would take more than three years. M.G.
et receivables for MCE Finance Ltd – a wholly owned unit of casino developer Melco Crown Entertainment Ltd – stood at just under US$262.7 million (2.10 billion patacas) in the third quarter to September 30 according to its unaudited results. The commentary on the finance unit’s results says: “Operating cash flows are generally affected by changes in operating income and accounts receivable with rolling chip patrons’ table games play and hotel operations conducted on a cash and credit basis…” A direct year-on-year comparison with the third quarter 2012 regarding receivables for MCE Finance isn’t possible. For the company’s reporting purposes Q3 2012 actually fell in the three months to December 31, 2012 according to the filing with Hong Kong Stock Exchange. Net receivables in
Q3 2012 were approximately US$320.9 million. “Prepaid expenses and other current assets,” in Q3 2013 were around US$44.3 million, compared to approximately US$32.5 million in Q3 2012. Under the non-operating expense heading, MCE Finance wrote off nearly US$50.3 million in debt during the nine months to September 30 this year. Expenditure on promotional allowances rose 16 percent in Q3 2013 to around US$41.2 million, compared to around US$35.4 million in the year prior period. Cash and cash equivalents held by the unit at the end of the three months to September 30 and also for the nine months to that date, rose 17 percent yearon-year to US$1.76 billion, compared to approximately US$1.51 billion in the year prior periods. M.G.
December 2, 2013
Au calls for business plan for local SMEs S
mall and medium enterprises (SMEs) could benefit from the insight from several international speakers and “learn how to work in a smart and more innovative way,” said the chairman of the Macau Association of Small and Medium Enterprises, Stanley Au Chong Kit. He said he was satisfied with the outcome of the Pan-Asia International Small Business Congress that ended last week. “It was a good initiative to engage the business community here,” Mr Au said on November 29. “This was one of the very few international conferences held in Macau, with several presentations and speakers from different Asian countries,” he said. “The problems that SMEs face here are similar to the hurdles they have elsewhere. They are short of human talent, face financing obstacles and the reliance on a single industry does not help,” Mr Au said. He said financing programmes from the government are useful, but stressed that Macau should have a special committee for small and medium enterprises. “It would be important to have a plan drawn for the future,” he said. The chairman of the SMEs association fears that smaller companies are being squeezed out by the gaming industry and says the government should lead the way in supporting economic diversification. “SMEs are vital for any economy, which cannot be reliant on only big corporations for its development,” he said. “It will not be good for the city in the long run.” The contacts and networking during the three-day congress will be useful to companies here, although it is not easy to find new opportunities, he said. “Networking is very important, but unfortunately Macau is neither a trading platform nor a manufacturing city,” Mr Au said. “There needs to be an alternative way to find suppliers, export your products and explore new markets.” T.A.
Hiroshi Takada says casinos in Japan could be good for the country’s SMEs
Macau might benefit from Japan casinos A Japanese SME group throws its weight behind legalising casinos in Japan and eyes deals with enterprises in Macau Tiago Azevedo
apanese companies are passing up opportunities in Macau, but that may change if Japan legalises casinos, according to the chairman of Japan’s Organisation for Small and Medium Enterprises and Regional Innovation, Hiroshi Takada. Mr Takada’s group, also known as SME Support Japan, is an independent body that supports thousands of SMEs in Japan. Mr Takada told Business Daily that a bill on integrated resorts might be submitted to the Japanese Diet, or parliament, next year. He was speaking on the sidelines of the Pan-Asia International Small Business Congress, which was held here last week. News media have reported that some members of the Diet intend to table a bill to legalise casinos by December 6, when the current parliamentary session ends, with a view to having it enacted in 2015. But Mr Takada doubts that the members will have enough time. He said a bill was more likely to reach parliament next year. “The integrated resort bill may be submitted to next year’s ordinary session of the Diet and would most probably be passed,” Mr Takada said, speaking through an interpreter. “After the enactment of the integrated resort bill, there will be great potential for collaboration between Japan and Macau firms.”
Olympic impetus Casino developers, some of them in the Macau market, see their best chance in years to build casinoresorts in Japan. They hope that the prospect of Tokyo
holding the Olympic Games in 2020 will give the drive to legalise casinos the impetus that it has lacked do far. The legalisation of casinos has been much talked about in Japan, but no bill to turn the talk into action has yet reached parliament. “There is a general feeling that it is very difficult to get public approval,” Mr Takada said. Legislation is now thought to have a better chance than before of being passed. The business-friendly Liberal Democratic Party is in power, controlling both houses of parliament for the first time since 2007, and Prime Minister Shinzo Abe backs the legalisation of casinos. “Most probably this bill will become law and allow for more specific cooperation to be launched,” said Mr Takada. He said enterprises would have much to gain if casinos were legalised. Mr Abe’s plan to end 15 years of deflation and the Bank of Japan’s ultra-easy monetary policy, dubbed Abenomics, has cheered Japanese enterprises. “Under Abenomics, SMEs will be able to enjoy a number of benefits and opportunities once the casino bill is approved,” said Mr Takada. “Our organisation supports the movement pushing forward with the bill.” He said that so far few Japanese enterprises had been looking for deals in Macau. “When the integrated resort bill is passed there may be more interest, and a boom in cooperation – not only focusing on the casino industry, but also to learn about the integrated resort concept and how smaller firms
The integrated resort bill may be submitted to next year’s ordinary session of the Diet and would most probably be passed Hiroshi Takada, SME Support Japan chairman
can benefit from it,” he said. “I think Macau will be in the limelight after that.” Some Japanese companies are already investing here. Dynam Japan Holdings Co Ltd has plans to run a pachinko hall in the Macau Fisherman’s Wharf theme park, starting next year. Dynam and Macau Legend Development Ltd, which runs Macau Fisherman’s Wharf, have reached a tentative agreement that would entail Dynam setting up and operating at least 100 pachinko machines, which combine elements of slot machines and pinball. Union Gaming Research analyst Grant Govertsen said in August that the Macau Fisherman’s Wharf pachinko hall venture could be the first step towards a joint bid for a gaming licence in Japan.
December 2, 2013 April 19, 2013
Macau Brought to you by
HOSPITALITY A day in October The annual rate of growth in the number of visitors in October was 2 percent, the slowest for six months. The annual rates of growth in the preceding five months ranged from 3.5 percent to 9.1 percent. The slowing of growth in October this year was due mainly to almost no growth at all in the number of visitors that stayed at least one night. Macau had only 9,600 or 0.9 percent more overnight visitors than a year earlier. Most of the growth was due to an increase of about 3 percent in day-trippers, so day-trippers made up a growing proportion of visitors.
Government too passive on infrastructure planning:
Macau Institution of Engineers
ver since the Ao Man Long corruption scandal, the government has been very passive on urban planning issues, responding only to citizen pressure and often delaying approvals, says the vice-president of Macau Institution of Engineers. Addy Chan Kuai Son additionally told Business Daily the long shadow cast by the trial and imprisonment of Mr Ao, a former secretary for Transport and Public Works, had created suspicion among the public and paranoia inside government departments. Mr Chan says the lack of an urban development master plan has contributed to problems – including multiple projects overlapping and causing transport chaos in tightly packed Macau. Luciana Leitão
Photo by Manuel Cardoso The October figures for visitors in the past four years show that day-trippers always outnumbered overnighters. That difference was greatest in 2011, when day-trippers outnumbered overnighters by five to four, and smallest last year, when daytrippers outnumbered overnighters by 10 to nine. But the growth in the number of day-trippers seems to be slowing, and the numbers of day-trippers from some places are falling. In October this year 5.7 percent more mainlanders took day trips to Macau than a year earlier. But the growth was insufficient to restore the number of daytrippers from the mainland to the peak reached in October 2010. The numbers of October day-trippers from Hong Kong and Taiwan have been slowly declining. The number from Hong Kong was about 12 percent lower in October this year than in October 2010, and number from Taiwan was about 27 percent lower. The number from Taiwan declined faster in part because Taiwan people now have direct access to the mainland by air, instead of having to use Macau or Hong Kong as a staging post. J.I.D.
How did the corruption scandal linked to former secretary for Transport and Public Works, Ao Man Long, affect Macau’s construction sector?
The impact can be résuméd [summed up] in one word: trust. Now, the public doesn’t trust the government, especially the [office of] Secretary [for Transport and Public Works]. Also, the government faces some resistance from within. They are always thinking: Will it be illegal? Will it obey the law? Is it acceptable? [With] Most of the cases, the government is passive. It just finishes the work to give the public what it wants. It’s not forward looking.
With construction work now picking up after a long period of suspension, do you think things have improved?
2 pct Annual rise in October visitors
The public is thinking [wondering] whether there is still corruption. It needs a lot of time to make it smoother. The problem is the public doesn’t trust the government and the government will also be very resistant to take [taking] decisions.
There is a lot of criticism of the work being done by Lau Si Io, the current secretary for Transport and Public Works, claiming he is afraid to take decisions. Is this true?
The approval time for projects has been extended for very long [periods]. The government checks a lot of details, as it doesn’t want to take any risk - and this, of course, is good. But also maybe they take a lot of time, because they check with the other departments. It seems like the DSSOPT [Land, Public Works and Transport Bureau] is the decision maker but they also use a lot of the time to ask different departments and without their comment they don’t have [make] the decisions, even for small projects in Macau.
Do we need a new secretary or will this continue to happen with another person? This has nothing to do with the person. Even if we change the person, it will have no meaning. It’s a problem of trust. It’s easy to change the secretary,
but who will replace him? And, after replacing him, will the environment suddenly change? The system has a problem. Before, because Macau is a small city, we trusted everything. The government trusted what engineers submitted and there was no need to take too much time. Now, they don’t trust the engineers…Also, the public doesn’t trust the government.
You’ve mentioned one of the problems for the construction sector, which is the approval time. But what other problems would you say are currently affecting the construction sector?
Macau needs a master plan to know what it needs. Public housing, a few years before, was the hot topic, so all the construction started at the same time. They used a lot of the manpower, but a lot of the other constructions like the Light Rail Transit (LRT) also used a lot of manpower. And the casinos also started construction. So, at the same time, a lot of projects were developing. Can the market pick it up? It is the problem. It has to do with the general schematic.
December 2, 2013 April 19, 2013
Macau start before [earlier], avoiding [having] all the projects start at the same time.
sustainability of the foundations, there are technological solutions to make it smooth.
Is the new land law effective in making the grants more transparent, considering the rule will now be for an open tender?
The government has submitted a bill proposing changes to the accreditation system of engineers and architects. You’ve already mentioned previously that you agree with this, but what can be improved on this draft?
There is a committee and everybody can know most of the reasons why the land directly passed to someone. But you need a committee to check if the reason is reasonable. If you are corrupted, you can have millions of excuses to hide reasons. So, the law could even be perfect, that this problem will happen. The government could let the public know more details, to prevent this kind of things from happening again.
But is the government currently being transparent?
For the future; like [as] it happens in other countries [jurisdictions], the government needs to publish all those secret documents, so that everybody is able to check it. It is a good system to prevent illegal things. And, after the meeting of the committees, can the documents be published? If these could be published, many things could be prevented.
You’ve mentioned some of the big construction work for the coming years, like the LRT. Do you agree with its construction?
When you ask ‘can the market pick it up’, are you referring to the human resources?
Not only manpower; machines and everything else. The government can think, before the casino construction starts, to do the infrastructure first and then later on, with the cooling down of the construction works, make it smoother and not open all the projects at the same time.
Why does Macau need a master plan?
It would define how to develop Macau - it would determine [development] phase by phase; which part is urgent and which part can be delayed.
Is this in the government’s plans? We hope it is, but at this moment I don’t see it happening.
This year, the government has made progress on discussing the land and urban planning laws. How important are these for the development of the construction sector?
The land law is an improvement. Before, it seemed the land was held by one person, who did not develop it. Now the lands are to be leased by the government. Also, for illegal occupants of land - there were a lot in Coloane - the punishment has been upgraded. It’s a good thing for the future, if the land is more controlled by the government. Because, if the developer wants to request [from] the government a piece of land, they need to calculate what time they can start construction. As such, some infrastructures can
It’s a new thing for Macau. It’s the next chapter for Macau in the transportation [system]. Mainly for the future, the city will use the LRT as the main transportation method and even the routing will affect Macau. In Hong Kong, the prices of houses in the streets that had stations of LRT [known there as MTR, or Mass Transit Railway], increased very fast. The LRT is good for Macau. If not, it seems Macau [would] always has [have] traffic jams. Macau wants to be a tourism city, but other tourism cities have an LRT.
Macau has been growing via reclaimed land. Is it sustainable to have a whole city like Macau extending into the sea?
Before, a lot of the buildings got old, maybe even dangerous. The landfill can be the buffer to change it a little bit, to go to new landfill locations. Of course, the landfill has some limitations. We need to develop underground and to excavate again to make the wastewater piping and the electricity piping. Macau is in bottleneck at this moment. We have no other industries than gaming, and the limitation occurs also because we don’t have enough land. That’s why we need to put our university in Hengqin. In terms of
It’s easy to change the secretary, but who will replace him?
I hope the government can listen more to the professionals, because this law is for us to work. This is the law that gives power to engineers to sign construction projects, so how to make it smooth?
Currently, engineers and architects, to be able to sign projects, need to register with DSSOPT. With this new system, you will need to pass by a committee, composed, for the most part, by public service representatives. How will it be different from the previous regime? We need professionals with experience and training and not only a bachelor degree, that’s why we will now have to pass an examination.
How will it help to facilitate cross-registration in other countries, which has been one of the Macau Institution of Engineers’ fights over the years? Our system is really different from the other countries [jurisdictions]. Other countries [jurisdictions],
have the practice – a system run by associations with over 100 years’ experience - of chartered engineers. It [the association] holds an examination and makes sure they [the candidate] have enough experience to become a professional engineer. We also need to have some technical training examination, to become similar to other countries [jurisdictions]. Only then, can we think about cross-registration.
The problem is the public doesn’t trust the government Macau needs a master plan to know what it needs. The LRT is good for Macau
December 2, 2013 April 19, 2013
Home prices jump by most this year Authorities likely to introduce further curbs on real estate
hinese home prices rose in November by the most this year, a survey showed yesterday, adding that authorities are likely to introduce further changes to control the lively real estate market. The average price of a new home in 100 major cities rose 10.99 percent year-on-year to 10,758 yuan (US$1,766) per square metre, said the China Index Academy, which compiled the survey. That was higher than the rises of 10.69 percent in October, 9.48 percent in September and 8.61 percent in August, said the academy,
Official data continues to confound bets that manufacturing is losing steam
Factory growth beats estimates in November
which is the research unit of the real estate website operator Soufun. High property prices have generated discontent among ordinary Chinese, and Beijing has sought for more than three years to contain their rise, while also promising to provide affordable housing. President Xi Jinping called a month ago for improved efforts to increase home supply and for more attention on public housing projects, state media reported at the time. A document pledging a series of reforms, issued after the Third Plenum meeting of Communist Party leaders in mid-November, hinted that a property tax might be expanded beyond its current two cities of Shanghai and Chongqing but did not give a timetable. “After the Third Plenum, the central committee (of the ruling Communist Party) will set up and improve long-term mechanisms regarding land, taxation, property registration and other aspects,” the academy said. Earlier measures to try to control prices have included restrictions on buying second and third homes, higher minimum downpayments and taxes in some cities on ownership of multiple homes.
China’s purchasing managers’ index clings to 18-month high
hina’s factory growth held at an 18-month high in November on firm domestic and foreign demand, defying expectations the economy faces a modest slowdown as 2013 draws to a close. The official Purchasing Managers’ Index (PMI) stood at 51.4 in November, the National Bureau of Statistics said, unchanged from October and ahead of market expectations for a reading of 51.1. Investors had expected the PMI, one of the earliest pieces of Chinese data released each month, to show China’s economy decelerated in the fourth quarter on slacker credit growth, fragile global demand, and slower restocking of inventories by firms. “Growth momentum held up in November,” said Louis Kuijs, an economist at RBS in Hong Kong. “The export order data suggests that global demand - key to the outlook for China’s manufacturing - improved a bit.” A sub-index for export orders nudged higher to 50.6 in November from 50.4 in October, hovering above the 50-point threshold separating growth from contraction. Experts will welcome the unexpected PMI strength as a sign that China can press on with sprawling plans outlined last month to cut back central economic planning without fear of endangering growth. After three decades of double-digit growth, analysts say China’s economy has reached a turning point where traditional growth drivers of heavy investment and brisk export sales must make way for a more sustainable expansion in consumption. In the near-term, China’s attempt to remake its economy should foster market confidence and perhaps even offset investor jitters over tighter monetary policy, said Mr Kuijs. “After a mild slowdown in the
fourth quarter of 2013, we expect China to benefit from improved global growth late this year and in 2014,” he said.
Cautious companies Yesterday’s PMI is the latest of a series of data confounding bets that China’s growth engine is losing steam. Factory production, retail sales and investment had all displayed encouraging growth in October, suggesting the world’s second-largest economy is stabilising. Still, analysts cautioned against undue optimism. The PMI showed new orders, a measure of foreign and domestic demand, edged down to 52.3 from 52.5 in October. The production and business activity expectation sub-index also slid to 54.9 from October’s 57.5. Liu Li Gang and Zhou Hao from ANZ Bank said China’s tightening credit conditions had lifted borrowing costs and would probably deter firms from investing heavily or expanding quickly. The PMI survey also showed stocks of purchases fell to 47.8 in November, a low not seen since July. “This indicates that the producers are not rushing to hoard raw materials due to lack of final demand,” the analysts said. Worried about brisk credit growth, stubbornly strong record house prices and quickening inflation, which hit an eight-month high in October, China’s leaders have signaled lately that monetary policy may be tightened slightly to cool prices. But analysts do not expect the mild tightening to cause a sharp fall-off in growth. A Reuters poll in October showed China’s economy is forecast to grow 7.5 percent in the fourth quarter, in line with the government’s 2013 growth forecast. Reuters
Average price of new home in 100 major cities rose 10.99 pct
December 2, 2013 April 19, 2013
December 2, 2013 April 19, 2013
Beijing sets reforms to end IPO freeze China may see listing thaw in 2014 as regulator smoothes approval process
hina’s securities regulator issued a reform plan for initial public offerings (IPO), as the government prepares to lift a more than one-year freeze on new listings in the world’s second-biggest economy. About 50 companies are expected to complete the IPO approval preparations and list or be ready to do so by the end of January, the China Securities Regulatory Commission (CSRC) said in a statement on its website Friday. There are more than 760 companies in the queue for approval and it will take about a year to complete an audit of all the applications, the regulator said. China, the world’s largest IPO market in 2010, with a record US$71 billion raised, hasn’t had an initial public offering since October 2012 as the CSRC cracked down on fraud and misconduct among advisers and companies. Communist Party leaders
pledged last month to change the IPO system as part of a package of reforms that signaled the biggest expansion of economic freedoms since at least the 1990s. “This is positive for the long-term development of the market as both companies and stock investors will gradually have more choice under the new policy,” said He Zongyan, an analyst at Shenyin & Wanguo Securities Co in Shanghai. “It may add downward pressure on the stock market in the short term as 50 new IPOs in the next few months may drain capital and force a correction in some inflated stocks.”
Hurt confidence The regulator stopped reviewing applications for listing on the country’s stock exchanges in Shanghai and Shenzhen amid concern a flood of new
shares could hurt investor confidence. Xiao Gang, a former central banker and Bank of China Ltd chairman who was named head of the CSRC in March, said November 19 the shift to a looser IPO system must be gradual to avoid shocks to the market. China’s benchmark Shanghai Composite Index and Shenzhen’s CSI300 Index have been the worst performers among 20 primary equity indexes in the Asia-Pacific region tracked by Bloomberg. In a separate statement, the CSRC said it will draft rules for a trial to allow companies to sell preferred stock, based on guidance issued Friday by the State Council, and seek public feedback on its proposals. The use of preference shares will help deepen corporate reform, provide a flexible financing tool for companies and promote the stable development of the capital market,
China hasn’t had an initial public offering since October 2012
the State Council, China’s cabinet led by premier Li Keqiang, said in guidelines issued on the central government website.
Capital requirements Banks will be able to include preference shares in calculations of their tier-one capital, giving them a new financing instrument to meet capital requirements of the Basel Committee on Banking Supervision, CSRC spokesman Deng Ge said in the statement. Preference shares will also help reduce corporate debt levels, Mr Deng said. The CSRC’s announcements build on reform pledges made in a 60-point document released by the Communist Party on November 15 after its top leaders met to map out policy changes for the coming decade. They vowed to give markets a bigger role in the economy and reduce government interference. In the new review and approval system, the regulator will only be responsible for examining whether applicants are qualified, leaving investors and the markets to make their own judgment about a company’s value and the risks of buying its shares. The new rules still impose requirements and threaten penalties on IPO advisers in an effort to curb misconduct in first-time share sales. Companies including state-owned China National Nuclear Corp. and Bank of Shanghai Co were awaiting approval for IPOs as of October 31, according to a list on the CSRC’s website. Some 83 companies have had their IPO applications cleared by the CSRC listing committee and are pending final approval. The companies may raise a combined 55.8 billion yuan (US$9.2 billion), according to June estimates from Ernst & Young LLP. Bloomberg News
Saab to restart sedan production Carmaker sets sights on Chinese market two years after bankruptcy
he new owners of Swedish carmaker Saab, National Electric Vehicle Sweden AB, will restart production of the 9-3 sedan today at the Trollhattan fa c tor y in Sw ede n , a NE VS spokesman said on Friday. The 9-3 sedan will be powered by a turbocharged gasoline engine and built in “small and humble numbers” for China and Sweden, NEVS spokesman Mikael Ostlund said. The move comes almost two years after Saab, which had made cars since 1947, filed for bankruptcy at the end of 2011. Saab was previously
Sweden’s Saab filed for bankruptcy at the end of 2011
owned by General Motors Co, which sold it to Dutch sports car group Spyker in 2010. NEVS, which is 22 percent owned by the Chinese city of Qingdao through the city’s investment company, bought most of the assets of Saab last year. Mr Ostlund reiterated that an electric 9-3 sedan is expected to launch in
China next year. Since NEVS acquired the assets, it has reached new agreements with the 400 suppliers for the 9-3, Mr Ostlund said. The vehicle that will begin production today will look similar to the last 9-3s that rolled off the line in Trollhattan in 2011. But Mr
Ostlund said NEVS may revamp the 9-3 when it is launched as an electric sedan next year in China. About 600 people work at Saab’s assembly plant in Trollhatten now, Mr Ostlund said. The plant’s workforce was around 3,500 at the time of Saab’s bankruptcy, he added. Reuters
December 2, 2013 April 19, 2013
December 2, 2013
Protesters are seeking to paralyse the country’s administration
Anti-govt protests hurting Thai economy: central bank Political violence convulse Bangkok as three killed, dozens wounded
nti-government protesters mobilised thousands to try to oust Thai prime minister Yingluck Shinawatra after violence overnight left at least two people dead and the central bank warned that the unrest is hurting the economy. Demonstrators removed barriers surrounding Government House, office of the prime minister, and tear gas was fired to repel them, according to Piya Utayo, a police spokesman. The protesters, who are seeking to paralyse the administration, also approached the Metropolitan Police Bureau, Mr Piya said. The army chief offered to broker talks between the two sides, according to an army spokesman. At stake is control of Southeast Asia’s second-largest economy in a conflict between supporters and opponents of Ms Yingluck’s brother, Thaksin Shinawatra. Suthep Thaugsuban, head of the protesters and a former deputy prime minister with the main opposition Democrat Party, told supporters his movement was seeking victory yesterday. It’s necessary to break the law to “root out the Thaksin system,” according to Mr Suthep, who has said he wants greater use of unelected councils to govern. “If they can change the government, they will want to set up their own government and will rewrite the constitution to give priority to unelected sources of power,” said
Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Bangkok’s Chulalongkorn University. The country’s electoral democracy is in the protesters’ view “the source of Thailand’s corruption,” he said by phone. Parties linked to Mr Thaksin have won the past five elections on support from the rural north and northeastern provinces. The protests in Bangkok are supported by the Democrats, which haven’t won a national poll in more than 20 years.
Army offer Army chief Prayuth Chan-Ocha is concerned that protesters tried to break into Government House and the Metropolitan Police Office, prompting the use of tear gas, according to deputy army spokesman Winthai Suvaree. Mr Prayuth offered to act as mediator to end the situation, Mr Winthai told reporters. The compound of the Thai PBS Channel was entered by anti-government protesters, who demanded their own programming from Bluesky Television network be broadcast instead, according to a report from PBS. Executives were negotiating, PBS said. Police backed by military forces were stationed at key ministries and places targeted by the demonstrators across Bangkok, Mr Piya, the police spokesman, said in a briefing broadcast
by state-owned NBT television. Three people were killed and 45 were injured in the overnight clashes between pro- and anti-government supporters near Ramkhamhaeng University in Bangkok, deputy national police chief Worapong Siewpreecha told AFP. The injury total was 54, according to a noon update from the Bangkok Emergency Medical Service.
BoT concern “Political unrest has affected consumption, investment and tourism,” Prasarn Trairatvorakul, governor of the Bank of Thailand, told reporters in Prachinburi province Saturday, 140 kilometers (87 miles) east of Bangkok. “Political protests also have direct impact on sentiment.” Tens of thousands of antigovernment protesters yesterday entered the compounds of the Department of Special Investigation and state-owned telecommunications offices, escalating the drive to overthrow Ms Yingluck’s administration. Seizing Ms Yingluck’s office, police headquarters and ministries will paralyse the government, according to Mr Suthep, whose comments were broadcast by Bluesky. Without the ministries, the government will collapse, he said. Mr Thaksin, a former prime minister, has lived overseas since a
court in 2008 sentenced him to two years in prison for helping his wife buy land from the government. A demonstration by government supporters at the Rajamangala National Stadium was called off at 9am after the violence, Anusorn Eimsa-Ard, deputy spokesman of Ms Yingluck’s Pheu Thai party, said by phone. Gunfire in area that began at about 8pm Saturday, continued into this morning, said Mr Anusorn, a leader of the so-called red shirts, who support Mr Thaksin. Ms Yingluck, whose party controls more than 300 seats in the 500-member lower house, said Saturday violence would not be used against demonstrators and reiterated an offer of talks. Mr Suthep has rejected multiple offers of negotiations. Thailand’s economy grew 2.7 percent in the third quarter from a year earlier, the slowest pace since the first three months of 2012, official data show. The central bank lowered its 2013 growth estimate to about 3 percent from 3.7 percent on Wednesday, the same day that it unexpectedly lowered its benchmark interest rate by a quarter of a percentage point. The baht weakened to 32.228 against the dollar on Thursday, the lowest level since September 9 as the protests spread. Thailand’s SET Index of stocks has declined about 17 percent since May 21. Bloomberg News/AFP
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December 2, 2013
Aquino prepares budget for typhoon reconstruction Haiyan to curb Philippines’ growth through first half of 2014
hilippine president Benigno Aquino budgeted an initial 40.9 billion pesos (US$934 million) for the reconstruction of communities damaged by super typhoon Haiyan. The government will rebuild infrastructure, housing, agriculture, and create jobs in the first phase of the plan, Communications secretary Sonny Coloma said Saturday at a briefing in Manila broadcast on government radio. The total cost of reconstruction will be higher and will depend on further assessment, he said. Spending on roads, homes and bridges will help support an economy that expanded last quarter at the slowest pace in more than a year. Policy makers estimate Haiyan will curb growth through the first half of 2014 and the Philippines benchmark stock index was the worst performer in the Asia-Pacific region in November on concern the typhoon will hurt earnings and gross domestic product. The init ial re construc tion expenditure will be partly financed by calamity funds and unused money from a budget lawmakers have to use at their discretion, Mr Coloma said. The Philippine Stock Exchange has fallen more than 3 percent and the peso has dropped more than 1
US$23 million in grants for relief operations and US$500 million in emergency loans for reconstruction. The government will hold meetings with investors in the United States in the first week of December to update them on rehabilitation plans, treasurer Rosalia de Leon said last week. A benchmark-sized global bond sale is being planned in 2014, she said November 21. The Philippines won its first investment-grade ranking from Moody’s Investors Service, Fitch Ratings and Standard & Poor’s this year after Mr Aquino boosted revenue and narrowed the budget deficit from a record in 2010.
Damage from Haiyan is estimated at up to US$14.5 billion
percent against the US dollar since Haiyan struck on November 8, leaving about 5,600 people dead and 3.8 million displaced. The stocks gauge dropped 5.7 percent for the month. The government has identified 171
municipalities, with a total population of 6.6 million, who will be given priority for spending, Mr Coloma said. The World Bank has offered almost US$1 billion of aid, while the Asian Development Bank pledged
Gross domestic product (GDP) rose 7 percent from a year earlier in the three months through September, compared with a 7.6 percent gain in the previous quarter. The government is keeping its expansion target of 6.5 percent to 7.5 percent for 2014, Economic Planning secretary Arsenio Balisacan said last week. Central bank governor Amando Tetangco said the typhoon will affect growth from this quarter through the second quarter of next year, citing the economic planning agency. Damage from Haiyan, which destroyed roads, farms, towns and an entire city in the Visayas group of islands, is estimated at US$6.5 billion to US$14.5 billion, according to catastrophe modeling firm AIR Worldwide. The local economies of the affected areas, which account for about 12.5 percent of the country’s GDP, may contract 8 percent to 10 percent next year, Finance secretary Cesar Purisima said November 12. Bloomberg News
Global recovery still too weak: S.Korea Country’s exports slow more than forecast as ASEAN demand falls Choonsik Yoo
xports by industrial powerhouse South Korea showed virtually no growth last month, underlining a still fragile global economy squeezed by a depressed Europe as growth slows in emerging markets. Overseas shipments by the world’s seventhlargest exporter rose just
0.2 percent in November from a year earlier in dollar value, government data showed yesterday, smaller than a median gain of 2.8 percent tipped in a Reuters survey of 13 analysts. Growth of sales to China, the United States and the European Union all slowed whereas exports to Southeast Asia’s 10-nation ASEAN bloc posted the worst decline since the 2008-2009 global financial crisis, the data showed. “Some of the big Nov exports +0.2 pct y/y economies, such as (vs +2.8 pct forecast) the United States, are recovering, but Exports to ASEAN fall are not there yet most in 4 years to spur corporate investment for Exports to China, US, Europe more production all slow and boost global
South Korea is home to the world’s biggest suppliers of ships
trade much,” said Park Sang-hyun, economist at HI Investment & Securities in Seoul. Exports to the Association of Southeast Asian Nations (ASEAN) dropped 11.2 percent in November from a year earlier, the worst since August 2009, with countries like Indonesia quickly running out of steam, the data showed. ASEAN takes 18 percent of South Korea’s total exports, compared with 27 percent by China and 10 percent for the United States. South Korea is Asia’s fourth-largest economy and
home to the world’s biggest suppliers of smartphones and ships. “Global trade will likely remain weak, at least through the first two quarters of next year, because any recovery in the big economies will mostly be led by consumption of small items instead of machinery and investment goods,” Mr Park said. Trade ministry data showed South Korea’s imports fell 0.6 percent in November on an annual basis, weaker than even the worst forecasts from the Reuters survey and
underscoring depressed domestic demand. Robust exports and imports performance in October, up 7.2 percent and 5.2 percent on the year, respectively, had stirred hopes global demand was recovering ground, thanks to the United States recovery and stabilising confidence in Europe. South Korea’s economic growth is expected to pick up to 2.8 percent this year from 2.0 percent last year and further to 3.8 percent next year, the central bank has forecast. Reuters
December 2, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 91.5
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DOW JONES INDUS. AVG
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PHILIPPINES ALL SHARE IX
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
0.9111 1.6347 0.9053 1.3612 102.33 7.9852 7.7527 6.094 62.5725 32.107 1.255 29.634 43.76 11965 93.233 1.23233 0.83265 8.2896 10.8691 139.29 1.03
-0.2736 0.0367 0.0552 0.1471 -0.0977 0.0025 -0.0013 -0.0246 -0.2597 0.0498 -0.0319 0.0304 -0.0457 0.443 0.1813 -0.0917 -0.1069 -0.006 -0.1564 -0.2441 0
-12.2085 1.0571 1.1157 3.1994 -15.8605 -0.025 -0.0271 2.2415 -12.11 -4.756 -2.6773 -2.0281 -6.2957 -18.1529 -4.1895 -2.0165 -2.0693 -0.8698 -3.1162 -18.4651 -0.0097
1.0599 1.6381 0.9839 1.3832 103.74 8.0111 7.7664 6.2566 68.845 32.48 1.2862 30.228 44.82 12028 105.433 1.265 0.88151 8.4957 11.0434 139.71 1.032
0.8848 1.4814 0.8891 1.2746 81.72 7.9818 7.7498 6.0773 52.89 28.56 1.2168 28.913 40.54 9590 85.389 1.20362 0.80331 7.8281 10.195 105.98 1.0289
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PING AN INSURA-H
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INDEX 23881.29 HIGH
52W (H) 24014.81 (L) 19426.35938
December 2, 2013 April 19, 2013
Leading reports from Asia’s best business newspapers
Creeping China Brahma Chellaney
Professor of Strategic Studies at the New Delhi-based Centre for Policy Research
The Philippine central bank said the country’s growth in the third quarter showed the effectiveness of current monetary policy settings in spurring economic activity. BSP governor Amando M. Tetangco Jr. added that the economic data last week proved the country’s recent boom was a result of strong fundamentals. “The gross domestic product performance in the third quarter attests to the underlying constructive dynamics of the economy,” Mr Tetangco said in a statement. “These developments affirm the appropriateness of current monetary policy settings,” he added.
Taipei Times Cathay Financial Holding Co cut its forecast for Taiwan’s GDP growth to 1.82 percent this year, from an earlier forecast of 2.27 percent in September, as exports and private consumption fared weaker than expected. “We had warned about the cut and decided to take a move after the economy failed to show improvement,” said Achilles Chen, assistant manager of economic research at the nation’s largest financial services provider by assets. Exports, which account for more than 70 percent of GDP, contracted last month, posting a mere 1 percent increase in the first 10 months from a year earlier.
Korea Herald South Korea’s industrial output grew at the fastest pace in 11 months in October, raising hopes that the economy might be picking up its recovery momentum, a government report showed. According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries gained 1.8 percent last month from a month earlier. This marked the fastest growth since November of last year when it increased 2.1 percent. It also represented a turnaround from a revised 2.3 percent shrinkage in September.
Straits Times Singapore’s home prices fell at a faster pace in October, dropping 1.2 percent from the previous month as evidence builds that the government’s efforts to cool the property market are working. The citystate’s residential property index fell to 159.1 points last month after declining a revised 0.9 percent in September, according to the National University of Singapore’s Singapore Residential Price Index. The measure tracking prices in the central region decreased 1.4 percent in October.
hina’s growing geopolitical heft is emboldening its territorial creep in Asia. After laying claim to 80 percent of the South China Sea, it has just established a so-called air defence identification zone in the East China Sea, raising the odds of armed conflict with Japan and threatening the principle of freedom of navigation of the seas and skies. Meanwhile, the People’s Republic continues to nibble furtively at territory across the long, disputed Himalayan border with India. Few seem to fathom the logic behind China’s readiness to take on several neighbours simultaneously. China is seeking to alter the status quo gradually as part of a high-stakes effort to extend its control to strategic areas and resources. Chinese President Xi Jinping’s promise of national greatness – embodied in the catchphrase “China dream” – is tied as much to achieving regional hegemony as to internal progress. China’s approach reflects what the Chinese general Zhang Zhaozhong this year called a “cabbage” strategy: assert a territorial claim and gradually surround the area with multiple layers of security, thus denying access to a rival. The strategy relies on a steady progression of steps to outwit opponents and create new facts on the ground. This approach severely limits rival states’ options by confounding their deterrence plans and making it difficult for them to devise proportionate or effective counter-measures. This is partly because the strategy – while bearing all the hallmarks of modern Chinese brinkmanship, including reliance on stealth, surprise, and a disregard for the risks of military escalation – seeks to ensure that the initiative remains with China.
The pattern has become familiar: construct a dispute, initiate a jurisdictional claim through periodic incursions, and then increase the frequency and duration of such intrusions, thereby establishing a military presence or pressuring a rival to cut a deal on China’s terms. What is ours is ours, the Chinese invariably claim, and what is yours is negotiable. For example, China says “no foundation for dialogue” with Japan exists unless the Japanese accept the existence of a territorial dispute over the uninhabited Senkaku Islands. Here, as elsewhere, China has painted its rival as the obstructionist party. As Chinese Foreign Minister Wang Yi put it, “Japan needs to recognise that there is such a dispute. The whole world knows that there is a dispute.” But there is a dispute only because China has succeeded in shaking the status quo in recent years by popularising the islands’ Chinese name (“Diaoyu”) and staging incursions into their territorial waters and airspace. After steadily increasing the frequency of those incursions since September 2012, China has recently begun increasing their duration. The establishment of a new air defence identification zone extending over the islands is its latest cabbage-style security “layer” – a unilateral power grab that U.S. Defence Secretary Chuck Hagel quickly branded “a destabilising attempt to alter the status quo in the region”. The zone even covers the sky over the Leodo (Suyan) Reef, a submerged rock that both South Korea and China claim. As China escalates its campaign of attrition against a resolute Japan, it increases the risk of armed conflict, whether by accident or miscalculation. China’s strategy has had more success – without provoking serious risks – against the
weaker Philippines. This is apparent from China’s effective seizure last year of Scarborough Shoal, located well within the Philippines’ exclusive economic zone, and the controlling presence of Chinese vessels this year around the Second Thomas Shoal, part of the disputed Spratly Islands. China has not yet tried to evict the eight Filipino marines still living on the Second Thomas Shoal, but Zhang has included this shoal in the country’s “series of achievements” in the South China Sea.
Camouflaging offence China is not aiming for control of just a few shoals or other tiny outcroppings; it seeks to dominate the South and East China Seas strategically and corner maritime resources, including seabed minerals. The combined land area of the Senkaku and Spratly Islands amounts to barely 11
China’s territorial creep is contributing to Asian insecurity, fuelling political tension, and turning the world’s economically most vibrant continent into a potentially global hot spot
square kilometres; but the islands are surrounded by rich hydrocarbon reserves. While seeking to enlarge incrementally its military footprint in the more than 80 percent of the South China Sea that it claims, China’s aim in the East China Sea is to break out of the so-called “first island chain,” a string of archipelagos along the East Asian coast that includes the Senkaku Islands and Taiwan. By contrast, vast tracts of disputed land are at stake in the resource-rich Himalayan region. Here, too, China’s incursions, after increasing in frequency, are now being staged intermittently for longer periods. Make no mistake: China’s territorial creep is contributing to Asian insecurity, fuelling political tension, and turning the world’s economically most vibrant continent into a potentially global hot spot. To be sure, China is careful to avoid any dramatic action that could become a casus belli by itself. Indeed, it has repeatedly shown a knack for disaggregating its strategy into multiple parts and then pursuing each element separately in such a manner as to allow the different pieces to fall into place with minimal resistance. This shrewdness not only keeps opponents off balance; it also undercuts the relevance of U.S. security assurances to allies and the value of building countervailing strategic partnerships in Asia. In fact, by camouflaging offence as defence, China casts the burden of starting a war on an opponent, while it seeks to lay the foundation – brick by brick – of a hegemonic Middle Kingdom. Chinese leaders’ stated desire to resolve territorial disputes peacefully simply means achieving a position strong enough to get their way without having to fire a shot. © Project Syndicate
December 2, 2013 April 19, 2013
Closing Iceland reveals controversial mortgage cuts Macau govt cuts public housing supply The Icelandic government said Saturday it would write up to 24,000 euros off the mortgage of every household, making good on an election campaign promise despite international warnings over the plan. The cost of the measure is estimated to reach 150 billion krona (US $1.2 billion) over four years, the government said in a statement. It would be funded by taxes on banks and funds managing assets of banks that went bust during the 2008 financial crisis, added the government. The Progressive Party won lateApril elections, after promising to offer household debt relief.
About 5,600 public housing units will be ready in the coming years, Wong Chan Tong, head of the cabinet of Secretary for Transport and Public Works, told media on Saturday. That figure is lower than the 6,300 units promised by Chief Executive Fernando Chui Sai On in November 2011. The cut is mainly due to a decision to build more two-bedroom flats – for which demand is higher – instead of one-bedroom units, said Mr Wong. Eighty percent of the units in the pipeline will be in Ilha Verde and Fai Chi Kei, he added.
Ukrainians protest after EU trade snub Tens of thousands defied a protest ban to join Kiev march
Online sales soar in Black Friday frenzy US stores eked out slim gain in weakest holiday sales since 2009 Sylvie Lanteaume
nline United States shopping for Black Friday deals soared to US$3 billion during a two-day period beginning Thursday, with tablets and cell phones as top must-have items, estimates showed Saturday. Online pur chase s reache d US$1.93 billion on Friday itself, the unofficial start of the retail sector’s holiday season. That marked a 39 percent increase over 2012, according to software maker Adobe, which analysed 400 million visits on some 2,000 American shopping websites. Holiday shopping traditionally accounts for 20 to 40 percent of an individual retailer’s annual sales, according to the National Retail Federation. Early online Black Friday sales, which began on Thursday, the United States Thanksgiving holiday, reached US$1.06 billion, up 18 percent from last year, according to Adobe. Technology giant IBM also reported increased numbers in overall online sales as it looked at 800 merchant websites.
IBM said Internet sales jumped 19.7 percent over last year on Thanksgiving and 19 percent on Black Friday, with orders averaging US$135.27, a 2.2 percent increase compared to last year. Online shoppers may have been wise to avoid stores, with reports of fistfights, a stabbing and a shooting as people elbowed their way through crowded shopping floors to snatch heavily discounted items. Purchases of smartphones, tablets and other mobile devices accounted for 24.2 percent of online sales, according to Adobe. Tablets represented 15.6 percent of online sales while smartphones representing 8.6 percent. IBM also found that mobile devices accounted for 21.8 percent of sales. According to Adobe, of the US$3 billion in total online sales over the two days, US$417 million was done on iPads and US$126 million was done on iPhones, while Android phones were used to buy US$106 million in purchases and Android tablets accounted for US$42 million. According to initial estimates of
in-store sales released Saturday by retail research group ShopperTrak, Americans spent US$12.3 billion during shopping over the two-day period, a 2.3 percent increase from the same timeframe in 2012. According to the firm, stores that opened on Thursday – a new trend transforming the sacrosanct Thanksgiving holiday – attracted more people than last year. Traffic in brickand-mortar shops on Black Friday, however, fell 11.4 percent, with retail sales decreasing by 13.2 percent. “The Black Friday shopping experience is changing with more shoppers choosing to go out on Thanksgiving Day,” said Bill Martin, ShopperTrak founder. “Consumers increasingly research products online before entering stores. When they arrive, customers know exactly what they want to buy,” he said. This season’s holiday shopping season is a full six days and one shopping weekend shorter than last year’s due to the late Thanksgiving season. AFP
ens of thousands of Ukrainians defied a ban on protests yesterday by marching through central Kiev in support of early elections meant to punish president Viktor Yanukovych for rejecting a key European Union pact. The flag-waving demonstators gathered in a park before moving toward Kiev’s Independence Square, in defiance of a court order banning rallies in the city centre, AFP correspondents said. The Kiev city administration said in an e-mailed statement that it wanted to ban protests in some downtown squares and areas near government buildings because it “wants to decorate everything for New Year and Christmas.” About 40 people were injured when Ukrainian police began breaking up a rally on Independence Square after midnight Saturday. People took to the streets to protest Mr Yanukovych’s decision to reject a possible Association Agreement with the European Union in favor of closer ties with Russia. Russia may be offering US$15 billion in loans, debt restructuring and asset purchases to persuade Ukraine’s leadership not to proceed with the European Union deal, weekly magazine Zerkalo Nedeli reported. Mr Yanukovych said in an address to the nation that he “condemned the violence and demanded the prosecutor general to investigate the case and punish people responsible for it.” Arseniy Yatsenyuk, an opposition lawmaker, said at a press conference that seven protesters were hospitalised. Opposition groups agreed to create a national resistance headquarters and prepare for a nationwide strike, he said. Bloomberg News/AFP