Debatebusiness urged daily 1 on a casino smoking ban
Friday April 19, 2013
Number 484 Wednesday February 26, 2014
Publisher: Paulo A. Azevedo
Closing Editor: Michael Grimes
Sniper profits on Zhuhai property deal Page 5
Hotel room numbers to near-double
Boston mulls Hengqin hospital plan M
assachusetts General Hospital, the Harvard Medical School teaching hospital in the United States, intends to set up a branch on Hengqin Island, the hospital’s prospective partner in the venture has said. A spokesperson for the prospective partner, the state-run Guangdong
Provincial Hospital of Traditional Chinese Medicine, confirmed the fact to Business Daily. “How we’ll cooperate in managing this branch hospital is still under discussion,” the person said. “At this point we cannot reveal further details.” On this side of the border, Macau has one public hospital, Conde de São
Januário General Hospital, and one private hospital, Kiang Wu Hospital, together serving a population of close to 600,000. Construction of a second public hospital near the Macau Dome in Cotai is due to finish in 2019. More on page
Macao Water asks govt for more money
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acao Water Supply Co Ltd has asked the government for more money for providing the city with water, even though the company made a profit of about 50 million patacas (US$6.25 million) last year. The government last increased the water supply fee it pays the company last year, by 5.92 percent. The Marine and Water Affairs Bureau said in a press statement yesterday it “is conducting initial analysis” on the Macao Water’s request of a 16-percent hike in the water supply service charge. Page
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4G network plans ‘taking shape’ Old school, new school Macau may not have too much longer to wait for fourthgeneration (4G) wireless telecommunications, almost a decade after it was first put to use in South Korea. The Bureau of Telecommunications Regulation says it is endeavouring to finish drawing up this year a proposal for issuing licences for 4G services. It added in a written response to questions from Business Daily it had been paying close attention to global trends.
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Classes at the University of Macau’s new 10.2 billion patacas (7.80 billion yuan or US$1.28 billion) campus on Hengqin Island began on February 12. But according to the university’s management, only general education courses in English, Portuguese and computer studies – as well as some courses for the Faculty of Law – are currently being taught there. For the first intake of students to the new site, it’s eerily quiet – for now. PageS
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Macau Bonjour unit buys out shop mortgage An indirect unit of cosmetics retailer Bonjour Holdings Ltd has completed a deal to buy out a loan raised offshore and amounting to HK$160.6 million (US$20.7 million). Bonjour Cosmetic Wholesale Center Ltd purchased it from British Virgin Islands firm Million Worldwide Investment Ltd. The debt was originally owed by Hong Kong-registered entity Wealthy Train Ltd. The latter owns a shop used by the group and the transaction will pay off a mortgage on the property. Bonjour Holdings’ same store sales in Macau and Hong Kong fell four percent year-on-year during the Chinese New Year holidays.
4G network licensing plan taking shape Government hopes to present ideas for 4G telecoms coverage this year Tony Lai
acau may not have too much longer to wait for fourthgeneration (4G) wireless telecommunications, almost a decade after 4G technology was first put to use. The Bureau of Telecommunications Regulation says it is endeavouring to finish drawing up this year a proposal for issuing licences for 4G services. The bureau said in a written response to questions from Business Daily it had been paying close attention to the global trend toward the use of 4G technology, and had been studying network technology standards, how to plan and restructure the use of the radio spectrum, and how to license 4G services. The bureau failed to say how soon any licence might be granted, or whether the companies that run the present mobile phone networks would automatically get licences.
Macau’s dominant carrier, Companhia de Telecomunicações de Macau SARL (CTM), disclosed last week that the government intended to create a market for 4G wireless telecommunications. CTM chief executive Vandy Poon Fok Hei told a press conference that his company was confident of getting a 4G licence and regarded obtaining a licence as a good opportunity to develop. Mr Poon had said previously that CTM was preparing for the advent of 4G services. 4G technology was used first in South Korea, in 2006, and was introduced in the United States in 2008. Hong Kong’s government auctioned parts of the city’s radio spectrum for 4G services in 2009, and two years later Hong Kong CSL Ltd became the first carrier there to offer 4G services.
Year 4G technology first used in South Korea
The Bureau of Telecommunications Regulation said all four companies that run mobile phone networks in Macau had applied to renew their licences for third-generation (3G) services. The bureau said it would consider the application each company had submitted in the light of “a basket of factors like its operational capacity, skills and experience, financial situation and plans for future business development”. It said the government would announce the success or failure of the applications at “an appropriate time”. The government granted eightyear licences for 3G services to CTM, Hutchison Telephone (Macau) Co Ltd and China Unicom (Macau) Co Ltd in 2007. It granted SmarTone Mobile Communications (Macau) Ltd a 3G licence in 2009.
Poor phone sales cut Hutchison revenue
obile operator Hutchison Telephone (Macau) Co Ltd was hit by poor smartphone sales, which cut its group wide turnover last year. Hutchison Macau, operated under the brand of 3 Macau, posted revenue of HK$569 million (US$71.1 million) last year, its parent firm Hutchison Telecommunications Hong
Y-o-y decline in revenue for 2013
Kong Holdings Ltd told Hong Kong Stock Exchange in a filing. This represents a 17.2 percent decline from HK$687 million in 2012. The filing did not give specific reasons for the decline in the Macau segment. But Canning Fok Kin Ning, chairman of Hutchison Holdings, said in the filing trading conditions were “challenging” group wide
last year due to “the weak market response to smart mobile phones and devices launched”. The group said its revenue from portable hardware sales dropped by 39 percent yearon-year to approximately HK$4.22 billion in total last year in the Hong Kong and Macau markets combined. Hutchison Macau’s biggest rival, Companhia
de Telecomunicações de Macau SARL, also posted a 4.5-percent decline in its turnover last year to HK$4.56 billion (US$588.3 million) on lower smartphone sales. The overall profit of Hutchison Holdings went down by a quarter from the previous year, to HK$916 million last year, the filing added. T.L.
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Massachusetts General Hospital
Hengqin hope Harvard teaching hospital has plans for Hengqin branch Stephanie Lai
assachusetts General Hospital, the Harvard Medical School teaching hospital in the United States, intends to set up a branch on Hengqin Island, the hospital’s prospective partner in the venture has said. A spokesperson for the prospective partner, the state-run Guangdong Provincial Hospital of Traditional Chinese Medicine, confirmed
to Business Daily a report to this effect in Guangzhou’s New Express Daily. The Chinese-language newspaper quoted the director of the Zhuhai Bureau of Health, Li Li, as saying the Hengqin New Area authorities had reserved 100,000 square metres of land for the branch hospital. Mr Li said the branch would be Massachusetts General Hospital’s first
outside the U.S. We contacted the Zhuhai Bureau of Health and Massachusetts General Hospital with a view to obtaining details, but neither had responded by the time we went to press. The spokesperson for the Guangdong Provincial Hospital of Traditional Chinese Medicine told us it would take part in the management of the branch hospital.
“But how we’ll cooperate in managing this branch hospital is still under discussion,” the spokesperson said. “At this point we cannot reveal further details.” The website of Guangdong’s Foreign Affairs Office says provincial Vice-governor Lin Shaochun and a Massachusetts General Hospital delegation met in the middle of December and discussed medical cooperation in gen-
Anti-inflammatory medication recalled Debate urged on casino C smoking ban
anada’s Apotex Inc is voluntarily recalling a batch of its anti-inflammatory tablets Apo-Naproxen 250mg in Macau and Hong Kong. The pharmaceutical company says it found that some batches of the product may contain foreign material originated from silicon tubing in contact with the tablets during the manufacturing process. While it might not cause serious side effects, there is still the rest of “mechanical irritation or trauma to the upper gastrointestinal tract.” Hong Kong’s department of health is investigating the case. According to a statement issued by the department, 188 bottles of the imported stock were supplied to clinics in Hong Kong, a private hospital, local private doctors and pharmacies. The rest was sent to Macau. Health authorities in Macau are also urging people not to take the medication.
acau Federation of Trade Unions legislator Ella Lei Cheng I (pictured) yesterday proposed a Legislative Assembly debate on a full smoking ban for casinos. She said in a written statement the aim was to better protect gaming workers’ health. “There’s a need to amend the law and enforce [a] full smoking ban inside casinos as Macau also adopts the Framework Convention on Tobacco Control,” the legislator argued in her statement. She also noted that according to casino workers, some operators have designated nonsmoking space in corridors or VIP rooms that are rarely used.
eral and the Hengqin branch hospital in particular. On this side of the border, Macau has one public hospital, Conde de São Januário General Hospital, and one private hospital, Kiang Wu Hospital, together serving a population of close to 600,000. Construction of a second public hospital near the Macau Dome in Cotai is due to finish in 2019.
Bossini’s interim profit HK$628 million
lothing manufacturer and retailer Bossini International Holdings Ltd announced yesterday a gross profit of HK$628 million (US$80.9 million) in the six months ended 31 December. Revenue for the group, however, decreased to HK$1.27 billion in the same period from HK$1.3 in 2012. Operating profit was HK$90 million, up from HK$51 million in 2012, which thus led to a widened operating margin of 7 percent compared to 4 percent the previous year. The group’s cash and bank balances as of the end of 2013 were HK$352 million, up from HK$344 million in 2012. Its net cash balance was HK$352 million, up from HK$344 million in 2013.
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Gaming stocks rise on fab February Market also appeared buoyed by bullish statements on Japan
acau gaming stocks jumped in Hong Kong yesterday. It coincided with analysts’ reports suggesting February gaming revenue could have expanded by as much as 21 percent year-on-year, with the mass-market segment soaring by 40 percent during the period. Kenneth Fong at J.P. Morgan in Hong Kong, suggested those numbers. Barclays analysts led by Phoebe Tse indicated 20 percent overall revenue growth for February across the different casino gambling segments. Mr Fong wrote: “Based on our channel checks and observation of gaming floors, mass market is exceptionally strong. We expect mass market growth should exceed 40 percent year-on-year for February.” Paradise Entertainment Ltd, parent firm of hybrid electronic table games maker LT Game Ltd, rose six percent, its highest intraday performance since June 2009. The shares have gained 51 percent year‑to-date. Among the Macau casino operators, Sands China Ltd rose 4.6 percent, Galaxy Entertainment Group Ltd was up 3.5 percent, while Wynn Macau Ltd gained 3.9 percent. The market also appeared to be buoyed by bullish statements issued by two Macau gaming investors about the prospects for Japanese casino resorts. On Monday, Las Vegas Sands Corp., the world’s largest gambling
company by market value, said it’s ready to invest US$10 billion (80 billion patacas) in Japan, projected to be Asia’s second- largest casino market. “We will spend whatever it takes,” chairman and chief executive Sheldon Adelson said at a media briefing in Tokyo. “We could pay all cash. We don’t have to, but we will borrow money in a typical mortgage‑to‑value ratio.” Yesterday MGM Resorts International, a 51 percent investor in Macau casino developer MGM China Holdings Ltd, stated it was
committed to spending up to US$5 billion in Japan. MGM Resorts wants to own at least 51 percent in a partnership with Japanese companies for projects in the country, chief executive James Murren said in Tokyo. Tokyo’s selection to host the 2020 Olympic Games has boosted expectations that gambling resorts, under discussion for a decade, will be made legal. “We will overinvest early on to ensure, as we have done everywhere else, that we have properties that are
built to last and that would stand additional competition,” Mr Murren said, speaking at a CLSA Asia-Pacific Markets forum. The final investment amount would depend on conditions such as the tax rate, he added. Union Gaming Group estimates Japan’s casino market could generate US$10 billion in annual revenue, trailing only the southern Chinese city of Macau in Asia. The territory had US$45.2 billion casino gaming revenue in 2013, seven times that of the Las Vegas Strip. M.G. with Bloomberg News
Media groups boost cooperation
aulo A. Azevedo (pictured left), chief executive of De Ficção – Multimedia Projects, and José Rocha Dinis (pictured right), administrator of Jornal Tribunal de Macau, reinforced yesterday the existing agreement to share content between the two Macau media groups. Under the deal, De Ficção’s Macau Business magazine and its sister publication Business Daily newspaper will be given the exclusive right to use – in English – content from the Portuguese-language daily Jornal Tribunal de Macau. JTM, in return will have the right to publish – in Portuguese – the contents of the English-language publications.
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Utility asks govt for more money Macao Water says it’s being squeezed by the need to invest in better supply infrastructure Tony Lai
acao Water Supply Co Ltd has asked the government for more money for providing the city with water, even though the company made a profit of about 50 million patacas (US$6.25 million) last year. The government last increased the water supply fee it pays the company last year, by 5.92 percent. Macao Water executive director Felix Fan Xiaojun said yesterday that the company needed the money so it could invest 1 billion patacas or more in the water supply infrastructure. “We have made a formal application to the Macau government for an adjustment this year in our water supply
fee,” Mr Fan told reporters. “A fee increase would could help ease some of the financial pressure we are under that is due to the big investments we will make in future, such as laying new water mains and the third phase of expansion of the water treatment plant near the reservoir.” He declined to say how big an increase Macao Water had asked for. “From our point of view, we certainly want a large increase to relieve the financial pressure on us all in one go,” he said. Macao Water has been making money since 2009. Mr Fan said his company had made a profit of roughly
50 million patacas last year because of cost reductions and the increase in its water supply fee. In 2012 Macao Water made an after-tax profit of 49.42 million patacas, 12.6 percent less than the year before.
Striking a balance “We all have to ponder this issue: whether a company has to wait to incur an actual loss before the government acts,” Mr Fan said, drawing a parallel between his company and Reolian Public Transport Co Ltd. Reolian went bust after the government refused to increase the company’s fee
Healthy profit on Sniper’s Zhuhai deal M
acau Property Opportunities Fund Ltd says it has sold two properties in Zhuhai – APAC Logistics Centre and Cove Residence – for a combined total of 392 million yuan (511.58 million patacas, or US$65 million). The fund – managed by Sniper Capital Ltd – says it jointly acquired the sites for US$11 million in 2008. Since then, it has developed APAC Logistics Centre into a state-of-the-art logistics facility and Cove Residence into a 484-unit apartment complex. “The agreed sale price represents a 34 percent premium to the September 2013 valuation of the properties and generated a net profit of US$29 million – equivalent to an internal rate of return of 21 percent,” said
the fund in a statement. MPO chairman David Hinde added: “Our investment in APAC Logistics Centre and Cove Residence was driven by the belief that demand for well-located properties in the area would escalate as Macau and neighbouring Hengqin Island continued to grow rapidly. This divestment has allowed us to generate a significant return on investment for our shareholders.” M.G.
264% Net profit on property sale
for running some of the city’s bus services. “We understand the public will have opinions whenever there is an adjustment in the fees of public concessionaires,” Mr Fan said. “So we don’t hope to get any support from the public. But at least they are not against it.” He said the government had responded to Macao Water’s request for more money by asking for more information. He predicted that negotiations would be “arduous”, because the government had to balance its own interests against the interests of Macao Water and
the public. Business Daily invited the Maritime and Water Affairs Bureau to comment but the bureau had failed to reply by the time we went to press. Macao Water last asked or an increase in its water supply fee in May 2012.
Cost disconnect The company asked for 26.2 percent more. A year later the government, under pressure from the public, granted an increase of only 5.92 percent. That means he government now pays Macao Water 4.65 patacas per cubic metre of water it supplies the city with. A change in what the government pays the company for supplying the city with water does not necessarily mean any change in what the government charges consumers for using water. The Maritime and Water Affairs Bureau said last month it hoped to come up with a new water consumption tariff by the end of June. The bureau said big consumers such as casinos and hotels might have to pay 10 percent more. Mr Fan said Macao Water would spend between 1 billion patacas and 1.5 billion patacas in the next few years on improving the water supply infrastructure so it could keep abreast of consumption, which would increase by 2 percent to 3 percent this year. He said the increase in consumption was due to businesses, particularly casinos and hotels, turning on their taps as the number of visitors grew.
Macau hotel room numbers to near-double T he number of hotel rooms in Macau could nearly double if pending and applied for projects are completed. There were a total of 16 hotel projects under construction in Macau during the fourth quarter of 2013. These, together with 27 other projects being appraised by the government, could see the city have up to 25,600 more guestrooms and 18,250 parking places. The Land, Public Works and Transport Bureau released the latest figures this week. Macau had 29.3 million visitors last year served by a current inventory of about 28,000 rooms According to the data, the 16 hotel projects under construction in the fourth quarter of last year
will offer Macau a total of 9,600 guestrooms. Of these, nine schemes are on the Macau peninsula and will offer 1,030 guestrooms. Five hotel projects on Cotai will have a total of 7,500 guestrooms, while two on Taipa will add 1,060 more guestrooms to the territory. Just these 16 construction projects already underway will also increase the number of parking spaces in Macau by 9,710. Also in the fourth quarter of last year, there were 27 hotel development projects under appraisal. If approved, these could see Macau have an additional 16,000 guestrooms once all 43 construction projects are complete. S.F.
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HOSPITALITY Rising reliance The number of Macau visitors has been growing steadily over the years. In the last five full years it went up by more than 7.5 million, reaching more than 29 million persons in 2013. That represents a growth of almost 7.8 percent per year between 2009 and 2013. Growth slowed down a bit last year, standing at 4.4 percent on the previous year. But that still amounted to an increase of more than 1.2 million visitors, that is, about 100,000 additional visitors per month. Most of the visitors came from mainland China, which is a well-established pattern. The reliance on that market is growing across the board. In fact, mainland Chinese visitors represented 101 percent of the increase registered in that period. That is, they slightly overcompensated for the net losses registered in the arrivals from all other sources of visitors taken together.
Old school, new school
In 2009 visitors from the mainland accounted for just above half of the total; that figure had risen to 63.5 percent in 2013. On average, more than 80,000 mainland residents crossed the borders every day. The same pattern is found in both overnighters and same-day visitors. The first saw their share of the total rise from 23.8 percent to 30.4 percent in the period, while the latter proportion rose from 26.8 percent to 33.1 percent. An increasing share of mainland visitors comes in the form of individual visa holders, eschewing packaged tours and group visas. They represent nowadays more than a fourth of the total number of visitors. Since 2009 their share went up by 5.4 percentage points to 27.8 percent last year. The province of Guangdong alone is sending 18.6 percent of total visitors, amounting to more than half a million people, on individual visas.
increase in mainland visitors with individual visas, 2009-13
Classes at the University of Macau’s new 10.2 billion patacas (7.80 billion yuan or US$1.28 billion) campus began on February 12. But according to the university’s management, only general education courses in English, Portuguese and computer studies – as well as some courses for the Faculty of Law – are currently being taught there. Rui Martins, Vice-Rector for Academic Affairs, says science laboratories, the library and the main computer rooms are still operating at the old campus on Taipa. ‘Soft openings’ – where a large project opens gradually rather than all at once – are common in the casino industry in neighbouring Macau. But at the university’s new Hengqin campus, the first students find it eerily quiet. Luciana Leitão Photos by Manuel Cardoso
he new campus seems “lonely”, says Lincoln Zhang, a secondyear Master’s student, coming from Mainland China. His friend Cristina Cao, from Beijing, agrees and adds: “The old campus was more convenient.” They are sitting together, catching a little bit of early spring sun. To get to the new campus, I caught bus number MT3U at Rotunda Ferreira do Amaral on Macau peninsula, to go to the new campus. The bus travels
through Cotai and passes by the Lotus Bridge crossing. But instead of depositing passengers at the normal tourist immigration point, it drives through the underwater tunnel built specially for students and staff to travel from Macau to the new seat of learning. It means they can commute daily between Macau and what in effect is a little piece of Macau on the mainland, without the need for immigration checks. Once at the campus, visitors
notice that despite the landscaping, water features and general feel of a 21st century, Silicon Valley-style haven for intellectuals, it is also – as Macau was for centuries – an enclave surrounded by another jurisdiction. A high wall keeps intruders out, and stops students or visitors without the necessary visas for the People’s Republic of China from straying into the hinterland of what is now the world’s second biggest economy. The scenery is very different from what you encounter on the hectic Macau peninsula. There are mountains in the background, artificial lakes, and a green landscape. And then there’s also the silence. That breaks when I reach a campus restaurant called Food Paradise. It seems to have attracted every student currently on site. And the predominant language to be heard is not Cantonese, but Mandarin. One of the mainland students is Patricia Peng who’s majoring in Portuguese and expects, in the future, to become a journalist. “I started classes at the University of Macau last semester and only now moved to the new campus”, she says. She explains she came from mainland China to the University of Macau to have a ‘different view’ on things. Currently that view includes the small inconveniences associated with any move to new premises. She says that currently “maybe it’s not so convenient”, as “it is a little difficult to transfer from Taipa”, and the majority of classes are still at the old campus. Another first year student is He Jian Young, aged 20. He’s
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reading Government and Public Administration. Originally from Shanxi province, he studies in Macau because he believes he can learn more and see different things compared to being in mainland China. “I can open my eyes”, he adds. The very fact I’m speaking to these students in English marks them out as young Chinese who have been either lucky enough or motivated enough to get a good basic education and widen their horizons. Although he’s now living at the
Hengqin Island campus, Jian Young still needs to go to class on Taipa every day, apart from days on which he has English classes. He’s upbeat about the new campus, having met a lot of new people. He also has the chance to play computer games and basketball. “For fun, I mostly play computer games with my classmates, using my own computer”, he says. He thinks the dorm rooms are pleasant and spacious. He only shares with another person. “And we have
one bathroom to share with another room”, he adds. He says he especially likes the fresh air, as well as the opportunity of living with classmates from mainland China. He believes that, when it is fully operating, the new venue will be much better than the old University of Macau. “Now we still need to take a bus to have classes [on Taipa], which will take 20 minutes. And because of that we must get up early. [But] we have the mountains here. It’s better to study in the new campus”, he says.
The campus in figures Current budget: Mop 10.2 billion Initial estimated budget: Mop 5.8 billion Size: 1.09 square kilometres Total building area: 940,000 sq. metres Number of buildings: > 60 Underwater tunnel (vehicle lanes): 1,570 metres Underwater tunnel (pedestrian lane): 500 metres Number of dry labs, wet labs, electronics and computer labs: > 280 Green area: 430,000 sq. m. Parking spaces for light vehicles ≈ 2,500 Parking spaces for motorbikes ≈ 1,300 Parking spaces for bicycles: 12 Bodies of water: 110,000 sq. m. No. of trees: > 22,000
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Majority angry at HK ‘locusts’ protest: Global Times But even 32 pct of Hong Kongers polled by loyalist paper favour ‘independence’
China’s corporate debt is at record high China’s corporate debt has hit record levels and is likely to accelerate a wave of domestic restructuring and trigger more defaults, as credit repayment problems rise. Chinese nonfinancial companies held total outstanding bank borrowing and bond debt of about US$12 trillion at the end of last year – equal to over 120 percent of GDP –according to Standard & Poor’s estimates. Growth in Chinese company debt has been unprecedented. A Thomson Reuters analysis of 945 listed medium and large non-financial firms showed total debt soared by more than 260 percent, from 1.82 trillion yuan (US$298.4 billion) to 4.74 trillion yuan (US$777.3 billion), between December 2008 and September 2013.
Myanmese domestics arrive in HK Only four Hong Kong recruitment agencies for domestic helpers lost their licences last year despite a record total of complaints against them. The findings by the South China Morning Post prompted calls for a self-regulating industry body to be set up to help protect foreign domestic workers. The facts emerged as the first group of 19 Myanmese helpers arrived in Hong Kong on Monday. Concern groups said the government should use the opportunity to clean up the industry. Elizabeth Tang Yin Ngor, general secretary of the International Domestic Workers Federation, said of the figures: “…I have always been dissatisfied with the supervision of the Labour Department.”
Hong Kong land auction fetches US$1.3 bln
early 80 percent of respondents on the Chinese mainland and nearly 60 percent of respondents in Hong Kong are against the “eliminating locusts” protests aimed at mainland visitors visiting the latter city. That’s according to a poll organised by China’s strongly patriotic Global Times newspaper. Protesters from a Hong Kong activist group gathered near Canton Road in Tsim Sha Tsui on February 16. They demanded the Hong Kong government reduce the quota for mainland visitors. The newspaper’s survey asking for views on that news – conducted by the Global Times Global Poll Center from Friday to Monday – collected responses from 1,209 mainland residents and 1,004 Hong Kong residents above 15 years old it said. A total of 78.8 percent of mainland respondents stated they were angry over the recent antimainlander protest, while 59.4 percent of respondents identifying themselves as Hong Kongers had the same feeling. The increasing influx of mainland visitors to Hong Kong – deemed “locusts” by their critics – has been taking up too many resources and disturbing local people’s lives, claimed the protestors. “Only a few Hong Kongers will take an aggressive approach. Most of them are against it due to cultural factors and blood relationship,” said Zhu Shihai, a professor specialising in Hong Kong studies from the Central Institute of Socialism in Beijing.
Good manners Chang Chak Yan, a professor with the Chinese University of Hong Kong, agreed, saying that most Hong Kongers have moderate manners and advocate the prosperous development of Hong Kong. Nearly 60 percent of both mainlanders and Hong Kongers responding to the poll believe that the current tensions are mainly
caused by bad manners displayed by some mainland visitors in Hong Kong. Other reasons include mainlanders flocking into Hong Kong to buy infant formula, raising house prices by speculative investment, and mainland children studying in Hong Kong, with some 50 percent of mainlanders and 70 percent of Hong Kongers believing these are factors. Zhu said it is feasible for the mainland to take measures if Hong Kong puts greater pressure on reducing the number of mainland visitors. “We should respect Hong Kong’s wishes, as an excessive number of visitors has already caused discontent there. Mainlanders should pay attention to it by negotiation and communication,” he said. Developing the “one country, two systems” principle, some opposition
activists have launched a “Hong Kong independence” campaign, which requests “total autonomy.”
No independence More than 90 percent of mainland respondents to its poll opposed this campaign, said Global Times, while Hong Kong residents responding to the survey revealed a more complicated attitude. A total of 41.5 percent said no to ‘independence’, 31.7 percent supported the idea, and 26.9 percent expressed no firm opinion. Mainland and Hong Kong residents also share different views over the development of “one country, two systems.” About 38 percent of mainland respondents hope to see a balanced improvement on both aspects, while 36 percent value “one country” as a basic premise. Meanwhile, over half of Hong Kong respondents consider that the difference in political systems should be strengthened, while 26 percent believe the government should push forward both aspects.
…an excessive number of visitors ... has already caused discontent there Zhu Shihai, mainland academic
Many Hong Kongers know that independence for Hong Kong is impossible, Zhu said, a view echoed by Chang. “Some Hong Kongers may deliberately exaggerate the issue to attract attention and gain more resources,” Zhu said. Both experts said that the difference between Hong Kong and mainland residents’ mentality over political systems is understandable. Hong Kong tends to emphasise its capitalist system and its residents are against the intervention from the mainland. “But the current tension mainly remains at the level of conflict of interests and is barely connected with the political system,” Zhu said. More than 70 percent of mainlanders and over 50 percent of Hong Kongers polled, think that enhancing communication between the mainland and Hong Kong is the most effective way to reduce tension.
A Hong Kong government land auction of three residential sites fetched a total of HK$9.8 billion ($1.3 billion), the government said yesterday. The land sales, a barometer of developers’ long-term confidence in the housing market, received 25 bids from Hong Kong and Chinese developers, according to Hong Kong’s land authority. A unit of Hong Kong-listed Poly Property won one site for HK$3.92 billion, while a subsidiary of K Wah International bid HK$2.94 billion for another parcel. The third piece of land was awarded to a unit of unlisted K&K Property Holdings Ltd for HK$2.91 billion.
LinkedIn for China despite censor fears Business networking site LinkedIn has launched a Chinese version, attempting to tap the huge market while navigating a strict censorship regime that has seen other foreign social media giants banned. China has the world’s largest online community with more than 618 million users. But its so-called Great Firewall blocks any online forums or content deemed sensitive, and has barred access to Facebook and Twitter for several years. Foreign tech giants are required to abide by strict rules to operate in the country, and unlike the English-language version of LinkedIn, the new site does not currently allow group discussions.
Property the driver for Hurun rich list Real estate remained the most lucrative road to riches in China last year, according to the Hurun Global Rich List. Six of world’s 10 top real estate tycoons are now from China and Hong Kong, according to Hurun Report Inc, which released its rundown yesterday. Hong Kong property tycoon Li Kai-shing claimed top spot in Greater China with his fortune rising 3 percent to 200 billion yuan (US$32.80 billion). Wang Jianlin, chairman of China’s largest commercial property developer, Dalian Wanda Group, and Lui Che Woo, founder of casino operator, Galaxy Entertainment Group Ltd, were the runners-up with personal wealth of 150 billion yuan (US$24.60 billion) each.
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Greater China Twitter-like microblog posts 43 pct rev hike Sina’s Weibo planning IPO later this year according to reports this week
ina Corp’s revenue soared 43 percent in the fourth quarter, as its Weibo messaging service more than doubled advertising sales despite strong competition from Tencent Holdings Ltd’s WeChat. Weibo, one of several Chinese Twitter-like services, increased ad revenue by 163 percent to US$56 million in the final three months of 2013. Sina Weibo has hired investment banks for a US$500 million U.S. initial public offering later this year, several media outlets reported on Monday. The company has hired Goldman Sachs and Credit Suisse to manage the New York listing, the Financial Times reported, citing two people familiar with the matter. Sina Weibo’s public relations office was unavailable for comment. Alibaba Group, China’s leading e-commerce platform, paid US$586 million for an 18 percent stake in Weibo in April last year, valuing the microblogging business at US$3.3 billion. Alibaba’s public relations department also declined to comment on the issue.
Public stake Normally Internet companies offer 10-15 percent of their equity for initial public offerings, meaning Sina Weibo could be now worth about
year-on-year to 280.8 million by the end of December 2013, China Internet Network Information Center said in a report published on January 16. The report sent Sina’s share price tumbling 7 percent on the same day.
Supreme People’s Court, Beijing
US$4-5 billion, Wang Guanxiong, a Beijing-based expert on IPOs, said. “We think Weibo is ready for IPO since management restructuring has finalised, as well as the platform turning profitable,” noted Lin Juan, analyst at research firm Wedge Partners, in a research note released earlier this month. In the previous quarter that ended September 30, 2013, advertising revenues generated by Sina Weibo posted a 125 percent year-on-year surge to US$43.7 million, while nonadvertising revenues from Weibo’s value-added services, such as Weibo membership fees and games, also
roared by 121 percent year-on-year to US$9.7 million. “Alibaba’s joining in has speeded up the microblogging platform’s commercialisation process,” Ding Daoshi, deputy managing editor of IT website sootoo.com, told China’s Global Times on Monday. Sina Weibo’s expected listing comes at a time when microblogging services in China are losing appeal due to strengthened government regulation and fast emergence of other social networking services, analysts said. The number of Chinese microblogging users dropped 9 percent
Weibo is facing increasing competition with Tencent Corp’s mobile messaging app WeChat, which is more private than Weibo, Ding said. Sina Weibo’s daily active users amounted to 60.2 million by the end of September 2013, while WeChat boasted 272 million monthly active users, data from the two companies showed. Sina Weibo’s offering also follows a number of Chinese companies which have been flocking to the US stock markets in their biggest numbers since 2010. “The current market environment is favourable to China-based Internet companies, as US investors have gradually regained their appetite for Chinese stocks based on better performance of some newly listed Chinese firms since the second half of 2013,” said Li Ling, an analyst at ChinaVenture Investment Consulting. Jd.com, a major online platform in China, announced in January a plan to raise US$1.5 billion in a US IPO that would be the largest by a Chinese Internet company.
Software firm guilty of unfair practices Qihoo 360 to pay 5 mln yuan to Guangdong-based Tencent Holdings
hina’s supreme court upheld a verdict that Qihoo 360, a major Chinese anti virus software provider, was guilty of unfair competition. The decision ends a high profile and long-drawn-out legal battle between Qihoo 360 and Tencent Holdings, China’s largest Internet company by market value. In a verdict handed down Monday, the Supreme People’s Court (SPC) rejected Qihoo 360’s appeal and upheld an earlier local court ruling, ordering Qihoo 360 to pay 5 million yuan (US$819,921) in damages to Tencent for unfair competition. Qihoo 360 was found to have induced or provided tools to help users change the operating mode of QQ software in order to promote Qihoo 360’s security software and increase its market opportunities and competitive advantage, the SPC said in its verdict. Qihoo 360 should be held legally liable for unfair competition, the court said. On April 25, 2013, the Guangdong High People’s Court had found Qihoo 360 guilty of unfair competition practices, and ordered it to pay 5 million yuan in damages to Tencent. In a statement to the Global Times newspaper, Tencent said the rulings by the SPC and the Guangdong court have drawn a clear boundary for lawful competition and will help promote orderly development of the Internet industry.
“We believe that the ruling by the Supreme People’s Court is a new start,” the statement said. Meanwhile, Qihoo 360 expressed its regret at Monday’s ruling, saying the legal battle had been provoked by Tencent plagiarising Qihoo 360’s security software and bundling it with QQ’s software. “Monopolies have appeared in China’s Internet market. [This] confines free competition and innovation and also damages the legal rights of the consumers,” Qihoo 360 said in a statement. Guangdong-based Tencent sued Beijing-based Qihoo 360 in August 2011 for unfair competition after Qihoo 360 offered its users Koukou Guard software it developed, which could cause Tencent’s QQ software to malfunction, according to Xinhua News Agency. The Guangdong High People’s Court began proceedings in the case in April 2012. “The case is typical of malicious competition in the Internet industry,” said Wang Yong, a lawyer with Beijing-based JT&N Law Firm. “The high compensation ruled on by the court sent a clear signal that the malicious practice of unfair competition cannot be tolerated,” Wang noted. Tencent has roughly 816 million active QQ users monthly while Qihoo 360 has around 465 million active personal computer users monthly.
The Fountainside Apt. on Top Floor Approx. 1800 sq feet HKD 19.9 million
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Chinese hustle part 3 The rise and pending fall of Hanlong Group chairman Liu Han
iu Han – a Chinese businessman who achieved world renown when a school he had previously donated survived the 2008 Sichuan earthquake while many government buildings collapsed – is one of 36 people being investigated for alleged links to criminal gangs reports Xinhua, an official Chinese news agency. Liu Han and his younger brother Liu Wei created a sophisticated network of crooked officials in his home base in Sichuan province through bribery, helping with promotions and providing drugs, according to investigators spoken to by the media outlet. Investigations were interrupted, evidence was destroyed and absurdly light penalties were dished out, Xinhua reports. For example, in May 2003, Sun Huajun, a member of Liu Han’s circle, was arrested by the police in illegal possession of firearms. He was prosecuted, but quickly reprieved, only 15 days after his arrest. Civilians in China are banned from possessing guns, ammunition, explosives and certain types of knives. Minor violations lead to jail sentences of three to 10 years. Major violations can lead to the death penalty.
Umbrella man “Liu Han was widely connected to government officials in his search for an ever more powerful “umbrella”, sometimes meant taking advantage of the contacts between his wife and spouses of those officials,” reports Xinhua. “Liu Han is extremely generous in his dealings with government officials. He is willing to pay, and he knows how to cater to their likes,” said righthand man Sun Huajun. “Liu Han would take me to dine with them, and offer them gifts such as gold or jade items worth hundreds of thousands or even millions of yuan,” said Liu’s ex-wife Yang Xue. “Sometimes he would deliberately lose when gambling, just to bribe them.”
Yang Xue is also being prosecuted in a separate case, reports Xinhua. As a result of Liu Han’s growing economic prowess, his connections expanded from Guanghan and Deyang to Mianyang, Chengdu and even Beijing, according to Yang and other core members of the gang. He gained access to officials at even higher levels when he was elected to the standing committee of the Sichuan provincial committee of the Chinese People’s Political Consultative Conference (CPPCC), and spent an enormous amount trying to corrupt them, claims the media outlet. “Under this “umbrella”, Liu Han’s organisation accessed greater economic interests, and Liu himself obtained a variety of political positions,” adds Xinhua. He was a member of the Sichuan provincial committee of the CPPCC for three consecutive terms. Righthand man Sun was a deputy to the Sichuan provincial People’s Congress. Liu Wei, a thug in Guanghan, became an Olympic Torch bearer in 2008. Liu Han’s powerful connections gave him certain control over local government appointments and promotions. In 2000, he proposed a tourist project at Mount Siguniang in Xiaojin County, but the plan was rejected by Ge, a county chief. Ge was swiftly transferred away from Xiaojin and
Liu Han’s power base in Guanghan, Sichuan province
Liu Han’s project got underway. In 2007, a truck owned by Liu Wei’s Guanghan gravel business was stopped for overloading. The man who stopped the truck, Lianshan Township party committee secretary Jiao, was demoted and transferred three months later. According to a Guanghan official who refused to be named, Liu Han wields a lot of power in the promotion of local officials. “Liu Han has money, connections, guns, and lieutenants willing to kill for him. Everyone is afraid of him. Once he is offended, you either die or lose your job,” said Wen Xiangzhuo, a member of Liu’s gang. There was no shortage of people willing to do Liu’s bidding. Local officials sought promotion, and gangsters toed the line because Liu could fix their troubles. “For more than ten years, Liu Han’s bloc has brought tremendous psychological intimidation to bear on Sichuan society. Victims did not dare voice their concerns. Law enforcement officials turned pale at the mention of his name and kept well out of his way,” states Xinhua.
Still fearful “Even now, when police investigated in Sichuan, people with inside knowledge trembled and were reluctant to talk. At one victim’s house, police went great lengths to persuade the family to cooperate, while they repeatedly demanded the police to keep the visit secret, afraid of Liu Han’s retribution, even from behind prison walls,” states the news agency. All these obstacles apparently do not deter the ruling Communist Party of China and the government. During a meeting on political and legal affairs last month, President Xi Jinping ordered law enforcers to “carry the sword of equality and scales of justice” and to defend social justice and equality, however they could. Even with Liu’s case under intense
scrutiny by central authorities, it took a year of painstaking investigation under the direct command of the Ministry of Public Security before the gang was raided and its key members seized, after more than 20 years of alleged extreme criminality.
Arrest celebrated As the news broke, local people celebrated with fire crackers; perhaps a new beginning on a par with the lunar New Year. “Now that Liu Han and Liu Wei have been arrested, merchants can finally do businesses as they will, and Guanghan will be stable for years to come,” a resident told Xinhua – on condition of anonymity. With the case now before the courts, the truth about the real Liu Han behind the billionaire facade awaits final exposure. “The downfall of the liu Han gang is a prime example of central authorities’ commitment to fight corruption and defend social justice,” states Xinhua. Some will wonder how Liu Han rose so high and lasted so long, and whether the authorities can ever tackle the seemingly systemic corruption in government and business in the world’s second-biggest economy
Once he is offended, you either die or lose your job Wen Xiangzhuo, member of Liu Han’s gang
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Electricity sparks trouble in Myanmar Country’s economic opening and progress threatened by power shortages
Protest against electricity shortages, prices – Yangon, Nov 2013
ith another summer approaching, industrial estates in Yangon, Myanmar, are again facing the prospect of massive power outages that owners expect will cost industrialists hundreds of thousands of dollars in profit. Such events also risk damaging the commercial capital’s efforts to bolster an investor-friendly reputation. In the months of March to May 2013, factories had as little as three hours of electricity a day, and for the first two weeks of May suffered complete and continuous power outages reports The Myanmar Times.
The Yangon Electricity Services Board (YESB) is currently able to supply factories with 18 hours of electricity every day, but when city use spikes in the hottest months, factories are unable to access the 3500 to 4000 electric units they need daily to operate – Yangon’s 31 industrial zones require on average a daily supply of 250 megawatts, with 80 megawatts consumed by the sprawling Hlaing Thuryar zone alone.
At issue “Power shortages cause industry to fall down,” said U Myat Thin Aung, chairperson
of the Management Committee for Hlaing Tharyar Industrial Estate at Yangon’s largest industrial zone in Hlaing Tharyar township. “Last May, the amount of electricity provided for Yangon’s industries was sometimes zero.” In May 2013, the power shortages were so intense that the 100 or so frozen seafood factories that require constant access to electricity to keep products frozen were forced to shut down for up to two weeks, resulting in hundreds of tonnes of food being left to spoil. Other factories meanwhile were forced to limit production hours to times when electricity supply was available.
A single day of production lost at a medium-sized frozen seafood factory is valued at losses of about US$2,200, U Hnin Oo, vice chair of the Myanmar Fishery Federation, said. “I would try to run my factory by generating electricity myself using diesel, but I don’t think I can survive long doing that,” U Tun Aye, owner of Shwe Yamone frozen fish factory in Hlaing Tharyar industrial estate, told The Myanmar Times. “If we don’t have electricity, we have to struggle even to survive – we cannot speak of extending the business,” he said, adding that his company would have to limit its production schedule in anticipation of blackouts this year. To make matters worse, businesses in the industrial zones now worry for their reputation as blackouts this year will impact newly signed export deals they have with countries in the European Union following the lifting of trade tariffs in July.
No power, no money “Factories still need to upgrade to become competitive, and to do that they need electricity,” Myanmar Fishery Federation vice president U Hnin Oo said, adding that several seafood factories in Yangon are now eligible to export to the EU. U Hnin Oo, of the Myanmar Fishery Federation, said that
Are you coming to Scarborough Shoal? Expect wet reception from Chinese coastguard service suggest Filipinos Philippine President Benigno Aquino demanded an explanation from China yesterday over a report the latter’s coastguard service had fired water cannon at Filipino fishermen at a disputed marine shoal. Aquino said the foreign department had been asked to file a “diplomatic message”. The move came a day after the Philippines’ military chief told reporters of the incident at Scarborough Shoal – known to the Filipinos as Panatag Shoal and to the Chinese as Huangyan Dao – now the subject of a bitter territorial row in the South China Sea. “The first step would be a
the electricity issue would not only hinder production but also stifle growth as the market depends on improving its operations as well as its technical capabilities. “Myanmar’s products need to be better quality, but if we don’t have reasonable electricity it is very difficult to take advantage of the EU market,” he said. Though the electricity issue is widespread – with nearly 80 percent of the population of Myanmar going with no access at all – economists believe that Myanmar’s power supply woes will have grave affects on the economy if something is not done soon. “Right now, although the government is inviting FDI [foreign direct investment], it cannot promise to provide a reasonable amount of electricity. This will be a barrier for most foreign investors who do not want to have to generate their own electricity,” U Hla Maung, an independent economist, said.
Hours of electricity per day for factories, mid-2013
from Philippines to disputed outcrop
diplomatic message... directed at the People’s Republic of China to ask them to explain what this incident was all about, what their intentions are,” Aquino told reporters, when asked whether a formal protest would be lodged. Scarborough Shoal is a rocky outcrop, considered a traditional fishing ground by Filipinos, which lies just 220 kilometres (135 miles) off the main Philippine island of Luzon. It is about 650 kilometres from Hainan island, the nearest major Chinese land mass. The South China Sea is one of the world’s most important waterways, home to vital shipping lanes and believed to sit atop lucrative mineral deposits. Both sides engaged in a tense standoff in the area in April 2012,
which ended with the Philippines retreating from the shoal.
‘SOP’? Aquino acknowledged that Philippine security officials were “not sure at this point in time” whether spraying water cannon at Filipino fishermen was a standard operating procedure by Chinese vessels in the area. “We don’t want to react to a oneoff incident,” Aquino said. Aquino said that as of Monday there were Filipino fishermen at the shoal “who were not being harassed or intimidated by any entity”. Philippine armed forces chief General Emmanuel Bautista said the incident occurred on January 27, although he did not divulge further
details and it was not clear whether any Filipinos were hurt. China on Monday declined to respond directly to the allegations, insisting only that it had “indisputable sovereignty” over the area. China claims most of the South China Sea on historical grounds, including waters near the coasts of its neighbours. The Philippines, along with Brunei, Malaysia, Taiwan and Vietnam also have competing claims to parts of the sea, and the rivalries have been a source of tension for decades. Last year, Manila asked a United Nations arbitration tribunal to rule on the validity of China’s claim to most of the sea, but Beijing has rejected the process. AFP
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Qantas may cut 5,000 jobs: report Struggling airline’s interim results due tomorrow Martin Parry
truggling Australian carrier Qantas yesterday said it was committed to slashing costs by A$2 billion (US$1.8 billion) but refused to confirm or deny a report that it will axe 5,000 jobs. The airline has been battling record fuel costs and fierce competition from subsidised rivals and in December said 1,000 jobs would go while warning it faced a half-year loss of up to A$300 million. Its interim result is due tomorrow and the Sydney Daily Telegraph, citing a Qantas source, said the job losses would be much worse as the airline restructures its finances to convince the government it deserves a debt guarantee.
As well as sacking 5,000 staff, the newspaper said Qantas might sell some of its terminals, while The Australian reported it would accelerate the retirement of older planes and defer new orders. The airline refused to go into details. “There is fresh speculation about what things we will or won’t announce on Thursday as part of our half-year results. We are not in a position to comment on that speculation,” the flag carrier said in a statement. “We have said that we will be making some tough decisions in order to achieve A$2 billion in cost savings over the next three years, which is a consequence of an unprecedented set of market conditions now facing Qantas.”
KEY POINTS Qantas says must slash A$2 bln from costs Media reports that 5,000 jobs to go Facing half-year loss of up to A$300 million Unions counter each worker makes A$205,000 for the firm
Transport Workers Union national secretary Tony Sheldon said Qantas must come clean on its restructuring plans with staff on edge over potential mass sackings. “Another day, another rumour of massive job cuts and the sale of planes and terminals,” he said. “Each baggage handler, check-in staff and ramp worker generates a A$205,000 return to Qantas above the cost of their employment. Sacking them is like a tradesman selling his tools to pay a one-off bill.” Qantas has said it faces “immense” challenges and has been lobbying the government to ease limits in
…we will be making… tough decisions…to achieve A$2 bln in cost savings Qantas spokesman
foreign investment or provide state intervention to help shore up its bottom line. Canberra has made clear there will be no taxpayer handouts but has flagged support for a relaxation of the Qantas Sale Act, which limits foreign ownership in the airline to 49 percent, or a possible debt facility. Qantas chief Alan Joyce argues that the cap is hurting Qantas’s ability to compete by restricting access to capital, particularly against domestic rival Virgin Australia, which is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad. Transport Minister Warren Truss on Tuesday said the conservative
government was drafting laws to allow Qantas to be majority foreigncontrolled while allowing a single foreign shareholder to own more than 25 percent. “The government is philosophically attracted to levelling the playing field,” he said, although Labor and the Greens have vowed to block any legislation in the upper house Senate. They are against allowing majority overseas ownership, but open to the government providing an assistance package. Prime Minister Tony Abbott said the government accepted the carrier was having to compete with the “ball and chain” of the Qantas Act. “But in the end Qantas do have to get their own house in order,” he said. Following the profit warning in December, Moody’s and S&P both downgraded Qantas’ credit rating to “junk” status, increasing the cost of financing for the carrier and restricting access for investors that do not put their money in lowerrated companies. The carrier pledged to press ahead with cost cutting regardless of whether the government decides to help. “We’ve said that we must take steps to reduce our costs regardless of whether the federal government acts on the uneven playing field in the Australian aviation market,” it said in the statement. Qantas shares closed 0.40 percent lower at A$1.23.5.
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Asia India’s Kotak to raise US$200 mln
Trans-Pacific trade – ministers see progress Property fund Ministers in 12-nation Trans-Pacific seeking capital for trade talks said yesterday they have made progress trying to finalise a domestic property deal during a four-day meeting in Singapore. But several issues persist, development particularly questions over market access. “While some issues remain, we have charted a path forward to resolve them”,” said New Zealand Trade Minister Tim Groser, reading from a joint media release at the end of the meeting. “Market access” issues remain one of the main sticking points, the ministers said. The Trans-Pacific Partnership aims to break down trade barriers across a wide range of sectors.
Myanmar ‘needs’ money laundering reform Effective laws to crack down on money laundering will get Myanmar out of the bad books of the intergovernmental Financial Action Task Force (FATF) and encourage more international investment, experts quoted by The Myanmar Times said. A report issued last year by FATF, a global body set up to track down terrorist financing and money laundering, put Iran and North Korea at the top of a list of countries it labelled “high-risk” and “non-cooperative” and that also included Myanmar as it either had no applicable laws, or its laws did not comply with international standards.
otak Investment Advisors Ltd., which manages US$1 billion in real estate assets, plans to raise $200 million for a private equity fund that will invest in residential properties in India’s biggest cities. The company, owned by billionaire Uday Kotak (pictured), raised US$200 million from overseas investors last year for the fund and will complete raising a similar amount by May this year, said V. Hari Krishna, a director at Kotak Investment. The fund will invest in residential markets in cities including Mumbai, Delhi, Bangalore and Pune, he said. “There is some level of capital shortage in the residential space and we will look to provide funds with a
focus on top cities,” Hari Krishna said in an interview in Mumbai yesterday. The fund will target a 20 percent return by providing debt and structured financing to large developers, he said, declining to name the companies. Private equity property funds made 45 investments last year in India, of which 37 had an announced value
S. Korea launches economic reform plan
growth as external conditions improve, analysts are sceptical that exports can substantially lift the Korean economy as more manufacturers build production sites overseas. Analysts say that reforming the more than US$1 trillion economy long dominated by family-run business conglomerates, or chaebols, is only one of the many challenges confronting the government. South Korea is trying to cope with a rapidly ageing population by boosting productivity in the domestic sectors and increasing labour force participation. The structural reforms sought by the government are longstanding. The administration has already set hard targets it wants to meet in three years: lifting the potential growth rate to 4 percent from the current estimate in the high 3-percent area, the employment rate by more than 5 percentage points and per-capita income by some 60 percent.
he website of Tokyo-based bitcoin exchange MtGox went offline yesterday after the value of the virtual unit sank to about a quarter of that on other platforms and Japanese regulators said they were unable to step in. Visitors to the www.mtgox.com domain got a blank page when they tried to log on, more than two weeks after the firm suspended cash withdrawals as claims swirled of a bug in the software underpinning bitcoin. The website failure came after Japanese regulators said they were powerless to intervene in an episode that has cast doubt on the viability of the crypto-unit. “We are not in position to take action” over the problem, said a spokesman for the Financial Services Agency of Japan, which regulates financial institutions such as banks, insurers and brokerage houses. Consternation has grown since MtGox stopped processing external transactions on February 7, claiming there was a problem with the programme that powers the currency, and allows it to be transferred between users or swapped for goods and services. The value of the unit on the exchange has gone into freefall since then. Around midday on Tuesday, a bitcoin was worth US$135, compared with the US$522 quoted by the CoinDesk bitcoin price index, which tracks the price of the currency on major exchanges. In January a bitcoin was worth more than US$900 at MtGox, one of the world’s oldest exchanges for the unit. Wild volatility has long been a part of the experimental digital currency, which does not have backing of a central bank or government and falls outside of traditional financial regulatory frameworks. Units are generated by a complex computer algorithm designed by one or more anonymous people in 2009, with a global cap on the eventual number of bitcoins set at 21 million units.
S India, Canada sign film co-production deal India and Canada have signed an audio-visual co-production agreement reports the Times of India. It will enable film producers from both countries to collaborate in various facets of filmmaking. The agreement – signed by Ministry of Information and Broadcasting secretary Bimal Julka and Canadian high commissioner to India Stewart Beck – is expected to benefit producers from both countries. It will allow them to pool “their creative, artistic, technical, financial and marketing resources for co-production” reports the newspaper, quoting the ministry.
Pakistan Cbank to boost Islamic finance Pakistan’s central bank has published a detailed five-year plan to promote Islamic finance through an array of proposed legislative changes, product incentives and instructions to market participants. The plan aims to double the branch network of Islamic banks, which now have about 1,200 branches, and increase the industry’s market share to 15 percent of the banking system by 2018 from roughly 10 percent now. The document says it would create a level playing field for Islamic banks in the world’s second most populous Muslim nation; their financing-to-deposit ratio would reach a level that was at least on a par with their conventional peers.
Bitcoin exchange offline after price crash
Big on aspirations, short on specifics, say analysts, commentators outh Korea’s president unveiled yesterday a three-year blueprint to steer Asia’s fourth-largest economy towards the next phase of growth. But the lack of specifics left some critics questioning the credibility of the package. After more than five decades of exports-led ascendancy that rapidly moved South Korea into the ranks of a major economy, the government of President Park Geun-hye is attempting tough reforms to ensure the hard-won successes aren’t squandered through red tape and policy paralysis. In her 40-minute live address to mark her first anniversary in office, Park promised a broad set of reforms over the next three years, including reducing the country’s reliance on exports and increased employment among women to rebalance the economy towards long-term, sustainable growth. “Unless we reshape our economic fundamentals, fix our abnormal practices and end the persisting cycle of low growth, there is no future for us,” Park said during the speech. But the lack of specifics on how to achieve such fundamental shifts in South Korea’s economic structure left critics questioning the government’s ability to deliver meaningful changes during Park’s single term ending in early 2018. “It appears [Park] doesn’t have concepts or philosophies about where the country’s economy should go,” said Rhee Jong-hoon, a political commentator and head of iGM Consulting. South Korea’s average annual growth in the past six years has slowed to 2.9 percent, down sharply from the average of 5.2 percent seen between 2000 and 2007. While the Bank of Korea sees growth accelerating to 3.8 percent this year from an estimated 2.8 percent
of US$1.4 billion, according to data from Venture Intelligence, a research company that tracks private equity and mergers and acquisitions. That number of transactions was 8.2 percent lower than the 49 investments with 39 disclosed deals valued at US$1.2 billion in 2012, the data showed. Such funds made 24 exits in 2013 compared with 18 in 2012. All of the exits, barring one, were through buy-back of the stake by developers, the data showed. Home sales have slid by as much as 50 percent since 2010 in India’s largest cities, Hari said. In some areas, such as Gurgaon, the area neighbouring the national capital New Delhi, volumes have plunged as much as 80 percent, he said. The decline in sales has been the steepest in Delhi and Mumbai, India’s most expensive real estate market, he said.. “Affordability has been hit,” Hari Krishna said. “Developers raised prices by as much as 70 percent since 2010 and that has come at the cost of volumes.”
President Park Geun-hye
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Hollywood ‘exile’ for black U.K. actors British government frets about lack of top roles for country’s ethnic minority performers Beatrice Debut
lack British actors have been taking Hollywood by storm, with Chiwetel Ejiofor’s Oscar nomination for ‘12 Years a Slave’ just the latest example, but at home they still face a lack of roles that has driven some from the country. The British government is now making efforts to change a situation that has seen the loss of major talents such as David Harewood, famed for his role in the CIA drama ‘Homeland’, David Oyelowo, who starred in the film ‘The Butler’, and Idris Elba, who shot to fame in the police series ‘The Wire’. “The media are still interested in ghettoising the presentation of ethnic minority groups within the UK”, Femi Oguns, head of the London-based Identity Drama School & Agency Group, which promotes young black talent, told AFP. He said the civil rights movement in the United States had allowed Black Americans to “force change” but that in Britain “we have adopted a more passive approach”. Oguns added that in British acting school there were quotas but that they led to only around two ethnic minority actors in a group of 30. The artistic exile that many black British actors now find themselves forced into is a setback for the cause of equal rights, actors say. “It’s hilarious really: we still cannot get through glass ceilings to save our lives back at home. But here we are natural Oscar contenders,” said Kwame Kwei-Armah, a British actor and playwright who is based in the United States.
“Nearly everyone you can think of moved away. Of course the same thing happens with white artists but I would argue, not to the same extent”, he told Britain’s Observer newspaper in a recent interview. Harewood – who played the head of the CIA’s counterterrorism centre in ‘Homeland’ with as authentically an American accent as his white British co-star Damien Lewis – said the problem was a lack of parts. “Unfortunately, there really are not that many roles for authoritative, strong, black characters in this country” said Harewood, who was born in the central English city of Birmingham. Another argument put forward by the British comedian and writer Natalie Haynes is that the longformat US television series give more opportunities than the often historically based British dramas such as Downton Abbey. According to a study by the Creative Skillset organisation, which deals with the British media industry, nearly 2,000 people of black and Asian origin left the fields of cinema and television between 2009 and 2012, following a rise between 2004 and 2006.
Blind castings The situation worried British junior culture minister Ed Vaizey so much that he called a round-table on the subject with professionals at the end of January. “It seems we are quite behind the US on this and we need to
Oscar prospect – Chiwetel Ejiofor
ensure that...Britain is reflected as a country of different people,” he was quoted as saying in the Sunday Times newspaper. “Some of our actors, like Idris Elba and David Harewood had to go to the US to get better careers for themselves”. Publicly funded broadcaster the BBC, which took part in the round-table, agreed that steps had to be taken. “We know more needs to be done to ensure more people from ethnic
minorities are better represented both on and off screen throughout the broadcast industry [...]. This is an on-going process but we are making progress”, the BBC said in a statement to AFP. Vaizey meanwhile proposed “blind casting”, or castings in which the colour of the actor being sought is not set out. A recent example of this was the casting of the British actress Adelayo Adedayo in the BBC series ‘Some Girls’. AFP
Vatican’s new money man admits ‘enormous’ task Australian cardinal now one of Catholic Church’s most powerful prelates
ustralian Cardinal George Pell, appointed by Pope Francis to head a new Vatican finance ministry, admitted Tuesday it will be “an enormous task” to put the Holy See’s economic affairs in order. Pell’s appointment on Monday makes him one of the most important men in the Catholic Church, charged with helping overhaul its much-criticised central administration following a wave of scandals. The Vatican said in a statement that Pell “has been asked to start work as soon as possible” as head of the Secretariat for the Economy, a role aimed at helping the poor and increasing transparency. The Catholic Church in Australia said he would begin his new job in March. The ministry will prepare an annual budget as well as impose international financial standards, in line with a series
Cardinal George Pell with Pope Francis
of recommendations made by a group of cardinals advising the pope, including for a “more formal commitment” to enforcing transparency. Pell said it was a significant move in the right direction, following a series of leaks to the media in 2012 about “numerous situations of corruption and misconduct”. “The review has highlighted
that much can be achieved through improved financial planning and reporting as well as enhancements in governance, internal controls and various administrative support functions,” said Pell, who will be based in Rome. “I am looking forward to implementing these recommendations as requested by the Holy Father.
“I have always recognised the need for the Church to be guided by experts in this area and will be pleased to be working with the members of the new Council for the Economy as we approach these tasks,” he added. “We need to be open to expert advice and aware of any opportunity to improve the way we conduct our financial administration.” “It is an enormous task and it is important we embrace and implement the recommended changes as soon as practicable.” The new ministry will be run by a 15-member council of eight clergymen from different parts of the world and seven lay financial experts. Francis has said he wants a style of government for the Church that is more “collegial” and less “Vatican-centric” and the process of consultation he used to reach his decision on the new ministry is seen as an example of this.
He reached outside the Church for advice, with the Vatican hiring international consultancy firms such as Ernst&Young, KPMG, Promontory and PricewaterhouseCoopers. AFP
I am looking forward to implementing these recommendations as requested by the Holy Father Australian Cardinal George Pell
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Leading reports from Asia’s best business newspapers Mario Livio
GLOBAL TIMES Import liberalisation seems the only logical way for China to meet its growing food needs, but it’s causing anxiety at home and abroad after years of near domestic self-sufficiency. This is particularly true with grain, the US Department of Agriculture reporting a near doubling of Chinese imports in 2013 to 22.8 million tons. A familiar name, Lester Brown, president of the Earth Policy Institute, has weighed into the debate, claiming growing Chinese demand will “place new strains on world food supply already stretched to the limit.”
MYANMAR TIMES Poor investment prospects and production could lead to a US$100 million shortfall in estimated fisheries exports this year, industry experts said. Fishery exports during the 2012-13 fiscal year totalled about US$650 million worth of produce being sold to China, Thailand and as far as the Middle East and US, according to government data. This year however, experts believe that figure will fall 15 percent to about US$550 million, well short of the industry’s revenue target of US$700 million. “Not only is income down, but so is export tonnage,” said the Myanmar Fisheries Processors and Exporters Association.
BUSINESS INQUIRER Ayala Land Inc. has struck a deal to buy out the 40 percent stake held by Mitsubishi Corp. in Philippine Integrated Energy Solutions, Inc. “This acquisition will effectively make PhilEnergy our wholly owned subsidiary,” ALI said in a press statement. PhilEnergy was formed as a 60-40 percent venture between ALI and Mitsubishi. Its first major move was a 1-billion pesos project to make energy and water consumption more efficient in Ayala Center (Makati) and Alabang Town Center. ALI invested in PhilEnergy in a bid to “further enhance the competitiveness of its properties,” it said.
TIMES OF INDIA Daimler executive Wolfgang Bernhard said he was cautiously optimistic about the outlook for the trucks business in 2014 thanks to new sales growth coming from emerging markets such as India. “We will use India as an export base for other markets in Africa and Southeast Asia,” Bernhard told a press conference in Stuttgart, Germany. In the second quarter of 2013, Daimler’s plant in Chennai began manufacturing FUSO brand vehicles for sale in selected export markets in Southeast Asia and Africa.
Astrophysicist, Space Telescope Science Institute, Baltimore
homas Edison is reputed to have said, “I have not failed. I’ve just found 10,000 ways that won’t work.” This statement sums up a fundamental – but often misunderstood – truth about scientific inquiry. Progress in science – as in any creative discipline – is not a direct march to the answer, but a complex, zigzag path, involving many false starts and blind alleys. Blunders are not only inevitable; they are essential to innovative thinking, because they point the way for other explorers. One may wonder whether today’s highly competitive, funding-starved scientific atmosphere, in which publications and citations have become a primary criterion for success, can accommodate such mistakes. The simple answer is yes. Indeed, they are as important as ever – and not only in academia. In fact, the entire scientific method is based on the notion that discovering what does not work is vital to learning what does. Any scientific theory must be falsifiable – that is, based on existing observations or experimental results. For a theory to be considered scientific, it must yield specific predictions of future observations or experimental results. If those observations or results contradict the predictions, the theory is discarded, or at least must be modified. The mistakes that are integral to scientific progress are not those that result from haste, sloppiness, or inexperience. Rather, they are the mistakes that arise from thoughtful, meticulous experimentation based on bold ideas – the kind of ideas that can lead to major breakthroughs.
Hoyle’s law Fred Hoyle, one of the twentieth century’s greatest astrophysicists, provided a perfect example of such a “brilliant blunder.” Hoyle and two of his colleagues proposed what became known as the Steady State model of the universe, according to which the universe did not evolve following the so-called “big bang” (a term that Hoyle coined); instead, it was constant, remaining the same throughout eternity. The idea was brilliantly elegant: just as our universe is homogeneous (the same at every point in space) and isotropic (looking the same in all directions), it remains the same at every point in time. While the Steady State theory was eventually falsified – our universe is expanding, and it most likely started from a big bang – it energised the entire field of cosmology, because
it brought into sharp focus the questions that had to be addressed. In fact, currently fashionable models of the multiverse – the concept that our universe is but one of a huge ensemble of universes – are consistent with the idea that they are collectively in a kind of steady state. The nineteenth-century physicist William Thomson, later known as Lord Kelvin, made his own brilliant blunder when he calculated that the Earth was less than 100 million years old – about fifty times younger than the age deduced from modern radiometric measurements. Though Kelvin’s estimate was seriously flawed, the effort remains central to the history of knowledge, because it applied real science – the laws of physics – to what had long been a subject of vague speculation.
Start up companies exemplify the potential benefits of risktaking. While only about 49 percent of manufacturing start-ups and 37 percent of information start-ups survive for four or more years, those that do have managed to produce breakthrough innovations.
Blunders are not only inevitable; they are essential to innovative thinking
Kelvin’s scaling Kelvin’s insights helped to launch a fruitful dialogue between geologists and physicists – a dialogue that eventually resolved even problems related to the length of time needed for Darwin’s theory of evolution to operate. And the oversight that warped Kelvin’s estimate – the possibility that fluid motion could efficiently transport heat within the Earth’s interior – turned out to be critical to understanding plate tectonics and continental drift.
Tom Watson, Jr., who led IBM through decades of strong growth, is known for having supported brilliant blunders. As he put it, “We should have the courage to take risks when they are thoughtful risks….We must forgive mistakes which have been made because someone was trying to act aggressively in the company’s interest.” Funding agencies for academic research should adopt a similar philosophy, awarding a certain share of financing to thoughtful, unconventional
proposals – those deemed risky, owing to a relatively low probability of success, but that could lead to important discoveries. Such a scheme would create opportunities to take advantage of serendipity – a major component of scientific discovery. Until about a decade ago, the Space Telescope Science Institute adopted a similar policy for allocating observation time for the Hubble Space Telescope. In addition, each year, the institute’s director was allotted a certain amount of discretionary time to grant to special projects that he or she deemed worthwhile. In 1995, Robert Williams used that time to take a major risk: he aimed the telescope at a seemingly uninteresting area for nearly ten days. The result was an image of more than 3,000 galaxies some 12 billion light-years away – the so-called Hubble Deep Field. Likewise, closer to home, as many as half of our discoveries of new medicines have originated from accidents. For example, isoniazid was initially tested as a tuberculosis drug; iproniazid, one of its derivatives, later proved to be effective in the treatment of depression. Space for brilliant blunders is vital to achieving the kind of creative breakthroughs that drive scientific progress. It is time for funding institutions to recognise that. © Project Syndicate
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Closing Klitschko wants to be Ukraine’s president
Cruise captain returning to disaster site
Vitali Klitschko, a former professional boxer turned Ukrainian opposition politician, says he is willing to run for the country’s presidency. It follows a dramatic and bloody week in Ukraine that has seen parliament oust Kremlinallied president Viktor Yanukovych. Scores of people were killed when protests turned violent in Kiev. The European Union’s foreign policy chief called yesterday for Russia to assist Ukraine as the ex-Soviet state faces its worst crisis since independence. “It is very important that Russia…lends its support to ensure the country can move forward,” Catherine Ashton told journalists during a two-day visit to Kiev.
Francesco Schettino, captain of the wrecked Italian cruise ship Costa Concordia, will return to the site of the disaster for the first time tomorrow as part of the court case against him. Yesterday a judge accepted a request from Schettino’s defence lawyers that he be allowed to take part in a visit to Giglio Island along with a group of experts, Italian media reported. Schettino and the experts will board the giant luxury liner. It foundered off Tuscany in January 2012 with 4,229 people from 70 countries on board in a tragedy that claimed 32 lives.
Xi chats with locals in Beijing walkabout Shows common touch on eve of national legislature meeting
hinese President Xi Jinping held another walkabout in public yesterday – a break with the traditional remoteness of the country’s leaders throughout the centuries. Mr Xi has done it at least once before, in December, less than a year after his installation as president, when he was snapped lining up with other restaurant customers to buy a pork bun in western Beijing. This time he visited a busy shopping street in downtown Beijing a week before the capital hosts the annual meeting of the national legislature, the Beijing News reported. Flanked by Beijing Communist Party Secretary Guo Jinlong, Xi arrived at the Nanluoguxiang shopping street at 11.15am and visited two traditional courtyard houses to ask people there about living conditions, the paper said. State media have highlighted Xi’s man-ofthe-people approach since he became party secretary in November 2012 and quickly asserted his authority. Xi pledged to tackle corruption,
inequality and environmental damage that has stirred public anger. Xi will mark his first year as president next month when the National People’s Congress holds its annual two-week meeting that runs from March 5. After he became party secretary, the official Xinhua News Agency published a profile of him under the headline “Xi Jinping: Man of the People, Statesman of Vision.” In December, the staterun People’s Daily posted photographs on its website of Xi visiting a steamed dumpling restaurant in western Beijing and chatting to customers. In April, a report about Xi taking a Beijing taxi ride became one of the most popular topics on the Internet in China. Hong Kong’s Ta Kung Pao newspaper later apologised for publishing what it called a fake account. Xi’s street walk yesterday took place on a day when the city’s pollution was at “hazardous” levels, according to a monitoring station on the U.S. embassy. The concentration of PM2.5, fine particulates that pose the
Italy’s retail sales suffer worst ever fall in value
etail sales in Italy fell by a record 2.1 percent in 2013 as the country struggled to pull out of a deep recession and consumers cut spending, official figures showed on Tuesday. The fall in the retail index in the eurozone’s third-biggest economy was the worst since 1990, when the National Institute of Statistics began collecting data. Christmas shopping failed to galvanise consumers, with non-food sales dropping in December by 0.3 percent from a month earlier and food sales down 0.5 percent according to the seasonally-adjusted data. Consumers are suffering from increased taxes and unemployment. Italy began shaking off its longest recession since World War II in the fourth quarter with a preliminary estimate showing growth of 0.1 percent, but the turnaround has done little to boost consumer spirits. The government has said it is hoping for growth of around 1.0 percent this year and the Bank of Italy is predicting a 0.7-percent result.
Screen capture of Xi Jinping from Sina Weibo
greatest risk to human health, near Tiananmen Square was 360 micrograms per cubic metre at 1pm local time, a reading described as “severely polluted.” The World Health Organization recommends PM2.5 exposure of no more than 25 over a 24-hour period. During today’s visit, Xi went to the home of a 69-yearold man surnamed Guan,
Beijing News said. Guan told the paper that Xi arrived at his home at 11.20 and talked with his wife while sitting on the sofa for around 15 minutes. Guan found Xi very amiable, the paper said. “He asked for news about myself and my family, and asked how my home was,” Guan said, according to the paper. “When he left he also
wished everyone well.” Photographs on the paper’s website show Xi waving to onlookers and surrounded by a small crowd of people taking photos. Nanluoguxiang has transformed in recent years from a quiet lane of courtyard houses into a busy pedestrian street packed with shops and food stalls.
Bank card fraud rose in Europe in 2012: ECB
Russia detains more than 400 protesters
ank card fraud rose for first time in four years in 2012, largely due to Internet fraud, data compiled by the European Central Bank showed yesterday. “Card fraud within the Single Euro Payments Area (SEPA) increased in 2012 for the first time since 2008, driven mainly by higher Internet fraud,” the ECB wrote in a new report. “More efforts will be required to ensure the security of online card payments as Internet purchases continue to grow,” it said. According to the ECB data, 1.0 euro in every 2,635 euros (US$3,620) spent on credit and debit cards issued within SEPA – the European Union, Iceland, Liechtenstein, Monaco, Norway and Switzerland – was lost to fraud. That represents 0.038 percent of a total of 3.5 trillion euros in transactions, up from 0.036 percent in 2011, the ECB said. The total value of fraud increased by 14.8 percent to 1.33 billion euros in 2012.
M.G. with Bloomberg News
pward of 400 Russian protesters faced court hearings yesterday a day after police detained them at a central Moscow rally, the largest such wave of arrests in nearly two years. The timing of the detentions has been seen in some quarters as linked to Ukraine’s political upheaval on Russia’s western border. The Russian demonstrators had gathered near Red Square late on Monday in support of activists jailed earlier in the day for staging “mass riots” in May 2012, a key case seen as a symbol of the harsh crackdown on dissent under President Vladimir Putin’s latest term. Police arrested some 420 demonstrators around the Manezhnaya Square and surrounding streets on various charges, including taking part in an unsanctioned rally and resisting police. Amnesty International condemned the detentions, saying: “the Russian authorities’ rampant violation of freedom of expression and assembly shows no sign of letting up.”