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he government will update the Legislative Assembly on construction of the city’s light rapid transit system on Taipa, and announce the new route across the Macau peninsula by the middle of next month. “It’s the government that requested to explain to us the progress of the LRT construction in Taipa, as well as what they are planning to do with the transit route on the southern section

of Macau peninsula,” said Ho business daily 1 Ion Sang, the president of the special committee on land and public concession affairs. Transportation Infrastructure Office director Lei Chan Tong said last month the government had hoped to wrap up the Taipa section of the city’s light rail network between the end of next year and 2016. More on page

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Year II

Number 485 Thursday February 27, 2014

Publisher: Paulo A. Azevedo

Closing Editor: Michael Grimes

Downtown LRT route announced by mid-March

Friday April 19, 2013

Brought to you by

www.macaubusinessdaily.com

End election vote-buying says prosecutor

Hang Seng Index 22487

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he electoral law should be changed to prevent local associations offering free meals and trips that could sway voters during the Legislative Assembly elections, assistant public prosecutor-general Vong Vai Va told the media yesterday. The Public Prosecutions Office proposes a maximum three-year prison sentence for anyone found guilty of making any offers to voters of “positions at public or private entities,” or offering “things or interests” to them. The law would come into effect starting from the day any legislative election date is announced. Page

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Visitor satisfaction improves

Bank card security toughened

Visitors to the territory showed on average an improvement in their level of satisfaction during the fourth quarter of last year. The latest figures released by the Institute for Tourism Studies (IFT) indicate that the tourist satisfaction index was 70.4 on a scale of one to 100. This is a slight increase of one index point over that of the previous quarter.

From July the territory’s banks will introduce new security measures for the bank cards they issue to customers. The Monetary Authority of Macao confirmed the fact in a written reply to a legislator. The authority told legislator Kwan Tsui Hang that all debit cards issued by the city’s banks must be replaced by chip-based cards “on or before June 30, 2014”.

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SJM profit beats estimates

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MGTO backs 2-centre tours Page

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22373

22335

22297

February 26

HSI - Movers Name

%Day

CHINA PETROLEU-H

4.08

CHINA OVERSEAS

3.47

POWER ASSETS HOL

2.78

SANDS CHINA LTD

2.74

TINGYI HLDG CO

2.68

CHINA RES ENTERP

-0.93

HANG SENG BK

-0.95

BOC HONG KONG HO

-1.05

HENDERSON LAND D

-1.27

WHARF HLDG

-1.31

Source: Bloomberg

I SSN 2226-8294

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HK editor hacked with cleaver Page

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2014-2-27

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February 27, 2014 Friday April 19, 2013

Macau opinion

Wage blues

José I. Duarte Economist

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t appears we have finally reached a decision on the minimum wage. The media announced a consensus has been reached and the government will shortly start the corresponding legislative procedures. Even by local standards on matters relating to labour market conditions, this signals (almost) the end of a protracted and painful delivery. Cleaning and security workers will have a minimum wage set at 28 patacas per hour. We are told this is the equivalent to monthly salary of 5,800 patacas. That’s roughly the figure you get if you assume a 45-hour working week. By the way, as an aside: why a minimum wage set only for cleaners and security workers? Other categories of workers would not deserve the same kind of guarantees? It is curious that the issue never seems to pop up. We have been reminded that most of the people consulted, an amazing 99 percent of them, thought the figure should be set at 30 patacas per hour. How this survey was carried is an issue we leave aside here. Presumably someone checked the validity of the methodology and the representativeness of the sample. In that case, given such a broad social consensus, a detailed explanation on why that figure was not retained would be forthcoming. In the end, when social harmony and the people’s opinions are permanently trumpeted as overriding principles guiding the setting of policies, such a blatant disregard of public opinion would seem worth a clarification. Anyway, we are reassured that is the adequate amount, based on “opinions collected, bearing in mind the Macau conditions, the wages of the employed and the capacity of the companies”. This seems a weighty set of supporting arguments. It is not easy, however, to determine exactly what they mean and how they could justify that figure – or any other that could have come out - without further elaboration. A lengthy set of presumed arguments is not the equivalent of a proper justification. The “Macau conditions’ are invoked, but what is precisely meant by that is not elaborated. The good thing about it is; this is a kind of “one-size-fits-all’ argument. The Macau conditions, in abstract, can be invoked to justify 28 patacas, or 25 patacas, or 35 patacas, or no patacas at all. The statement “the Macau conditions indicate that no minimum should be set” has the same logical value and the same explanatory power as the statement “the Macau conditions indicate that the minimum wage should be set at – you choose your favourite amount – patacas”. Exactly the same can be said of the reference to the capacity of companies. And one could even extend the list of justifications to include the Macau traditions, the feelings of the people, the habits of the residents, the regional cultural values, and so on. You see the point, almost anything that could cross our mind. Their explanatory value would still be same and undistinguishable from none. A mysterious explanation is the reference to the wage of the employed. What does that mean? That the minimum wage is calculated as a percentage of some reference wage? That cannot exceed a certain amount? It is not clear... But where the line of reasoning completely loses its bearings is when it is claimed that set value will raise the wages of the target workers by 80 to 90 percent. The implausibility of the statement and the fact that, if we are to believe in the media reports, it was actually uttered, is stunning, to say the least. If that were remotely the case, we would have to conclude that the actual wage for those categories of workers stands currently at around 3,000 patacas. Presumably, the vast majority of cleaners and security staff in town are receiving income support from the government and one of the non-stated aims of the policy is to reduce social policy disbursements. Obviously, to accept that such a rise would be even remotely feasible or enforceable begs a suspension of disbelief – in particular in the known “Macau conditions”. How someone felt appropriate and plausible to declare it, is not reassuring regarding the depth of thought given to these matters. Contrast that with what the representative of the companies declared: “we have no opinion about the amount set by the government”. They are mainly concerned about the principle. For someone representing companies facing a mandatory figure that presumably will almost double their labour costs in those categories of workers, it seems a very casual reaction. But, in the end, that reaction sums up appropriately what this all is about: too much ado about almost nothing. It is doubtful the decision will have much of a practical impact. Assuming it is actually enforced, fairly or at all, if it should produce some effects they would possibly be, in many cases, detrimental for the very workers it purports to protect. Something was changed, so as to ensure that everything keeps being, essentially, the same. The critical labour market issues will keep going unaddressed.

Young Macau travellers in PATA survey PATA – the Pacific Asia Travel Association – is to launch a survey of young travellers across the region. The survey is open to travellers between 16 and 35 years of age from Brunei, Cambodia, China, Hong Kong, Indonesia, Japan, South Korea, Laos, Macau, Malaysia, Myanmar, the Philippines, Singapore, Taipei, Thailand and Vietnam. Answers will be used in a new report called The Rise of the Young Asian Traveller, due to be launched in April. All participants will be entered into a prize draw for a two-night hotel stay in the region.

SJM profit beats estimates Net income rose 14 percent to HK$7.7bln in 2013

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acau casino operator SJM Holdings Ltd reported fullyear profit that beat analyst estimates as mainland Chinese gamblers bet more in Macau. Net income rose 14 percent to HK$7.7 billion (US$993 million) in 2013 from HK$6.75 billion a year earlier, according to a statement to Hong Kong’s stock exchange yesterday. That surpassed the HK$7.58 billion average of 15 analysts’ estimates compiled by Bloomberg. Gaming revenue climbed 10 percent to HK$86.96 billion. SJM joins Sands China Ltd and Melco Crown Entertainment Ltd in reporting improved results in Macau. The home grown company, which controls 20 of the 35 casinos in Macau, had a market share of 24.8 percent in 2013, compared with 26.7 percent a year ago. The company’s mass-market table gaming revenue increased by 13 percent while gambling revenue from VIPs, or highstake bettors, rose 9.4 percent last year, it said. SJM, founded by Stanley Ho Hung Sun, faces intensifying competition as rivals, including Sands China, Wynn Macau Ltd and MGM China Holdings Ltd, draw gamblers to their resorts with new shopping malls, restaurants and theatres. They are also expanding in Macau’s Cotai district, dubbed by Sands’ chairman Sheldon Adelson as Asia’s version of the Las Vegas Strip. SJM currently doesn’t have a presence there, but has just announced a

HK$30 billion plan for a Cotai project called Lisboa Palace.

Fresh chapter The former casino monopoly broke ground on the scheme on February 13. It is scheduled to open in 2017, two years later than projects developed by its peers, including Melco Crown’s Studio City. SJM’s fourth-quarter adjusted earnings before interest, taxes, depreciation and amortisation, or EBITDA, rose 24.5 percent to HK$2.37 billion in the three months to December, based on Bloomberg’s calculations from adjusted EBITDA of HK$6.31 billion for the first nine months. That beat the HK$2.34 billion average of nine analysts’ estimates compiled by Bloomberg. SJM has stepped up its efforts in wooing the premium mass and mass-market gamblers who bet in

24.8%

SJM market share in 2013

New chapter – SJM’s Cotai project (Photo: Manuel Cardoso)

cash and provide fatter margins than high rollers, or VIPs. The company gained mass-market share in the fourth quarter as Grand Lisboa, its biggest casino, opened a premium mass lounge in October, according to Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG.

Premium mass The so-called premium mass gamblers make bigger bets in cash than the mass-market bettors and incur lower costs than VIPs brought in by middlemen earning commissions. SJM proposed a special dividend of 3 HK cents per share and a final dividend of 5 HK cents per share, according to the statement. The shares rose 0.4 percent to HK$24.40 before the earnings announcement. The stock has dropped 6.2 percent this year, compared with the benchmark Hang Seng Index’s 3.7 percent decline. The Macau government in 2002 ended Stanley Ho’s four-decade casino monopoly and allowed five other companies including Galaxy Entertainment Group Ltd, Melco Crown and Sands China to build casino resorts that feature shopping malls, convention centres and theatres, diversifying Macau into a tourism destination. Gambling revenue in Macau jumped 19 percent last year to US$45.2 billion; about seven times that of the Las Vegas Strip. Bloomberg News


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Macau

Govt to explain LTR delays Officials will update Legislative Assembly on construction of Taipa section and reveal city route Stephanie Lai sw.lai@macaubusinessdaily.com

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he government will update the Legislative Assembly on construction of the city’s light rapid transit system on Taipa, and announce the new route across the Macau peninsula by the middle of next month. “It’s the government that requested to explain to us the progress of the LRT construction in Taipa, as well as what they are planning to do with the transit route on the southern section of Macau peninsula,” said Ho Ion Sang, the president of the special committee on land and public concession affairs. The special committee is responsible for following up on major issues related to public concessions and infrastructure. It can be invoked by either legislative assembly members or the government. Transportation Infrastructure Office director Lei Chan Tong said last month the government had hoped

to wrap up the Taipa section of the city’s light rail network between the end of next year and 2016. If it is complete in 2016, the railway would be “six-to-eight months” behind the government’s initial schedule, he said. Mr Lei has not revealed the size of the budget overruns. The government is also yet to announce the network’s route through the southern part of the Macau peninsula. After opposition from residents, the route was shifted from the heart of the area and instead will run along the waterfront. Meanwhile, at a separate committee meeting yesterday, the government and assembly members agreed to raise the limit on the SME Credit Guarantee Scheme from 500 million patacas (US$62.6 million) to 900 million patacas. This change in the guarantee limit

Reolian’s future, cable broadcasts up for discussion Members of the Legislative Assembly have asked the government to clarify if it has sought a replacement bus company to continue the services operated by bankrupted Reolian Public

Transport Co Ltd. The chairman of the special committee on public concessions, Ho Ion Sang, said yesterday clarification had been sought. It is unclear if another bus company or investor had been sounded out, or if a tender process had commenced. The committee will also seek the government’s strategy on sustaining the city’s sole cable television service after the licence held by Macau Cable TV Co Ltd expires on April 21.

will be gazetted by April at the latest and should cover all loans made under the scheme for 2½ years, secretary for the second permanent committee Dominic Sio Chi Wai said.

The SME Credit Guarantee Scheme offers up to 70 percent of a low-interest loan, capped at 3.5 million patacas and with a fiveyear term.

End vote buying, extend campaign period: prosecutor T he electoral law should be changed to prevent local associations offering free meals and trips that could sway voters during the Legislative Assembly elections, assistant public prosecutor-general Vong Vai Va told the media yesterday. The Public Prosecutions Office proposes a maximum three-year prison sentence for anyone found guilty of making any offers to voters of “positions at public or private entities,” or offering “things or interests” to

them. The law would come into effect starting from the day any legislative election date is announced. “In the previous legislative elections, we observed that there were associations offering free meals, trips or entertainment to their members that carried the purpose of luring voters,” Mr Vong explained. He added: “It did seriously hamper the fairness of the election and imposed a negative influence on [the] MSAR’s image and reputation”. Vasco Fong Man Chong, the head

of the city’s graft watchdog, the Commission Against Corruption, also made a similar call after the legislative election in September last year, saying at the time that all electoral tickets should declare which associations were supporters of that ticket. Mr Fong was however criticised last year for allegedly failing to act even in the face of televised evidence at the September polls. Voters were recorded saying they had been promised meals by electoral tickets on the actual day

of last year’s vote. Speaking to media yesterday, Vong Vai Va also suggested that the campaign period for legislative elections should be extended to four weeks instead of two weeks as practised under current rules. “Having too short a campaign period will just make the electoral tickets attempt ways to campaign in advance illegally,” said Mr Vong, “This really harms the fairness of the legislative election.” S.L.


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Macau Tourist office appoints new deputy chief
 Cheng Wai Tong has been appointed deputy director of the Macau Government Tourist Office. The announcement was published in yesterday’s Official Gazette. According to the dispatch, Mr Cheng begins his new job on Monday. Mr Cheng has worked for the tourist office since 2000 and has been its head of planning and development since 2011. He replaces Manuel Gonçalves Pires, who moves to become the chief executive of public broadcaster TDM. Mr Pires will replace Leong Kam Chun on March 1. Mr Leong submitted his resignation on February 5.

MGTO promotes two-centre tours Delegation visited Taiwan to market Macau-Hengqin trips Sara Farr

sarafarr@macaubusinessdaily.com

Macau delegation at marketing event in Taiwan

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acau Government Tourist Office has been promoting two-centre tours to Taiwan

tourists. A delegation recently made a cross-strait visit to market trips that include Macau and the recently opened Chimelong theme park on Hengqin Island. “Macau has gradually become a leisure tourism destination worthy of a longer trip, from Taiwanese visitors’ perspective,” said MGTO director Maria Helena de Senna Fernandes. That was a reference to the fact about half of Macau’s total 29.3 million visitors in 2013 were day-trippers rather than overnight sleepers. They help to keep the average length of visitor stay down to 1.1 nights.

The number of people from Taiwan visiting Macau has fallen for the past two years, official data show. Last year the number was just over 1 million, 6.7 percent fewer than in 2012. In 2011 the number was over 1.2 million. Earlier this month Macau concluded an open skies agreement with Taiwan to help boost air links between the two jurisdictions. But an airline industry executive told Business Daily on the sidelines of the signing ceremony that Macau’s pricing was putting off some Taiwanese tourists. “The drop in visitors from Taiwan is mainly because hotel room rates here are too high, and the tourism industry has to come up with

attractive packages,” said the person. But Ms Senna Fernandes said her department was working to boost

Macau has gradually become a leisure tourism destination worthy of a longer trip Maria Helena de Senna Fernandes, MGTO director

the appeal of Macau. “The [MGTO] office will also enhance its cooperation with airlines and travel agencies in the Taiwan market, suggesting fun ideas of exploration in Macau and various itineraries ranging from cultural, festive to shopping tour packages,” she stated. Some tours could be tailored to suit individual groups, she suggested. In addition, Macau will continue to promote multi-destination tour products and in particular, launch a new Macau-Hengqin tour route, including hotel stays at the Chimelong’s theme park on Hengqin Island, said MGTO. A 20-strong Macau delegation held meetings in Taipei and Kaohsiung to promote tourism to Macau.

Visitor satisfaction improves An Institute for Tourism Studies index headed north in the fourth quarter

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isitors to the territory showed on average an improvement in their level of satisfaction during the fourth quarter of last year. The latest figures released by the Institute for Tourism Studies (IFT) indicate that the tourist satisfaction index was 70.4 on a scale of one to 100. This is a slight increase of one index point over that of the previous quarter. It is also a 0.2 points increase

year-on-year. The results were obtained after a survey of 1,213 randomly selected visitors was carried out between October and December, 2013. The IFT Tourism Research Centre has been tracking quarterly data on visitor satisfaction in Macau since 2009. According to the survey, visitors’ satisfaction with the “events sector” increased

by 5 percent (rather than percentage points) to 77.9 points, an all-time high. This sector also ranks highest compared to others, and has done so for the past seven quarters. Visitors’ satisfaction with tour guides and tour operations also increased considerably by 6.2 percent to 65.7 quarter-on-quarter. This increase in satisfaction coincided with the mainland

government’s ban – from October – on zero-cost tours from China. Other sectors whose rankings improved were restaurants with 69.3 points up from 66.7, casinos with 72.5 up from 70, retail shops with 69.9 points up from 67.8, hotels at 70.2 up from 68.5 and transportation with 75 points, up from 73.3. However, visitors’ satisfaction with immigration services

dropped by 7.4 percent to 67.3 quarter-on-quarter. Overall satisfaction levels increased throughout most of sectors in 2013 over that of the previous two years to an average of 70.3 points from 69.8 in 2012. According to the report, the tourist satisfaction index for the whole of 2013 is expected to remain stable, once the final numbers are analysed. S.F.


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Macau

Bank card security to be tightened From July, all debit cards issued by the city’s banks must be replaced by chip-based ones Tony Lai

tony.lai@macaubusinessdaily.com

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rom July the territory’s banks will introduce new security measures for the bank cards they issue to customers. The Monetary Authority of Macao confirmed the fact in a written reply to a legislator. The authority told legislator Kwan Tsui Hang that all debit cards issued by the city’s banks must be replaced by chip-based cards “on or before June 30, 2014”. “All ATMs [automated teller machines] in Macau should support both local and overseas chip-based cards and adopt related technology for transaction authentication” starting from July 1, the reply said. The authority added it had issued in November notice of the change and passed the information to the territory’s 29 licensed banking companies. For credit cards, the

to better protect the interests of banks and cardholders Monetary Authority of Macao

deadline for replacing all magnetic stripe cards with so-called smart chip cards was scheduled for December 2015, the regulator added. This move is to “strengthen the security of ATMs and bank cards… to better protect the interests of banks and cardholders,” amid the recent increase in credit card and debit card use, said the territory’s de facto central bank.

Plastic’s appeal Legislator Ms Kwan asked in her inquiry – submitted December – whether more security measures are needed for bank cards as more transactions are now done via that method. Chip-based cards are considered as more secure options than magnetic stripe cards as it is more difficult for fraudsters to clone information from the chips.

Figures provided by the monetary authority show more than 754,400 credit cards were issued by banks by the end of last year, up by more than 76 percent from the 427,000 in circulation at the end of 2010. Spending via credit card rose in the territory by more than 70 percent from 8.1 billion patacas (US$1 billion) in 2010 to 13.87 billion patacas last year. There are no figures available for spending via debit card. The authority said in its written reply reply to Ms Kwan that all banks should have at least one security enhanced arrangement for debit cards starting from July, including setting up purchase limits for the cards based on the needs of cardholders. The cross-border cash withdrawal functions

of the cards should be deactivated by default, and customers required to ‘opt in’ if they wish to use such a service, said the authority. Previously, they had been activated by default for cross border cash withdrawals. The authority – Macau’s de facto central bank – also said five banks here, following the example of some banks in Hong Kong, have abolished charges for dormant accounts; starting this year. Business Daily reported last month that Bank of China Macau branch, Industrial and Commercial Bank of China (Macau) Ltd and Tai Fung Bank Ltd had stopped charging fees on bank accounts that have no activity reported for at least a year. The fees had varied from 50 patacas to 200 patacas every half a year in the past.

754,400

Number of credit cards in circulation by end-2013

Local manufacturer’s loss widens

Forward step for Belle

A Macau-based manufacturer reported a net loss of US$1.4 million (11.2 million patacas) in the third quarter of 2013 ended December 31, compared to a net loss of US$200,000 a year before. Deswell Industries Inc. produces a wide variety of plastic parts and components used in industrial products as well as printed circuit board assemblies. Its corporate office is in Macau, and the company has two local subsidiaries – Jetcrown Industrial and Kwanasia Electronics. Net sales decreased by 18.5 percent to US$5.2 million in the company’s plastic segment and decreased by 25.2 percent to US$5.5 million in the electronic and metallic segment.

Footwear retailer Belle International Holdings Ltd – which has three outlets in Macau – recorded group revenues of 36.3 billion yuan (47.37 billion patacas, or US$5.9 billion) in the 12 months to December 31. It was a 10.3 percent improvement on the previous year, the firm told the Hong Kong Stock Exchange. From now on its financial year-end will be February 28 “to coincide with the natural retail cycle in the footwear and sportswear retail businesses.” Belle has one shop at The Venetian Macao, one in Horta e Costa, and a third at Rua de São Domingos near Senado Square.


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Macau Esprit swings to first half profit Clothing retailer Esprit Holdings Ltd recorded a first half net profit of HK$95 million (US$12.2 million) – its first profit in a year – thanks to a turnaround plan that its chief executive said would also seek to stem losses in China. The clothing retailer has struggled in the world’s second-largest economy, where it shut 38 directly managed stores last year as it grappled with high rents, stalling sales and wholesalers with too much inventory. Esprit reported a loss of HK$4.39 billion (US$566 million) in the year ended June 2013. Macau was one of the few growing segments in the last full fiscal year.

Portline orders 6 vessels from China Portuguese shipping company chaired by Macau casino exec Ambrose So Alex Lee

alexlee@businessdaily.com

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ortline – the biggest shipping company in Portugal – has ordered six new ships from Asian shipyards. The new vessels will serve its domestic and international routes. The ships “are scheduled for delivery within two to three years”; a source in Portugal told Business Daily.

Separately, Ambrose So Shu Fai, chief executive of Macau casino developer SJM Holdings Ltd – who is also Portline’s chairman – confirmed to this newspaper that the first of the six – a bulk carrier – is being built near Shanghai and will be delivered in 2016. Portline Transportes

Marítimos Internacionais, SA, often referred to simply as Portline, was founded in October 1984 by the Portuguese government and privatised in 1991. Currently it is a limited liability company by shares. The existing fleet of 16 ships has – according to the company’s website – close

to one million metric tonnes deadweight, consisting of 14 bulk carriers and two container ships. One of the bulk carriers is named M/V Port Macau and was built in 2008 by Tsuneishi Heavy Industries at Zhoushan in Zhejiang province, eastern China. Portline’s general cargo

services operate primarily in Europe, linking to Cape Verde, The Canary Islands, West Africa, and Brazil. Coal, fertiliser, ore and grain are some of the main products transported by Portline bulk cargo service, serving markets in the Atlantic, Pacific and Indian Oceans.

Portline’s M/V Sabrina I

Corporate

Macao Water marks 80th year

Galaxy hosts staff soccer cup

A group of 35 students from Kwong Tai Middle School Macau visited Macao Water recently. Students saw the water treatment plant and central control room, where they were given a tour to learn more about saving water. This year Macao Water celebrates its 80th year supplying the commodity under a government concession contract. To mark the anniversary, the company is holding a number of events. They include the collection and display of historic photographs, and a competition for original photography titled ‘Olden Days, Today – Water and Life’. It will trace the history of water supply development in the territory. In 2015, Macao Water plans to hold an inauguration ceremony for its new drinking water treatment plan project in the city – known as MSR III. The plant, built in partnership with French company Degrémont, will increase local water production capacity to 390,000 cubic metres a day.

Galaxy Entertainment Group Ltd hosted a Lunar New Year Soccer Cup competition for its staff. The casino operator said it was to enhance team bonding in the workplace and promote among staff the importance of regular exercise. More than 100 company employees, their families and friends took part. GEG athletes were divided into nine teams, including one team formed by the GEG executives. After several warm-up and elimination round matches, the soccer team from the surveillance department ultimately won the main trophy. Ritchie António, the winning team’s captain, said: “Although we were only playing against our colleagues, we took the competition seriously and gave our very best in each game. The firm said the event – hosted by GEG’s Staff Social Club – also aimed to promote the importance of work-life balance, and to improve teamwork and communication among the company employees.


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Macau

Local students get preference University of Macau says maximum 20 pct of undergraduates from mainland Luciana Leitão

newsdesk@macaubusinessdaily.com

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he new University of Macau campus may be on Hengqin Island, surrounded by mainland sovereign territory, but Macau students will continue to be given preference for undergraduate places, the Rector says. In an interview with the Chinese-language service of Rádio Macau the Rector, Zhao Wei, stated that the ratio of Macau students reading for a first degree, relative to outside undergraduate students, would remain unchanged.

The number of mainland Chinese undergraduates shall not exceed 20 percent of all the students in any faculty, stated Mr Zhao. There are no such restrictions for postgraduate courses. According to the university’s management, so far 1,300 teachers and students have moved into the resi-

dential buildings on the new campus, while some staff members have also started working here. Two residential colleges on the new campus have opened their doors as well as one restaurant, one convenience store and a laundry. At the official launch of the Hengqin campus, six new course programmes and two new faculties were announced. The latter are for health sciences and design. They are due to open in the next academic year, starting this autumn. The buildings and equipment of the Faculty of Health Sciences are ready, while the Faculty of Design is not as advanced. Details on the courses offered by the faculties are not yet available. For the new academic year, the university is offering doctorates in biomedical sciences and applied physics and materials engineering, as well as a Master of Social Sciences in Macau studies, and Masters of Law in legal translation and in Macau law and practice. There is also a new dual-language (Chinese and Portuguese) Bachelor of Law course. At the inauguration ceremony for the Hengqin campus, the Rector said the new premises would be able to accommodate up to 10,000 students.

The new campus on Hengqin

That’s only 1,400 more than previously housed at the Taipa campus. And with the budget for the new site currently at 10.2 billion patacas (US$1.28 billion) that works out to 72.86 million patacas per extra student. But advocates of the move point out that the Taipa site has been

at or near absolute capacity for some years, and the new site offers a major upgrade of all facilities. Mainland-based, state-owned, contractor Nam Yue Group Co Ltd is currently working to complete the new teaching buildings and the staff residences.


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Greater China

Hong Kong’s Financial Secretary, John Tsang

HK posts HK$12 bln budget surplus But modest size leads to renewed calls for fiscal prudence James Pomfret and Donny Kwok

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ong Kong unveiled a modest package of measures for its working class in its budget yesterday, as it tries to ease pressure on its finances while appeasing voters increasingly concerned about the city’s growing income gap. In a speech focused on maintaining Hong Kong’s competitiveness, Financial Secretary John Tsang said its economy grew 2.9 percent last year compared with 1.5 percent in 2012, and was expected to expand 3 to 4 percent this year. The budget contained some tax cuts for the working class but a bumper “giveaway” package didn’t materialise this time. “In terms of the relief measures, this is within our expectation. We consider these relief measures can help relieve the rising living cost of the middle class as well as the grassroots,” said Jennifer Wong, a tax partner at KPMG China. “This is a forward-looking budget.” Tsang did budget around HK$20 billion in one-off relief measures including tax concessions, rent subsidies for public housing tenants and welfare handouts. But that was below the previous year’s HK$33 billion in one-off assistance. The city’s lower- and middleincome families struggle with rising costs from home prices that have more than doubled since 2008, and the spill over effects of a strengthening yuan. As a global financial centre and gateway for investment into mainland China, Hong Kong is among the most vulnerable developed economies to any sudden bouts of capital outflows.

Since its currency is pegged to the U.S. dollar, it is also more exposed to tapering in U.S. monetary stimulus and expected interest rate rises. A Reuters poll of analysts had estimated the economy would grow 3.5 percent this year.

Property cooling Tsang said the government would not loosen a raft of property cooling measures that have begun to show signs of moderating the once redhot market. Government finances are highly volatile because of a narrow tax base -- only a third of wage earners pay income tax and it is heavily reliant on revenues from selling land to developers, limiting its ability to clamp down on the sector. “These (measures) serve to forestall an increased risk of a property bubble that would hamper our macro-economic and financial stability,” Tsang said. A targeted 470,000 residential flats would be built in the coming 10 years and 71,000 private units are also expected to come onto the market within four years to help supply.

Surplus welcome The government recorded a provisional surplus of HK$12 billion ($1.6 billion) for the 2013/14 fiscal year, in line with expectations, but far less than HK$64.8 billion last year, prompting Tsang to remind of the need to preserve Hong Kong’s revenue base, though without raising taxes.

KEY POINTS HK posts surplus of HK$12 bln for 2013-14 fiscal 2013 GDP up 2.9 pct; 2014 growth forecast at 3-4 pct Property cooling curbs to continue, to avoid risk of bubble Govt to increase housing land supply

“We have to ensure that our expenditure growth keeps pace with economic and revenue growth. We should also strive to forge a consensus in the community on preparing for Hong Kong’s fiscal challenge in the short, medium and long term,” he said. The government previously said it was expecting a mild deficit of HK$4.9 billion. Hong Kong is a special region of China with its own distinct financial system but its fortunes are increasingly

tied to the mainland, where growth is slowing. Efforts by the Chinese government to boost Shanghai as a financial centre also pose a drag on the city, which has the largest pie of the lucrative offshore yuan business and wants to retain it. With respect to Hong Kong’s role as China’s largest offshore yuan hub, with total yuan deposits of more than 1 trillion yuan ($163.2 billion), Tsang said it would work with China to deepen reforms and diversify and strengthen its yuan products in Hong Kong, though without giving specifics. Hong Kong is one of the world’s richest cities, flush with billionaires and gleaming skyscrapers and fiscal reserves of over HK$745.9 billion. Nevertheless, it struggled in past decades to contain a yawning wealth gap that has seen around 1.3 million of its 7 million population pushed below the poverty line, according to a government-commissioned report. Last month, Hong Kong’s leader Leung Chun Ying announced a multi-billion dollar raft of poverty alleviation measures including a lowincome working family allowance, which while lauded as long overdue also raised concerns the city’s reserves might be run down by the new recurrent expenditure. “The community’s rising aspirations in an evolving environment will inevitably put increasing pressure on public finances,” said Tsang. He said recurrent expenditure on welfare in 2014/15 would hit HK$56.9 billion, a nearly 10 percent jump from last year. Reuters


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Greater China

Attack on yuan speculators risks backfiring

Hong Kong H-share gauge drops

Previous widening of trading band failed to increase volatility or reduce meddling Pete Sweeney and Kevin Yao

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hina’s central bank rattled speculators this week by engineering a sudden fall in the yuan against the dollar, but economists warn that induced downside risk was no substitute for true liberalisation in the currency market. Unless the central bank takes bolder steps toward allowing the market to determine the exchange rate, traders believe the correction could do little more than present speculators with a fresh buying opportunity. Beijing has committed to letting the market determine the yuan’s true value, part of a wider project to encourage international usage of the currency to rival the dollar. The yuan’s orchestrated reversal also has unleashed speculation that the central bank is preparing to widen the currency’s daily trading band, currently set at 1 percent either side of a daily midpoint fixed by central bank. But even if the band is widened, traders doubt whether it can hold the yuan back from strengthening further, given the enduring ability of Chinese assets to attract capital inflows. Since January 13, the spot yuan has undergone an unprecedented fall of more than 1.5 percent, guided downward by the central bank with the help of major state-owned banks, which traders say were selling off yuan at the central bank’s behest. Wang Jun, senior economist at the China Centre for International Economic Exchanges (CCIEE), a well-connected think-tank in Beijing, told Reuters that the central bank had to deliver a clear message to speculators. “It needs to tell the market, ‘No more one-way rise for the yuan,’ and introduce two-way fluctuations in

the rate like other major currencies have,” Wang said. The country’s foreign exchange regulator attempted to soothe markets yesterday afternoon, saying that the adjustment was “normal,” resulting from market players independently unwinding their long yuan positions. But most participants believe this unwinding was defensive, triggered by state-owned banks’ massive dollar purchases. As a relatively low-risk, highyield currency that has gained over 35 percent against the dollar since it was revaluated in 2005, the yuan remains a favorite among international investors. The Greek debt crisis in early 2012 did provoke a brief swoon that saw the currency lose 1.6 percent in six months, but it began to recover in July 2012 to gain as much as 5.5 percent by mid-January. In reaction to this inexorable rally, speculators onshore and off built huge long yuan positions on assumption that the bull party would run and run. Speculative foreign capital inflows appeared to gather pace from the fourth quarter through January, data from the State Administration for Foreign Exchange suggested. Most economists expect the trend to continue this year, unless the yuan enters an extended decline.

Garbled signal The PBOC has attempted to deter yuan bulls in the past, but seldom achieved much success. Most economists and traders still expect the yuan to appreciate between 2-3 percent this year, even given recent developments. There is little economic justification for letting the yuan slide. Economists say depreciation would do little to

help exporters, for whom the yuan’s strength is a minor irritant compared with the explosive rise in labor, material, and rental costs. GaveKal/Dragonomics research house economists Chen Long and Arthur Kroeber argued in a report titled “No, the Renminbi Is Not Tanking” that the PBOC’s short-term goal is to mislead speculators into thinking the era of yuan appreciation is over, panicking them into liquidating long positions at a loss. “Some observers have leapt to the conclusion that Beijing is spooked by slower economic growth and the recent sharp devaluations by emerging-market competitors, and now wants to drive the currency lower to keep its exports competitive,” they wrote. “We don’t buy it.”

Japanese firms sued over wartime forced labour A court in Beijing for the first time accepted a lawsuit filed by a group of Chinese citizens against Japanese firms seeking compensation for forced labour during wartime, China Radio International reported yesterday. Beijing No. 1 Intermediate People’s Court accepted a lawsuit filed by a group of 37 people seeking compensation of about 1 million yuan (US$163,327) each, as well as apologies from Mitsubishi Materials Corp., and Nippon Coke & Engineering Co., formerly known as Mitsui Mining Co., the report said, citing the plaintiffs.

Market timing While most agree that widening the band would be a positive incremental step toward further reform, by itself it cannot introduce genuine downside risk so long as the PBOC and its allies at the major state-owned banks continue to meddle. Indeed, when the PBOC widened the yuan’s trading band from 0.5 percent to 1 percent in April 2012 the market confounded expectations by becoming less, rather than more, volatile. That’s because the central bank continued to use the daily midpoint to restrain appreciation, setting it so that the spot rate remained on a tight leash. In reaction, traders refused to do business anywhere near the midpoint and simply waited for the PBOC to cave in and let the yuan rise again – a bet that has consistently paid off until recently. Reuters

KEY POINTS C.bank pushes down yuan 1.5 pct since mid Jan, Biggest slide since Greek debt crisis Economists doubt genuine end of yuan appreciation Abrupt drop squeezing speculators, especially in HK

The People’s Bank of China

A gauge of Chinese stocks traded in Hong Kong dropped, heading for its longest losing streak in eight months, amid concern about slowing growth in the world’s second-biggest economy. The Hang Seng China Enterprises Index slipped for a seventh day, its longest losing streak since June. The measure has tumbled 10 percent this year, the most among 94 global benchmark indexes tracked by Bloomberg. The Hang Seng Index added 0.1 percent yesterday. The yuan was at 6.1292 per dollar, down 0.03 percent, after tumbling about 1 percent over the past week, the most since at least 2007.

Beijing drivers risk 90-to-1 odds for car plate Beijing’s aspiring car owners would rather brave the long odds of winning a licence plate in a lottery than opt for an electric vehicle. While the city received more than 90 bids for each available permit for conventional gasoline autos in the latest draw held yesterday, only 1,428 people applied for the 1,666 new- energy vehicle plates offered, according to a statement on the municipal government’s website. The lopsided demand underscores the challenges carmakers such as BYD Co., whose E6 electric car qualified for Beijing’s subsidies for the first time this month.

China smog drives masks out of stock China’s biggest online face-mask sellers were running out of stock yesterday as consumers rushed to protect themselves from smog that has shrouded large swathes of northern China for a week. The Tmall outlet of Totobobo, which makes transparent reusable masks in Singapore, put up a notice saying new stocks would not be available until April 1. Another seller, Vogmask, had only children’s models left on its Tmall store. “I’m looking for face-masks and an air purifier as the smog is getting worse. And then I found masks were sold out and the price of air purifiers is shooting up. Is everybody panicking?” complained a blogger on Sina Weibo.

Luxembourg, China talk about fund recognition Luxembourg is talking to China about allowing mutual recognition of investment funds based in the two countries, a senior Luxembourg official said yesterday. Such an agreement would boost the European financial centre’s bid to be a major hub for the offshore renminbi, or yuan, currency, which China is liberalising with the eventual aim of establishing a fully convertible currency. China and Hong Kong are thought to be in the final stages of a mutual fund recognition programme, which allows funds domiciled in Hong Kong to be sold in China and vice versa.


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Greater China

Beijing smog ‘hazardous’ 7 days straight News comes only week before annual meeting of China’s legislature

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ollution in Beijing was stuck at unhealthy levels for the seventh straight day, prompting warnings for people to stay indoors as thick grey smog shrouded the capital a week before the annual meeting of China’s legislature. Chinese President Xi Jinping experienced the smog at ground level on Tuesday during a public walkabout in downtown Beijing. During the visit, he chose to forego the sort of mask typically worn by ordinary people when pollution peaks. The concentration of PM2.5, the small particles that pose the greatest risk to human health, hit 512 at 10am yesterday, or “beyond index,” according to a U.S. Embassy pollution monitor. The World Health Organization recommends day-long exposure levels of 25, and the last time PM2.5 dropped below 150 in Beijing was February 19. The heavy smog in Beijing may draw new scrutiny to government pledges to ease pollution around the country as leaders gather for the meeting of the National People’s Congress that begins

on March 5. At the end of last year’s event, Premier Li Keqiang promised to clean up pollution and said smog gave him a “heavy heart.”

20x

Above daily safety level for small particles

In a bid to fight Beijing’s pollution, 147 industrial companies have cut or suspended production, the Xinhua News Agency reported on Tuesday, citing the Beijing Municipal Economic and Information Commission. In Liaoning and Shandong provinces, visibility fell to less than 50 metres and expressways were closed, Xinhua said. “The real work has to happen to get to the sources

of the pollution and eliminate that over time,” Bernhard Schwartlander, the World Health Organization’s China representative, said at a briefing in Beijing. “We have to put more pressure on all of the authorities and all the industry production to improve so we can actually reduce the very heavy pollution.” Government officials and agencies have become more vocal in decrying China’s soiled water, air and soil, which has become a leading cause of social unrest in the nation of 1.3 billion people. The U.S. Embassy’s pollution monitor said the Air Quality Index in the city exceeded 150 on 26 of the last 31 days. Smog here is now at an “unbearable stage,” the government’s top climate-change adviser, Li Junfeng, said on Sunday. That statement followed a Shanghai Academy of Social Sciences report that said Beijing, was “barely suitable” for living. Ordinary Chinese have also found new ways to express their anger about pollution. A man in northern China, Li Guixin, filed a

lawsuit against his hometown of Shijiazhuang, saying it owed him the 10,000 yuan ($1,635) he spent on an air filter and a treadmill to exercise indoors, his lawyer Wu Yufen said yesterday.

Air quality “Li Guixin couldn’t take a walk or run like in the past as air quality worsened and he also has to wear a mask now when he goes out,” said Wu, who also lives in Shijiazhuang, home to some of China’s worst air pollution. “His case is relevant for everyone in our city.” In response, the chief engineer of the city environmental protection bureau said the lawsuit reflects the public’s increased environmental awareness. “No matter what the result of the lawsuit turns out to be, the city’s environmental authority will work scrupulously to fulfil its duties in combating air pollution,” Cheng Gang said, according to Xinhua. North and central China have seen medium- or heavypollution since Feb. 20, with the most severe smog

in Beijing, Tianjin, Hebei province and surrounding areas, the National Meteorological Center said today on its website. The centre forecast that the smog would ease today. The conditions in Beijing were similar to those the city saw before the meeting of the legislature last year, when concentrations of PM2.5 rose to 469, according to the Beijing government. The smog hasn’t dispersed because of “disadvantaged diffusion conditions for pollutants,” Zhang Kai, a Beijing- based officer at Greenpeace, said by phone yesterday. “Pollution is always a regional issue and the government should ask more provinces to control coal consumption.”

…barely suitable for living Shanghai Academy of Social Sciences, on Beijing pollution

Exposure to PM2.5 contributed to 8,572 premature deaths in Beijing, Shanghai, Guangzhou and Xi’an in 2012, according to estimates by Greenpeace and Peking University’s School of Public Health. Coal burning is the main source of pollution, accounting for 19 percent, while vehicle emissions contribute 6 percent, according to the report. Chinese authorities have pledged to shut polluting factories and limit the number of cars to curb air pollution. The environmental protection regulator said on Sunday it had sent inspection teams to determine if local authorities in Beijing and surrounding areas had taken adequate measures against smog. Bloomberg News

Guangzhou shipyard stake flipped

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aosteel Group Corp., the parent of China’s biggest publicly-traded steelmaker, sold shares in Guangzhou Shipyard International Co. for a HK$155.7 million (US$20.1 million) profit in less than three weeks. State-owned Baosteel sold 16.2 million shares in the shipbuilder for HK$16.90 each, according to a term sheet obtained by Bloomberg News. The price was 8 percent lower than Guangzhou Shipyard’s close of

HK$18.36 on Tuesday. Baosteel bought 31.1 million Guangzhou Shipyard shares at HK$7.29 each in a private placement completed on February 11, according to a Shanghai exchange filing that day. The two other investors were the shipbuilder’s parent, China State Shipbuilding Corp., and China Shipping Group Co., the statement showed. Guangzhou Shipyard plans to use the proceeds of the private placement

3

Weeks Baosteel held shipyard shares

to buy a yard in southern China jointly owned by the three investors, according to a September 30 filing announcing the deal. Shares of Guangzhou Shipyard were down 4.5 percent to HK$17.54 as of 11.18am in Hong Kong yesterday. They have nearly tripled in the past 12 months. Credit Suisse Group AG managed the share sale for Baosteel, the terms show. Bloomberg News


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Asia

Rinehart nears US$7.8 bln mine finance deal Australian iron ore producer could garner 55 mln tonnes per year from Roy Hill project Sharon Klyne, Joyce Lee and Prakash Chakravarti

of 14 banks from Australia, Japan, China and Europe who were financing the deal. Included in the financing was a yuan tranche provided by Industrial and Commercial Bank of China (ICBC) and Bank of China Ltd to pay for equipment from China, one of those sources said. The sources declined to be identified because of confidentiality clauses and because the deal has not been finalised. Roy Hill was not immediately available to comment.

Mine airport

KEY POINTS 14 banks joining with export credit agencies: sources Roy Hill airport, camps, port berths completed Construction to be completed end-2015: source ICBC, Bank of China to pay for Chinese gear: source

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ustralian billionaire Gina Rinehart’s Roy Hill iron ore project is close to finalising a US$7.8 billion financing deal, sources said, a vital step towards an end-2015 start for the giant mine in Western Australia’s iron-rich Pilbara district. The 55-million tonnes-a-year project, which would make Roy Hill Australia’s fourth-largest iron ore mine, will add to hefty new supplies coming on line from Rio Tinto, BHP Billiton and Fortescue Metals Group. It could also add to the wealth of mining magnate Rinehart, already Australia’s richest person with a US$17.7 billion fortune, according to Forbes. Roy Hill is likely, however, to be the last new project of this scale to

get off the ground, given worries over shaky underlying demand for iron ore in China, the world’s biggest consumer of the steel-making raw material. Other miners are rethinking expansion and cutting costs as iron ore prices drop. At just below US$120 a tonne yesterday, prices have fallen more than 11 percent so far this year and are down almost 40 percent from a record high of US$200 reached in February 2011.

March signing “The agreement is not completely settled yet. All the views have to be gathered as there are a lot of stakeholders. But as of now I don’t see any problems, and a March signing

looks likely,” said one source with direct knowledge of the negotiations. The start for the project, which includes a 344 km (210 mile) rail line and port facilities, has been pushed back amid delays in finalising equity partners and debt funding. Roy Hill had initially been targeting an end2014 start to production. “According to current plans, first shipment is expected in the latter half of 2015. It can be understood as a trial run just before construction is expected to be completed by end2015,” said the source. A second source said the total included a working capital facility of about A$600 million and around US$3 billion from commercial banks. Six other sources identified a group

Export credit agencies (ECAs) including Export-Import Bank of the United States, Export Import Bank of Korea (KEXIM), Japan Bank for International Cooperation (JBIC) and Nippon Export & Investment Insurance (NEXI) are backing Roy Hill with guarantees and direct loans, the sources said. Rinehart’s Hancock Prospecting Pty Ltd owns 70 percent of the project, with Japanese trading house Marubeni Corp holding 15 percent, South Korean steel giant POSCO with 12.5 percent and Taiwan’s China Steel Corp 2.5 percent. Together, the owners have committed A$3.2 billion (US$2.9 billion) in equity to the project, according to its website. Work on Roy Hill is well progressed, with a small airport already open with a runway big enough for a Boeing 737 aircraft. Villages to house 3,600 construction workers and 2,000 operational staff on site and at Port Hedland have also been completed, as has dredging for its two deep water berths at the port, Australia’s biggest iron ore terminal. Roy Hill has so far been able to avoid the kinds of cost blowouts that plagued other resource projects in Western Australia during the height of the mining investment boom a few years ago. After four years of delays and billions of dollars of budget blowouts, CITIC Pacific made its first shipment of iron ore concentrate from its US$10 billion Sino Iron project in the Pilbara in December.

Vietnam’s coffee discount doubles Follows advance in futures prices in London trading

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uyers of coffee from Vietnam, the biggest grower of the robusta variety used in instant drinks, are getting a bigger discount for their beans as futures rallied and domestic prices gained, according to Volcafe Ltd. Vietnamese beans for shipment in March and April were last week at a discount of US$40 a metric ton to the futures traded on NYSE Liffe in London, the coffee unit of commodities trader ED&F Man Holdings Ltd. said in a report e-mailed on February 21. That compares with a discount of US$20 a ton a week earlier. Robusta futures traded in London jumped 8.3 percent last week. The rally “brought sellers and farmers out of the wood to book their consigned coffee or liquidate partially their stock,” Winterthur, Switzerland-based Volcafe said. Local prices gained and discounts in the export

US$40 Discount per tonne on beans shipping March, April

market rose, it added. Robusta’s advance last week was the biggest since February 2012. Arabica beans soared 19 percent, the most since August 2001, over the same period as dry weather threatened to cut output in leading producer Brazil. Vietnamese beans were trading in the local market at 37,800 dong (US$1.79) a kilogram on February 21, up 6.8 percent from a week earlier, data from the Daklak

Trade & Tourism Center on Bloomberg showed. Farmers in Vietnam sold 35 percent to 40 percent of the 2013-14 crop, down from 53 percent a year earlier,

according to Volcafe. Growers are reluctant to sell and deals are only being closed at higher prices, it said. Local prices climbed to a record 51,600 dong a kilogram in 2011.

Reuters

“Local prices are currently in the middle of a 2 to 3 year range,” Volcafe said. “We continue to expect disciplined selling from producers, stepping back from dips in the market.” In Indonesia, the thirdbiggest robusta producer, premiums fell less than anticipated as exporters are selling beans for nearby shipment and holding back on sales for later delivery, according to the report. Indonesian beans for shipment in March and April were last week at a premium of US$55 a ton to the exchange price, down from US$65 a ton a week earlier. “Exporters remain reserved about the new crop and adopted a wait and see attitude,” Volcafe said, referring to the 2014-15 crop that will start in Indonesia in about April. Bean deliveries from farms in Indonesia totalled 2,200 tons to 2,400 tons last week, according to the report. That compares with 1,500 a ton a week earlier. The fly crop, which usually peaks in December or January, is still in progress, Volcafe said. The next main harvest will last longer and have “limited volume.”


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Asia

Eco-friendly palm oil efforts in crisis Malaysia threatening to quit sustainability group

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body advocating ecologically sustainable production of crude palm oil – a vital ingredient in many of the world’s food and detergent products – is in crisis. Malaysian producers – who with Indonesian growers account for 80 percent of world output – are threatening to withdraw from the body, citing major differences of approach. The Malaysian Palm Oil Association (MPOA), which represents the private plantation companies, will decide at a meeting tomorrow whether to quit the Roundtable on Sustainable Palm Oil (RSPO) grouping.

for being unable to meet the RSPO requirements on high carbon stock, palm oil mill effluents and greenhouse gas emissions,” said an industry official. The MPOA has recommended to its 17-strong council and executive council that include plantation big boys such as Sime Darby Bhd, IOI Corp Bhd, Kuala Lumpur Kepong Bhd, United Plantations Bhd, Felda Global Ventures Holdings Bhd as well as mid-tiered plantation companies and independent small estate owners, to do away with the RSPO.

Foot dragging At the same time, the RSPO, fed up with the MPOA stalling on the implementation of measures that would facilitate sustainable planting, has given the Malaysian body an ultimatum to consider its position in the international multistakeholder organisation, reports The Star newspaper. The RSPO is a non-profit organisation issuing the certificate that validates that the production of palm oil is sustainable. The RSPO certificate is crucial for plantations to export their products to European and other Western countries. Industry officials said that of late, there had been a stalemate in negotiations between the RSPO and Malaysian oil palm growers on a host of contentious issues. “Chief among them is the compensation imposed on planters

KEY POINTS Roundtable on Sustainable Palm Oil validates production RSPO is a non-profit organisation Claims Malaysians dragging heels on sustainable planting Malaysia, Indonesia account for 80 pct+ of crude palm oil

“Now is the time that requires the wisdom of the MPOA council and exco members to make a decision on whether to quit the RSPO or continue to be a part of it,” the official told The Star, adding that at least two local plantation companies had agreed to exit the RSPO. Should the MPOA, as the umbrella body of all plantations in the country, quit the RSPO, then it would be joining many of its counterparts from emerging economies. However, the individual planters may continue to be a part of the RSPO on their own accord. For instance, Sime Darby, which is one of the largest plantation groups in the country, can continue to be a part of the RSPO to effectively penetrate the European market even if the MPOA opts out of the organisation. In September 2011, Gabungan Pekebun Kecil Indonesia (GAPKI), the MPOA’s Indonesian counterpart, quit the group. GAPKI’s rationale then was quite straightforward. It felt that for all the efforts and costs incurred by planters to comply with the RSPO requirements, their exports of crude palm oil (CPO) had failed to fetch a premium and secure a good uptake. Both Malaysia and Indonesia account for over 80 percent of CPO production globally. According to sources, the RSPO is turning out to be “not the right organisation” for the MPOA; one that can act fairly to enable oil palm growers to pursue and embrace the principle of sustainability in the production of

palm oil. They pointed out that MPOA members should support and work closely to build the national certification standard, the Malaysian Sustainable Palm Oil (MSPO), which is expected to be “officially” launched by the end of next month. Some planters also claimed the governance and aspirations of the RSPO had changed, whereby the increasing involvement of NGOs such as World Wildlife Fund (WWF)-linked individuals and Western green activists had been found at all levels of the RSPO task force, committees and organisational set-ups.

Trojan horse “Now the RSPO is as good as the Trojan Horse of the WWF,” said a member of the MPOA, adding that the oil palm growers who had previously formed the majority of the RSPO have now become the minorities. “Any objection put up by the oil palm growers’ grouping is no longer sustained but scuttled by the voting majority of the RSPO members from among the NGOs and green activists during most of the annual general  meetings.” Some industry observers suggested that the potential exit from the RSPO by the MPOA also comes hot on the heels of the Unilever-Wilmar group’s trade alliance compelling the Sarawak Oil Palm Plantation Owners Association to give an undertaking that there would be “No deforestation, no peat and no exploitation” by the planters.

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com CLOSING editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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February 27,19, 2014 Friday April 2013

Asia Vietnam simplifying Business Law Aims to attract fresh foreign investment to the country

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mendments to Vietnam’s Business Law do away with the need for firms to register their business purpose and stick to it, ease restrictions on foreign firms and require transparency from stateowned ones, reports Thanh Nien News. Firms can enter any business which is not proscribed by law, according to the bill to be presented to the National Assembly this year or next. Nguyen Dinh Cung, head of the Central Institute for Economic Management, which is drafting the bill for the Ministry of Investment and Planning, said the changes are aimed at creating flexibility in the business environment. Current regulations, effective since

2005, require firms to spell out their business when registering and doing any other business is punishable. Tuoi Tre newspaper quoted Cung as saying: “Sometimes a company sees a new business opportunity, but has to wait to amend its registration. However, by the time that is done, the chance might be gone.” He said the changes to the law would save the costs of repeated registrations and business risks. But Tran Huu Huynh, a lawyer and chairman of the Vietnam International Arbitration Center, said a new problem of people abusing the bill’s provisions to establish companies just for value-added tax and other scams could crop up. Authorities thus need to oversee

businesses better once they become operative, he said. The bill changes the definition of foreign-invested firms from those with any rate of foreign investment to ones with at least 51 percent. It simplifies business establishment procedures for both local and foreign firms, and eases restrictions on the latter, which are now barred from several sectors like pharmaceutical and fuel distribution. Dr Dau Anh Tuan, head of the legal department at the Vietnam Chamber of Commerce and Industry, said the changes would make the business environment friendlier and help draw more investment. He quoted a World Bank report as saying that establishing a business in Singapore or Malaysia involves just three procedures, all done online, while in Vietnam it takes nine.

Asahi boosting Indonesia soft drink sales by 2017 Asahi Group Holdings Ltd has announced plans to boost annual soft drink sales in Indonesia to 50 billion yen in 2017 from 7 billion yen in 2013. In 2012, Asahi set up local joint ventures to produce and sell soft drinks with major Indonesian food maker PT Indofood CBP Sukses Makmur TBK. As part of ongoing efforts to expand operations in the Southeast Asian nation, Asahi has also acquired a local bottler of U.S. beverage giant PepsiCo Inc. and the bottled water operations of an Indonesian company jointly with Indofood CBP.

Sri Lankan stocks recover from 10-week low Sri Lankan shares recovered from a near 10week closing low yesterday on bargain hunting in beaten down shares, snapping a nine-session falling streak, led by the top conglomerate John Keells Holdings. Foreign investors bought the island nation’s risky assets on a net basis in an oversold market. The main stock index gained 0.63 percent, or 36.89 points, to close at 5,872.81, up from its lowest close since December 18, hit in the previous session. The index dropped nearly 7 percent in the last 15 sessions through to Tuesday, Reuters data showed.

AirAsia’s profit drops 19 pct

2005

Year that current business rules were enacted

Malaysia’s AirAsia Bhd, Asia’s biggest budget airline by passenger traffic, saw its fourth-quarter profit drop 19 percent on higher expenses for fuel and aircraft maintenance. Net profit for the three months ended December 31 fell to 245.4 million ringgit, while net profit for the full year stood at 364.1 million ringgit. Malaysian Airline System (MAS) reported on February 18 a net loss of 343.3 million ringgit on high costs and tough competition.

U.S. fines Asiana US$500,000 over crash Said carrier failed to help the families of victims as required by the law

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.S. aviation authorities have fined South Korea’s Asiana Airlines US$500,000 over last year’s deadly San Francisco air crash for failing to help properly the families of victims, officials said. Three passengers died when Asiana Airlines Flight 214 clipped a seawall with its landing gear, skidded off the runway and burst into flames at the end of an otherwise routine flight from Seoul to San Francisco on July 6. Asiana “violated federal law last July by failing to adhere to the assurances in its familyassistance plan following the crash,” according to the U.S. Department of Transportation, which said some families were not contacted for up to five days afterwards. The fine is the first imposed by the DoT under a 1997 law which requires foreign airlines to keep to a “family-assistance plan” in the event of aircraft accidents resulting in a major loss of life, it said. In a brief response, Asiana appeared to reject the basis of the penalty. “Asiana provided extensive support to the passengers and their families following the accident and will continue to do so,” the airline said in a one-line statement. U.S. Transportation Secretary Anthony Foxx said in a damning appraisal: “In the very rare event of a crash, airlines have a responsibility

to provide their full support to help passengers and their families by following all the elements of their family-assistance plans. “The last thing families and passengers should have to worry about at such a stressful time is how to get information from their carrier.” One of the three victims had been pulled alive from the plane and placed near one wing. But the Chinese teenager was later run over and killed by a fire truck which did not spot her lying under a layer of fire retardant foam. U.S. prosecutors decided in October not to bring charges against

The last thing families and passengers should have to worry about…is how to get information… Anthony Foxx U.S. Transportation Secretary

the firefighter driving the truck. Another 182 passengers and crew aboard the Boeing 777 were injured, in the first fatal commercial airline crash in the United States since 2009. The DoT said that Asiana initially lacked adequate staff to communicate in the languages spoken by the flight’s passengers, which included South Korean, American and Chinese nationals. It added: “The only number generally available to the public that family members could call was Asiana’s toll-free reservations line. Locating this phone number on Asiana’s website required significant effort.” The reservations line did not include a separate menu option for calls related to the crash and callers were required to navigate through cumbersome automated menus before being connected to an Asiana employee. “In addition, Asiana took two full days to successfully contact the families of just three-quarters of the passengers. The families of several passengers were not contacted until five days following the crash. “Asiana’s response to the crash of flight 214 indicates that the carrier failed to commit sufficient resources to carry out its family-assistance plan.” A final U.S. report on the reasons for the crash is expected to be ready by the first anniversary of the disaster. AFP

Thai govt to issue US$615 mln of debt Thailand’s caretaker government plans to sell up to 20 billion baht (US$615 million) of short-term debt this week to help fund a controversial rice-buying scheme, according to documents seen by Reuters yesterday. The Finance Ministry’s Public Debt Management Office (PDMO) will auction eight-month, statebacked paper yesterday, according to a letter sent by the PDMO inviting the Metropolitan Waterworks Authority to bid. PDMO officials were not available for comment. The proceeds would be for the Bank for Agriculture and Agricultural Cooperatives (BAAC) to pay rice farmers, some of whom have been waiting months for payment for crops sold to the government programme.

South Korea’s won reverses losses South Korea’s won reversed losses to rise to the strongest level in a week on speculation exporters are repatriating overseas income as the end of the month approaches. Global funds bought more Korean equities than they sold for the fourth straight day, exchange data show, pushing the Kospi benchmark index of stocks to the highest close since December 30. The economy continued a gradual recovery in the first quarter and wasn’t affected significantly by the Federal Reserve’s reduction of stimulus, the Bank of Korea reported in its analysis of regional economies yesterday.


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International

Protests ease in Caracas But U.S. expels Venezuelan diplomats

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tudent protesters marched toward the Cuban embassy in yet another day of antigovernment demonstrations in Caracas as the United States announced the titfor-tat expulsions of three Venezuelan diplomats. The US action, which answered Venezuela’s expulsions of three American diplomats a week ago, came a day after President Nicolas Maduro said his government would name a new ambassador to Washington. The State Department said the Venezuelans would have 48 hours to leave and that Caracas needed to “show seriousness” in order for the relationship between the two countries to move forward. Separately, Panama called for an “urgent” foreign ministers’ meeting of the Organization of American States to seek a solution to the Venezuelan crisis “through dialogue.” Caracas appeared to be slowly returning to normal after a night of sporadic clashes, although in some middle class neighbourhoods streets were still partially blocked by barriers of rubble and garbage. On Tuesday morning, small groups of youths made their way toward the Cuban embassy, another potential

flashpoint and a target of opposition ire. “Venezuelans who don’t protest don’t get out of this. Join us,” read a banner set amid a small group of students.

‘Peace’ conference But by midday just dozens of people had joined the march, suggesting an easing up of pressure on the eve of a national dialogue convened yesterday by Maduro. Maduro invited “all social, political, union and religious groups” to take part in the “national peace conference,” although he

provided few details. The Venezuelan president, the late Hugo Chavez’s handpicked successor, also said he would ask the National Assembly to form a Truth Commission to look into the protests, which he claims are an attempt to “justify foreign intervention in Venezuela.” Maduro, who sees the protests as a coup d’état in the making, last week kicked out three US diplomats who he said had met with student protest leaders. But he said his government would name a new ambassador to the United States on Tuesday.

Maduro said he was naming a new ambassador because “Americans think we are killing each other” and he wants to improve dialogue with the US. The two countries have not exchanged ambassadors since 2010, reflecting the bad blood that has prevailed between the two trade partners since Chavez came to power in 1999. State Department spokeswoman Jen Psaki said Washington had seen reports about Maduro’s intention. “But Venezuela also needs to show seriousness for us to be able to move

forward. And recent actions, including expelling three of our diplomats, continue to make that difficult.” Even as he seemed to extend an olive branch, Maduro lashed out at comments by White House spokesman Jay Carney, who on Monday urged him to concentrate on dialogue with the opposition and free detained demonstrators immediately. “Are you the Venezuelan Supreme Court? Does the United States wield judicial power in Venezuela to decide who is guilty and who should go free?” Maduro exclaimed. He spoke on a day that saw some of the worst protests against his government since the protests began in the western state of Tachira February 4. In the latest reported death, a student who was on a rooftop terrace fell backwards to his death on the street as police were breaking up the crowd. With 45 people still under arrest after marches largely inspired by the country’s dire shortages of basic goods and longstanding problems with inflation, the potential for escalation remained visible. In a rare public split within Maduro’s ranks, a ruling party governor called for the release of all jailed protesters. Jose Gregorio Vielma Mora, the governor of the western state of Tachira where the student-led protests began, also criticized the government’s use of the military, calling the response “a grave error” and “unacceptable excess.”

Swiss bank ‘helped clients evade U.S. taxes’

‘Sexist’ World Cup-themed shirts withdrawn

U.S. Senate makes claims against Credit Suisse after two-year inquiry

Host Brazil complained to maker Adidas about ‘suggestive’ motifs

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witzerland’s second largest bank, Credit Suisse, used elaborate measures to find wealthy clients and help them evade United States tax authorities, a scathing report from a U.S. Senate inquiry said on Tuesday U.S. time. The report contains the results of a two-year Senate investigation and comes a day before the heavilyanticipated questioning of Credit Suisse chief Brady Dougan and other top bank figures before the panel. “The investigation found that, as of 2006, Credit Suisse had over 22,000 US customers with Swiss accounts whose assets, at their peak, exceeded 12 billion Swiss francs (US$13.5 billion),” the report said. “Although Credit Suisse has not determined or estimated how many of those accounts were hidden from US authorities, the data suggests the vast majority were undeclared,” it added. Among the bank’s cloak-anddagger practices, Swiss bankers were sent to the United States to secretly find clients, leaving no paper trail, at events sponsored by the bank – such as at golf tournaments in Florida. The bank also helped its clients find “intermediaries” who could help them create offshore shell companies

to hide the money trail from the Internal Revenue Service. “One former customer described how, on one occasion, a Credit Suisse banker travelled to the United States to meet with the customer at the Mandarin Oriental Hotel and, over breakfast, handed the customer the bank statements hidden in a Sports Illustrated magazine,” wrote the investigators. Third-party companies were also engaged by the bank to provide credit cards permitting clients to secretly use their hidden funds. By 2008, the report says, there were more than 1,800 Credit Suisse bankers employed to manage US client accounts, many of which were never declared to the IRS, and whose transactions were structured to avoid US tax reporting requirements. From 2008 to 2011, after the break of a tax evasion scandal at fellow Swiss bank UBS, Credit Suisse starting putting an end to its evasive practices, asking clients to close their accounts or declare them. In total, by the end of 2013, the number of Swiss accounts held by U.S. clients at Credit Suisse fell by 85 percent, the report said. AFP

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razil forced the withdrawal of a line of World Cup shirts bearing suggestive motifs seen as harming the country’s image. Following a complaint by the state tourist board, official cup sponsor Adidas withdrew the shirts, which had gone on sale in the United States. One of the designs depicts a heart completing the phrase “I love Brazil” but curved to suggest a tanga-clad female backside. Another had a picture postcard view of Rio’s Sugarloaf Mountain and a woman in a bikini holding a football with the double entendre strapline: “Lookin’ to score.” State tourism body Embratur said it ���strongly repudiates the commercialisation of products linking Brazil’s image with sex” and had contacted Adidas to demand the shirts be withdrawn. Brazil’s minister of state for women, Eleonora Menicucci, also complained of a “lack of respect towards our country.” “It is unacceptable for a multinational producer of sports goods such as Adidas to sell T-shirts bearing images and phrases linking Brazil to sex tourism,” she said. Adidas responded by saying it was

withdrawing the products, adding: “It is important to stress that this was a limited edition range which was only available in the U.S.” Brazilian President Dilma Rousseff says the World Cup host is happy to welcome foreign visitors – around 600,000 are expected for the June 12 to July 13 tournament. But she has said the country will not tolerate sex tourism and will boost measures to combat it. AFP


business daily 15 15

February 27,19, 2014 Friday April 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

TAIWAN TIMES Drug maker OBI Pharma Inc said that it will start generating revenue this year, driven by the planned launch of its DIFCID antibiotic in Taiwan by the end of the second quarter. The company has failed to post revenue since 2011, before its started trading its shares on the Emerging Stock Market in 2012. “We are currently finalising talks with the National Health Insurance Administration concerning drug prices, as well as with our suppliers regarding materials prices,” general manager Amy Huang said.

THE JAPAN NEWS Japan’s corporate services price index (CSPI) in January rose 0.8 percent from the same month a year before, the Bank of Japan said. The index stood at 96.3 against 100 for the base year of 2005. Last December, the index was up a revised 1.1 percent. In January, the index fell 0.6 percent month on month after a revised 0.2 percent rise in December, the central bank said. The CSPI measures the change in the price of goods sold by corporations. It is a leading indicator of consumer price inflation.

THE STAR Hong Leong Bank Bhd may miss its own 10 percent loan growth target this year, as retail demand cools down on economic worries and stricter lending curbs by Bank Negara. But the bank said there were still plenty of opportunities to keep loan expansion at 8 percent this year. “At the end of the day, there is still urbanisation and the middle-income group that is getting more affluent,’’ group managing director and chief executive officer Tan Kong Khoon told a press briefing on the bank’s second‑quarter results.

THANH NIEN NEWS Vietnamese logistics firms are having a rougher go of it ever since Vietnam fully opened the market to foreign companies in January, before which point foreign investors could only own a maximum stake of 49 percent in such companies here. Do Van Nhan, chairman of Gemadept Corp, told the Saigon Times that his firm had been divesting from its non-core activities since early 2013 to focus on port operations and logistics given the forecast of increased competition. The Ho Chi Minh City-based firm sold its Gemadept Tower office building to raise US$45 million in capital late last year.

Intellectual property and economic development Rod Hunter

Ex-senior director for international economics, U.S. National Security Council

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n his recent State of the Union address, US President Barack Obama reiterated his ambition to complete the Trans-Pacific Partnership, a proposed trade agreement among the US and 11 Pacific countries. Meanwhile, the European Union and China are pressing to close their own deals in Asia and elsewhere. If these proliferating trade pacts are to spur virtuous cycles of growth for developing countries, they must not only reduce trade barriers; they must also build the institutional framework of a modern economy, including robust intellectual property (IP) rights. Some activists and government officials get the relationship between strong IP protection and economic growth backwards, claiming that IP rights are an obstacle to development, and thus should not be enforced until after countries achieve high-income status. This attitude is particularly prevalent in India, which recently put trade negotiations with the EU on hold, and it was central to the failure of the Doha Round of global trade talks. As Indian Commerce Minister Anand Sharma put it, “inherent flexibilities must be provided to developing countries.” But the bottom line is that the ideas protected by IP rights are the dynamo of growth for developed and developing countries alike. Instead of diluting IP rights, developing countries like India should recognize that strengthening IP protection is a prerequisite for attracting the foreign investment that they need to help their economies grow, create jobs, and improve their citizens’ capacity to consume.

Tangible intangibles Today, IP accounts for much of the value at large companies. One study found that in 2009, across a variety of industries in the US, intellectual capital – patents, copyrights, databases, brands, and organizational knowledge – held a 44 percent share of firms’ overall market value. Such companies have little desire to put their IP at risk of erosion or outright theft; they want to do business where they know that their IP is safe. Developing countries have a lot to gain from attracting multinational firms. Such companies bring technologically advanced imports and new management techniques that foster growth in domestic firms, while spurring industrial modernization. They also spawn new local companies that serve as

suppliers, thereby boosting employment, augmenting workers’ skills, improving productivity, and increasing government revenue.

…the ideas protected by IP rights are the dynamo of growth for developed and developing countries alike

Currently, India attracts a mere 2.7 percent of global spending on research and development; China, with its stronger IP rights, attracts close to 18 percent; and the US brings in 31 percent. United Nations data show that India’s stock of foreign direct investment (FDI) was equivalent to just 11.8 percent of its GDP from 2010 to 2012 – far lower than the developing-economy average of roughly 30 percent. According to a new study by the economists Robert Shapiro and Aparna Mathur, if India achieved Chinese levels of

IP protection, its annual FDI inflows would increase by 33 percent annually. In the pharmaceutical sector – which is particularly vulnerable to IP infringement – a stronger IP regime could increase FDI inflows from US$1.5 billion this year to US$8.3 billion in 2020, with pharmaceutical R&D doubling to US$1.3 billion over the same period. The increased FDI would create 18,000 new jobs in the pharmaceutical industry.

Investment generator If India could transform its IP regime to resemble the US system, which is more robust than China’s, the benefits would be even greater. Inward FDI could increase by as much as 83 percent annually by 2020; in the pharmaceutical industry alone, FDI could reach as much as US$77 billion, with R&D rising to US$4.2 billion and 44,000 new jobs being created. The Indian government’s ongoing assault on pharmaceutical IP makes these findings even more significant. Over the last two years, India has invalidated or otherwise attacked patents on 15 drugs produced by international firms in order to make way for local champions, claiming that exclusivity enables companies to charge high prices that harm consumers. Allowing local producers to copy patented medicines, officials assert,

will bring down prices and expand access. But drug patents and prices are not the main – or even a major – obstacle to patients’ access to medical care in India. The bigger issue, as the IMS consultancy found last year, is the shortage of doctors, clinics, and hospitals, especially in rural areas. Even the public clinics and hospitals that do exist are often rendered useless by high rates of absenteeism by doctors. Medicine, however affordable, is of no value if no one is available to prescribe or administer it. Furthermore, Indians lack access to insurance programs, particularly for outpatient care. This, coupled with the lack of a public safety net, makes health problems a leading source of economic hardship, even for middle-class families. Far from improving citizens’ access to health care, weak IP protections are exacerbating India’s formidable health‑care challenges. It is time for India’s leaders to recognise the positive role that IP can play in fostering growth and improving citizens’ wellbeing. It is equally important for trade negotiators worldwide to reject the notion that IP protection is a luxury that only rich countries can afford. The reality is that IP protection is an economic engine that developing-country citizens should not have to forego. © Project Syndicate


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February 27, 2014 Friday April 19, 2013

Closing Flamenco legend Paco de Lucia dies

Putin orders battle-readiness alert

Paco de Lucia, the Spanish guitarist who brought flamenco to a world audience, has died in Mexico aged 66, his family and officials said yesterday. Born Francisco Sánchez Gómez, he was credited with modernising the gypsy tradition of his native Andalusia, absorbing jazz and pop influences in a decades-long career. He died of a heart attack according to the mayor’s office in his Spanish hometown of Algeciras. A family statement said he was playing with his children on a beach at the time. “Paco de Lucia’s death turns his genius into a legend,” said a statement by the mayor of Algeciras.

Russian President Vladimir Putin yesterday ordered a snap check of the battle-readiness of the country’s armed forces in the west and centre of the country, including the area bordering Ukraine. “The commanderin-chief has set the task of checking the capability of the armed forces to deal with crisis situations posing a threat to the military security of the country,” said Defence Minister Sergei Shoigu, quoted by the Interfax news agency. The drill involves army, navy and air force troops based in the western military district, a vast territory bordering Ukraine, Belarus, the Baltic States, Finland and the Arctic.

Hong Kong editor hacked with cleaver Ming Pao’s Kevin Lau well known as investigative journalist

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he former editor of a Hong Kong newspaper whose ousting triggered protests over media freedom was hacked with a cleaver yesterday in an attack that drew condemnation from the United States and press groups. Kevin Lau, former editor of the liberal Ming Pao newspaper, was hacked at in broad daylight by two men who escaped on a motorbike in the Chai Wan district where the newspaper’s headquarters is located, police said. Hong Kong chief executive Leung Chun Ying described the attack as a “savage act” after visiting Lau in hospital where he underwent multiple operations. The US consulate said it was “deeply concerned about... this vicious crime” and joined calls from media groups for the authorities to bring the perpetrators to justice. The attack comes at a time of growing unease over freedom of the press in the city, with mounting concerns that Beijing is seeking to tighten control over the semi-

autonomous region. Health officials said Lau underwent surgery for wounds including a 16 centimetre-long (six-inch) gash that cut through all his

Second day of protests in Turkey

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housands of demonstrators took to the streets of Turkey’s two main cities for the second consecutive day yesterday in protest against Recep Tayyip Erdoğan ‘s government after corruption allegations against the prime minister surfaced. Demonstrators gathered in Istanbul’s central Taksim Square as well as in central Ankara. It followed protests the previous day in six Turkish cities – Istanbul, Ankara, Trabzon, Sakarya, Izmir and Eskisehir. Yesterday’s protests were organised by the main opposition Republican People Party after leaked recordings of Erdoğan and his son allegedly discussing how to hide large sums of money became public. Erdoğan has angrily dismissed the recordings as a “vile attack” by political rivals, but that did not seem to convince protesters who chanted “There are thieves!” and “Government resign!” Demonstrators also shouted “Everywhere is bribery! Everywhere is corruption!”, a play on the “Everywhere is Taksim! Everywhere resistance!” chant heard during huge anti-government protests in Istanbul’s Taksim Square in June.

back muscles, and was in a serious condition but added that his life was not in danger. Tang Chung Ngai, chief of surgery at Eastern Hospital where he was being treated,

said Lau was also cut on his shoulder and in four places on his legs. Lau, who was known for hard-hitting political investigations before being

Haider’s daughter to run in EU election

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he daughter of late Austrian far-right leader Joerg Haider announced yesterday she plans to run in May’s European parliamentary elections, giving her father’s underachieving party a much-needed boost. “I’m a fervent European,” Ulrike HaiderQuercia told a press conference in Vienna to present the leading candidate for the Alliance for Austria’s Future (BZOe). The European Union system however needed reforming, the 37-year-old lawyer and political expert added, going as far as to argue that the euro currency “was no longer salvageable” and that alternatives should be discussed. Her father Joerg Haider, who died in a drinkdriving accident in October 2008, was long Austria’s most notorious politician abroad, famously praising Hitler’s “orderly” employment policies. His Freedom Party’s entry into government in 2000 even prompted unprecedented European sanctions against Austria, before Haider split from the party to found the BZOe. The latter won an impressive 10.9 percent in general elections in 2008.

reassigned as chief editor in January, was confronted by two assailants when he got out of his car. “One of them alighted from the motorcycle and used a chopper to attack the victim,” police spokesman Simon Kwan said. Ming Pao said on its website that it was offering a reward of HK$1 million (US$129,00) for information leading to the capture of those responsible for what its current chief editor Cheung Kin Por denounced as “coldblooded” acts. “We don’t want journalists in the city to work under fear in the future,” Ming Pao Staff Concern Group spokeswoman Phyllis Tsang said. “If this situation happened, it would have a really serious impact on press freedom in Hong Kong,” she told AFP. Plans to replace Lau with an editor from Malaysia seen as pro-Beijing prompted protests from staff who feared an attempt to stifle the paper’s investigative reporting. AFP

30,000 Icelanders demand poll on Europe

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ore than 30,000 Icelanders – almost one in eight of the Arctic country’s potential voters – had by yesterday signed a petition demanding a referendum on the pursuit of European Union membership. Thousands of protesters thronged the streets of Reykjavik on Monday and Tuesday to demand a referendum after the government said it was dropping its EU membership bid without a popular vote. The petition can be signed on a website (thjod. is) where the user needs to provide a social security number to guarantee a reliable count. Iceland’s eurosceptic government suspended EU accession talks indefinitely last September in line with an election pledge. On Friday it announced a draft bill to “retract the application for membership of the European Union” which the island nation submitted in 2010. Opposition parties complained that no time had been allocated for debate and the bill was postponed. The government move is opposed by Icelanders from both the pro- and anti-EU side.


Macau business daily, Feb 27, 2014