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MOP 6.00 Closing Editor: Michael Grimes


hina’s unwanted entry to the club of countries blighted by domestic terrorism – as heralded by Saturday’s knife attacks at a railway station in Kunming that left at least 29 dead and 140 wounded – could have implications for security in Macau says a scholar. Although entry from the mainland to Macau is by individual visa or via tour group – thus offering a basic level of security screening – it indicates that the problem of extremism is spreading.

Five-month climb in housing prices ends Page 2

Civil servants want 5.7 percent pay rise Page 4

Xinhua – quoting official sources – blamed the Kunming attack on separatists from the troubled western region of Xinjiang. “I think the attack at Kunming rang an alarm for them [local security forces] to reinforce intelligence exchanges with mainland officers,” Wang Jianwei, head of government and public administration at the University of Macau told Business Daily. More on page

Wynn spends US$700 mln on Cotai project so far Page 5


Year II

Number 487 Monday March 3, 2014

Publisher: Paulo A. Azevedo

Kunming outrage raises security concerns

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Workers march against ‘relentless’ casino expansion

‘Certain’ govt won’t grant all tables for Cotai projects: Tam

More than one thousand casino workers took to the streets yesterday in what the organisers said was a demonstration against “relentless expansion’” of the casino industry – despite the fact the sector has helped to deliver one of the highest employment rates in the developed world. A local gaming workers’ union called Forefront of Macau Gaming, claimed that about 3,000 people took part. Police estimated that about 1,300 joined the rally.

One of Macau’s most senior officials moved to head off residents’ protests about the number of gaming tables the government will grant for new Cotai projects. Secretary for Economy and Finance Francis Tam Pak Yuen said on Friday the government would not grant all gaming tables the casino operators have requested for their new resorts in Cotai – at least until 2022. He didn’t say how many they would get in the interim.





Local real estate crash is ‘unlikely’ Even though property prices have risen to near-unaffordable levels for locals, Macau and Hong Kong are unlikely to face a homes price crash, suggests a real estate professional. Catherine So is regional general manager of online property consultancy It manages Macau real estate website She says government curbs on loan-to-value ratios imposed on private borrowers should help to mitigate the risk of over-leveraging. Pages 6 & 7





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Five-month climb in housing prices ends Seasonal factors drove down the average price by 13.6 percent m-o-m in January Tony Lai


ousing prices fell sequentially in January after rising for five months in a row, official data show. Estate agents blame the fall on seasonal factors, and say the housing market began to pick up again after Lunar New Year. The Financial Services Bureau announced on Friday that the average price of residential floor space was 84,156 patacas (US$10,519.50) a square metre in January, a 13.6 percent decline on December prices. The number of homes sold was 758, 11.1 percent fewer. The fall in the average price was the first since July. The chief executive of Midland Realty (Macau) Ltd, Ronald Cheung

Yat Fai, said: “The period from the end of November to February is usually a low season for the industry … particularly the time before Lunar New Year.” The new lunar year began on January 31.


Fall in home sales m-o-m

Mr Cheung said the market had since begun to pick up again. “March is normally a strong month, when increases in prices and sales are certain,” he said. Ricacorp (Macau) Properties Ltd managing director Jane Liu Zee Ka said: “The market has become more active since Lunar New Year, with a rise of 3 percent in housing prices.” Ms Liu said several property developers intended to begin this month selling unfinished flats that they had failed to sell before.

Unfinished business The average price of housing was 12.9 percent higher in January than a year earlier.

More people calling Macau home

Secretary for Transport and Public Works Lau Si Io said last month that the government was “paying close attention” to the property market and did not rule out taking new measures to curb housing prices. The average price of unfinished flats was 104,766 patacas a square metre in January, 16.7 percent fewer than in December. The number of unfinished flats sold was 85, or 11.2 percent of all homes sold. The average price of completed homes was 78,925 patacas a square metre, 6.7 percent decline on December. HKP Estate Agency (Macau) Ltd district sales director Marco Wong Kwok Ki forecast last month that this year one unfinished flat will be sold for every nine completed homes sold. Last year the ratio was three to seven. Wong said the ratio would widen because the new law on pre-sales had curbed the supply of unfinished flats. Since June the law has allowed the sale of unfinished flats only once the foundations of the building that will contain them are complete and each flat is registered with the government.

Population increased 4.4pct in 2013 to 607,500


n additional 25,000 people are calling Macau home, with the total population increasing 4.4 percent to 607,500 at the end of last year. The number of Chinese immigrants was 3,338, fewer by 722 than in 2012. Of these, 1,295 were granted right of abode. In addition, the total number of illegal immigrants from mainland China who were deported last year totalled 1,335, an increase of 184 cases over 2012. Non-resident workers totalled

137,838 at the end of 2013, an increase of 27,286 over 2012. The elderly were 8 percent of the population, up by 0.3 percentage points year-on-year. Children and teenagers up to the age of 14 accounted for 11.3 percent of the total, down by 0.3 percentage points, while adults aged between 15 and 64 made up the majority of the population at 80.7 percent, slightly down by 0.1 percentage points. Figures from the Statistics and Census Service show that

6,571 babies were born in 2013, a decrease of 744 over the previous year. Deaths totalled 1,920, an increase of 79 year-on-year, with the three major causes of death being neoplasms and heart and lung problems. In 2013, a total of 4,153 people got married, up by 9.8 percent year-on-year, while the number of divorces also increased – by 25 cases to 1,172 in 2013 – over the same period the year before. S.F.

The period from end November to February is usually a low season for the industry Ronald Cheung, CEO, Midland Realty (Macau)

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Kunming outrage raises security concerns Unprecedented attack on civilians at train station highlights spreading domestic terrorism, says scholar Stephanie Lai


hina’s unwanted entry to the club of countries blighted by domestic terrorism – as heralded by Saturday’s knife attacks at a railway station in Kunming that left at least 29 dead and 140 wounded – could have implications for security in Macau says a scholar. Although entry from the mainland to Macau is by individual visa or via tour group – thus offering a basic level of security screening – it indicates that the problem of extremism is spreading. Xinhua, an official Chinese news agency – quoting official sources – blamed the Kunming attack on separatists from the troubled Western region of Xinjiang. The distance from Urumqi, the capital of the semi-autonomous region – to Kunming in Yunnan province in the southwest of China, is 2,497 kilometres (1,550 miles), making it an unusual target for separatist unrest. That has previously mainly been confined to Xinjiang. The distance from Urumqi to Macau is 1,862 kilometres. “This incident has highlighted the fact that the separatists’ attacks have began spreading outward from Xinjiang to the rest of mainland cities, and the target of attacks has also shifted from purely security forces in China to civilians,” Wang Jianwei, head of government and public administration at the University of Macau told Business Daily. The scholar noted that the attack at Kunming station was reminiscent of an incident at Tiananmen Square in Beijing in October last year. Then, three people reportedly from Xinjiang – driving a sports-utility vehicle – crashed into crowds of tourists, killing two, before setting it on fire and dying themselves.

Screening enhanced “In Macau and Hong Kong, the security officers’ main task is to screen for smuggling cases, as well as drug and human trafficking,” said Mr Wang, “But now I think the attack at Kunming rang an alarm for them to reinforce intelligence exchanges with mainland officers to identify for suspicious criminals, or terrorists.” “Compared to here or Hong Kong,

mainland cities are easier targets for domestic extremists’ activities as there are not any visa restrictions on Chinese residents travelling within the state,” the scholar pointed out. “That being said, Macau and Hong Kong are not impossible targets if there were terrorists’ planning to plant an attack by using fake visas,” Mr Wang added, “Also, the two cities do not have a very strict control over foreign visitors moving in or out, and they are popular transit points for mainland Chinese visitors that travel abroad.” Pro-democrat legislator Ng Kuok Cheong however does not think the assault at Kunming has significant implications – in terms of security policy – for Macau and Hong Kong. “We see rare instances of the execution of the state security law, article 23 of the Basic Law, since it came into effect [in 2009],” said Mr Ng. The law punishes crimes of treason, secession or subversion against the Chinese government, or what it calls “preparatory acts” of these crimes and the theft of state secrets. “But Beijing always imposes a very strict vigilance on security issues in Macau and Hong Kong,” Mr Ng believes, adding that Beijing’s “prominent” influence in Macau can be seen on issues such as the gaming concessions. State broadcaster CCTV said that three of the four alleged Kunming attackers killed by police were male, and one female.

I think the attack at Kunming rang an alarm for them to reinforce intelligence exchanges with mainland officers Wang Jianwei, head of government and public administration, University of Macau

Another female suspect was wounded by police gunfire and sent to a hospital for emergency surgery, it said. Some eyewitness accounts on social media say there were more than a dozen attackers.

Some 190 terrorist attacks were recorded in Xinjiang in 2012, increasing by a significant margin from 2011, according to the regional public security department quoted by Xinhua.

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Workers march against ‘relentless’ casino expansion They also reprised now-familiar call against outsiders being card dealers Stephanie Lai


ore than one thousand casino workers took to the streets yesterday in what the organisers said was a demonstration against the “relentless expansion’” of the casino industry – despite the fact the sector has helped to deliver one of the highest employment rates in

Civil servants want 5.7 pct pay rise T

he civil service pay committee proposes salaries for such workers this year should rise by 5.7 percent. The figure takes account of inflation and salary trends in private companies. The Public Administration and Civil Service Bureau said in a press statement last week that the committee expects the government payroll to increase in May. The civil service committee – composed of government officials, and representatives from the workforce and from business as well as academics – would “soon submit” a proposal to the government after reaching a consensus, the statement said. The committee “proposes the value

the developed world. The organiser of yesterday’s rally, a local gaming workers’ union called Forefront of Macau Gaming, claimed that about 3,000 people took part. Police estimated that about 1,300 people joined the rally. The headline reason for the event

of each point in the pay index of civil servants to increase from 70 patacas now to 74 patacas, representing a rise of 5.71 percent which can cover the inflation [rate] of 5.5 percent in 2013”, the statement said. Other factors – including the rise in payroll costs in the private sector, the financial situation of the government and the public’s opinions – had also been considered, the statement added. Gaming operators Sociedade de Jogos de Macau, S.A, Sands China Ltd and Wynn Macau Ltd have each announced a 5-percent hike in salary for their workers this year. The government is expected to table a bill relating to civil servants’ pay to the Legislative Assembly after considering the proposal of the committee. The government employees previously received a salary hike of 6.06 percent in May last year. The director of the Professional Civil Servants Association of Macau, Kun Sai Hoi, said last week his group hoped this year’s hike could be backdated to January instead of starting in May. T.L.

was to pressure the government to say exactly how many new gaming tables it will allow for the six major new casino resorts being built on Cotai. The government said it had capped table expansion at three percent growth annually until 2022, but has since hinted it might be flexible in the light of the huge capital investment being made on Cotai. “If we did not get any response from the government, we’ll not rule out escalating our actions into an assembly that lasts for many hours, or even [having] a strike,” the union’s president Ieong Man Teng told media yesterday. The government’s equivocation on the table numbers was evidence of the “relentless expansion” of gaming, claimed Mr Ieong. Those taking part in yesterday’s march appeared to lump together with the table numbers issue other grievances. They included the – by now – well-known opposition to allowing imported workers to be casino dealers. But casino smoking and even high local house prices were also on the list of complaints. “We hope that the government could legislate against importing nonresidents to work as croupiers,” said Mr Ieong. “Also, we requested a full smoking ban in casinos to protect workers’ health, and for all these issues we’ve already petitioned to the government.” The rallying workers walked from Tap Seac Square to Government Headquarters. Four workers – croupiers and pit supervisors – Business Daily spoke to yesterday said they were strongly opposed to a suggestion from SJM

Holdings Ltd chief executive Ambrose So Shu Fai that the government should consider letting casinos employ migrant workers as croupiers. “The property price here is so high that there are not many good job options left if you want to sustain your livelihood, and croupier is a job that should be defended,” said 43-year-old dealer Moon Lei, who refused to disclose her full name. She added that most of her croupier colleagues are workers aged 30 to 50. “I don’t really desire or expect a promotion myself, but I wish I could stick in my job until I retire,” Ms Lei said, adding that she feared that migrant workers employed as casino dealers would accept lower wages than resident workers.

I don’t really desire or expect a promotion myself, but I wish I could stick in my job until I retire Moon Lei, casino dealer marching yesterday

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Macau Wynn spends US$700 mln on Cotai so far Wynn Macau Ltd had spent US$703.7 million (5.62 billion patacas) on its underconstruction Wynn Palace resort on Cotai as of December 31, the firm confirmed in its final results released yesterday. It also said the total budget – including “construction costs, capitalised interest, pre-opening expenses, land costs and financing fees,” – is US$4 billion. The resort will have a 1,700-room hotel, “performance lake”, meeting space, a casino, spa, shops and food and beverage outlets. “We continue to remain on schedule for an opening in the first half of 2016,” added Wynn Macau. Macau operations saw a US$365.4 million (10.6 percent) increase in casino revenues to nearly US$3.81 billion for the year ended December 31.

‘Certain’ govt won’t grant all tables for Cotai projects: Tam Might not get all they want until after 2022 suggests Secretary for Economy and Finance Tony Lai

Secretary for Economy and Finance Francis Tam


ne of Macau’s most senior officials moved to head off residents’ protests about the number of gaming tables the government will grant for new Cotai projects. Secretary for Economy and Finance Francis Tam Pak Yuen said on Friday the government would not grant all gaming tables the casino operators have requested for their new resorts in Cotai – at least until 2022. That hands the problem on to someone else, as the former factory boss is expected to retire from his post within 12 months, after serving as economy secretary since the handover from Portuguese administration in 1999. Mr Tam also said the new Cotai resorts would be “the last round of large-scale gaming development” here. He suggested it would be enough to make the territory competitive against other gaming jurisdictions for decades. Speaking on the sidelines of a

seminar organised by the Macau Chamber of Commerce on Friday, Mr Tam said, “We do not rule out that the projects can get all the tables they have requested – namely 500700 tables each – 10 years later.

Tough luck “But for the 10 years starting 2013 we are certain that the government will not grant all the tables each project has requested. The number the government gives will be based on the compound annual rate of no more than 3 percent [on gaming tables] in 10 years [starting 2013].” There were many requests from the gaming operators asking for tables, but the government hadn’t made any commitments, he added. The secretary, however, did not say when the government would decide how many tables will be given to the six Cotai resorts currently either under construction or in final planning. MGM China Holdings Ltd has said

in filings it hopes to have 500 tables for its maiden Cotai resort due to be completed in 2016. SJM Holdings Ltd has said it would like 700 tables for its Lisboa Palace project, with a hoped-for completion in 2017. Gaming Inspection and Coordination Bureau figures show Macau had 5,750 gaming tables at the end of last year, 4.8 percent more than a year earlier. Mr Tam stressed on Friday it is “inevitable” that Macau needs the development of gaming resorts in Cotai to “consolidate its economy”. “Only after completing such development in 2016-17, we can then dare to say we are capable to handle the competition from other places in the region in the next 10 to 20 years,” the secretary said.

Limits set “But this development is not an unlimited development,” he said.

“As you all know there will be no more land zoned for gaming after the completion [of the resorts] in 2016-17.” He added there would be a “bright prospect” for the city after the resorts – together with the Hong Kong-Zhuhai-Macau Bridge – are completed in 2016 and beyond. Macau took in gaming revenue of360.8 billion patacas (US$45.2 billion) last year, seven times as much as the Las Vegas Strip. But the territory is facing potential competition in the region for Chinese gamblers’ money – from the likes Japan and Taiwan, which are considering legalising casino gambling. Hiroyuki Hosoda, chairman of a cross-party group of pro-casino lawmakers in Japan, told Bloomberg News last week he expects a casino bill would win parliamentary approval by June. Brokerage CLSA Ltd expects Japan’s casino market could eventually generate as much as US$40 billion a year.

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Local real estate crash

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HOSPITALITY Independent roaming The Individual Visit Scheme (IVS) was created to stimulate mainland citizens’ travel to Macau, at a time of greater worries about the local economy. Although the concerns behind its creation subsided, its use continues to be strong. That is especially true for the regions that provide the majority of visitors to Macau. Data with the regional breakdown on the use of individual visas have been published for the last three full calendar years. They deliver a very diverse pattern of use across the various cities and provinces of China. Big cities, as a rule, are the major users of the mechanism. The four top cities are included in the five top spots.

Even though property prices have risen to nearunaffordable levels for locals, Macau and Hong Kong are unlikely to face a homes price crash, suggests a real estate professional. Catherine So is regional general manager of online property consultancy It’s a subsidiary of iProperty Group Ltd and also manages Macau real estate website Ms So says that – barring major external events such as a regional financial crisis or public health emergency – the two Special Administrative Regions and their housing markets will continue to benefit from strong and stable economies and low unemployment. She adds that government curbs on loan-to-value ratios imposed on private borrowers should help to mitigate the risk of over-leveraging even if the markets see some short-term price corrections. Luciana Leitão

The leading user, in relative terms, is Tianjin. In the three years shown, the percentage of visitors coming for that city and travelling under an individual visa stood steadily around 86 percent of the total. But Tianjin represents a small amount of visitors. Last year, fewer than 110,000 visitors came from there. Shanghai, which sends four times that amount, is approaching similar percentage levels. Shanghai’s IVS usage figure rose to 82.6 percent of all the visitors it sent to Macau last year. Next in this ranking comes Beijing; but, in this case, fewer than three quarters of its outbound visitors have an individual visa. In the case of the provinces, only Guangdong a proportion of individual visas above 50 percent. For Guangdong, that figure rose almost 12 percentage points in the last three years. That is significant because it is also, by far, the region providing more visitors to Macau. In 2013, the 8.2 million that came from that province were more than ten times as big as the contingent coming from the second in line, the province of Fujian. J.I.D.


proportion of Guangdong visitors with IVS visas, 2013


What are your expectations for the real estate market in Macau? As we all know, prices have definitely increased in the Macau market. If you look at a few years ago, in 2009, we’re [now] looking at an average per square foot price of HK$1,700 [US$219] in Macau. [When] you look at it again in 2013 and it has risen to about HK$6,000 to HK$7,000 per square foot. That’s over a 300 percent increase, which is a very steep increase by any measure. And if you put things in perspective and you compare it with the median income in Macau, it’s a pretty frightening number. Any family in Macau, if you don’t eat, don’t live and don’t wear anything, you still have to save up 13 years until you can fully fund an average property in Macau. Hong Kong is even worse. Prices are definitely very expensive and have increased quite a bit in 2013 compared to 2012, not only in terms of sales but also in terms of rentals with increasing [numbers of] foreigners hired in Macau. It’s gotten quite busy in Macau, supported by a very good [strong] gaming industry. With all that, I guess government has really stepped in and tried to improve the situation and has rolled out with a number of cooling measures in the past couple of years; the latest one being announced in June 2013. What you saw in the market in the second half of 2013 was the transaction volume really come down, but on the flipside, prices haven’t really come down as a result.

Supply is continuously low. Only about 1,800 new units are estimated to be made available in the Macau market in the coming year, so that’s one of the reasons that explains the current situation. Considering the transaction volume has decreased and the prices haven’t, should we assume the cooling measures by the government have not been effective? Housing problems have never been simple for any market. Macau is faced with its own issues. Hong Kong is faced with similar issues. China had an overheating property market and it still does. London has its own problems. It’s never an easy fix, and it’s never an immediate fix, because you have to balance various factors. The people that haven’t been able to afford an apartment, obviously they are angry and the people who have bought an apartment don’t want to see a significant depreciation in the asset value. My personal opinion is what it [government intervention] has effectively done is to stop the crazy increase in property prices in the market. Comparing Macau’s real estate market with Hong Kong’s, are the problems similar? Hong Kong is facing a very similar situation. Prices have gone up tremendously in the past few years, so if you look at 2009, average per square foot pricing in Hong Kong was about HK$5,400, and if you look at it again in 2013 it has increased over 65 percent to HK$8,900. Relative to 2003,


where it was at the last low point, it increased 300 percent. When you compare it with the median income, it is even crazier [than Macau]. It [average pricing] is 15 times the average household [annual] income. That means you have to save [for] 15 years and not spend a dime before you can pay for an apartment in Hong Kong. Similarly, the government has stepped in with a number of cooling measures in the past couple of years: the special stamp duty, business stamp duty, a new ordinance to control how new properties are being sold in the market. As a result [the] property transaction volume is also coming down. You’re looking basically at an average volume of about 4,500 transactions a month [in Hong Kong] versus close to 8,000 per month in 2012, you can see it has definitely come down tremendously. A 40 percent drop in transaction volume in 2013 versus 2012. It’s a very similar situation [to Macau], but one thing the [H.K.] government has managed to do is to stop prices from continuing to rise at the rate they have been. So, in a sense, would you say the Hong Kong government’s intervention was more effective than Macau’s? In Macau it [pricing] has not

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triggered the panic of selling and that’s what caused the [previous] crash. We’re not seeing any of that in either market. Absenting any macro disaster – like we saw in 2007, and in 2003 with SARS [severe acute respiratory syndrome] in Hong Kong and in 1997 with the Asian financial crisis – my personal view is it would be very difficult to see a major crash in either market. There may be slight adjustments, because there are always people who don’t have a strong financial balance sheet looking to cash in [on assets] in the more immediate term. But that’s not [applicable on] a market wide basis. Macau’s Chief Executive has already admitted the possibility of a property market bubble. Do you believe any ‘bubble’ is likely to burst? The policies on controlling the loan [-to-value] ratio in both markets really help prevent a really largescale bubble problem. For example in the past any buyer could leverage a property up to 90 percent [of the value], so if property prices come down 10 percent, it basically wipes out your entire down payment and get you into [a] negative net assets situation. But since the government of both markets are controlling loan ratio at 50 to 67 percent [of value], even if there is a short-term adjustment in prices – let’s say 10 to 30 percent – it wouldn’t be creating as big of a panic as it would in a normal situation, like in the Western world, where most

increased at a crazy rate but you still see an increase despite the government intervention. To that extent, yes, prices in Hong Kong have been more stabilised after cooling measures [than Macau]. If the measures were similar, why did they have different results? It’s fundamental factors. The Macau economy is growing very strongly. The gaming industry is very strong. [The] increasing visits from mainland [tourists] and closer ties between the mainland and Macau, fundamental factors like interest rates being low, inflation being high; all those factors come into play, resulting into a continual price increase. But what the [Macau] government has managed to do is to at least slow down the price increase versus the previous year. Is it sustainable to have the prices increasing at this level, in Macau and in Hong Kong? There are many factors to look at. What’s driving the increase, the fundamental reasons for it and for the Hong Kong market is because of the interest rate and a strong demand not only domestically but also from overseas and from mainland China as well. And Chinese, historically, have really believed in property as a valuable asset. [Whether it’s] sustainable or not, really depends on a number of factors. When there is demand and low supply, of course the prices are going to be kept at a high level. So, if you purely look at it from a local resident’s perspective, both governments [Hong Kong and Macau] have done what a government is supposed to do – which in the medium- and longterm is attempt to increase [the] public housing supply. That’s to solve the domestic issue of average prices being unreasonably high

what it [government intervention] has done is stop the crazy increase in property prices

people are leveraging up to 80 to 90 percent. Property supply in the region is difficult, considering the obvious lack of space. How can we increase supply? Land in any given city is scarce. It’s the same in London, in New York, in Tokyo. Everyone wants a piece of Hong Kong. There’s a similar situation in Macau, but what the government can always do is to buy areas in the outskirts and put in infrastructure to allow those areas to become ‘liveable’ residential areas. With the right infrastructure, right transportation, right community facilities, those areas could be developed into new residential areas to address the supply problem. And that’s exactly what the government in those markets is doing. Macau is developing the northern Taipa area, and Hong Kong is developing in the New Territories.

relative to local incomes. Is increasing the supply the solution? That’s part of the policy that both governments have attempted not only in terms of rolling out public housing, but also in terms of land supply. Ideally and in the mediumterm you’re looking at a five year horizon – on average – from the time you sell [government] land, to [it] being acquired by a developer, to planning the development, to pre-sales and [finally] making the units available. The government is doing a series of things that it hopes will increase supply as soon as possible. But it’s not an overnight thing, and there are other factors that come into play. The developers need to make money and they don’t have an urgency to sell. Another factor is the particularly strong balance sheets of Hong Kong residents. What triggered the last financial bubble was macro panic. [If] the economy is not stable, people are not confident that they can their job, not confident that they can finance their mortgage, and that’s what

...if you don’t eat, don’t live and don’t wear anything, you still have to save up 13 years... [to] fund an average property

400 sqm Villa Luxury Condo in Cascais-Guincho 4 suites, garage for 2 cars, 5070 sqm plot area Price:HKD15,000,000


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Greater China China investigates 27,236 graft cases A total of 27,236 corruption cases were investigated from January to November last year, according to a report from the Supreme People’s Procuratorate (SPP) on Saturday, states Xinhua. About 2,257 of the 36,907 people investigated during the period were officials at county head level and above, accounting for 6.1 percent, said the report. The number of cases was an increase of 6.8 percent year on year, and the number of corrupt officials was up 6.3 percent year on year, according to the SPP. The body’s action has been in line with the Communist Party of China Central Committee’s requirements of fighting “tigers and flies”, referring to high and low ranking corrupt officials, the SPP said.

Yuan slide might be ‘end of an era’ Fluctuations seen by some analysts as deliberate move by central bank

PRC can explore Mars says scientist China has the capability of exploring the planet Mars, Ye Peijian, a top scientist with the Chang’e-3 programme, the country’s lunar probe mission, told Xinhua. The country is capable of sending a probe to circle Mars and having it land on the planet, Ye said, adding that the country has no problems with tracking control and communications technology. China’s space missions have seen systematic development. The Chang’e-3 lunar probe, a part of the second phase of the country’s lunar programme, soft-landed on the Moon on December 14, with the nation’s first moon rover Yutu (Jade Rabbit) aboard.

Mainland-made aircraft checked after incidents Following two accidents on landing, the Chinese Modern Ark 60 (MA-60) aircraft must be thoroughly checked, China’s aviation watchdog announced on Friday . All MA-60 should have their landing signal systems checked, said the Civil Aviation Administration of China. Those with more than 6,400 take-offs should be grounded for checks. This will involve two domestic airlines, Joy Air and Okay Airways, and four airlines in Laos, the Philippines, Zimbabwe and Bolivia, the administration said. A Joy Air MA-60 crashed during landing operation at Zhengzhou airport, in central China’s Henan Province on February 4 when the front landing gear suddenly retracted. There were no casualties.

China fights online leaks of classified maps China is to crack down on sales or uploads of classified maps on the Internet to curb geographic information leaks, authorities announced on Friday. The campaign will focus on online trade in classified basic surveying and mapping results, and digital navigation maps without confidential treatment, the National Administration of Surveying, Mapping and Geoinformation said in a statement. It plans to inspect e-commerce websites, blogs and bulletin boards. People found illegally selling or providing classified maps will be harshly punished, while websites containing sensitive geographic information will be shut down, according to the statement.


he yuan closed at an eightmonth low against the dollar on Friday after a sharp midday dip. Economists quoted by China Daily said this volatility might signal the end of nearly a decade of gains for the currency. The yuan was down by 0.9 percent during the trading day, the biggest such movement since at least April 2007. Economists said the People’s Bank of China might have orchestrated the recent volatility to prepare the market for another broadening of the yuan’s daily trading band to 2 percent, against the current 1 percent. The yuan closed at 6.1550 per US dollar. The move came as the PBOC set the daily reference rate 10 basis points higher on Friday at 6.1214. Since Feb 17, the yuan has lost almost 2 percent. It had risen 34 percent against the dollar since its revaluation in 2005. The currency has fallen repeatedly in the past two weeks. Many dealers said the depreciation is a deliberate move by the PBOC to target speculative funds betting on continued rises.

Planned adjustment

Official promises ‘frugal, efficient’ CPPCC Top political adviser Yu Zhengsheng on Friday vowed frugality and efficiency in the upcoming annual session of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC). Yu, Chairman of the CPPCC National Committee, made the remarks at a closing meeting of the Standing Committee of the CPPCC National Committee. The meeting held to prepare for the annual session that begins today. He stressed that meeting styles must be improved to make the annual session “simple, pragmatic and highly effective, clean and righteous,” echoing the highprofile campaign launched by the Chinese leadership to fight extravagance, formalism and bureaucracy.

“The latest retreat was largely government-guided. The PBOC intervention reflects its desire to tame expectations of appreciation and counter hot money inflows as it prepares for band widening,” Singapore’s DBS Bank Ltd said in a research note on Friday. Intervention, it added, does not reflect a fundamental policy shift toward weakening the currency. Dariusz Kowalczyk, a Hong Kong-based economist with Credit Agricole CIB, wrote in a research note on Wednesday that a band of 1.5 to 2 percent may be established soon, possibly within weeks. In a sign that the central bank is


ready to fine-tune its foreign exchange policy framework, it started sounding out exporters on the impact of the recent depreciation. Reuters quoted an anonymous employee at an exporter as saying that the company had received a phone call and an e-mail from the central bank seeking comment on the recent depreciation. Ye Shuhui, a sales manager of Ningbo Jinfan Toy Co in Zhejiang province, told China Daily that he doesn’t see any benefit for his company in the depreciation. It means that future payments by customers won’t be worth as much if the renminbi depreciates. However, further appreciation of the yuan wouldn’t be good news either, as it would indicate rising costs. “The ideal is for the yuan to remain stable,” he said. “Depreciation of the yuan may seem like good news. But few exportoriented companies can benefit from this instantly, because most orders

were completed long ago,” said Zhang Guanjin, general manager of Shaoxing Jinyong Textile Co Ltd in Zhejiang.

Stability policy Australia and New Zealand Banking Group Ltd said in a report on Friday that although the PBOC will allow mild appreciation in the medium term to maintain its overall policy direction for a “generally stable” yuan, “the recent move has indicated the PBOC is willing to tolerate a more volatile market movement in the year ahead”. UBS AG’s China economist Wang Tao said in a research note that the Chinese currency will largely trade at 6.1 yuan per dollar throughout the year amid wider fluctuations. While welcoming the increased volatility, ANZ said encouraging capital outflow will be a better way to promote exchange rate flexibility. For example, if the foreign exchange quota for residents was raised from the current US$50,000 to US$250,000 per year, there could be large capital outflows. “The two-way flow of capital will naturally lead to volatility in exchange rates of the renminbi against major currencies,” said ANZ.

US$ 50,000


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Greater China No red carpet for cheating cinema managers China movie theatres barred from showing films after box office fraud


ine Chinese cinemas have been banned from screening new movies after they were found to have cheated on box office figures, reports Xinhua, one of China’s official news agencies. According to two film associations, six of the suspended venues are cinemas in east China’s Shandong Province and northern Shanxi. They are banned indefinitely until they rectify their practices. The other three are banned for one month, said a statement issued by the China Film Producers’ Association and China Film



Distribution and Screening Association. The two semi-official organisations are under the State Administration of Press, Publication, Radio, Film and Television. The affected cinemas were found to have reported fake box office figures to authorities, sold hand written (or no) tickets or hindered official box office inspections, reports Xinhua. In one case, a cinema in south China’s Hainan Province registered no audience at all in their computer system despite the screenings in question receiving viewers normally. “All these misconducts aim to avoid lawfully sharing box office earnings with filmmakers and other relevant parties,” reported Xinhua. “There is nothing we can do but comply with the order. I think box office fraud is far more prevalent among cinema chains,” Liu Chunlei, manager of Shidaihuana Cinema in Shanxi, one of

the cinemas being punished, told Xinhua. Liu said screenings of current titles are still under way at his cinema but they would not screen new films such as RoboCop, a remake of the 1987 classic directed by Paul Verhoeven, which was due to be released in China on Friday. Another five cinemas were

named for similar but less serious practices. Local authorities in southwest China’s Chongqing Municipality also found a cinema screening an unlicensed movie. Cinema personnel have been handed over to the police for further investigation, said the statement. China’s total box office

Thousands protest at HK editor attack

China scraps tariffs on oil exploration facilities T

Police ‘share same goal’ in catching suspects, says local commander


housands of people took to Hong Kong’s streets yesterday to show support for press freedom and to demand police step up efforts to catch the assailants who critically injured a former newspaper chief editor in the city. Kevin Lau Chun To, former chief editor of a Hong Kong’s Ming Pao Daily News, was ambushed on Feb. 26 as he got out of his car near a restaurant in Sai Wan Ho when an assailant slashed him with a meat cleaver. The attack left Lau’s internal organs exposed and damaged nerves in his leg, the South China Morning Post reported on Feb. 28. Lau, 49, is now chief operating officer at a unit of Media Chinese International Ltd, which owns Ming Pao. About 13,000 people participated in yesterday’s march, Hong Kong Journalists Association chairwoman Sham Yee Lan told reporters. Police said around 8,600 people joined the rally at its peak, according to Radio Television Hong Kong. Lau, who had been in critical condition, is now stable and was transferred to a private hospital ward on Saturday, Ming Pao News reported yesterday. “Violent attacks are to make us fear, and if we are scared we will lose our freedom,” Lau said in a recorded message broadcast to protesters today outside the city’s government offices. “I hope all journalists remain fearless and believe that justice can be manifested.” The police attach great importance to this case and are investigating every angle, Li Kin Fai, regional police commander on Hong Kong Island, said in a statement today. “Police would not tolerate any

HK$3 mln


sales neared 21.8 billion yuan (US$3.56 billion) in 2013, a year-on-year increase of 54.3 percent. A circular issued last month by the administration banned cinemas from manipulating viewing figures and other cinematic fraud, urging inspectors to routinely audit cinemas and report misconduct.

violence,” Li said. “The police, the media and members of the public shared the same goal to apprehend the culprits.” The attack has added fuel to earlier concerns among Hong Kong journalists that the city’s press freedom is being eroded. Yesterday’s march followed a Feb. 23 protest attended by at least 1,600 people. The city’s ranking on the global Press Freedom Index compiled by Reporters Without Borders fell to 58 last year from 18 in 2002. Ming Pao has tripled to HK$3 million (US$387,000) its cash reward offered for the capture of Lau’s assailants. Hong Kong police located a taxi driver who picked up a possible suspect in the slashing, the SCMP reported on Saturday, citing an unidentified person. Bloomberg News

he Chinese government announced on Friday it is including some oil and gas exploration equipment to its list of items that can be imported free of duty, reports Xinhua. The new items that are exempted from tariffs and value-added import tax include drilling equipment, semisubmersible drilling rigs, liquefied natural gas carriers and several other facilities that are used in exploration and high-end manufacturing. The measure took effect on Saturday. China expects the items to help in resource exploration, air pollution control, new energy development and railway safety. “The adjustment shows China is accelerating the advance of emerging industries like equipment manufacturing amid the latest global wave of industrial transformation and upgrading,” said Wang Zhonghong, researcher under the Development Research Center of the State Council. Wang suggests the government stimulate domestic enterprises’ technological innovation via financial aid and overseas cooperation to enhance core competence, apart from imports. The list, compiled in 2009 and having been through several adjustments, contains products needed by China but that cannot currently be manufactured there Meanwhile, some parts used in engineering machinery, urban railway transit facilities and nuclear electricity equipment were removed from the list.

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Greater China

Law, reform must work in tandem, says Xi Economic changes require coordinated effort, say country’s leaders


enior officials leading China’s reform programme emphasised on Friday that any changes must conform to Chinese law, reports China Daily. Top leaders have not stressed coordinating reform and the legal system to this extent since Deng Xiaoping’s reforms started in the late 1970s. President Xi Jinping, the leader of the group, said that legislation should be coordinated to ensure that reforms are implemented alongside new laws. The central leading group was established by a decision of the Third Plenum of the 18th Central Committee of the Communist Party of China in November as a measure to promote the country’s deepening of reforms. The group’s first meeting was held on Jan 22. It approved the working rules for the group and six subgroups. The group’s second meeting prioritised economic reform as it entails more coordinated efforts in related fields. “Economic reform should be carried out to ensure macroeconomic growth and the improvement of people’s lives,” Xi said. Xi presided over the meeting attended by deputy group leaders Li Keqiang the Chinese premier, Liu Yunshan and Zhang Gaoli, as well as other group members and heads of relevant departments in the key reform fields. With seven years left to fulfil the targets set by the Third Plenum, Xi emphasised at the meeting the importance of this year’s reforms. “The starting of a race decides the second half of the race, and implementation is the key for effectively deepening reforms,”

President Xi Jinping

Xi said. Judicial and social system reforms should integrate old and new systems to foster justice and fairness, he said. “As for the reforms concerning people’s immediate interests, there

…ensure…all reforms serve the people’s interests President Xi Jinping

Sun Art says 2013 profit up 15 pct Supermarket chain plans many more stores on mainland


un Art Retail Group Ltd, China’s largest hypermarket chain by market capitalisation, posted a 15.2 percent rise in net profit for 2013, with an expanding

store network helping it shrug off an economic slowdown. “Looking ahead, we will continue to maintain steady new store expansion by leveraging

should be a social-stability evaluation system to ensure that their concerns are heeded and that all reforms serve the people’s interests,” Xi said. “There must be a workable evaluation mechanism to assess reform results and interpret reform plans for the citizens.” A tten d ees a t th e m e e t i n g deliberated on and passed the group’s main work for this year: the opinions on legislative tasks proposed by the Third Plenum; a report on key reforms of the economic system and ecological civilisation system submitted by sub-leading groups; an implementation plan on the cultural system; opinions on social system reform and the labour distribution plan; and reports on reform progress since January delivered by department heads in fields listed at the central leading group’s first meeting.

the opportunities arising from accelerating urbanisation and prudently selecting the location of new stores to ensure their quality,” chief executive officer Bruno Robert Mercier said in a statement. Net profit rose to 2.78 billion yuan (US$451.6 million) for year ended in December, from 2.41 billion yuan a year ago, it said in a statement over the weekend. That matched an average forecast of 2.79 billion yuan from analysts polled by Reuters. Revenue surged 10.7 percent to 86.20 billion yuan. Gross profit margin increased 0.9 percentage points to 21.6 percent. Sun Art, a joint venture between Taiwan conglomerate Ruentex Group and privately held French retailer Groupe Auchan SA , also competes with Wal-Mart Stores Inc, the world’s biggest retailer that bought control of Chinese online store Yihaodian in 2012. Sun Art said it continued to open new stores at a steady pace, adding 50 hypermarket complexes in 2013. It operated 323 hypermarkets across China under Auchan and RT-Mart banners at the end of 2013, of which 10 percent were in first-tier cities. Same-store sales growth slowed to 2.0 percent during the year, compared to 3.3 percent for 2012. Pushing into e-commerce as competition in the hypermarket sector

China’s yuan passes Swiss franc in popularity C

hina’s yuan surpassed the Swiss franc to become the seventh most-used world payments currency in January, global transaction services organisation SWIFT said. With a market share of 1.39 percent, the yuan remained one of the top 10 most-used currencies for payments worldwide for the third consecutive month. It ranked eighth in December. Yuan payments increased by 30.6 percent while the growth for all payment currencies was 4.8 percent in January, SWIFT said. However, yuan payments were still heavily concentrated in Hong Kong, which had a market share of 73 percent, followed by the UK, Singapore, Taiwan, the United States, France and Australia. “Looking at the first month of 2014, which was the highest payments value recorded for RMB so far, it is clear that the RMB is on its way to remaining a top 10 currency for global payments,” Michael Moon, SWIFT’s Asia Pacific director of payments markets, said in a statement. Beijing is stepping up efforts to make its currency an international one by accelerating reforms in domestic markets as well as introducing pilot programmes to allow freer yuan movements cross borders. It clarified details for conducting cross-border yuan transactions in the Shanghai free trade zone last week, officially kicking off yuan business in the pilot zone. Reuters

heats up, Sun Art established Uitox E-commerce as one of its e-commerce business platforms and it launched a shopping website in January 2014. “We will continue to improve and develop e-commerce business, enhance consumer shopping experience and explore new shopping channels,” Mercier said. A tie-up announced last October between the world’s No.3 retailer, Tesco, and China Resources Enterprise , potentially poses a challenge to Sun Art’s lead. Sun Art shares fell 19.4 percent so far this year, lagging a two percent slide in the benchmark Hang Seng Index. Reuters

2.78 bln yuan Net profit to end Dec

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Japan mission departs for N.Korea talks Rare meeting aims to improve ties between the two neighbours


File photo from February 2 poll

Thailand begins re-runs of troubled elections No initial signs of fresh attempts to obstruct polls as protestors grow weary Apilaporn Vechakij


olls opened peacefully in five Thai provinces yesterday for re-runs of a widely disrupted general election, authorities said, in the first move to complete a troubled vote that could provide a mandate for a new government. A February 2 election failed to ease the months-long political crisis after anti-government protesters seeking to topple Prime Minister Yingluck Shinawatra obstructed the vote in many opposition strongholds. Demonstrators at that time prevented 10,000 polling stations from opening, affecting several million people, mainly in opposition strongholds in Bangkok and the south. The nation’s Election Commission said the results would not be announced until polls have been held in all constituencies, setting a rough deadline of April for their completion. A total of around 120,000 people were registered in 101 constituencies across five provinces for yesterday’s vote, election commissioner Somchai Srisutthiyakorn told AFP.

according to an AFP reporter, but there were no signs of new obstruction of the polls. Until the full results are announced, Prime Minister Yingluck remains in a caretaker role with limited power over policy. Under Thai election law, 95 percent of the 500 seats in the lower house of parliament must be filled to enable the appointment of a new government. Thailand’s main opposition party, which boycotted the vote, in February lost a legal bid to nullify a controversial election. In addition to the street protests, Yingluck faces a slew of legal challenges to her government, including charges of negligence over a troubled rice subsidy scheme, which could see her removed from office. Thailand has been riven by political divisions since 2006 when

Peaceful start “The polls are going peacefully – everything is under control and there are no problems,” Somchai said, adding that a few dozen protesters blew whistles at one polling station in Rayong province. A trickle of voters arrived at two polling stations early yesterday in Phetchaburi – one of the affected provinces south of Bangkok –


Seats in lower house Thai law insists are filled

Thaksin Shinawatra – Yingluck’s older brother – was ousted in a bloodless military coup. Hatred in some quarters of Mr Shinawatra has fuelled demonstrations, which seek to end the influence of his billionaire family on Thai politics. Shinawatra-linked parties have won every election for more than a decade, drawing on support from the rural north and northeast.

Stages dismantled Anti-government protesters yesterday began dismantling rally stages at several key intersections in the capital after announcing the end of their self-proclaimed “shutdown” of the city. Crowds have dwindled amid a spate of near-daily gun and grenade attacks –including an attack seven days ago in a downtown shopping area, which killed a woman and two children. Protesters have moved their tents to a park in the centre of the city, which has also been occupied for weeks. The movement has denied the retreat marks a defeat, saying it would keep up its struggle to overthrow a government that it sees as corrupt. Firebrand protest leader Suthep Thaugsuban, who is known for his soaring rhetoric, has predicted Yingluck’s government will fall within a fortnight. AFP

apanese government and Red Cross officials set off yesterday for talks in China with their North Korean counterparts in a rare meeting that might help improve frosty relations. The delegation headed to Shenyang for the Red Cross talks about possible visits by Japanese to the graves of family members who died in North Korea decades ago, or missions to collect their remains. The team includes Keiichi Ono, who heads the foreign ministry’s Northeast Asia division. The government talks will be held on the sidelines of the Red Cross meeting. While there were few details of the agenda for the meeting, which starts today, officials are hopeful that good discussions might help bridge the gap between the two nations, said Osaku Tasaka, head of the international division at Japan’s Red Cross. “We don’t know exactly what kind of agenda items (North Koreans) will bring,” he told  reporters. “This meeting is designed specifically for the remains. But if discussions on this theme make progress, I hope it will also make a positive impact on other subjects.” Ties between the two countries have long been strained, though they periodically try to resume dialogue with the ultimate – and so far elusive – goal of establishing formal diplomatic relations. Officials from the two Red Cross societies last met in August 2012 and this led to talks by government officials in November of that year. They had planned to meet again in December 2012 but that was cancelled after Pyongyang announced its plan to launch a long-range missile. One of the thorniest issues between Tokyo and Pyongyang is the fate of Japanese citizens who were kidnapped by North Korean agents in the 1970s and 80s to train its spies. But it is not clear if government officials will discuss that in the upcoming talks, Japanese diplomats have said. North Korea, meanwhile, craves trade with Japan yet blasts its military alliance with the United States, its 1910-45 colonisation of Korea and its treatment of ethnic Koreans in Japan. AFP

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Italians query Philippines arms deal Complain that rival Spanish bidder acted improperly


n Italian company has complained that the Philippines’ Department of National Defense (DND) awarded a 5.3-billion pesos (US$118.8 million) contract for the procurement of military aircraft to a Spanish firm – despite questions on the bidding process – reports the Philippine Daily Inquirer. In a letter to the DND, Italian firm Alenia Aermacchi said the Spanish company Airbus Military should have been disqualified from the bidding for the procurement of three medium-lift fixed-wing aircraft because it failed to disclose its business relationship with PT Dirgantara, an Indonesian company that also joined the bidding. Defense Undersecretary Fernando Manalo on Friday said a notice of award had already been issued to Airbus Military and the contract for the procurement of the military planes would soon follow. But Alenia said the DND should have nullified the Spanish firm’s bid for violating the prohibition in the government procurement law regarding conflict of interest among prospective bidders in government projects. “A simple perusal of the company websites of both PT Dirgantara Indonesia and Airbus Military shows that the two bidders … are strategic partners in the production of the [military planes] CN 235 and CN 295,” Alenia said in a Jan. 16 letter signed by Roberto Pierdominici, the firm’s regional sales director. Under Republic Act No. 9184, also known as the Government Procurement Reform Act, a conflict of interest among bidders exists if a prospective supplier “has a

relationship, directly or through third parties, that puts them in a position to have access to information about or influence on the bid of another bidder or influence the decisions of the procuring entity.”

No feedback The Inquirer tried to get a comment from DND spokesperson Peter Paul Galvez on the issue, but he did not answer calls to his mobile phone. In an earlier interview with reporters, Defense Assistant Secretary Patrick Velez said the DND would only award the contract to Airbus Military

after all the issues raised against the Spanish firm had been settled. A representative of Alenia, who asked not to be identified for lack of authority to speak with the media, said the defence department had yet to answer its questions regarding Airbus Military’s bid. Citing a press statement, the Italian firm said Airbus Military itself admitted that the development of the CN 295 was a product of its “strategic partnership” with the Indonesian firm. In a press release on its website dated May 21, 2013, Airbus Military stated that it was putting up a

“delivery centre and a final assembly line” for CN 295 planes in Bandung, Indonesia, “as a direct result of (PT Dirgantara) and Airbus Military’s strategic partnership signed in 2011.”

Conflicting interests “(T)here is thus no doubt that the relationship of the two bidders … is a conflict of interest … Clearly, the bidders have a direct relationship that puts them in a position to have access to information about or influence on the bid of another bidder or influence the decisions of the procuring entity regarding this bidding process,”

Cambodia ‘getting away with murder’ Australian ex-foreign minister highly critical of country’s PM Hun Sen


ormer Australian Foreign Minister Gareth Evans has said Cambodian political leaders should be “named, shamed, investigated and sanctioned” by the international community, reports the Phnom Penh Post. In an opinion piece published in the newspaper, Evans says the behaviour of the administration led by Prime Minister Hun Sen “has now moved beyond the civilised pale”. “Cambodia’s government has been getting away with murder,” Evans writes, adding that the response of the international community in the post-election period, marked by mass protests before a violent crackdown by authorities last month that left several dead, was “muted”.

Democracy is on the right track and people can voice their concerns and show their choice at the election Phay Siphan, Council of Ministers spokesman

“Australia’s statements have been typical – falling over backward to avoid giving offence, and too anxious to balance criticism with praise,” he says, adding that a recent meeting between Australian foreign minister Julie Bishop and Hun Sen saw “no robust critique” delivered. “There is a place for quiet diplomacy that relies on genuine engagement to encourage significant behavioural change. But when states behave badly enough for long enough, loud megaphones can also be in order. “I know Hun Sen and worked well with him in the past. I have resisted strong public criticism until now, because I thought there was hope for both him and his government.… [But] it is time for Cambodia’s

I have resisted strong public criticism until now, because I thought there was hope for both him and his government Gareth Evans, Former Australian Foreign Minister

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | 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 | office manager Elsa Vong | Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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Asia Alenia said in the letter, a copy of which was sent to Executive Secretary Paquito Ochoa Jr. “Worse, both bidders denied the existence of the relationship upon express request of clarification by the bids and awards committee during the opening and evaluation of the bids,” it added. The Italian firm said PT Dirgantara and Airbus Military should be disqualified from participating in the procurement at hand, “without prejudice to the imposition of appropriate [suspension/blacklisting] and civil [restitution for damage and forfeiture in favour of the government] sanctions.” Alenia had initially participated in the bidding for the military planes held on Nov. 11, 2013, but the DND declared a failure of bidding after admitting that it failed to publish the supplemental bid bulletin a week prior to the opening of bids.

South Korea opposition joins forces

Indian wine industry losing sparkle

Democratic Party teams with smaller outfit ahead of local elections


outh Korea’s main opposition Democratic Party merged with a smaller party led by former presidential candidate Ahn Cheol Soo. The Democrats and Ahn’s New Political Vision Party reached agreement early yesterday morning, and will work together to improve democracy and people’s livelihoods, Democratic Party leader Kim Han Gil said today in a joint press conference with Ahn in Seoul. The new party has yet to be named. The merger could bolster liberal opposition to President Park Geunhye’s conservative Saenuri Party ahead of municipal elections in June and the next presidential election, due in 2017. While Ahn’s party only holds two seats in parliament, he has

the highest approval rating among opposition party leaders. “Our goal is to win the presidential election,” Ahn said. “We will seek political reform, uphold democracy, boost shared growth, build a welfare state, and aim for peace and unification.” Park’s ruling party holds 156 of 298 parliamentary seats, and the Democratic Party has 126 lawmakers. The president has a 55 percent approval rating, according to a Realmeter survey conducted Feb. 17-21, while Ahn’s support is at 24.2 percent. Chung Mong Joon, a ruling Saenuri Party lawmaker and former chairman of Hyundai Heavy Industries Co., announced his candidacy for Seoul mayor in a speech in the city yesterday. The poll will be held June 4. Bloomberg News


Myanmar Buddhists on edge at Malaysia killings Myanmar Buddhist exiles in Malaysia believe they are being targeted for violence and even murder. Exiled Myanmar pro-democracy activist Aung Gyi’s body was found in a car boot on February 4, the victim of a stabbing, police and activists have said. San Win and other Buddhists said the killing was one of many and indicates a spill over of deadly Myanmar communal violence into Malaysia, which has a large community of Myanmar migrants and refugees. “We are very scared. It’s not safe here for us,” said San Win, head of a group that provides free funerals to needy Myanmar nationals.

Bangladesh FX reserves at new high

Alenia Aermacchi in row with Spanish company Airbus Military

Bangladesh’s foreign exchange reserves stood at an all-time high of US$19.15 billion at the end of February, US$1.03 billion more than the earlier record set in January, and more than 38 percent higher than a year earlier, the central bank said yesterday. The higher reserves, which stem from a widening current-account surplus, are enough to cover more than six months of imports. At the end of February 2013, reserves totalled US$13.85 billion. Rising exports and slowing imports have helped build reserves despite a drop in inward remittances due to fewer Bangladeshis going abroad to work.

Contract for aircraft worth US$118.8 mln Claim Spanish failed to declare conflict of interest Says Airbus Military had relationship with another Indonesian bidder

political leaders to be named, shamed, investigated and sanctioned by the international community,” he writes. Son Soubert, who first worked with Evans in the lead-up to the Paris accords – an agreement that helped end decades of internecine strife in the country following the ending of the Khmer Rouge’s murderous dictatorship – praised Evans’ decision to speak out. “I really support his views and his courage to stand up for the Cambodian

The wine industry in the Indian state of Maharashtra is losing its sparkle reports the Times of India. Of the 75 wineries in Maharashtra, 50 are on the brink of closure; an estimated 5 million litres of unsold wine stacked up in barrels and winery owners staring at unpaid bank loans they had taken on interest. Even farmers have shunned growing wine grapes and have switched to the sober table grapes business. Of the 93 wineries in the country, 75 are in Maharashtra. Officials of All India Wine Producers’ Association and Indian Grape Processing Board (IGPB) said most farmers failed to factor in marketing expenses.

people … he knows quite well that [Hun Sen] will never change,” the former constitutional council member and current Human Rights Party president said. Council of Ministers spokesman Phay Siphan said that on the contrary to Evans’ call, foreign governments should engage to help Cambodians “transition” and make their own democratic choices. He added that Evans should examine what has recently occurred

in Cambodia beyond media reports. “The Paris agreements stipulate very clearly that no foreigners shall interfere with Cambodia’s politics. We do have a legitimate [government], democracy is on the right track and people can voice their concerns and show their choice at the election,” Siphan said. “Help Cambodian people to have their own power to decide. Let Cambodia belong to the people and not the politicians.”

UAE-led group buying India power plants

A consortium led by Abu Dhabi National Energy Co (TAQA) has agreed to buy two hydroelectric power plants in India from Jaiprakash Power Ventures for about US$616 million, TAQA said yesterday. State-run TAQA, with a 51 percent stake in the consortium, will control the operations and management of both plants under the deal. One of Canada’s largest institutional investors will own 39 percent and IDFC Alternatives’ India Infrastructure Fund II will hold 10 percent, it said. In addition to its US$616 million expenditure, the consortium will acquire the plants’ non-recourse project debt, TAQA said without giving a value for the debt.

Iraq oil exports at record 2.8 mln barrels

Parting ways – Hun Sen (left) Cambodia’s prime minister, and Gareth Evans

Oil exports from Iraq rose to a record 2.8 million barrels per day (bpd) on average in February, Deputy Prime Minister for energy Hussain al-Shahristani told reporters on Saturday. The increase is likely to restore some confidence in Iraq’s oil revival, which slowed last year due to technical and security problems, as well as an ongoing resource row between Baghdad and the country’s autonomous Kurdish north. A sustainable rise could weigh on global oil prices. The February figure was up from 2.228 million bpd the previous month thanks to the completion of work on expanding the capacity of the southern Basra port, from which the bulk of Iraq’s crude is shipped.

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Rio celebrates ‘other’ Ronaldo Samba schools, cross-dressing, feature in annual revels Chris Wright


ore than a million Rio Carnival revellers laid aside bitterness at Brazilian leaders to join wild festivities on Saturday in what has been dubbed “the greatest show on Earth.” Many participants said they had resolved to forget – at least until festivities end Tuesday – about lingering protests over corruption and the cost of hosting the World Cup. The Rio tourist board said 1.3 million people joined the fray to cavort as the Marvellous City’s oldest bloco or street party group Cordão da Bola Preta danced to a raucous samba beat. A total of four million are accepted during the entire five-day event. But there was a reminder of some of Brazil’s social problems as festivities in the northern city of Salvador were tainted by the fatal shooting of a young man. Police said they were investigating after the 27-year-old victim was shot six times. In neighbouring Bolivia, four people were killed and more than 60 injured when a bridge collapsed onto spectators and a group of

demonstrating -- and wanted to let loose instead. “Carnival is carnival. Celebrate! Protests can wait -- at least for now,” shouted Christophe Land, one of 50 men decked out in black “Spiderman” outfits. Other revellers agreed as they celebrated what was also their city’s 449th birthday. “Nobody wants to protest, not this week,” Cristiano Floriano, clad in canary yellow, told AFP. Sergio Mendes added: “I am a protester -- we all know Brazilian politicians are corrupt. But the people are the majority -- and carnival is for us.” musicians marching in the opening Carnival parade in the Oruro highlands.

Soccer hero In business centre Sao Paulo, tens of thousands of people were on hand as the Gaviões da Fiel samba school hit the streets, their theme this year was an homage to the career of 2002 world soccer champion Ronaldo. Sao Paulo, which will host the World Cup opening match

on June 12, kicked off major celebrations Friday night. Ronaldo’s float included four female “bodyguards” for the man who scored a record 15 goals in World Cup action. Back in Rio, 1980s star Zico is the theme of the Imperatriz Leopoldinense school’s performance in the city’s own nod to ‘soccerised’ Carnival. Rio’s flamboyantly dressed residents were adamant that, for now, they had spent enough time

Playing dirty There were some sour notes, however, as media reported a military police unit used tear gas to disperse a group of “garis,” or carnival cleaners, who are demanding better pay and conditions. Additionally, Rio police fined 117 people for urinating in public, local media reported. Otherwise, relative calm reigned before throngs of locals and foreigners alike

Obama confronts Putin on Ukraine Warned Russian leader that Crimea action flouts international law


resident Barack Obama told President Vladimir Putin at the weekend that Russia’s dispatch of troops to Ukraine flouted international law and warned he was courting political isolation if the incursion continues. Obama also spelled out the right of the Ukrainian

people to chart their own destiny and symbolically began to line up the longtime Western alliance against Russia, calling the leaders of France and Canada. Secretary of State John Kerry also hosted a joint conference call with six other foreign ministers from Europe and Canada as well

as EU foreign policy chief Catherine Ashton and the Japanese envoy to the US “to coordinate on next steps.” Obama’s 90-minute telephone call with Putin represented the kind of direct confrontation between the men who run the White House and the Kremlin rarely seen since the end of the Cold War.

The White House account of the call was unusually detailed and blunt, hinting at tense exchanges as fractures deepened in a relationship that has been deteriorating since Putin returned as president in 2012. “President Obama expressed his deep concern over Russia’s clear violation

swarm the city centre Sunday and Monday, when 12 elite samba schools will bid for the annual Carnival crown at the city’s famed Sambadrome. Outfits for the elite groups can cost thousands of dollars, but Saturday’s street parade participants gave them a good run for their money, with a range of often risqué creations. Crossdressing among the men was a typical theme, while a group of men and women dressed as Neanderthals, who had daubed themselves in black paint, rubbed against anyone in range. “Hey, that’s my natural colour,” laughed one black man the group targeted. Nearby, a clown holding a huge “Say no to Racism” banner looked on in approval. Men in diapers and fluffy pink rabbit ears, microskirted women flaunting skin, as well as Barack Obama and Superman lookalikes only added to the visual feast.

Brazil ‘united’ Above the din, one reveller who gave her name only as Rosana said Brazilians can be optimistic in a World Cup year, despite the country struggling with its preparations. “Brazil is getting better. We are a united people who maybe have to break a few things in the system. But not windows,” said the 27-year-old, speaking for most Brazilians horrified at how anarchists latched onto the recent protests to spark clashes with military police. AFP

of Ukrainian sovereignty and territorial integrity,” the White House said. Obama told Putin his actions were a “breach of international law, including Russia’s obligations under the UN Charter, and of its 1997 military basing agreement with Ukraine.” Kerry also warned in a later statement that Moscow was risking the peace and security not just of Ukraine, but also the wider region. If Russia did not deescalate tensions, it would have a “profound” effect on ties with the US, said Kerry, who is due to meet his Russian counterpart Sergei Lavrov on the sidelines of talks in Rome next week. Asked about the tone of the call, a senior US official resorted to diplomatic parlance indicating an uncomfortable conversation, describing it as “what you’d expect: candid and direct.” Obama’s national security team met at the White House to mull options on Ukraine, a day after the president warned Putin’s actions would incur “costs.” Those costs would entail an immediate halt from the US side to preparatory talks on the G8 summit in the Olympic resort of Sochi on the Black Sea in June, Obama told Putin. AFP

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March 2014 Friday 3, April 19, 2013

Opinion Business


Asia’s new security trifecta

Leading reports from Asia’s best business newspapers


Jaswant Singh

Ex-finance, foreign and defence minister of India

Spain-based distribution chain Dia Group is readjusting its China strategy by withdrawing its discount chain Diatiantian from Beijing and focusing on the Shanghai market, Chinese media reported. Diatiantian will exit the Beijing market within the year, and concentrate on Shanghai and surrounding markets, planning to open 100 stores this year, Fernando Gonzalez Somoza, the discount chain’s China regional general manager, was quoted as saying by China Business News. After a decade’s development, there were about 360 Diatiantian stores across China as of 2013, with most located in Shanghai and just a few in Beijing.

PHNOM PENH POST In Kampot, on Cambodia’s southwest coast, a pilot project led by the provincial Department of Agriculture is helping farmers in 10 villages use more advanced growing techniques for durian trees. As part of the project, farmers hope to form a promotion association, similar to the one that exists for Kampot pepper. Officials at the Commerce and Agriculture ministries are also encouraging growers to come together and help Kampot durian gain the World Trade Organization’s proof of origin status, which will help set it apart from international competitors.

BUSINESS INQUIRER With peace at hand in Mindanao, President Benigno Aquino has invited the Malaysian business community to invest in the region’s untapped resource potential, citing how governance reforms and a fairer business climate have led to an economic revival in the Philippines in recent years. Addressing some 200 of Malaysia’s top business executives, Aquino said Friday the Philippines was past its days as a “laggard” and “the sick man of Asia,” with its economic rise recognised internationally through credit rating upgrades and renewed global interest.

TIMES OF INDIA Inequality is the cause of lower wages for domestic workers in India, and there is a need to ratify the ILO Domestic Workers Convention to guarantee decent and secure work to them, Jayati Ghosh, Professor of Economics, JNU said on Saturday. “Inequality in India permits lower wages for domestic work. No society can survive without massive contribution that domestic work makes to national income,” Ghosh said while delivering UN lecture on ‘The Invisible Workers: Rights, Justice and Dignity for Domestic Workers.’ She urged for India to ratify the ILO Domestic Workers Convention that guarantees the fundamental rights to domestic workers to decent and secure work.


inter is India’s diplomatic high season, with the cool, sunny weather forming an ideal backdrop for pageantry, photo ops at the Taj Mahal or Delhi’s Red Fort, and bilateral deal making. But this winter has been particularly impressive, with leaders from Japan and South Korea visiting to advance the cause of security cooperation in Asia. The first to arrive was South Korean President Park Geun-hye. Despite a strong economic foundation, the bilateral relationship has long lacked a meaningful security dimension. But China’s recent assertiveness – including its unilateral declaration last November of a new Air Defence Identification Zone, which overlaps about 3,000 square kilometres of South Korea’s own ADIZ, in the Sea of Japan – has encouraged Park to shore up her country’s security ties with India. North Korean leader Kim Jongun’s unpredictable and often provocative policies represent an additional impetus for improved ties – as do China’s increasingly visible plans to weaken South Korea’s alliance with the United States. Not surprisingly, the discussions during Park’s four-day visit focused on grand strategy, and included detailed talks on maritime security and naval shipbuilding.

Going nuclear Nuclear energy also featured prominently on the agenda, owing to both countries’ dependence on energy imported through dangerous sea-lanes. In 2008, South Korea, as a member of the Nuclear Suppliers Group, supported the waiver granting India access to civilian nuclear technology and fuel from other countries – both of which it had

been denied since becoming a nuclear-weapons power in 1974. Indeed, India’s nuclear tests are what initially spurred the NSG’s formation. South Korea’s support of India’s civilian nuclear ambitions earned it high praise in India and helped to advance bilateral civilian nuclear cooperation.

Abe hopes to create a new ‘arc of freedom and prosperity’ connecting Asia’s two major democratic economies

This budding strategic partnership is undoubtedly important. But when it comes to the regional balance of power, India’s deepening ties with Japan are even more consequential. While India’s relationship with the United States has been faltering of late, following the arrest and mistreatment of an Indian consular official in New York, its ties with Japan are flourishing. The visit last December of Japanese Emperor Akihito and Empress Michiko was the clearest sign yet of a de facto alliance between the two democracies. The imperial couple last visited

India more than a half-century ago, as Crown Prince and Princess, when India was part of the non-aligned movement and Japan was happy with a security guarantee from the US. But, with China’s rise having shifted Asia’s balance of power, Indian and Japanese leaders have been seeking new security assurances, and the visit by the Emperor and Empress was the clearest signal Japan could send concerning the value it places on this emerging alliance. The search for greater security was even more explicit in January, when Japanese Defence Minister Itsunori Onodera spent four days in India discussing the specifics of enhanced defence cooperation. During the meeting, Onodera and his Indian counterpart affirmed their countries’ intention to “strengthen the Strategic and Global Partnership between Japan and India,” including “measures ranging from regular joint-combat exercises and military exchanges to cooperation in anti-piracy, maritime security, and counterterrorism.” In fact, later this year, bilateral naval exercises will be held in Japanese waters for the first time – sending a powerful signal to China. But Indo-Japanese relations must extend beyond the realm of security – something that Prime Minister Shinzo Abe, who has pursued enhanced bilateral ties more vigorously than any other Japanese leader, seems to grasp. Convinced that a strong India is in Japan’s best interests, and vice versa, Abe hopes to create a new “arc of freedom and prosperity” connecting Asia’s two major democratic economies. While Abe could have done more during his recent visit to India to advance this vision –for example, by meeting with Indian opposition leader Narendra Modi, who may become the country’s next prime minister

– it seems certain that such a relationship will be achieved in the coming years. Japan has already surpassed the US as one of India’s largest sources of foreign direct investment, accounting for inflows totalling US$2.2 billion last year. And the two countries recently tripled their US dollar currency-swap arrangement, bringing it to US$50 billion.

Japanese trade Abe, India’s chief guest at this year’s Republic Day celebrations, also rightly views enhanced trade as a key element in deepening the bilateral relationship, thereby contributing to substantially increased security. But bilateral trade amounted to only US$18.4 billion in 2011-2012 – far smaller than India-China trade and a pittance compared to Japan-China trade. Even with a significant deepening of ties, however, bilateral relationships alone will be inadequate to counterbalance China. Achieving an internal Asian balance of power will require India, Japan, and South Korea to build a tripartite security arrangement, which can be achieved only if Japanese and South Korean leaders overcome their historical animosities. As Winston Churchill declared in his famous 1946 speech in Zurich, “We cannot afford to drag forward across the years that are to come the hatreds and revenges which have sprung from the injuries of the past.” Just as France and Germany pursued reconciliation in order to build a better future in the years following Churchill’s declaration, Japan and South Korea must learn to tame the hatreds and injuries of the past in order to build, with India, a structure of peace and a more prosperous future for Asia. © Project Syndicate

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Closing Connery stirred by Scots independence

Spanish minister cuts short Iran trip over crisis

James Bond star Sean Connery yesterday urged his fellow Scots to vote for independence in their referendum later this year, saying it was an opportunity “too good to miss”. The 83-year-old actor, one of the most high-profile backers of the Scottish National Party’s campaign for a ‘yes’ vote in September, said independence would raise Scotland’s profile. This could encourage more investment in the Scottish film sector and lead to the “international promotion of Scotland as an iconic location”, Connery wrote in the Sun on Sunday newspaper.

Spain’s foreign minister yesterday cut short his visit to Iran in order to attend EU talks on the crisis in Ukraine, the Spanish embassy in Tehran confirmed. “He will leave this afternoon for Brussels,” a diplomatic source said. Foreign Minister Jose Manuel GarciaMargallo, who arrived in Tehran on Saturday for a planned four-day visit, is to attend an emergency meeting of EU foreign ministers tomorrow. “We are concerned about the territorial integrity of Ukraine,” Garcia-Margallo said in a joint press conference with his Iranian counterpart Mohammad Javad Zarif.

Ukraine mobilises army as Obama warns Russia On ‘brink of disaster’ says Prime Minister Arseniy Yatsenyuk Dmitry Zaks


kraine said yesterday it would call up all military reservists after Russian President Vladimir Putin’s threat to invade his neighbour drew a blunt response from US President Barack Obama. The stark escalation in what threatens to become the worst crisis in relations since the Cold War came as proRussian forces seized control of key government buildings and airports in the strategic Crimean peninsula – a semiautonomous part of Ukraine. Ukraine’s Prime Minister Arseniy Yatsenyuk said his

crisis-hit country was on the “brink of disaster”, accusing Russia of declaring war in a bleak appeal to the international community. “This is the red alert, this is not a threat, this is actually a declaration of war to my country,” he told reporters in English, a day after Russia’s parliament approved the deployment of troops to Ukraine. “If President Putin wants to be the president who started a war between two neighbouring and friendly countries, between Ukraine and Russia, he has reached his target within a few

Lithuania recalls Russia envoy over Ukraine L

ithuania recalled its ambassador from Russia for consultations yesterday after Moscow approved sending troops into neighbouring Ukraine. In a brief statement, the Baltic nation’s foreign ministry said the move was in reaction to “illegal Russian actions against Ukraine’s sovereignty and territorial integrity”. Russian President Vladimir Putin obtained the green light from parliament on Saturday to use military force in Ukraine’s Crimea peninsula, sparking an international outcry. Lithuania and fellow Baltic states Latvia and Estonia broke away from the crumbling Soviet Union in 1991 after five decades of communist rule and joined NATO in 2004. They have had rocky ties with Moscow since independence and are jittery about Russian military moves in the region. Lithuania played a key role in efforts to seal a European Union association pact with Ukraine during its stint as EU president last year. Ukrainian president Viktor Yanukovych’s rejection of that deal in favour of an aid agreement with Russia sparked the protests.

inches. We are on the brink of the disaster.” US leader Barack Obama has branded Russia’s parliament vote a “violation of Ukrainian sovereignty” and told his Russian counterpart Vladimir Putin in a phone call that Moscow’s reported deployment of troops outside bases that it leases from Ukraine in the Crimea peninsula had broken international law. Yatsenyuk yesterday appealed to the international community. “We believe that our Western partners and the

NATO chief says Russia threatens Europe’s peace N

entire global community will support the territorial integrity and unity of Ukraine and will do everything they can in order to stop the military conflict provoked by the Russian Federation,” he said. Russia’s parliament voted on Saturday to allow troops to deploy in its western neighbour. Witnesses said a group of Russian soldiers had also blocked about 400 Ukrainian marines at their base in the eastern Crimean port city of Feodosiya and were calling on them to surrender and give up their arms.

ATO chief Anders Fogh Rasmussen urged Russia yesterday to stop its military activity and threats against Ukraine, saying Moscow’s action threatened “peace and security in Europe.” “Russia must stop its military activity and its threats,” he said in a brief statement before opening crisis talks with NATO’s 28 ambassadors. “Today we will discuss the implications for European security.” Speaking as Ukraine’s interim authorities accused Russia of triggering “a red alert” with what was “actually a declaration of war”, Rasmussen said he had convened the North Atlantic Council “because of President Putin’s threats against this sovereign nation.” “What Russia is doing now in Ukraine violates the principles of the United Nations Charter. It threatens peace and security in Europe. Russia must stop its military activities and its threats.” “We support Ukraine’s territorial integrity and sovereignty. We support the right of the people of Ukraine to determine their own future without outside interference.

Putin said in statement he was responsible for the safety of ethnic Russians in Crimea – home to Kremlin navies for nearly 250 years – and southeastern swathes of Ukraine with ancient ties to Moscow that look on Kiev’s new pro-EU leaders with disdain. The Western-backed interim leadership that took power in Kiev a week ago responded to Moscow’s move toward its first invasion of a neighbour since a brief 2008 confrontation with Georgia by putting the military on full combat alert on Saturday. AFP

Czechs summon Russian ambassador over Crimea C

zech Foreign Minister Lubomir Zaoralek said yesterday he had summoned the Russian ambassador over Moscow’s decision to send troops to Ukraine’s Crimea region. “I will meet him at 1300 GMT today [to tell him that]... if this is the beginning of an invasion to occupy Crimea, it’s something with which we have rich experience and we can’t agree with it,” he said in a debate on Czech public television. “There is no way out of the situation but diverse pressure that will persuade Russian officials to abstain from this solution,” Zaoralek said, adding he was not considering recalling the Czech ambassador to Moscow right now. On Saturday, Zaoralek and Czech President Milos Zeman likened Russia’s moves in Crimea to the Soviet-led 1968 occupation of former Czechoslovakia which crushed a widespread democratic reform movement in the country, claiming more than 100 lives. Czechoslovakia shed communist rule in 1989, four years before it split peacefully into the Czech Republic and Slovakia.

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