Macau Business Daily, July 14, 2014

MOP 6.00 Number 581 Monday July 14, 2014

Publisher: Paulo A. Azevedo

Closing editor: Alex Lee

Challenging Times

Year III

S

ome 10,000 more public housing units are slated for Zone A. A 70 percent jump from the original figure. This is “not a hypocritical show,” says the Chief Executive, 6 weeks before the CE election. He has also dismissed the unofficial referendum gauging public opinion on the electoral system as contrary to the provisions of the Basic Law. Nevertheless, Beijing and the local administration admit it’s a ‘challenge’ PAGE

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Interview

Alvis Lo Iek Long

Macau: Severe shortage of doctors

2&3

He’s the director of the Macau Public Hospital Physicians Association. And concedes there’s a severe shortage of manpower in the health sector. Especially specialist doctors. In an interview with Business Daily, Alvis Lo Iek Long says he’s confident that the situation will improve. More doctors and more specialists are in the pipeline. But we will have to wait at least 5 years PAGE 6 & 7

Blue sky thinking

HSI - Movers

Macau is well positioned for Tigerair Taiwan’s inaugural flight. It’s scheduled to start in Autumn, with Singapore the main contender. The open skies agreement between Macau and Taiwan is the trump card

Name

July 11

Page 3

Top Gear

Tactical test HSBC analysts are evaluating the OCBC deal. They should raise the price offer for Wing Hang Bank, with Elliot Capital Advisor a strategic shareholder, say the seers PAGE

4

Ford sales in Macau and Hong Kong almost quadrupled in the first half.

Compared to a year ago, the company moved 473 units, an all-time record.

The US company expects to continue growing here in the second half

Lenovo Group Ltd

2.08

COSCO Pacific Ltd

1.68

China Resources Ente

1.40

Li & Fung Ltd

1.19

PetroChina Co Ltd

1.12

China Merchants Hol

-0.79

Hang Lung Properties

-0.84

Hutchison Whampoa Lt

-1.14

Tingyi Cayman Island

-1.16

China Resources Pow

-3.93

Source: Bloomberg

I SSN 2226-8294

Page 3

Take it to the limit Brought to you by

Fabled Atlantic City could be the next Detroit. Casinos are shutting down and thousands of jobs are at risk. There’s a die-hard core of business people, though, who still think it can be turned around.

More family appeal is needed, they say

Linda Chen, COO of Wynn Macau, says she’s focused on the “next level.” That’s the gaming industry she’s talking about.

Not her rumoured prime positioning to step into the boss’s shoes come the time.

Right now, her priority is getting Wynn Palace open in 2015

PAGE 8 and 9

2014-7-14

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27˚ 33˚

Atlantic City, the new Detroit

%Day

2014-7-15

27˚ 33˚

2014-7-16

28˚ 33˚

2

July 14, 2014

Macau

CE: Unofficial referendum poses no pressure

Brought to you by

The government here and Beijing say that the unofficial referendum to be launched in late August is a ‘challenge’ to electoral law for the city’s top office

HOSPITALITY

Stephanie Lai

sw.lai@macaubusinessdaily.com

Drop issues Most visitors to Macau come from China, Hong Kong and Taiwan. But most visitors coming from other places in Asia, or even from farther away, while in much smaller numbers, must not be ignored. They tend to stay longer in Macau and spend more on all kinds of goods and services. One of the indicators of these visitors’ flows is the number of those that arrive on package tours. Setting China aside – we are dealing with another scale – and Hong Kong – a singular case, due to its proximity - five countries form what we could call a second tier of sources. They are Taiwan, South Korea, Japan, Thailand and Malaysia. If we look at the figures since 2010 these are the Asian countries for which, on average, more than 10,000 monthly visitors arrive on package tours. Other Asian countries will record values well below that threshold and non-Asian countries register even less meaningful figures.

Taiwan, with an average of almost 47,000 monthly visitors in the period shown is well ahead of all others. The next country, Korea, was just below 27,000; and the third one, Japan, recorded an even lower figure, with just over 17,500 tour visitors per month. Japan was the leader in early 2010, but lost out to Taiwan and Korea in early 2011, two countries whose numbers kept rising steadily; its position is currently being challenged by Thailand. The figures for May show a striking drop affecting all countries, displaying values not recorded since 2010. But it advisable to wait for possibly revised numbers at a later date. A drop so unusual is likely to be the result of significant underreporting at the time of publication.

JID

7.7%

Tour visitors from Taiwan growth, JanMay, on previous year

I

ncumbent Chief Executive of Macau Fernando Chui Sai On, also seeking a re-election on August 31, said he was not “pressured” by the unofficial referendum planned by local activists to gauge public reaction towards the electoral system of the city’s leader by the last week of next month.

Last Monday, three local pro-democracy groups – Macau Conscience, Macao Youth Dynamics and Open Macau Society – announced their plan to launch an unofficial referendum between August 24 to 30 via online voting and physical polling stations to gauge citizens’ demands for democracy here, an action that the Macau Government spokesperson and China Liaison Office branded “unlawful”.

Speaking to media on the sidelines of a visit to the reclaimed Zone A on Friday, Chief Executive Chui told media that he did not find the planned referendum a “pressure” on his upcoming campaign to seek re-election, while adding that the referendum runs contrary the Chief Executive electoral system as stipulated in the Basic Law. “We oppose this referendum,” Mr. Chui declared to media on Friday.

“For this action that we oppose, how can it put any pressure on me?”

The Chief Executive only added that the administration would continue to observe the planned actions of the activists.

In a press release issued on Saturday, government spokesman Alexis Tam Chon Weng also reiterated the stance that the planned unofficial referendum was a “challenge” to the Chief Executive electoral system, while stressing that any amendment to the system was subject to the authority of the Standing Committee of the National People’s Congress as opposed to a “civil referendum”.

Mr. Tam’s remarks echoed the statements of the China Liaison Office of Macau issued on Wednesday, which stressed that there was “no legal basis” in China’s Constitution or Macau’s Basic Law supporting the civil referendum, and that the regional jurisdiction of the MSAR was not authorised to invent or initiate a “civil referendum” system.

“We think these are intimidating remarks [from the officials],” one of the referendum organisers Jason Chao Teng Hei remarked yesterday at a discussion about the upcoming event, “If they [the officials] have the legal standings saying our actions

are illegal, they should announce it.

Throughout the whole week, they could not really say which laws we have violated.”

Mr. Chao added that the planned action was to ask whether the public here support universal suffrage for electing Macau’s Chief Executive by 2019, and whether they have confidence in incumbent Chief Executive Mr. Fernando Chui. If a challenger for the city’s top office emerges in time for the planned referendum, it will ask respondents which candidate they prefer.

“On the government side, they interpret it that a public unit cannot organise a referendum; but now we are organising it as a private entity, and the result is not legally binding . . .” Chao said yesterday. “Even if the government sees the referendum as a opinion poll, through this action they are going to see people’s thoughts on our candidates running for the top office and whether there ought to be any changes to be introduced to the existing political system.”

Legal risks At yesterday’s discussion over the planned referendum, pro-democracy legislator Antonio Ng Kuok Cheong said he was supportive of the action but he cited the possible legal risks of initiating such a referendum.

“A legal dispute is likely to happen as the electoral rules state that on the Chief Executive election day, there should be no more campaigning of candidates’ names, and some people

may complain that a poll [like a referendum] is actually a format of campaigning,” Mr. Ng said yesterday.

“Article 122 of the Chief Executive election law is against violators using candidates’ names for negative purposes during the campaign period,” Mr. Ng added. “This could be another area inducing disputes.”

The penalty for violating Article 122 that the legislator mentioned is a maximum sentence of one-year imprisonment or 360 days of fines.

The election for the Chief Executive is taking place on August 31; the campaign period is set from August 16 to August 29, according to the city’s Election Commission’s agenda.

The electoral law bans any release of poll results on the candidates from the time spanning the campaign period to the next day of the election day; violating this ban could result in a fine of 10,000 patacas (US$1,253) to 100,000 patacas, Article 152 of the Chief Executive election law states.

When asked about the possible turnout for the unofficial referendum, Mr. Chao said he could not predict it at the moment.

“With this referendum we are answering the big questions first, like whether Macau should have universal suffrage for the top office . . . ” Mr Chao said. “It’s true that we don’t have universal suffrage as clearly marked in our law [as Hong Kong does] so now this is a chance for the public to express opinions on this matter before we proceed to see how we can strive to have universal suffrage here.”

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July 14, 2014

Macau

Macau well positioned for Tigerair Taiwan’s inaugural flight

T

aiwan-based budget carrier Tigerair Taiwan is considering Macau or Singapore as the destination of its inaugural flight when the carrier launches its service this Autumn, Taiwanese media reports.

ETtoday quotes the general manager of Taipei’s China Airlines, Luo Hao-ming, saying that Tigerair Taiwan will cooperate with China Airlines’ routes to Hong Kong if the carrier successfully launches its commercial service between Macau and the island. Singapore is another choice as first destination as Tiger Airways has the advantage of operating experience in Singapore.

The carrier is a joint venture between China Airlines Ltd, Tiger Airways Pte of Singapore and Mandarin Airlines.

China Airlines holds 80 percent of the carrier’s stake while the other two hold 10 percent each.

Application for the related aviation rights is still under process, according to Mr. Luo. The carrier will announce the destination of its debut flight in August.

The two cities penned an open skies agreement in February, allowing more airlines to fly between the region and the island with unlimited passengers and freight. Currently, bilateral flights between the cities are only offered by Macau’s flagship carrier Air Macau Co Ltd, and Taiwan’s Eva Airways Corp, TransAsia Airways Corp and

Mandarin Airlines.

Tigerair Taiwan, and its budget carrier peer V Air established by TransAsia Airways Corp, can only fly to Macau after the open skies agreement signed in February comes into force. The pact allows airlines to carry unlimited passengers and

freight between here and the island, and allows more airlines to do so.

“I believe that we’ll see progress [on the approval of open skies pact] in the new legislative term [in Taiwan],” director-general of Taipei Economic and Cultural Office here Mr. Lu Chang Shui announced to media on Friday,

“Within this year, this open skies agreement should come into force.”

Currently, the air services agreement between the two places permits only Macau flagship carrier Air Macau Co Ltd, and Taiwan’s Eva Airways Corp, TransAsia Airways and Mandarin Airlines to offer flights.

Ford almost quadruple sales in SARs The US company posted record sales of 473 units in the first half with a new line of models

F

ord Motor Company recorded sales of 473 units during the first half of 2014 in Hong Kong and Macau. Compared to the first half of last year, there was an increase of 288 percent in sales.

According to Ford, this is the best half year in sales for the American manufacturer in both markets. The increase in sales was supported by “a robust line-up of passenger and commercial vehicles.”

“We’re now selling more vehicles in Hong Kong and Macau than we have in decades and these latest results show that local consumers are connecting with the Ford brand as we rapidly grow in the market,” said Ford Managing Director for Asia Pacific Emerging Markets David Westerman.

“Together with our world-class

partners, Future Motors, Ford is perfectly positioned to continue growing in Hong Kong and Macau through our ever-expanding line-up of vehicles and commitment to the highest quality of after sales service,” Westerman continued.

In the passenger segment, the Fiesta proved to be the most popular model, with sales of 149 units. It was followed by the Kuga Sports Utility Vehicle (SUV) which sold 78 units.

As for commercial vehicles, the Transit van was the most popular with sales of 131 units, increasing by more than 200 percent compared to last year.

In April, in partnership with Winson Motors, Ford opened a newly upgraded dealership facility in Macau.

Chief Executive: Increase in public housing no ‘show’ W hilst inspecting the construction of Zone A of the new urban area with the Secretary for Transport and Public Works Lao Si Io last Friday, Chief Executive Fernando Chui Sai On said that the increase in public housing was determined by citizens’ demands and needs.

Mr. Chui stressed to TDM that the adjustment was totally unrelated to his reelection. He said this is not a hypocritical show for the reelection and that he “has never thought of putting himself on show.” He believes that citizens will evaluate his work in the course of time.

Mr. Lao said the housing for the ‘sandwich class’ - referring to the middle class - to be built in the reclaimed zone is still in draft stage.

He does not think that the previous works will be in vain as the objective of their work is to respond to society‘s

need for public housing.

The new adjusted plan will increase the number of public housing units; transportation and social facilities will not be decreased, Mr.Lao said.

On the other hand, Mr. Lao did not comment on the Wynn Macau Cotai land deal. When asked if he knew of the existence of Tien Chiao Entertainment and Investment Company which Wynn Resorts paid 400 million patacas (US$50 million) to, for development rights in Cotai, he said his daily workload is very heavy so it is impossible for him to remember every single company.

The government announced last Thursday that it is adjusting the construction plan for Zone A of the new urban area, increasing the number of public housing units to 28,000 from the original 18,000 while there will be some 4,000 units allocated to private housing.

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July 14, 2014

Macau

CY Foundation posts 13.4 million-pataca loss Record losses due to investments made in the gaming industry sector in Macau and all of Asia as company shifted from property and entertainment to gambling

C

Y Foundation Group Limited lost 13.4 million patacas before taxes during the fiscal year ended March 31, it was announced on Friday. In spite of the negative results, CY Foundation managed to reduces its losses before taxes by 78.7 percent since the 2012/2013 fiscal year.

The reduction of the losses was primarily achieved by turning losses of 49.3 million patacas into a profit of 1.04 million patacas in the packaging products business. Meanwhile, CY Foundation lost 9.9 million patacas in the Electronic Gaming Business that is mainly focused in Macau.

In 2013/2014, CY Foundation finished the process of joining the gaming industry, a procedure that

resulted in the loss of 9.9 million patacas. Nevertheless, the company sees the gaming industry as an opportunity to boost income in the future.

‘Macau’s gaming industry has traditionally been dominated by the VIP gaming high roller segment. In recent years, mass market gaming is seeing growth at a faster pace than VIP gaming and junket business.

The Board is of the view that the acquisition of CY Management Limited (formerly known as Weike (G) Management Macau Limited, a company incorporated in 2009) will enable the Group to generate sustainable income and cash flow in the medium term,’ the company report reads.

For the future, the company is

planning its gaming business for not only Macau but also in Asia.

‘We will continue to procure new business relationships in Macau and plan to extend our geographical reach to other parts of Asia. We have a business plan to expand our services to operate 3,000 or more slot and multi-terminal machines throughout Asia in the coming three years.’

As for 2012/13, the group decided to change its strategy to invest in the gaming industry. In order to focus on the industry, CY Foundation gave up its investment interests in the property market, which had recorded a profit of 2.7 million patacas. At the same time, the group discontinued its operations in the digital entertainment business

HSBC analysts weigh in on OCBC deal T he emergence of Elliot Capital Advisor, owned by famous hedge fund manager Paul Singer, as a strategic shareholder in Wing Hang Bank (WHB) with a 7.8 percent capital position, could undermine Oversea-Chinese Banking Corporation’s (OCBC) goal to buy more than 90 percent of Wing Hang

Bank shares, analysts from HSBC said.

Singapore-based OCBC offered HK$125 a share to WHB shareholders in order to acquire more than 90 percent of its capital and delist the bank if the operation is successful. If it’s not the case, OCBC admitted keeping Wing Hang listed, a sign that

the Singapore bank is not planning to raise the takeover price, HSBC thinks.

OCBC’s offer is available until July 29, with the acceptance level by shareholders slightly over the 50 percent mark, far from the objective but already a controlling stake.

HSBC stated that even if

that recorded losses close to 2 million patacas.

‘Since the Group recorded unsatisfactory financial performance with losses in 2012/13, the Company’s board of directors made a careful review of the existing businesses with a view to restructuring existing businesses and seeking new investment opportunities,’ it was disclosed.

‘With a view to better allocating our resources, the Group, on 30 September 2013, discontinued our property investment business by selling the entire interest in a former wholly-owned subsidiary, Expert Global Investments Limited, which owned investment properties located in Beijing. We used part of the proceeds to expand the gaming business.’

unsuccessful (OCBC gaining control of 90 percent of shares), there’s no difference between owning 100 or 75 percent of Wing Hang’s capital, as OCBC will still have a majority.

However, there are financial implications to this move. “If OCBC acquires 90 percent of WHB at HK$125 a share and then reduces its stake to 75 percent by selling 15 percent in the market at HK$71 per share (equivalent to 1x December 2013 BV, which is what small-sized

Homg Kong banking groups like Dah Sing Banking Group trade at), it will incur a one-off loss of SG$403 million (MOP 3.2 billion)”. We believe this will be the main reason for OCBC to review its offer”, said HSBC in a note to clients.

HSBC says that the impact of the one-off loss OCBC could suffer from keeping WHB listed is minimal, but sees an offer price increase as a plus, especially if the hike is as much as keeping WHB listed.

Sa Sa grows disappointing 5.3 percent in HK & Macau S a Sa International Holdings Limited released its first quarter report last Friday, showing that turnover in Hong Kong and Macau had risen by 5.3 % to HK$1.61 billion. Despite this, the cosmetic group claimed that its operating performance in the regions was ‘below expectations.’

The latest report shows that the company grew 4.9 percent in global revenues, to HK$1.99 billion during the first quarter ended June 30. An increase of 9.6 % in

number of transactions was registered in the Hong Kong and Macau market during the first quarter, which amounted to 4.3 million transactions; however, average sales per transaction fell by 3.4%, to 370 million.

The group believes that the decline in average sales per transaction shows that the purchasing power of the Mainland Chinese visitor is weakening, which is the primary reason that the group’s performance did not match expectations.

According to the report, the group registered an increase of 3.3% in revenue in other markets during the first quarter, including Mainland China, Singapore, Malaysia, Taiwan and its official website. The group also saw a decline of six stores and counters for its network, with stores in the Mainland decreasing by six and by one in Taiwan.

Malaysia added one store, for a total of 274 stores in the group’s retail network.

5

July 14, 2014

Macau

Wynn Macau COO: Macau about starting from basics The Chief Operating Officer of Wynn Macau, Linda Chen, said that Wynn is now focusing on expanding the activities offered by Wynn Resort.

She also said that Steve Wynn will remain in his position for many years

W

ynn strategy is focused on taking the Macau gaming industry to the ‘next level’ and adding other experiences besides gambling, the Chief Operating Officer of Wynn Macau, Linda Chen, told CNN in an interview with the American broadcaster.

“When we first came to Macau, the scene was more about gaming,” Chen said. “And the aspiration for Macau, the reason we wanted to be here, is taking it to the next level,” she explained as Wynn prepares to open Wynn Palace, the new casino-resort of the company, in 2015.

Ms. Chen is going to experience again a grand opening having been involved in 1989 in the opening of Mirage resort, in Las Vegas. “It was the best experience anybody can have. We did so much preparation for about a year. We thought we were so ready for the opening but then in every detailed operation is where you see the actual challenge of . . . Sometimes you could prepare more,” she recalled.

Ms. Chen compared the gaming markets of Las Vegas and Macau and stressed the different challenges faced by the company in each market.

“Vegas is a mature market and so it’s about creating something even more to the next level. You have to always be trying to figure out something different that would be different and intriguing,” she said.

“Macau is about starting from the basics. In Vegas, it’s no longer just about gaming. It’s about the entertainment. It’s where you

would consider the best shows in the world, the best shopping, and the best restaurants. It’s about the whole experience, and that’s what we wanted to do here,” she said about the strategy of the company for Macau.

Steve Wynn’s successor?

Linda Chen is seen as the successor to Steve Wynn when the American entrepreneur retires. However, that is not a scenario that she predicts for

the near future.

“Mr. Wynn’s very young, he’s not ready to retire soon,” Chen told CNN. “I hope he works for another 30, 40 years and I’ll be alongside with him,” she added.

After graduating from New York’s Cornell University in 1989, Linda Chen joined the gaming industry. However it was a shock for her parents.

“It was the end of the world for them,” she said. “For Chinese parents

coming from Taiwan, they never knew anybody else who worked in the casino industry. They never thought somebody would live outside the casinos in Las Vegas. So it took a while, but eventually they were supportive.”

During the interview, the 47-yearold executive also explained why she enjoys working at Wynn Macau. “I don’t have a typical day and probably that’s what is good about my job because every day is a new challenge.”

Las Vegas Sands, Adelson face $5 Billion Macau Plan Suit T he Las Vegas Sands Corp. and Chairman Sheldon Adelson have been sued by a former potential partner in a casino venture for as much a $5 billion over claims of trade secrets theft.

The Asian American Entertainment Corp. claims it is owed money for work that led to Sands securing a contract that allowed the company to develop its Macau casinos.

The chairman of Asian American Entertainment, Shi-Sheng ‘Marshall’ Hao, negotiated an agreement with Adelson, Sands’ majority shareholder, in 2001 to win the contract, according to the July 9 complaint filed in federal court in Las Vegas.

The filing follows the dismissal last month of Asian American Entertainment’s Macau lawsuit

THERE ARE THINGS WE DON’T DO

accusing Sands of breaking agreements related to a bid for the Macau Government’s award of gaming concessions in 2001.

“Using a different lawyer every time, AAEC has repeatedly filed lawsuits trying to take credit for that which they didn’t do,” Ron Reese, a Sands spokesman, said in an e-mail.

“Las Vegas Sands will respond to this latest version of the same meritless lawsuit in court.”

Asian American Entertainment accuses Sands of ‘surreptitiously’ sharing the plans with Galaxy Entertainment Group , which Sands later joined with to develop Macau properties.

The document at issue contained a plan to profit from temporary resorts, market research, business models and a list of architects to be used, according

to the complaint. Divulging that information was ‘a complete betrayal of trust and a misappropriation of a

BUT WE DO•••

proprietary document whose contents were clear trade secrets,’ according to the complaint.

There are men and women who give human kind their perseverance, their genius, their generosity and, in some cases, their own life.

Those people and their actions are our inspiration.

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6

July 14, 2014

Macau

Macau needs more specialist doctors There is a severe shortage of manpower in the health sector, especially specialist doctors. In an interview with Business Daily, the director of the Macau Public Hospital Physicians Association, Alvis Lo Iek Long, said that this is currently one of the most severe problems facing the health sector, although he believes it will improve in the future as many graduates are training to become specialists. With more doctors, plus the new hospital, problems such as the lack of beds or the long waiting period should be alleviated.

Luciana Leitão leitao.luciana@macaubusiness.com

Photos: Manuel Cardoso

Is the health sector in Macau growing positively or negatively?

On the whole, I can see the future is positive, because Macau is growing fast; tourism is growing fast but over the past several years we’ve seen some problems occur.

Residents say it’s not easy to see a doctor and when they go to emergency they need to wait for a long time; it’s not easy to see a specialist in Macau. In the coming years, however, the situation will improve, because now the public healthcare system is undergoing infrastructure and manpower improvement. Regarding hardware, the emergency room has been renovated, increasing in area as well as capacity. Also, Macau will have a new public hospital between Taipa and Coloane and then also we can provide more services to Macau residents. As for the software, manpower, there has been much debate over the past decade; there aren’t enough doctors in the public hospital — and the government is providing more training posts for specialists. This month, there will be a recruitment [drive] for around 30 specialist training posts for different departments, and the government said it will have more in the second half of this year.

According to the director of Macau Health Bureau, in the coming five years there will be more than 275 specialist training posts for Macau doctors. In the next five to 10 years, the number of specialists will double. Also, we can see Kiang Wu Hospital will also generate some specialists. In 10 years time, the number of doctors, especially specialists, will be enough.

Until then, we may see some problems, but I hope in the future these problems can be resolved — maybe the manpower can be solved, but not all of a sudden.

Maybe the import of foreign specialists from Portugal and Mainland China will bridge the gap during the training period.

Training a doctor to be a specialist takes at least six years, and to be very good it takes more time.

These specialists will have finished their training period when the new hospital is operational?

It’s hard to say. The larger scale infrastructure may have unexpected problems.

Manpower should increase year by year. If all of a sudden, every doctor is trained to be a specialist, this isn’t good. During the training, doctors need to do many operations, [conduct] many procedures and see many patients.

If there are too many specialists all of a sudden in the training process there will not be enough patients for them to train on.

During the training, you have some supervision and the tutor cannot supervise many doctors at the same time. It is better to do it gradually.

Besides, for the medical students it’s also better to do it gradually — if they are medical students at year 2 and year 3, if they have much training maybe all the posts will be filled up and when graduating they may not have the opportunity to step into a position. As long as the process is non-stop and every year for 30/40 specialist training posts, it’s OK. But isn’t the government proposing more?

The government is proposing around 60 posts per year — the number is a bit high, but they need to solve the problem. A lot of medical students who have graduated for several years are waiting for a post, and they need to solve the historic problem.

Before, there were some legislation problems, so they couldn’t keep training posts for them, but now that’s been resolved. Every year, 30 to 60 is OK, but after four to five years, when the historic problem is resolved, and relatively young doctors have suitable training, then they should slow down the pace of the training.

have good service, fast results and everything is arranged because you’re paying a lot of money. But if you compare a private system that requires a lot of money with the public system in Macau that’s not fair.

The patient also complains of the waiting time for outpatients, but I have personally seen Hong Kong’s public hospital, Queen Mary, almost the best hospital in the world, with the waiting time much longer than ours. Yet, they [Hong Kong patients] are not complaining, because they see this is the reality, so they go to Hong Kong’s private hospitals. But in Macau they always compare the private service in Hong Kong with the public service in the territory.

In that case, can we compare the quality of Hong Kong’s private hospitals with Kiang Wu? I haven’t worked in Kiang Wu Hospital, so it’s unfair to comment.

Yet, for common diseases, because Kiang Wu Hospital has some experts from Mainland China and

The evolution The locals say: if you want to lose your money, go to Kiang Wu; if you want to lose your life, go to the public hospital. Is it really as bad as they say?

This is an old saying, not in recent years.

I graduated in Mainland China from medical school in 2000 and I’ve been working here for 10 years in Macau and I can see differences in the healthcare system.

The Macau health [care] situation may not be very good, but in recent years it has improved.

Communication and learning is very convenient — you can learn from international conferences or online, so ability and skills are improving at a fast pace.

I’ve been undergoing training in Hong Kong for half a year and I’ve worked there, and can see that for around 90 percent [of diseases] Macau is not inferior to Hong Kong — just in some rare diseases because Macau doesn’t have many patient resources. Patients are a kind of resource for a doctor to grow up with — doctors need to see and treat patients to get some experience. With rare diseases, because Macau only has half a million population, maybe not every doctor has seen the patient.

So, for some diseases, Hong Kong may be better than Macau. But for common diseases, I don’t think there’s much discrepancy in terms of level.

Also, these Macau citizens that complain are going to Hong Kong to private hospitals; they aren’t going to the public hospital, so when you go to private hospital, everything is very good — you

Residents say it’s not easy to see the doctor and when they go to emergency they need to wait for a long time; it’s not easy to see a specialist in Macau

Hong Kong, maybe they have consultants doing special clinics for them. They’ll catch up — it’s easy to catch up nowadays.

When I was a student, the Internet was not widely used and if you wanted to learn something we had to wait for our professor or boss

to learn something from a foreign country and come back to tell us.

Nowadays, with the Internet, I can learn about many rare diseases.

I’m an internal medicine doctor, and many things can be learned online. In some rare disease cases, someone will post it and report it in a medical journal, if you’re willing to learn.

Macau’s economy is growing and there are many distractions; there are many things to play with and reading medical books takes a few hours a day, so I don’t think that’s happening with the new graduates.

They have a lot more to do now.

Rare diseases Are you saying that people go to Hong Kong only for some rare diseases?

That’s partly true. In Macau, residents are entitled to have free medical services, and if the doctors say here that they cannot assess the problem, they have a mechanism to refer them to Hong Kong. And the patient doesn’t have to pay.

Some people don’t want to wait and want to have a fast treatment; they’re not going to wait for this process and they go on their own.

But there are many people going to Hong Kong, for common diseases, like, for instance, cancer. How do you explain it?

There are three kinds of treatment and all are available in Macau. For chemotherapy there’s no problem and for radiotherapy we refer them to Kiang Wu Hospital because it has the machine for it. As for operations, most operations can be done in Macau nowadays.

The ones that need to be referred are special cases: for example, recently I encountered a tumour in the trachea, in the central area, requiring special surgical techniques so the patient was referred to Hong Kong for the operation.

Still, there are a few cases that need to be followed up in Hong Kong.

Considering the growth of Macau and the fact that Macau prides itself on being an international city, does it make sense to have this gap?

For the benefit of the patient, it makes sense. If I have the techniques, I need to operate on at least 10 patients to have the competency and every year I need to do it three or four times. If the case is rare — one case in every five to six years — the surgeon may know how to do it, but if he just does the procedure once in every five years, no matter how clever he is, I don’t think he can do the best for the patient. For this kind of rare disease, referrals make sense.

Although Macau’s economy is growing, we just have half a million population and we’re not

7

July 14, 2014

Macau Interview

going to see some rare diseases and do some rare procedures all the time. At this point, it’s not realistic, unless we’re so good that we have patients coming from other places just for our procedure — then we have more experience.

In that sense, considering we have such a small-sized population does it make sense to have a new public hospital?

Yes. The population will grow and Taipa and Coloane also have some public housing and, after that, many people will live in that area, so having another hospital [makes sense]. Eventually, Macau will grow to 1 million people and at that time we’ll need a new hospital.

Also, having a new hospital is good, because it’s a medical complex and has some beds for rehabilitation. Because now if a patient has a stroke and cannot move, for the first week they need to stay in the hospital for intensive treatment; after that, they still cannot move and need to have some physiotherapy or rehab, but they don’t have to stay in the hospital, because the hospital is reserved for patients with more acute problems.

So, it’s better to have some rehabilitation centre.

According to the director of Macau Health Bureau, in the coming five years there will be more than 275 specialist training posts for Macau doctors

So, is a new hospital a matter of urgency?

Yes, it is, because we can see it’s very crowded in Macau’s public hospital. I can see in the future, as medical services get better and better, more people will have faith in the Macau system and go back to the public hospital, and even the private hospital.

Few specialists What would you say are the negative factors of the health sector in Macau?

The negative is the manpower shortage. In the past decade, there have not been enough specialists training in Macau.

As a whole, the territory does have enough doctors — if you count private doctors and new graduates — but we don’t have enough specialists. We need more specialists to provide better service to our patients to shorten the waiting time and have other better services. I hope in the future we’re going to have more training posts, so they can partly solve the problem.

The second problem is internal, for every doctor. Now, doctors as a whole may not be as dedicated to their medical career as in the past. Apart from their career, doctors make investments, etc., so the reality is that they’re not so ‘puritanical’ about learning and studying — that’s what we see with the new graduates. If the specialist is just a number, but the number increases very easily, will they focus on their learning or do they just want to find a job with good pay? We need to think about what we can do to help them build career objectives.

I’m now the new director of the Macau Public Hospital Physicians Association. We’re going to launch a mentorship programme to arrange [to match] one senior doctor to one trainee. The main purpose is not to teach them how to treat, but how to make them know that being a doctor is not just a job, it’s something more from the heart.

Does Macau need a medical university?

I don’t think so, because we need

hardware — places and resources and, according to some figures in Hong Kong, teaching a medical student takes HKD3 to HKD4 million. Nowadays, people can go to China, Hong Kong, Taiwan and even England and Australia; they can learn and come back.

One good point is that after they learn in different places, it’s not bad for Macau.

Macau, in the long run, the number of doctors needed every year, at most is around 50, so do we really need a medical school?

I don’t think so.

How about a medical bar association; do you agree there should be one?

If the power is given to a private organism, I’m not sure it works well. The idea is good — the medical industry should have the power to regulate this, but the reality in Macau, under the current system, is that they’re not having such a change, so it’s not easy to change the scenario. It’s not likely.

Do you agree with the law regarding medical errors that was recently passed by the Legislative Assembly?

There should be more discussion about this. It’s a good idea to have this law, but some details deserve more discussion.

If something happens to the patient and the medical procedure was OK, the doctor is still responsible for this, and it’s very dangerous for the doctor or even for the patient. If the doctor does a normal procedure and something happens the medical care is not 100 percent predictable; if the doctor needs to take responsibility it’s very high risk. So, in the future, if there are high-risk treatments, the doctor may think it’s better not to do it.

8

July 14, 2014

Gaming

Atlantic City, the Detroit of gaming?

Detroit was once the US Motor City as Atlantic City was ‘the’ East Coast gambling town. The first went bankrupt in 2013, the latter is seeing a flow of casino shutdowns leaving thousands of workers without a job. Competition from new openings in nearer towns like New York, Delaware, Maryland is putting Atlantic City on a Detroit trajectory

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fter 19 years working as a cook at Atlantic City’s Showboat Casino, Dave Rose is counting the weeks until he and about 2,000 fellow workers lose their jobs when the casino is shuttered at the end of the summer.

The Showboat will be the second major casino to close in this struggling New Jersey shore city this year (Trump could be third in September), a trend that has some tourism officials talking about revamping the aging gambling Mecca to broaden its appeal beyond bachelor parties and busloads of retirees, with more family-friendly attractions.

“They’ve been saying that for ten years,” said Rose, who holds out little hope of that strategy working and fears he will have a hard time finding a job that matches the $18.18 per hour he earns at the Showboat.

“There aren’t too many good-paying jobs out there,” he said. The unemployment rate in the city stood at 10.3 percent in May, among the highest of any major U.S. metropolitan area and

well above the national rate, which was at 6.3 percent in May, and has since fallen to 6.1 percent in June.

Atlantic City, which once held a lucrative East Coast gambling monopoly, has fallen hard. Gaming revenue has fallen to $2.8 billion, a little more than half its 2006 peak of $5.2 billion.

The decline reflects the opening of new casinos in the northeastern United States in recent years: NewYork, Delaware, Maryland and Connecticut today all have casinos and Massachusetts is in the process of awarding licences.

One of the main questions for officials and workers in Atlantic City is, after Caesars Entertainment Corp pulls the plug on the Showboat on Aug. 31, how many of the city’s remaining 10 casinos will survive.

The Revel casino and resort, which was a centerpiece of New Jersey Governor Chris Christie’s efforts to bring Las Vegas-quality gambling to Atlantic City’s declining gaming business when it opened in April 2012, last month filed for bankruptcy for the second time in

its short history.

The casino, which employs 3,140 workers and is losing $2 million a week even in the peak summer season, is trying to line up a buyer. If it doesn’t find one in the next few weeks it plans to close.

Christie had provided a $261 million tax package to help build Revel after Morgan Stanley, which had begun building the casino, pulled out of the project two years ago and took a $932 million loss.

“We still have five or six relatively successful casinos,” said John Palmieri, the executive director of New Jersey’s Casino Reinvestment Development Authority, an economic development agency funded by a tax on casinos. “There were 12. Can we support nine? Will that end up dropping to seven or eight? That’s the big question.”

Losing more casinos could punch a big hole in Atlantic City’s budget, which has historically offered generous contracts to public employees and relied on casinos to provide about 80 percent of its tax revenue, said Michael Busler, a professor of finance at Richard

Stockton College, located in Galloway, New Jersey.

“We aren’t done dropping yet,” Busler said. “What (the mayor) has to do is get spending way down.”

Atlantic City Mayor Don Guardian took office early this year to discover the city ran a $10 million budget deficit last year, a number that is on track to rise this year without budget action. Almost one in three city residents live below the poverty line, according to U.S. Census Bureau data, more than triple the poverty rate across New Jersey.

Guardian was not available for comment but he will hold a teleconference on Thursday to brief the press on the city’s efforts to address changing market conditions, officials said.

‘LIKE A GHETTO’ Just a block off Atlantic City’s boardwalk, the glitz fades quickly.

Busy commercial strips are filled with payday lenders, liquor stores and other businesses targeting lowincome consumers.

The city’s crime rate, six times

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July 14, 2014

Gaming higher than the state average, prompts many visitors not to wander from their hotels or the boardwalk. A heavy blow to the city’s reputation came in 2010 when a gambler from north New Jersey was car-jacked inside a casino parking garage, stuffed in his trunk and murdered in a rural area.

“It’s like a ghetto,” said Bob Jeannotte, 70, a visitor from East Brunswick, New Jersey, who sat on the boardwalk in early July while his wife slept late. “You’d think the casinos would help bring the place up.”

Voters opened the door to casinos in 1976, hoping to revitalize the city’s run-down hotels. While money flowed in, it did little to bring up the rest of Atlantic City, as funds from the taxes casinos paid were spent on projects all over the state, Palmieri said.

State law allows property owners to retroactively appeal over the taxable value of their property and the city’s decline has prompted several casino owners to do so, leaving the city to pay refunds on past taxes. In June, the owner of the Borgata Casino said it had reached a settlement with the city that would bring it a refund of $88.25 million for tax payments made from 2011 through 2013.

The city had to borrow $143 million in fiscal 2013 to cover the cost of the successful tax appeals

by Borgata and others.

FUTURE IN FAMILIES? For all the troubles, there remains a steadfast group of local business people who believe in Atlantic City’s future.

“This town has amenities that can’t be replicated in any other market,” said Anthony Catanoso, who owns the Steel Pier boardwalk amusement park. “We are packed with families every night.”

Tourism officials and civic leaders say the future lies in reinventing itself as a familyfriendly resort, an approach

Trump Atlantic City Casino may close in September

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ew Jersey’s struggling gaming industry hub faces another blow as the Trump Plaza casino in Atlantic City prepares to tell workers it may close in September, a state assemblyman said.

Trump Entertainment Resorts Inc. lawyers has just announced that the property may shutter as soon as Sept.

16, Assemblyman Vincent Mazzeo, a Democrat who represents Atlantic City in the state legislature, said in an interview last week. Notices will be sent to 1,000-plus workers as soon as this week warning them of the possible closure, he said.

Trump Plaza would join a roster of Atlantic City casinos buckling under as the resort community has yet to rebound from the worst U.S. recession since World War II. The Atlantic Club casino closed in January, Caesars Entertainment Corp. (CZR) announced it will shut down its Showboat property on the city’s boardwalk Aug. 31, and Revel, a $2.4 billion mirrored-glass casino that was supposed to usher in an era of opulence and resurgence for the city, is searching for a buyer in bankruptcy.

that Las Vegas tried in the 1990s.

That Nevada city has since returned to its traditional focus on more hedonistic entertainment capture in its “What Happens Here, Stays Here” slogan.

Local officials see hope in a newly built outlet mall, a Bass Pro Shop currently under construction, and the construction of a new conference center at one casino.

One hotel operator, St. Petersburg, Florida’s TJM Properties has bought into the idea, acquiring the former Atlantic Club Casino, which closed in January, and the Claridge Hotel, which it plans to develop with a 30,000-square-foot (2,787 square meter) children’s museum.

“We are going after families,” said Sherry Amos, a spokeswoman for the hotel. “We want people to take their families to the outlets, and we want them to take their families to the beach.”

The terms of the sale of the former Atlantic Club prohibit the space from housing a casino in the future.

Atlantic City officials note that even as gambling income has declined, the city’s other revenues have picked up. Taxes on drinks and tickets to shows hit $35.5 million last year, up from $26.2 million in 2005. But those tax receipts are dwarfed by the city’s earnings from taxes on gambling and parking, which came to $214 million in 2013, though that is less than half their level a decade ago.

The developments elsewhere in the region has some longtime Atlantic City workers wondering if they would have better luck moving to chase casino jobs in other places rather than counting on a revival at home.

“If this closes, I’ll have to take my children out of the state,” said Mike DeVita, a 52-year-old bartender who has worked at the Showboat for 27 years. “It’s the only trade I know.” (Editing by Scott Malone and Martin Howell) Reuters

Chris Cahill, a Trump spokesman, didn’t return a phone call, text or e-mail in response to requests for a comment.

“It’s a done deal - they’re going to move in this direction,” said Mazzeo, a Democrat. “The big issue for this region is that you’ll have 6,000-8,000 people who will now be unemployed. That’s going to have a devastating effect on our economy and on this region.”

Regional Competition Mazzeo said a buyer could emerge for Trump Plaza to rescue the property and save jobs. That prospect, though, is clouded by the need for an estimated $100 million in renovations and $20 million to $25 million in legacy pension costs, he said.

New Jersey Governor Chris Christie announced in 2010 a five-year turnaround plan for Atlantic City that included a marketing push to increase non-gaming tourism. The state in November also began online gambling as a way to attract new business for casinos. That hasn’t produced as much revenue as expected.

Trump Plaza is a 39-floor hotel with 906 rooms and 86,000 square feet of casino space, according to the company Web site. Trump Entertainment also operates the Trump Taj Mahal in Atlantic City.

The potential layoff notices were reported earlier by the Press of Atlantic City.

Bloomberg

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July 14, 2014

Greater China

China and U.S. to cooperate BIT or bite on oil reserves The agencies will hold annual technical meetings alternately in each of the two countries Judy Hua and Chen Aizhu

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hina and the United States have signed a preliminary agreement to cooperate on strategic petroleum reserves (SPR), China’s National Energy Administration (NEA) said, marking the first such effort between the world’s top two oil consumers.

Under the agreement, the U.S. Energy Department and NEA will share information on technical, management and policy issues related to oil stockpiles, the Energy Department said in a statement on Friday.

The pact was forged during a visit to Beijing last week by U.S. Energy Secretary Ernest Moniz with NEA head Wu Xinxiong, the NEA said on its website late on Thursday.

The agencies will hold annual technical meetings held alternately in each of the two countries.

“These activities will allow the two countries to understand each other’s systems and decision-making, which will facilitate effective response to disruptions in the global petroleum

Pictured Energy Secretary Ernest Moniz reached the deal with the NEA head Wu Xinxiong

supply,” the Energy Department said.

Ensuring a sufficient emergency oil stockpile means more to China after it surpassed the United States late last year as the world’s largest net oil importer. Overseas purchases help meet around 57 percent of China’s total crude oil requirement.

The International Energy Agency (IEA), the energy watchdog for developed nations, has long pushed for China to be more transparent in sharing its stockpile data, even though China is not an IEA member.

China aims to eventually meet the OECD standard of stockpiling enough to cover 90 days of net oil imports.

By the end of 2013, China had a total of 141 million barrels reserve space, a research arm of the country’s top oil and gas producer CNPC estimated in January, which would be equivalent to about 22 days of the country’s net oil imports.

China filled its first batch of SPR tanks totalling 102 million barrels by early 2009 and began building phasetwo tanks later in the same year.

China finished construction of two reserve bases for the second phase Lanzhou and Dushanzi in landlocked northwest - in late 2011 and pumped oil into them in the first half of 2012, industry sources have said.

Beijing has not disclosed secondphase details such as location, individual capacity, investment or construction schedule. Both the government and oil firms have guarded the details on stock levels amid worries that giving away data would put China at a disadvantage in the market.

In the first half of 2014, Chinese crude imports rose 10.2 percent versus a year earlier, more than double the rate in 2013 despite subdued demand growth for oil. Analysts have said such high imports could suggest stockpiling in commercial storages or even SPR tanks.

Barclays predicted in May that China could add up to a total of 58 million barrels this year of new SPR capacity.

Reuters

Moving away from economic confrontation, the bilateral investment treaty provides China and US with powerful tools for co-operation

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he China-U.S. bilateral investment treaty (BIT) will re-anchor the bilateral economic relationship in the 21st century, said a former senior White House official.

Daniel M. Price, who served as “sherpa” and international economic affairs advisor to former U.S. President George W. Bush, made the remarks in an exclusive interview with Xinhua amid the sixth round of the ChinaU.S. Strategic and Economic Dialogue (S&ED) in Beijing.

“While China and the U.S. have over the years been party to many multilateral negotiations, this is the first -and only- negotiation between the two countries aimed at achieving a binding bilateral treaty on economic issues,” said Price, who is now the managing director of Rock Creek Global Advisors, an international economic policy advisory firm in Washington.

“The BIT will set rules governing investment in all sectors of the economy and be the first time China and the United States will address comprehensively market access issues for foreign investors,” said Price.

He noted that this is essential for development of the as yet underperforming investment relationship, as U.S. investment only accounts for 3 percent of all foreign direct investment (FDI) in China while Chinese investment in the United States only takes 1 percent of the FDI. If the world’s two largest economies can successfully negotiate and complete the BIT, “they will be at the forefront with other leading nations setting investment standards for the 21st century,” he said. Price pointed out that the potential benefits of a BIT far outweigh any potential risks.

On the Chinese side, placing investment relations with the United States on a stable treaty basis would mitigate the uncertainty created by the sometimes shifting political winds on attitudes toward inbound Chinese investment, he said.

In addition, a BIT will create leverage to advance domestic economic reforms that are currently being debated in China, because reform-minded leaders can rightfully argue that their proposals are necessary not only to strengthen the domestic economy but also to secure agreement on a treaty that will protect Chinese investment in the United States, he added.

Finally, by making cross-border capital flows and investments easier, a BIT will help reorient the Chinese economy toward the private sector by increasing the pool of capital available to private companies, which will help them become more innovative, he noted.

“The increase in capital will be especially beneficial for small- and medium-sized enterprises that often have difficulty securing loans and are forced to rely on the informal lending market,” he said.

For the United States, a BIT would level the playing field between U.S. investors in China and their competitors from countries whose governments have already negotiated high quality BITs with China, such as the Netherlands and Germany, Price said.

Xinhua

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July 14, 2014

Greater China

Auto Expo new car industry battlefield

Yuan settlement grows fast in May The China-Europe settlement of Chinese currency renminbi, or the yuan, saw fast growth in May, according to a report unveiled Saturday by the Bank of China. The yuan settlement amount between China’s mainland and four European countries -Germany, Britain, Luxembourg and France- doubled from a year earlier, with their total taking up a share of 8 percent in China’s overall cross-border yuan settlement, the report showed. In spite of the strong growth in Europe, Asia continued to take the lion’s share. Hong Kong, Macao, Taiwan, Singapore, Japan, the Republic of Korea and Vietnam jointly took up 77.5 percent of the total, the report showed.

Price cuts unleash a war between car brands as the sector gets ready for the green revolution

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fierce competition is being staged at the Changchun International Automobile Exposition among auto dealers as Chinese customers have become picky when buying cars.

Yu Yang, a manager with the FAW-Toyota Sales Company in charge of the northern China market, told Xinhua that price discounts have become an increasingly important factor in the buying decisions of Chinese consumers.

“Auto makers, no matter world class brands or domestic brands, have to consider their pricing strategies more seriously these days to avoid being put at a disadvantage,” said Yu. At the expo, which lasts from July 11 to July 20, local auto brands and joint-venture brands such as FAW, Mazda, Ford and Volkswagen all offered deep discounts to buyers. Even luxury manufacturers such as BMW and Mercedes-Benz have marked down their prices.

Analysts attributed the fierce price competition to rising auto output.

Statistics from the China Association of Automobile Manufacturers (CAAM) showed that China’s automobile output exceeded 11 million units during the first half of 2014, up 9.6 percent from the same period last year. Meanwhile, many cities have put

M&A rules for listed firms eased

A past edition of Changchun Auto Expo

a ceiling on car purchases by adopting car lottery systems to combat traffic jams and air pollution.

Apart from competitive price cuts, new energy vehicle have also emerged as a battleground.

From January to June, the output of new energy vehicles in China more than doubled from the same period last year to 20,962 units, while sales over the same period rose to 20,477 units.

Dong Yang, secretary-general of CAAM, said that rising product quality

Alibaba amends IPO filing Company opens door to board expansion following IPO

US$130 billion

new self-estimated value for the company

Jack Ma during a speech at the World Economic Forum

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group of 27 top executives and investors in Alibaba Group Holding Ltd., including cofounder Jack Ma, can appoint another

two directors to the company’s board once it goes public, according to a U.S. regulatory filing on Friday.

The move would expand the

and growing public environmental awareness have made new energy vehicles a new growth point in China’s auto market.

Supportive government polices have also given a boost to environmentally friendly products.

To save energy and combat pollution, the Chinese government announced on Wednesday that new energy cars will be exempted from a 10-percent purchase tax starting from September 1 to the end of 2017.

China is making it easier for listed companies to buy, sell or swap their assets, its latest attempt to streamline bureaucracy and encourage mergers and acquisitions, the country’s securities watchdog said on Friday. Under the new rules, listed firms no longer need the regulator’s approval when buying, selling or swapping assets, as long as such deals are not conducted for back-door listings, the China Securities Regulatory Commission (CSRC) said in a statement on its website.

CNPC sees PetroChina closing Dover purchase

Xinhua

Chinese e-commerce company’s board to 11 members from nine and cement the group’s control over the board after Alibaba’s initial public offering on the New York Stock Exchange later this year.

In its updated prospectus filed with the U.S. Securities and Exchange Commission, Alibaba boosted its estimated value to US$130 billion, up from more than US$116 million in earlier filings.

The figures, which fall short of several analyst estimates of the company’s worth, were calculated to set employee compensation and do not necessarily represent the IPO price.

The company also gave a more detailed explanation of its controversial decision in 2011 to spin out its Alipay payments service, a PayPal-like affiliated established in 2004.

Jack Ma’s group of investors already planned to designate four of Alibaba’s nine directors prior to its IPO. With the new disclosure, the group can name six of 11 directors if they expand the board.

In the updated filing, Alibaba said it needed to spin out Alipay and turn it into a domestic entity in 2011 to prevent delays in obtaining an operating license under newly issued Chinese regulations.

Alibaba spun out Alipay to a group that includes Ma, who holds a 46 percent stake in Alipay through another company, Zhejiang Alibaba E-Commerce Co. Alipay provides the lion’s share of payment services for the company’s retail marketplaces.

“This action enabled Alipay to obtain a payment business license in May 2011 without delay and without any detrimental impact to our China retail marketplaces or to Alipay,” Alibaba said.

Reuters

PetroChina Co. is committed to completing its C$1.32 billion (US$1.23 billion) purchase of the stake it doesn’t own in the Dover oil-sands project in Canada soon, according to the Beijingbased company’s parent. PetroChina, China’s biggest oil and natural gas producer, is working with Calgarybased Athabasca Oil Corp. to close the purchase of Athabasca’s 40 percent stake in Dover, Chen Shudong, the incoming director for China National Petroleum Corp.’s Canadian unit, said in an e-mail. The two energy producers formed a joint venture in 2010 to develop Dover.

Beijing to enforce use of clean coal in anti-pollution drive China’s capital city, Beijing, will enforce the use of cleaner low-sulphur coal from August 1 in a bid to tackle the soaring levels of air pollution that frequently clog the country’s major cities, the official Xinhua media agency said on Saturday.

Beijing will implement strict controls and targets for airborne sulphur from coal, Xinhua said, citing the Beijing Municipal Administration of Quality and Technology Supervision. This is the first time China has enforced the use of low-sulphur coal across all industries to tackle pollution.

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July 14, 2014

Asia

Modi’s reforms will need to wait Last Thursday’s budget surprisingly showed no new changing measures

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he maiden budget from India’s new right-wing government has promised a return to high growth, but disappointed some who hoped premier Narendra Modi might use his thumping mandate to unleash radical change.

The Bharatiya Janata Party (BJP) government opted for small steps in last week’s budget, in what it called “the beginning of a journey” after winning in May the biggest electoral majority in 30 years.

While some economists felt Finance Minister Arun Jaitley should have been bolder, Deepak Lalwani, head of financial consultancy Lalcap, told AFP it was not “realistic to have ‘big bang’ reforms so quickly”.

Jaitley pledged faster economic growth, tighter fiscal discipline, greater openness to foreign investment and revamped infrastructure.

But he left intact US$43 billion worth of anti-poverty subsidies -- raising questions about how he will meet ambitious targets to cut government overspending.

Jaitley’s predecessor P. Chidambaram noted acerbically that after criticising the previous left-leaning Congress government’s subsidies as “mindless populism”, the new man in the job did not touch them.

“Welcome to the real world,” Chidambaram remarked.

India’s hundreds of millions of poor are a vital vote bank, and the BJP and allies have their eyes on state elections this year. They control just eight out of 29 local governments, and anti-populist moves could alienate voters.

Economists have long argued that

Brokerage Nomura called the failure to tackle subsidies a “disappointment”.

But others said rather than missing the reform boat, Jaitley is playing a longer game to build consensus in a fractious democracy of 1.25 billion people in which competing business, social and political interests abound.

Low-hanging fruit

Indian finance minister Arun Jaitley arrives at the Parliament house to present the general budget for 2014 in New Delhi, India on 10 July 2014

India’s economic potential will only be unleashed when it curbs subsidies and ends suffocating regulation.

They also advocate relaxing rigid labour protection laws that discourage manufacturers from hiring, and easing complex land acquisition laws

to boost industry.

The budget left all these issues off the to-do list, although Jaitley said he hoped a long-awaited national goods and services tax (GST) to increase inter-state commerce would be ready

by December.

Finance secretary defends deficit target Finance Minister Arun Jaitley vowed to cut the deficit to 3.6 percent by 2015/16 and 3 percent the year after

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ndia’s top finance ministry official said that plans announced in this week’s budget to stick to a fiscal deficit target of 4.1 percent of GDP are “very credible”, despite criticism from ratings agencies that the number is optimistic.

On Saturday Finance Secretary Arvind Mayaram said however that he thought the approach was feasible.

“If you look at the numbers as they stand today, I think it’s a very credible number,” he told a panel session hosted by the Federation of Indian Chambers of Commerce and Industry on Saturday.

“We are looking at bringing the investment cycle back. That’ll be the pump primer,” Mayaram said, confirming that India’s government is projecting economic growth will

Indian locals watch a screen showing a live telecast of the budget speech of Indian Finance Minister Arun Jaitley at the Bombay Stock Exchange (BSE), in Mumbai

“Mr Jaitley has presented an admirable budget and he’s extended hope of many more reforms,” Ajay Bodke, investment strategy head at brokerage Prabhudas Lilladher, told AFP. Reducing subsidies at a time when farmers are struggling through a weak monsoon was not an option in this budget, said Bodke.

The government already delivered some bitter pre-budget medicine in the form of a double-digit hike in rail fares.

“Nothing can be done overnight -things take time in India- but Mr Modi is a free-enterprise person, and so we could have a different India in five years,” said D.H. Pai Panandiker, who heads the RPG Foundation think-tank.

“If he’s in power for 10, we may really become a progressive, middleincome nation,” he told AFP. Still, Jaitley’s decision to stick to the last government’s goal of cutting the fiscal deficit to a sevenyear low of 4.1 percent of GDP has raised eyebrows.

He plans to meet the target through higher tax revenues and quadrupling privatisation proceeds.

AFP

rise to 5.8-5.9 percent this fiscal year.

He also said Modi’s administration might be able to exceed the US$9.7 billion divestment target set out in the budget - which it aims to meet by selling government stakes in both state-owned and private companies partly because India’s stock markets were stronger this year than they had been last year.

Asia’s third-largest economy grew by 4.7 percent in the year that ended on March 31 - the second consecutive year of growth of below 5 percent.

With varying degrees of severity, ratings agencies Fitch, Moody’s and Standard & Poor’s have all expressed worries that the pledge to keep the fiscal deficit at 4.1 percent in 2014/15 is unrealistic. The target was set by the previous government, an unwieldy coalition led by the now ousted Congress party.

Two particular challenges for India’s economy in the coming months are the threat of a bad monsoon, with the annual June-September rains that determine farmers’ incomes off to a poor start, and volatile oil prices due to civil war in Iraq.

Reuters

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July 14, 2014

Asia

Unstoppable Kiwi

Myanmar attracts US$176 million New Zealand’s dollar is the most overstretched in three years, in June trading patterns suggest, putting in jeopardy its chances Myanmar attracted US$176 million in of surpassing a record high foreign investment last month, thus

bringing the nation’s total contracted foreign investment to US$46.71 billion as of June 2014 since 1988 when Myanmar opened its door to the outside world, local media reported yesterday. In June, the investment from Japan, South Korea, Thailand, Singapore, Malaysia and China’s Hong Kong mainly flew into such sectors as manufacturing, transport and communication, livestock and breeding as well as agriculture. For the first half of 2014, foreign investment was mostly injected into the sector of transport and communication, totalling some US$1.1 billion.

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he kiwi, named for the flightless bird on the NZ$1 coin, has strengthened 7.4 percent versus the U.S. dollar this year, rising to within 0.1 cent of an all-time high.

That’s the best performance among 31 major peers tracked by Bloomberg.

The gains pushed a measure of the currency’s momentum to the highest level since July 2011, suggesting an imminent turnaround.

“The kiwi’s probably at the top of the range,” Mark McCormick, a macro strategist at Credit Agricole SA in New York, said by phone on July 9. “Our outlook for the second half of the year is that the U.S. dollar’s probably going to make a comeback.”

New Zealand’s currency surged this year as the nation’s central bank became the first in the Group of 10 to raise interest rates since 2011. At the same time, the Federal Reserve has reiterated its commitment to an accommodative monetary policy, with Chair Janet Yellen saying last month that borrowing costs will stay at an all-time low for an extended period.

Stochastics signal The currency’s stochastics indicator, when measured on a monthly basis to smooth out daily peaks and troughs, has surpassed the March levels that preceded an almost 2 percent decline in the currency over the next two months. The median estimate of more than 40 strategists surveyed by Bloomberg foresees an almost 5 percent drop to 84 by year- end.

A Credit Suisse Group AG index based on swaps shows traders are betting the Reserve Bank of New Zealand will increase its 3.25 percent

India’s industrial output grows Christchruch has become an icon of New Zealand surge after several earthquakes

The RBNZ is quite hawkish - they’ve been raising interest rates, they’re in a tightening cycle - whereas with the Fed we’re seeing a pretty steady course Eric Viloria strategist Wells Fargo & Co.

main rate by another 0.84 percentage point in the next 12 months. The Fed has kept its benchmark rate in a record- low zero to 0.25 percent range since 2008.

“We maintain a favourable view toward the New Zealand dollar,” Eric Viloria, a strategist at Wells Fargo & Co. in New York, said by phone July 9. “The RBNZ is quite hawkish - they’ve been raising interest rates, they’re in a tightening cycle - whereas with the Fed we’re seeing a pretty steady course.”

Even so, there are signs that the RBNZ’s tightening may already be hurting the economy, which may in turn cap the local dollar’s gains.

Business confidence moderated last quarter to the least since the first three months of 2013, while home building approvals slid 4.6 percent in May, the most in four months.

Bloomberg News

Widodo and Subianto make Indonesia tremble The country faces a long period of uncertainty after last week’s disputed presidential election

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fter a bitterly-fought campaign, Jakarta governor Joko Widodo and his rival, ex-general Prabowo Subianto, both used different unofficial tallies to claim they had won on Wednesday Most credible counts showed Widodo in the lead, sparking a rally in stocks and the rupiah Thursday on the expectation that he will be declared the winner when official results are announced later this month.

But the initial euphoria quickly wore off. The Jakarta stock market slumped as much as two percent the following day, and was 1.3 percent down at the close as investors grew nervous about the potential for a prolonged deadlock.

“Given the conspicuous absence of a concession, the market still cannot rid itself of the spectre of draggy uncertainty for a while more,” said economist Wellian Wiranto, from Singapore’s OCBC Bank.

Investors favour Widodo as he is seen as a potential reformer and a clean leader in one of the world’s

Joko Widodo (C), Indonesian President Candidate, gives a speech claiming victory in the Indonesian election in front of his supporters, in Jakarta, Indonesia, 09 July 2014. Indonesian presidential candidate Joko Widodo was leading in unofficial early counts after polls closed on 09 July 2014

Yndustrial production grew an annual 4.7 percent in May, the highest since October 2012, providing welcome positive news for Prime Minister Narendra Modi’s new government as manufacturing activity and electricity generation increased. Finance Minister Arun Jaitley unveiled his first annual budget on Thursday, promising to revive the Indian economy from the longest slowdown in a quarter of a century with a mix of structural reforms and fiscal consolidation. Output from mines, utilities and factories, grew for the second straight month after a contraction of 0.5 percent in March, government data showed.

Sumatec to buy Borneo Energy Malaysian upstream oil and gas company Sumatec Resources Bhd has agreed to buy Borneo Energy Oil And Gas in a cash and share deal worth US$250 million, Sumatec said on Friday. Sumatec signed a framework agreement with Borneo Energy’s owners Abu Talib Abdul Rahman and Murat Safin for the purchase. Borneo Energy owns Kazahk upstream oil and gas firm Buzachi Neft LLP, according to a local stock exchange filing. Buzachi has two 25-year contracts, valid until November 2026, to explore for and produce oil and gas in Karaturun Vostochnyi and Karaturun Morskoi fields, the filing showed.

Envestra declares dividend, defying suitor

most corrupt countries.

Prabowo, a top military figure in the era of dictator Suharto, has struck a fiercely nationalistic tone on the campaign trail, and is looked at warily by markets.

It is not a good time for Indonesia to be hit by uncertainty that could scare off investors, as it undergoes a painful transition from a decade of rapid growth fuelled by high global prices for its abundant commodities.

Falling commodity prices, as well as a series of protectionist policies, have hit the economy, which expanded at 5.21 percent in the first quarter -its slowest pace since late 2009.

Foreign investment has also slowed steeply, with investors wary of the uncertain business environment.

Corruption, seen as a major obstacle to operating in Indonesia, remains rampant.

Investors are hopeful for a quick end to the stalemate, with Widodo being declared the official winner later this month and Prabowo graciously conceding defeat.

AFP

Australian gas pipeline owner Envestra Ltd on Friday declared a final dividend earlier than planned, potentially throwing into doubt a A$2.2 billion (US$2.1 billion) takeover offer from Hong Kong’s Cheung Kong Infrastructure Holdings Ltd (CKI).

Envestra’s directors have recommended the May 9 offer from billionaire Li Kashing’s company, but both companies recently revealed they disagreed on the date when the Australian takeover target would declare its final dividend. Envestra wanted to bring the date forward to July 11 - Friday - to ensure enough shareholders voted in favour of the deal.

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July 14, 2014

International American Airlines picks CFM for engine deal CFM International, a joint venture between General Electric Aviation and Safran of France, said on Sunday that it had been picked by American Airlines Group to provide engines for 100 Airbus A320neo jets the airline has on order. CFM said the order is worth US$2.6 billion at list prices. The deal confirms what sources familiar with the matter told Reuters this month and marks a loss for United Technologies Corp’s Pratt and Whitney unit, which makes the other engine offered on the Airbus A320neo.

Putin signs nuclear energy deal with Argentina

Russian President Vladimir Putin signed a nuclear energy cooperation deal with Argentina on Saturday on a trip to bolster trade ties and strengthen Russia’s influence in Latin America. Putin’s energy minister, Alexander Novak, told reporters in the Argentine capital that the Russian state atomic energy corporation, Rosatom, had made an offer to tender for the construction of two new nuclear power units in Argentina. Novak said Rosatom could offer “comfortable” financial terms to Latin America’s No. 3 economy, which has struggled to advance its nuclear energy programme and lure foreign investors deterred by a raft of punishing capital and import controls.

Lindt near deal to buy Russell Stover Swiss-based chocolate maker Lindt & Spruengli is in advanced discussions to acquire family-owned U.S. candy business Russell Stover, and the two companies could announce an agreement as early as next week, the Financial Times reported on Saturday. Quoting unnamed sources close to the matter, the Financial Times said that while it is unclear whether an exact price had been agreed upon, a figure of US$1.4 billion is being discussed. The newspaper reported that talks were on-going and no deal was certain.

Fed officials debate timing of rate increases A debate is intensifying among the Federal Reserve’s regional bank presidents about whether to push interest rates up from zero sooner than planned because of recent improvements in the U.S. job market, the Wall Street Journal reported. Most Fed officials at June’s policy meeting didn’t see rate increases until 2015, according to projections made before the Labor Department reported on July 3 that the jobless rate fell to 6.1 percent in June, the Journal said in an article posted late on Friday. Fed officials hadn’t expected unemployment to fall to near 6.1 percent until the end of this year.

Foreign banks kneel down to U.S. rules The British Bankers’ Association (BBA) estimates Western banks have cut hundreds of relationships with corresponding banks in emerging markets, hurting businesses, governments and people in poorer countries

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inanciers may grumble that the United States is acting like an imperial power in punishing foreign banks for dealings far beyond U.S. territory, but in the end they are more likely to bow to Washington than kick against its dollar muscle.

Last week, French politicians and business leaders demanded an end to the global dominance of the U.S. currency -and hence of the U.S. banking system- after a New York court fined French bank BNP Paribas US$9 billion for doing business in Sudan, Iran and Cuba. Yet despite irritation at the long reach of U.S. sanctions, most bankers see that as wishful thinking.

Instead, major lenders in Europe and Asia are reacting to the steady flow of punishments from the United States by doing ever more to comply with U.S. laws and by cutting business ties in countries Washington dislikes rather than risk its wrath and, in the worst scenario, risk exclusion from the dollar system.

Official regulators outside the United States are starting to look at ways to prevent their own banks and markets from being damaged by the scale of U.S. penalties. But for now, each bank on its own has little choice but to toe Washington’s line.

The British Bankers’ Association (BBA) estimates Western banks have cut hundreds of relationships with correspondent banks in emerging markets, hurting businesses, governments and people in poorer countries.

Large commodity traders such as Glencore, Vitol, Trafigura and Mercuria are stepping in to plug the gap in trade finance. Meanwhile, far from turning their backs on the United States as a result of the demands of regulators and judges, foreign banks who have fallen foul of

BNP has to pay a huge fine to U.S. for dealing with Iran

U.S. rules are doing everything they can to ensure they can still tap the world’s financial epicentre.

Nowadays, bankers are loath to object in public to U.S. requirements, even though privately many believe Washington is using its financial dominance to push its foreign policy agenda and give its own banks the edge over foreign rivals.

Banks’ shareholders remain more troubled by the legacy of past failures to follow U.S. policies. Analysts at Morgan Stanley expect major banks to pay out another US$75 billion in the next three years, on top of US$210 billon already paid.

But estimates are hard to pin down. As recently as February, BNP Paribas was setting aside just US$1.1

billion to cover its U.S. sanctions settlement. That was US$8 billion off target.

Uncertainty is putting off investors and causing headaches for regulators.

A senior official at the Bank of England said this week that potential fines were making it harder to work out how much capital regulators should tell lenders to hold.

“Regulators in some Asian jurisdictions are beginning to recognise that they need to band together, as they won’t get very far on their own,” said Mark Austen, chief executive of Hong Kong-based bank trade group the Asia Securities Industry and Financial Markets Association.

“We are seeing a sea change.”

Reuters

Regulators want clearer dark pools T

he regulatory noose is tightening around dark pools, private share-trading venues that promise anonymity for specialist investors, offering a chance for rival exchanges in the United States and Europe to take back market share.

But traditional stock-exchange operators such as LSE Group, NASDAQ-OMX and Euronext can’t just expect business to drop back into their laps after years of seeing market share slip away to more opaque platforms that offer privacy or to upstart venues with slick technology.

A recent batch of enforcement actions against dark pools run by big global banks, coupled with incoming rules in Europe that aim to make markets more transparent by putting a cap on dark-pool trading, has alerted investors to the risks of trading in the murkier areas of the market.

The risks range from concern over a lack of disclosure about how the pools operate and price trades to fears

that some give an unseen advantage to high-speed traders using sophisticated technology and computer algorithms.

But in a tough environment where overall trading volumes have yet to

KEY POINTS Regulators raise awareness of risks at some types of trading venue Exchanges will need work, effort to pull back share More volume seen increasing fees, data revenue Big fund managers still see appeal in dark pools

return to pre-crisis peaks, it will be no mean feat to persuade professional investors drawn to the lower costs and price stability of dark pools to change their habits and concentrate more trades on a smaller number of venues.

“It is going to be a fight for the public exchanges,” said Matthew Coupe, director of regulation and market structure for financialcompliance company NICE Actimize.

“The dark pools are not going to give up market share easily.”

When contacted by Reuters, several exchanges highlighted the growing momentum behind increased market transparency and said they would work closely with regulators.

“Clearly dark pools are increasingly on the radar of regulators,” said Spanish exchange BME. “Operators of regulated market platforms (are) well positioned to take advantage of these changes and turn them into opportunities.”

Reuters

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July 14, 2014

Opinion Business

wires

The old world’s new roles

Leading reports from Asia’s best business newspapers

GLOBAL TIMES

Joseph S. Nye

University Professor at Harvard University and former US assistant secretary of defence and chairman of the US National Intelligence Council

China will issue 26 billion yuan (US$4.23 billion) in two-year book-entry treasury bonds next week, according to a statement from the Ministry of Finance. The ministry said the bonds will have a fixed interest rate, which will be decided through competitive tendering on July 18. It added that the bonds will be sold on the interbank market between July 19 and 23 and will become tradable on the secondary market on July 25. Interest calculation will start on July 21. This is the ministry’s 15th issuance of book-entry treasury bonds this year.

THE PHILSTAR The Philippine economy is showing signs of fatigue but is likely to recover in 2015, British bank HSBC said in its latest Asia Economic Quarterly Report. It noted that after eight quarters of above six percent growth, “the economy is showing signs of fatigue.” “First quarter 2014 GDP (gross domestic product) slowed to 5.7 percent from 6.3 percent in fourth quarter 2013. Based on its latest forecasts, HSBC said the country’s GDP growth will narrow down to 5.9 percent in 2014 from 7.2 percent in 2013 and recover anew in 2015 to 6.1 percent.

THE NEW ZEALAND HERALD It is the great conundrum of New Zealand’s investment scene and the great mystery of the Auckland economy.

Why has the median house price risen 25 per cent in Auckland in the past two years to more than NZ$620,000, yet the median rent for a three-bedroom rental has risen just 6 per cent to NZ$550 a week? Why have rents not kept up with prices in a market short of housing and facing a migration boom?

The numbers look even more extreme going back to 2007.

THE JAPAN NEWS A government panel has adopted a proposal for regulatory changes that would block plans by discount mobile carrier Ymobile Corp. to offer fourth-generation wireless services. The proposal sets new conditions under which the communications ministry plans to allocate frequency bands for 4G services later this year. Under the previous conditions, a company with a parent that holds onethird or more of its voting rights was forbidden from applying for frequency bands at the same time as its parent because they are regarded as belonging to one group.

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AMBRIDGE – China’s rise has raised many questions for the West, with some wondering whether it is set to usurp a struggling Europe’s global leadership role. As one columnist put it, “there is nothing much European governments can do in East Asia, save serve as marketing managers for their domestic businesses.” With neither the diplomatic weight nor the military heft to make an impression in the region, Europe had better leave the heavy lifting to the United States. But this does not have to be the case.

For Europe, the implications of China’s rise are far-reaching, beginning with the United States’ strategic “pivot” toward Asia. After more than 70 years as a top US priority, Europe is beginning to lose its privileged position in the eyes of American policymakers.

Moreover, European sales of high-tech dual-use products that complicate America’s security role in Asia is bound to create friction.

Nonetheless, warnings that the Atlantic partnership is eroding are unduly dire.

Tellingly, US President Barack Obama’s administration has replaced the term “pivot,” which implies a turn away from something, with “rebalancing.” This change reflects a recognition that China’s increasing economic dominance does not negate the importance of the European Union, which remains the world’s largest economic entity and a leading source of economic innovation, not to mention values like the protection of human rights.

This is not to say that Asia’s rise will not demand adjustments. When the Industrial Revolution began, Asia’s share of the global economy began to decline from more than 50% to just 20% by 1900. By the second half of this century, Asia is expected to recover its former economic dominance –that

is, account for 50% of global output– while lifting hundreds of millions of people out of poverty.

This power shift –perhaps the most consequential of the twenty-first century– implies serious risks. Historians often warn that the fear and uncertainty generated by the emergence of new powers like China can trigger serious conflict, like that which Europe experienced a century ago, when Germany overtook the United Kingdom in industrial production.

With Asia riven by territorial disputes and historical tensions, maintaining a stable security balance will not be easy. But there are levers in place that can help.

In the 1990s, when US President Bill Clinton’s administration was considering how to respond to China’s increasing economic might, some urged a policy of containment. Clinton rejected that advice: It would have been impossible to forge an anti-China alliance, given the enduring desire of China’s neighbours to maintain good relations with it; more important, such a policy would have guaranteed future enmity with China.

Instead, Clinton chose a policy that could be called “integrate and insure.” While China was welcomed into the World Trade Organization (WTO), America revived its security treaty with Japan.

If China pursues a “peaceful rise,” its neighbours will focus on building strong economic relationships with it. If it throws its weight around – which some say is implied by its recent actions on the Indian border and in the East and South China Seas – its neighbours will seek to balance its power, with an American naval presence offering backup.

Where does Europe fit into this picture? For starters, it should monitor and restrain sensitive exports to avoid making the security situation

more dangerous for the US. Even in trading terms, Europe has an interest in regional stability and secure sea lanes.

Furthermore, Europe can contribute to the development of the norms that shape the security environment. For example, Europe can play an important role in reinforcing a universal interpretation of the United Nations Convention on the Law of the Sea, rather than China’s idiosyncratic version – especially given that the US has not even ratified the treaty.

Contrary to the claims of some analysts, China is not a revisionist state like Nazi Germany or the Soviet

Though China is not attempting to upend the global order, it is now undergoing a profound –and destabilizing– transformation.

With the rise of transnational issues like climate change, terrorism, pandemics, and cyber crime – brought about by rapid technological progress and social change– power is being diffused not among states, but among a wide range of non-governmental entities

Union, eager to overthrow the established international order. Indeed, it is not in China’s interest to destroy international institutions – such as the United Nations, the WTO, and the International Monetary Fund– that have helped to facilitate its rise.

Given Europe’s leading roles in such institutions, it can help China gain the multilateral legitimacy that it seeks, in exchange for responsible behaviour.

Though China is not attempting to upend the global order, it is now undergoing a profound –and destabilizing– transformation. With the rise of transnational issues like climate change, terrorism, pandemics, and cyber crime –brought about by rapid technological progress and social change– power is being diffused not among states, but among a wide range of non-governmental entities.

Addressing these challenges will require broad international cooperation, with China, the US, and Europe each playing an important role.

Finally, there is the question of values. Europe, together with the US, has already resisted Chinese (and Russian) demands for greater Internet censorship. And European countries like Norway and Germany have willingly taken economic hits in the name of human rights.

While it is impossible to predict how Chinese politics will evolve, other countries’ experiences suggest that political change often occurs when per capita income reaches roughly $10,000.

If such change does occur, Europe will have an opening to promote its core values even more effectively.

Whether China’s economic interest in an impartial world order based on the rule of law will lead to greater protection of individual rights remains to be seen. Only China will decide that. But Europe can make a strong case.

The Project Syndicate 2014

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July 14, 2014

Closing Nepali to allot US$10,000 to each lawmaker

Apple refutes Chinese GPS’s security doubts

For the first time in the history of Nepal and probably in the world, Nepali government is all set to dole out as much as US$10,000 to each parliamentarian, officials confirmed yesterday. State media and concerned stakeholders in Nepal have been warning the government not to allot extra budget for the election constituencies through the lawmakers stating that such a trend will violate fiscal discipline only. The lawmakers from all parties in the current government, however, had been protesting at the parliament, demanding for the fund since more than a month ago.

Apple Inc. assured Chinese customers that location tracking on its iPhone can’t be used to identify activity of individuals, a day after China’s state-owned television broadcaster said the software poses a security risk. The iPhone function can collect data and may result in a leak of state secrets, China Central Television reported on July 11, citing Ma Ding, head of the online security institute at People’s Public Security University of China.

In response, Apple said on its Chinese website that it has never “worked with any government agency from any country to create a backdoor.”

Playing with trade fire Australians don’t feel the deal with Japanese will affect their proposed free trade agreement with China

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greements with Japan over security and commerce aren’t hampering efforts to strike a free-trade deal this year with China, its biggest economic partner, according to Trade Minister Andrew Robb.

Japan and Australia last week signed accords on defence technology transfers and tariff reductions, as Shinzo Abe made the first formal visit to Australia by a Japanese prime minister since 2002.

Australian Prime Minister Tony Abbott is seeking to add trade agreements while balancing diplomatic ties with China and Japan, amid a dispute between the nations over a group of uninhabited islets in the East China Sea. Abbott’s government has concluded deals this year with both Japan and South Korea, which together with China buy more of Australia’s iron ore, coal and other exports than the rest of its customers combined.

Discussions with a Chinese counterpart in recent days

had offered no evidence that the deals with Japan “has had any impact on our relationship,” Robb said today in an interview with Sky News television. “I saw no sense of concern about the last week.”

Abe, who said he’d discussed with Abbott attempts by China to “change the status quo” in the region has faced criticism from China’s President Xi Jinping over a reinterpretation of his country’s pacifist constitution.

Abbott was chided in China’s media over comments made during Abe’s visit in which he described “the sense of honour” of Japanese soldiers during World War II.

77 pct 2009-2014 China’s trade increase with Australia

G-20 summit “The agreement with Japan will benefit our farmers and our businesses,” Abbott said today in an e-mailed statement. Once the deal is fully implemented, 97 percent of Australian exports to the world’s third-largest economy will receive preferential

access or enter duty-free, while domestic consumers will benefit from cheaper car parts and household items, according to the statement.

Trade liberalization will also be a focus of this year’s Group of 20 leaders summit, which is being hosted

by Australia in Brisbane in November. “The outcome should be more jobs, better infrastructure, freer trade

Prime Minister Tony Abbott (R) speaks to Prime Minister of Japan Shinzo Abe during a ceremonial welcome outside Parliament House in Canberra, Australia, 08 July 2014

and greater co-operation,” said Abbott. “These are the foundations of stronger economies.”

Business leaders from around the world will be in Sydney this week as part of the associated B-20 meeting.

Surging trade An agreement with China has become a greater economic imperative as the nation has increased trade with Australia by 77 percent since 2009, and it’s the biggest consumer of iron ore, Australia’s most valuable export. Two-way trade between the nations in 2013 reached A$150 billion (US$141 billion), more than double the value of Australia’s partnership with Japan, its second largest economic partner.

While Chinese economic growth is slowing, there will still be scope for countries such as Australia to gain from trade with the world’s most populous nation, Reserve Bank of Australia Governor Glenn Stevens said in an interview published on The Australian newspaper’s website.

“It’s just we have to be sufficiently adaptable to see those opportunities and go and take advantage of them,” Stevens was quoted as saying.

“They don’t just drop in our lap.”

Bloomberg News

Corrupted deals uncovered in Xinjiang

Brazil sells 25 planes to China

Government to buy more green vehicles

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nti-graft inspectors have uncovered powerfor-money deals and collusion by officials with investors in seizing state-owned property at Xinjiang Production and Construction Corps.

According to a statement posted on the website of the Communist Party of China Central Commission for Discipline and Inspection (CCDI) on Saturday, power-for-money deals were found in construction and land projects, as well as in the purchase of agricultural materials in the corps.

A list of other malpractice, including lax supervision of officials’ power and loss of state assets, was revealed in the statement. Inspectors also found officials’ family members to be operating businesses under the jurisdiction of those officials.

In a bid to fight corruption, the CCDI launched rounds of inspections of provincial-level authorities, ministries, state-owned institutions and companies.

From March to May, anti-corruption authorities made inspections in Beijing, Tianjin, Liaoning, Fujian, Shandong, Henan, Hainan, Gansu, Ningxia and Xinjiang. They also inspected the Ministry of Science and Technology, China Oil and Foodstuffs Corporation, Fudan University and the Xinjiang Production and Construction Corps.

Xinhua

razil will announce the sale of about 25 planes made by Embraer SA to Chinese airlines on Thursday during a visit by China’s President Xi Jinping, a Brazilian official said.

President Dilma Rousseff’s international affairs advisor, Marco Aurelio Garcia, said on Friday that the aircraft sale and plans for cooperation in infrastructure projects in Brazil, such as railways, will be among a series of agreements to be unveiled.

Embraer has been seeking to expand its manufacturing operations in China, a key market for the world’s third-largest commercial plane maker.

But plans to refit its regional jet plant in Harbin to make the larger E-Jets were not approved by Chinese authorities as China is investing in a competitor in that size of aircraft.

Instead, Embraer is making the Legacy 650 business jet in Harbin, though the outlook for Chinese business jet sales has dimmed recently with a general chilling of conspicuous consumption in China.

Xi will make a state visit to Brasilia after attending a summit of the BRICS. Reuters

hina unveiled a plan yesterday encouraging government organs to buy more new energy vehicles, which has been hailed as a move to fight pollution and drive the slowly growing new energy car market.

From 2014 to 2016, new energy vehicles will account for no less than 30 percent of newly purchased cars in state organs, according to the plan jointly released by the National Government Offices Administration (NGOA), the National Development and Reform Commission, the Ministry of Finance, the Ministry of Science and Technology, and the Ministry of Industry and Information Technology.

The plan also applies to government organs and public institutions in regions where controlling small particle emissions has become a challenging task in the fight against pollution, an NGOA spokesman said.

The number of new energy vehicles will account for at least 15 percent of new cars in 2014 for local government departments and public institutions in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta.

Xinhua