Macau Business Daily, Aug 26, 2014

MOP 6.00 Closing editor: Sara Farr Publisher: Paulo A. Azevedo Number 612 Tuesday August 26, 2014

No end in sight A

Year III

s many as 5,000 gaming workers took to the streets yesterday. The wave of protests has lasted almost a month. Police put the number of demonstrators at 1,400. Organisers say at one point 7,000 unhappy workers marched. Some wore stickers identifying the casino company they worked for. Police were out in strength, with minor clashes observed. Another protest is scheduled for the end of the week PAGE

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About turn www.macaubusinessdaily.com

Opinions can change in the blink of an eye. Or so it seems. SJM executive director Ambrose So has performed an unexpected U-turn on the dealer issue. He recently went on record saying the government should approve the hiring of foreign workers to take up casino dealer positions.

And rationalised why. He now favours the government’s localsonly policy

Future Bright to launch two Korean food chains in Macau Page 5

Deswell’s net sales shrink 19.7 pct Page 6

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Fledgling flame

HSI - Movers August 25

As many as 6,000 citizens have already cast their votes.

The government deems the civil referendum ‘illegal’.

Hosted by three local pro-democracy associations, the referendum seeks opinions on universal suffrage and the Chief Executive’s performance. Voting will run until August 30, a day before the official CE election.

The Public Prosecutor’s Office has been handed files on four vote-collating volunteers

More casino workers When it comes to manpower, the gaming sector wins hands down. Its workforce increased 3.5 percent to just over 55,500 in the 2Q. Monthly wages averaged MOP20,160 excluding bonuses and allowances. But other professions are catching up

Name

%Day

China Petroleum & Ch

4.28

BOC Hong Kong Holdi

2.31

Cheung Kong Holding

1.37

MTR Corp Ltd

1.28

CNOOC Ltd

1.19

China Mengniu Dairy

-1.72

Want Want China Ho

-1.86

China Resources Ente

-2.05

China Shenhua Energ

-3.01

CITIC Pacific Ltd

-3.28

Source: Bloomberg

I SSN 2226-8294

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Media moves

Brought to you by

Taiwan’s Wei family took the leading role. It has acquired majority shareholding of China Network Systems (CNS), the top cable TV operator on the island. Australia and China are now discussing the role of media in promoting both countries’ links in a Sydney forum Page 9

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August 26, 2014

Macau

Ambrose So performs volte-face on dealers policy SJM boss Ambrose So has changed his stance, claiming he would support Chui Sai On’s position of maintaining a locals-only policy for dealer positions Stephanie Lai

sw.lai@macaubusinessdaily.com

should facilitate the provisioning of accommodation and transport for their imported workers – a policy direction that Mr. Chui has mentioned in his re-election manifesto.

Further adjustment

A

s Macau Chief Executive Fernando Chui Sai On reaffirmed the policy of reserving dealer positions for locals, casino operator SJM Holdings Ltd’s executive director Ambrose So Shu Fai said he “supported” Mr. Chui’s stance.

This is despite the intensified human resource competition anticipated among fellow operators when the Cotai casino-resorts open in the near future.

“Regarding the policy of reserving dealer positions for residents only, I would support it,” Mr. So said yesterday. “In each territory, the government is responsible for overseeing the job opportunities of its residents; and just now the Chief Executive said some job types should be prioritised for local residents.”

Mr. So spoke to media after attending a meeting with Mr. Chui yesterday as a business sector member of the Electoral College.

The 400-member conference, whose constituents are not directly elected by the public, will vote to elect the city’s next Chief Executive on August 31. MGM China Holdings Ltd’s co-chairperson Pansy Ho and Galaxy Entertainment Group Ltd’s deputy chairman Francis Lui are also members of the electoral conference.

Mr. So’s remarks yesterday are markedly different from the stance he recently expressed: in February, the SJM boss urged the government to consider letting casinos employ imported workers, saying that this change of policy could even help

residents’ careers.

Speaking at the groundbreaking ceremony of SJM’s Cotai project in February, Mr. So said at the time that if the dealers for locals only policy was to remain, Macau residents could not move upwards as the casino operator could not hire people to replace them as they got promoted.

Mr. Chui, currently campaigning for a second five-year term, remarked to the electoral conference yesterday that residents here should have the freedom to choose the dealer position, while taking this job did not mean they would have no access to a fair education system and promotion opportunities.

During the meeting, however, Mr. So failed to obtain a clear answer from Mr. Chui on how the gaming operators

Speaking to media yesterday, So expressed confidence in the sufficiency of the local pool as a source of workforce prior to SJM’s completion of its Cotai project – the Lisboa Palace - slated for 2017.

“For SJM’s Cotai project, which will only be completed in 2017, I believe that for the years until then we’ll see a considerable number of graduates here,” Mr. So said. “There will be an accumulation of human resources, and by then [2017] we’ll see how we should adjust to that to fit our operation.”

The Lisboa Palace, which will occupy nearly 75,000 square metres of land, will support three hotels together comprising up to 2,000 rooms. This Cotai development will feature up to 700 gaming tables and 1,200 slot machines.

Mr. So mentioned yesterday that he would expect between six to eight staff working a gaming table on a roundthe-clock shift, which means the casino operator would need 4,200 to 5,600 dealers per gaming table for the Cotai project if the operator gets approval for 700 tables from the government.

However, the SJM chief executive did not directly respond to how the dealers for locals-only policy would weigh on the firm’s operation costs or profit margin in future years. ”As I mentioned earlier, we would constantly talk with our staff to get to know their living index,” So told media. “And we’d see how we could lift or improve their benefits and recruitment terms.”

Chui proposes scrapping daylighting rules The Chief Executive candidate said that in the next term of government his administration will work on scrapping an old daylighting rule applicable to the city’s buildings

M

acau’s incumbent Chief Executive Fernando Chui Sai On said he agreed to the cancelling of a bylaw that partly determines a building’s height according to the shadow it casts on the road, saying that the next government should work on the issue.

Mr. Chui, who met with business sector members of the Electoral College yesterday morning, responded to a comment by property developer Kuan Vai Lam that the next administration should propose the scrapping of a bylaw which determines a building’s height and architectural design from the area

of the shadow it casts on the road.

Bylaw No.42/80/M dates back to early 1980.

“I think this bylaw should be duly cancelled,” said Mr. Chui yesterday during his campaign session for the upcoming Chief Executive election on August 31.

“The next term of government should raise a proposal cancelling this bylaw as we have to comply with new urban development rules”.

Director of the Architects Association of Macau Ben Leong remarked to Business Daily that the major principle of this more than three decade-old bylaw was to ensure

sufficient daylight for buildings and roads neighbouring the project under construction.

“I would agree that Mr. Chui’s suggestion is a reasonable one,” Leong said. “Now we have the urban planning law and a committee reviewing most construction plans, including the restriction of height of a particular project or the issue of width inbetween buildings, which should suffice as a substitute for the bylaw.”

“The setback that needs to be done on a project as required by this bylaw also impacts the building’s outlook, and the law itself did not always

present the best solution or scientific means to determine the daylighting of the building’s surrounding,” Mr. Leong remarked.

Macau’s urban planning law came into effect on March 1 this year, and sets rules on master and detailed urban planning for the various districts of the city.

As the new law stipulates, an advisory body known as the urban planning committee is also responsible for reviewing the construction plan of a project once the government publicises the application of a project for public feedback.

S.L

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August 26, 2014

Macau

Protest movement escalating; civil disobedience mounting More than 5,000 gaming workers from the six operators took to the streets yesterday to express their ongoing dissatisfaction with company pay, benefits and perks. At one point, disenchanted protestors breached a police security barrier Kam Leong

kamleong@macaubusinessdaily.com

T

he wave of gaming protests reached another climax yesterday. The very first demonstration gathering employees from the Big Six gaming operators, for a time, broke through the defensive line of police in front of Starworld Hotel when they were blocked from marching around MGM Macau.

The demonstration, staged by local gaming union Forefront of Macau (FMG), started from the plaza abutting Sands Macau and headed towards Government Headquarters.

The union claimed that some 5,000 workers had joined the protest when the group arrived at the Starworld Hotel, with as many as 7,000 taking to the streets during the ‘peak’ of the march. Police, however, put the figure at only 1,400.

The two primary objectives of yesterday’s protest were to improve the general wages and benefits of the gaming workers as well as to reach an agreement on a total smoking ban inside the casinos, according to Ieong Man Teng, president of the union.

Mr. Ieong reiterated that he hopes that Chief Executive Fernando Chui Sai On could focus his attention on the demands of gaming workers, when the protesters arrive at the destination to submit their demands letter.

Chaos at MGM A scene of chaos unfolded after the group passed Starworld Hotel.

Gaming workers from MGM Macau tried to march straight to the property to express their demands but found the road blocked by police. Expressing a great deal of frustration, they clamoured for the police to “Open the way!” Not having their demands met, protesters broke through the defensive line.

After negotiating with the police, who insisted that the group could not march around MGM, the leaders calmed their chants by pointing out that if the leaders got arrested for this violation there would be no-one to organise further action when they arrived at their destination.

The march returned to its original route and protesters continued on

their way passing Wynn as well as Grand Lisboa, where they gathered for a while before making their way to Government Headquarters once more.

Movement upgraded for SJM Mr. Ieong announced at the end of the demonstration that there will be another assembly this Saturday, targeting SJM. The movement “capping the casino floats” - will only end when SJM responds to its gaming workers, according to local media TDM. Another demonstration organiser, Cloee Chao, claimed that more than half of yesterday’s protesters were employed by SJM. The chief executive of SJM, Ambrose So Shu Fai, said on the sidelines of a meeting with the CE candidate yesterday morning that the gaming corporation had met with its employees not just once and had a “full channel and constant dialogue” with each labour group.

“We’re very willing to talk with our labour groups on the subject, and we have duly communicated with them and listened to their opinions to make improvements [in remuneration],” he said.

However, he stressed again that the organisers of the demonstration are not from SJM, and thus he did not think that they had sufficient legitimacy to discuss the issues with the company.

In response, SJM protesters wore stickers yesterday proclaiming ‘I am from SJM’ to show their dissatisfaction.

Legislator António Ng Kuok Cheong also attended the demonstration in a show of support. He told reporters that he thought that such a wave of protests was only a skirmish for the gaming industry.

Mr. Ng perceives that more furious battles many come should the CE candidate succumb to allowing non-resident workers to be dealers in order to solve future human resources problems, despite the CE candidate now saying he would not permit it.

The wave of gaming protests that started last month has no end in sight in the near future.

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August 26, 2014

Macau

Gaming sector workforce grows 3.5pct in Q2 In the second quarter of the year the number of employees in the gaming sector grew 3.5 percent. Of the 57,500 employees in this industry, 44.8 percent are dealers. While in 2015 the new wave of casinos opening in Cotai will increase the demand for workers, as at the end of June the job vacancies in the industry stood at 1,529 João Santos Filipe

jsfilipe@macaubusinessdaily.com

T

he number of employees working in the gaming sector increased 3.5 percent year-onyear to 57,550 from roughly 55,556, according to data released yesterday by the Statistics and Census Service Bureau (DSEC). Of these 57,500 workers, roughly 44.8 percent – or 25,783 - are dealers.

Excluding bonuses and allowances, in the gaming sector full-time employees in June were paid an average of 20,160 patacas, up by 6.7 percent year-on-year. The average earnings for dealers is 17,530 patacas per month.

From 2015 onwards, as the second tranche of new casinos opens on the Cotai Strip, the manpower needs of the gaming sector are expected to increase steeply. In the second quarter of the year, however, the number of vacancies in this sector dropped 62

percent year-on-year to 1,529. This notwithstanding, the vacant posts for dealers fell more significantly by 319 in the second quarter of the year.

In terms of language skills, besides Cantonese, knowledge of Mandarin and English is required at 85.5 percent and 72.1 percent, respectively, for the vacancies in this sector.

In addition, the gaming industry had the largest share of participants in vocational training. Of the 36,568 participants that attended training courses in the second quarter, 17,328 (47.4 percent) were employed by the sector.

Transport, communications pay better The survey on manpower needs and wages also revealed that excluding the gaming sector, the best paid

workers are in the transport, storage and communications sector. At the end of June, the average earnings in this sector reached 19,200 patacas per month, an increase of 11.6 percent year-on-year from 17,210 patacas in June 2013. In this sector, telephone, paging and hotline service operators had an increase of 60.4 percent yearon-year from 11,100 patacas in June last year to 17,800 patacas.

The second best paid sector is public sewage and refuse disposal activities (14,780 patacas) followed by the wholesale and retail trade (11,800 patacas) and security activities (9,770 patacas).

Although the security activities sector is the lowest paying, in percentage terms it registered the largest increase in the second quarter.

The number of employees in the sector increased 23.7 percent year-on-year from 5,329 to 6,592.

The wholesale and retail trade posted the second largest expansion (14.2 percent) engaging 48,717 persons in the second quarter, while last year it engaged 42,643 people. The retail trade alone grew 15 percent year-on-year, from 26,840 workers in June 2013 to 30,859 workers last June. As for the wholesale trade it employs 14,188 persons, while in the year before it employed 12,709, an increase of 11.6 percent year-on-year.

Despite being one of the best

paying sectors, the public sewage and refuse disposal activities sector was the only one to lose workers. Nine persons withdrew from this sector, which meant a decrease of 1.2 percent from 732 to 723.

Universal suffrage: NPC debates Hong Kong reforms

light to the city to revise its election methods for its top official in 2017 as well as its Legislative Council in 2016.

Only one Hong Kong representative, Rita Fan Hsu Lai-tai, will have the power to vote during the meeting of the country’s top legislature.

In June, the pan-democrats Occupy Central campaign held a ‘referendum’ for the public on how they should elect their leader from three proposals suggested by different associations, which allow citizens to directly nominate candidates. A total of 792,808 citizens cast their ballots.

The campaign is threatening to hold another Occupy Central movement to block the city’s central business zone if there is no satisfactory plan to allow Hong Kong citizens to elect their leader by themselves in 2017, according to SCMP. In addition to Hong Kong, Macau is conducting an unofficial referendum organised by three local associations regarding whether local citizens agree that the Chief Executive here should be elected by universal suffrage in 2019 and if they trust the sole candidate in the election this year. This referendum is deemed ‘illegal’ by both the central and local governments, who say it is not in line with the Macau Basic Law.

T

he National People’s Congress Standing Committee (NPC) kicked off its meeting on political reforms in Hong Kong yesterday. The meeting may lead to a crucial decision as to whether the Special Administrative Region will be able to elect its Chief Executive by universal suffrage for the first time in 2017.

The meeting, which is being held in Beijing, will end on Sunday. Twelve Hong Kong deputies of NPC were invited to discuss the reform. They will have the right to speak but not to vote on the decision, according to Hong Kong English newspaper South China Morning Post.

The week-long meeting of the Standing Committee will deliberate a report based on the results of public consultation on political reforms in Hong Kong. The committee members will decide if they will give the green

Vacancy rate increases in all sectors In the second quarter of the year, vacancy rates increased in all sectors that were surveyed except for transport, storage and communications, which remained unchanged. The largest increase was registered in public sewage and refuse disposal with a rise of 9.4 percentage points year-on-year to 12.8 percent.

This notwithstanding, security activities have the largest vacancy rate with 13 percent. However, and while the wholesale and retail trade sector registered a vacancy rate of 12.8 percent, the sub-sector of the wholesale trade alone reached 13.3 percent in terms of vacancies.

The security activities sector recorded a turnover of 7 percent of employees, followed by the wholesale and retail trade (6.3 percent) and transport, storage and communications (6.2 percent). The retail trade alone registered a 7.2 percent turnover rate, while the subsector of the wholesale trade recorded a 4.8 percent rate.

K.L.

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August 26, 2014

Macau

Future Bright to launch two Korean food chains in Macau Company profits are up 37 percent in 1H with strong sales from Macau restaurants, and plans are in the pipeline to expand into Zhuhai and Cotai.

Meanwhile, Forever 21 will pay Future Bright HK$19 million per annum to rent its store in the Yellow House near the Ruins of St Paul, 33 percent more than the previous rental contract Luís Gonçalves

luis.goncalves@macaubusinessdaily.com

Company will open 20 restau rants from Korea’s ‘M ad for Garlic’ and ‘Bis tro Seoul’ chains in the n ext five years in Macau, Zhu hai and Hong Kong

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uture Bright Holdings Ltd reported a 37 percent profit increase in the first half due to growing revenues in its restaurants here and charging US brand Forever 21 40 percent more to rent its flagship store in the Yellow House, near the Ruins of Saint Paul. The company is also introducing two famous Korean food franchises to Macau – ‘Mad for Garlic’ and ‘Bistro Seoul’.

In a filing submitted to the Hong Kong Stock Exchange, Future Bright said that its profits amounted to HK$118.5 million in the first half

of the year, a 37 increase on the same period in 2013. The company explained that the two main drivers were the solid performance of its restaurant and catering businesses and a ‘considerable growth’ in gains from its property investments.

From January to June, Future Bright’s revenues climbed 21.4 percent to HK$419 million from a year ago (HK$345 million), despite operating with three fewer restaurants than in 2013 (from 37 last year to 34).

Today, the company manages a chain of 27 restaurants, three food

courts and three industrial catering enterprises. ‘The group’s restaurant chain has performed with good growth in turnover and net profit, in line with the mild increase in number of visitors’ inflow to Macau’, Future Bright said in its report.

Food and catering revenues grew 21.1 percent in the first half yearon-year, with Japanese restaurants, the company’s largest business with Edo chain, seeing revenues increasing 19 percent. The catering segment doubled its revenues in the same period to HK$14.5 million, while its food courts underperformed with revenues decreasing 12.8 percent.

Future Bright also confirmed that it had earned a ‘steady rental income’ in the first half due to the new rent contract signed with Forever 21.

The US fashion brand opened its first store in Macau in the Yellow House, near St. Paul’s Ruins, one of the most touristic and expensive sites in the territory. Forever 21 leased the six-storey commercial building occupying 21,000 square feet for HK$18 million per annum. This represents an increase of 33 percent from the previous Yellow House rent leased by Future Bright of around HK$14 million per year. The contract between Future Bright and Forever 21 is for five years. Forever 21 operates over 615 stores in the United States, with international operations in Canada, mainland China, Hong Kong and Europe.

Despite charging more to rent the Yellow House, Future Bright says the commercial building near the Ruins of St. Paul has lost value in the real estate market. In December 2013, the Yellow House was valued at HK$520 million

but by June-end this was revised down to HK$502 million, HK$18 million less - and the same amount as Forever 21’s annual rent.

and their cases will be sent to the Public Prosecutor’s Office.

Reacting to the arrests, Chui Sai On stressed that the civil referendum was illegal and that police acted according to the law.

The pro-democracy New Macau Association, in turn, considered the

five arrests an “outrage” and “ abuse of power” by the government and authorities. Legislator Antonio Ng Kuok Cheong of the New Macau Association told Business Daily that the arrests were “really ugly and the referendum itself is not illegal”.

Enter Korea With a portfolio comprising mainly Japanese and Chinese restaurants, Future Bright is expanding to other cuisines, with Korea next on the menu.

The company says that this month it landed the franchise to operate the ‘Mad for Garlic’ and ‘Bistro Seoul’ restaurants for the next 10 years in Macau, Hong Kong and Zhuhai.

Future Bright plans to open 20 restaurants of both chains in the next five years in these three areas.

‘Mad for Garlic’ is Korea’s first garlic-themed Italian restaurant and Future Bright says it’s also one of the most famous restaurant chains in the country with a presence also in Singapore, Indonesia and the Philippines. ‘Bistro Seoul’ restaurants are upper dining Korean restaurants providing atmosphere mixed with Korea’s traditional colours, modern inspiration, and dishes using the finest, freshest ingredients. The two new franchise offers will be part of Future Bright’s strategy to expand its business in Macau, but especially into Hengqin Island and Zhuhai. In the latter, the company underlined that the three big restaurants and food court set to open by the end of the year in Huafa Mall (in Zhuhai) will ‘play an important contributor of considerable future revenue to the group’.

Future Bright also announced that it has already signed to rent six shops to open new restaurants in a new casino shopping mall in the Cotai area within the next two years.

6,000 cast vote in referendum, Jason Chao questioned again

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lmost 6,000 people cast their vote yesterday in an unofficial referendum on universal suffrage in Macau on the second day of voting. According to macau2014. org - the website engaged by the three pro-democracy associations –– as at 8:00pm last night some 5,800 people had voted in the unofficial referendum.

The consultation was launched by the Consciousness of Macau, Macau Youth Dynamics and Open Society Macau associations and follows a prodemocracy movement that started this year in Hong Kong and spread here.

The informal referendum coincides with the period of the election campaign of the sole candidate for the Chief Executive post, the current leader of the government, Fernando Chui Sai On. The voting period will

run until August 30, a day before the official CE election scheduled for the next day.

Activist Jason Chao, one of the referendum’s main promoters, faced further questioning by Judiciary Police yesterday regarding accusations of qualified disobedience in connection with collecting personal data from the Internet.

On Sunday, authorities detained five volunteers involved in the referendum and the two leading associations promoting the initiative, including Jason Chao, but released them several hours later. The four volunteers who participated in the classroom collecting votes through ‘tablets’ were identified as suspects of qualified disobedience under Article 40 of the Law on Protection of Personal Data [Law no.8/2005]

L.G. & S.L.

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August 26, 2014

Macau Brands

Trends

Pop-up Vintage Raquel Dias newsdesk@macaubusinessdaily.com

Deswell’s net sales shrink 19.7 pct The Macau-based manufacturer’s net sales decreased to US$8.9 million in the first quarter of the fiscal year.

The plastic division was the most affected, with sales shrinking 22.9 percent João Santos Filipe

jsfilipe@macaubusinessdaily.com

V

intage is one of the biggest trends of the last few years.

Men dress in tweed jackets, tight shirts with old school shoes, and look cool. Women slide into pencil skirts, retro hairstyles and 80’s colours, and look just right. There’s no denying it; even the old table cloths and granny accessories are being brought out into the house to create a variety of decorative styles from ‘shabby chic’ to a 60’s feel. If you live in Europe or the States, this trend can be followed by going to one of the many second-hand clothing shops. Vintage goods are sold everywhere in cities like London, Paris and New York.

For a long time, however, it seemed that we in Macau and Hong Kong had no place to resort to, other than to buy firsthand. This has changed, at least for this summer.

Japanese vintage superstore Vintage Qoo has launched a pop-up store in Hong Kong.

The brand has stores in most of Japan and a successful business online. The concept is simple: high-end brands like Chanel, Hermes and Gucci are resold by the brand that holds a large vintage collection. Clients, fans and friends then double up as models in the social media.

This is big news for vintage designer fans as they have a huge collection of Chanel pieces, and will only be sold at the Causeway Bay pop-up store. The shop opened on July 4 but, sadly, closes in approximately two months.

Visit: Shop 219, wtc more, 280 Gloucester Road, Causeway Bay, Hong Kong. Tel: (852) 2573 2802

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et sales of the Macau-based manufacturer Deswell Industries decreased 19.7 percent year-on-year from US$11.1 million to US$8.9 million, during the first quarter of the fiscal year that ended June 30. In the plastic division, net sales decreased 22.9 percent to US$4.9 million while net sales for the electronic and metallic division shrunk 16.3 percent to US$4.4 million.

However, the company managed to reduce the operating loss from US$1.4 million in the first quarter of 2013 to US$0.8 million in the same period this year, the company said in its first quarter results report.

The total gross margin of its products increased to 9.7 percent, while in the same quarter the previous year it was 7 percent. Gross profit margin increased in the plastic division to 14.7 percent from 8.7

percent of net sales. ‘The increase in gross profit and margin in the plastic division was mainly due to decreases in labour costs resulting from reduction in headcount, and in factory overhead as a percentage of sales’, the company explained.

In the electronic and metallic division gross profit margin decreased to 4.7 percent from 5 percent of net sales. ‘The decrease in gross profit and margin in the electronic and metallic division was mainly attributed to increase in labor costs as a percentage of sales, resulting from more allowances paid’, Deswell explained in a statement on the results for the first quarter.

“We endeavour to maintain tight control on our spending and to improve the efficiency of our production. This resulted in a significant decrease of 24 percent in selling, general and administrative expenses for the first

quarter of fiscal year 2015. Also, we were able to realise US$203,000 in the quarter from renting idle space that we identified after streamlining our production cycle”, Edward So, chief executive officer of Deswell Industries said.

At the same time, Mr. So said that the company’s marketing and engineering teams are looking for new products to develop that the company can bring to market. “Our marketing team and engineering team are exploring original equipment manufacturer and original design manufacturer opportunities for certain new products, such as wireless audio streaming products, digital video products, and electronic accessories for smartphones. We expect these products will contribute reasonable profit margins upon their successful development and launch in the market”, he said.

Corporate

Peter DeRaedt

GSA, IMGL to co-organise Macao Gaming Summit The Gaming Standards Association (GSA) and the International Masters of Gaming Law (IMGL) have both been confirmed as co-organising partners for the Macao Gaming Summit to be held in November.

GSA president Peter DeRaedt said that “since 2003, the Gaming Standards Association has had a strong presence in Macau and established a close and collaborative agreement with the Macau Polytechnic Institute (MPI) in 2007. GSA continues to believe that innovation will grow exponentially in Macau and throughout Asia. We’re looking forward to working closely with the MGS conference as co-organisers.”

“The combined depth of knowledge and unique insight into their respective fields will be invaluable to the show and all in attendance,” Ira Iskandar, conference manager at Koelnmesse, the event and conference management partner of MGS, said.

GSA is an international trade association that facilitates the identification, definition, development, promotion and implementation of standards to enable interoperability, innovation, education and communication for the benefit of the entire industry. Its members include international manufacturers, suppliers, operators and regulators.

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August 26, 2014

Macau Portuguese TDM director elected ABU chairman João Francisco Pinto, Portuguese News and Programme Controller of local broadcaster TDM, was elected as chairman of the ABU (Asia Pacific Broadcasting Union) News Group which held a three-day meeting in Istanbul, Turkey last week. He was unanimously elected by the Asiavision members who participated in the meeting. Kenji Kohno of NHK-Japan and Lee Jae-kang of KBS-Korea were elected News Group vice-chairs.

Pinto will serve a three-year term and be responsible for managing a news exchange platform comprising 30 Asian broadcasters broadcasting from the Middle East to the Pacific Islands.

Jetstar HK sells 3 aircraft as it awaits approval

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ew budget airline Jetstar Hong Kong said it has sold a total of six of its aircraft because it is taking longer than expected to get a licence to operate.

The airline, which is a joint venture between Australia’s Qantas, China Eastern Airlines and Hong Kongbased Shun Tak Holdings, applied for regulatory approval in 2012 in the neighbouring SAR. An airline will only be given an operation licence if its principal place of business and centre of its decisionmaking is in Hong Kong, according to local laws.

“Jetstar Hong Kong can confirm the sale of a further three aircraft, now a total of six Airbus 320s, with three remaining in the fleet for launch,” the airline’s chief executive officer Edward Lau is quoted as saying by news agency AFP. The airline sold three A320s this

month, and three in April. “This has been an unfortunate but prudent business decision made by the Jetstar Hong Kong board as the regulatory approvals are taking longer than initially expected,” Lau said, adding that the sale doesn’t affect the firm’s readiness once approval is given.

Lau said Jetstar is working “closely” with the government and is “confident of gaining all the necessary approvals”.

The catalogue price of the latest sale of three A320s this month is US$281.7 million (MOP2.25 billion), according to Dow Jones Newswires.

The regulatory approval for the airline has also faced opposition from the city’s flag carrier Cathay Pacific, which says the airline is not based in Hong Kong.

“The whole Jetstar network is part of an Australian entity and certainly can’t pass the test of being principally

based here in Hong Kong,” Cathay’s chairman John Slosar had said earlier this month, Dow Jones reported.

Qantas owns the Jetstar brand and has other joint ventures in Japan, Singapore and Vietnam.

Shipping and property giant Shun Tak Holdings, founded by Hong Kong tycoon Stanley Ho, bought a third of

Jetstar Hong Kong for US$66 million in June of last year, helping its bid to set up locally. Hong Kong-listed Shun Tak is run by managing director Pansy Ho, daughter of Stanley, who is also a Macau casino mogul.

The low-cost carrier plans to fly to destinations in China, Japan, South Korea and Southeast Asia.

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August 26, 2014

Greater China Graft probe reaches Resources Holdings Chinese police are questioning the former audit director of China Resources Holdings Co Ltd as part of a broad investigation into suspected corruption in the state-owned company, a government newspaper reported yesterday. The Economic Information Daily said Huang Daoguo, who retired this month, was believed to have illegally obtained an audit report on China Resources Holding, which he passed on to the company’s now sacked chairman, Song Lin. China Resources Holdings is a holding company for a group of energy, land and consumer businesses in mainland China and Hong Kong.

Largest developer H1 profit up China State Construction Engineering Corp Ltd (CSCEC), the country’s largest real estate conglomerate, posted first-half net profit of 11.8 billion yuan (US$1.92 billion), up 34.4 percent from a year earlier. Operating income hit 374.9 billion yuan, an on-year increase of 24.2 percent, according to a filing posted on the Shanghai Stock Exchange on Sunday. New construction projects rose 9.8 percent to 720 billion yuan, with real estate deals jumping 15.6 percent to 632.3 billion yuan. Infrastructure business fell by 20.8 percent to 82.8 billion yuan.

Taiwan insurers chase yuan debt Insurers’ premium income more than doubled in the past decade as increasingly wealthy Taiwanese prepared for retirement

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aiwan’s insurers drove a surge in issuance of foreign debt, as an easing of ownership curbs allowed them to seek higher returns on US$580 billion of assets.

Corporates have sold 4.3 billion yuan (US$699 million) of yuandenominated Formosa notes since the rule change in May, compared with 1.5 billion yuan in the previous four

months. Dollar debt offerings also picked up, climbing to US$4.8 billion as Morgan Stanley raised US$950 million in Taiwan’s largest-ever such sale. All of the U.S. currency securities were bought by insurers, as were 40 percent of Formosa bonds with maturities of three and five years, according to CTBC Bank Co. Insurers’ premium income more

than doubled in the past decade as increasingly wealthy Taiwanese prepared for retirement, swelling demand for bonds and pushing down yields on local-currency debt. The 10-year sovereign Taiwan dollar yield fell to an average 1.59 percent this year from 2.66 percent in 2004, compared with the 4.15 percent coupon on Bank of Communication

Over the past few years, most of the industry’s problems have been about where the cash can be invested.

When one pool fills up, we need to look for the next one Paul Hsu, Life Insurance Association in Taipei

McGuigan seals wine distribution deal

Growth recovery takes pause According to China economist at UBS The owner of Australia’s McGuigan wine label said yesterday it had won a distribution deal with China’s stateowned food conglomerate COFCO, giving it a chance to tap the vast market. Australian Vintage said it had signed a long-term agreement with COFCO Wine and Spirits to distribute McGuigan wine effective immediately. “There is currently an opportunity for Australian wine in China, and it’s one of the most exciting emerging markets for the global wine industry,” chief executive Neil McGuigan said.

China overtook France as the world’s largest consumer of red wine last year.

Internet users willing to pay for content A recent survey suggested that Chinese Internet users are willing to pay for quality content online, among which concert ranks the third highest of all online video categories that they’re willing to pay for. The survey, released on Saturday, was conducted online by market research company CTR, a Sino-British joint venture. Of all 4,338 valid responses collected online, 19 percent said they are willing to pay to watch “concerts” online, after “latest blockbuster movies” (43 percent) and “classic movies” (29 percent). There are 32 percent respondents saying they are “not willing to pay for online video”, according to the survey.

UBS headquarters at Offenbach

C

hina’s economic recovery took a temporary pause in July owing to weaker domestic investment demand, but it still remained on track, said Wang Tao, chief China economist at Switzerland’s largest bank UBS, in a research note.

China’s macro economic data for July suggested the economic rebound since early this summer has taken a temporary pause, she said.

Although industrial production growth still printed a respectable 9.0-percent year-on-year despite last year’s high base, growth momentum moderated slightly compared to June and was lower than expected.

While July’s industrial production weakness was led by China’s power and ferrous metals sectors, fixed-asset investment was hampered mainly by manufacturing and property investment.

China’s credit data in July was much weaker than expected, dealing a big negative surprise to markets in light of recent expectations for strong easing.

July’s new loans fell from June’s over 1 trillion yuan (US$162.6 billion) to 385 billion yuan.

“The blame rested with seasonal factors and changing shadow banking activity, not policy tightening. As such, August’s credit numbers should

improve,” she said.

Wang maintained that summer rebound had taken a breath, but it remained on track. Continued policy support and improved external demand should keep China’s growth momentum relatively firm through September.

The positive impact of still accommodative liquidity conditions, faster fiscal spending, and additional policy support, including intensified support for social housing and relaxation of local property restrictions, will still likely be felt in the next few months.

Wang projected China’s economic growth at 7.3 percent to 7.4 percent in the third quarter.

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August 26, 2014

Greater China Co.’s 2021 yuan paper sold on the island.

Formosa notes “fulfil the need of insurers to raise returns,” said Yuanchun Huang, a Taipei-based fund manager at Fuh Hwa Securities Investment Trust Co., which manages NT$130 billion (US$4.3 billion).

“Taiwan government bonds, or other Taiwan dollar investment-grade bonds, have low yields. Insurers also don’t have to really worry about credit risks as many yuan bond issuers are systemically important financial institutions.”

Swelling coffers Taiwanese insurers’ total annual premium income grew an average 8 percent in each of the last 10 years to NT$2.7 trillion in 2013 from

NT$1.2 trillion in 2003, according to Financial Supervisory Commission data. Premiums collected added up to 17.6 percent of gross domestic product in 2013, the world’s highest penetration rate, a Swiss Re Ltd. report shows.

Returns on local investments have suffered with the central bank maintaining the benchmark rate at 1.875 percent for the past 12 quarters. The insurance sector’s 3.8 percent weighted average liability cost was significantly higher than its recurring investment yield of 2.8 percent in 2013, according to a June presentation by the financial regulator.

“Over the past few years, most of the industry’s problems have been about where the cash can be invested,” said Paul Hsu, chairman of the Life Insurance Association in Taipei. “When one pool fills up, we need to look for the next one.”

Trading volume CTBC, Taiwan’s fourth-largest listed financial firm by market capitalization, sold Taiwan’s first yuan bonds in February 2013, after a currency-clearing pact with China paved the way for domestic banks to start taking such deposits. Issuance remained slow as higher yields on similar notes in Hong Kong, called Dim Sum bonds, drew investors.

Trading volume is low, with only four of the 19 outstanding Formosa bonds changing hands in July, according to GreTai Securities data. The 5.8 billion yuan of Formosa issuance this year made up only 2 percent of the offshore yuan debt market, data compiled by Bloomberg show.

Bloomberg News

Weakness persisted in private property activities as manufacturing investment simultaneously decelerated

3rd China-Australia Media Forum kicks off in Sydney With the attendance of officials from China, Australia and mainstream media representatives

T

he forum, co-hosted by China’s State Council Information Office and Australian News Channel Pty Ltd, will focus on “Media’s Role in Promoting China-Australia Relations” this year.

Cai Mingzhao, minister for China’s State Council Information Office, said in the opening ceremony that China-Australia ties is one of the most important relationships in the Asia-Pacific region and media is the tie for promoting the mutual understanding and friendship between the two countries.

Cai also advised on three aspects for the development of media.

First, to continue to improve the mechanism of media exchanges and cooperation between the two countries, second, to strengthen exchanges and cooperation in the field of emerging media such as the Internet, and third, to give positive energy to the bilateral relations.

Chinese Ambassador to Australia Ma Zhaoxu said the scale of communication and mutual understanding between China and Australia is unprecedented now.

But differences remain. Thus,

media shoulder the responsibility in promoting bilateral relations.

Ma hopes that Chinese and Australian media will continue to play a constructive role in the process and strengthen exchanges and cooperation, and to set up a mature and rational public opinion environment in order to truly reflect the two countries.

Paul Fletcher, Parliamentary Secretary to the Minister for Communications said the Forum gives a great opportunity to exchange and share views from both countries.

Media play a more and more critical role in the growing bilateral relations.

Fletcher hopes the media from China and Australia work more closely in the future to further promote Sina-Australia ties.

During the sessions, about 50 attendees have discussed topics including the role of media in bilateral relations, how to build media exchange between Chinese and Australian media organizations, how new media models are affecting traditional media and the impact of technology on journalism.

Xinhua

Wei family to buy cable TV operator CNS Denny Thomas and Faith Hung

KEY POINTS Deal for 60 pct stake is for US$2.4 bln including debt -sources

Wang Tao, UBS economist

The Chinese economy expanded by 7.5 percent in the second quarter of this year, slightly higher than the 7.4 percent growth in the first quarter.

Wang also said the rebound is not likely to last through year-end.

There is some optimism that the worst in China’s property sector downturn may be soon over, and that further policy easing will help support sales and construction in the coming months.

“We do expect some improvement in sales and construction in the next few months, as already incorporated in our forecast.... we believe property construction will slow further by year end and into 2015 as the structural shift in this sector’s demand and supply balance advances.”

As the negative impact of the property slowdown weighs more heavily on the overall economy, the economist expected the Chinese economic growth to further slow down to 6.8 percent in 2015.

Xinhua

Wei family will also tap other businessmen to invest -sources Deal is MBK’s second attempt to exit CNS

T

aiwan’s Wei family has agreed to buy majority control of China Network Systems (CNS), the island’s biggest cable TV operator, for about US$2.4 billion including debt from private equity firm MBK Partners, sources with direct knowledge of the matter said.

The Wei family, best known for controlling Hong Kong-listed noodle maker Tingyi Cayman Islands Holding Corp, is diversifying into telecoms and media. Its new 4G wireless services firm, Taiwan Star, will begin services this week.

The Wei family, which is led by Wei Ying-chiao, will be making the investment in CNS in a personal capacity and will also ask other Taiwanese businessmen to invest, the sources said.

If successful, the CNS purchase will rank as Taiwan’s third-biggest M&A deal ever, matching American International Group Inc’s US$2.4 billion sale of its Taiwan unit in 2011, according to Thomson Reuters data.

MBK owns 60 percent of CNS, which has about 1.2 million cable TV subscribers. CNS competes with Kbro and several other small rivals.

The person said the Wei family planned to hold more than 50 percent of the company and that businessmen who may be tapped to invest include H.T. Tsai, the chairman of Cathay Financial Holding Co and T.C. Gou, the chairman of electronics parts firm Cheng Uei Precision Industry Co Ltd. The Wei family beat rival bidders Hon Hai Precision Industry Co, a key Apple Inc supplier, and Far EasTone

Telecommunications, the person said.

This is the Asia-focused buyout firm’s second attempt to sell CNS after regulatory delays helped cause the collapse of a previous deal with a group led by Want Want China Holdings, a rice cake maker and owner of a Taiwanese media conglomerate.

A banker working on the deal said the Wei family’s personal investment in the acquisition and lack of other media businesses is expected help smooth regulatory clearance of the deal. At the closure of the deal, CNS would have debt of about US$1 billion, the person added.

Morgan Stanley is advising MBK, while UBS AG is advising the Wei family. Morgan Stanley and UBS declined to comment.

Reuters

10

August 26, 2014

Greater China

Food sector trips up over issue Some firms have tried to bring the system into wider use in China butthe technology has failed to catch on Adam Jourdan

T

he entanglement of H.J. Heinz Co. in China’s latest food scare highlights a key concern for international and local firms - how to keep track of ingredients from diverse sources in a country where food supply tracing technologies are far from the norm.

The U.S. food maker apologised to Chinese consumers last week and said it would tighten controls over suppliers after it was forced to recall some infant cereal from store shelves due to excess levels of lead.

Food safety scares erupt regularly in China - KFC parent Yum Brands Inc., McDonald’s Corp, Wal-Mart Stores Inc. and Fonterra Co-operative Group Ltd have all suffered recently - and such incidents can seriously dent sales.

But barcode tracking systems for produce, common in the United States and Europe, are largely absent.

“Standardized traceability of food products does not currently exist in China. It’s a long way from it,” said David Mahon, Beijing-based managing director of an investment firm focusing on China’s food and beverage sectors.

China’s food traceability systems and regulation were classified as “poor” in an August report from the Institute of Food Technologists. This was the lowest score of around 20 countries included.

Food safety barcodes store details such as the farm of origin, dates of harvest, planting, storage and shipment, meaning clients down the line can trace a particular batch and find out how and why any issues occurred.

We have rigorous and overlapping internal and external testing procedures and audits to ensure that our suppliers in China, and around the world, meet our strict specifications Vijay Guyah, spokesman for Burger King

Some firms have tried to bring the system into wider use in China French grocer Carrefour SA launched a barcoding system last year for fruit and vegetables - but the technology has failed to catch on due to the high costs of implementation throughout scattered supply chains.

Sensitive market Heinz said it had identified the supplier and ingredient - a skimmed soybean powder - responsible for the recall of four batches of its AD Calcium Hi-Protein Cereal from stores in eastern China, but added the firm needed to do more to keep

suppliers in check.

“We will keep improving traceable food safety control systems from ‘farm to factory’,” Heinz said in a statement posted on its Chinese website.

Heinz, which was bought out by Warren Buffett’s Berkshire Hathaway Inc. and private equity firm 3G Capital last year, did not respond to requests for further comment.

Consumers in China are highly sensitive to issues of food safety, especially with baby products, after powdered milk tainted with the industrial chemical melamine led to the deaths of at least six infants in 2008.

Danone SA and Abbott Laboratories saw infant formula sales in China plunge last year after concerns over a potentially fatal bacteria in a supplier’s product. Tests later showed the initial finding was incorrect.

China has soaring levels of soil and water pollution, with seven out of the top 10 farming provinces amongst the areas most exposed to heavy metal pollution such as lead, according to a March report from HSBC. Major firms, including fast food chains McDonald’s and Burger King Worldwide Inc., said they had put in place stringent testing and auditing procedures in China to avoid issues such as contamination from water and soil pollution.

“We have rigorous and overlapping internal and external testing procedures and audits to ensure that our suppliers in China, and around the world, meet our strict

specifications,” said Vijay Guyah, a Singapore-based spokesman for Burger King.

Broken chains Agricultural supply chains in China tend to be highly fragmented with most farms still small-scale.

Even with stringent auditing processes of suppliers - which multinational firms such as Heinz would carry out - it’s difficult to keep track of all suppliers along the line, some of whom may be tempted to subcontract to cut costs.

What’s more, while China’s regulators have tight food safety rules, industry insiders said the watchdogs simply did not have the manpower to properly enforce them.

“It’s not that the technology doesn’t exist in China, it’s just the chains are too fragmented,” said an industry executive in China, who previously ran a food processing plant serving multinational firms in China and abroad.

The former executive said that one batch of frozen vegetables that his firm shipped to the Japanese market had become contaminated by chemicals after an audited, longterm supplier topped up its harvest from a neighbouring farm.

“When supply chains are so large, you can’t always prevent a supplier buying from someone else if someone else has a cheaper price,” the former executive said. “It’s a matter of one guy doing things wrong and the product is contaminated.”

Reuters

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August 26, 2014

Asia

Housing prices in Gangnam district in Seoul are growing firmly

Loan conditions ease Korean homebuyers’ Risorgimento The government increased the loan limit for homebuyers to 70 percent of a property’s value from as low as 50 percent, starting this month

S

outh Korea loosened banks’ mortgage restrictions this month as Finance Minister Choi Kyung Hwan, appointed in July, seeks to revive a stagnant property market in Asia’s fourth-largest economy, boost growth and stimulate domestic consumption. A nationwide weekly apartment purchase price index hit a six-year high on August 18, according to Kookmin Bank data.

The new polices are “stronger than people had expected and are thawing the market,” said Shim Gyo Un, a real estate department professor at Konkuk University in Seoul. “People who have been burdened by surging rents now are turning to buying as they have easier access to mortgages and they feel bank loans are cheaper than rents.”

The government increased the loan limit for homebuyers to 70 percent of a property’s value from as low as 50 percent, starting this month.

Borrowers will be allowed to use 60 percent of their income for mortgage payments, up from 50 percent for homes in Seoul, which had the most stringent lending rules.

Mortgage loan applications received at Standard Chartered Plc.’s Korean unit almost tripled to 927.5 billion won (US$910 million) this month through August 22 compared with the total in July, the bank said in an e-mailed statement today. The easing in the loan-to-value and debtto-income limits as well as the Bank of Korea’s interest rate cut contributed for the rise, the bank said.

Falling prices South Korea has avoided the surge in home prices seen in Hong Kong and Singapore in the last five years as the government tackled record

household debt levels with measures including capping banks’ lending to households and promoting fixed-rate mortgages.

Apartment prices in the capital Seoul fell for four straight years through 2013 after almost tripling in the previous 11 years, according to an index compiled by Kookmin Bank, the country’s largest mortgage lender.

Prices for Seoul and the surrounding metropolitan area, where almost half of the country’s 50 million people reside, have been stagnant since they peaked in 2008 after the previous decade of boom elevated household debt.

Easing mortgage curbs to boost the property market is at the centre of Finance Minister Choi’s policies to stimulate growth - dubbed Choinomics after Japan’s Abenomics, which refers to reflationary monetary and fiscal policies to revive economic expansion.

Gangnam style The Bank of Korea cut the benchmark interest rate for the first time in more than a year on August 14, to 2.25 percent.

The average new mortgage loan rate was 3.58 percent in June, the lowest level since the Bank of Korea began tracking the rate in September 2001.

The economy expanded at the weakest pace in more than a year last quarter and the central bank last month reduced its growth forecast for this year to 3.8 percent.

The nationwide apartment purchase price index was 101.9 in the week of August 18, the highest level since April 2008, according to the data from Kookmin Bank.

Prices in Seoul’s affluent Gangnam

People who have been burdened by surging rents now are turning to buying as they have easier access to mortgages and they feel bank loans are cheaper than rents Shim Gyo Un, real estate department professor, Konkuk University Seoul

area -immortalized in Psy’s hit song Gangnam Style- rose at the strongest pace in more than five months in the week to August 18, the data show.

Same fundamentals Some are skeptical of the measures’ success.

Choi’s determination to “normalize” the housing market and boost sentiment may exacerbate South Korea’s household debt without lifting home prices, said Lim Hyun Mook, head of real estate at Shinhan Bank, the third-largest lender by assets.

A 10 percent drop in home prices would more than double the interestpayment burden for those whose mortgages exceed 60 percent of the

home value, the Korea Development Institute said in a report published in June, based on 2012 data.

The household debt, including loans and goods purchased on credit, stood at a record 1,024.8 trillion won at the end of March, including 422 trillion won in mortgages extended by banks and other depository institutions, according to the latest data from the Bank of Korea.

Debt risk The Financial Services Commission in February said that it aims to reduce the country’s household debt-to-disposable-income ratio by 5 percentage points by 2017. South Korea’s 163.8 percent ratio is higher than that of the U.S., Canada and the average of member countries of the Organization for Economic Cooperation and Development, the regulator said.

Finance Minister Choi’s measures will boost the housing market in the short term, especially as interest rates fall, said Kim Kyung Soo, an economics professor at Seoul-based Sungkyunkwan University.

Buy, rent Prices for properties sold at auction are rising. The average auction price was about 87 percent of what properties were valued at in July, the highest since at least 2008, according to Real Estate Taein, an online auction information provider.

The apartment purchase price index for the Seoul metropolitan area fell 5.9 percent over the five years through July in contrast to the 48 percent jump in an index for rents, according to Kookmin Bank data.

Bloomberg News

12

August 26, 2014

Asia Korean fund thinks central bank could cut rate South Korea’s central bank is likely to cut borrowing costs for the second time this year to help revive the economy, according to Samsung Asset Management Co. The country’s biggest fund manager sees scope for the Bank of Korea to reduce its benchmark interest rate to 2 percent, most probably in October or November, after lowering it to 2.25 percent from 2.50 percent on August 14, said Lee Do Yoon, its chief investment officer for fixed income. Bank of America Merrill Lynch is the only forecaster among 26 surveyed by Bloomberg predicting another cut in 2014.

ASEAN meeting kicks off Myanmar President U Thein Sein calls on member states to exert collective efforts for regional economic integration through free flow of goods, services and investment

T

he 46th meeting of economic ministers of the Association of Southeast Asian Nations (ASEAN) and its related meetings kicked off in Myanmar’s capital of Nay Pyi Taw yesterday.

Myanmar is rotating chair of ASEAN this year.

Speaking at the opening of the four-day ASEAN Economic Ministers Meeting (AEM), Myanmar President U Thein Sein called on the member

states to exert collective efforts for the regional economic integration through free flow of goods, free flow of services and investment, free flow of skilled labour and free flow of capital as envisaged in the ASEAN Economic Community (AEC) blueprint.

Telling the meeting that Myanmar is giving priority to carrying out the task for small and medium enterprises (SME) development, U Thein Sein said the capacity building programs

for the four ASEAN member states -Cambodia, Laos, Myanmar and Vietnam under the Initiative of ASEAN Integration (IAI) Phase-2 will contribute to narrowing the development gap among ASEAN member states and to accelerate the regional integration.

In order to operationalize the ASEAN Framework on Equitable Economic Development (AFEED), a monitoring report, being developed with the World

Thailand to sell 200,000 tonnes of rubber The Thai military government has approved a plan to sell its 200,000 tonne rubber stockpile to ease price pressures and cut storage costs, a senior government official said yesterday, potentially hitting prices in the short-term. Thailand, the world’s biggest rubber exporter, normally exports about 250,000-300,000 tonnes a month. Global rubber prices have fallen more than 25 percent this year, due to oversupply and worries about demand from top consumer China.

Spokesperson declined to say if the 200,000 tonnes would be sold at once or reduced gradually.

S. Korea’s trade terms worsen South Korea’s trade terms worsened for three straight months as import cots grew amid a fall in export prices, central bank data showed yesterday. The net terms-of-trade index for goods, which gauges how much goods can be imported with a unit export, fell 1.9 percent in July from a year earlier, according to the Bank of Korea (BOK). It was the third consecutive fall, posting the biggest monthly decline in more than two years. The index declined 2.7 percent in June 2012. The worsening came as import prices increased 1.6 percent last month on higher commodity prices.

Cambodia, Argentina to strengthen ties Cambodian and Argentine senior officials met yesterday to discuss ways to promote ties and cooperation for mutual benefits. The meeting was made between Cambodia’s Foreign Secretary of State Ouch Borith and Argentina’s deputy State Secretary for Foreign Ministry Carolina Perez Colman. Speaking to journalists after the meeting, Borith said the two sides are working together to draft a Memorandum of Understanding (MoU) on the establishment of a political consultation mechanism and the MoU is expected to be signed in the near future.

Today’s sessions: AEM-28th ASEAN Free Trade Area (AFTA) Council Meeting AEM-17th ASEAN Investment Area (AIA) Council Meeting 46th AEM and 12th ASEAN Economic Community (AEC) Council Meeting

Free trade pacts on New Zealand’s agenda Asian ministers will sign the First Protocol to Amend AANZFTA, which would make AANZFTA more transparent and friendly for business

N

ew Zealand Trade Minister Tim Groser will be seeking to advance his government’s free trade agenda at a series of key AsiaPacific regional meetings this week.

Groser said yesterday that he will be traveling to Nay Pyi Taw, Myanmar, to attend the East Asia Summit (EAS) Economic Ministers Meeting to attend the second Ministerial Meeting for the Regional Comprehensive Economic Partnership (RCEP) free trade agreement negotiations.

“RCEP has the potential to be a game changer for regional trade.

It is important that all 16 countries continue to work together to realise the vision of a modern, comprehensive and high-quality agreement,” Groser said in a statement.

“The EAS is the only leaders-led regional process that includes all of the region’s major players. Through these meetings, New Zealand is able to engage with our key partners in the Asia- Pacific with a view towards strengthening trade and economic

New Zealand Trade Minister, Tim Groser

ties and deepening regional economic integration,” Groser said in a statement.

In Myanmar, Groser would also attend the annual Association of Southeast Asian Nations (ASEAN) Australia-New Zealand Economic Ministers consultation, which would focus on the implementation of the ASEAN-Australia-New Zealand Free

Trade Agreement (AANZFTA).

Ministers would sign the First Protocol to Amend AANZFTA, which would make AANZFTA more transparent and friendly for business, he said.

“New Zealand is committed to working with Australia and ASEAN in fully implementing our AANZFTA commitments and to maximize business up-take of the real opportunities that agreement offers,” said Groser.

Groser would also attend the Sixth Global Forum of the United Nations Alliance of Civilizations in Bali, Indonesia.

“The Alliance of Civilizations is a leading global initiative for intercultural dialogue, understanding and cooperation. New Zealand values this forum as it supports New Zealand’s comprehensive, multifaceted and long-term approach to countering extremism and combating terrorism,” he said.

Xinhua

editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk João Santos Filipe, Luciana Leitão, Luis Gonçalves, Michael Armstrong, Sara Farr, Stephanie Lai, Óscar Guijarro, Kam Leong GROUP SENIOR ANALYST José I. Duarte Brands & Trends Raquel Dias Creative Director José Manuel Cardoso Designer Francisco Cordeiro WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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August 26, 2014

Asia Bank’s technical assistance, will be tabled at the 25th ASEAN Summit to be held in November this year in Myanmar, he said.

He expressed welcome of the commencement of negotiation for the establishment of ASEAN-Hong Kong FTA to promote trade and investment, while also welcoming the negotiation on the Regional Comprehensive Economic Partnership (RCEP) in order to deepen and broaden the economic relations between ASEAN and its existing FTA partners in the future.

Observing that 82.1 percent has been completed on the implementation of AEC blueprint which is to be realized by 2015, he urged the ASEAN member states to make utmost efforts to implement the remaining measures in a timely manner.

He also called for increased awareness and involvement of the

people and businessmen in the region on AEC. He urged the member states to support Myanmar’s endeavour in developing the ASEAN Principles for the Public-Private Partnership Framework during Myanmar’s ASEAN chairmanship this year.

The Public-Private Dialogue on New Industries and the 2nd ASEANUS Business Summit will be organized during the present AEM in order to create platforms for business to business and government to business engagement, he added.

The four-day 46th ASEAN Economic Ministers Meeting will discuss issues related to AEC, implementation of tasks by sectoral working groups, implementation over FTA agreements between ASEAN and its dialogue partners.

The ASEAN ministers will also discuss progress of their economic cooperation, focusing on the ASEAN’s service liberalization and talks on the RCEP and the elimination of non- tariff barriers once the ASEAN international goes into effect in 2015.

Issues concerning service and investment liberalization with Japan, as well as upgrading its existing freetrade pacts with China and South Korea will be finalized at the meeting.

Moreover, ASEAN will sign four agreements on the liberalization of more service businesses and agree to amend FTA with Australia and New Zealand.

ASEAN will also sign an FTA with India and agree on the acceptance of accounting professionals among ASEAN members.

Xinhua

Malaysia Air mulls job cuts The airline’s parent Khazanah Nasional Bhd., will discuss the proposals tomorrow, which also include cutting some routes

M

alaysian Airline System Bhd. is considering job cuts, a review of aircraft orders and replacing its chief executive officer after the national carrier suffered two disasters this year, people familiar with the plan said.

The airline’s parent, sovereign wealth fund Khazanah Nasional Bhd., will discuss the proposals tomorrow, which also include cutting some routes, one person said, asking not to be identified as the discussions are private. The carrier may need to lay off between 3,000 to 4,000 people, a second person said. The carrier had 19,577 employees at the end of last year, according to data compiled by Bloomberg.

Khazanah is also talking to as many as three people as possible candidates to replace Malaysia Airlines Chief Executive Officer Ahmad Jauhari Yahya, whose term is due to expire in mid- September, one of the persons said.

The restructuring measures and Khazanah’s offer earlier this month to buy out minority shareholders

are part of the plan to revive the Subang, Malaysia-based airline.

The carrier, which will report earnings Aug. 28, is struggling to stem losses and repair its image after the downing of Flight 17 in Ukraine last month compounded woes from the disappearance of a jet in March.

“The airline needs fleet rationalization,” said K. Ajith, an analyst at UOB Kay Hian Pte in Singapore. “The question is where, how and what type of aircraft. The long-haul European routes might be cut. The European routes have been money-losing for Malaysia Airlines.”

A call to the office phone of Khairunnisak Dzun Nurin, a spokeswoman for the airline, wasn’t answered. The stock has declined 18 percent this year.

The airline needs to take tough measures in a thorough overhaul and the government and Khazanah are in the final stages of working out the restructuring plan, Prime Minister Najib Razak said.

Bloomberg News

Singapore transport eases inflation Petrol prices rose at a slower pace while housing-related cost pressures remained subdued

S

ingapore’s headline inflation rate in July unexpectedly eased to a four-month low on lower transport costs, but a tight labour market could keep core inflation elevated in coming months.

The headline, all-items consumer price index (CPI) in July rose 1.2 percent from a year earlier, data showed yesterday, moderating from June’s 1.8 percent rise and matching a 1.2 percent increase recorded in March.

The reading was well below the median headline inflation forecast of 2.1 percent in a Reuters poll, and was also below the lowest estimate of 10 economists surveyed.

The easing of the headline inflation rate was mainly due to lower private transport costs, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said in their joint press release of the CPI data.

Private road transport costs in July fell 1.6 percent from a year earlier, after rising 2.8 percent in June.

The decline was mainly due to a comparison against a high base from a year ago, when the prices of car permits surged, the MAS and MTI said.

Petrol prices rose at a slower pace while housingrelated cost pressures

Singapore skyline

KEY POINTS July CPI +1.2 pct y/y, lowest since March Softer headline CPI due to lower private road transport cost July core CPI +2.2 pct y/y, up from +2.1 pct in June

remained subdued. The cost of accommodation was largely unchanged from the year before, after rising an annual 0.5 percent in June, the data showed.

The easing in housing and transport inflation reflects supply-side factors and comes as no surprise, said Jeff Ng, an economist for Standard Chartered Bank in Singapore.

He added that the MAS was likely to stick with its current policy stance at its next policy review due in October.

Inflation in the services sector quickened to 2.5 percent year-on-year from 2.2 percent in June.

The MAS’ core inflation measure in July picked up to 2.2 percent from a year earlier, from 2.1 percent in June, but below the median forecast in a Reuters survey of 2.4 percent.

The MAS core inflation measure excludes changes in the price of cars and accommodation, which are influenced more by government policies.

The MAS, Singapore’s central bank, reiterated yesterday that it expects core inflation to come in at 2-3 percent in 2014, adding that domestic cost pressures, stemming in particular from a tight labour market, are likely to remain the primary source of inflation.

In its joint statement with the MTI, the central bank also reiterated that CPI-all items inflation is projected to come in at 1.5-2.0 percent in 2014.

Reuters

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August 26, 2014

International French borrowing costs reach record low Borrowing costs for France fell to a record low level early yesterday despite the resignation of the government, which plunged the country into a political crisis on top of depressed economic activity.

But analysts said the main factor was not increased risk from the political situation in France, which could be expected to push interest rates up, but a promise by the European Central Bank to ensure that deflation does not take hold in the eurozone. That implied a possible injection of central bank funds.

German business morale sours again That was the lowest level in just over a year Michelle Martin

KEY POINTS

Burger King plans to expand

Business climate index falls to lowest level since July 2013 Ifo economist says Ukraine crisis burdening German economy German economy suffered 0.2 percent contraction in Q2

Fast-food chain Burger King plans to buy Canadian chain Tim Hortons in an acquisition that will make it the world’s third largest in the fast-food sector. Following the merger of the two groups, Burger King’s majority shareholder, investment firm 3G Capital, will hold a majority in the new enterprise. The remaining shares will be distributed between the current shareholders of Tim Hortons and Burger King. Both brand names will be retained.

The two companies’ current market value is about US$18 billion.

French PM presents government resignation

France’s Prime Minister Manuel Valls presented the resignation of his government to the president yesterday, Francois Hollande’s office said in a statement.

The statement said a new government would be formed on Tuesday in line with the “direction he (the president) has defined for our country.” The move comes a day after leftist Economy Minister Arnaud Montebourg called for new economic policies and questioned what he called Germany’s “obsession” with budgetary rigour.

Rocket and Zalando to unveil listing plans German venture capital firm Rocket Internet and Zalando, Europe’s biggest specialist online fashion retailer, are both on the brink of announcing plans to list on the Frankfurt stock exchange, several sources with knowledge of the matter said. Both companies want to announce plans for initial public offerings (IPO) in the first half of September. Zalando, which is holding a media presentation on its business next Thursday, and Rocket Internet are likely to list stakes of around 15 percent each by selling new shares, separate sources have previously said.

G

erman business sentiment dropped for a fourth straight month in August, suggesting concerns about the Ukraine crisis and the impact of sanctions against Russia are sweeping through corporate boardrooms in Europe’s largest economy.

The Munich-based Ifo think tank’s business climate index, based on a monthly survey of some 7,000 firms, fell to 106.3 from 108.0, undershooting the Reuters consensus forecast for a decrease to 107.0.

That was its lowest level in just over a year and marked the longest period of successive monthly declines in the index since the height of the euro zone crisis in 2012.

The reading raised doubts about the strength of the economy after a surprise second-quarter contraction, sending the euro to a day’s low against the dollar and pushing German Bund futures up to a day’s high.

“This significant drop leaves no doubt about it - the German economy has passed its peak for now,” said Thomas Gitzel, chief economist at VP Bank Group.

“Geopolitical risks are unnerving German firms but even without the various conflicts it would not have been possible for the German economy to grow more,” he added.

German gross domestic product (GDP) shrank by 0.2 percent between April and June and the finance ministry has partly blamed this on the Ukraine crisis and sanctions against Russia.

Ifo economist Klaus Wohlrabe said the Ukraine crisis was burdening the economy, though he said the impact was hard to quantify. He said Germany was still far away from recession.

Germany has extensive business ties with Russia, with more than 6,000 German firms active there.

Around 10 percent of German exporters send goods to Russia and some of those are concerned that the standoff between Moscow and the West over Ukraine will hurt their business.

Consumer goods group Henkel has forecast a tough six months ahead with political turmoil in Russia and German defence firm Rheinmetall has cut its profit outlook.

The value of German shipments to Russia fell 15.5 percent to 15.3 billion euros in the first six months of the year, led by a sharp fall in car and machinery shipments and Ifo said manufacturers were expecting less impetus from exports.

Firms were the most downbeat about their business situation since July 2013 and they also felt more pessimistic about their future prospects than they did last month.

Reuters

Roche to buy U.S. biotech firm InterMune The InterMune deal brings it a promising new drug for treating a progressive and ultimately fatal scarring condition of the lungs

R

oche Holding AG has agreed to buy U.S. biotech company InterMune Inc for US$8.3 billion in cash, helping the world’s leading maker of cancer drugs expand into the treatment of rare or incurable diseases.

Roche’s efforts to produce successful non-cancer drugs from its own labs have been mixed, with setbacks in recent years for experimental drugs against heart disease, diabetes and schizophrenia.

The Swiss drug maker already markets Pulmozyme for cystic fibrosis and Xolair for severe asthma in the United States and has other experimental respiratory products in clinical development, including another severe asthma drug called lebrikizumab.

The InterMune deal brings it a promising new drug, pirfenidone, for treating a progressive and ultimately fatal scarring condition

of the lungs. Pirfenidone is approved for so-called idiopathic pulmonary fibrosis (IPF) in Europe and Canada, and is undergoing U.S. regulatory review.

Roche said on Sunday it would pay US$74.00 a share through a tender offer for InterMune, representing a premium of 38 percent to the closing price on August 22 and a 63 percent premium over August 12 when takeover speculation around the stock began to circulate. ] The acquisition, which has been recommended by the boards of both companies, is the largest by Roche since 2009, when it bought out the remaining stake it did not already own in U.S. group Genentech for around US$47 billion.

Analysts described InterMune’s price tag as “hefty” given it only has one marketed product in a field that is likely to become increasingly competitive over time.

But Sanford C. Bernstein analyst Tim Anderson, who rates the stock ‘outperform,’ praised the decision to beef up outside oncology as a “smart tactical move.”

Industry analysts expect pirfenidone, which is given as a pill, to have sales of US$1.04 billion in 2019, according to consensus forecasts compiled by Thomson Reuters Pharma.

The large premium ascribed to InterMune is not unusual in biotech takeovers, reflecting intense competition for promising new drugs among larger companies, which rely on small innovative firms for a growing proportion of their products.

Roche said the transaction was expected to be neutral for its core earnings per share in 2015 but would boost profits from 2016 onwards. It said guidance for this year remained unchanged.

Reuters

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August 26, 2014

Opinion Business

wires

Leading reports from Asia’s best business newspapers

MYANMAR TIMES

The high cost of cheap meat Christine Chemnitz Shefali Sharma

Head of the Department of International Director of Agricultural Commodities and Globalization Agricultural Politics at the Heinrich Böll Foundation at the Institute for Agriculture and Trade Policy

The government has formed a committee to combat money laundering in the country, aiming to get off a list of the world’s worst offenders. Experts from 15 different institutions including government ministries as well as the Central Bank and Supreme Court were named to the Anti-Money Laundering Central Board last week. The board’s joint secretary U Soe Myaing said Myanmar longs to be removed from the list of countries with a bad reputation in money laundering. Officials say Myanmar has taken steps to stem money laundering.

It enacted an Anti-Money Laundering Law in March.

THE BANGKOK POST Developing countries by definition face a constant struggle against the problems of poverty and income inequality. Thailand is no exception. Over the past few decades, despite steady economic growth and industrialisation, inequality has remained a persistent and divisive factor within Thai society and politics. In absolute terms, poverty has indeed fallen. In 2012, 8.4 million people or 12.6% of the population earned below the poverty line of 30,000 baht per year, compared with 20 million people or 35.4% of the population counted below the poverty line a decade earlier.

THE TIMES OF INDIA Government officials told TOI that the commerce department has already taken up the issue of interest subsidy, which expired at the end of March, with the finance ministry and the extension is a certainty, given that a budgetary provision of over Rs 1,600 crore has already been made. What is now being debated is the sectors that would be covered by the scheme in the new five-year policy expected to be announced at the end of September. For exporters, the interest subsidy … is a crucial area.

THE NEW ZEALAND HERALD Mega’s chief executive doesn’t think the seizure of 20 per cent of the company’s shares will cause problems for its backdoor listing on the New Zealand stock exchange.

Mega, an encrypted online storage service launched

by Kim Dotcom last year, announced in March that it was looking to do a backdoor listing via NZX-listed TRS investments. Under the terms of the deal that was unveiled at the time, TRS will acquire all of Mega’s shares for US$210 million and Mega’s shareholders will be issued 700 million new TRS shares.

B

ERLIN – Factory-style livestock production is a critical driver of agricultural industrialization.

Its remorseless expansion is contributing to climate change, deforestation, biodiversity loss, and human-rights violations – all to satisfy Western societies’ unhealthy appetite for cheap meat.

Europe and the United States were the largest meat consumers in the twentieth century, with the average person eating 6090 kilograms (132-198 pounds) annually – far more than is required to meet humans’ nutritional needs.

Though Western consumption rates are now stagnating and even declining in some regions, they remain far higher than in most other regions in the world.

Meanwhile, in emerging economies – especially the so-called BRICS (Brazil, Russia, India, China, and South Africa) – members of the burgeoning middle class are changing their diets to resemble those of their rich-country counterparts. In the coming decades, as incomes continue to rise, so will demand for meat and dairy products.

To meet this demand, the world’s agribusiness firms will attempt to boost their annual meat output from 300 million tons today to 480 million tons by 2050, generating serious social challenges and ecological pressures at virtually every stage of the value chain (feed supply, production, processing, and retail).

One major problem with factorystyle livestock production is that it leads to considerable greenhouse-gas emissions – and not just because the digestive processes of ruminant animals produce methane. The waste from the animals, together with the fertilizers and pesticides used to produce feed, generate large quantities of nitrogen oxides.

Indeed, the factory model implies

In emerging economies – especially the socalled BRICS (Brazil, Russia, India, China, and South Africa) – members of the burgeoning middle class are changing their diets to resemble those of their rich-country counterparts. In the coming decades, as incomes continue to rise, so will demand for meat and dairy products.

significant land-use change and deforestation, beginning with the production of feed. As it stands, about one-third of existing agricultural land is used for feed production, with the total share used for livestock production, including grazing, amounting to about 70%.

With expanded meat consumption, soybean production alone would nearly double, implying a proportional increase in the use of inputs like land, fertilizer, pesticides, and water. Increased

crop diversion to feed livestock will put upward pressure on food and land prices, making it increasingly difficult for the world’s poor to meet their basic nutritional needs.

Making matters worse, the shift from mixed-use or indigenous systems of raising livestock to large-scale operations jeopardizes rural livelihoods, particularly in developing countries. Pastoralists, small producers, and independent farmers simply cannot compete with low retail prices that fail to account for the industry’s true environmental and health costs.

And the industrial livestock system, with its low wages and poor health and safety standards, does not provide a good alternative for employment.

Finally, there is the public-health impact of industrial livestock production. For starters, excessively high levels of meat and dairy consumption are contributing to nutrition-related health problems like obesity and cardiovascular disease. Moreover, keeping large concentrations of animals in confined spaces facilitates the proliferation of infectious diseases that can spread to humans, such as avian flu. And measures used to mitigate that risk, such as the administration of low doses of antibiotics to prevent disease (and promote growth), are creating a publichealth crisis by strengthening resistance to antimicrobial drugs.

Add to this the horrific conditions suffered by the animals themselves, owing to the industry’s resistance to applying reasonable animalwelfare standards, and one might wonder how the industry could have been allowed to grow so large. The answer lies in its oligopolistic power, which enables industrial livestock producers to externalize their true social and environmental costs, which must then be covered by workers and taxpayers.

The reality is that there are other

ways to meet the world’s need for meat and dairy. In the European Union, only two key elements of the Common Agricultural Policy (CAP) would have to be changed to reduce drastically the distortions in the production system. Implementing these changes would send a clear signal that European policymakers take consumers’ wishes seriously.

The first change would be to prohibit imports of genetically modified feed, and require that farmers produce at least half of their animal feed on their own farms. A clear set of rules on feed procurement would eliminate international imbalances in nutrients, and diminish the power of multinational agricultural biotechnology corporations like Monsanto. Moreover, slurry and manure would no longer be transported long distances, and could be used to fertilize farmers’ own land to produce feed.

Second, the unnecessary administration of antibiotics in feed and watering systems should be prohibited. This would force farmers to treat animals individually for illnesses, based on veterinary diagnosis.

In the United States, the Food and Drug Administration could ban the non-therapeutic use of antibiotics. And the US Department of Agriculture’s farm bill programs could provide increased support for free-range livestock operations, in order to encourage more sustainable approaches to meat production.

Of course, these actions would be only important first steps. As emerging-economy middle classes grow, it is vital to recognize that existing Western models of meat production and consumption do not provide a sound blueprint for the future. It is time to create a system that adheres to our ecological, social, and ethical boundaries.

The Project Syndicate 2014

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August 26, 2014

Closing Hong Kong total exports of goods grow

Net gold imports from HK fall to lowest

In July 2014, the values of Hong Kong’s total exports and imports of goods both showed year-on-year increases, at 6.8 percent and 7.5 percent respectively, the city’s Census and Statistics Department announced yesterday.

The value of total exports of goods (comprising re-exports and domestic exports) increased by 6.8 percent over a year earlier to HK$326.2 billion (about US$42 billion), after a year-onyear increase of 11.4 percent in June 2014, the department said when releasing the external merchandise trade statistics for July 2014. Within this total, the value of re-exports increased by 6.8 percent.

China’s net gold imports in July from main conduit Hong Kong tumbled to their lowest since June 2011 because of ample supply and as jewellers waited for bargains. July net gold flows into China from Hong Kong dropped to 22.107 tonnes versus 40.543 tonnes in June, according to data e-mailed to Reuters by the Hong Kong Census and Statistics Department.

Total gold imports from Hong Kong fell to 38.945 tonnes from 56.047 tonnes in June.

China, which overtook India as the biggest consumer of the precious metal last year, imported over 1,000 tonnes of gold in 2013.

The Great Hall of People at night

National Congress extends the reform trend China clarifies citizens’ rights and allows cities to get legislative powers

C

hina’s top legislature yesterday began to review a draft amendment which will make it easier for citizens to take the government to court.

The Standing Committee of the National People’s Congress (NPC) yesterday started its bimonthly meeting to review a number of documents, including a draft amendment to the Administrative Procedure Law tabled for its second reading. If the amendment is passed, actionable cases will no longer be confined to “specific administrative acts”.

As the law stands, citizens, companies or other organizations may

file suit against “specific administrative acts” by administrative agencies or personnel which they believe to have infringed their rights.

As Articles 11 and 12 explicitly list kinds of disputes that are actionable, the amendment removes the word “specific,” which in practice sometimes becomes an excuse for courts to throw out cases.

Currently, courts can only revoke an administrative act when it is deemed illegal. The draft allows the revoking of acts that are “evidently unreasonable”.

The draft also compels defendants--representatives of the administrations concerned--to personally

appear before the court. At present, some defendants simply ask their lawyers to represent them in court, which often does little to help settle the dispute.

Another change in the draft is that both the original department that carried out action in question and the administration that reviewed the case will be listed as joint defendants. According to current law, an administrative agency which has reviewed another agency’s questionable act is only regarded as a defendant if it changed the original decision.

In practice, these stipulations have resulted in reluctance to change

More legislative powers

controversial decisions, and thereby avoid being dragged into troublesome legal wrangling, rendering the administrative review system ineffective in some situations.

The draft also extends time limits for plaintiffs to file suit and for hearings to take place.

Budget bill tightens The draft revision to China’s Budget Law, tabled for its fourth reading yesterday, requires funds raised through local government bonds to be used only for public service.

The deliberation of the bill has taken an unusual long time since its first reading in December, 2011. One of the most controversial issues is local government bonds.

The third version of the bill, tabled in April,

HK to hold constitutional Lagarde demands development session German leadership

T

he Government of the Hong Kong Special Administrative Region (HKSAR) said yesterday that it will jointly organize with the Liaison Office of the Central People’s Government a briefing session on constitutional development of Hong Kong in the HKSAR. The briefing session will be held on September 1 in the morning at AsiaWorld-Expo, Hong Kong International Airport.

The Deputy Secretary-General of the Standing Committee of the National People’s Congress (NPCSC) Li Fei, the Vice-Chairperson of the Legislative Affairs Commission of the NPCSC Zhang Rongshun, and the Deputy Director of the Hong Kong and Macau Affairs Office of the State Council Feng Wei will come to Hong Kong to address the briefing session. The organizing parties will invite guests from different sectors of the community to the briefing session. Guests to be invited will include members of the Legislative Council, chairmen and vice-chairmen of the District Councils, Hong Kong deputies to the NPC, Hong Kong members of the National Committee of the Chinese People’s Political Consultative Conference, and people from different sectors of the community.

Xinhua

green lighted bond sales by provincial-level governments, but it placed them under strict conditions.

This fourth version states that the money raised can only be used for public service and that the central government will assess risk in local debt.

If the risk is out of control, there will be warnings, a fast response and punishment for those responsible.

More Chinese cities will be given legislative powers, according to a draft amendment to the 2000 Legislation Law delivered to the country’s top legislature for deliberation yesterday.

All cities with subordinate districts will be allowed to make laws in accordance with their local conditions.

At present, of 282 cities with subordinate districts, only 49 have legislation powers: 27 capitals of provincial regions, four special economic zones and 18 big cities approved by the State Council.

Li Shishi, director of the NPC Standing Committee’s Legal Affairs Commission, said yesterday that all other cities with subordinate districts will be allowed to make local laws and regulations on construction, sanitation, the environment, etc. in a positive and steady manner and in accordance with local conditions.

Xinhua

China to set higher fines for safer work

I

MF chief Christine Lagarde wants Germany to play a bigger role in propelling economic recovery in Europe, she hinted in an interview broadcast yesterday, suggesting that German wages should rise.

Part of her remarks may be interpreted by personalities on the left of French politics as going in the same direction as criticism of French, German and European Union austerity policies by French Economy Minister Arnaud Montebourg at the weekend.

Lagarde told Swiss public broadcaster RTS: “What I think is very important for Germany is to participate in the recovery movement in a very intense way. It has the means to do so.”

Describing the European economic recovery as “laborious”, the head of the International Monetary Fund stressed that the continent’s economic powerhouse had “room for manoeuvre”, as seen in recent wage negotiations.

Last month, Bundesbank chief Jens Weidmann said that German wages had scope to rise by up to to three percent because “we are practically in a situation of full employment”.

AFP

C

hinese lawmakers are considering imposing fines up to 5 million yuan (US$810,000) on enterprises involved in serious work safety accidents.

Managers in charge of such enterprises who are found to have failed in their work safety duties will face fines totalling between 30 and 80 percent of their annual income, according to a draft amendment to the workplace safety law.

The bill was tabled yesterday for a second reading at the bi-monthly session of the Standing Committee of the National People’s Congress (NPC), to be held from yesterday to Sunday.

Managers responsible for “serious” and “extremely serious” accidents shall never serve as principals in enterprises in the same industry, according to the bill.

“Serious accidents” are defined as those causing 10 to 30 deaths, 50 to 100 serious injuries, or direct economic losses of between 50 and 100 million yuan, according to the regulation on work safety issued by the State Council, China’s cabinet, in 2007.

Xinhua