Macau Business Daily, Sept 29 2014

MOP 6.00 Closing editor: Sara Farr Publisher: Paulo A. Azevedo Number 635 Monday September 29, 2014 Year III

Unemployment rate one of world’s lowest A

nother record stands. Macau’s unemployment rate remains at a stable 1.7 percent.

For the last 10 months, the lowest on record for the MSAR. And one of the lowest in the world. Of the 6,800 registered unemployed, about 1,500 are first-time jobseekers. Largely fresh grads, they will likely be devoured by casinos, hotels or restaurants. These account for 40 percent of all jobs in Macau. Add construction and that share jumps to 55 percent

www.macaubusinessdaily.com

PAGE

Wynn accuses short-seller Chanos of slander in lawsuit

Unions up the ante Casino dealer protests continue unabated. Hundreds of MGM employees circled the building yesterday. They demand the company restructure its whole wage system, branding the current one unfair. Union leaders say that complaints taken to the Labour Affairs Bureau remain unresolved.

At the heart of the complaints is that staff salary adjustments are contingent upon five conditions.

And the smoking ban issue

Page 8

Sands China sees full occupancy for Golden Week Page 8

HSI - Movers September 26

Page 3

Industry downturn It’s the Chinese industrial sector again. It’s facing the lowest moments of recent years. Last weekend, the National Bureau of Statistics announced that profits had declined for the first time in two years

2

Name

Hereby hangs a tale The climb-back has started. MGM China and parent company MGM Resorts have been upgraded by Fitch. The new MGM China rating – BB – is sweet. Just one notch below investment level, which facilitates easier, cheaper borrowing. Fitch also paints a rosy outlook for both operators despite big debts maturing

Page 11

Page 9

%Day

Galaxy Entertainmen

3.56

Sands China Ltd

2.78

MTR Corp Ltd

1.43

CLP Holdings Ltd

1.11

Bank of Communicati

1.07

China Petroleum & Ch

-1.55

China Shenhua Energ

-1.58

China Mengniu Dairy

-1.77

Want Want China Ho

-1.96

Belle International

-3.20

Source: Bloomberg

I SSN 2226-8294

Interview

Expansion dependant upon land The Institute for Tourism Studies wants to expand. New degrees and programmes for current and future students are in the hopper. But the Institute craves land, IFT president Fanny Vong told Business Daily in this week’s exclusive interview. Plus more faculty talent, which she sees herself in a global competition for. Meanwhile, IFT’s international base continues to grow

PAGE 6 & 7

Brought to you by

2014-9-29

2014-9-30

2014-10-1

26˚ 32˚

25˚ 32˚

24˚ 29˚

2

September 29, 2014

Macau

Quarter of unemployed are first-time jobseekers Macau has maintained its record low unemployment rate for the 10th straight month despite the growing number of new workers arriving in the territory.

Hotels and casinos are sucking up all the available labour force Luís Gonçalves

luis.goncalves@macaubusinessdaily.com

A

quarter of all unemployed workers in Macau are firsttime jobseekers, official data revealed on Friday. As the gaming industry flourishes here, casinos, restaurants and hotels continue to request more employees to cope with demand. These three sectors are also the

main drivers keeping the unemployment rate at an all-time record low for 10 straight months.

According to the Statistics and Census Services (DSEC) department, the unemployment rate in Macau stood at 1.7 percent between June and August. That’s the lowest level ever recorded

here and hasn’t changed since last November, when it dropped from 1.8 percent.

Macau has been able to maintain its enviable record despite the continuous growth of the working population. The number of non-resident workers, for example, increased by 6.6 percent from the first to second quarter, a sign that Macau’s economy continues to absorb the flow of fresh labour streaming into the territory.

First job The statistics office said that in the June to August quarter Macau had 6,800 unemployed, a marginal increase of 1.5 percent or 100 individuals, compared to the May to July period.

Of these, 23.1 percent were

first-time jobseekers, around 1,570 people.

These 1,500-plus new entrants in the market are likely to be hired by the casino industry and related sectors like hotels and restaurants, the enterprises that have been hiring the most, statistics suggest.

In the June to August period, the employed population in casinos grew by 0.9 percent, in hotels by 2.7 percent and in restaurants by 2.2 percent, the three highest growth rates of all sectors. The total labour force employed amounted to 388,7000, an increase of 0.5 percent or 1,700 individuals.

Gaming companies hired in these three months 1,300 new workers, hotels 700 and restaurants more than 600.

The retail sector, by contrast, decreased its labour force by

2.4 percent, losing 200 jobs.

Macau has enjoyed one of the lowest unemployment rates in the world since the arrival of the gaming industry. In 2010, with all current operators already going at a full head of steam, the unemployment rate was almost double that of today, at 3 percent. Since then, the rate has been declining fast. With the success of casinos and the increasing number of tourists, Macau’s economy has translated into full employment.

According to the Statistics and Census Service, casinos, hotels and restaurants account for almost 40 percent of all jobs in Macau.

Add the construction sector, closely linked to the gaming industry with the upcoming Cotai openings, and the share jumps to 55 percent.

OCTOBER 10th

The Most Prestigious Golf in MacaU

The Asian Outpost of the International Golf Circuit Grand Prix of the City of Lugano Lucky Number 8 E d i t i on 2 01 4

Charity Golf & Gala Night

Premium Partners

Sponsors

Media

Special Partner

Contributors Organizer

For GALA NIGHT tickets please write to golf@macaubusiness.com or visit www.macau-event.com Business Daily Half Page Ad September 24th.indd 1

9/24/2014 8:59:21 AM

3

September 29, 2014

Macau

MGM staff agitate for management response Workers staged their first protest yesterday, their second ‘activity’ following their meeting with the Labour Affairs Bureau two weeks ago, in their attempt to negotiate a better remuneration system Kam Leong

kamleong@macaubusinessdaily.com

M

GM workers staged a demonstration around the casino property yesterday afternoon in a bid to convince the gaming corporation to cancel its ‘unfair salary lift scheme’ and bring salaries of dealers into line, combining basic salary and tea money (the tips) Workers’ representative Ung Kim Ip said that some 300 workers participated in the rally yesterday, themed ‘Say no to the unfair system’.

The protestors, wearing orange in an echo of the colours of MGM, gathered in the front of One Central for half an hour prior to marching a lap round MGM Macau.

According to Mr. Ung, staff were dissatisfied that their demands, expressed to the Labour Affairs Bureau in the middle of the month, remained unresolved.

“For example, we had reported the issue that when workers are not able to attend work because of transportation problems or weather conditions on typhoon days, the company would reduce [staff] holidays although such absence should been seen as reasonable,” Mr. Ung said, claiming that the government department had agreed that such an arrangement was not reasonable. “However, according to the information we had received, the corporation is still reducing holidays for such issue.”

In addition, he said that the five requirements that the employer had set for adjusting staff salaries was not fair.

“Firstly, you cannot take sick leave more than the Labour Affairs Bureau regulates. Secondly, you cannot receive warning letters for a year. In addition, you cannot be absent from work without reason. Fourthly, those working for less than a year are not qualified for promotion. Finally, there is a salary ceiling,” Mr. Ung claimed.

“However, the workers think that the highest salary they may receive is still lower than the market price,” the representative said, revealing that the salary of MGM dealers is a few hundred patacas lower than other companies’ dealers, while those of MGM supervisors and pit managers are a few thousand lower than gaming staff in different corporations.

Urging their employer to respond to their demands before Golden Week, Mr. Ung told reporters that MGM staff might step up their activities, such as staging industrial action if their demands are not responded to. He did not indicate what kind of industrial action might be embarked upon.

At the end of the march, Mr. Ung and four other staff representatives submitted their letter of demands to their employer, which a representative from the Public Relations office received.

In addition to the salary issue, Mr. Ung complained once again about

the measures the corporation had taken to deal with the new smoking regulations coming into force from October 6, banning smoking on the mass gaming floors of all casinos if the establishments do not build appropriate airtight smoking rooms.

“The smoking or non-smoking areas should be divided according to the numbers of such gambling tables instead of the current method, which divides the non-smoking areas or smoking areas into half-half, based on the total area of the casinos.

Currently, the casinos are building non-smoking areas in the corridors or the leisure areas to earn more [from] smoking tables,” Mr. Ung claimed.

The wave Mr. Ung, who is also a board member of local gaming labour union Forefront of Macau Gaming (FMG), stressed that the protest yesterday was initiated by the staff themselves

Ung Kim Ip and a representative from the PR office of MGM

not FMG despite core members of the union attending to show their support.

In fact, FMG has been the focus of the gaming industry since the end of July, when it first staged a protest against Sands China, which some 2,000 attended. The wave of gaming protests then kicked off. The union has staged various assemblies or demonstrations against the gaming corporations - Sands China, Galaxy Entertainment Group, SJM, MGM Macau and Wynn Macau – in addition to protesting against the gaming corporations collectively, including Melco Crown, on August 25.

The rallies have led Sands China, Galaxy Entertainment Group and SJM to offer a 14th month bonus to their employees plus other benefits.

Yet, the union says most staff are still not satisfied. SJM workers said recently that they would stage another movement against SJM during Golden Week although the details of this protest have yet to be announced.

4

September 29, 2014

Macau Brought to you by

HOSPITALITY Pulling alone

H&M September sales growth wilts in unusually warm weather The world’s second-biggest fashion retailer plans to boost sales with new stores in Asia, mainly Taiwan, Philippines and Macau. The latter set to open next year

The month of August usually signifies the peak tourism period of the year. A secondary peak occurs in the month of December. With two thirds of the year accounted for and the major month included in the tally, the main features of the year concerning visitor flow begin to consolidate. In these eight months, the combined share of the three top sources of visitor - mainland China, Hong Kong and Taiwan – reached a new high, just a tad below 91 percent of the total number of visitors. This share has been rising and that value represents a gain of 2.5 percentage points relative to the same period in 2010. However, mainland China is the real and single significant driver of this growth. Both the total number of visitors in the year to August and their share of the total in the same period were down for Taiwan and Hong Kong. In the period observed here their shares dropped by 9.3 and 2.3 percentage points, respectively. Greater China growth is only sustained, in fact, by visitors from China, who have lifted the corresponding share by 14 percentage points since 2010.

F

The leading component in China’s rise is the number of same-day visitors. Their number reached more than 7.66 million in August, a rise of 18.2 percent relative to the same period last year. Overnight numbers also ran above average, albeit at a markedly slower rate of 9.9 percent. Figures for Hong Kong and Taiwan maintained a downward trend, which has been a feature of recent years. Small increases in the number of overnight Taiwanese visitors and same-day Hong Kong visitors have not been enough to prevent further declines in the total number of visitors originating there.

58,508

daily average number of visitors from China, Jan-Aug

ashion retailer Hennes & Mauritz’s recent strong sales growth has slowed sharply this month as unusually warm weather delayed purchases of cold-weather gear, it said after reporting quarterly profit in line with expectations.

The Swedish company said sales in the September 1-23 period rose 7 percent, compared with a near-20 percent increase in August, putting September on track to be the slowest month for sales growth this year.

In the six months from March through August, sales growth averaged 16 percent.

In H&M’s home town of Stockholm, which has enjoyed unseasonably warm weather this month, one store had sweaters, scarves, gloves and jackets with faux fur lining in autumn colours of browns and maroon on prominent display.

“September was a little lower than we had planned because some products haven’t sold due to the warm weather,” Chief Executive Karl-Johan Persson told a news conference.

The performance of the world’s second-biggest fashion retailer in recent months had helped its shares outperform those of bigger rival Inditex, pulling them up 6 percent this year against a 7 percent fall for the Spanish group.

However, the news of sharply slowing sales in September pushed H&M shares down 3.5 percent on Friday compared with a 0.4 percent

weaker European retail index, while Inditex shares were little changed.

H&M shares trade at 23 times forward earnings against 25.5 times for Inditex.

“Clearly, H&M can deliver very strong earnings growth when they are able to grow sales at about 20 percent, but given a long run average like-for-like sales rate of 1 percent, we remain cautious,” Bernstein analyst Jamie Merriman said.

H&M reported pre-tax profit up 20 percent at 7 billion crowns (US$974 million) in its June-August third quarter, in line with analysts’ forecasts.

Margins under pressure Inditex last week reported that sales growth for the period August 1 to September 12 in local currencies slowed to 10 percent from 11 percent in the first half. It also reported a worse than expected fall in secondquarter margins to 56.5 percent as trading in its lucrative overseas markets turned tougher.

H&M said its third-quarter gross margin fell slightly to 58.3 percent from 58.8 percent a year ago, hurt by higher raw materials prices, cost inflation, capacity at suppliers, purchasing currencies and transportation costs.

“Higher manufacturing costs and price pressure will continue to lead to gross-margin compression,” said

Bernstein’s Merriman, confirming her “underperform” rating for H&M shares.

H&M has said that a drive to increase wages for Asian clothing workers, who have recently been involved in violent clashes in Cambodia, was likely to dent profitability as weak demand and stiff competition made it hard to pass on costs to shoppers.

The company plans to open a net 375 new stores this year but said it will delay its launch in India until spring 2015, but did not explain why.

The launch was previously scheduled for this autumn.

The Philippines will become a new market for the group next month and it will open shops in South Africa, Peru, Taiwan and Macau in 2015.

H&M also said that online sites launched in Italy and Spain in August and China this month had made a very good start. The company, which reiterated plans to open in eight to 10 new online markets next year, was slower than many of its peers to start selling online and now has an online presence in 13 markets, compared with 27 for Zara-owner Inditex.

Zara will join China’s fast-growing Tmall online marketplace, run by e-commerce giant Alibaba, in October and Persson said it is possible that H&M could also go that route but would concentrate on its own site in China for now.

Reuters

5

September 29, 2014

Macau

Mainland banks relax mortgage policies Bank of China and Agricultural Bank of China are keen on speeding up the processes of lending money to first-time homebuyers in order to boost confidence in the property market

T

he Bank of China and Agricultural Bank of China, two of mainland China’s biggest lenders, are encouraging their branches to boost mortgage lending, South China Morning Post reported last week. This decision seeks to boost confidence in the property market.

‘We will be active in supporting individual home purchase’, BOC stated in a press release. The company explained that bank branches are allowed to adjust mortgage policies depending on local market conditions. Also in order to address customer demand for home purchases branches are allowed to use different policies to enhance the efficiency in approving loans.

Agricultural Bank of China also revealed that it is increasing mortgage lending to meet the demand of first-time homebuyers and those trading up to bigger flats to improve their living conditions. The bank also stressed that it would speed up the approval process for loans.

Of the two banks, Bank of China

is the only one represented in Macau, while the closest branches to Macau of Agricultural Bank of China are in Zhuhai.

The Chinese media recently

reported that China’s Big Four Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China - were considering

easing mortgage lending for first-time buyers with the goal of preventing a slump in property sales. Local media report that these banks were considering offering 30 percent discounts on the benchmark rate for first-time buyers.

Some market experts, however, doubt that such decisions will have the necessary impact in terms of instilling confidence in the market.

“The news could boost market sentiment. But the decline in sales is because potential buyers remain cautious about the market outlook.

What they’re concerned about is whether the property they buy will appreciate, not the cost”, said Tao Dong, Chief Regional Economist at Credit Suisse.

“We doubt it is enough to restore buying confidence. We believe developers’ credit risk is more dependent upon sales performance”, Jefferies Securities property analyst Venant Chiang said of the 30 percent discount on mortgage loan rates.

J.S.F.

Samsonite: Macau, HK outperform Asian markets

Macau signs up to tax transparency charter

Sales of the world’s largest branded luggage maker grew 14.7 percent in the first-half here, almost double that of mainland China and Japan. It also helped increase Asia’s contribution to Samsonite’s global profits

The Special Administrative Region is preparing to change its laws in order to implement new standards to enhance tax transparency and combat cross-border tax evasion

Luís Gonçalves

luis.goncalves@macaubusinessdaily.com

João Santos Filipe

jsfilipe@macaubusinessdaily.com

S

amsonite sales in Hong Kong and Macau increased by 14.7 percent in the first half of the year outperforming the majority of other markets where the world’s largest branded luggage maker has a presence. In Asia, for example, revenues here grew almost twice that of mainland China and were only bested by South Korea.

According to an interim report filed with the Hong Kong Stock Exchange, Samsonite sales in Macau and Hong Kong totalled US$35.2 million in the first half of 2014 from US$30.7 million a year ago. That’s an increase of 14.7 percent and US$5 million more in revenues.

Despite the difficult year that some of the world’s major retail companies have been through in Hong Kong and Macau, Samsonite is still in the black. In Samsonite’s Asian markets, Hong Kong and Macau’s growth was higher than in mainland China (8.3 percent), Japan (13.6 percent) and India (12.6 percent). Only South Korea outperformed Macau, where sales went up by 20 percent in the first half.

Asia was also the best market for Samsonite in the first leg of the year. The company’s global sales in the region accelerated by 12.4 percent in the period, with the North America market growing 11.4 percent, Europe

12.4 percent and Latin America 8.9 percent.

The healthy performance in the first six months was important for Samsonite, as the company has its biggest market in Asia, accounting for 38 percent of its total sales, followed by North America at 32 percent share.

More crucial is the fact that Asia generated 44 percent of the company’s profits (North America was second with 30 percent) in the first half versus 41 percent a year ago. ‘Along with additional product offerings and point of sale expansion, the success of the Group’s business in the Asia region has been bolstered by its continued focus on country-specific products and marketing strategies to drive increased awareness of and demand for the Group’s products’, wrote Samsonite in its report on Asia.

Global Samsonite profits jumped 14 percent in the first six months of the year to US$186.7 million from US$163 million a year ago.

M

acau is preparing legislative procedures to adopt new standards to automatically exchange financial account information – named Common Reporting Standard (CRS) – involving countries all around the world, the Financial Services Bureau (DSF) has revealed.

The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes is advocating the implementation of new standards to enhance tax transparency and combat cross-border tax evasion.

Over 60 jurisdictions have already committed to implementing the new global standard by 2017 or by the end of 2018.

According to existing practice, the exchange of information is only conducted at the request of other jurisdictions. The new standards, however, will allow for automatic exchange of financial account information

for tax purposes among participating jurisdictions on an annual basis. Financial institutions are also required to adhere to due diligence procedures consistent with the new standards.

In order to meet internationally agreed standards regarding the exchange of tax information, Macau has passed Phase I and Phase II Peer Reviews conducted by the Global Forum in 2011 and 2013, respectively. So far, Macau has concluded tax treaties with 20 jurisdictions, of which five are Double Taxation Convention and 15 are Tax Information Exchange Agreements.

As a member of the Global Forum, the Macau Government has expressed its support for the new standards. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes numbers 122 members, including Macau, Hong Kong and China.

6

September 29, 2014

Macau

More land necessary to expand, says IFT president For the Institute for Tourism Studies (IFT) to grow, it needs more land resources in order to be able to launch new Bachelor degree programmes.

In an interview with Business Daily, president Fanny Vong says that human resources, and especially the lack of land, have been obstacles to the growth of the higher education institution. Having already approached the government requesting more space, Mrs. Vong expects these problems to be resolved, even though she doesn’t know when. Until that day comes, she says IFT will cut its cloth accordingly Luciana Leitão leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

How would you characterise Macau’s current higher education sector?

The higher education sector has come quite a long way but since the first university was established in the 1980s the sector as a whole has developed a lot in terms of providing diverse, multiple programmes.

Some programmes are more skewed towards the tourism and hospitality industry, like our programmes. There are also programmes that are more skewed towards the needs of the community; like, for example, we’ve seen an expansion in nursing programmes in the number of student intakes. The University of Macau has also launched new programmes over the years, so the current status of higher education is that we see very stable development and we see that these institutions, including ourselves, are keeping very close pace with the development of the community.

What kind of programmes would you launch if there was space?

There are several but when we launch programmes we have to go through a consultative process with our internal [departments]. I don’t think this is the right time to say it now but there are programmes that we think IFT can provide related to tourism and hospitality.

For example, just giving examples without attachment to decisions to be made by a body: aviation.

There’s a blank. Some programmes related to tourism planning.

What are the main challenges for the higher education sector?

I would say human resources, in terms of hiring good faculty members. It’s a challenge, especially for some speciality programmes like tourism and hospitality. We’re in competition not only within our own community or the sector; we’re competing for qualified staff with the region and even the rest of the world.

The other challenge for most institutions is space. This isn’t only a problem for the higher education sector but for high schools and others. Some of them are also trying to find a better space, so that we can provide a better learning environment.

I’d say land resources are one of the main challenges. Without enough space it’s difficult to launch new programmes because with every programme you launch you need to have space for teachers, you need to have classrooms, and you need to have support administrative staff offices.

As for other challenges, I’d say we challenge ourselves to do better in terms of quality of programmes.

Could Hengqin Island be an area for the further development of IFT? We don’t limit our opportunities to one place only. Of course, we hope our roots remain here in Macau, so space in Macau would be a priority for us.

But we see this as a win-win for both Macau as well as Mainland collaboration because for Macau residents it doesn’t need any further explanation - the kind of manpower you need for the next few years - but it’s the same for the Mainland, too, when you see the number of hotels they have. We also have a lot to learn from Mainland operations - their mentality, the way customers are served, how they look at customer satisfaction.

Is the lack of land in Macau posing an obstacle to IFT’s growth?

That is the case.

There are programmes that could be launched to better serve this sector, the tourism and hospitality sector. But because of lack of space for one programme you offer you have to have space for teaching, space for students and space for equipment and so on. Without this, the current space that we have is already saturated, so we cannot have any new degree programmes.

Has IFT asked the government for more land?

Yes. At this stage, they’re very much aware of the needs of IFT; plans are already being made but the government will announce those plans when the timing is proper.

So, it will still take a bit of time?

Yes, still.

higher education institutions and to give more flexibility to designing programmes.

We see very stable development and we see that these institutions, including ourselves, are keeping very close pace with the developments of the community

The next step in-class theories and learning.

We’re also making changes ourselves — some time ago we started introducing courses outside the curriculum, like artistic, sports, culture, trying to unleash the potential of students. We’ve realised that not all students are academic achievers, not all do well inside a classroom but they have aspects that can be developed further outside the classroom and we’re trying to give them more opportunities.

The second thing is to give students more exposure to knowledge that’s outside their own [domain] so they’re aware of different aspects of life, of the world and of people and culture, to make them better human beings as a whole.

A need for change

What are the positive aspects of the evolution of the local higher education sector?

I would say diversity — all higher education institutions are given resources, room to seek their own path of development. Besides, the positive thing is that we’ve also seen an increase in flexibility and core scheduling. We used to have a very traditional mode of students going in the daytime doing Bachelor degrees. The reality in Macau is that when people have different schedules of work, shift-work, then we also begin to see more programmes tailor-made to suit the schedules of working professionals.

What could be improved in the higher education sector in Macau?

We could give students more control over their learning. A few institutions are already doing that — they’re giving students more choices and taking up extracurricular activities, not only for

There’s a big discussion about a higher education law. What do you expect from this diploma?

The law has not yet passed, and we don’t know what the final version looks like. It’s a little bit early to comment. But I think the overall spirit is to give more autonomy to

This year, you’ll have 657 students graduating from IFT. Isn’t it a small number, considering the expansion of hospitality and tourism in Macau?

Of course. One institution alone will not solve the human resources shortage of Macau. The number is huge. It takes the whole education sector and it takes more than that; new policies on how you import labour and how you manage the balance between local labour interests and the need for numbers to be filled.

What would you like to see in this law?

Pretty much autonomy; giving more autonomy to institutions.

Of course, the catch is: first of all, these institutions have to be proven to be able to sustain quality and to provide quality programmes.

Then, these institutions should be given more autonomy to design and launch their own programmes without going through all the administrative procedures of applying for programmes. Also, the spirit of quality assurance — this is a major theme in the new higher education law.

What is IFT’s future strategy?

We’re very optimistic. Just now, we mentioned the lack of land and human resources but I think this will be resolved very soon.

We’re optimistic that we will be able to achieve our mission better by providing more programmes that we believe society and Macau needs.

Currently, we have eight degree programmes, with two in the evening. We see there’s a need for working professionals to come back to get a higher degree so that they can move up the career ladder, and this is what we want Macau residents to do, to be able to move up to be competitive.

We’ll do our best with the given resources to help Macau residents acquire the skills and qualifications they need to move up.

Push for diversification With the government emphasising the need to diversify the economy and the tourism sector, is IFT designing its programmes accordingly?

What we can see is the government trying to diversify into two areas: the first one is MICE – that’s been talked about for many years - and the second one is quite recent: the cultural and creative industries.

For both these areas, IFT has been involved; the first one as long ago as 2005. It was in 2005 that we first launched our event management degree programme — that was the first one in Macau, we were the pioneers — and then, two years ago, we were appointed as members of the committee of cultural industries by the Macau Government.

Once we were on the committee, we started to think about what we could do and what we are already doing by stepping into this area

7

September 29, 2014

Macau

We’re in competition not only within our own community or the sector but we’re competing for qualified staff with the region and even the rest of the world

offering courses and training programmes in the cultural and creative sector. Our continuing education school has launched a number of different programmes in this area and will continue.

What kind of courses?

Not degree programmes.

Courses like poster designer, advertisement design, souvenir design, photography; we have an arts administrative certificate programme in collaboration with the Cultural Affairs Bureau and then we have various other courses. This is a new portfolio we’re developing. We’re constantly monitoring the situation and we’re always trying to respond quickly.

We also launched a new Bachelor degree in 2011 — culinary arts management degree programme.

This is also a response industry; seeing all these hotels and this industry, we understand the need for professional and educated chefs and food critics, food writers and things like that. We’re happy to see our first graduates next year.

A few years ago, it seemed the MICE sector would grow more than it did.

Does it still make sense for IFT to be promoting the industry?

I wouldn’t nail the coffin down just yet because it’s only a few years down the road. The first casino opening without any MICE facility was Sands, in 2005. Venetian only opened in 2006, so it’s been eight years and Las Vegas took decades to develop its MICE industry.

The problem is that the MICE industry has been overshadowed by the rocketing growth of the gaming sector. But before gaming liberalisation there were even less events — if we can call them events at all — but with the setup of these new MICE facilities or these casino complexes, we do see hoards of people coming in to attend events that we never saw before. We see that the industry is picking up, we can see there are changes pre and post-gaming liberalisation. We need to give it time and we have to put it into perspective when analysing the MICE sector alone.

For ourselves, we can feel that the students we produce in the MICE sector have always been absorbed by the sector. We have no issue with students having difficulties finding a job in the MICE sector.

The employment prospects for this programme are good and that’s an indirect kind of hint that the industry is growing and in need of people.

In terms of development of IFT, is the cultural and creative industry now your focus as opposed to the MICE sector?

We’re targeting all our areas, not giving more weight to this or that.

You may see we focus more on cultural industries because it’s a baby; we give it more care to grow [so with our current programmes we’re] in a very strong position.

Going international In terms of internationalisation, which is something that makes sense for a higher education institution focused on tourism and hospitality, are you trying to arrange more agreements with other universities in order to enhance it?

It’s always been our pillar of development. Since the inception of IFT, we’ve been very clear that one feature of IFT is that we have to be international. Tourism and hospitality is an international industry, it cannot be very closeminded. We’ve been adding partners every year. We have very prestigious and international partners like WNTO, UNESCO. We send students to them for internship and we have a very good collaboration with them.

We also have bilateral agreements with different units and so far we’ve covered 26 countries and regions and are still growing. We’re also now eyeing a bigger piece of the Mainland. We have partners in the Mainland but we also realise the rapid growth of the Mainland, so we’re also, on one hand, internationalising our partnerships

worldwide while on the other we’re not neglecting the Mainland market.

We also see an expansion of tourism and hospitality schools as well as businesses in China. For example, hotel groups and national chains opening up like mushrooms in the Mainland. They also need a lot of skilled people. This also presents opportunities for our students, to one day go there and participate in that growth.

Are you currently discussing further agreements with other universities?

Last year, we signed an agreement with Turismo de Portugal, a group of hotel training schools, so every year we’re adding. Every time we have a new partner, we try to arrange student exchange — sending students to them and receiving them.

Yesterday, it was Guangzhou Tourism School, that’s our latest partner, and this one is more for vocational and professional training. This is a good collaboration because it’s under the framework of Guangdong Macau collaboration.

I’m talking with a university in Scotland but this is in a very preliminary stage. Edinburgh is very good at events — they have this structure whereby they have a private company funded by the government running a series of annual festivals and events, attracting tens of thousands of participants and visitors.

We have 10 higher education institutions in the territory. With such a limited population, is there room for so many?

All this has proved they are worth a stronghold in Macau. All of them have been working well, have been recognised by local residents and have been able to get student intakes every year. So far, I don’t see any issue with having 10.

Don’t forget I mentioned we have our own strong areas and our own development paths that are different from others. There’s only one Nursing School, which is one of the 10, only one in this. There are only four universities, and even among themselves they have different roles.

With the growth in the tourism industry and the thirst for professional degrees in order to climb the degree ladder, each has its place in Macau.

In that case, would you say there’s no competitiveness within the higher education institutions of Macau?

If there isn’t, there should be.

You cannot totally eliminate competition. Competition is good in the sense that you keep doing your best. But competition cannot be to the extent that it is detrimental, when you’re engaged in cutthroat competition. The spirit is that each institution will find its own place in society, some stronghold in society, and perform well per the expectations of the community.

8

September 29, 2014

Macau

Wynn accuses short-seller Chanos of slander in lawsuit

When untrue statements about our company are made, we are vigilant in defending our reputation Michael Weaver, Wynn Resorts spokesman

S

teve Wynn, the billionaire casino mogul, has filed a lawsuit accusing prominent short-seller Jim Chanos of slander over an alleged statement that Wynn violated a U.S. anti-bribery law.

Wynn, 72, and his company Wynn Resorts Ltd filed suit against Chanos, founder of New York-based hedge fund Kynikos Associates LP, in federal court in San Francisco.

The lawsuit accused Chanos of telling several people at a private “invitation-only” event in Berkeley, California, on or about April 25 that Wynn and Las Vegas-based Wynn Resorts had violated the federal Foreign Corrupt Practices Act. Wynn said the statement was false and defamatory, that Chanos made it with reckless disregard of the truth, and that the statement wrongly

Sands China sees full occupancy over Golden Week Advanced hotel booking for the hotel and casino operator is “close to 100 percent” for its 9,200 hotels rooms here

S

ands China , the Macau casino operator controlled by billionaire Sheldon Adelson, reversed losses to jump the most in a week in Hong Kong trading after saying it expects full occupancy during China’s Golden Week.

Advanced hotel booking for Sands China is “close to 100 percent” for the week-long Chinese holiday starting October 1, spokeswoman Mabel Wu said by phone. The company had 9,200 hotel rooms in Macau at the end of last year, more than any other operator, she said.

Sands China surged as much as 3.5 percent last Friday, the most since September 19 and snapping a 4-day decline. It traded at HK$42.15 in Hong Kong. The five other Hong Kong-listed Macau operators also gained after Bloomberg News reported Wu’s comments.

Macau’s gambling revenue fell a third straight month in August as a crackdown on graft and extravagance led to high-stakes Chinese gamblers

avoiding the city, the only place in China where casinos are legal.

The advanced booking rate suggests Macau remains attractive to gamblers even as China’s campaign to clean up government shows no sign of abating.

Still, Chinese visitors going to Macau during the Golden Week tend to be family oriented holiday-makers who do not gamble too much, Steven Leung, a sales director at UOB Kay Hian Ltd, said via telephone. “It remains a question whether these bookings can translate into higher casino revenue.”

MGM China Holdings rose as much as 5.7 percent to HK$23.25, erasing earlier losses. Galaxy Entertainment Group climbed as much as 3.8 percent, SJM Holdings advanced 3.4 percent and Wynn Macau Ltd. rallied 4.1 percent. Melco Crown Entertainment Ltd. rose as much as 0.9 percent, and was down by 0.5 percent in Hong Kong.

Bloomberg

suggested that he violated a criminal law. The lawsuit is seeking unspecified compensatory and punitive damages.

Chanos and Kynikos Associates LP did not immediately respond on Friday to requests for comment.

In the complaint, Wynn also said that he and Wynn Resorts have been “thoroughly investigated” on numerous occasions by gaming regulators in Nevada and Massachusetts, the U.S. Securities and Exchange Commission and other government agencies, and that no official agency has identified reliable evidence of an FCPA violation. The complaint did not quote from the alleged slander or provide any surrounding context.

“When untrue statements about our company are made, we are vigilant in defending our reputation,” Wynn Resorts spokesman Michael Weaver said in a statement. “We have no further comment about our legal strategy.”

Wynn’s lawyer declined to comment.

In July 2013, Wynn Resorts said the SEC decided to take no enforcement action after probing an allegation by Japanese billionaire Kazuo Okada that the company may have violated the FCPA by donating US$135 million to a university in Macau, a major gambling hub where Wynn Resorts operates.

Wynn Resorts forcibly redeemed Okada’s 20 percent stake in the company in February 2012, accusing Okada of making improper payments to Philippine officials to advance a $2 billion casino project there.

Okada and Wynn have traded allegations of illegal conduct in more than two years of U.S. litigation.

On May 15, Chanos told CNBC television that he would “no longer be long the Macau casinos,” but declined to say whether he was conducting short sales related to Macau. Shortselling, which involves the sale of borrowed shares and subsequent repurchase, is a bet that a stock’s price will go down. Chanos is known for having shorted Enron Corp stock many months before the energy trader’s December 2001 bankruptcy.

Wynn is worth US$3.5 billion, Forbes magazine said.

Reuters

Corporate

Oris launches LE watch for Macau GP driver In salute to racing driver Darryl O’Young’s 10th year on the Macau Grand Prix circuit, Swiss luxury watch manufacturer Oris recently launched the Oris Darryl O’Young Limited Edition during the Oris Motorsport Challenge in Sepang, Selangor.

O’Young won the Macau Grand Prix in 2005, 2006 and 2008. Only 500 LE watches are available worldwide and come with a bold red highlighted 10 o’clock to celebrate the driver’s 10th anniversary. The number 55 is accentuated, too, on the dial to symbolise the number 55 BMV GT car that the driver raced in last year’s Macau Grand Prix.

O’Young personally contributed ideas to the design of the LE watch, such as choice of colour and rubber strap. The driver said that one of the new features of this edition is the chronograph function and date window at 6 o’clock.

9

September 29, 2014

Macau

Almost there Fitch has upgraded MGM Resorts and MGM China’s ratings, with the latter reaching the borderline of investment level. A new upgrade is likely, says the credit agency. Less debt and Las Vegas performance offsetting Macau’s current slowdown were the main drivers for the upbeat outlook Luís Gonçalves

luis.goncalves@macaubusinessdaily.com

F

itch, the smallest of the world’s three largest rating agencies, upgraded both MGM Resorts and MGM China ratings on expected strong performance in Las Vegas and Macau and fewer concerns about the operator’s high debt. The outlook is positive – meaning new upgrades are likely in the coming months – and for MGM China, the revision put the company here on the borderline of ‘investment grade’, the highest and safest level in Fitch rankings.

MGM Resorts saw its rating climb from B to B+, while its subsidiary company, MGM China, which manages its casinos in Macau, also received un upgrade from the previous BB- to BB. The new MGM China rating is now only one notch below investment level, a grade where companies can borrow money more easily and cheaper from investors.

Fitch also awarded both operators a positive outlook. In rating agencies language it means that a new upgrade is likely in the coming three to six months.

Fitch said that the upgrade reflects the ‘company’s strong performance on the Las Vegas Strip and Macau as well as Fitch’s longer term positive outlooks for these markets’. But MGM’s financial position, which Fitch showed some concerns about a few months ago regarding its US$2.4 billion debt maturing in 2016, was also upgraded.

The rating agency underscored that MGM has US$3.6 billion liquidity available and it enjoys full access to

capital markets, a sign that investors trust the gaming operator despite its debt. These factors ‘largely offset Fitch’s concerns related to MGM near-term liquidity needs’. The reduction of MGM’s debt from US$13.9 billion to US$12.9 billion in the last two years was also a plus.

The slowdown of gaming revenues here in recent months is unlikely to affect much of MGM’s performance as a whole as the ‘Las Vegas Strip offsets

the recent softness in Macau until 2016 when MGM’s projects start to come online’, wrote the credit agency.

But for Fitch MGM has an advantage in Macau against its peers given current market trends: it has wide exposure to the mass market, the best performing segment and most profitable now that the VIP sector is declining by two digits. According to Fitch, MGM makes 77 percent of its profits from mass gamblers.

Regarding Macau, Fitch is still one of the most optimistic agencies.

It expects revenues this year to grow by 4 percent, while the majority of analysts are already pointing to a flat performance compared to last year. The figure is based on the assumption that mass revenues will increase 15 percent and VIP will decline 15 percent. The soft expectations are driven by the upcoming smoking ban, the lack of new supply, and tough 2013 comparisons, Fitch said. The agency expects the market to recover through the first half of 2015 with mass posting 10 to 20 percent growth year-on-year.

10

September 29, 2014

Greater China Infrastructure bank gains support A China-led effort to launch the Asian Infrastructure Investment Bank has attracted the interest of 21 countries, Beijing’s Ministry of Finance said yesterday. Representatives from South Korea, Thailand, Indonesia and Singapore participated in meetings held on Saturday in the Chinese capital to discuss the plan. The meetings were chaired by Chinese Deputy Finance Minister Shi Yaobin, the ministry said in an article posted on its website. Jin Liqun, a former deputy finance minister and former Asian Development Bank vice president, headed China’s preparation team.

State-owned ex-head charged for bribing The former chairman of Chinese staterun shipyard Hudong-Zhonghua Shipbuilding has been charged with taking bribes, prosecutors said on Friday, the latest official to be swept up in President Xi Jinping’s anti-corruption crackdown. The Supreme People’s Procuratorate said in a notice on its website that Gu Tiquan, former board chairman of the Shanghai-based shipyard, would be prosecuted. It did not give details. Hudong-Zhonghua is a subsidiary of China State Shipbuilding Corp, one of the largest shipbuilding conglomerates in the country. The yard has been leading China’s push into high-tech shipbuilding, and currently has contracts to build 14 liquefied natural gas tankers.

iPhone smuggling detected in SHG

Change of rules at Shanghai zone investment Foreign firms engaged in international maritime cargo handling will, for the first time, be allowed to hold up to 51 percent

C

hina has introduced a fresh round of regulatory changes in the Shanghai Free Trade Zone in a bid to jump-start interest in the district, which has been struggling to attract more overseas companies, a government website said yesterday.

The changes, which were approved by the State Council earlier this month, involve ownership rules and other restrictions for companies engaged in more than two dozen activities ranging from heavy equipment production to the export commodity trade.

Overseas companies located in the zone will, for the first time, be allowed to establish wholly owned motorcycle manufacturers, as well as aviation engine parts design, production and maintenance companies.

Wholly foreign-owned railway bridge and station equipment producers will also be allowed to set up shop.

Ownership restrictions were also lifted on a variety of export commodity firms, including cotton, sugar, salt, and cooking oil trade firms. Those activities were formerly limited to Sino-foreign joint ventures.

Foreign firms engaged in international maritime cargo handling for the first time will be allowed to hold up to 51 percent of any joint venture, up from 49 percent earlier, according to the new rules.

Most of the rule changes announced had already been made public, including many of the manufacturing and export processing regulations.

The 29 square kilometre Shanghai Free Trade Zone, located on the outskirts of China’s commercial capital, was meant to test broad economic and financial changes, including currency liberalisation, market-determined interest rates and free trade.

The area, however, has stumbled

because many of the Shanghai FTZ’s preferential policies have been on a nationwide basis, including crossborder cash pooling and netting for multinational companies, detracting from what was meant to be the exclusive nature of policies within the zone.

Newly registered foreign enterprises accounted for 12 percent of the more than 10,000 firms allowed to operate within the zone by the end of June, official data showed.

China embraces carbon pricing Top economic planning agency has said its planned carbon trading scheme will cover 40 percent of China’s economy Customs officials at Shanghai Pudong International Airport have seized 453 iPhone 6 and iPhone 6 Plus, estimated to be worth over 2 million yuan (US$320,000). The latest Apple smartphones were found in seven luggage carried by two passengers from Tokyo, one Japanese citizen and the other Chinese, on Thursday, according to the customs, which declined to give more details as investigation is still underway. As of Thursday, officers in the Shanghai airport have found a total of 831 iPhones that were not declared by travellers. Among them, 691 seized phones were under probe on suspicion of smuggling, authorities said.

Green materials in affordable housing China will stress the use of environment-friendly materials in building affordable housing in major cities starting this year in an effort to promote greener homes. Yang Rong, an official with the Ministry of Housing and Urban-Rural Development, said that under the national plan, more than 70 percent of affordable housing will be constructed under the green standards by 2020. China has been plagued by high energy cost of its constructions, which consume around a third of the country’s total energy use. The country released the first green home standards in as early as 2006.

Valerie Volcovici

M

illions of visitors and residents could hardly miss the message projected on the side of the world famous United Nations building in New York this week: “Put a price on carbon.”

At the UN’s Climate Summit this week a diverse group of global leaders, from World Bank president Jim Yong Kim to California Governor Jerry Brown, spoke of the need for polluters to pay for each ton of carbon they emit. More than 1,000 companies pledged their support for the effort.

Carbon pricing, largely rejected by the United States and struggling in Europe, is suddenly all the rage, with China leading the charge. The world’s biggest greenhouse gas emitter plans to establish a national market for carbon permit trading in 2016 and has already launched seven regional pilot markets.

Boosters of carbon pricing policies say that once China sets a national price on carbon, others will follow.

“Once China goes live, that will establish a major price (signal) that will affect all the other markets and all other (carbon) prices,” said Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change.

Chinese Foreign Minister Wang Yi addresses the 69th session of the United Nations General Assembly at United Nations (UN) headquarters in New York, New York, USA, 27 September 2014

11

September 29, 2014

Greater China Industrial profits drop in August

643

foreign companies operating in the Shanghai Free Trade Zone Excluding Hong Kong and Taiwan, foreign companies comprised just 6 percent, or 643 entities, far fewer than expected.

The state-run Xinhua news agency said earlier this month the zone’s deputy head, Dai Haibo, had left his post. The South China Morning Post newspaper, quoting sources, reported that Dai was suspected of disciplinary violations and would be forced to step down.

Reuters

Once China goes live, that will establish a major price (signal) that will affect all the other markets and all other (carbon) prices Christiana Figueres, Executive Secretary of the UN Framework Convention on Climate Change

China’s top economic planning agency has said its planned carbon trading scheme will cover 40 percent of its economy and be worth up to US$65 billion.

“You will see a shift in the fulcrum toward China and that will attract other countries,” Rachel Kyte, World Bank Group special envoy for climate change, told Reuters.

Premier Li Keqiang reiterated this month that the government will stick to targeted easing and can’t rely on monetary stimulus to spur growth

P

rofits at industrial companies in China declined last month for the first time in two years as a slowdown in the world’s secondlargest economy deepens.

Total profits of China’s industrial enterprises fell 0.6 percent from a year earlier in August, the National Bureau of Statistics said in Beijing. That compares with July’s 13.5 percent increase and is the first drop since August 2012, based on previously reported data.

The decrease highlights another sign of stress in the industrial sector after output growth slowed to a five-year low. Policymakers have eschewed broad stimulus measures to revive growth, opting for targeted easing and expedited spending.

Industrial profits in the first eight months of the year slowed to a 10 percent increase from 11.7 percent in the first seven months. The lower growth last month was exacerbated by a high base last year, when August saw a 24.2 percent profit jump, according to previous reports.

Profits were dragged by the slowdown in industrial production, weak demand and falling factory prices, NBS said in a statement. Profit growth in the eight months slowed in industries including steel, chemicals and electronics, it said.

Sinosteel Corp., a Chinese stateowned mining company and steel trader, said this week that it’s facing

Governments like Chile and Mexico and U.S. states like California will be keen to link their emerging carbon markets to the Chinese model, Kyte said.

South Korean Environment Minister Yoon Seong-kyu said his country, which in 2015 will be the first in Asia to launch a national carbon market, wants to eventually link its scheme to China’s.

Kyte said emerging economies have shown a strong interest in using measures like markets and taxes to rein in pollution, and have joined the Bank’s Partnership for Market Readiness for help to shape their carbon pricing policies.

The initiative is helping countries like Vietnam design and pilot carbon pricing instruments in its steel, solid waste and power sectors, Colombia explore the launch of a carbon tax and Kazakhstan fix problems with the pilot emissions trading scheme it launched in 2013.

The International Emissions Trading Association (IETA) has been lobbying since 1999 for an international framework for carbon trading. It also has supported schemes in emerging economies and in U.S. states like California and the U.S. Northeast’s Regional Greenhouse Gas Initiative, a power sector trading scheme that launched in 2009.

The group suffered a blow when a national cap-and-trade bill passed the U.S. House of Representatives in 2009 but died in the Senate a year later.

Since then, “We’ve spent a lot more of our time talking to businesses in China to build capacity to make emission trading work,” said Dirk Forrister, president of IETA. Reuters

financial difficulties as the economy slows and some customers are not paying on time.

Low gear China’s economy remained stuck in “low gear” this quarter, with struggling retail and residential real-estate industries countering improvements in manufacturing and transportation, a private survey showed this month. Growth in

investment slowed further, borrowing costs rose and the share of firms applying for and getting bank loans remained at “rock bottom levels,” according to the China Beige Book.

Banks including Royal Bank of Scotland Group Plc. and Barclays Plc. reduced their economic growth forecasts after data for August showed the weakest industrial-output expansion since the global financial crisis.

Bloomberg News

No way out for corrupt officials A Chinese senior prosecutor has pledged efforts to chase fugitive corruption suspects as well as to “resolutely cut off the escape route of suspects”

A

t a conference on an international manhunt of duty-related crime suspects on Saturday, Qiu Xueqiang, deputy procurator-general of the Supreme People’s Procuratorate (SPP), urged prosecutors to intensify their work to prevent relevant suspects from escaping.

Such efforts include proper risk evaluation of the targets’ fleeing and early warning against such situations, Qiu said.

Prosecutors should enhance the information sharing with other authorities and formulate detailed plans to prevent suspects’ absconding.

Qiu told the prosecutors to target on suspects both in China and abroad and they should take measures to chase the suspects at large and at the same time stop potential fugitives.

The SPP on Friday announced the launch of a half-year campaign targeting fugitive suspects of corruption and other duty-related crimes.

Also on Saturday, Chinese police announced that it has seized 102 suspects in a separate campaign targeting corrupt officials and suspects in economic crimes that have fled abroad.

In a latest move, Chinese police on Saturday afternoon escorted four suspects captured in Thailand to Beijing.

One of the four was suspected of loan fraud and has been at large for 10 years. The other three were suspected of contract frauds with one case involved money up to 67 million yuan (US$10.9 million), the Ministry of Public Security (MPS) said in a statement.

It was also the fourth time Chinese police conducted arrests in Thailand amid the police’s recent manhunt campaign and to date a total of 16 suspects of major economic crimes in the country have been seized and brought back to China.

Meng Qingfeng, director of the economic crime investigation bureau of the MPS said the international pursuit is an important step of China to crack down on graft and to promote the rule of law.

Meng said Chinese police will continue the efforts to deepen international cooperation of law enforcement and diligently practice its duty to fight crimes and protect the people.

Xinhua

12

September 29, 2014

Asia Cambodia’s anti-graft fully working The Cambodia’s Anti-Corruption Unit (ACU) had received 728 corruption-related complaints in the first nine months of this year, down 16 percent from the same period last year, the agency said in a statement yesterday. “From January to September 2014, the ACU had received a total of 728 complaints - 370 of them were made in conditions of anonymity,” said the statement posted on its website. Cambodia is still riddled with bribery and corruption. According to Transparency International’s 2013 Corruption Perceptions Index, the country ranked 160 out of 177 countries.

WB approves loan for Philippine project The World Bank’s Board of Executive Directors approved a US$141 million loan for a climate-friendly transport project in central Philippines. The Washington-based lending agency said the financial package, consisting of US$116 million from World Bank and 25 million from the Clean Technology Fund, will help finance the construction of the 23-km Cebu Bus Rapid Transit (Cebu BRT) project. The Philippine government will provide counterpart financing amounting to US$87.5 million. The project will run from Bulacao to Tambalan in Cebu City and will include transit ways, stations, terminals, a depot and other facilities.

Kingfisher says court halted decision Grounded Indian carrier Kingfisher Airlines Ltd has said a court has halted the execution of a decision by state-run United Bank of India’s that declared the airline and its directors “wilful defaulters”.

The Calcutta High Court will hear the case on November 10 and has sought more information from both sides, Kingfisher said in a statement late on Saturday. United Bank officials could not be reached immediately for comment on Sunday. The airline, founded by liquor baron Vijay Mallya, has not flown in two years for want of cash. It owes more than US$1 billion to a consortium of lenders, mostly state-run.

Philippine coal projects attract few bidders Only nine companies have applied to develop coal sources in the Philippines, much lower compared to previous contracting round, the Department of Energy (DOE) said. The department said that of the nine applications received for the Philippine Energy Contracting Round V (PECR 5) on Friday, one was disqualified after the preliminary examination of documents that the bidders submitted.

Nenito Jariel Jr., division chief of DOE’s Coal and Nuclear Management Division, acknowledged that there was a low turnout of applications for the PECR 5 for coal, attributing it to the current market price of the product.“hostage-taking” by suddenly threatening not to lift tariffs on Japanese auto parts unless Tokyo met U.S. demands on agriculture.

SoftBank in talks to buy The talks were first reported by the Hollywood Reporter, which a buyout would value DreamWorks at US$3.4 billion Kevin Krolicki and Paritosh Bansal

J

apan’s SoftBank Corp is in talks to acquire DreamWorks Animation SKG , the Hollywood studio behind the “Shrek” and “Madagascar” movie hits, a person with knowledge of the situation said.

An acquisition of DreamWorks

by SoftBank would make it part of a cash-rich Japanese communications and media company that, under founder and chief executive Masayoshi Son, has shown a willingness to take big bets on combining disparate businesses.

The Hollywood Reporter said SoftBank had offered US$32 per share for DreamWorks, a substantial premium to the stock’s Friday closing price of US$22.36.

Buying DreamWorks, which is headed by veteran Hollywood producer and film executive Jeffrey Katzenberg, would make SoftBank the second Japanese technology company to buy a Hollywood studio, following Sony Corp, which bought Columbia Pictures in 1989.

SoftBank has recently cashed in on a share of its investment in

DreamWorks Animation headquarters

Chinese e-commerce giant Alibaba and dropped its pursuit of mobile carrier T-Mobile US in the face of opposition from anti-trust regulators in the United States.

Last week, SoftBank booked a US$4.6 billion gain on the share

listing of Alibaba Group in New York. SoftBank retains a 32 percent stake, making it Alibaba’s biggest shareholder.

SoftBank has significant stakes in other large listed entities, including U.S. mobile carrier Sprint, through

Tech sector sizzles in Myanmar Unlike in the West where web design began with a focus on computers and laptops, Myanmar Internet consumers will be primarily using cheap smartphones

M

yanmar web surfers were once paradigms of patience and ingenuity as they dodged and weaved through the former military regime’s communications blocks in decrepit backstreet Internet cafes.

But commuters in Myanmar’s biggest cities can now be seen tapping away on smartphones as an online awakening sweeps the country, fuelled by the loosening of juntaera restrictions and foreign telecoms firms unleashing a flood of affordable SIM cards.

Big brand names like Facebook, Google, Viber and Instagram have rapidly expanded their presence in the country, lured by the growing market -- and web-savvy local entrepreneurs are also seizing the chance to create Internet ventures in Myanmar style.

Internet boom Internet access has already increased exponentially since the country began to throw off the shackles of military rule.

It is important to make money -- we have to buy cartoons, pay our staff.

Advertisements do not make enough money Aung Chit Khin, editor

Just one percent of the population was thought to be online three years ago, as the democratic transition began, but the loosening of web controls and greater access to affordable phone cards has opened the Internet up to millions.

On Saturday Norway’s Telenor

launched SIM cards costing just 1,500 kyat (US$1.5) in Mandalay -- a far cry from the US$3,000 a card could cost under military rule -- ahead of a wider roll-out in Yangon and Naypyidaw.

The move comes after Qatari firm Ooredoo began selling its SIM cards at the same price last month, throwing open the mobile Internet floodgates.

An estimated 25 percent of people are already online and the Myanmar Computer Federation expects around half of the population, over 25 million people, to be surfing the net in the next three years.

Mobile money -- using the credit bought to top-up mobile phones to make payments for other goods and services -- helped by the flood of affordable SIMs is now entering circulation.

It is seen as a vital potential tool for the vast swathes of Myanmar’s largely unbanked and rural population to access anything from loans to retail payments.

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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 editor editor@macaubusinessdaily.com newsroom newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

AFP

13

September 29, 2014

Asia Malaysia could allow duty free palm oil exports

DreamWorks quoted an unidentified source as saying

A further extension in duty free exports would help it reduce stockpiles

which it had pursued a deal for T-Mobile, internet portal Yahoo Japan and online games maker GungHo Online Entertainment.

A SoftBank spokesman said the company had no comment on the reported talks with DreamWorks.

A representative of DreamWorks could not be immediately reached for comment.

Move into content In July, SoftBank hired former Google executive Nikesh Arora to run a newly created unit called SoftBank Internet and Media, reporting directly to Son, in a move that stoked speculation the telecommunications company could be considering a move to acquire content production assets.

SoftBank held the equivalent of more than US$17 billion in cash and equivalents as of the end of June, its most recent reported quarter.

DreamWorks, based in Glendale, California, has seen its share price has drop 37 percent this year after two consecutive quarterly losses, a string

of weak-performing releases such as “Mr. Peabody & Sherman” and investor concern about the production costs of its movies.

In July, DreamWorks said the U.S. Securities and Exchange Commision was investigating a write-down it took at the end of 2013 on the animated flop “Turbo”.

Dreamworks Animation was spun off from DreamWorks Studios in 2004 as a separate listed company.

The earlier Dreamworks studio had been founded in 1994 by Steven Spielberg, David Geffen and Katzenberg, who moved with the spin-off and remains chief executive of the animation company, which also has the franchise hit “Kung Fu Panda” and owns the rights to Felix the Cat. The move by SoftBank comes as Alibaba is also looking to expand its video content offered through a set-top box in China. In July, the company announced a partnership with Lions Gate Entertainment for its titles including “The Hunger Games”.

Reuters

M

alaysia, the world’s secondbiggest palm oil producer, could extend duty free exports until the end of 2014 if prices of the tropical oil remain at current levels, a leading palm oil producer told Reuters in an interview.

Malaysia has allowed duty free exports of crude palm oil for September and October. A further extension in duty free exports would help it reduce stockpiles but also put pressure on rival top producer Indonesia to consider similar measures.

Indonesia has allowed duty free exports for October in response to the Malaysian duty structure.

“If prices remain at the current level, then Malaysia could allow duty free exports in November and December,” Mohd Emir Mavani Abdullah, chief executive officer of the world’s third-largest palm plantation operator Felda Global Ventures Holdings Bhd, told Reuters.

Both Malaysia and neighbour Indonesia set export taxes on a monthly basis. In August, Malaysia’s export duty for crude palm oil was 5

percent, while Indonesia has set its September rate at 9 percent compared with 10.5 percent in August.

Malaysian palm oil futures settled at 2,177 Malaysian ringgit (US$668.40) per tonne on Friday, after hitting a 5-1/2-year low at 1,914 ringgit on September 2.

Palm oil has fallen a quarter since its March peak of 2,916 ringgit. The duty free exports have been helping in bringing down stockpiles in Malaysia, Mohd Emir said.

Indian market Felda Global is planning to enter India, the world’s biggest importer of palm oil, by setting up a port-based refinery with a local partner, said Mohd Emir, who was in Mumbai for a Globoil India conference.

“We are examining a couple of proposals now,” he said.

India’s palm oil imports in the 2014/15 marketing year starting in November are forecast to surge to 9 million tonnes, compared with 2.6 million tonnes in 2005/06.

Reuters

India turns to nuclear as energy crisis deepens India currently has one of the world’s largest reserves of thorium - a nuclear fuel that is safer to use than uranium

I

ndia’s new prime minister is turning to nuclear energy to ease a power crisis made worse by the cancellation of hundreds of coal mining permits, but he faces scepticism both at home and abroad.

Energy-starved India relies on coal to produce two thirds of its electricity, but power blackouts are common and demand is rising quickly as the economy and middle class expand.

On Wednesday, the Supreme Court cancelled over 200 coal-mining permits because the licensing process was deemed illegal, making the need for alternative energy sources yet more pressing.

Prime Minister Narendra Modi has made nuclear a priority as he seeks to fulfil his campaign pledge to kickstart the country’s flagging economy.

But to succeed, he will need to convince a sceptical public that nuclear is safe, and dispel foreign proliferation concerns to secure the imports of uranium and technology that India needs to produce atomic energy.

“Concerns of power disruptions raised post the Supreme Court judgement on the coal issue show how

India wants to learn from China’s success in achieving self-sufficiency in reactor design and adaptation of technology Nuclear fuel cells supply is one of the key problems regarding nuclear power development in India

reliance on single source of energy is unhealthy,” said Amit Bhandari, energy and environment fellow at Gateway House, a Mumbaibased think-tank.

Nearly 400 million Indians still have no access to electricity, according to the World Bank.

India’s 20 nuclear plants currently account for less than two percent of its power capacity, but the government wants to boost this to 25 percent by 2050.

Modi has quickly set about trying to achieve that.

He secured Prime Minister Shinzo Abe’s pledge to speed up discussions on a nuclear agreement during a visit to Japan last month, before signing a deal with Australian Prime Minister Tony Abbott that will pave the way for uranium sales to India.

China’s President Xi Jinping also showed willingness to talk nuclear cooperation with India on a visit last week, although no

specific pact was announced.

The country has yet to master the technology that would allow it to use thorium-based reactors to create power.

Until it does, New Delhi needs to keep importing uranium, since its own reserves of the radioactive element’s ore are modest.

Experts say a rise in the cost of producing electricity due to worsening coal shortages could work in nuclear’s favour as the

Avinash Godbole, Institute for Defence Studies and Analyses

pressure to find alternative new energy sources builds.

“Nuclear energy has an image problem. People start seeing the mushroom cloud from an atomic bomb explosion whenever the word nuclear is mentioned,” said Bhandari of Gateway House.

AFP

14

September 29, 2014

International Chile first S. American state to tax carbon President Michelle Bachelet of Chile enacted new environmental tax legislation making the country the first in South America to tax carbon dioxide (CO2) emissions. Part of a broad tax reform, Chile’s carbon tax will target the power sector, particularly generators operating thermal plants with installed capacity equal or larger than 50 megawatts (MW). These installations will be charged US$5 per tonne of carbon dioxide (CO2) released.

Thermal plants fuelled by biomass and smaller installations will be exempt.

Ghana relies on IMF deal over investors Ghana President John Dramani Mahama said that a deal his country is hashing out with the International Monetary Fund could help it by improving its image with foreign investors. He said his economic team had come up with solutions the West African cocoa, gold and oil producer’s main economic issues: a yawning deficit, rising inflation and a weakening currency.

But he said the plan required the IMF stamp of approval to reassure global markets. He said he hoped the deal for financial assistance would improve credit after ratings agencies cut it over.

Secret Fed-Goldman tapes to be heard An influential U.S. senator wants to hold hearings into “disturbing” issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc., a bank the Fed was tasked with policing.

Elizabeth Warren, a Democrat on the Senate Banking Committee, called for hearings after portions of the recordings from 2011 and 2012 were made public.

Fellow Democrat Sherrod Brown, also a committee member, called for a “full and thorough investigation” into the allegations they raised. The tapes appear to show an unwillingness among some Fed supervisors to both demand specific sensitive information.

Cuba sentences Canadian CEO A Cuban court has sentenced Canadian executive Cy Tokmakjian to 15 years in prison for bribery and other economic charges in a case his company and Western diplomats have called a chilling development for potential foreign investors.

Two of his aides from the Tokmakjian Group received sentences of 12 and 8 years, and Cuba seized about US$100 million worth of the company’s assets, the Ontario-based transportation firm said in a statement. The Tokmakjian Group, which did an estimated US$80 million in business annually with Cuba until it was shuttered in September 2011.

Goldman tightens conflict-of-interest rules Goldman Sachs Group Inc. has tightened rules on investments its bankers can make in individual stocks and bonds, a company spokesman said. Goldman’s decision, announced internally on Friday, also bars bankers from investing in activist or event-driven hedge funds, Andrew Williams, a Goldman Sachs spokesman, told Reuters. The rule will be effective immediately, he said. Separately, U.S. Senator Elizabeth Warren, a Democrat on the banking committee, called for hearings into issues raised by secretly taped conversations between Federal Reserve supervisors and Goldman officials.

Public versus private?

Swiss mull health system shift Going public would be a seismic shift for a country whose health system is often hailed abroad as a model of efficiency, but is a growing source of frustration at home because of soaring costs Jonathan Fowler

S

wiss voters are deciding whether to ditch the country’s all-private health insurance system and create a state-run scheme, with polls indicating that they will reject the plan.

Going public would be a seismic shift for a country whose health system is often hailed abroad as a model of efficiency, but is a growing source of frustration at home because of soaring costs.

“Over the past 20 years in Switzerland, health costs have grown 80 percent and insurance premiums 125 percent,” ophthalmologist Michel Matter told AFP. “This is not possible anymore. It has to change,” said Matter, who heads the Geneva Physicians Association, which backs calls to scrap the current system.

L eft- l ea n i n g p a r ti es h a v e championed the push for a state-held insurance scheme, saying it is the only way to rein in rising premiums and guarantee they are used efficiently and transparently.

A referendum comes after reformers mustered more than the 100,000 signatures required to hold a popular vote, a regular feature of Switzerland’s direct democracy.

Recent polls showed that 54 percent of voters oppose the plan.

In a sign of growing public concern, however, that is far narrower than the 71 percent who rejected similar reforms in a 2007 referendum.

Over the past 20 years in Switzerland, health costs have grown 80 percent and insurance premiums 125 percent Michel Matter, ophthalmologist

The current system requires that every resident in the wealthy nation of eight million hold basic health insurance, but offers freedom of choice among the 61 companies competing for customers.

In a country where the average monthly net salary is 4,950 Swiss francs (4,100 euros, US$5,268), health premiums are around 400 francs per adult per month.

That does not include out-of-pocket spending on treatment such as dental care, not covered by basic insurance.

Premiums vary by insurer, age and region of residence, and clients

can cut them by opting for an annual deductible -- a sum they pay from their own pockets -- of up to 2,500 francs.

Critics say the current system is unfair because basic coverage costs a millionaire no more than it does a low-paid worker.

Studies show that almost one-fifth of those on low incomes have skipped at least one monthly payment in a country where rents and retail prices are among Europe’s highest.

The reformers also allege that insurers have too much political clout, with research showing that 14 percent of lawmakers have links to health firms or the sector’s lobby groups.

But for Switzerland’s cross-party government and its right- and centredominated parliament, the current system has proven its mettle and is debt-free, unlike the health services of France, Italy or Britain.

“We don’t have a deficit in Switzerland. It’s a healthy system.

Of course we can criticise a lack of transparency by some insurers, but state control isn’t going to solve such problems,” said Ivan Slatkine, a senior party official from the rightist Liberal Radicals.

Supporters of the status quo argue that higher premiums are inevitable given an ageing population and costly cutting-edge medical care, and say shifting to a public system would generate few savings.

AFP

EU authority stumbles into trade minefield Consumer and environmental groups and some EU lawmakers have been particularly critical of investor-state dispute settlement provision

T

he European Union’s trade co m m i s s i o n er - d es i g n a te stumbled into a political minefield by suggesting she wanted to exclude a controversial investor protection clause from a planned EU-U.S. trade agreement.

A European Commission source said however that the furore was the result of an error in a leaked draft version of testimony by Sweden’s Cecilia Malmstrom that would be corrected in the final version.

A German member of the European Parliament for the Greens posted on his website the written responses of Malmstrom, put forward to be trade commissioner in Jean-Claude Juncker’s new European Commission, to questions posed by legislators before Malmstrom’s confirmation hearing today.

In her prepared answers, Malmstrom addressed concerns over a dispute settlement provision that could form part of an ambitious EUU.S. free trade agreement that is under negotiation.

Jean Claude Juncker

Consumer and environmental groups and some EU lawmakers have been particularly critical of investorstate dispute settlement (ISDS), a provision allowing foreign companies to bring claims against a country if it breaches a trade treaty.

They say including it in the EU-U.S. trade deal, known as the Transatlantic Trade and Investment Partnership (TTIP), would limit a country’s right to pass laws to protect its citizens or the environment.

In the document posted on EU lawmaker Sven Giegold’s website, Malmstrom quotes Juncker as saying that no limitation of the jurisdiction of courts in EU member states would be accepted in the new transatlantic trade agreement.

Malmstrom’s comment was pounced on by political opponents of the investor protection mechanism.

But a European Commission source, speaking on condition of anonymity, said it was all a mistake and the quotation attributed to Juncker would not appear in the final version of Malmstrom’s written testimony.

The source blamed the mistake on an unidentified official who had inserted words that Juncker had not actually uttered.

Reuters

15

September 29, 2014

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Paying for productivity Laura Tyson

A former chair of the US President’s Council of Economic Advisers, is a professor at the Haas School of Business at the University of California

THE KOREA HERALD South Korea is closely monitoring the won-yen exchange rate that financial authorities say has reached a worrisome range and is encouraging exporters to take some hedging measures, officials said yesterday. “The low-yen trend has entered its third year, but it is showing signs of accelerating recently,” an official staying close to exchange issues said. “Any lopsidedness in exchange rates can negatively impact the local economy. We are watching the situation very closely.” Both the finance minister and the central bank chief have repeated their concerns about the weakening yen.

PHILSTAR The Bangko Sentral ng Pilipinas expects to finalize an overhaul of bank capital requirements within the year to allow the banking sector to experience more robust growth as well as raise systemic stability in the long-term, its top official said. Central Bank governor Amado Tetangco Jr. said local banks will need to increase their minimum capital under a new rule that will be issued by the agency before the end of the year.

Tetangco declined to say by how much the capitalization would be increased.

THE JAPAN NEWS Central Japan Railway Co. is unlikely to start construction of its magnetic levitation Shinkansen line linking Tokyo and Nagoya before the end of this year, President Koei Tsuge said. The firm, better known as JR Tokai, aims to start the maglev Shinkansen service between Shinagawa Station in Tokyo and Nagoya Station in Nagoya in 2027. The fastest train on the 285.6-kilometer-long line will connect the two stations in only 40 minutes. It is “very difficult” to start construction by the end of the year, Tsuge told reporters.

TAIPEI TIMES Bill Gross, the bond market’s most renowned investor, quit Pacific Investment Management Co (PIMCO) for distant rival Janus Capital Group Inc. on Friday, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago. Gross, 70, had been clashing with the firm’s executive committee and had threatened to resign multiple times, a source familiar with the situation said. The committee had planned to accept his latest resignation from the post of chief investment officer on Saturday.

O

ne of the United States’ defining – and disheartening – economic trends over the last 40 years has been real-wage stagnation for most workers. According to a recent US Census report, the median full-time male worker earned US$50,033 in 2013, barely distinguishable from the comparable (inflation-adjusted) figure of US$49,678 in 1973.

Because most households earn the bulk of their income from their labour, the absence of real-wage growth is a major factor behind the stagnation of family incomes. The average family income of the bottom 90% of households has been flat since about 1980. Real family income for the median household in 2013 was 8% below its 2007 level and nearly 9% below its 1999 peak.

Stagnating middle-class wages and family incomes are a major factor behind the US economy’s slow recovery from the 2007-2009 recession, and pose a serious threat to long-term growth and competitiveness.

Household consumption accounts for more than two-thirds of aggregate demand, and consumption growth depends on income growth for the bottom 90%.

The heyday of US economic growth in the two decades after World War II was also a golden era for the middle class. The long boom of the 1990s, when the US enjoyed sustained full employment, was one of few periods in the last 40 years when incomes climbed at every quintile of the income distribution.

Many influential economists are now worried that the US faces anaemic growth and “secular stagnation,” owing to a persistent gap between aggregate demand and full employment.

Stagnant middle-class incomes imply weak aggregate demand, which in turn means slack labour

markets and stagnant wages for most workers. In the absence of aggressive monetary and fiscal policies to support aggregate demand at full-employment levels, the result is a vicious slow-growth cycle.

Two competitiveness gurus, Michael Porter and Jan Rivkin of Harvard Business School, recently warned that stagnant middle-class incomes undermine US companies in several ways. “Businesses cannot thrive for long while their communities languish,” they cautioned. Unless corporations step up to the plate, “American business will suffer from an inadequate workforce, a population of depleted consumers, and large blocs of anti-business voters.”

Porter and Rivkin are not calling on businesses simply to pay their workers more. Instead, they are urging businesses to engage in a “strategic, collaborative” push to improve education and training to raise the skill levels of their workers.

That is a laudable goal. But, as Porter and Rivkin find in their survey of business leaders, companies often discourage investment in skills by their reluctance to hire full-time workers. Nearly half of the respondents indicated that, when possible, they prefer to invest in technology or outsource to third parties and hire part-time workers, none of whom receive much additional training or have a stake in their company’s longterm success.

There is also a disturbing implication in the Porter-Rivkin survey that workers themselves, along with America’s schools, are to blame for wage stagnation: If only workers were not so poor in math and science, so illequipped for the modern world, and so unproductive, they would earn higher incomes.

The reality is different. US productivity has been grow-

Employees who have a direct stake in a company’s profitability are likely to be more motivated and engaged, and turnover is likely to be lower

ing at a respectable pace for two decades. The problem is that productivity gains have not translated into commensurate wage increases for the typical worker or income growth for the typical family.

According to standard economic theory, real wages should track productivity. As Lawrence Mishel of the Economic Policy Institute has documented, this was the case from 1948 until about 1973. Since then, real wages for the typical worker have flat-lined, while productivity has continued to climb.

Mishel calculates that productivity increased 80.4% from 1948 to 2011, while median real wages rose only 39% – almost none of the wage growth occurred during the last four decades.

True, highly skilled workers, especially those with sought-after technology skills and postgraduate degrees, have fared much better. But that prosperity has reached only a small elite.

From 1979 to 2012, the real median wage increased by only 5%. But real wages climbed 154% for the top 1% of wage earners and 39% for the top 5%, while real wages stagnated for the bottom 20th percentile of workers and fell for the bottom tenth. Indeed, inequality in labour compensation has been the largest driver of yawning income inequality, except at the very top of the income distribution, where capital income has been more important.

Meanwhile, corporate profits have soared. The GDP share of after-tax corporate profits is at a record high, whereas labour compensation has plunged to its lowest share since 1950.

Strong productivity growth is an important policy goal. But it is not enough to increase most workers’ wages or most families’ incomes. Reconnecting productivity gains and wage gains requires both policy actions, such as an increase in the minimum wage with a link to productivity growth, and changes in corporate human-resources practices, such as broader reliance on profit-sharing programs.

Such programs have intuitive appeal. Employees who have a direct stake in a company’s profitability are likely to be more motivated and engaged, and turnover is likely to be lower.

This intuition is confirmed by empirical research.

Some 20 years ago, Alan Blinder of Princeton University corralled a number of economists, including me, to examine existing studies on the link between profit-sharing and productivity.

The overwhelming majority of the studies found a strong positive effect. Shared Capitalism at Work, a recent book edited by Douglas Kruse, Richard Freeman, and Joseph Blasi, confirms this conclusion with more recent evidence.

Various forms of profit-sharing – including grants of options and restricted stock, annual profit-based bonuses, and employee stockownership plans – have been growing as a share of labor compensation since the 1960s. But most workers are not covered by such plans, and the biggest beneficiaries have been CEOs and top managers, a significant fraction of whose pay is tied to productivity, as reflected in profits and stock performance. Such incentive pay schemes have driven the outsize increases in compensation for the top 1% of the wage and salary distribution.

America’s long-run living standards and economic competitiveness depend not just on productivity growth, but also on how that growth is shared.

More equitable sharing of profits with America’s workers and their families would do much to address the worrisome stagnation of wages and middle-class incomes in recent decades.

Project Syndicate

16

September 29, 2014

Closing

Hong Kong protesters bring streets to a standstill Beijing said that while it would allow elections for Hong Kong’s leader in 2017, it would insist on vetting the candidates Aaron Tam

Student protestors man the barricades at an overnight mass sit-in in front of HK’s Central government offices, Hong Kong, China, 28 September 2014

T

housands of pro-democracy demonstrators brought parts of central Hong Kong to a standstill yesterday in a dramatic escalation of protests that have gripped the semi-autonomous Chinese city for days.

Police used pepper spray on protesters who had spilled into a major multi-lane highway, after breaking through barricades set up to stop people swelling the crowds camped outside Hong Kong’s government headquarters since Friday.

Dozens of police wearing gas masks, riot shields and helmets were seen rushing towards the scene, an AFP reporter said -but they struggled to control the crowds, who numbered in their tens of thousands in the general area.

Protesters shouted, “Shame! Shame! Shame!” as they tried to shield themselves from the pepper spray with umbrellas and plastic sheets.

Traffic had ground to a halt on busy Connaught Road, with

the police forced to retreat as the protesters rushed towards the crowds outside government headquarters on the other side.

They cheered and embraced each other in the middle of the road, a major city artery usually filled with whizzing taxis and buses.

The extraordinary scenes came at the climax of a week of student-led action against China’s refusal to grant full democracy to the former British colony.

Beijing said that while it would allow elections for Hong Kong’s leader in 2017, it would insist on vetting the candidates.

Students have boycotted classes in the past week, while the increasingly tense protests have also seen them mob the city’s leader and storm into the complex housing government headquarters.

Prominent pro-democracy group Occupy Central threw its weight behind the protests yesterday, saying they were bringing forward a mass

civil disobedience campaign that had been due to start on October 1.

“Occupy Central starts now,” Tai told the crowds outside government headquarters.

The group had sparked months of heated debate in the city of seven million over its plan to bring Hong Kong’s financial district to a standstill with a mass sit-in. Yesterday they appeared to have come close to reaching that goal.

Hong Kong’s leader, Chief Executive Leung Chun-ying, told a press conference his administration was “resolute in opposing the unlawful occupation actions by Occupy Central”, branding its activities illegal as they were designed to paralyse the city.

He said his government would hold more public consultations on the planned political changes -- a move already scheduled before the protests.

Police chief Andy Tsang did not confirm whether his

Rosneft drills the Arctic with Exxon help

Adidas fights to attract top talent to HQ

R

A

ussia, viewed by the Obama administration as hostile to U.S. interests, has discovered what may prove to be a vast pool of oil in one of the world’s most remote places with the help of America’s largest energy company.

Russia’s state-run OAO Rosneft said a well drilled in the Kara Sea region of the Arctic Ocean with Exxon Mobil Corp. struck oil, showing the region has the potential to become one of the world’s most important crude-producing areas.

The announcement was made by Igor Sechin, Rosneft’s chief executive officer, who spent two days sailing on a Russian research ship to the drilling rig where the find was unveiled today.

The well found about 1 billion barrels of oil and similar geology nearby means the surrounding area may hold more than the U.S. part of the Gulf or Mexico, he said.

The discovery sharpens the dispute between Russia and the U.S. over President Vladimir Putin’s actions in Ukraine.

Bloomberg News

We have the right to stay here and to protest. The world needs to know what is happening in Hong Kong. They need to know we want democracy but don’t have it Ryan Chung, student

force would attempt to clear the protesters yesterday night, but told reporters that if such an operation was attempted, officers would use the minimum force necessary.

Traffic on the busy Connaught Road had already been heavily slowed by a man who had climbed onto the outside of a bridge and threatened to jump unless protesters were allowed through police lines. Firefighters were forced to place a large inflatable mat on the road below.

He surrendered shortly after the protesters broke through.

Ryan Chung, a 19-year old student watching events unfold, said: “We have the right to stay here and to protest.

The world needs to know what is happening in Hong Kong.

They need to know we want democracy but don’t have it.”

The crowds of protesters camped outside the city’s government headquarters had swelled on Saturday night to more than 10,000, with scuffles with police overnight as lines of officers pushed back surges of people with riot shields.

Political analyst Sonny Lo said the protests marked a turning point in the city’s long campaign for democracy.

“From now on there will be more confrontation, possibly violent ones between citizens and police,” he told AFP. But he added that with Beijing maintaining a hardline stance, it was difficult to see a way out of the standoff.

“The government needs to handle the students very carefully -- any mishandling will spark larger acts of civil disobedience,” he said.

Former colonial power Britain handed Hong Kong back to China in 1997 under a “one country, two systems” deal that guarantees liberties not seen on the mainland, including freedom of speech and the right to protest.

But tensions have been growing in the southern Chinese city over fears that these freedoms are being eroded, as well as perceived political interference from Beijing.

AFP

Asian oil temptation for Total

didas needs world-class designers, brand experts and technical whizzkids to improve its image against U.S. rival Nike , but persuading them to move to its headquarters in rural Germany is difficult.

Adidas has been losing market share to the world’s biggest sportswear brand Nike, which is seen as far cooler in consumer surveys and is based near the hip U.S. city of Portland, Oregon.

Adidas acknowledges it is hard to recruit at its headquarters near the Bavarian town of Herzogenaurach, particularly for design, marketing and digital roles, and admits it missed trends in the U.S. market, where Under Armour has just overtaken it as No. 2 behind Nike. Nike’s better than expected earnings on September 25 underscored its ascendancy. Adidas is responding by locating some key design roles in the United States at the same time as investing heavily in new facilities at its home base near the historic Bavarian town where Adidas was founded by shoe maker Adi Dassler in 1949.

Reuters

F

rench firm Total is working behind the scenes to take the lead on an ambitious pipeline connecting Central and South Asia, sources close to the project say, pioneering a novel gas exchange mechanism to overcome legal hurdles.

It is one of the most ambitious energy projects in the world, connecting the giant gas fields of Turkmenistan to Pakistan and India, two emerging energy-hungry markets, while crossing the rocky valleys of southern Afghanistan which are partly controlled by Taliban insurgents.

Following the withdrawal of Soviet troops from Afghanistan in the late 1980s, US group Unocal and Argentina’s Bridas were chomping at the bit to build major gas.

Over the past few years, rivalry has given way to the idea of regional cooperation for an 1,800 kilometre pipeline connecting TurkmenistanAfghanistan-Pakistan-India, or more simply TAPI. Last year, sources close to the project had indicated US giants ExxonMobil and Chevron were interested in leading the US$7.5 billion project.

AFP