Macau Business Daily, Oct 6, 2014

MOP 6.00 Closing editor: Luis Gonçalves Publisher: Paulo A. Azevedo Number 638 Monday October 6, 2014 Year III

Zhuhai property attracts Macau buyers Z

huhai eased property purchase restrictions last week. And Macau residents were not slow to respond. Macau University Golden Week became a golden opportunity for Zhuhai real estate agents. There was a fourfold increase enters world’s TOP300 PAGE 5 in interest by Macau buyers. Bigger, better equipped, and cheaper was the clarion call. Less restrictions and anticipated 24-hour border crossing is the icing on the cake. But don’t count on a corresponding drop in Macau prices, local realtors say

www.macaubusinessdaily.com

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Staff play sick card

Gaming analysts not ready to be bullish

Almost 1,000 gaming workers called in sick.

SJM, MGM and Galaxy staff took collective leave during Golden Week. They are dissatisfied with their remuneration and working conditions. This afternoon, SJM employees are slated to return to the streets

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OCBC Wing Hang opens in Macau PAGE 8

VIP recovery in December, says Adelson PAGE 8

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Running out of steam China’s services sector has reduced growth speed.

This according to the official Purchasing Managers’ Index (PMI). Recent surveys have warned of slowing momentum. Now official results confirm it

HSI - Movers October 3

Hong Kong protests tarnish Golden Week

Name

Macau welcomed more visitors in Golden Week. Some 14 percent more than a year ago, official data reveals. But a local tourism trade chamber predicts a likely drop in Mainland visitors. Hong Kong’s ‘Occupy Central’ movement is the likely culprit. More than 620,000 people visited Macau during the 4-day holiday

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%Day

China Overseas Land

6.11

China Resources Lan

5.00

China Mobile Ltd

3.45

AIA Group Ltd

2.62

MTR Corp Ltd

2.30

HSBC Holdings PLC

-1.13

China Merchants Hol

-1.25

Sun Hung Kai Propert

-1.27

CNOOC Ltd

-1.35

China Petroleum & Ch

-1.62

Source: Bloomberg

Interview

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Government support draining Macau’s art scene competitiveness

Brought to you by

Sérgio Almeida is co-founder and business director of Red Studio. He and his partner have tested the waters. And they think there’s an artistic pulse here.

In an interview with Business Daily, he suggests the casino industry give local artists a chance. Red Studio sees a gap in the cultural landscape, he says, as Macau lacks an art institute. It just needs to unlock the potential

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October 6, 2014

Macau Dengue strikes Guangdong; Macau reinforces prevention Macau authorities have stepped up efforts to publicise the dengue fever prevention message to visitors in addition to spraying pesticide near the Border Gate in the wake of a serious outbreak of the mosquito-borne disease in Guangdong Province, doctor Leong Iek Hou from the Macau Centre for Disease Control and Prevention told media on Friday. This year, the city has so far recorded two dengue fever cases, while neighbouring Zhuhai has reported over 120 dengue cases, Ms. Leong noted. On October 1, the first day of China’s National Day week-long holiday, the Health Bureau announced that the city is under continuous threat of the spread of dengue virus in the greater Guangdong Province, whose health authorities have announced over 18,860 cases so far, including four deaths.

Zhuhai eases property purchasing restrictions Many Macau residents went property viewing in Zhuhai during the National Day holidays as China has loosened purchasing restrictions in a bid to revive its cooling property market. Some real estate agencies, however, believe that the easing will not have much impact on the Macau market.

Joanne Kuai

joannekuai@macaubusinessdaily.com

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he National Day Golden Week holidays became busy working days for real estate agents in Zhuhai, as many Macau residents took the opportunity to view property in the city across the border. It eased its property purchasing restrictions just before the holiday started.

In front of the sales centres of some real estate agencies about 10 minutes drive away from the Gongbei Border Check Point several cars displaying Macau-Mainland dual licence plates were parked.

Macau resident Mrs. Ho says her family is considering purchasing a property in Zhuhai as an apartment of similar quality is three to five times more expensive in the SAR. “Living here (in Zhuhai) and travelling to the Macau Peninsula to work is not much different to living in Taipa or Coloane and crossing the bridge every day. And with the food, household appliances and other utilities much cheaper here it would be a good option financially overall,” she said.

Zhuhai housing authorities eased property purchasing restrictions in the city in a regulation published on Friday prior to Golden Week.

Properties occupying an area of 144 square metres in downtown Zhuhai are open to non-local residents, according to the new rule.

Previously, proof of social security contribution and tax payments were needed.

The restriction was imposed in November 2011 in Zhuhai. So far, over 40 cities nationwide have loosened property purchasing restrictions.

Only five cities - including Beijing, Shanghai, Guangzhou and Shenzhen - are still enforcing the rules.

Some real estate agents in Zhuhai said they usually have two batches of clients visit a property in a day; during the Golden Week holidays, there were more than 7 to 8 groups a day, primarily from Macau.

“There used to be a lot of Macau people buying houses to invest in, in Zhuhai. But nowadays, with the upcoming completion of the Hong Kong-Zhuhai-Macau Bridge in 2016, the (Zhuhai) Light Railway Transit being built, and hopes that the Zhuhai-Macau border will open 24 hours, more Macau buyers are considering purchasing a property for their own use and living here in Zhuhai.” said Chen Yihui, sales manager at Shihua Real Estate Co Ltd, Zhuhai Branch.

“A three-bedroom apartment in Macau can easily be priced at over 10 million yuan. Here, the mediumluxury ones are selling for only 20,000 yuan per square metre,” Ms. Chen said. “Even the rent is much cheaper.

But it’s been fuelled because of you Macau people. It has increased almost 10 percent since March this year.

But three bedrooms for 4,000 yuan is still cheap.”

In addition, China’s central bank has made it easier for people to qualify for smaller down payments that were previously available only to first-home buyers in a document it published on 30 September, as the government seeks to boost the slumping property market.

Regardless, Director of Centaline (Macau) Property Agency Ltd Jacky Shek Po Tak told Business Daily that he believes that these policies on the other side of the border would not have a big impact on the Macau real estate market.

“Ever since the ‘buy a property, get a cross-border licence plate’ promotion finished, Macau people have lost their appetite to buy a house in Zhuhai,” Mr. Shek remarked. “It’s not a mainstream thing to invest in Zhuhai. Plus, the policies are made for mainlanders who buy for self-use.

When they (Zhuhai authorities) first launched the property purchasing restrictions, there was no obvious

influence on Macau’s real estate market. Now they are lifting the ban, I don’t see why it will make a difference.”

The estate agent is also expecting local average home prices to cool. The latest data from the Financial Services Bureau reveals that the average home

price in the January-August period this year reached 100,896 patacas per square metre, a 23 percent increase compared to 81,791 patacas per square metre year-on-year; home transactions in the period totalled 5,443 cases, down from the 8,274 of a year earlier.

Cheong Kuoc Vá: Macau ready for after midnight border crossing at Ilha Verde Secretary for Security Cheong Kuoc Vá said that the Macau authorities have prepared for the early-morning operation of the border and are waiting for their Mainland counterparts to get ready.

The General Administration of Customs has authorised that non-resident workers from Mainland China using the Ilha Verde Cross-border Industrial Zone may travel between the SAR and Zhuhai after midnight.The port is expected to be open from midnight until 7:00am.

Cheong Kuoc Vá has had 10 additional E-Channels installed. Mr. Cheong admits that there is currently a shortage in manpower but expects the problem to be solved by the beginning of December, as 180 new officers will graduate.

In addition, the Transport Bureau says that they plan to add a night bus route for non-resident workers using the Ilha Verde border after midnight. The route is expected to connect the Cross-border Industrial Zone and Fai Chi Kei for passengers wishing to transfer to other night bus routes. Macau New Era general manager Daniel Fang Li Qun told Business Daily that they have been discussing the issue with the authorities for more than a month and will make relevant arrangements as soon as the policy is in position.

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October 6, 2014

Macau

Golden Week visitors up 14 pct but less mainlanders A local tourism trade chamber has voiced concern about a possible drop in mainland visitor figures, which have been partially affected by neighbouring Hong Kong’s ‘Occupy Central’ movement. More than 620,000 people visited Macau during the 4-day Golden Week Stephanie Lai

sw.lai@macaubusinessdaily.com

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acau saw a rise in visitor arrivals of about 14 percent to over 620,000 people for the National Day Golden Week holiday from October 1 to October 4 but alocal tourism trade chamber voiced concern about the “slight drop” in overall number of mainland Chinese visitors as their travel plans have been disrupted by the Occupy Central pro-democracy movement in Hong Kong.

For the first four days of the National Day vacation, a traditional peak season for outbound mainlander tourists, Macau welcomed 620,305 visitors to the city, a 14.3 percent increase

compared to the same period last year, latest data from Public Security Police shows. The arrival figure is, however, inclusive of other non-residents, namely outside labourers and students working and studying in the city.

Of the over 620,000 visitor arrivals, 501,930 were registered as mainland visitor arrivals, up 11.8 percent on a year ago, police figures show.

Mr. Wong Fai, vicepresident of the Travel Industry Council of Macau, remarked to Business Daily that the chamber would expect a “slight drop” in overall number of mainland

visitors travelling here for the whole Golden Week, a situation exacerbated by the cancellation of package tours by mainland Chinese travel agencies that tie up Hong Kong and Macau in a single trip amid concerns about the Occupy Central movement in Hong Kong.

“When compared to the National Day Golden Week last year, the very time when mainland authorities imposed the new tour rule, we expect the overall mainland visitor arrivals this year to maintain at more or less the same level,” Mr. Wong told us. “But when compared to the same period in 2012, we may see a 10-20

percent decrease in mainland p a ck a g e t o u r v i s i t o r s , which will also eventually contribute to a slight drop in the overall mainland visitor arrival figure for Golden Week this year.”

In 2013, some 897,000 people visited Macau during the National Day Golden Week, between October 1 and 7, which has been a rise of 5.7 percent when compared to the same period in 2012. The new tour rule Mr. Wong mentioned refers to a tourism law that came into force on October 1 last year, an effort by the Chinese administration to ban controversial practices including so-called ‘zero-fare’

group tours where agencies lured visitors by advertising cheap tours but forced them to shop during trips.

Macau’s Public Security Police estimated in the past week that the city’s inbound visitor arrivals might increase year-on-year by 5 percent to 7 percent for the National Day Golden Week.

The Occupy Central movement that flared in the past week has seen thousands of protesters blocking the key financial and retail districts in Admiralty, Causeway Bay, Tsim Sha Tsui and Mongkok in Hong Kong, an unprecedented action initiated by protesters demanding full democratic elections by 2017.

“Despite the Occupy Central movement, individual [mainland] visitors that travel for business purpose are not really impacted,” Mr. Wong Fai added. “But to a certain extent some individual mainland visitors’ travel plans were also affected by the movement as they also like to go shopping and sightseeing in Hong Kong and Macau [sequentially].”

“If Occupy Central persists, we’d have to convene with the travel agencies again to see if we have to shift our focus to develop and promote other tour packages for mainland tourists, like a trip to Macau only or other options,” said Mr. Wong.

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October 6, 2014

Macau

Industrial action hits SJM, MGM and Galaxy during Golden Week The wave of movements against gaming operators continues. Almost 1,000 gaming workers from the three gaming corporations took collective sick leave to express their dissatisfaction with their remuneration and working conditions.

Meanwhile, SJM workers are staging another assembly this afternoon Kam Leong

kamleong@macaubusinessdaily.com

S

ome 800 gaming workers participated in industrial action last Friday and Saturday to complain about their benefits and wages not being improved by their employers. These workers are working for SJM Holdings Ltd., MGM China Holdings Ltd. and Galaxy Entertainment Group.

Following a series of protests and movements demanding a lift in their wages yet not met, these workers primarily dealers and supervisors decided to walk off the job by taking collective sick leave and working to rule during National Day Golden Week, according to Cloee Chao, secretary general of the gaming labour union Forefront of Macau Gaming.

Ms. Chao told Business Daily that half of the workers are from SJM’s Grand Lisboa, while some 200 are from MGM, with the remaining from the StarWorld Hotel of the Galaxy Group.

Although the industrial action targeted three different gaming corporations, the secretary of the labour union said it was organised spontaneously by the workers. She also said that the number of participants from SJM increased by some 100 on the second day of the action while that from MGM decreased.

Meanwhile, the Chief Executive Officer and Executive Director of MGM China, Grant Bowie, told Business Daily yesterday in a phone interview that the operation of the corporation was not affected by the industrial action. “However, we will continue talking to our team,” he said, claiming that the company is

THERE ARE THINGS WE DON’T DO BUT WE DO • Advertising • Branding & marketing consulting • Marketing strategy • Creativity • Design

listening to the comments and will make an appropriate decision for every team.

In fact, MGM China said on Friday in a statement that ‘The vast majority of our team members have reported to work and are delivering their high level of service as usual,’ Reuters reported.

Business Daily had also tried to reach SJM for comment on the issue but there was no reply from the corporation by the time this story went to press.

The wave of protests shows no sign of letting up soon. Some black-shirted SJM workers will gather in the square in front of Macau Tower this afternoon at half past two to complain about their unfulfilled demands to the management of SJM, who are attending the company’s celebration cocktail of the People’s Republic of China’s 65th anniversary.

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

Those people and their actions are our inspiration.

•••

info@goldfishmacau.com +853 2833 1258

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October 6, 2014

Macau

Too early to tell While the full smoking ban in casinos begins today, analysts warn it’s still too early to get bullish Sara Farr

sarafarr@macaubusinessdaily.com

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ith the full smoking ban taking effect today, Morgan Stanley analysts reiterate how this “negative catalyst” could impact stocks by making them drop lower before they go higher again.

There are three such scenarios that have led the American bank to lower estimates for the remainder of the year and into the first quarter of 2015. These are: the impact of the smoking ban on the mass market, low junket liquidity in the VIP segment, and the hiring of labour for Cotai projects underway. As a result, analysts at Morgan Stanley have lowered their EBIDTA estimates by between 6 percent and 8 percent.

If analysts’ estimates prove correct, mass market growth could be in only the single digits due to the smoking ban

said in their latest note to clients. Assuming mass growth ranges between 0 percent and -5 percent, and VIP between -20 percent and -30 percent until the second quarter of next year, and if EBITDA multiples fall to 10 times, ‘the stocks could decline over 20 percent from current levels,’ analysts caution. and supply shortage as only 12 casinos have set up smokedesignated rooms. As at last Friday, the Health Bureau had received applications from a total of 28 casinos requesting permission to build a total of 62 smoking rooms. However, relevant paperwork is missing for the majority of these to start the relevant works, and only one-third of the casinos have received the go-ahead to set up smoke-designated rooms.

In addition, a junket liquidity crunch could see a 20 percent decline in earnings before interest, taxes, depreciation and amortization (EBITDA), and a further 15 percent decline in the first quarter of 2015 mainly due to labour costs.

‘Based on our current assumptions, we expect EBIDTA growth, and thus stock prices to bottom around March/April 2015,’ analysts

University of Macau ranked among world’s best 300 The Macau Institution, founded in 1981 and recently relocated to Hengqin Island, has, for the first time, made it into the group of the 300 best universities in the world João Santos Filipe

jsfilipe@macaubusinessdaily.com

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he University of Macau ranked between 276 and 300 positions in the annual Times Higher Education World University Rankings 2014-2015, released last Tuesday. This is the first time that the institution has made it into the rankings of the Times Higher Education (THE) magazine.

‘In recent years, the University of Macau has made a great effort to improve teaching and research, following international standards and making significant social and global outreach’, the public institution said. ‘In particular, it carried out a comprehensive reform of its undergraduate curriculum, established the Honours College, incorporated international perspective into its curricula, implementing a unique ‘4-in-1’ model of education and established Asia’s largest and indepth system of residential colleges’, it added.

The list was topped by the NorthAmerican University California Institute of Technology. The first Chinese university on the list is the University of Hong, Kong, achieving

43rd position. In relation to Mainland China, the University of Peking was best positioned, in 48th place.

As for the Special Administrative Region of Macau, the University of Macau – which has relocated to the island of Hengqin – was the only institution in the territory to make it onto the list.

Although the overall score of the University of Macau was not revealed, THE didw reveal how much the institution achieved in the five considered indicators that are assessed on a scale ranging from 0 to 100.

Teaching was the worst indicator for the UM. The institution was awarded 17.1 points. On the other hand, in relation to International Look it achieved 73.3 points. The University of Macau was also awarded 68.1 points for Citations, 33.6 for Industry income and 20.3 for Research.

“While UM welcomes the good results of THE ranking, it would nevertheless like to stress that the university is not working for a place in the ranking”, the institution stressed.

Further concerns Meanwhile, Macau gaming stocks were up by an average of 5 percent at the end of September, especially after the announcement of the end of a particular anti-corruption programme

by Beijing. The increase in gaming stocks, according to analysts, is primarily due to the fact that ‘some believed this announcement removed a headwind for Macau gaming,’

Wells Fargo Securities, LLC said in a note to clients.

However, ‘the announcement referred to a very specific anti­corruption programme and not the broader anti­corruption drive that has been a cause of the slowdown in Asia luxury sales and Macau gaming,’ the brokerage firm said, adding that there is still ‘high uncertainty’ given the smoking ban that comes into effect today and Chinese president Xi Jinping’s visit to Macau. ‘The broader and more high profile anti­corruption campaign is one of the often referenced key drivers of the slowdown in Macau... [and] is separately run by a task force that Premier Xi Jinping himself oversees and began 22 months ago.’

The American investment bank also said that an increase in anti-government scrutiny is possible. ‘We may actually see an increase in anti­corruption scrutiny. Despite increasing anti­corruption related news flow (including an investigation into a former Politburo member), many of the task forces set up to investigate potential corruption have yet to release their findings,’ the latest note to clients reads. ‘We believe the anti­corruption drive is part of a longer­term process to strengthen the Chinese economy, rather than a short­term mechanism,’ the note adds.

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October 6, 2014

Macau Brought to you by

HOSPITALITY Shifting costs The annual survey on travel agencies confirms and consolidates some trends that have been developing over recent years.

The number of travel agencies keeps rising.

Last year saw a net increase of 14 agencies, roughly equivalent to a growth of 7 percent, relative to the previous year. Staff increased a tad slower, displaying a growth rate just below 5.9 percent. As a result, the average size of the establishment hardly moved. For a third year in a row, that figure is hovering around 18.5 workers per establishment.

The structure of the cost, however, is going through noticeable changes, emphasising features that were already visible before.

The total share of ‘staff costs’ went up by 1.3 percentage points and represented in 2013 slightly over 9 percent of the total revenues, when compared to a similar figure in 2010.

The share of ‘other operating expenses’, excluding the acquisition of goods and services, went up 4.4 percent in the same period. Together, they amounted to almost one-fifth of the revenues last year.

These changes are the outcome of significant rise in staff and operating expenses since 2010. In that period, staff costs went up by almost 10.3 percent, translating into a rise of 21 percent in the cost of the average worker. Other operating expenses just boomed, mainly pressured by renting costs.

Although last year they rose by just 11.8 percent, the total rise in the period between 2010 and 2013 amounted to 143 percent.

Between 2010 and 2011 alone those costs went up by 76 percent. Compared with these, the changes in the cost of acquisition of goods and services seem trivial. They rose by 5.4 percent last year, and 23.5 percent since 2010, quite in line with inflation.

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number of travel agencies, end of 2013

Macau’s performing arts industry hasn’t gone forward because of lack of competitiveness Even though the market is still very small, Red Studio is trying to provide training for locals in the performing arts field. In an interview with Business Daily, co-founder and business director Sérgio Almeida says he and his partner, Sally Benson, expect to fill a gap, despite the small size of the market, as there is currently no arts institute in the territory. Mr. Almeida believes that if local companies, especially hotel-casinos, start to hire locals for a few of their creative projects, namely in the advertising business, then the industry would grow much faster Luciana Leitão leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

How did this idea to create Red Studio in Macau arise?

It was my partner, Sally. She’s in the industry, she’s an actress, did modelling, acting and a lot in the industry. When we decided to leave Beijing [after living there for a few years] it was definitely to open something of our own and, given my experience in the administrative management area and hers in the creative and performance area, we decided to combine both and open Red Studio.

Red Studio has only been around for nine months. How’s it going?

Until now, we’ve done a lot of testing. We’ve tested out the market, we just throw out a couple of programmes every month to see how the market reacts but after six to seven months we’ve completed the testing phase.

In terms of growth, it’s very volatile because it is testing. We’re happy to say we’ve always made a profit. Obviously, that profit wasn’t always sustainable in terms of personal life — to live here in Macau — but it was always a profit, nevertheless. We’ve finished the testing phase and we’ve created a proper plan where we set objectives. Everything suggests we’re going to meet them and probably going to exceed them.

Was there a gap for a performing arts training centre in the territory?

We thought it was missing but it could have been missing for lots of reasons and one of them was simply because people didn’t want it. That’s why we did the testing phase, to see if there was an interest, which I think there is. Nevertheless, the market is still small, and many of these programmes cannot be done multiple times a year.

Even with all the casinos we have here [the James Bond movie] Casino Royale was still shot in Shanghai, and there are no casinos there

Are people showing interest in attending your programmes just for fun or because they’re interested in pursuing it as a career?

Our programmes vary. Some people use it just for fun and to learn some skills that you might be able to apply straight away after finishing the workshop. For others, it’s just the beginning.

For instance, our cake decoration workshop; you go there and you learn a skill, and next time you [bake] a cake, you know how to decorate the cake, you won’t follow cake decoration. As for the modelling, that’s just the beginning — you’re creating your portfolio, in case you want to work in the future, you have the basis you need to [enter] that industry. Many people that attend our modelling workshop do want to proceed.

However, another 50 percent want to do it just for the fun.

The programmes Other than the cake decoration and the modelling programmes, what other workshops do you run?

We have a bunch. We have everything related to the creative and performing arts, it involves a lot. We’re focusing more on drama for kids because that’s what my partner Sally teaches and it’s her main area of expertise; we’re also doing modelling, public speaking, which we haven’t been able to implement properly yet. We do make-up workshops and we’re very successful but there’s not enough market to do those twice a year, maybe just once a year.

And then we move on to birthday parties, and so on.

What kind of goals do you have for the future?

We definitely intend to create new programmes. We intend to bring a proper acting programme to Macau for teenagers.

Obviously, this requires more than just a weekly workshop but we’d like to develop into that industry — modelling, acting.

Also, working for the last few years in Beijing in acting, my partner developed a lot of contacts in the film production industry and we plan to use those contacts to bring the talent here and produce something.

Is there a market for cinema production in Macau?

There are obviously a lot of funds from the government therefore they want to expand. With film production, there are two sides to it: if you’re making something for Macau or something not to be shown in Macau. So, film production is not necessarily for Macau. Our production wouldn’t be a workshop, we would have to market and advertise it. It would just be another short film, we would just produce it.

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October 6, 2014

Macau If cinema is your ultimate goal, why haven’t you chosen to settle in the neighbouring region or in Mainland China, where there’s actually a film industry?

We’re from Macau. Secondly, Hong Kong and China are so well developed; that for us, as a starting point, would probably be very difficult. Of course, we want to bring these things to Macau and we would love to combine our home with these things. We don’t want to leave our own home to do these things. And let’s not forget we were doing that in Beijing and it was enough.

Are casino operators potential partners for Red Studio?

We would love [that to be] so but until something more concrete happens we cannot really say anything. Even with all the casinos we have here [the James Bond movie] Casino Royale was still shot in Shanghai, and there are no casinos there. I don’t know how Macau is going to be able to match the competition from the Mainland and Hong Kong but we hope so.

What’s missing in Macau in terms of a cinema industry?

There are no studios. Around the world, you have studios that fund and produce films that actors can go to audition. As an actor, the first thing you look for in a city are agents and studios — they don’t exist here; there’s not even a proper agency. It’s just too small.

Macau’s been such a small, densely populated city for so long and now it’s expanding, and with time these things will arrive here because Macau is one of the most interesting skylines in the world. And to have that in cinema would be just incredible.

Some of the producers we’ve dealt with said that Macau can have a very good combination of the new modern developed city, yet at the same time has very traditional and old places. For a movie, we can have these two contrasts, without having to struggle a lot.

Macau businesses and casinos need to trust local businesses to produce their films, photo shoots and advertising. The sooner local businesses start to support local businesses we will have a stronger industry because all of a sudden the casinos will come to a local company to pass their photo shoots, do their photo shoots and shoot their shots.

The commercials and ads need to be done here, by companies here.

Two days after we arrived, we were called for a paid government commercial. Many of those people came from Hong Kong and there’s absolutely no need for that, it’s over-priced compared with the talent in Macau and, since the job was so basic, I’m sure a lot of people could do it here. Macau [should] hire Macau people to do jobs here; there’s no need to bring them from Hong Kong. Then we can talk about movies and short movies.

A new career Do people attending your programme have a professional objective to follow up on such training programmes?

For most of them, that’s the very first training, all of them share this passion, some of them have plans to leave Macau. It happens a lot, actually — the girls and even the guys in our workshop have a day on leave, so it’s hard to commit to anything. And for those that do want to follow it up here, every time we have jobs or we hear about something we suggest them.

We are bringing a few of them to Pinktober, in Hard Rock, and another one to a new clothing line that is going to be launched in Macau. All these for now are free and not paid jobs but they gain more experience and exposure.

We’re talking about teenagers?

Most of them, yes, for the modelling workshop.

Do you believe that the lack of a creative industry has to do with the education system in Macau?

The government is doing a lot about it but I don’t know if it’s the best they’re doing. Making it very accessible to people loses that competitive factor so there are no companies fighting about it and therefore there are no new programmes; there’s no marketing because the government is going to pay anyway. I don’t know if this is really helping the market or actually making it worse but there is an effort. Some of the problems we see are simply getting the funds that have to be spent somehow. Because of this lack of competitiveness, the industry hasn’t been able to make that step forward.

One of the issues is Macau is considered a developed city in the

The commercials and advertising need to be done here, by companies here

the hope that some of these turn out to work professionally in the industry. Of course, these are very small programmes and guarantee nothing. However, bigger programmes, one year, would guarantee a better follow-up in the industry and that’s our target.

We’d love to have people finishing our one-year courses and then have them work in the industry; probably not in Macau but to be able to send them somewhere else in the world, that would be the goal.

world and yet we don’t have a performing arts institute; you can’t get an acting degree in Macau.

The fact that there isn’t actually a university where you can go and be an actor or a director hurts the growth of the industry as well.

We’re trying to fill that void with workshops.

Have you already talked to casinos about potential partnerships?

Actually we have but these casinos have a lot of their own staff and they have everything they need in-house. The commercials they do are mostly for the Chinese market but most of these videos are so few, they keep on playing them over and over again.

Still, Red Studio has only been organising short programmes.

Is your goal in the future to set up some kind of professional certification?

Yes, that’s exactly it. Now, what we’re doing is these small programmes — we still follow up on them and guide them in

City of Dreams is preparing Macau Studio City. Should that be a boost to the film industry?

Definitely. Once they open the studio, they will probably want to invest in it; they don’t simply want to film. It could also target different markets. We might even find a way to work together.

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October 6, 2014

Macau

Adelson predicts high-roller rebound

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he VIP gambling business in Macau could see a recovery in two months, following a Chinese government crackdown on corruption that has sapped demand, Las Vegas Sands Corp. Chairman and Chief Executive Officer Sheldon Adelson recently said.

Chinese players have been “staying below the radar” by refraining from going to Macau and spending money in ostentatious ways, Adelson said yesterday at the Global Gaming Expo, the industry’s annual trade show in Las Vegas. “They don’t want to send the message they may be corrupt.”

Sands and some of its biggest U.S.-based competitors have relied on Asia for growth as U.S. casino hubs, including Las Vegas, slumped in the aftermath of the 2008 credit crisis.

Macau, the world’s largest gambling market, has shown rapid growth that stalled in recent months. Shares of the Sands China Ltd. unit, which operates properties in Macau, have dropped by about onethird since early July.

“Everything is cyclical,” said Adelson, 81. “It’s like gambling. Sometimes you’re up, sometimes you’re down.”

China’s campaign against lavish spending by party officials has accomplished its objectives, the governmentrun Xinhua news agency reported September 30, citing

a statement after a meeting of the Political Bureau of the Communist Party of China Central Committee. The push against misbehaviour may be ending, Xinhua said.

The Xinhua report was referring to a specific programme rather than the broader anti-corruption drive that has slowed luxury sales in Asia, Cameron McKnight, an analyst at Wells Fargo & Co., wrote in a note to clients.

A pick-up in anti- corruption scrutiny is possible, McKnight said.

Adelson also said he would be interested in building a casino at the Meadowlands racetrack in New Jersey if proposals to expand casino gambling beyond Atlantic City were approved by state legislators.

Sands, the world’s largest casino company, rose 2.4 percent to $62.68 at 9:59 a.m. in New York. The shares had dropped 22 percent this year as at yesterday.

Sands China declined 2.4 percent to HK$40.50 on September 30. Financial markets in Hong Kong were closed today and yesterday for a national holiday.

Industry-wide revenue in Macau may have declined as much as 13 percent in September, Teledifusao de Macau reported September 30, citing the city’s Secretary for Economy and Finance, Francis Tam. Bloomberg

OCBC Wing Hang opens in Macau, HK The HK$38.4-billion deal brings the Singapore-based bank a total of 80 branches across Macau and Hong Kong

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s many as 13 Macau branches and 57 Hong Kong and mainland China branches of Banco Weng Hang, SA now operate under the flag of OCBC Wing Hang, following a HK$38.4 billion (US$5billion) deal taking over parent firm Wing Hang Bank Ltd by Overseas Chinese Banking Corp (OCBC).

Since China’s national day on October 1, the bank now has 80 branches across Macau and Hong Kong, the company statement said.

“We will help OCBC Wing Hang business customers seize opportunities in South East Asia and beyond to take their businesses further,” Na Wu Beng, CEO of OCBC Wing Hang, said, adding that “very soon, OCBC Wing Hang customers will be able to do even more with the enlarged

OCBC group, leveraging the group’s extensive regional and international network, industry-specific expertise and local insight.”

Currently, the Singapore-based bank is waiting to be listed on the Hong Kong Stock Exchange market following the delisting of Wing Hang and OCBC banks, respectively. The process is expected to be complete by mid-month.

OCBC paid HK$125 a share in cash in exchange for all of Wing Hang’s shares, according to a filing with the Hong Kong Stock Exchange on April 1.

According to Wing Hang’s 2013 annual report, net profits of the Macau subsidiary Banco Weng Hang surged 31.2 percent year-on-year to MOP356.3 million last year.

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October 6, 2014

Hong Kong

Deadline looms for Hong Kong protesters

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deadline for pro-democracy demonstrators to clear Hong Kong’s barricaded streets loomed Sunday, as its Beijing-backed leader claimed the disorder now risked “serious consequences” for public safety and Chinese state media said it had ruined the city’s image.

Embattled Chief Executive Leung Chun-ying said the government was determined to “take all necessary actions to restore social order” and allow residents to “return to their normal work and life”. In particular, he pointed to the need to allow government staff to resume work

by Monday morning.

Only a few hundred were on the streets early Sunday afternoon in the downtown Admiralty district near government headquarters. Hours earlier, tens of thousands had turned out there in the biggest gathering yet of the weeklong protest.

But it remained to be seen whether protesters had heeded Leung’s call or merely headed home for some rest before taking to the streets again, which has been the pattern all week.

Those there said they had no intention of leaving.

“I don’t know the police’s strategy, but I’ve told my friends and students that we have to be here tonight,” said Petula Ho, an associate professor at Hong Kong University (HKU).

“Students don’t have to be in dangerous areas in the front but we must be here.”

Nixon Leung, a 22-year-old Masters student at HKU, said: “I’m worried about the threat from CY but I’m not going to leave because we’re fighting for our values and genuine universal suffrage.

“We must continue our fight. The

government has not responded to our demands for civil nomination and for CY to step down but have constantly asked us to retreat. We simply cannot accept that.”

The protesters are demanding the right to nominate who can run as Hong Kong’s next leader in 2017 elections.

Ominous warning The Communist government of China, which regained sovereignty over Hong Kong from Britain in 1997, insists that only pre-approved candidates will be able to stand and has repeatedly said the protests are doomed to fail.

Leung said he was determined to clear the streets near the government offices by Monday, after two public holidays cut short the working week last week.

“We have to ensure the safety of government premises and restore their operation,” Leung said in a televised address late Saturday.

“The most pressing task for the government is to reopen access to the CGO (Central Government Offices) on Monday so that some 3,000 CGO staff can return to their workplace and continue to provide services to the public.”

Leung, who was voted into office by 689 people on a pro-Beijing committee numbering just 1,200 two years ago, issued an ominous warning if the protests are not ended.

“The situation may probably evolve into a state beyond control, and will have serious consequences for public safety and social order,” he said.

Sunday marked exactly a week since police fired tear gas at protesters in an effort to disperse them but only adding sympathy to their cause and boosting numbers.

“I’m going to stay” “I saw police transporting bags of supplies that looked like riot gear into government headquarters,” said Ivan Ha, a psychology student.

“But despite that I’m going to stay until real dialogue happens, hopefully with CY,” the 20-yearold added.

Student leaders said early Sunday that they were willing to enter into negotiations with the government if certain conditions were met.

They had earlier scrapped an offer of talks over anger at police for failing to protect them from violence.

Sporadic clashes have broken out, mainly in the Kowloon district of Mongkok, with democracy activists claiming that agitators from the city’s triad mobs are being paid to attack peaceful demonstrators.

Hong Kong’s main student union, HKFS, said in a statement: “The government should investigate why the police were so lax in enforcement, accusations of helping criminals and to give an explanation to the public as soon as possible.

“As long as the government responds to the above, the students are willing to talk again,” it said.

AFP

HK shares hit four-month low as political, economic turmoil takes toll

H

ong Kong shares sank to a four-and-a-half month low, with investors unloading stock amid the continued civil unrest in the city and more gloomy economic news on China.

Chief Executive Leung Chun-ying defied pro-democracy protesters’ demands to step down by Friday, with pressure also increasing from

Leung’s backers in Beijing over one of the most serious political challenges they have faced in decades.

At midday on Friday, the Hang Seng Index fell 1.0 percent to 22,701.57 points, the lowest level since May 21. The China Enterprises Index of the top Chinese listings in Hong Kong was off 0.8 percent to a more than three-month low.

For the week with three trading sessions, they are now down 4.1 and 3.4 percent, respectively.

Having corrected more than 10 percent from its early September peak, the benchmark index was at its most technically oversold in 15 months, with its relative strength index standing at 21.3. On the technical momentum indicator, a reading below 30 suggests an index is oversold.

Recent weakness in the Chinese offshore market has left the Hang Seng China A-H Premium Index at its highest since February at 101.18, suggesting H-shares are now trading at a discount to A-shares.

Hong Kong markets were shut on Wednesday and Thursday for public holidays. Those in the mainland will stay closed until next Wednesday.

China’s official Purchasing Managers’ Index (PMI) released on Wednesday hovered at 51.1, indicating a modest expansion in activity and a tad ahead of forecasts for a 51.0 reading.

But the official non-manufacturing survey on Friday showed the country’s services sector grew at its slowest pace in eight months in September after new orders shrank for the first time since the 2008 global financial crisis.

“The official PMI let investors take a breath for now because at least it did not get worse,” said Larry

Jiang, chief strategist at Guotai Junan International in Hong Kong.

“The downward pressure in China is still worrying, so people are waiting to see if anything comes out from the fourth plenary session of the key Party meeting around October 20.”

Dividing sectors On the upside, Chinese property developers outperformed after China cut mortgage rates and downpayment levels for some home buyers for the first time since the 2008 global financial crisis, although the move itself highlighted worries about a shaky economy.

China Resources Land surged 7.5 percent and China Overseas Land & Investment jumped 5.1 percent.

Macau casinos were again weaker ahead of September gambling revenue data. Several factors are working against the beaten-down sector, including a smoking ban and escalating labour issues.

Retail’s extended losses, led by jewellery retailer Luk Fook Holdings International which shed 3.8 percent.

Prada SpA shares fell as much as 4.6 percent but trimmed losses to 0.6 percent by the lunch break.

Hong Kong’s protests may have cost retailers HK$2.2 billion (US$283.42 million) in sales, ANZ said in a research note.

Reuters

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October 6, 2014

Greater China Hon Hai to hire 5,000 engineers Taiwan’s tech giant Hon Hai plans to boost its research and development capabilities at its headquarters, with founder Terry Gou saying up to 5,000 engineers will be hired in two years, local media reported yesterday. Gou on Saturday unveiled his vision outside Taipei city while stumping for a politician campaigning for a local election next month, the Commercial Times and Economic Daily News reported. “We hope to recruit the best talents from the world to Tucheng,” he said. “We plan to increase the number of engineers by 5,000 in two years and by 10,000 in five years.”

PBOC vows to maintain steady credit growth Central bank said yesterday it will use various monetary tools to maintain adequate liquidity and reasonable growth in credit and social financing. In a statement to summarize the third-=quarter monetary policy committee meeting, the People’s Bank of China also said it would continue to implement prudent monetary policy, while pushing ahead with interest rate and yuan exchange rate reforms. It also noted that China’s economic growth remained within a reasonable range. Policymakers have rolled out a series of stimulus measures this year as economic growth momentum shows signs of faltering.

Listed banks see slower net profit growth China’s listed banks reported slowdowns in net profit growth in the first half year, according to a report from the Institute of International Finance under the Bank of China. China’s listed banks reported 675.9 billion yuan (US$110.80 billion) in net profits in the first half year, up 10.67 percent from the same period last year, but the growth rate was 2.86 percentage points lower year on year, the report said. Of the 16 listed lenders, the top five pocketed 513.7 billion yuan in net profit in the first half year, up 9.32 percent from the same period last year.

Solving transport bottlenecks China aims to ease transport bottlenecks which are affecting economic development by 2020 with a plan announced on Saturday to tackle issues such as excessive road tolls and poor connectivity and to ensure the smoother flow of goods.

Despite billions of dollars being invested in recent years on roads, railways and ports, China’s rapid economic growth has meant that transport facilities still easily clog up, raising the cost of doing business. Last year, logistics costs made up 18 percent of gross domestic product (GDP), roughly double that of the developed world and higher even than Brazil or India.

Services growth dips to 8-month low The government hopes to grow the sector further to overtake manufacturing as the bigger engine of the economy Koh Gui Qing

C

hina’s services sector grew at its slowest pace in eight months in September after new orders shrank for the first time since the 2008 global financial crisis, a survey showed on Friday, exposing more weakness in the world’s secondlargest economy.

The official non-manufacturing Purchasing Managers’ Index (PMI) edged down to 54.0 in September from 54.4 in August, the National Bureau of Statistics said, but still well above the 50-point mark demarcating growth on the month from a contraction.

In a sign that China’s cooling property market remained a key drag on the economy, the PMI showed the real estate sector shrank in September, alongside other industries such as logistics and aviation.

Lacklustre activity in the housing sector weighed on overall new orders, which fell to 49.5, a level not seen since December 2008 and down from 50 in August.

Friday’s data raised questions about whether China’s move this week to cut mortgage rates and downpayment levels for some home

Service sector represented 46 percent of China’s economy in 2013

Zara partly cedes control to Alibaba They will open an online store on Tmall, a Chinese website owned by Alibaba Group

S

ince opening its first website four years ago, Inditex SA has maintained full control of online sales for its flagship brand Zara. To gain a stronger foothold in China, the Spanish retailer plans to partially cede both oversight of the chain’s Web sales and a share of its profit.

This month, Zara will open an

online store on Tmall, a Chinese website owned by Alibaba Group Holding Ltd. where companies such as Nike Inc., Burberry Group Plc. and The Gap Inc. sell their wares.

Tmall, which outranks Amazon.com as China’s biggest e-store, with more than 100,000 brands represented, takes 0.5 percent to 5 percent of sales

Tourism booms in Qinghai Tourism is booming in northwest China’s Qinghai Province, with more than 16 million tourist arrivals in the first eight months, said the provincial tourism bureau. The province hosted 16 million domestic tourists and 36,873 from overseas from January to August, official statistics showed. Tourism revenue totalled 16 billion yuan (US$2.6 billion) during the period, up 26.5 percent year on year. Qinghai organized a number of promotional activities such as snow tours in the first half of this year, which contributed to tourism growth, said a provincial tourism official.

Zara shop in Hong Kong. Zara has more than 400 shops in China

made on the site.

Zara is one of the strongest Western retailers in China, where Inditex has 456 stores. But its two-year old Zara. cn, which will continue to exist, isn’t even among the 10,000 most popular Web destinations in China, while Tmall is No. 7, according to data tracker Alexa.

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October 6, 2014

Greater China buyers would be enough to revive its sagging housing market and rejuvenate its sputtering economic momentum.

Indeed, the PMI showed the property, aviation, catering and environmental protection industries all took in fewer orders last month.

Overall slack caused employment in the sector to shrink for the third consecutive month as a sub-index for jobs inched down to 49.5 from 49.6 in August.

China’s slowdown risks are undermining the lift to the Asia region from a stronger U.S. economy, Hak Bin Chua, an analyst at Bank of America Merrill Lynch, wrote in a research note. Its cooling import demand is also disproportionately hurting Asian commodity exporters such as Indonesia and Thailand, he added.

More showroom traffic Financial markets in China are shut for the “Golden Week” National Day break and will resume trading on October 8, though shares of Chinese property developers rose in Hong Kong on Friday on hopes the new measures will revive sales.

So far, it is not clear whether reduced mortgage rates would succeed in turning the housing market around, but early reports in the Chinese media suggest the move has piqued buyers’ interest.

Some Chinese have cancelled their holiday plans for “sudden showroom visits”, said the Shanghai Morning Post. It quoted a property broker as saying that he started getting enquiries from potential home buyers from Tuesday evening, when China lowered mortgage rates.

Accounting for about 15 percent

Amazon.com Inc. The IPO prospectus raised at least one red flag for retailers considering sales on its websites: The U.S. government has called Tmall’s sister-sites, Taobao. com and Alibaba.com, “notorious markets” for counterfeit goods.

Anti-counterfeit deposits Tmall has sought to allay concern about counterfeiting by requiring retailers to put down cash deposits as a guarantee that their products are legitimate. That anti-knockoff stance has increased the site’s appeal to companies such as Inditex, according to Christodoulos Chaviaras, an analyst at Barclays Plc in London.

Counterfeiting is “a welldocumented problem in China, we have seen it in the past, and Tmall comes as a solution there,” Chaviaras said.

Prior to Zara joining Tmall, Inditex sales in China were set to grow as much as 20 percent over the next few years, Barclays estimates.

The bank hasn’t updated its forecast, but Chaviaras said the deal will likely boost sales growth. China accounts for about 8 percent of Inditex sales, according to Societe Generale SA. The Spanish company doesn’t break out sales data by country. Two smaller Inditex brands, Pull & Bear and Bershka, are already present on Tmall.

Though Alibaba takes a share of profits on Tmall, it lets retailers maintain control of their interaction with clients. That was a key part of its attraction to Inditex, according to Pablo Isla, the retailer’s chief executive officer.

“It’s no different from online sales through our own Web page, so it’s like opening a store in a shopping mall,” Isla said.

Bloomberg News

The ‘Golden September’ peak season in the property sector did not materialise. The market tracked a weak trend and activity was on the subdued side Wu Wei, China Federation of Logistics and Purchasing official

of China’s gross domestic product, the housing market affects 40 other sectors from glass to cement to electronic appliances.

The government’s move this week to relax lending standards for mortgages would be welcomed by investors who worry China’s economy is cooling too fast. But at the same time, it would disappoint millions of Chinese who feel that home prices are still far too unaffordable, despite the recent price declines.

Many analysts expect further support measures to be announced in coming months to shore up the most vulnerable sectors of the economy if conditions do not stabilise.

Services made up about 46 percent of China’s economy in 2013, having overtaken manufacturing as the country’s biggest employer in 2011.

Reuters

Premier Li to attend Europe summit He will also hold a meeting with Russian delegates in order to sign rail and energy deals

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hinese Premier Li Keqiang will attend a summit of European and Asian leaders on a trip starting this week that will also include a visit to Germany and the signing of energy and high-speed rail deals with Russia, the government said.

Li’s October 9-16 swing through the continent is his second this year, and culminates in the Asia-Europe Meeting (ASEM) summit in the Italian city of Milan, the foreign ministry said in a statement.

In response to the crisis, Russian President Vladimir Putin has turned to China. In May, the two countries signed a US$400 billion gas supply deal and Moscow has said it will double bilateral trade by 2020.

China is ready to seize any business opportunities in Russia resulting from Moscow’s diplomatic showdown with Europe over Ukraine, Beijing’s ambassador to Berlin said this week.

While in Russia, Li will sign more than 30 agreements on finance, energy and high-speed rail cooperation, the official Xinhua news agency said on Saturday, without providing details.

China and Russia have close economic and diplomatic links, and China has been unwilling to get involved in the Ukraine crisis aside from calling for talks and a peaceful resolution.

Chinese Premier Li Keqiang

While in Germany in March, President Xi Jinping said that China would not take sides with the West or Russia over Ukraine, disappointing any hopes Beijing might add its weight to international pressure on Moscow for annexing Crimea.

Li will hold talks with German Chancellor Angela Merkel and sign a series of agreements, Xinhua said without elaborating.

Human rights could also be on the agenda, an issue invariably raised by German politicians in meetings with their Chinese counterparts.

In a video podcast, Merkel said she hoped Hong Kong police react to the protests in a “level-headed way.”

Reuters

Local third-party borrowing modified Upper-tier local governments will begin to issue bonds directly in their own name

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he Chinese government has taken key steps towards increasing the responsibility of individual regional and local governments for their own borrowing and investment decisions, a Moody’s report said.

The new guidelines, announced on October 2 by the State Council, represent an important move towards establishing a new direct borrowing model for local governments, it said.

The guidelines will restrict indirect borrowing such as through local government financing vehicles (LGFVs), thereby leading to a deceleration of local government debt, which has been climbing sharply over the past years.

Moody’s notes that they will also address the problem of riskier forms of borrowing from different sources, as well as related loopholes. Part of this approach includes restricting the activities of lenders. The end result should be the adoption by the local governments of more direct ways of financing, in turn heightening transparency and ultimately leading to more responsible decision-making.

These guidelines constitute another milestone in the development of a local government bond market in China, the effective management of the sharp rise in local government related debt, and the restriction of increasingly riskier forms of borrowing, it said.

The guidelines follow the central government’s amendment of the budget law in August which ended the prohibition on the regional and local government borrowing.

Just upper-tier local governments (Shanghai local government pictured) will be allowed to issue bonds

39 pct of all local bonds and debt borrowed by local government financing vehicles.

June 2013

Principal features of the new guidelines announced on October 2 include: upper-tier local governments will begin to issue bonds directly in their own name; lower-tier local governments, such as cities and towns, will only borrow through upper-tier governments; general obligation bonds and special purpose bonds will be permitted in accordance with quotas set by the State Council; LGFVs will halt borrowing on behalf of local governments, a major move as the bonds and debt of these entities equalled 39 percent of total local government-related debt as of June 2013, according to Moody’s.

Xinhua

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October 6, 2014

Asia Microsoft demands US$6.9 mln from Samsung Microsoft Corp is demanding US$6.9 million interest from Samsung Electronics in a dispute over smartphone patent royalties, according to a lawsuit unsealed by a New York federal court on Friday. Microsoft is asking the court to rule that it did not breach a business collaboration agreement with Samsung, and that Samsung must pay interest on more than US$1 billion in royalty payments which it delayed in protest at Microsoft’s planned purchase of rival Nokia’s handset business. Samsung made royalty payments on time to Microsoft during the first fiscal year after they signed their 2011 agreement, the lawsuit said.

Indian banks’ loans up Banks issued 9.7 percent more loans in the two weeks to September 19 than in the same period a year earlier, while deposits rose 13.4 percent, the Reserve Bank of India’s weekly statistical supplement showed. Outstanding loans rose 55.9 billion rupees (US$908.43 million) to 61.5 trillion rupees in the two weeks to September 19. Non-food credit rose 48.8 billion rupees to 60.4 trillion rupees, while food credit rose 7.1 billion rupees to 1.1 trillion rupees. Bank deposits fell 260.8 billion rupees to 81.1 trillion rupees in the two weeks to September 19.

Thailand to expand airport Thailand’s military government will go ahead with a 62 billion baht (US$1.9 billion) expansion plan at Bangkok’s main Suvarnabhumi airport, the country’s transport minister said on Saturday.

Thailand will also build a third runway worth 19 billion baht at the airport and plans to build another three provincial airports, Air Chief Marshal Prajin Juntong told reporters. “The second-phase expansion of Suvarnabhumi airport will have to be done quickly to meet increasing numbers of tourists,” he said.

A committee will be set up look into project details before presenting them to cabinet for approval, he added.

Marubeni to shift focus to trading naphtha Japanese trading house Marubeni Corp is refocusing its energy trading on naphtha and liquefied natural gas (LNG) and away from crude as it targets becoming a niche market player in a tough environment, the head of the business said. Japan’s trading firms have struggled to stay competitive in the energy trading business in recent years as domestic oil demand has dwindled and crude’s low price volatility has depressed margins. And with tighter regulation reshaping the energy trading industry, large international trading firms such as Trafigura, Vitol and Glencore have gained prominence in the business.

Thailand tipped to retake Sector players predict the kingdom’s industry is again set to surge

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wo years after losing its place as the world’s biggest rice exporter, Thailand is eyeing a return to the top spot as the impact of a bungled subsidy scheme eases and it sells cheaper grain to a grateful global market.

The subsidy, which offered farmers up to 50 percent above market rates for their rice, helped former premier Yingluck Shinawatra win the rural votes she needed to take office in 2011.

But it also sent tremors through the world market before spectacularly unravelling, leaving Thailand with around 18 million tonnes of overpriced rice and Yingluck skewered by a corruption charge.

Thailand was pushed off the top spot by India in 2012, as buyers hit back at the kingdom’s attempt to fund the costly subsidy by driving up global prices through grain hoarding.

India and Vietnam moved swiftly to gobble up Thailand’s crumbling market share, with the Indian government rapidly releasing more of their own rice for export.

Thailand’s junta, which seized power in May, ended the rice scheme soon after the coup and is flogging

stockpiles to soften the price of Thai rice to around US$450 a tonne comparable to India and Vietnam.

Getting back to the top From January until September 2, the kingdom sold seven million tonnes of the grain -- already more than for the whole of 2013 -- according to Chookiat.

It should sell 10 million tonnes by the end of the year, as experts call

I’m sure we can get back our world title this year Chookiat Ophaswongse, Thai Rice Exporters Association honorary president

Pacific trade pact hindered by secrecy Japan and United States’ progress on the TPP deal is creating and an uneasy feeling for the rest of the partners

S

ecrecy about trade negotiations between the United States and Japan is hampering progress on a broader Pacific trade pact, a senior Chilean official said.

Hopes of sealing a deal this year on the ambitious 12-country Trans-Pacific Partnership (TPP) are looking dim, largely because of a deadlock between the pact’s two biggest economies, the United States and Japan, over how widely Japan will open its doors to farm exports.

Other TPP members would like to know more about how those discussions are going, said Chile’s head of international economic relations, Andres Rebolledo, who has overall responsibility for the trade talks.

“These bilateral negotiations take in two ... we don’t know the detailed state of the talks between the U.S. and Japan, for example, and that has been one of the complications,” he said.

Some TPP partners hope that whatever is agreed between the United States and Japan will serve as

These bilateral negotiations take in two ... we don’t know the detailed state of the talks between the U.S. and Japan, for example, and that has been one of the complications Andres Rebolledo, head of international economic relations

a blueprint for bilateral agreements with other countries. They hope the deal will act as a catalyst to resolve other tricky issues such as common standards on drug patents and worker protection.

Rebolledo said he was meeting U.S. Trade Representative Michael Froman next week.

“I hope he will tell us a bit more about how their talks with Japan are going,” he added.

Relatively small Chile, which is the only one of the group to have pre-existing bilateral trade deals with all the others, was focusing its efforts on Japan, where there are still issues over market access, he said.

Other sensitive issues for the country include intellectual property, investment services and labour, he said.

The White House has been pushing to conclude TPP talks now in their fifth year - this year, although U.S. officials have said there is no particular deadline and the substance will dictate the timetable.

Reuters

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October 6, 2014

Asia Myanmar to boost tourist arrivals

rice crown for farmers to focus on producing higher quality -- and higher value -- strains of rice.

Darren Cooper, senior economist at the London-based International Grains Council, said it is “quite possible (Thailand) could edge out India in 2014”, explaining the kingdom has already begun to reclaim portions of the key African market it lost -- such as Nigeria, Ivory Coast and Ghana.

Thailand’s military rulers have

paid most of the farmers, hundreds of whom took to the streets, after they were left out of pocket as banks refused to lend cash to Yingluck’s stricken administration to keep the scheme going.

But to wean farmers off handouts they are focusing on lowering production costs, including of fertilisers and machinery.

The junta has “requested the co-operation” of suppliers to cut costs, said Paitoon Urairong, deputy director general of the rice department at the Ministry of Agriculture and Cooperatives.

While the loss of large state handouts is upsetting farmers, some experts say greater efficiency is to be welcomed.

Critics pilloried Yingluck’s flagship rice policy for damaging Thailand’s biggest export by paying farmers for large harvests irrespective of the quality.

Now, the junta’s stance on subsidy is sending jitters across the countryside.

The proposal to slash production costs is “not enough”, says Prasit Boonchoei, president of the Rice Farmers Association.

According to him, farmers need to invest an average of 6,500 baht (US$200) per rai (1,600 square metres) to produce 800 kilogrammes of rice.

AFP

Tourists worldwide destined for Myanmar to get e-visa within five days

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yanmar’s immigration authorities have allowed online electronic (e)-visa to tourists from 24 more foreign countries aimed at attracting more tourists to the Southeast Asian nation.

The decision to add the two dozens foreign countries to the list of permitting e-visa came one month after such e-visa system was formally introduced to tourists from 43 countries including ASEAN’s on September 1.

Since the taking office by the civilian government in 2011, tourist arrivals in Myanmar remarkably reached 1.06 million in 2012 and 2.04 million in 2013.

Of the 2.04 million tourists visiting Myanmar in 2013, 1.144 million came through border gates, while 817,699 through the Yangon International Airport and 69,596 through Mandalay International Airport in the second largest city, official figures show.

In the first seven months of this year, that number reached 1.6 million, targeting 3 million by the year-end, according to the hotels and tourist authorities.

Of the foreign visitors, those from Asia accounted for 70 percent with others from Europe, America, Africa and the Middle East also growing, figures showed.

Myanmar saw the opening of over 1,000 hotels, motels and guest houses so far in 2014, making available for about 41,000 rooms at present across the country.

The 2014 figures were up from 731 in 2011 with over 25,000 rooms when the civilian government took office.

Most of the hotels are located in Yangon, the commercial hub of Myanmar, where tourist arrivals continue to increase.

There is a total of 39 foreigninvested hotels and commercial complexes across the country including Yangon and Mandalay Region.

Foreign investment in the hotels and tourism sector hit US$1.854 billion, accounting for 3.97 percent of the total and standing 5th sectorally in Myanmar’s foreign investment lineup as of June 2014 since late 1988 when the country first opened door to the world.

Xinhua

Abe still ‘neutral’ on tax hike The Japanese premier said he will scrutinise various data in deciding whether the world’s third-biggest economy is strong enough to endure a further tax increase Kaori Kaneko

J

apanese Prime Minister Shinzo Abe remains “completely neutral” on whether to raise the national sales tax, Economy Minister Akira Amari said yesterday even as he expressed concern about the strength of the country’s economic recovery.

Abe faces a tough decision by year’s end on whether to raise the tax for a second time - doubling the tax rate over 18 months - in a bid to curb Japan’s runaway government debt.

The risks to his “Abenomics” strategy to reflate the long-moribund economy are increasing, whether Abe decides to go ahead with the tax or not. Raising the tax as the recovery falters could send the economy into a tailspin, while delaying the move could shake investors’ confidence in Japan’s ability to repair its tattered finances.

“I think he is completely neutral” on the decision, Amari told a talk show on public broadcaster NHK. “The prime minister is carefully searching to find the most effective combination to achieve economic recovery, stability for the social-security system and fiscal reform.”

Abe raised the tax to

KEY POINTS Economy minister ‘concerned’ about recovery’s strength Abe to decide in Dec on whether to raise tax again

8 percent in April from 5 percent. He says he will decide in December whether to proceed with a plan to raise it to 10 percent in October 2015. Economists generally expect he will raise the tax.

The premier said on Friday he will scrutinise various data, including the effect of bad summer weather and rising fuel costs on consumption, in deciding whether the world’s thirdbiggest economy is strong enough to endure a further tax increase.

Hit by the April tax hike, the economy shrank by a worse-than-expected annualised rate of 7.1 percent in the second quarter from the previous three months, the

Prime Minister Shinzo Abe arrives at National Diet before delivering his policy speech at the opening of the Extraordinary Diet session in Tokyo Japan last week

deepest fall since JanuaryMarch 2009, when the global financial crisis hit Japan’s exports and factory output.

GDP is expected to claw back 3.6 percent in the JulySeptember quarter, a Reuters poll found last month, before another run of bleak data was

released.

“The recovery trend is certain,” Amari said. “The July-September numbers should show a robust recovery.

But I’m a little concerned that this robustness is a bit weak.”

He said it will take time for a positive economic cycle

to take hold as companies cannot in a single year raise wages enough to compensate for the tax increase and the inflation generated by Abe’s growth policies, which aim to pull Japan out of 15 years of deflation and tepid growth.

Reuters

14

October 6, 2014

International Airbus insider trading trial suspended French judges effectively suspended a trial involving allegations of insider trading in the shares of Airbus Group to allow a higher court to rule on whether the longawaited procedure was constitutional.

The latest abrupt twist in one of the most high-profile corporate cases of recent years came after defence teams urged the French court system to take note of a recent European judgment upholding the right not to be tried twice.

Seven current or former managers and two former industrial shareholders are accused of illegally selling shares in what was then known as EADS.

Germany promotes taxi market competition The arrival of online transport company Uber should be used to boost competition in Germany’s taxi market, though regulators must make sure traditional services do not face disadvantages, the head of the country’s competition watchdog said. U.S. group Uber, which allows users to summon taxi-like services on their smartphones, has faced regulatory scrutiny and court injunctions from its early days, even as it has expanded rapidly into roughly 150 cities around the world. Courts in Berlin and Hamburg last month upheld bans on the company, saying it did not comply with German laws on the carriage of passengers.

Colombia’s oil sector rejects tax reform Oil sector hit out at a proposed tax reform that the government has presented to Congress, arguing that higher duties on corporate earnings would damage the already troubled driver of the economy. A bill was presented to Congress on Friday that seeks to raise an additional 53 trillion pesos (US$26.2 billion) over the next four years, including a tax on earnings above 1 billion pesos at 12 percent, up from 9 percent currently. The government also extended a bank transaction tax through 2018 and will ask Congress to approve a charge on individual assets above 1 billion pesos.

Siemens may close some energy plants German industrial conglomerate Siemens expects low profit margins at its energy division in the next couple of years and could close some factories as a result, the head of the division told the Boersen-Zeitung newspaper. Lisa Davis said the company was reviewing individual sites and it was unclear whether some would be closed or whether they would be used for different products. The newly-created Siemens Power and Gas division makes products ranging from gas turbines and compressors to oilfield equipment. Siemens strengthened it this year with the acquisitions of U.S.-based Dresser Rand as well as Rolls Royce’s power unit.

JPMorgan attackers targeted 9 more firms About nine other banks and brokerages were infiltrated by the same group of hackers who recently attacked computer systems at JPMorgan Chase & Co, the New York Times reported, citing unnamed people briefed on the matter. The report, which could not be independently verified and did not identify any of the victims beyond JPMorgan, said it was not clear how serious the attacks had been. JPMorgan said on Thursday that names and contact information for some 83 million household and small business customers were stolen, making it one of the biggest data breaches in history.

U.S. SEC to decide on SAC insider trading case The SEC will also be weighing in on a long-running debate over whether insider trading is a victimless crime Emily Flitter and Sarah N. Lynch

T

he U.S. Securities and Exchange Commission will decide this week whether investors in two drug stocks at the centre of the largest-ever insider trading case are entitled to compensation.

If the SEC rules in their favour, the investors could seek a portion of the US$602 million the SEC collected in a settlement from a division of SAC Capital Advisers after former portfolio manager Mathew Martoma was caught trading on secret tips. It would be the SEC’s largest pay-out ever to insider trading victims. The settlement money would otherwise go to the U.S. Treasury.

The SEC will also be weighing in on a long-running debate over whether insider trading is a victimless crime. Defence attorneys in several recent cases have made that argument

SAC was selling shares to get out before the rest of us knew the drug was a bust Lance Bredvold, investors self-identified as SAC victim

Securities Exchange Commission headquarters in Washington, USA

to push for lighter sentences for their clients.

Calling the investors victims would put the SEC at odds with criminal courts, where judges and prosecutors have avoided designating victims.

Federal sentencing guidelines rely on the size of the insider trader’s profits based on the belief that victims and the losses they suffer in such cases are nearly impossible to identify. In SAC’s case, prosecutors have already argued that Elan and Wyeth investors are not victims.

SEC enforcement director Andrew Ceresney said in an interview on Friday that previous court cases had established grounds for identifying insider trading victims, but doing so was challenging.

“If you look at the case law, courts have talked about contemporaneous traders being victims,” he said. “I think it’s a question of fairness in markets.”

He declined to comment specifically on the SAC case.

In 2012, the SEC sued SAC, which is now called Point 72 Asset Management, for violating securities laws after Martoma traded on tips that a once-promising Alzheimer’s drug had failed a late-stage trial.

SAC agreed to settle the case in March 2013. A jury in a separate criminal case convicted Martoma of securities fraud and conspiracy in Manhattan federal court. He was sentenced on Sept. 8 to nine years in prison. SAC admitted guilt in a second criminal case for which it paid additional penalties.

A group of investors who, at the time of Martoma’s trades, owned shares of Elan, which is now owned

by Perrigo Company Plc and Wyeth, now owned by Pfizer Inc, filed a class action suit against SAC in which they are separately seeking around US$2 billion.

“SAC was selling shares to get out before the rest of us knew the drug was a bust,” wrote Lance Bredvold, one of several investors who identified themselves as victims in letters to the SEC. Federal prosecutors leading the criminal case against SAC argued that class action plaintiffs were not victims of the crime and should not be allowed to have a say in court about the plea deal, which needs to be approved by a judge.

The SEC’s five-person governing commission is expected to decide the matter at a closed-door meeting on October 9.

Reuters

Banks fight over post-financial crisis regulation They are divided on how the measures should be applied to each bank

T

he world’s largest banks are pushing regulators for more flexibility in the last major set of rules to come out of the global financial crisis: requirements that would double the capital cushion banks are forced to hold.

Leaders of the 20 most important economies, the G20, in November will issue a draft rule, which many of the biggest banks say need to be tailored to each institution.

The rules are the final set being considered by the nations in the wake of the crisis, after raising requirements for shareholder equity and requiring banks show how they can be wound down without government money.

Banks are divided - amongst themselves and with regulators - on how the measures should be applied to each bank, with debates over the right level of capital, whether riskier banks should hold more of it, and how the capital must be distributed through the company’s units across the world.

A logical next step and a good next step Adrian Docherty, BNP Paribas, global head of financial institutions advisory

Unusually, though, they largely agree with the point of the new rules, raising their ability to absorb losses.

The plan, known as Total LossAbsorbing Capacity (TLAC), is “a logical next step and a good next

step,” said Adrian Docherty, global head of financial institutions advisory at BNP Paribas.

But he said there could be unintended consequences and that flexibility was key.

For instance, European banks want to avoid having to set up a holding company structure to make them look more like U.S banks, something they say could be a costly exercise.

Regulators in each country will implement the plan, which will double the amount of capital that would not be repaid in a crisis by earmarking some bonds for losses. Contracts for such bonds could make clear that the money is gone when certain triggers are hit, for instance.

Regulators have made some concessions to banks since the beginning of the year, one banking source said. For instance, they have agreed to allow more flexibility in how the TLAC capital is counted.

Reuters

15

October 6, 2014

Opinion

Leverage and the next wires emerging markets crisis Business

Leading reports from Asia’s best business newspapers

THE KOREA HERALD

James Saft

Reuters columnist covering economics and financial markets

South Korea’s household loans extended by financial institutions are expected to surpass the 1,000-trillion won (US$942.6 billion) mark this year, data showed yesterday, escalating concerns over the number of indebted households seeing meagre income growth compared to rises in prices, especially rents.

Outstanding household loans by financial institutions including commercial lenders, insurers and financial agencies stood at 982.5 trillion won as of the end of the second quarter, according to the data from the Bank of Korea. As of end-August, household loans reached 993 trillion won.

THE JAPAN NEWS The familiar sight of smoke rising from the chimneys of sento public bathhouses is disappearing in Tokyo. Sento have switched their fuel from heavy oil, which is growing increasingly expensive, to city gas, which has a relatively stable price but produces no smoke. Yahata Yokujo, a sento in Ota Ward, Tokyo, changed its fuel for boiling water from heavy oil to city gas in June. “After changing fuel to city gas, the fuel costs dropped by 20 to 30 percent compared to the time when we used heavy oil,” said Toshiyuki Moriguchi, 58, manager of the sento.

TAIPEI TIMES Yahoo Inc, flush with cash from selling a portion of its stake in Alibaba Group Holding Ltd of China, appears ready to bet on what it believes is set to be the next big Internet phenomenon. The company has held talks to invest in Snapchat, people with knowledge on the matter said on Friday. However, the deal has not yet closed, the people added. If Yahoo makes the investment, it will join a bevy of other prominent investors, including the venture capital firm Kleiner Perkins Caufield & Byers, that have valued the service at about US$10 billion.

PHILSTAR The Senate is expected to approve this month a joint resolution granting President Aquino the authority to contract additional generating capacity to address a looming power crisis in the summer of 2015. “We will work to finish this before the end of October so that the President would be given the power and the DOE (Department of Energy) could buy or rent the generating sets to provide the necessary power supply from March to July of next year,” said Drilon.

The Senate committee on energy, which is headed by Sen. Sergio Osmeña III, is working on the joint resolution.

D

ebt is clogging the arteries of the global economy, setting us up for the next crisis, which just might come from emerging markets.

The 16th Geneva Reports on the World Economy, released last week by the Centre for Economic Policy Research’s International Center for Monetary and Banking Studies, makes grim reading.

The main takeaways are: firstly, we’ve not made progress in deleveraging despite all the happy talk to the contrary; secondly, high debt levels are constraining growth; and thirdly, the interaction of the first two is “poisonous”.

To be sure, debt in the financial sector has fallen, particularly in developed countries, and in some countries such as the U.S., household debt is down slightly, but this has been more than outweighed by growing official indebtedness.

World total debt, not including financial companies, has risen since the crisis, from 176 percent of GDP in 2008 to 212 percent in 2013.

Up to the last crisis, in 2008, borrowing in developed markets was driving global leverage, and arguably global growth.

The baton has been passed.

“Since then emerging economies (especially China) have been the driving force of the process,” according to the report. (http://www.voxeu. org/sites/default/files/image/ FromMay2014/Geneva16.pdf) “This sets up the risk that they could be at the epicentre of the next crisis. Although the level of leverage is higher in developed markets, the speed of the recent leverage process

in emerging economies, and especially in Asia, is indeed an increasing concern.”

Since the financial crisis, emerging markets leverage, excluding financials, is up 36 percentage points, as against a rise of 25 percentage points in the developed markets.

Remember too that nominal interest rates have declined less than the decline in GDP rates, placing further strain from debt on growth. Low and declining inflation places an added strain, making debt harder to carry. Indeed fomenting a bit of helpful inflation has been one of the traditional remedies to over-indebtedness, but one which is proving all too hard in current circumstances to effect.

The irony here being that central banks in leading economies, most notably the Fed, have engaged in extraordinary monetary policy to try to stoke a bit of inflation. The Fed has taken its balance sheet from about 7 percent of GDP before the crisis to nearly 25 percent today, a move which has aided in the growth of leverage. To the extent that the Fed plans to or will trim its balance sheet in coming years, it will have a dampening effect on growth and pose risks to asset prices.

China and the fragile eight While the report concentrates on China, it also raises flags about the ‘fragile eight’ (Argentina, Brazil, Chile, India, Indonesia, Russia, South Africa and Turkey) as a group, all of which have taken leverage markedly higher since the crisis.

As is so often the case, it was at the point at which poten-

Productivity growth in the Chinese economy is now about half of what it was in 2006 while the working-age population will soon decline

tial growth in China and elsewhere started to fade, perhaps inevitably, that leveraging up suddenly started to look like a bright idea. Unfortunately, taking on that leverage, especially, as was so often the case, to back low-yielding projects, only puts further restraint on future potential growth, magnifying the effect of its natural slowing.

Productivity growth in the Chinese economy is now about half of what it was in 2006 while the working-age population will soon decline. Those types of forces made a slowing of growth inevitable; taking on debt to combat that slowing is potentially toxic.

Since 2008, Chinese total debt (ex-financials) is up by 72 percent of GDP, a run rate of 14 percent per year. For comparison, that’s about double the rate of growth the U.S. and UK had during their subprime bubble years before the crisis, when Brits and Americans alike thought the road to riches was paved with marble countertops and stainless steel appliances.

China’s government, as investors point out, is not that highly indebted, leaving it room to backstop a crisis if need be.

That means no default. More likely is a scenario mixing higher inflation and currency depreciation shifting the burden of lightening the debt load to foreigners.

That’s going to hurt the global economy through lower demand for global exports and via investors who get their fingers burned in China.

Don’t be too surprised if a falling renminbi makes ‘currency wars’ headlines a feature again in the not-too-distant future.

Reuters

16

October 6, 2014

Closing China police bust telecom fraud gang

Yellow alert for typhoon Phanfone

Fifty-one suspects have been nabbed in a telecom fraud case involving more than 300 victims nationwide, said police in north China’s Shanxi Province yesterday. The gang registered a company in the eastern province of Anhui and tried to trick citizens into investing in a gold business via online platforms or telephone between March and September, said police in Taiyuan, the Shanxi provincial capital. More than 300 citizens in 18 provinces or cities were cheated out of more than 10 million yuan (US$1.6 million) in the case. Telecom-based fraud, in which suspects cheat people through telecommunication channels, is a growing crime in China.

China’s marine forecast station yesterday issued a yellow alert for a powerful typhoon moving into the East China Sea after barrelling into south-western Japan. Typhoon Phanfone, which was downgraded from an earlier super typhoon, is moving at 20 km per hour, according to the station. The typhoon could create waves up to seven meters high in the eastern part of the East China Sea between yesterday noon and today’s noon, according to the forecast. Waves as high as 3 meters will be seen off the coast near Shanghai and Zhejiang Province.

Vietnam, a home for motorbikes Currently, more than 96 percent of the motorbike market in Vietnam is shared by five famous brands

V

ietnam is said to be a home for motorbikes as it is among the few countries in the world where this vehicle runs countrywide.

Currently, motorbikes are still the most convenient means of transportation used by most Vietnamese.

According to the latest statistics from the Vietnam Ministry of Transport, Vietnam has had 38 million registered motorbikes, which makes it the world’s fourth largest motorbike market after China, India and Indonesia.

Opinions have been voiced, however, about the bikes’ responsibility for causing traffic jams and accidents in Vietnam and hence it is necessary to reduce the number of motorbikes.

However, research conducted for the national strategy on the safety of road transport still showed that by 2020 motorbikes will still be a key important road vehicle in Vietnam.

In the latest adjusted plan on road transportation development in Vietnam to 2020 and a vision to 2030, the number of motorbikes will be kept at 36 million units by 2020. However, as of the end of March 2013, the number of registered motorbikes to the Ministry of Transport

A panorama of Ho Chi Minh City marked by the massive presence of the motorbikes

surpassed 37 million units, far beyond the scheduled 36 million units. On average, each month, the ministry grants licenses to over 3 million new motorbikes. At this pace, the number will likely hit 40.5 million units by 2020, equivalent to 2. 4-2.5 persons per unit.

Motorbikes are mostly used in big cities, like the capital Hanoi and southern Ho Chi Minh City, accounting for 30 percent and 35 percent, respectively, of the total operating in the country.

It meets 90 percent of the citizens’ demand for transportation, accounting for 95 percent of the total vehicles running in the

country, reported the ministry.

“Many Vietnamese are using motorbikes because the price of this vehicle is suitable for the income of most users, at around 25 million VND (US$1,200) per unit. In addition, in the context of the current road infrastructure still being poor and public transport being insufficient, motorbikes are still a mobile and convenient means of transport in Vietnam,” Nguyen Thanh Phuong, deputy head of Bac Ninh Province’s Committee on the Traffic Safety, told Xinhua in recent interview.

He also said that motorbikes are not only a

means for personal transport, but also for transporting goods as well.

Pham Trung Kien, 50, owner of a private company in Ho Chi Minh City, told Xinhua that he has both a motorbike and a car, but he often goes to the office by motorbike due to its convenience than using the car.

Currently, more than 96 percent of the motorbike market in Vietnam is shared by five famous brands, including Honda, Yamaha, Suzuki, Piaggio and VMEP. Of these giants, Honda accounts for the most sales, with total output of more than 2.5 million units per year.

Many Vietnamese are using motorbikes because the price of this vehicle is suitable for the income of most users, at around 25 million VND (US$1,200) per unit Nguyen Thanh Phuong, Bac Ninh Province’s Committee on Traffic Safety, deputy head

Statistics from Honda Vietnam revealed that in 2012, the number of motorbikes sold in Vietnam totaled 3.11 million units, of which 1.97 million units were sold by Honda Vietnam.

However, the figure decreased to 1.87 million units in 2013.

Tsang seeks to restore HK investor confidence

Hebei sets ecological restoration goals

IMF to cut German growth forecasts

H

H

T

ong Kong Financial Secretary John Tsang said he hopes to protect investor confidence in the city where protesters seeking direct elections have obstructed roads for more than a week.

If Hong Kong’s order, governance and core values are shaken, it’s a price that no one can bear, Tsang wrote in a blog on the government’s website. Hong Kong has generally functioned normally despite many blockades, and financial markets have operated smoothly, Tsang said.

Tsang is leaving Hong Kong this afternoon to attend the annual conference held by the International Monetary Fund and the World Bank.

He’s scheduled to meet U.S. Federal Reserve Chair Janet Yellen for the first time. Tsang said he will use the opportunity to clarify misunderstanding of Hong Kong’s international image.

Hong Kong lawmakers pleaded for protesters to leave areas they’ve occupied for more than a week after the city’s top official set today Monday as the deadline to open access to government offices barricaded by demonstrators.

Bloomberg News

ebei, north China’s worst-polluted province, has set a string of ecological restoration.

The province, which surrounds Beijing and Tianjin, will plant 530,000 hectares of forest by 2017 and raise forest coverage from 28 percent last year to 32 percent, according to a recently unveiled official plan.

By 2017, no rivers or tributaries should have water quality inferior to Grade V, said the document.

China grades water quality according to six levels: grades I to V and “inferior to Grade V.” Water below Grade III is unsafe to drink.

Hebei will address 664 open-pit mines close to railways, highways or towns within two years.

In 2014, 10 illegal mines, 46 licensed mines and 32 mining firms will be shut down. Another 251 mines that have failed to meet environmental protection requirements will halt production for restoration. By 2015, ecological restoration will be completed for 325 more mines.

Total investment in the projects will be more than 60 billion yuan (US$9.7 billion).

Xinhua

Xinhua

he International Monetary Fund (IMF) will cut its estimates for German economic growth in 2014 and 2015 to around 1.5 percent for each year due to the crises in Ukraine and the Middle East, weekly German magazine Der Spiegel said uyesterday.

The forecasts are due to be published on Tuesday.

In July the IMF predicted Europe’s largest economy would expand by 1.9 percent this year and by 1.7 percent next year.

Der Spiegel said the IMF would also call on the German government to do more to boost public and private investment as this would help prop up growth in the short term and also bring benefits for the country in the medium term.

Europe’s largest economy had a strong start to the year but shrank by 0.2 percent in the second quarter and some economists have warned of the risk that it was in recession between July and September, especially as business and investor sentiment has weakened.

Reuters