Macau business daily, Apr, 20, 2015

MOP 6.00 Year IV

Number 773 Monday April 20, 2015

Publisher: Paulo A. Azevedo

Closing editor: Luís Gonçalves

16 Macau-bound flights diverted due to bad weather I Page 5

Very Important Problems Casino figures continue to confound. The market awaits relief but the headwinds keep blowing. Q1 numbers are far from reassuring.

With the take from high rollers plunging 42 pct, and operators making MOP30 billion less. Thus, Macau’s fiscal surplus tanked more than 50 pct in the period. Meanwhile, the People’s Bank of China is clamping down on the use of underground banks and offshore companies to channel ‘black’ loot overseas. Investors say the move will hurt VIPs, premium mass gamblers, and junkets.

Making it even more difficult to move money Pages

4&5

10,000 retail outlets in HK launch joint campaign to tackle crisis

INTERVIEW

Macau’s cake boss They call her the 3D cake master in town. With famous Korean pop star Rain on her roster of customers. Lidia Lourenço operated online cake shop LinaLenço Dessert on Facebook for five years before finally opening her own shop, she tells Business Daily.

Quitting a full-time job at the age of 40 was a leap of faith. But she has a passion for cake-making. The next goal? Breaking into the cake shop business in Mainland China

PAGES 6 & 7

Keep taking the tablets Tablet computers boomed last year among local residents. With households owning one growing a whopping 33.6 pct to 80,000. Official data also reveals families primarily access the Internet via mobile broadband, for communication purposes

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www.macaubusinessdaily.com

Final Cut Yesterday, China cut reserve ratio requirements and power prices. The measures follow last week’s weak economic results. Authorities have been suggesting that helping measures could be implemented. As long as wages and unemployment are unaffected

Page 16

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New giant pandas arrive this month Page 5

Steve Wynn ‘obligated’ to vote for Elaine Wynn Page 8

HSI - Movers April 17

Name

Expensive delays The LRT project continues to siphon up money. The Light Rapid Transit segment in Taipa has already run up a tab of MOP9 billion, Secretary for Transport and Public Works Raimundo Rosario admits.

With no agreement with the contractor in

sight, he said the gov’t could incur more legal costs. And even be forced to open a new tender. The amount expended on the LRT to date would build a third of Galaxy Phase II

China Overseas Land

2.74

AIA Group Ltd

2.21

China Mobile Ltd

2.09

Galaxy Entertainment

1.58

Cathay Pacific Airwa

1.35

China Life Insurance

-2.03

Industrial & Commerc

-2.16

China Resources Powe

-2.38

China Construction B

-2.44

Bank of China Ltd

-2.54

Source: Bloomberg

I SSN 2226-8294

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The Dark Knightmare At least 400 gaming tables. That’s the number Melco Crown Entertainment has committed to having in its upcoming integrated casino resort Studio City. If not, it could technically default on a HK$10.86 billion loan, Melco says. Loan conditions include the full opening

%Day

Brought to you by

of the Batman-inspired Studio City by October 1, 2016. With a minimum of 400 gaming tables. Chairman Lawrence Ho says he has “no idea” how many tables the government will allow

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2 | Business Daily

April 20, 2015

Macau

Taipa segment of Light Rapid Transit MOP9 billion to date The LRT has already cost MOP9 billion, the Secretary for Transport and Public Works has revealed. In the last session of the Policy Address, the door to hiring non-permanent residents and foreigners for the government was also opened João Santos Filipe

jsfilipe@macaubusinessdaily.com

Construction on idle land causing problems

T Raimundo Rosário rejects recycled water for Macau Peninsula The Secretary said he is against the implementation of recycled water on the Macau Peninsula because of the costs involved and the public works required.

“In environmental terms, it makes sense to adopt this system. But we do not lack water in Macau because we are importing it from Mainland China and it is cheap”, he said.

“Recycled water is expensive and it would only be used for toilets. Is it worth it? I have my doubts”.

On the sidelines of the Policy Address, the Secretary also revealed to journalists that in the coming months the government will launch a public consultation on reclaimed land plots B, C, D and E.

he Light Rapid Transit (LRT) segment in Taipa has already cost the government MOP9 billion, the Secretary for Transport and Public Works, Raimundo Rosário, said on Friday during his Policy Address at the Legislative Assembly.

“Considering the rail yard, and that we may not reach an agreement with the contractor, we may have to take this issue to court. This will bring extra costs and we may have to open another tender. All this process will bring extra costs to the government, which is why I cannot announce the budget for the project”, Raimundo Rosário said.

“So far, the government has spent MOP9 billion on the Taipa segment of the LRT”.

Concerning the problem of budget overruns on public works, Secretary Rosário explained that since he has taken up office budget overruns have never exceeded 25 per cent, as it would require a new government contract with the contractor.

Hiring foreigners for the government With regard to the problem of the lack of human resources

in the government, he conceded that non-permanent and foreign workers may have to be hired.

This solution was also suggested

by Legislative Assembly member Leonel Alves, who mentioned the Basic Law. “In relation to Article 97 and 99 of the Basic Law, I’ve already thought about it and I think we will have to use it. The reason I have come to this conclusion is because there are important construction [projects] approaching in the next [few] years and also quantity of construction will present problems”, the Secretary explained.

Directly awarded contracts The Secretary for Transport and Public Works also conceded that the current law on directly awarded contracts should be revised as it no longer suits the reality of the territory.

“Since the handover, there has never been a change in the directly awarded contract law, which is capped at MOP2.5 million. I agree it needs to be revised because since then the situation of Macau has changed a lot”, Raimundo Rosário explained.

The Secretary for Transport and Public Works admitted that the Law on Land approved in 2013 has caused problems for the government because it does not take into account parcels of land in which the development deadline has already expired but there are ongoing construction [projects] to develop it, as contracted by the government.

“We must find a solution for land considered idle but which have works being developed on it. The law did not take into account this scenario and so there is an omission in the law. As the law to develop the land has [been enacted] already this is a juridical and social problem”, Raimundo Rosário said of the issue.

“The government and the Legislative Assembly will have to find a solution for the problem. I don’t know who is responsible for this but I think that we will have to resolve this problem”, he told the Legislative Assembly.

On the same topic, Legislative Assembly member Mak Soi Kun suggested that there should be a list to rank the different kinds of contractors and the different kinds of construction they are able to undertake in order to avoid problems caused by lack of experience.

Raimundo Rosário said he agreed with the suggestion but did not have the capacity to create this list as his resources at the Secretariat are too stretched.

“I agree with this suggestion and many others presented here today. But I do not dare to make any promise because we already have too much work and we cannot assume more. This is like going to a buffet restaurant; I only have one stomach and its capacity will not expand so I cannot say I will eat all the food”, he explained.

Business Daily | 3

April 20, 2015

Macau

Studio City could ‘default’ on loan

C

asino operator Melco Crown Entertainment Ltd. could technically default on the approximately HK$10.86 billion (US$1.4 billion) Studio City project in Cotai if the casino-resort was unable to secure a minimum 400 gaming tables available for operation by October 2016, the company said in its 2014 annual results filed with Nasdaq on Wednesday.

“Under the Studio City Project Facility, we are required to satisfy certain conditions relating to the formal opening of the property by October 1, 2016,” Melco Crown stated in the filing. “These conditions require, among others, the full opening of Studio City for business to the general public by October 1, 2016, with a minimum 400 gaming tables available for operation.”

“In the event that we are unable to meet these conditions, it may constitute an event of default under the Studio City Project Facility,” the casino operator added.

Guarantees The Studio City Project Facility refers to the senior secured project facility, dated January 28, 2013, entered into between, amongst others, Studio City Company Ltd. as borrower and certain subsidiaries as guarantors for a total sum of HK$10,855,880,000 and consisting of a delayed draw term loan facility and a revolving credit facility, according to the company’s filing.

Under the senior term loan and

revolving facilities agreement, dated January 28, 2013, the guarantors were Australia and New Zealand Banking Group Ltd.; Bank of America, N.A.; Bank of China Ltd., Macau Branch; Citigroup Global Markets Asia Ltd.; Credit Agricole Corporate and Investment Bank; Deutsche Bank AG, Hong Kong Branch, and Industrial and Commercial Bank of China (Macau) Ltd. UBS AG Hong Kong Branch acts as book runner.

“Any such event of default could cause all amounts outstanding with respect to the Studio City Project Facility to become due and payable

immediately and entitle the lenders to take enforcement actions,” Melco Crown noted in the filing.

Control The city’s Secretary for Economy and Finance, Lionel Leong Vai Tac, reiterated last week that the average growth in the number of gaming tables will be strictly controlled within 3 per cent from 2013 to 2022.

As at the end of March, the number of gaming tables in the city was 5,630, some 81 tables less than the previous quarter.

Presenting the company’s Studio City project in January, Melco Crown’s co-chairman Lawrence Ho Yau Lung said the company hoped to get as many as 400 gaming tables from the government early in the operation of the casino-resort. The US$3.2 billion casino-resort is due to open in the third quarter of this year.

At the presentation in January, Mr. Ho said he “had no idea” of the number of gaming tables Melco Crown could get for Studio City but noted that the property was to be built with a capacity for 500 gaming tables.

S.L.

4 | Business Daily

April 20, 2015

Macau

China’s new crackdown on banks further weighing on VIP play

VIP revenues plunge 42 pct in Q1

Beijing has again signalled that it will counter outflow of corrupt cash from the Mainland, including that which has reached the local gaming industry Stephanie Lai

sw.lai@macaubusinessdaily.com

T

he cost of money transfer could increase for VIP gaming promoters here. The People’s Bank of China (PBoC) announced last week a campaign to stop the use of underground banks and offshore companies to transfer ill-gotten gains from corruption and bribery overseas.

PBoC, the central bank, will liaise with four ministries including the State Administration of Foreign Exchange, to crack down on underground banks, offshore company accounts and various illegal means of transferring cash gained from corruption, according to the central bank statement published on its official website on Thursday.

The campaign, which will last until the end of the year, dovetails with the ‘Sky Net’ operation, which focuses on capturing fugitive officials, the central bank said.

Additional difficulties “While this measure does not specifically target Macau, we believe this may create additional difficulties for players (especially VIP and premium mass) to move money and thus potentially drag [down] gaming revenue,” Hong Kong-based analysts at Credit Suisse AG wrote in a note on Friday.

“This is because high-end players normally use junkets who in turn use underground banks to move money between China and Macau. More control over the underground banks is likely to increase the cost of money transfer,” the analysts wrote.

Macau casinos are facing their lowest revenue this year since 2011 as Beijing’s anti-graft measures

stretch into a third year. Gross gaming revenue in the world’s largest gambling hub fell 39 per cent to MOP21.5 billion last month – the second-worst monthly decline on record.

Lei Kuok Keong, vice-director of local gaming workers’ union Forefront of Macau Gaming, who formerly worked at a local VIP gaming promoter, said that the Mainland government’s control of underground bank operations had already started to tighten since President Xi Jinping’s nationwide graft crackdown began three years ago.

Illegal flows “I think the central bank has released this statement at a time amid recent talk that some undeclared or even illicit flows of money have surged into the Hong Kong stock rally from Mainland China,” Mr. Lei remarked.

“But, of course, at the same time, it’s always Beijing’s aim to curb any such outflow of corrupt cash into the local gaming industry.”

While this measure does not specifically target Macau, we believe this may create additional difficulties for players (especially VIP and premium mass) to move money and thus potentially drag [down] gaming revenue

G

A Reuters analysis shows that Chinese investors have moved a net 68 billion yuan (US$10.97 billion) into Hong Kong-listed stocks via the Shanghai-Hong Kong stock connect programme since its launch in November, the vast bulk of it during just a few days in April.

That new money, plus tens of billions of dollars from a separate channel for Chinese institutional investors and untold flows from Chinese-controlled offshore funds, helped push the market’s capitalisation to HK$28.6 trillion in April from HK$25.5 trillion in November.

aming revenues from the VIP sector totalled MOP37.7 billion (US$4.7 billion) during the first quarter of the year, slumping 42 per cent from MOP65.1 billion one year ago, the latest official data released by the Gaming Inspection and Co-ordination Bureau (DICJ) reveals.

In the past three months, the city generated a total of MOP64.7 billion from the gaming industry, suggesting revenues gained from the VIP market for the quarter occupied 58.2 per cent of total revenues.

On a quarter-on-quarter comparison, the VIP gaming revenues of the first quarter also dived 18 per cent from MOP46.1 billion.

Meanwhile, mass market gaming revenues posted a year-on-year decline of 27 per cent to MOP27.1 billion from MOP37.1 billion. Compared with the last quarter of 2014, revenues in the first quarter dropped 8.1 per cent from MOP29.5 billion.

Nevertheless, the proportion of mass market revenues increased 15.2 per cent year-on-year, jumping from 36.3 per cent of total gaming revenues to 41.8 per cent during the first quarter.

Meanwhile, the number of gaming tables slightly decreased from the fourth quarter last year to 5,630 tables, down 81 tables. In addition, the number of slot machines decreased to 12,688 from 13,018 in the fourth quarter of 2014.

With Reuters/Bloomberg

K.L.

Credit Suisse

Corporate City of Dreams Macau presents Family Li Imperial cuisine

MGM MACAU wins sixth consecutive ‘Best Business Hotel in Macau’

Chinese culinary masterpiece Jade Dragon at Crown Towers, City of Dreams Macau, will present three exclusive nights of Family Li cuisine between May 8 and 10, Friday to Sunday. The successor of the legendary Family Li cuisine, hailing from Beijing, Mr. Li Xiaolin will come to Jade Dragon and prepare the Family Li menu that has inherited the essence of the imperial food served within the walls of the Forbidden City during the Qing Dynasty, offering Macau locals and tourists the opportunity to enjoy exquisite Chinese imperial cuisine.

Guests are able to enjoy more than 20 different dishes from the Family Li Imperial Cuisine restaurant in Beijing, which was founded by Chef Li Xiaolin’s father, Chef Li Shanlin. Family Li Cuisine inherits the cooking ingredients, recipes and cooking methods of the imperial kitchen of Empress Dowager Cixi’s times (late Qing Dynasty) without any modern methods.

The Family Li lunch menu is priced at MOP688 per person, with dinner menus at MOP1,488 and MOP2,280 per person, respectively.

MGM MACAU, for the sixth consecutive year, has been awarded the Best Business Hotel in Macau accolade at the TTG China Travel Awards. MGM MACAU has received the award for the past five years, after winning Best New Hotel in Macau in 2009.

Inaugurated in 2008, the 8th Annual TTG China Travel Awards 2015 presentation ceremony took place at the Grand Kempinski Shanghai on April 16, honoring the best of Greater China’s travel industry in a host of sectors including hotels and resorts, serviced residences and travel services segments throughout the region. The winners were selected based on votes by industry professionals and elite destination management readers of all TTG publications, reflecting the assessment and acknowledgement from an industry perspective.

Business Daily | 5

April 20, 2015

Macau Fiscal surplus halved in first quarter

T

he fiscal surplus as at the end of the first quarter plunged by 52.9 per cent year-on-year, as the government saw consecutive drops in its revenues whilst expenditure increased by nearly 70 per cent.

The latest central account released by the Financial Services Bureau (DSF) shows that the fiscal surplus during the first quarter of the year totalled only MOP16.5 billion compared to the MOP35.1 billion that the government posted during the same period last year.

However, the annual target of fiscal surplus set by the government is MOP51.9 billion. As such, if the fiscal surplus does not go lower than MOP16.5 billion in the following three quarters, the target can still be met and even exceeded.

More than half Macau households use tablets

Revenues down, expenditure up

Last year, the number of households equipped with tablets grew a hefty 33.6 per cent year-on-year. Local families accessed the Internet primarily via mobile broadband, and for communication. Meanwhile, the number of fibre broadband users has doubled Kam Leong

kamleong@macaubusinessdaily.com

T

he number of households equipped with tablets grew by a substantial 33.6 per cent year-on-year in 2014, meaning more than half of the city’s families with computer equipment at home also possess tablets.

The latest survey on information technology usage by the Statistics and Census Service (DSEC) indicates that 81.1 per cent of the local 189,600 families were equipped with computers last year, of whom 78.7 per cent own desktop computers, while 55.6 per cent possess portable computers. In addition, some 52.5 per cent own tablets, up 13.2 percentage points from 2013.

Meanwhile, the number of households using the Internet increased 4.6 per cent year-onyear to 159,900 last year, with the total number of Internet users up 11.9 per cent year-on-year to 420,500.

According to DSEC, households

using fibre optical broadband connection to access Internet almost doubled from a year earlier to 17,700 in 2014.

Nevertheless, most households 87.1 per cent of the total - accessed the Internet via mobile broadband, which increased 7.2 percentage points year-on-year.

By contrast, the proportion of households using fixed broadband declined by 6.4 percentage points in 2014 to 79.9 per cent of the total.

Primarily for communication The primary purpose of local residents accessing the Internet in 2014 was for communication, DSEC said, with 86.9 per cent, or 365,600 of total Internet users, claiming so, up 6.6 percentage points year-on-year.

The other two major purposes were for web entertainment and information search, accounting for 75.6 per cent and 66.9 per cent of

16 Macau-bound flights diverted to Hong Kong, Shenzhen

A

total of 16 flights bound for Macau had to land in Hong Kong, Shenzhen and Taiwan’s Kaohsiung airports due to bad weather on Saturday night, according to Macau International Airport Co. Ltd (CAM). The diverted flights also led to the cancellation of 22 departure flights. The Meteorological Bureau cited the strong south wind and 600-inch low height of clouds as reasons some of the flights could not land. The Civil Aviation Authority said flights diverted to other airports due to weather was not a special case.

the total, representing an increase of 2.1 percentage points and a drop of 6.3 percentage points year-on-year, respectively.

Meanwhile, median spending on online shopping surged 33.3 per cent year-on-year to MOP1,000 (US$125), despite the number of Internet users shopping online only growing by 0.2 percentage points, occupying 13.0 per cent of the total.

Most online shoppers purchased clothing, footwear and handbags from the Internet, DSEC said, noting that the percentage of online shoppers buying travel services from the net had doubled in 2014, reaching12,500.

On the other hand, 96.6 per cent of total Internet users accessed the Internet at home, similar to 2013 percentages. The proportion of Internet users accessing the net at any location via mobile phone grew by 10 percentage points to 79.5 per cent last year, according to DSEC.

New giant pandas arrive this month

A

new pair of giant pandas selected by the central government will arrive in the city on April 30, according to a press release by the Secretariat for Administration and Justice yesterday. The new pair of pandas will be named for the first pair of pandas in Macau – ‘Hoi Hoi’ and ‘Sum Sum’. Meanwhile, the original ‘Hoi Hoi’ will be sent back to Mainland China for a pandabreeding programme. The new pair of pandas for Macau was arranged by the local government after the original ‘Sum Sum’ died in June last year of kidney failure. ‘Hoi Hoi’ and ‘Sam Sam’ together mean ‘happy’ in Cantonese.

Meanwhile, the government’s revenues also posted a year-on-year decline to MOP28.3 billion during the first quarter, down 32.9 per cent compared to MOP42.1 billion one year ago.

The plunge in revenues was due to the biggest source of government income – gaming taxes – decreasing 32.2 per cent in the three months to MOP23.9 billion from MOP35.8 billion one year ago.

Other income, such as indirect taxes, despite only amounting to MOP805 million of total revenues, also dived 40.6 per cent year-onyear.

The slump in the city’s revenues also suggests that the revenues the government should generate in the remaining three quarters have to reach at least an accumulative MOP117 billion, or MOP39 billion per quarter, to reach the annual target of MOP141.1 billion.

Although revenues have dropped significantly, the government spent more in the first quarter.

According to DSF data, the government spent a total of MOP11.8 billion in the past three months, compared to the MOP7.05 billion of one year ago, surging 67 per cent.

Nevertheless, the money that the government has spent on investment had been cut by 56.4 per cent, amounting to only MOP25.6 million although it had allocated MOP58.8 million for the same purpose during the same period last year.

K.L.

Online food shop criteria necessary

I

n the interests of food safety, industrial standards or guidelines should be applicable to online shops that sell food products, says legislator Chan Meng Kam. The legislator submitted a written enquiry saying that even though the Civic and Municipal Affairs Bureau said that food that’s sold online is subject to the Food Safety Law online shops usually have neither physical venue nor commercial registration making it hard to trace whenever a food safety problem occurs. The legislator urges the government to tackle the loophole in food import supervision.

6 | Business Daily

April 20, 2015

Macau “Mainland China’s cake shop market has only started” Having operated online cake shop LinaLenço Dessert on Facebook for five years, Lidia Lourenço has finally opened her own shop. The 3D cake master in town shares with Business Daily her experience of quitting a full-time job and taking the risk at the age of 40 out of passion for cake-making. She wants to teach more people how to make beautiful cakes in Macau, in addition to breaking into Mainland China

Joanne Kuai

joannekuai@macaubusinessdaily.com

How did you start in the cake shop business?

I have had an online cake shop on Facebook for five years. During the fourth year, I was feeling a little bit tired. Because, depending on the complicatedness of the cake sometimes it takes 12 hours or even two day to make one.

Sometimes, I had to stay up all night long to make a cake. Also, I used to have a full-time job at TDM and had to make cakes during my free time, which meant I didn’t have any free time left.

And during weekends or public holidays, due to the increasing amount of cake orders, I had even more work than working days.

Afterwards, I had my own programme on TDM, teaching people how to make desserts. The shooting had to be arranged at weekends because I still had my full-time job during weekdays.

That made me even busier than before.

But actually, I didn’t do it because of the money but out of my passion. I really like making cakes. Despite being busy and the hardships, I was really gaining a lot of pleasure and satisfaction.

However, that type of schedule was really making me unhealthy. I had even lost a lot of weight. Even my colleagues scolded me, saying that I shouldn’t keep doing it.

I stopped taking orders to make cakes for a while, but I saw on Facebook that more and more people were doing this and I was so afraid of losing my customers.

After I had my second child, my daughter, I told myself that 100 days after the delivery I had to get back to work and I did. I’m the type of person that gets excited and more energetic when there is more work; when there’s nothing to do I feel bored.

However, I still needed to spend time with my family, my kids.

Sometimes, during the weekends, I could only sleep for two hours because I would take my kids to Hong Kong and play to accompany them. I can’t be that selfish to focus all on my own work but neglect them.

You know, with the full-time job I had in TDM we had a one-month holiday for annual leave. I would use these times to go abroad to join cake-making workshops, to learn new skills, or even busy myself with my cake orders. Because of that, I didn’t really enjoy the ‘holidays’ with my children and family.

I started thinking that I might have to give one thing up – either the job at TDM or the cake-making.

It was a very difficult decision to make. I had been with TDM for more than 10 years and I had such good colleagues and friends there.

And I thought about my age. I am 40 year old already. And there

probably is no way back if I quit a full-time job. I didn’t know if I should take the risk or not. But I really love making cakes. After a lot of struggling, I handed in my letter of resignation.

During that time, taking orders to make cakes was my sole source of income. But if I went out to join workshops, I couldn’t make money. And my energy was not like before. I really felt like I got tired more easily after having my daughter two years ago.

Around Christmas time last year, I thought I needed another way out. And I thought why not open a shop? I would take orders and make cakes here as well as hosting workshops and giving lessons on how to make cakes. I imported cake-making materials and tools from Hong Kong and Britain and other places to sell in my shop so that people here in Macau didn’t need to travel that far or go through a lot of hassle to buy the ingredients and tools.

How did you start making cakes in the first place?

You’re not going to believe this story. It was back in 2009. I had one month’s holiday and I went to Britain. The last week I stayed at my home there I was feeling very

eat them all. But my colleagues started complaining because I had been ‘feeding them too well’. And they asked me ‘why don’t you open an online shop on Facebook?’ I thought ‘why would anyone order my cakes?’ And they told me ‘it’s free anyway’. Then I decided to give it a try. And I still remember the first day I opened the page on February 1, 2010 - I received my first order immediately.

In the first half year, I was making ‘simpler cakes’. But a lot of people were requesting some more ‘complex cakes’. I couldn’t tell them I didn’t know how to make them: I just said ‘the ingredients are out of stock, just wait’. And I noticed that more people were selling those ‘complex cakes’.

I thought I must adapt to the market otherwise I would lose all the customers, so I bought books from Britain on Amazon and started reading and teaching myself.

In the first six months that I started making 3D cakes, I charged quite little, merely for the ingredients.

Every time I make a cake, the idea was given by the customer because they ordered something particular.

Only after that did I gain more confidence and charged a bit more.

Now that I look back, some 3D cakes I made in the beginning were rather ‘ugly’; I really appreciated my customers’ support.

Anyway, it reached a point that I really needed to go and study more skills. The first time I went - to take a course in Scotland - it was not some fancy skills that I learned but more about some efficient ways for me to save more time. There are many ‘tricks!’

I don’t have a limit or special requirement, some of my customers are so-called VIPs in town, some are just ordinary people

bored and I started to search on YouTube how to make chocolate cakes. There was a page teaching people how to make them step by step. I didn’t know how to make cakes before. Anyway, I managed to make one and I took a pretty photo and posted it on Facebook, and there were a lot of ‘Likes’ and I was so happy. And I continued doing it – making cakes, posting pictures, people ‘liking’- I was enjoying it a lot. And when I got back to work, I would bring the cakes I made to my colleagues because I made them but I couldn’t

How is the business in terms of cake orders?

On average, I have at least 30 orders a month. For example, now my cake booking schedule is full ‘til the end of May. Now I take fewer orders, because before the cakes I made were simpler; now the cakes I make are bigger and take longer to make.

The price of normal cakes ranges from MOP300 to MOP600. The cookies, which are quite popular now, are sold for MOP250 a pack.

There are 14 in a pack. You can’t find those cookies, anywhere else, not even in hotels. It’s my own special recipe.

For 3D cakes, the cheapest is MOP700. The most expensive one I made was MOP10,000. It was for Rain (Korean pop star). Last year, he was in town for a jewellery shop opening and the staff found out his birthday was the next day. His assistant gave me a phone call and ordered the cake. I felt like it was a dream. It’s a very unforgettable memory.

Who are your target customers?

Business Daily | 7

April 20, 2015

Macau Frankly speaking, I never dreamt of achieving what I’ve achieved so far. That’s why I think people should not think too much or calculate too much about what they are going to get in the future because nobody can predict the future

I don’t have a limit or special requirement. Some of my customers are so-called VIPs in town. I do feel honoured that they order cakes from me. Some of them are just ordinary people.

And 98 per cent of the customers are not really my friends. They really come to me because of my work. Some of them have to even ‘save up’ to buy my cakes. I know my products are not cheap. But it’s worth every penny because of the ingredients I use and my dedication and hard work.

I remember there was a boy that’s apparently still in school. He was very sincere when he came to put down the order. I knew that he was in school because he was even wearing school uniform. So I charged him only a little.

How is the experience of giving workshops?

It’s quite rewarding. Some students come in with ‘zero’ but they leave this place with new knowledge and ideas. I was very glad to see that when making a cake they can really achieve some techniques and build up something beautiful step-by-step.

Another important thing is that when I make cakes for my customers I always insist on delivering the cake myself because I love seeing their happy faces and I want them to feel comfortable. This is an intimate feeling for me to build up a relationship with my clients.

When giving classes, it’s similar in a way to meeting people who share your passion in making cakes and you can chat and exchange ideas and make cakes together.

I treasure this friendship that we build up through this.

Some of them come from Hong Kong, some even from Beijing.

You also invite masters from overseas, right?

Yes. Karen was the first one here to give the master workshop. She has always been my idol. I’ve been admiring her work for a long time.

I sent her many messages before

for years but she never replied.

Once I saw she was holding a workshop in Dublin and I signed up immediately. I expressed my admiration immediately when I met her. And I followed her to Spain again.

When I was planning the opening of the shop, I thought about her and sent her a message and she agreed immediately. I was very happy. That’s why actually the opening date of my shop was decided because of her schedule.

She gave the workshop the day following the opening ceremony of my shop. Fortunately, everything went well.

The upcoming one is by Natalia.

The technique she has is very unique. I am very curious about how she ‘plays around’ with gravity. She’s never been to Hong Kong, China, or even Asia. So I want to be the first to invite her here, to Macau.

Why did you choose this location?

I know this is an industrial building. But you must understand that a shop on the street would ask for way much more rent. I would go bankrupt before I opened my shop if it were on the street.

I went to some shops in Hong Kong. Some of them are very out of the way, as well. I think that if people like it they will find it, anyway.

Also, after five years’ experience of having the online shop on Facebook, I have a group of people that follow my page closely. When I said I was opening a shop, some of them really came to visit. It’s a very unique feeling that we finally get to meet each other in person.

What’s your marketing strategy?

So far, it’s just based on social media. Facebook and also Wechat for the Mainland market. It’s basically word of mouth.

How did you come up with the name LinaLenço for the shop?

That came from my middle name and last name. I don’t really like my first name. When I was 14 year old, I wanted to be a fashion designer and I had this name in my mind for my future brand already.

And when I had the online cake shop, I consulted a lawyer back in 2013 and had all my licences done and trademark registered.

Now you have your own shop, please share the experience – what do you think’s the biggest reason behind your success so far?

When giving classes, it’s similar in a way to meeting people who share your passion in making cakes and you can chat and exchange ideas and make cakes together. I treasure this friendship that we build up through this

Frankly speaking, I never dreamt of achieving what I’ve achieved so far. That’s why I think people should not think too much or calculate too much about what they are going to get in the future because nobody can predict the future. Even though I have my shop now I don’t know whether it’s going to be successful or not.

What’s the future plan?

I have a dream that I want to get a certificate from the school in Britain so that I will be qualified and teach students here more systematically; and that they will be awarded with certificates after completing my course.

I have another dream: I usually make the cakes based on customers’ requests and follow their instructions. However, there are some really difficult and beautiful designs in my mind that I haven’t put into practice. In the next five years, I hope to put more effort into developing my own design and style because this is an art. I wish one day that someone will invite me to give a master workshop, just like Natalia or Karen.

Another important thing is to break into the Mainland China market. Mainland China’s market has only just started. I wish one day someone would invite me to give a course there. Also, I have already got the licence to distribute Belgium chocolate in Hong Kong, Macau and Mainland China. So I want to have a course there and sell my products as well.

That’s why I also want to have the copyright of the future TV programme that’s probably coming soon. I want it to be broadcast on the Mainland.

8 | Business Daily

April 20, 2015

Gaming Judge says FBI ruse violated Paul Phua’s rights The FBI violated the rights of a former Macau junket operator when agents posed as Internet repairmen to get into his Las Vegas suite to search for evidence of wrongdoing during the World Cup soccer tournament last summer, a U.S. federal judge has ruled, Associated Press reports. The ruling threw out evidence collected last July from Paul Phua Wei-seng’s high-security luxury villa at Caesars Palace. “The government violated the defendant’s Fourth Amendment rights” against unreasonable searches and seizures, U.S. District Judge Andrew Gordon said in a bluntly worded decision. Phua’s attorneys said they were stunned to learn that investigators enlisted a Caesars contractor to shut off Internet access so that agents disguised as repairmen could enter with hidden cameras.

Steve Wynn ‘obligated’ to vote for Elaine Wynn The former wife of the American billionaire says he has endorsed her to be re‑elected to the board of directors. Now he explains he is obligated to do so and that his words must not be “misconstrued” João Santos Filipe

jsfilipe@macaubusinessdaily.com

S

teve Wynn says his words must not be misinterpreted in relation to supporting the re-election of his former wife Elaine Wynn to the board of directors of the company. The casino mogul also said that he supports independent directors and that he is obligated to vote for Ms. Wynn’s re-election.

The clarification of the Cofounder and CEO of Wynn Resorts came after his wife

announced that she had the endorsement of her former husband, which according to her was announced on a TV show in relation to her re-election to the board of directors.

“My comments on The Charlie Rose Show should not be misconstrued. Decisions about nominations and re‑nominations of directors are the responsibility of independent directors of

Wynn Resorts Limited. They have made the decision about the re-nomination of Elaine Wynn for the reasons which they have thoroughly and carefully explained to our stockholders”, he said. “It is very important that all stockholders know that I have nothing but the highest respect for the independent directors, their business judgment and their overriding sense of fiduciary responsibility

to Wynn Resorts and its stockholders”.

Wynn also went on to explain that he has no other option but to vote in favour of Elaine Wynn’s re-election.

“Under the stockholders agreement (which Ms. Wynn seeks to invalidate through litigation) I am obligated to vote in favour of Ms. Wynn’s re-election”, he clarified.

The directors of Wynn Resorts want to remove Elaine

Wynn from the board because of a lawsuit she filed against Steve Wynn regarding her ability to sell stock. Ms. Wynn has a 9.4 per cent stake in the company, which makes her the third largest shareholder, but the shareholder agreement limits her to US$10 million annual share sales over the next decade. She filed the lawsuit against her former husband in order to scrap this limit.

Apa Group to build Japan’s biggest hotel in Yokohama

A

pa Group aims to capitalise on a boom in visitors to Japan by building the country’s biggest hotel in time for the Tokyo 2020 Olympic Games, the chief executive of the nationwide hotel chain said.

The unlisted operator of midpriced accommodation plans to open a 2,400 room hotel in the port city of Yokohama, some 40 km (25 miles) south of a capital city experiencing an upsurge in room rates following a 29 per cent jump in tourists last year.

“With the possibility that Yokohama might host a casino, the city will attract more people and that’s good for us,”

Toshio Motoya said in an interview, referring to the ongoing debate over the legalisation of casino gambling.

Apa has been expanding in Japan to help cater to the 20 million visitors a year the government targets by 2020 from a record 13.4 million in 2014, achieved by relaxing visa restrictions and broadening the range of goods available tax-free.

Olympic boom The boom has attracted firms other than hoteliers. Last month, a Fuji Media Holdings Inc. subsidiary edged

out a fund run by Morgan Stanley to buy a hotel holding company. A month earlier, private equity firm Bain Capital Partners spent US$400 million on a hotel operator.

As well as its Yokohama project set to depose its Makuhari which, from 2016, will expand to 2,001 rooms from 1,501 - Apa plans a 1,000-room hotel near Tokyo’s sumo stadium in Ryogoku, and a 620-room hotel in the Tokyo shopping district of Shinjuku.

With those in the pipeline, Apa will become the capital’s biggest chain by number of rooms, according to its website.

“I still think we have the best business opportunities in Japan and particularly Tokyo is attractive so that’s our prime focus,” Motoya said. “But eventually the market will mature and that’s when we will shift our focus to overseas.”

Apa plans to expand in Asia over the next five years to counter impending market saturation and an inevitable lull after the Olympics, Motoya said. The hotelier wants local partners, particularly in Singapore, South Korea and Taiwan, he said.

Reuters

Business Daily | 9

April 20, 2015

Hong Kong

10,000 retail outlets launch joint campaign

I

t’s a joint effort against the background of consecutive months of dropping sales. More than 10,000 retail outlets, restaurants and malls in Hong Kong will take part in a fiveweek campaign to attract tourists and hopefully boost consumer spending by 20 to 30 per cent, The Standard reports.

The paper said that Hong Kong’s Tourism Board is pushing the ‘Happy at Hong Kong Super Jetso’ campaign using HK$20 million of the HK$80 million allocated from the budget to stimulate tourism. The campaign will run from April 27 to May 28, with some sectors specifically targeting locals.

Some of the biggest retail players in the city will slash prices. Ocean Park has partnered with Yahoo to offer 40 per cent off admission tickets if purchased online. At Disneyland, Hong Kong residents who spend two nights at either of the resort’s two hotels get free buffet dinners and children will receive free admission to the park and free breakfast. Madame Tussaud’s wax museum on The Peak will offer a free children’s ticket per each adult ticket.

Malls take the stage Giant malls in Causeway Bay, Tai Koo, Tung Chung and Tuen Mun, will also offer concessions such as a HK$10 dining coupon per HK$100 spent. Tai Hing Roast restaurant

Watch sellers call time

W

chain is offering a HK$20 voucher for every HK$100 spent. Cosmetics chain Sasa is offering a HK$30 coupon for every HK$100 spent. Luxury watch store Emperor Watch and Jewellery is offering 50 per cent off some watches and jewellery products.

Retail association chairman Simon Kwok Siu-ming told The Standard that the global economic environment, strong Hong Kong dollar, and adjustment of the multiple-entry permit scheme have hit the catering, retail and tourism industries.

Commerce Secretary Gregory So Kam-leung said the campaign targets

both tourists and local residents. Each tourist will also have the opportunity to participate in a lucky draw for airline tickets and hotel rooms.

The Standard reported that initial reaction among locals is that the concessions are not attractive enough.

“The concessions are even less than the discounts provided for shopping by some banks’ credit cards,” one said.

However, a tourist from Guangzhou welcomed the promotion, saying he will go to Ocean Peak with his family because of the lower ticket prices.

“The discount is quite huge,” he told the Hong Kong newspaper.

atch sellers in Hong Kong are reducing operations amid sluggish business that has been hit by fewer tourist arrivals, The Standard reports.

Kowloon Watch Co. will close its 20-year old branch in Sha Tin next mid-month, while Stelux Holdings has ended the tenancy for one of its City Chain outlets in Mong Kok. “Upper class retailers are asking for discounts of from 30 to 40 per cent before renewing leases,” Kevin Lam Ying-wai, head of business space at commercial property consultancy DTZ told the newspaper.

Brand name watches in Kowloon Watch, including Tudor and Omega De Ville, are being sold at 30 to 40 per cent discount. Kowloon Watch abandoned its site on Percival Street, Causeway Bay, last month as revenues declined an average 20-30 per cent across its branches.

Brands that have multiple outlets within a short distance such as on Canton Road, Haiphong Road and Nathan Road are most likely to vacate one or two sites when current contracts expire, Lam said.

City Chain has abandoned one of its two branches on Sai Yeung Choi Street South. The 350 sq. ft. site, with a monthly rent of more than HK$300,000, is located at No. 28, close to the other branch at No. 30.

The owner of the vacated property, Jimmy Tang Kui-ming, also the chairman of Prince Jewellery & Watch, said that the anti-parallel trading protests had dealt a severe blow.

McMac Co. Ltd. (McDonald’s Macau)

20th April Welcome Advertisement outlined.indd 1

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10 | Business Daily

April 20, 2015

Greater China Accelerating yuan’s internationalization Beijing will accelerate reforms to the country’s currency as part of a push for the yuan’s inclusion in the International Monetary Fund’s currency basket, China’s central bank governor Zhou Xiaochuan said on Saturday. In a statement to the IMF steering committee, Zhou argued that Beijing had made strides toward making the yuan freely convertible, and that it should be included in the IMF’s Special Drawing Rights basket. China has committed to further open its capital account and liberalize the way the exchange rate for the yuan, or RMB, is managed, including reducing currency market intervention.

Minsheng to invest in solar power plant Minsheng Investments (CMI) will invest 15 billion yuan (US$2.4 billion) in a 2 gigawatt solar power plant in the north-western region of Ningxia, which the company says will be the largest such plant of its kind in the world. CMI, the largest private investment fund in China, said in an announcement emailed to Reuters that the plant would take up around 60,000 mu, equivalent to nearly 40 square kilometres. The news comes after CMI said in February it would invest 1 billion pounds (US$1.5 billion) in a Chinese-led project to develop a new financial district in London.

China-Malaysia renew currency arrangement China and Malaysia have renewed their currency swap arrangement for a further three years, according to a statement on the website of the Malaysian central bank. The swap exchanges 180 billion yuan (US$29.04 billion) for 90 billion ringgit (US$24.83 billion), according to the report, unchanged from the previous swap arrangement in 2012, which increased the size of the first swap signed in 2009.

“This renewed bilateral currency swap arrangement reinforces the on-going commitment by both central banks in promoting the use of local currencies for payment settlement,” said Bank Negara Malaysia in its statement.

Alibaba fined for pricing violations E-commerce giant, Alibaba Group, has been fined 800,000 yuan (US$129,000) by the price bureau in eastern Zhejiang province for violations by third-party sellers during promotions on its e-commerce platforms. “The company has been fined 500,000 yuan (US$81,000) for matters related to Singles’ Day pricing by third-party sellers on our Tmall marketplace in 2013 and 2014 and 300,000 yuan (US$48,000) for pricing in other promotions in 2013 and 2015,” Alibaba Group said in a statement.

Educated and young “fox hunters” China’s team charged with hunting down officials suspected of corruption who have fled overseas is aged 30 on average, speaks foreign languages and is well educated, a Chinese official said, giving rare details of a secretive operation.

The government launched Operation Fox Hunt last year to go after suspects who have left China to try and seek refuge abroad, often taking large sums with them, though little information about the project has been made public.

Zhou says China has room for monetary easing The People’s Bank of China made its first interest-rate cut in two years in November and followed with another reduction announced in February Bonnie Cao

C

hina’s central bank Governor Zhou Xiaochuan said the world’s second-largest economy has scope compared with other nations to ease its monetary policies though won’t necessarily take advantage of it.

“We have room in the reserve ratio and our interest rates are not zero yet,” Zhou, said in a brief interview in Washington, where he was attending the International Monetary Fund’s spring meetings. “There is definitely room. But we need to adjust carefully.

It doesn’t mean we will have to utilize it or fully utilize the room.”

Banks including Macquarie Group Ltd. and HSBC Holdings Plc flagged the need for further stimulus after China’s economy expanded last quarter at the slowest pace since 2009 and industrial-production gains in March were the slowest since November 2008. An economy-wide inflation indicator turned negative last quarter for the first time since 2009, suggesting room for easing.

Premier Li Keqiang last month

said policy makers will step in to support the economy if jobs and wages are hurt by the slowdown, while Zhou previously said the nation needs to be vigilant about deflation risks and policy makers have “room to act.”

Property slump China is battling a property slump, excess industrial capacity, localgovernment debt and capital outflows, with the economy last year expanding at the slowest pace since 1990. The nation is among at least 30 countries that have loosened monetary policy this year as lower commodity prices give room to stimulate.

Gross domestic product rose 7 percent in the three months through March from a year earlier, while industrial production last month increased by 5.6 percent, after a 6.8 percent rise in the first two months of the year.

In a statement at the meetings in Washington taking place from Friday to Sunday, Zhou said that

The market should be the judge of the renminbi’s value rather than us Zhou Xiaochuan, People’s Bank of China Governor

while China’s economic expansion is slowing, it’s still within a “reasonable range” and employment growth remains stable.

He reiterated that China will pursue “prudent” monetary policy and said it will adjust “adaptively” according to the economy and

Securities regulator denies encouraging short-selling In the past, short-selling was tightly restricted in China and most investors focused on making money on upside stock moves

C

hina’s recent liberalisation of stock short-selling rules is not intended to encourage the practice, the China Securities Regulatory Commission (CSRC) said on Saturday, after overseas markets dropped sharply in response to the move.

In a post on its official microblog account, the CSRC published a transcript of a journalist question and answer session in which it was asked whether the goal of the policy was to encourage short-selling and depress the stock market.

“This is a misunderstanding, a misreading,” the CSRC said.

Short-selling involves borrowing stock in order to sell it, with the aim of buying it back more cheaply and thereby make a profit. The practice has been blamed in some countries for sharp falls in stock markets.

Chinese regulators said on Friday, after mainland markets had closed, they would allow fund managers to lend shares for short-selling, and would also expand the number of stocks investors can short sell, in a bid to raise the supply of securities in the market.

Institutional investors including mutual fund companies and asset management businesses of securities firms are encouraged to lend stocks because the “margin financing

This sort of trade is a mature mechanism used in overseas markets, it helps moderate volatility and helps with price discovery and hedging against risk ... It is certainly not encouraging shorting as has been said, even less an attempt to suppress the market China Securities Regulatory Commission

business has been growing rapidly, but the business of short-selling has been developing slowly,” the Shanghai and Shenzhen stock exchanges said in a statement.

Some traders blamed a fall in overseas markets on the news, with the S&P 500 posted its biggest percentage loss since March 25.

Bourses in mainland China and in Hong Kong have been surging in recent months, as Chinese investors pile into both markets, many of them making heavily leveraged bets that the bull run -- which has seen the CSI300 index rise over 87 percent in the last six months — has further to run.

Major indexes hit seven-year highs on Friday, as retail investors rushed to open stock accounts and borrow a record amount of money to buy shares, pushing trading turnover to record highs.

Some expect the rally to continue with tacit policy support from Beijing, but others are worried it could come unhinged given the heavy presence of individual Chinese retail investors, many of them inexperienced, and the fact the rally is occurring while the rest of the economy shows signs of weakening.

However, recent experiences with sharp short-term market corrections have shown — in particular retail investors that conduct between 6080 percent of transactions in Chinese stock markets — lack adequate hedging options such as shorting.

Reuters

Business Daily | 11

April 20, 2015

Greater China

Zhou Xiaochuan (C) People’s Bank of China Governonr, between Tharman Shanmugaratnam (R), Chairman of the Monetary Authority of Singapore, and German Federal Minister of Finance Wolfgang Schaeuble (L) a IMFC meeting last weekend

inflation, according to the statement posted on the PBOC’s website.

Stock market One hurdle that may curb the extent of any monetary stimulus is China’s surging stock market, which took off

after the central bank cut interest rates in November. Another may be reticence to reignite debt risks and a repeat of the 2009 stimulus binge.

Zhou and the Chinese government have been pressing the IMF to include the yuan in its Special Drawing Rights basket of currencies regarded as global

reserve currencies. IMF Managing Director Christine Lagarde has said that “we welcome and share this objective.”

Zhou, in Saturday’s interview, declined to speculate on when the yuan, also called the renminbi, would be added to the basket.

March home prices fall China has implemented a series of loosening policies since the third quarter of 2014 Clare Jim

C

hina’s average new home prices continued to fall in March, but on a narrowing trend that is expected to continue as the government’s stimulus policies bolster sales volumes.

Average new home prices in China’s 70 major cities dropped 6.1 percent last month from a year ago, the seventh consecutive month fall, following February’s 5.7 percent decline.

But the monthly fall between March and February was 0.1 percent, narrowing from a 0.4 percent fall in the previous month, with the capital city of Beijing braking eight consecutive drops and rising 0.3 percent, as prices continue to stabilize.

China’s gross domestic product

grew at its slowest pace in six years at the start of 2015, building expectations that authorities will roll out more policy stimulus to avert a sharper slowdown.

Growth in China’s real estate investment in the first quarter slowed to 8.5 percent from a year earlier, the lowest rate since 2009 as developers focused on clearing excess inventory, but property sales volume’s decline narrowed, down 9.2 percent.

Price recovery will be slow, however, weighed by inventory still at its high level especially in the lowertier cities, as many developers are resorting to price cuts to reach sales targets.

“The slowing decline in home prices was in line with expectations

and it didn’t show big improvement.

After the stimulus policies in late March, we have to have at least three more months of solid data to confirm a bottoming of the housing

The IMF this week indicated it may be abandoning its long-held view that the Chinese exchange rate is undervalued.

“The market should be the judge of the renminbi’s value rather than us,” Zhou said.

Bloomberg News

downturn,” said Roselea Yao, an economist at Gavekal Dragonomics based in Beijing.

“If we don’t see much better data, the government will have to roll out more loosening policies such as raising the household leverage.”

The National Bureau of Statistics (NBS) data on Saturday showed new home prices in Beijing rose 0.3 percent between March and February, bouncing from a 0.2 percent fall in February from January, while Shanghai prices were flat following a 0.1 percent fall. Another top-tier city, Shenzhen, rose 0.7 percent after 0.2 percent last month.

Liu Jianwei, a senior statistician at NBS, said in a statement that he expected home sales and prices to continue to stabilize.

China has implemented a series of loosening policies since the third quarter in 2014, relaxing home purchase restrictions, cutting interest rates, and easing bank reserve requirements to bolster the housing market, which accounts for some 15 percent of GDP. The latest policy measures include lowering second-home mortgage terms and increasing home-buying tax breaks.

Reuters

12 | Business Daily

April 20, 2015

Asia India issues fresh tax notice to Vodafone Indian tax authorities have issued a fresh notice to Vodafone Group Plc seeking re-assessment of tax returns for assessment year 2009-2010, news channel ET Now reported on Saturday citing sources familiar with the development. The government in January said it would not appeal a regional court ruling in favour of Vodafone in a long-running dispute under which the taxmen had accused a unit of the British telecoms firm of under-pricing shares in a rights issue. Vodafone has 30 days to respond to the fresh notice, the news channel’s report said.

Cambodia unveils garment figures Cambodian Labour Minister said yesterday that the country’s garment and footwear industries, the kingdom’s largest foreign currency earner, are comprised of 1,087 factories with 700,000 direct jobs. “These factories have spent more than US$1 billion on wages per year,” he said. “In addition, the garment and footwear industries generate about 2 million indirect jobs, such as house rentals, food sales and transportation,” he said. According to the Ministry of Commerce, the nation exported garment and footwear products worth nearly US$6.2 billion last year, accounting for 80.5 percent of the country’s total export.

Australia to join tax avoidance efforts Australia and the U.K. will collaborate on ways to stop multinational companies diverting profits and avoiding taxes, according to Australian Treasurer Joe Hockey. The countries will establish a working group subject to the completion of the U.K. general election next month, Hockey said in an e-mailed statement yesterday. The group will develop measures to address multinationals diverting profits away from host countries, he said. The Organization for Economic Cooperation and Development is reviewing strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

Japanese debt rating pending budget Japan’s sovereign debt rating will come under downward pressure if its government falls behind on its goal of achieving a primary budget surplus in fiscal 2020, Tom Byrne, senior vice president of Moody’s Investors Service, said. The budget target has become increasingly difficult to achieve with Prime Minister Shinzo Abe having delayed a second sales tax hike last year, after the first increase nudged Japan into recession. Abe’s decision prompted Moody’s to cut Japan’s sovereign debt rating by one notch to A1 in December. The U.S. ratings agency has said the outlook was stable.

Rice and auto parts become key at U.S.-Japan trade deal Rice, wheat, barley, beef, pork, dairy products, sugar and starch crops are considered politically sensitive products that have to be protected by Japan Aya Takada

J

apanese and U.S. negotiators will seek to resolve the most contentious issues of rice and auto parts to help the two countries reach a trade pact, Japanese Economy Minister Akira Amari said.

Both sides need to soften their stance to reach an agreement, Amari said on public broadcaster NHK yesterday, before meeting U.S. Trade Representative Michael Froman for high-level talks on a trade deal that negotiators hope will lead to a broader Asia-Pacific pact involving 10 other nations.

An accord giving the U.S. and Japan access to each others’ markets for products such as rice, pork and automobiles would only take effect if incorporated into the Trans-Pacific Partnership, a 12-nation negotiation that Japan joined in 2013. Although all the governments must agree, the U.S. and Japan are by far the largest economies involved.

“We cannot accept all the U.S. requests on rice imports,” Amari said,

Japan’s rice is a protected product

without elaborating on the demands.

“We will negotiate cautiously for a deal that could be accepted by Japanese lawmakers.”

Amari could not ignore a resolution

by Japanese lawmakers, which says any trade deal should not undermine

sustainability of rice production by local farmers, he said.

Rice, wheat, barley, beef, pork, dairy products, sugar and starch crops are considered politically sensitive products that have to be protected, according to Hiroshi Oe, Japan’s TPP

Malaysian central bank Governor sees slower growth The fall in commodity prices is also affecting Malaysia’s currency

M

alaysia’s economy may expand less than previously expected this year, in part because of slower external demand as the rest of the world grows at a pace that’s only moderate, central bank Governor Zeti Akhtar Aziz said.

Malaysia’s current interest rates are accommodative and conditions now allow the nation to maintain borrowing costs “at these levels,” she said.

While the global recovery “is so modest that it’s not going to fuel inflation,” Zeti said a lack of price pressures shouldn’t prevent central banks from increasing interest rates to prevent imbalances from forming.

The U.S. Federal Reserve should act sooner rather than later, she said.

Zeti said that reversals “have already commenced” in the run-up to the rate increase, which could come as early as June. She said Asia as a region will also be resilient in the face of any volatility that comes from the Fed policy change.

Malaysian central bank Governor Zeti Akhtar Aziz

Malaysia’s government said in January that growth will be 4.5 percent to 5.5 percent this year, down from an earlier projection of as much as 6 percent. Zeti said in the interview that the midpoint could be “slightly lower” at about 4.8 percent.

Consumption tax Risks depressing the outlook include slower external demand and a pullback in domestic consumption

after the government implemented a new consumption tax, which is 6 percent and started in April.

Lower oil prices are also playing a role in the slowdown, she said.

Malaysia derives about 30 percent of its government revenue from oilrelated sources.

Zeti also said Asia has “immense” infrastructure demands, and that the China-led Asian Infrastructure Investment Bank shouldn’t be viewed as a challenger to the World Bank.

When asked if China could surpass the U.S. as the driver of the world financial system, she said that two or more global leaders would be better for global stability. The Chinese renminbi does have potential as an international reserve currency, she said.

“I am still very positive that the euro will emerge as an important international reserve currency,” she said. The potential for the yuan to become one of them is “significant.”

Bloomberg News

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

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Business Daily | 13

April 20, 2015

Asia ambassador. Japanese farmers are a central constituency of the ruling Liberal Democratic Party.

Rice The U.S. is demanding that Japan should increase imports of U.S. rice by 215,000 metric tons, of which 175,000 tons is for table rice and the remainder for food processing, said NHK. Japan bought 360,000 tons from the U.S. last fiscal year, almost half the volume that the nation must import under a World Trade Organization deal. The country imposes a duty of 341 yen (US$2.87) per kilogram on imports above the quota.

Japan’s rice consumption is declining as its population ages and shrinks. Table rice consumption will fall 1 percent to 7.8 million tons for the year to June 30, the Agriculture Ministry forecasts, a decline of 10 percent from a decade earlier.

Consumption will continue to slide by about 80,000 tons annually for the foreseeable future, Vice Agriculture

Japanese Prime Minister Shinzo Abe to visit Washington on April 28

Minister Yoshitsugu Minagawa has said.

Car parts For auto parts, Japan is demanding an immediate elimination of 2.5 percent tariffs on imports. Amari told NHK yesterday he expects Froman to concede on the duties as the product isn’t politically sensitive for the U.S. and the American vehicle industry is dependent on parts supply from Japan.

Froman said Thursday that the broader group of countries is also nearing completion of the Asia-Pacific pact, which would cover about 40 percent of global trade.

The visit by Froman, President Barack Obama’s top international trade adviser, to Japan April 19-20 comes ahead of a visit by Japanese Prime Minister Shinzo Abe to Washington April 28. In trade talks, ministers often finalize details of pacts, which are then formally approved by heads of state and government.

“I expect them to welcome progress in TPP talks at their summit meeting,” Amari said.

A bipartisan group of lawmakers in the U.S. Congress introduced on Thursday legislation that would grant the president fast-track negotiating authority. It would let the president submit trade deals to Congress for an expedited vote without amendments.

For TPP members to complete the trade deal, Japan and U.S. must wrap up bilateral talks and U.S. Congress needs to pass the Trade-Promotion Authority bill, Amari said.

“I expect the TPA bill to be passed by the end of May,” he said.

Bloomberg News

Sri Lanka bars central bank chief from foreign travel Prime Minister sets up three-member panel to investigate alleged insider dealing

S

ri Lanka has imposed a three-month ban on overseas travel by its central bank governor, Arjuna Mahendran, who faces an investigation over alleged insider dealing, an official said on yesterday.

Sri Lankan Prime Minister Ranil Wickremesinghe set up a threemember panel to investigate the alleged insider dealing at a February 27 bond auction after opposition parties accused Mahendran of involvement and demanded an independent inquiry.

The probe panel was scheduled to hand its findings to the prime minister on April 10, but the outcome has yet to be made public.

“The Bribery Commission has asked to impose a travel ban on the central bank governor for three months,” A. H. L. De Zoysa, a spokesman of the Immigration and Emigration Department, told Reuters.

He said Mahendran’s passport had not been impounded, but he had been barred from foreign travel to facilitate the Commission’s investigation.

Mahendran, a Sri Lankan-born

Singapore national, was questioned on Thursday by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), media reported.

Mahendran, as well as officials of the anti-graft body, declined to comment on the investigation.

The central bank governor took a voluntary leave of absence from March 16 pending the outcome.

At the February bond auction, the government raised more than 10 billion rupees from a 30-year treasury bond at 11.73 percent after initially offering just 1 billion rupees with an indicative price of 9.5 percent.

Soon after the auction, primary dealers raised concerns over possible insider dealing, as one particular dealing house had been favoured and the yield spiked more than 2 percent from the indicative price of 9.5 percent.

Besides the Mahendran investigation, Wickremesinghe also launched an inquiry into allegations of corruption in government bond sales by the central bank since 2012.

Reuters

14 | Business Daily

April 20, 2015

International Comcast, Time Warner to meet officials over merger Representatives of Comcast Corp and Time Warner Cable Inc are preparing to meet U.S. Department of Justice officials to discuss competition concerns raised by the planned US$45 billion merger of the two cable giants, the Wall Street Journal reported on Saturday.

The meeting next Wednesday would aim to negotiate possible concessions addressing those concerns, the Journal said, citing people familiar with the matter. The paper said it would be the first time the two cable giants have met with regulators since announcing their proposed deal a year ago.

Deutsche Bank revamps retail business Deutsche Bank will sell Postbank but keep a pared back own-brand retail business in the overhaul plan currently favoured by management, sources familiar with the internal discussions at Germany’s biggest lender said. Only two management board members support dumping all retail activities, with the other six favouring just selling Postbank, the sources told Reuters, speaking on condition of anonymity as the matter is not public. The bank will decide on the hotly-debated overhaul as soon as next week, they added.

IMF nations point to exchange rate, geopolitical risks Low inflation remains a concern for many developed economies David Chance and Anna Yukhananov

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he International Monetary Fund’s member nations warned of risks to the global economy from exchange rate shifts and geopolitical tensions as they took note of “moderate” global growth and “uneven prospects.”

While economies in developed countries have strengthened, some emerging nations are being hit by weaker commodity prices and exports, the IMF’s steering committee noted in a communiqué.

With the United States poised to hike interest rates, the panel - speaking for the Fund’s 188 member nations - said moves toward “policy normalization” needed to be effectively communicated to reduce adverse impacts on other economies.

It also said the “possibility of lower growth potential” was becoming an important global challenge, a topic the panel’s chairman said was central to talks on Saturday.

The spring meetings of the IMF and World Bank, concluded yesterday, have taken place amid growing concerns cash-strapped Greece will fail to reach agreement with its European Union and IMF creditors on reforms that would unlock bailout cash and stave off default.

At the same time, risks of a stronger dollar and low commodity prices have hit emerging markets as China’s blistering economic growth has slowed.

Low inflation remains a concern for many developed economies despite signs the European Central Bank’s quantitative easing program has boosted

Ghana’s IMF programme likely to free up other lending The head of the International Monetary Fund said on Saturday that a new IMF support program for Ghana would likely unlock lending from other bilateral institutions. “It clearly will have a catalytic effect,” IMF Managing Director Christine Lagarde told a news conference at the conclusion of a meeting of the IMF’s steering committee. “When a country has signed a program ... it generally always triggers on the part of other bilateral institutions, of other bilateral lenders, financing that sometimes had been frozen or locked.”

Russia denies gas deal with Greece Russia denied on Saturday a German media report suggesting that it could sign a gas pipeline deal with Greece as early as Tuesday which could bring up to five billion euros into Athens’ depleted state coffers. German magazine Der Spiegel, citing a senior figure in Greece’s ruling Syriza party, said the advance funds could “turn the page” for Athens, which is now struggling to reach a deal with its creditors to unlock new loans to avert bankruptcy. “No, there wasn’t (any agreement),” said Kremlin spokesman Dmitry Peskov.

U.S. warns not to rely on U.S. consumers The United States pressed the world’s leading exporters, including Germany and Japan, to generate more economic growth within their borders, warning that the world could not rely too much on U.S. consumers. “We are concerned that the global economy is reverting to the pre-crisis pattern of heavy reliance on U.S. demand for growth,” Treasury Secretary Jack Lew said in a statement that also called on South Korea and China to boost domestic demand.

Europe’s ailing economy, and the communiqué called for easy monetary policies to be maintained where needed.

“Global imbalances are reduced from previous years, but a further rebalancing of demand is still needed,” the communiqué said. That appeared to echo U.S. concerns over Germany’s huge current account surplus.

In the United States, the central bank’s moves toward a rate hike have sent the dollar soaring, and officials from nations around the globe warned of the risk of financial and economic disruptions as the path of major central banks diverge.

Canadian Finance Minister Joe Oliver said in a statement to the IMF panel that “among the most significant downside risks (was) the potential for financial instability associated with asynchronous monetary policy in systemic economies.”

While there has been little sign at the meetings of a renewed flare-up in the “currency wars” despite a surge in the value of the dollar against the euro and yen, China’s growing economic clout has overshadowed the talks.

Beijing has touted its own development bank, a rival to the established Washington-based institutions, and is pushing to include the yuan in the IMF’s currency basket to reflect its economic might.

Reuters

Germans protest against Europe-U.S. trade deal Merkel has spoken out repeatedly in favour of TTIP, but her coalition partners, the centre-left Social Democrats (SPD), are deeply divided Noah Barkin

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housands of people marched in Berlin, Munich and other German cities on Saturday in protest against a planned free trade deal between Europe and the United States that they fear will erode food, labour and environmental standards.

Opposition to the Transatlantic Trade and Investment Partnership (TTIP) is particularly high in Germany, in part due to rising anti-American sentiment linked to revelations of U.S. spying and fears of digital domination by firms like Google.

A recent YouGov poll showed that 43 percent of Germans believe TTIP would be bad for the country, compared to 26 percent who see it as positive.

The level of resistance has taken Chancellor Angela Merkel’s government and German industry by surprise, and they are now scrambling to reverse the tide and save a deal which proponents say could add

US$100 billion in annual economic output on both sides of the Atlantic.

In Berlin, a crowd estimated by police at 1,500 formed a human chain winding from the Potsdamer Platz square, past the U.S. embassy and through the Brandenburg Gate to offices of the European Commission.

In Munich, police put the crowd at 3,000, while organisers Attac estimated it at 15,000. Hundreds also marched in Leipzig, Stuttgart, Frankfurt and other European cities on what Attac hailed as a “global day of action” against free trade, though the protests appeared to be largest in Germany.

“I think this deal will open the door to genetically-modified foods here,” said Jennifer Ruffatto, 28, who works with handicapped people and was pushing her baby in a stroller.

“Companies will gain from this at the expense of people.”

Helmut Edelhauesser, a 52-yearold from Brandenburg, said he would

prefer a free trade deal with Russia.

“The U.S. push for world domination is unacceptable,” he told Reuters. “Obama sends out drones to kill people and wins the Nobel peace prize. This has to stop.”

Marchers held up posters reading “People have a right to food not profits” and “Beware the TTIP trap - companies win, people lose!”

After the excesses of the Gestapo secret police under the Nazis and the Stasi in communist East Germany, Germans are also particularly sensitive to official surveillance. Revelations in 2013 that the U.S. had bugged Merkel’s mobile phone provoked outrage across the country.

Merkel has spoken out repeatedly in favour of TTIP, but her coalition partners, the centre-left Social Democrats (SPD), are deeply divided. Their leader Sigmar Gabriel, the economy minister and a TTIP convert, has promised a formal party vote on any deal.

Reuters

Business Daily | 15

April 20, 2015

Opinion Business

wires

How to reform the IMF now

Leading reports from Asia’s best business newspapers Paulo Nogueira Batista, Jr. Executive Director of the IMF

Hector R. Torres

Former Alternate Executive Director of the IMF

THE KOREA HERALD The number of stock-rich shareholders on the country’s secondary stock market, the KOSDAQ, surged this year on the back of a bullish run by the tech-laden bourse, data from a corporate tracker showed yesterday.

According to Chaebul.com, there were 64 stockholders who have portfolios worth more than 100 billion won (US$92.5 million) as of Friday, the highest-ever figure on record. That compares with 46 stock-rich shareholders on the KOSDAQ market earlier this year. Most of the stockrich were major shareholders and owners of IT firms.

TAIPEI TIMES Chances are increasing that Legislative Speaker Wang Jin-pyng will announce a bid for president, according to sources close to Wang.

Chinese Nationalist Party (KMT) representative in Kaohsiung Lee Po-jung said that Wang has started to motivate his staff and will be convening party members this week to initiate the signature drive required to run for the KMT presidential nomination. Wang has remained equivocal about his intentions. “I’m not saying that I will run, but I’m not saying I will not, either,” Wang said.

President Barack Obama has been unable to secure Congressional approval

THE BANGKOK POST Deputy Prime Minister MR Pridiyathorn Devakula is more upbeat about economic prospects in the second quarter, saying the economy could grow 4% if exports manage to eke out zero growth or move in a positive range during that period. In his round-up of the government’s six-month performance he said he believed exports to China and the EU would strongly recover in the second quarter, helping to shore up overall shipments for the period. First-quarter exports were estimated to contract by 4% due mainly to the bearish performance of major markets such as China, the EU and Japan.

PHILSTAR Twelve power companies have expressed interest in administering the output of the 200-megawatt coal-fired thermal power plant in Mindanao, the Power Sector Assets and Liabilities Management Corp.

(PSALM) said yesterday. The 12 companies are Conal Holdings Corp., FDC Davao Del Norte Power Corp., FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc., Masinloc Power Partners Co. Ltd., Meralco Powergen Corp., Nexif Pte Ltd., SMC Global Power Holdings Corp., SPC Power Corp., Team (Philippines) Energy Corp., Therma Southern Mindanao, Inc. (TSMI) and Vivant Energy Corp.

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ore than four years have passed since an overwhelming majority of the membership of the International Monetary Fund agreed to a package of reforms that would double the organization’s resources and reorganize its governing structure in favour of developing countries. But adopting the reforms requires approval by the IMF’s member countries; and, though the United States was among those that voted in favour of the measure, President Barack Obama has been unable to secure Congressional approval. The time has come to consider alternative methods for moving the reforms forward.

The delay by the US represents a huge setback for the IMF. It stands in the way of a restructuring of its decision-making process that would better reflect developing countries’ growing importance and dynamism. Furthermore, with the reforms in limbo, the IMF has been forced to depend largely on loans from its members, rather than the permanent resources called for by the new measures. These loans, meant as a temporary bridge before the reforms entered into effect, need to be reaffirmed every six months.

In our view, the best way forward would be to decouple the part of the reforms that requires ratification by the US

Congress from the rest of the package. Only one major element – the decision to move toward an all-elected Executive Board – requires an amendment to the IMF’s Articles of Agreement and thus congressional approval.

The other major element of the reform package is an increase and rebalancing of the quotas that determine each country’s voting power and financial obligation. This change would double the IMF’s resources and provide greater voting power to developing countries. Congress would still need to ratify the measure before the US’s own quota increased, but its approval would not be required for this part of the reform package to take effect for other countries.

The connection between the two parts of the reforms has always been unnecessary; the measures are independent, require different approval processes, and can be delivered separately. Removing the link between them would require the support of the US administration, but not ratification by Congress.

This separation could be implemented smoothly. A simple majority of the IMF’s Executive Board would recommend it to the Board of Governors, where a resolution separating the reforms into two parts would require 85% of the votes. In 2010, the reform package passed with more than 95% of the votes.

In our view, the best way forward would be to decouple the part of the reforms that requires ratification by the US Congress from the rest of the package

The changes to the quotas could then quickly become effective. The quotas for each member country have already been agreed, so there would be no need for further complex and time-consuming negotiations. Countries that are willing and able to pay their quota increases would be allowed to do so, increasing the IMF’s resources and boosting their relative voting power.

The key obstacle to this proposal is the requirement of

congressional approval to increase America’s quota share.

This opens the possibility that the US’s voting power could temporarily fall below the 15% threshold needed to veto decisions that require the support of 85% of IMF members’ votes.

In order to secure US support, the Board of Governors could commit not to consider any draft decision requiring 85% backing without America’s consent. This guarantee could be included in the resolution dividing the reform package into two parts. It would remain valid until the US was in a position to increase its quota and recover its voting share. The Executive Board could approve an analogous commitment and request the IMF’s managing director to refrain from submitting any draft decision requiring an 85% majority without first obtaining US support.

The US administration might face criticism from Congress for accepting a measure that would temporarily cut the country’s voting share and for relying on a political agreement to preserve its veto power. But the agreement could also act as an incentive for ratifying the reforms. The power to reinstate the US’s formal veto power would lie entirely in the hands of Congress – making it unlikely that another four years would pass before the matter is finally resolved.

Project Syndicate

16 | Business Daily

April 20, 2015

Closing Central bank cuts reserve requirement ratio by one per cent China lowers electricity price for grid, enterprise users China will lower the reserve requirement ration for commercial banks by one percent starting today, the country’s central bank announced yesterday.

An extra one-percentage RRR cut will be given to commercial banks for agricultural services and an additional reduction of two percentage points to the Agricultural Development Bank of China. The central bank will further lower RRR by 0.5 percentage point for eligible banks that lend a certain amount of loans to agricultural borrowers or small and micro businesses. People’s Bank of China (pictured) reaction comes after a week where negative data confirmed the decelerating trend of the economy.

Top economic planner will cut the prices of coalgenerated power for grid companies and enterprise users, it announced yesterday. Starting today, the grid purchase price will be reduced by two cents per kilowatt-hour, the National Development and Reform Commission (NDRC) said. Grid companies buy electricity from power generators and sell it to end users, profiting from the price gap. Due to the sluggish economy, coal prices are low, creating a good environment for power price cuts. The NDRC said the price reduction will enable grid companies not only to cut prices for customers but to subsidize clean energy.

Foreign automakers double down on China bets despite slowing growth Jake Spring

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oreign automakers continue to plough money into factories in China, the world’s largest car market, even as the biggest economic slowdown in a quarter of a century crimps sales growth.

Market leaders Volkswagen AG and General Motors show no sign of letting up on their planned investments, while Toyota Motor and Ford Motor are also pursuing new China expansion plans.

That’s in spite of the economic slowdown further depressing the car market in January-March, when sales grew only 3.9 percent, compared to 9.2 percent a year ago and way below the 7 percent growth that the China Association of Automobile Manufacturers (CAAM) predicts for this year.

Foreign automakers, many of which are expected to unveil new products for China at this week’s Shanghai auto show, including Ford’s redesigned Taurus sedan, aren’t fretting over the first quarter slowdown. But if the fallout from the broader economic slowdown bleeds into the rest of the year, global automakers may need to reconsider their China expansion plans, said James Chao, Asia chief of IHS Automotive.

Dongfeng Motor Group facilities. Donfeng and Peugeot Citroen will build a joint technology centre in Shanghai dedicated to developing cars for Asian market

A handful of foreign automakers are still outperforming the market, with Ford, for example, posting 9 percent sales growth in the first quarter.

“It’s still a tale of two worlds, with domestic manufacturers probably hovering around 60 percent capacity and the international joint ventures at 80-85 percent. It’s a big difference,” Chao said.

Anthony Lau, Shanghai-based research director for consultancy TNS Sinotrust, said even strong single-digit growth in car sales in

China is much better than in markets elsewhere.

China accounted for more than half the total industry spending on new or expanded capacity last year, with plant investments worth US$12.7 billion, according to an annual Canadian study of automakers’ outlays.

Adding capacity Foreign automakers are likely to hoover up more idle capacity from smaller domestic firms, said Chao at

PSA Peugeot Citroen and Dongfeng Motor Group will spend 200 million euros (US$216 million) on a joint project to develop a platform to manufacture small cars, the French company said yesterday

IHS, as Ford did in acquiring a factory from Harbin Hafei Automobile that will add 200,000 vehicle per year capacity when upgrades are finished in 2016.

That follows Ford’s launch last month of a new factory in eastern China’s Hangzhou, with annual capacity for 250,000 vehicles.

Even Toyota, whose first-quarter sales slipped 0.1 percent, is ending a years-long expansion freeze, spending US$440 million to add a new facility and a third line at a factory in Guangzhou, which could start production in 2017 with capacity to make about 100,000 cars a year.

Volkswagen is targeting China capacity of 5 million vehicles a year by 2019, up from 3.5 million in 2014, as part of a 22 billion euro (US$23.3 billion) investment push, a company spokeswoman said, and GM has its sights on hitting that 5 million number a year earlier.

By the time these expansions come on-line, the years of breakneck double-digit growth will likely be long gone: economists predict 7 percent GDP growth this year and a further notching down to 6.8 percent in 2016.

Reuters

China unveils measures to boost exhibition industry

Singapore wants to be in AIIB’s management

EU dreams of Iranian gas to break dependence on Moscow

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hina is planning to boost development of the exhibition industry through market liberalization, according to a guideline released by the State Council yesterday.

A ministerial joint conference, including a dozen central government departments, will be established to coordinate the formulation and implementation of new market rules, the guideline said, setting a deadline of 2020 for China to have an exhibition centre “with a sound development environment and a high level of internationalization”.

Licensing of economic and technological exhibitions will be gradually delegated to provinciallevel commercial authorities, while the number of government-funded exhibitions will be reduced. In their place, private companies are encouraged to organize and sponsor such events, according to the plan.

It said China will guide big exhibition companies to acquire, merge with or buy stakes in foreign counterparts to establish multinationals.

Small exhibition firms will meanwhile enjoy tax breaks, and customs procedures will be streamlined to facilitate cross-border events.

Xinhua

ingapore, one of the earliest nations to back a China-led development lender, is among countries considering the need for a presence in the Asian Infrastructure Investment Bank’s management.

“We were one of the early prospective founding members. We’ve moved early, and we’ve encouraged others to move as well,” Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam said in an interview in Washington on Friday. “Several countries including ourselves are looking at whether we should have our own candidates represented within the management of the institution, but it’s too early to say anything on that.”

Singapore joined 20 countries in being first to sign up for the AIIB in October. Since then, U.S. allies from Australia to the U.K. have opted to back the bank, confounding efforts by the administration of President Barack Obama to campaign against the institution.

“There’s now a recognition that the AIIB will be a win-win, not just for China or those who joined early, but for the global system,” Shanmugaratnam said.

Bloomberg News

he EU is hoping future gas imports from Iran can break its dependence on Russia as prospects grow for a nuclear deal that would include lifting sanctions on Tehran.

The European Union is betting on so-called Southern Corridor pipelines to supply gas to southern Europe via Turkey from fields in Azerbaijan and nearby countries, including Iran.

Due to be operational in 2019, the project is expected in an initial stage to deliver 10 billion cubic metres of gas per year to Bulgaria and Greece.

But with Iranian gas flowing after an eventual lifting of the sanctions, “capacity could be increased to 40 billion cubic metres of gas per year and that would be substantial,” a European official told on condition of anonymity.

Europe is seeking to diversify its energy suppliers and supply routes as the Ukraine crisis strains ties with Russia to breaking point.

The 28-nation bloc depended on imports for more than half its needs at a cost of some 400 billion euros in 2014.

AFP