Macau business daily, 2015 July 13

Closing editor: Luís Gonçalves

MOP 6.00

Shaken, but still standing All the usual suspects. Hitting the profits of Emperor Entertainment Hotel, down 16pct y-o-y. Although revenues are up 10pct for fiscal 2014/2015. The group controls Macau Grand Emperor Hotel and Best Western Taipa Hotel

Year IV

Number 833 Monday July 13, 2015

Publisher: Paulo A. Azevedo

Page 4

Hope in the air Is the haze clearing a little? The Legislative Assembly has passed the gov’t-backed bill drafting a universal smoking ban in casinos. And suggests the closure of smoking lounges. But the Secretary for Social Affairs and Culture has held out an olive branch. Alexis Tam said the gov’t will consider smoking lounges if they can be scientifically proved to be “effective”. But no compromise on a universal smoking ban Page

2

Ahead of the game

Pass the hankies Spare a thought for China’s wealthiest. Many lost big when national stock markets plunged last week. Almost erasing profits ploughed in since the beginning of the year. US$100 billion evaporated

Page 8&9

HSI - Movers

They did it again

July 10

Louis XIII is betting big. On being the most extravagant hotel-resort property in Macau. It will offer the most expensive suite in the world. And the largest fleet of Rolls-Royce Phantoms in the world. Now Stephen Hung is turning his attention to the most exclusive restaurant. Paris-based three-Michelin star restaurant L’Ambroisie is to open its only other property in Louis XIII. With prices to match and limited seating

Page 5

Interview www.macaubusinessdaily.com

T. Rowe reduces Wynn Resorts stake, leaving founder top holder Page 5 Fewer duty-free cigarettes allowed to enter Macau Page 3

Macau GP preparations continue as FIA ratifies FIA GT World Cup Page 4

Negative headlines. Gaming crises. Economic recession. And now for the good news. The Macau Gov’t has already achieved its fiscal surplus goal for the year.

With six months yet to go. As at June, the city’s fiscal surplus was MOP25.2 billion. Well in excess of the year’s targeted MOP18.8 billion

Page 4

Infrastructure contract law amendment needed Page 3

Connecting the dots Echo Chan is the deputy secretary general of the Secretariat for the Forum for Economic and Trade Co-operation between China and Portuguese-speaking countries.

Macau is reinforcing its role as trade agent for China and Portuguese-speaking countries, she told Business Daily, as a platform for SME’s. The opportunity is already here. Demand for good quality products from Portuguesespeaking countries from China is rising fast, she says

Page 6&7

Name

%Day

CITIC Ltd

+9.03

China Life Insurance C

+6.61

Ping An Insurance Gro

+4.98

China Mobile Ltd

+4.64

China Overseas Land &

+4.02

Li & Fung Ltd

-0.51

Power Assets Holding

-0.58

MTR Corp Ltd

-0.72

China Resources Enter

-1.90

Want Want China Hol

-2.07

Source: Bloomberg

I SSN 2226-8294

2015-7-13

2015-7-14

2015-7-15

27˚ 33˚

27˚ 33˚

27˚ 33˚

2 | Business Daily

July 13, 2015

Macau

“Effective” smoking lounges a possibility, says Alexis Tam The city’s gaming operators’ aspirations have not yet been completely stubbed out.

Although the Legislative Assembly passed the government-backed bill drafting a universal smoking ban in casinos and suggests cancelling smoking lounges, the Secretary said there is still hope for the sector if they can prove that smoking lounges will be “effective” Kam Leong

kamleong@macaubusinessdaily.com

T

he bill proposing a universal smoking ban and the elimination of smoking lounges in casinos passed its first reading at the Legislative Assembly (AL) last Friday with only two votes in the negative.

Claiming the government’s stand on the full-smoking ban policy remains firm, the Secretary for Social Affairs and Culture, Alexis Tam Chon Weng (pictured), nevertheless conceded that smoking lounges in casinos could be a possibility if the city’s gaming sector can scientifically prove that the establishment of such could effectively prevent tobacco harm.

The Secretary said after attending the plenary session of the AL that the government would acquiesce to allowing gaming operators to establish smoking lounges if they can really prove that their lounges can effectively protect the health of workers and tourists from smoking.

“Some legislators seem very confident about establishing smoking lounges that can scientifically and effectively prevent the health of gaming workers and tourists being affected by tobacco,” the Secretary said. “[The decision allowing smoking lounges] will depend upon their proposals”.

Asked by reporters whether that means the government would give in to allowing smoking lounges if they are proved to be viable in preventing tobacco harm, the Secretary said, “Yes, exactly.”

“We hold an open attitude on the issue as we have been doing. We have been putting our focus on the opinions of gaming workers, as their number totals 83,000. Although the number of gaming bosses is relatively lower, their benefits involved in the bill is still high [thus] we totally understand their situation and concerns. As such, we will see if their proposals really are viable. However, our stand [on the full-smoking ban] will not change,” Secretary Tam emphasised.

Nevertheless, according to the Secretary, the government has not yet discussed what requirements these smoking lounges will need to meet to be considered as ‘viable’ in casinos.

Two opposed

In fact, the debate on the bill last Friday among the legislators continued focusing on the establishment of smoking lounges. Legislators supporting the establishment, primarily representing the business sector, argued that smoking lounges should not conflict with the government’s full-smoking ban and would stop the gaming industry downturn worsening.

Government representatives, as well as legislators opposed to the lounges, cited academic reports claiming that smoking lounges will not completely prevent the harm that tobacco causes to individuals in the casinos, indicating that there is no direct proven correlation between

economic losses and a smoking ban.

Indeed, 26 of the 28 attending legislators voted in the affirmative for the bill, including legislators who have direct business interests in the gaming sector, such as Angela Leong On Kei, the executive director of SJM Holdings Ltd., Chan Meng Kam, the boss of Golden Dragon Group that controls Casino Golden Dragon, as well as Melinda Chan Mei Yi, wife of gaming entrepreneur David Chow Kam Fai, who owns Macau Fisherman’s wharf.

Directly-elected legislator Zheng Anting, who has been urging the government to permit smoking lounges with the city’s junket association, and indirectly-elected legislator Kou Hoi In, director of the Macau Chamber of Commerce, were the only legislators to oppose the bill.

Pressure

Following the discussion, Secretary Tam admitted toreporters that he has been feeling the pressure from legislators from the business sector, who played the cards of the city’s economy and local manpower employment.

During the AL discussion, SJM boss Angela Leong revealed that the six major gaming corporations had invested some MOP2 billion in establishing the current smoking lounges on mass gaming floors.

“If the government thinks that the current smoking lounges do not meet its standard, we can improve

upon them. We should consider how to maintain the city’s gaming tax under the full-smoking ban. Of course, the gaming downturn is not all due to the ban, although it may make the situation worse. I hope the government can consider these factors when discussing the bill for final reading,” she said.

Meanwhile, legislator Cheang Chi Keong queried why the government makes an exception for smoking lounges in the local airport but not casinos. “I guess it’s because the airport is mostly used by tourists.

As such, it may not be necessary to ban smoking lounges inside casinos.

Should we seek a balance between protecting the health of workers, and [the businesses of the] gaming corporations? I think most people will agree with me that casinos are not for local residents but tourists,” Mr. Cheang said.

Not having participated in the heated discussion prior to the vote, indirectly-elected legislator and businessman Chan Chak Mo warned in a joint statement with indirectlyelected Cheung Lap Kwan and four Chief Executive-appointed legislators - Sio Chi Wai, Tsui Wai Kwan, Lau Veng Seng, Fong Chi Keong - that the elimination of a smoking ban in casinos would worsen the economy.

Reservations

“We voted in the affirmative for the bill but we [have reservations] on the regulation eliminating smoking lounges inside casinos... With gross gaming revenues dropping 13 consecutive months and declining year-on-year 37 per cent cumulatively during the first half of the year, plus the intensive competition with casinos in nearby cities with no smoking ban, we can predict that the gaming industry will not recover from its downturn very soon. No-one knows how much impact the full smoking ban will bring to the city’s gaming industry, but for sure the situation will be worsened,” he said.

This group of businessmen stated that they agree with the establishment of smoking lounges if they meet the requirements of the government, urging the government and their colleagues to adopt an open attitude to the possibility of the establishment by considering “the overall economy of Macau.”

Business Daily | 3

July 13, 2015

Macau Fewer duty-free cigarette allowed into Macau Travellers will be allowed to bring in fewer duty-free cigarettes when entering Macau, according to the Chief Executive’s despatch, effective today. Travellers are permitted to bring in 19 cigarettes, or 1 cigar or 25 grams of other manufactured tobacco for personal consumption. This is in a bid to prevent the importation of dutiable tobacco, especially following the increase in cigarette tax. This change further accommodates work on smoking controls under the New Regime of Tobacco Prevention and Control.

AL urges amending infrastructure law to extend public finance supervision Legislators believe there may be a loophole in supervising public expenditure if the government does not amend the city's infrastructure contract law and procurement law

L

egislators on the follow-up committee for public finance perceive that the government should also amend the current law on infrastructure contracts and public procurement, so that they can be in line with the proposed changes to the current budget framework law and extend the public supervision on government expenditure.

The sub-committee of the Legislative Assembly (AL) met with Secretary for Economy and Finance Lionel Leong Vai Tac (pictured) on the amendments to the current budget framework law last Friday morning.

The president of the committee, Mak Soi Kun, told reporters after the closeddoor meeting that the legislators

reckon there may be a loophole in supervising public expenditure if the government does not also amend the city’s infrastructure contract law and procurement law.

Last Monday, the government released the drafted amendments to the budget law for public consultation. The proposed bill suggests mandating government departments list all their budgeted expenditure on major investment plans, especially infrastructure projects involving multiple years of investment.

In addition, the amendments propose that official departments will need to estimate total expenditure, and the yearly budget for these multiple-year projects, as well as submitting an execution report regarding the investment plans to the AL within 30 days of each quarter ending.

The Secretary told reporters after the meeting that he believes the suggested amendments to the budget framework law will effectively extend public supervision of government expenditure, which will thus respond to the demands of society. However, he noted that the government will listen to more opinions on the proposal as it is still in the consultation stage.

The government expected last week that the amendments to the budget framework law could be applied to the production of the budget plan for the 2017 fiscal year, if the bill could be submitted for legislation to the AL this year.

K.L.

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4 | Business Daily

July 13, 2015

Macau

Fiscal surplus: Government surpassed 2015 goal in June While analysts predict one of the worst recessions for Macau due to the decline of gaming revenues, the government is still generating above-budget surpluses João Santos Filipe

jsfilipe@macaubusinessdaily.com

M

acau is suffering recession but the finances of the Special Administrative Region continue to be very healthy. During the first six months of the year, the government registered a surplus of MOP25.2 billion. This surplus already exceeds the target budgeted by the government for 2015, which projected MOP18.8 billion for the whole year.

For the period from January to the end of June the government’s revenue amounted to MOP55.1 billion, which is still a decrease of 33.9 per cent in relation to the same period of the

previous year (MOP88.4 billion).

Following the decline in gaming revenues, direct taxes from gaming activity have correspondingly decreased - down 35.6 per cent to MOP45.7 billion from MOP71 billion. This decline explains for the most part the difference between the surplus in 2014 and this year. Indirect taxes mirrored the same trend, with government revenues down 34.9 per cent to MOP2.1 billion from MOP3.2 billion.

Other direct taxes increased 21 per cent year-on-year during the first six months of the year to MOP1.8 billion

Macau GP preparations continue as FIA Ratifies FIA GT World Cup Regulations

T

he Macau Grand Prix Committee has been working in close cooperation with the Federation Internationale de L’Automobile (FIA) regarding preparations for the FIA Formula 3 Intercontinental Cup and the FIA GT World Cup. The regulations for both races were adopted during the FIA World Motor Sport Council meeting on July 10. The 62nd Macau Grand Prix will be held from November 19 to 22.

The format of the SJM Macau GT Cup - FIA GT World Cup will see two free practice sessions followed by a 30-minute qualifying session on the Friday. On Saturday, a 12-lap Qualifying Race will determine the grid positions for Sunday’s 18-lap race.

Twenty eight entries from a maximum of seven manufacturers will be invited to enter by the FIA GT World Cup Selection Committee on which the Macau Grand Prix Committee is represented.

Chong Coc Veng, President of the Automobile General Association MacaoChina (AAMC), commented: “The Macau Grand Prix is delighted to have been granted the first FIA GT World Cup, and we are honoured to work together with the FIA for the first time on such an important race.

“Over the years, the Macau Grand Prix has learned a great deal through its organisation of the FIA Formula 3 Intercontinental Cup, Guia Race, Macau GT Cup and the support races for Asian drivers on our programme.

In order to further strengthen the management of the new and very recent designation granted to the Macau GT Cup for this year, the FIA and AAMC have appointed the Stephane Ratel Organisation (SRO) to assist in its coordination. The FIA and AAMC will do their utmost to establish a fair and equitable entries selection system.”

In the first six months of 2015, direct taxes from gaming activity declined 35.6 per cent to MOP45.7 billion from MOP71 billion

from MOP1.4 billion, slightly helping to reduce the impact of the decline in gaming revenue.

Expenditure climbing

If on the one hand revenue went down expenditure went up 30 per cent yearon-year to MOP28.1 billion from MOP21.8 billion. However, and in spite

of such increase, with half of the year already gone the government has only spent around one third of the money (34 per cent or MOP29.9 billion) projected for the whole of 2015. The Secretary for Economy and Finance had projected spending MOP87.9 billion during the current year.

While the government has a tight rein on expenses, current expenditure is still the highest since 2013. By comparison with that year, expenses grew MOP12.8 billion in 2015 from MOP17 billion. This is not a surprise as Fernando Chui Sai On promised to be more focused on social spending in his second term in order to provide a better quality of living for the Macau population.

Another aspect where the Executive is also increasing investment is capital expenditure. From 2013 to 2014, the government cut investment in this area by 4.8 per cent year-on-year from MOP1.21 billion to MOP1.15 billion.

But this year this expenditure has already climbed to MOP1.77 billion, a year-on-year increase of 53.1 per cent.

Emperor Hotel profits drop HK$100 million In spite of the decline in profits, the group managed to increase its revenue from hotel activities with the acquisition of Best Western Taipa

T

he profits of Emperor Entertainment Hotel have declined 16 per cent year-on-year, amounting to almost HK$100 million, as profits dipped during the annual year of 2014/2015 to HK$504.3 million from HK$600 million.

The group that controls in Macau Grand Emperor Hotel and Best Western Taipa Hotel (formerly branded Inn Hotel Macau) saw its revenues drop 10.2 per cent year-on-year to HK$2.03 billion from HK$2.27 billion.

This decline was mainly explained by reduced visitor spending and the slowdown in the Chinese economy.

However, the board of the group also cited protests in Hong Kong, the smoking ban on mass market gaming floors, new measures controlling cross-broader capital flows, and tighter visa restrictions as reasons for the decline.

The main source of revenue for Entertainment Hotel, which operates under a gaming licence held by SJM, was gaming, which

accounted for HK$1.7 billion and generated 85.1 per cent of the group’s total revenue.

However, gaming revenue in Grand Emperor declined 15.6 per cent year-on-year from HK$2.1 billion.

While revenue from gaming in Grand Emperor went down the self-managed VIP rooms of the group increased revenue by 11.8 per cent to HK$504.7 million from HK$451.5 million. The 10 tables of the Emperor Hotel generated an average win per table per day of HK$243,000 from HK$218,000.

Best Western boosts revenue

During the financial year, the revenue from the two hotels increased 41 per cent to HK$303.7 million from HK$215.4 million due to the acquisition of Best Western Macau (named Inn Hotel Macau at that time) which was finalised in March 2014. Hotel revenue during the year was 14.9 per cent of the total revenue of the group.

During fiscal year 2014/15 Grand Emperor Hotel had an occupancy rate of 88 per cent and an average room rate of HK$1,258 per night, a decrease from HK$1,304 in 2014.

Conversely, the average room rate in Best Western increased to HK$620 per night from HK$559 per night. However, the occupancy rate decreased to 93 per cent from 98 per cent.

In relation to food and beverage revenue, Emperor Hotel generated HK$129.7 million from HK$122.4 million in the previous year.

Revenue from rental and other activities also increased to HK$45.2 million from HK$38.2 million.

In spite of declining gaming revenue during the year, the company is confident about the long-term prospects of ‘Macau as a premier global gaming and entertainment destination, supported by the city’s solid fundamentals including close proximity to the Mainland, continuous infrastructure improvements and attractiveness of crosscultural experiences’.

J.S.F.

Business Daily | 5

July 13, 2015

Macau UM holds symposium on biomedical sciences with two Nobel laureates The Second Macao Symposium on Biomedical Sciences, organised by the University of Macau (UM) Faculty of Health Sciences (FHS), opened at UM last Friday. Nearly 200 renowned scholars and researchers from around the world attended the symposium. Participants discussed the breakthroughs in biomedical sciences in recent years and future trends, exchanging ideas on issues related to global health research. Some of the highlights included the Nobel laureate lecture ‘Resistance to Antibiotics and Preserving the Microbiome’ by Israeli scientist Ada Yonath and another Nobel laureate lecture titled ‘Are we Going to Cure All Diseases and at What Price?’ by Prof. Aaron Ciechanover

Louis XIII bringing deluxe restaurant L’Ambroisie to Macau With approximately only 38 seats, the Paris restaurant is one of the most sought-after reservations in the world, the company says

P

aris-based restaurant L’Ambroisie is going to open its only other property in Macau in the luxury resort Louis XIII. The news was announced last week by the Group in its annual results of the company.

‘The fabled L’Ambroisie in Paris, which has held three Michelin stars since 1988, will open its only other property in the Louis XIII hotel complex. With approximately only 38 seats, the critically acclaimed Paris restaurant is one of the most soughtafter reservations in the world’, the group explained in the filing with the

Hong Kong Stock Exchange.

In Paris, the restaurant is run by chefs Bernard and Mathieu Pacaud and according to Michelin the price of a meal in the restaurant that first opened in 1986 ranges from MOP1,871 to MOP2,940.

In addition to L’Ambroisie, the resort will also host the second Macau store of high-end jewellery retailer Graff Diamonds. Clients, however, will only be admitted to the shop by invitation, as the company plans to sell “some of the most exclusive jewels in the world”.

According to the filing, the US$1.1

billion project is on schedule to open mid-2016, with the superstructure topped out in early June 2015, while the excavation of the basement has been completed.

Louis XIII will occupy a gross floor area of approximately 945,000 square feet and offer around 200 duplex suites and villas, whose area will range from 2,000 to 12,000 square feet.

Concerning the annual results of the group, the loss for the year attributable to the owners decreased 41 per cent year-on-year to HK$30 million from HK$50 million.

T. Rowe reduces Wynn Resorts stake, leaving founder top holder

T.

Rowe Price Group Inc. has reduced its stake in Wynn Resorts Ltd. by more than half to 4.7 million shares, according to a regulatory filing on Friday, leaving founder Stephen Wynn the largest stockholder.

The Baltimore-based mutual fund manager was the largest investor in the casino operator as recently as April, with more than 10 million shares, and backed management in its ouster of board member Elaine Wynn, also a major investor in the company. The fund group’s stake now totals 4.6 per cent.

Wynn Resorts gets more than twothirds of its revenue from Macau, a market that has experienced a yearlong slump as wealthy Chinese cut back on their gambling. Wynn Resorts and other U.S. casino operators have more than US$10 billion in projects under construction in Macau scheduled to open over the next two years.

The stock fell 1.2 per cent to US$103.90 at the close in New York.

Wynn Resorts has declined 30 per cent this year.

Wynn, 73, and his ex-wife Elaine, also 73, each own just under 10 per cent of the stock, with him holding about 500,000 more shares, according to data compiled by Bloomberg.

Bloomberg

Corporate

CEM announces results of Energizing Tour second quarter lucky draw Since CEM launched the Energizing Tour in 2009, more than 25,000 people have already visited Coloane Power Station, including schools, local associations, and companies, the public at large and even groups from overseas. Through these visits citizens have the opportunity to get close up to the local generation process and the main local generation infrastructure as well as having a better understanding

of CEM operations and services. Also, an Energy-Quiz featuring energy savings concepts can be found quarterly on the CEM Energizing Tour Facebook fan page.

Of all the participants correctly answering the Quiz, three of them receive a MOP300 supermarket cash coupon. Plus, five from all new Facebook fans who ‘LIKED’ the page will receive a MOP500 supermarket cash coupon at the end of the year.

McDonald’s Macau donates 800 kg of white rice to city seniors McDonald’s Macau recently donated 800 kg of white rice to local social service organisations. Michelle Ho, Managing Director of McDonald’s Macau and McDonald’s volunteers visited S. Francis Xavier Home for the Aged (a subsidiary of Macau Caritas) and Centro de Actividades de Tung Sin Tong on July 10 for the rice giveaway and were well received by the representatives of the two organisations.

Ms. Mini Lau of Centro de Actividades de Tung Sin Tong thanked McDonald’s Macau

for the kind donation. She said Tung Sin Tong, which has a history of over a century, has received great support from the public.

More than a hundred seniors attended the rice giveaway activity at S. Francis Xavier Home for the Aged and participated in games with McDonald’s volunteers led by Michelle Ho. In return, the seniors expressed their happiness and thankfulness to the rice donor by singing. Ms. Helen Sou of S. Francis Xavier Home for the Aged said the rice received will be served in the daily meals of the seniors.

6 | Business Daily

July 13, 2015

Macau

Macau reinforcing trade agent role for China and Portuguese-speaking countries Macau is striving to achieve its mission as a support service platform for small and medium businesses from China and Portuguese-speaking countries. In an interview with Business Daly, the deputy secretary general of the Secretariat for the Forum for Economic and Trade Co-operation between China and Portuguese-speaking countries, Echo Chan Keng Hong, said she also wants to reinforce the platform’s promotional function for the food products trade for these countries as well Stephanie Lai

sw.lai@macaubusinessdaily.com

In 2013, the 4th Ministerial Conference was held here for China and Portuguese-speaking countries, positioning the threeyear mission for Macau to be a support service hub for small and medium enterprises (SMEs), a centre for conventions and exhibitions (MICE) businesses as well as a ‘commodities distribution centre’, as outlined by thenSecretary for Economy and Finance Francis Tam.

How well has this been implemented so far?

Macao Trade and Investment Promotion Institute (IPIM) has already been handling the functions as a support service hub for SMEs and for MICE businesses.

All the trade fairs the unit helps organise are actually fulfilling part of the goal.

The ‘commodities distribution centre’ is a project led by the Secretary for Economy and Finance here and China’s Ministry of Commerce, with the works to realise it being handled by IPIM. The whole concept of it means that in Macau we have to create an online portal that works around-the-clock, an information platform where people can access information about the markets, and what support services we

can offer to SMEs and for the MICE businesses as well as Portuguese-speaking coutnries’ food product information. This portal also includes a database of professionals. This website has actually been operational since April. And the content of it is still being enriched now, which we – with various businesses and education institutions – will permanently feed more content to.

And for this goal serving as a ‘commodities distribution centre’ it’s actually meant as one for food products. IPIM already has a product display centre called Macao Ideas for the Portuguesespeaking countries’ companies.

But for food products we mean to build a new product display centre, which we hope can be realised by 2016 – and it’s going to be a separate centre from Macao Ideas.

So this distribution centre is meant to be another Macao Ideas display centre?

In its design, as the government requires, the project also has to fulfil a logistics and trade function for the businesses. As I understand, IPIM is working on the project.

We hope that in the next stage the centre can also play a trade function as well.

We mean to build a new product display for food products, which we hope can be realised by 2016 and separated from Macao Ideas

How well do you think the product display centre can work as a distribution centre?

It’s going to be effective. With Macao Ideas, it is a place that bundles up all different types of products and promotes them well.

Compared to 2003, we’ve seen a tenfold increase in the demand for Portuguese-speaking countries’ products in China in ten years time. And for the products that entered Mainland China via Macau

the volume that went in there has kept on increasing. So we reckon that while there’s still demand for good quality products [from Portuguese-speaking countries] Macau can serve the function of trade promoter.

With the US$1 billion Cooperation and Development fund, co-sponsored by the China Development Bank and Macau Industrial and Commercial Development Fund, we know that two projects from Mozambique and Angola, respectively, have secured some financial support.

What are these projects?

The capital support from the Fund for the Mozambique project is worth US$10 million, while that for the Angolan project is US$5 million. The capital gained from the Fund has already been invested in the projects.

The Angolan project is a solar lighting one, while the Mozambique project is actually an investment made by some Chinese companies in agricultural cooperation in the country. Through this project the Chinese party is introducing a rice-planting technique, the ploughing and irrigation system required as well as warehousing, transportation and food manufacturing.

Business Daily | 7

July 13, 2015

Macau Echo Chan Keng Hong In March, veteran administrator Echo Chan Keng Hong took up the post of co-ordinator of the Support Office to the Permanent Secretariat of the Forum for Economic and Trade and Co-operation between China and Portuguese-speaking countries, an organ responsible for helping promote multi-lateral economic exchanges.

Ms. Chan, previously a director at the Macao Institute for Promotion of Trade and Investment (IPIM), succeeded Rita Botelho Santos, who had held the post since the creation of Forum Macau in 2003.

She was also previously a co-ordinator of the Traditional Chinese Medicine Industrial and Scientific Park, a MSAR-invested project located in Hengqin born out of cooperation initiatives between the city and the Guangdong Government.

Mozambique is a country with rich agricultural resources but most of their food sources are reliant upon imports. So they need agricultural techniques and professionals from Mainland China to help them grow crops to feed their demand for food products.

We understand that there are still 10 other projects being reviewed for financial support from the fund. Can you tell us more about these 10 projects?

These 10 applications involve projects located in Brazil, Timor Leste and Guinea Bissau, with sectors ranging from agriculture to tourism to hotels and the manufacturing of electronic projects. Now, it is the ChinaAfrica Development Fund that oversees the applications and reviews the cases.

When mulling financing for these projects, do any particular sectors have priority?

As we understand it, the fund is open to all types of businesses – what they consider is the feasibility of the project and how well it can work in the market. As the fund has introduced before, the financial support is not only meant for benefiting Mainland Chinese companies but those that invest in Portuguese-speaking countries can also consider applying for it.

Macau has spoken of serving as a platform for promoting medical businesses between China and the Portuguese-speaking countries. How well has the city achieved that goal?

As said in the 3rd Ministerial Conference [of the Forum for Economic and Trade Co-operation between China and Portuguesespeaking countries, held in 2010], Macau had the goal of developing traditional Chinese medical practice and taking part in this field co-operating with regional partners. In 2012, we started the training programme for

traditional medical practice, where we had officials, trade chamber representatives and training institution members from seven Portuguese-speaking countries participate in the programme here.

The results were very good.

So at that time, we started to build ties with Portugal and Brazil to see how we could open up their markets [for medical business], and to see about their product certification, and make some preparation works for all that.

We’re glad to see that these works are still ongoing.

When compared to 2003, we saw a tenfold increase in the demand for Portuguesespeaking countries’ products in China

What’s the role of the Guangdong-Macau Traditional Chinese Medicine Science and Technology Industrial Park in Hengqin?

The Guangdong-Macau Traditional Chinese Medicine Science and Technology Industrial Park in Hengqin is a government invested project. We see that the Portuguese-speaking countries have also joined their international exchange and co-operation centre.

The government has been promoting the [medical] sector through these training programmes and reached out to interested countries to join. Has its role been successful?

From the goal set in the 3rd ministerial conference, the MSAR said it hoped to develop the traditional medical sector and participate in regional co-

operation, which takes years to brew and now we are only at the very first step. This is a process where the city is playing a platform role, and it cannot be achieved overnight.

What is the appeal of Hengqin for Portuguese-speaking countries’ firms; what business opportunities do they see there now?

Hengqin is no doubt a highlight of regional co-operation because it’s close to Macau, and is an extension of space which the city lacks, as well as a market for a wider audience. For outside investors, the island is like Macau, which they

see as access to the bigger market of Zhuhai or even Guangdong.

In the ministerial meetings or other activities of the Forum, we see to the needs of the delegates [from Portuguese-speaking countries] there and take them to visit not only Hengqin but other provinces in China they’re interested in.

Has the Forum’s budget or operation been affected by the downturn in gaming revenues?

Any chance to undergo a structural change and become part of IPIM?

We don’t really have such information [of a structural change] at the moment. But even if there is a need for a change in the unit’s structure or in work assignment, this kind of scenario always happens in different government departments here.

So you’re saying that it’s possible for the Forum [to undergo a structural change]?

No, I don’t mean that. What I’m saying is that the Forum’s activities are meant to be permanently held here, and its goal to support the central government’s economic development policies will not change. Regarding the budget issue, just as other government departments, we always spend the amount we need. And we always have different means to avoid unnecessary expenses – even before this gaming slump happened. Of course, now we will be even more cautious.

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Richest Chinese lost about US$100

Billionaires in the U.S. and Western Europe have less than half of their fortunes tied dire Tom Metcalf, Jack Witzig and Sterling Wong

I

t takes an iron stomach to be one of the richest people in China.

Billionaires from China and Hong Kong who rank among the 400 wealthiest people on earth gained US$121 billion this year through June 12, 2015, when equity markets peaked there. They lost almost US$100 billion as shares plummeted this month, including US$30 billion at the start of the week, before the rally on Thursday and Friday.

“I hope these people realize that it’s just paper money,” said Niklas Hageback, who helps oversee about US$202 million at Hong Kongbased money management firm Valkyria Kapital. “I hope for their own personal mental health that they have been able to realize that.

Otherwise, if you just start to look at your own income statements, the losses are truly horrendous.”

The rise and fall (and potential rise again) has reshuffled the top echelon of global wealth, pushing the world’s most- populous country above all others except for the United States in the numbers of billionaires created and the fortunes they control.

There are 26 billionaires from mainland China who have a combined US$262 billion, about 6 percent of the US$4.1 trillion held by the world’s 400 richest people, according to the Bloomberg Billionaires Index.

Two years ago, they numbered 21

Wang Jianlin, China’s richest person, added US$12.4 billion to his fortune recently

and controlled US$106 billion, or 3 percent of the combined fortunes.

The biggest gainer in the region this year is China’s richest person,

Wang Jianlin, who’s added US$12.4 billion to his fortune. The biggest fall belongs to Robin Li, who’s down US$2.9 billion.

No fortunes illustrate the whipsaw better than those of Pan Sutong, the Chinese-born chairman of Hong Kong-based conglomerate Goldin

India, Pakistan to join China, Russia in security group With the addition of Iran, the group would control around a fifth of the world’s oil and represent nearly a half of the global population Lidia Kelly, Denis Pinchuk and Darya Korsunskaya

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ndia and Pakistan began accession to a regional security group led by China and Russia on Friday after two days of summits which President Vladimir Putin (pictured) held up as evidence Moscow is not isolated in the world.

The Shanghai Cooperation Organisation, meeting in the Russian city of Ufa a day after the BRICS emerging economies held a summit there, said the invitation to the two Asian nations showed a “multi-polar” world was now emerging.

Those words will have pleased Putin, who says the United States has an out of date vision of a “uni-polar” world dominated by Washington and wants to show Russia has not been weakened by Western sanctions over its role in the Ukraine crisis.

“The evolution of the SCO is taking place at a complicated stage in the development of international relations and amidst the emergence of a

multi-polar world,” the group said in a declaration after the meeting.

“These processes are accompanied by increasing security challenges and threats, increasing uncertainty and instability in various regions of the world.”

The SCO, which also includes the Central Asian former Soviet republics of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, is widely seen as a platform for

Moscow and Beijing to project influence in the region.

Until now it has not been a big force and relations between China and Russia have not developed as quickly as Moscow would like, despite agreement on a major gas supply deal last year.

But Putin saw the signs of unity in the SCO and the BRICS - Brazil, India, South Africa, China and Russia - which agreed to coordinate efforts to keep their economies stable,

launched a development bank and agreed on a currency pool.

Indian Prime Minister Narendra Modi said the expansion of the SCO should serve a “springboard” for the organisation to become one of the most dynamic in the world.

“The time has come to reach out across the region,” Modi said. “We have everything we need to succeed.”

Pakistani Prime Minister Nawaz Sharif said: “President Putin’s efforts will enhance the political and economic scope of the Eurasian belt.”

Energy producers

The addition of Pakistan and India, two nuclear-armed neighbours who have years of tensions between them, could also lead to easing the conflicts between New Delhi and Islamabad.

The two leaders agreed in a separate meeting in Ufa that Modi would visit Pakistan next year.

Joining a group that includes energy producers such

as Kazakhstan and Russia may have been a strong incentive for the two countries to join.

“India is particularly interested because it lacks direct access to Central Asia, and it sees SCO membership as a way to get a better foothold on the region. SCO membership could better position India to benefit from Central Asia’s gas riches,” said Michael Kugelman, senior programme associate for South and Southeast Asia at the Wilson Centre in Washington.

But he added: “In (the) SCO, India and Pakistan wouldn’t be dominant powers China and Russia would retain that title.”

The SCO did not invite Iran to join, although it has long sought membership. The group says Iran can join only after reaching a deal with big powers on its nuclear programme.

The BRICS account for a fifth of the world’s economic output and 40 percent of its population.

Reuters

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billion in a month

Major retailers see robust sales growth

ectly to public shares, according to data compiled by Bloomberg

In a five year scheme, this is just a hiccup… It’ll be a dent on a longerterm chart, but it won’t be more than that Niklas Hageback, Valkyria Kapital

Group, and China’s richest woman, Zhou Qunfei, chairman of consumer electronics supplier Lens Technology Co Ltd. At the start of the year, Pan

had a fortune of US$3.7 billion.

Goldin Financial Holdings Ltd. and Goldin Properties Holdings Ltd. soared in early 2015, pushing his fortune to more than US$25 billion in May. Most of that gain was wiped out a month later. He has US$4.0 billion today.

Zhou’s fortune surged with the IPO of Lens Technology in March.

In the following two months, the stock rose by more than 500 percent,

adding more than US$10 billion to her fortune and making her one of China’s ten wealthiest people in the process. She lost nearly US$5 billion, or close to 40 percent, of her fortune in June.

The roller coaster rides reflect the extent to which the fortunes in the region are tied to volatile public exchanges. The 38 billionaires have 66 percent of their wealth in assets that trade publicly, according to the index.

Surging markets increased the value of the biggest fortunes in China and Hong Kong by more than a third in the first half of 2015. And while the July meltdown has eroded more than half of those gains, the 38 richest were by 16 percent yearto-date through Thursday. The 103 richest in Western Europe rose 4 percent in that period and the 127 richest in the U.S. fell 1 percent.

In mainland China it’s even more striking. There are 14 Chinese billionaires among the world’s 200 richest people with US$205 billion combined. Two years ago there were five with US$40 billion. The richest in Russia of that group have US$173 billion down from US$218 billion two years ago. The richest in Germany have remained flat at 15 billionaires with about US$174 billion.

China’s top 100 retailers saw combined sales jump 26.2 percent year on year to 3.37 trillion yuan (US$544 billion) in 2014, an industry association official said. Wang Yao, vice president of China General Chamber of Commerce, said at an expo held in the eastern city of Kunshan that the annual growth rate for leading retailers was 6.4 percentage points higher than in 2013 due to the explosion of e-commerce. Online sales soared 110 percent to 1.1 trillion yuan and online-sales growth contributed to 82.7 percent of sales growth for the 100 retailers, said Wang.

Premier supports healthy development of capital market China has the confidence and capability to promote the healthy development of its capital market and provide a sound financial environment for economic growth, Premier Li Keqiang said. “China is and will face various challenges and risks during economic expansion. We will never take them lightly,” Li told a conference on the current economic situation. “We are confident that the government can ward off any regional or systemic risks in the economy and ensure we have an open, transparent, stable and healthy capital market,” said the premier.

22 listed brokers’ profits quadruple in H1

Growth forecast at 6.9 pct in second quarter

The net profits of China’s 22 listed brokers rose by 358 percent in the first six months year on year, according to unaudited statistics collected by Securities Association of China. Their net profits stood at 84.69 billion yuan (US$13.88 billion) at the end of June, according to the Saturday edition of the “China Securities Journal”. Their business revenues climbed 280 percent to 173.75 billion yuan in the first half year from the same period last year. Net assets stood at 766.05 billion yuan, up 45.74 percent year on year.

That would be the worst quarterly result since the first three months of 2009, in the depths of the global financial crisis, when China’s economy expanded by 6.6 percent

Kenya expects 100,000 Chinese tourists

C

hina’s GDP growth likely slowed further in the second quarter, an AFP survey has found, as a slowdown in investment and trade weighed on the world’s second-largest economy.

The median forecast in a poll of 14 economists indicates gross domestic product (GDP) expanded 6.9 percent in April-June, marginally down from 7.0 percent in the first three months of this year.

The National Bureau of Statistics (NBS) will release the official GDP figures for the first quarter of 2015 on Wednesday.

“According to the figures we have now, economic activities remained very sluggish, particularly fixedasset investment, which grew 11.4 percent in May, a multi-year low,” Liu Li-Gang, Hong Kong-based ANZ economist, told AFP of the secondquarter performance.

‘Big downward pressure’

Chinese authorities want investment to slow as part of their plan to diversify economic growth away from bigticket projects to increasingly wealthy consumers. But too fast a deceleration can be harmful.

“The economy is still under quite big downward pressure,” said Li Ruoyu, an analyst at the State Information Centre, a government think-tank in Beijing, also citing weak investment.

New restrictions on local government debt and finance vehicles have limited lower-level authorities’ ability to fund infrastructure projects, she said.

The stock market turmoil could also create new risks in China’s financial system, which faces numerous other challenges such as high corporate debt and an opaque “shadow banking” sector.

But the swings in equities are largely seen as having little effect on the real economy -- a key driver of global growth -- and unlikely to prove a major detriment to private spending.

Rate cuts

For this year as a whole, the AFP survey predicts growth at a median 7.0 percent, more optimistic than a forecast of 6.8 percent in a similar poll in April and in line with the government’s official target of “about 7.0 percent”.

China last year recorded its slowest annual growth since 1990, expanding

Bloomberg News

7.4 percent, down from 7.7 percent in 2013.

The International Monetary Fund lowered its 2015 global economic growth forecast on Thursday, citing a quarterly contraction early this year in the United States, the world’s biggest economy.

But the Washington-based institution left its forecasts for the eurozone and China intact, brushing off worries over the crisis in Greece and Shanghai share volatility.

Economists see positive effects to come from authorities’ efforts to put a floor on the slowdown.

The People’s Bank of China, the central bank, has cut benchmark interest rates four times since November and also took steps to encourage banks to make more loans.

Such measures can take time before growth reacts.

China’s new home prices increased in June for the second straight month, a private survey showed. In addition to rate cuts, authorities have taken steps to boost the property market, easing mortgage policies such as lowering minimum down payment levels on second homes nationwide.

AFP

Kenya, the capital of Safari, expects 100,000 Chinese tourists in 2016, a commercial counsellor from the Embassy of Kenya in China said on Friday. China is currently Kenya’s second largest source of tourists from Asia following India with more than 40,000 tourists visiting the country every year, said commercial counsellor Vincent E. Omuse at a tourism promotion fair in Beijing. The east Africa’s biggest economy expect the number to grow to 100,000 in 2016, he said. Some 12 percent of gross domestic product and 70 percent of foreign exchange revenues of Kenya come from tourism.

“Robot supermarket” to open in south China Government officials in Guangdong Province’s Foshan City announced that they will open a 20,000-square-meterplus “robot supermarket” in the city’s Shunde District. The first-of-its-kind centre will open to the public in September. It will give robotics developers a place to exhibit and sell their latest models, as well as provide a platform for research and development and intellectual property rights (IPR) protection, said Xuan Ganhua, an official with the local robotics industry area in Shunde.

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Slowing economy saps demand for luxury cars Several automakers have already readjusted their pricing strategies Norihiko Shirouzu

P

rices for German luxury cars in China are tumbling as the country’s stock market sell-off and worries about broader economic growth chill demand for auto brands that once commanded price premiums from affluent Chinese consumers.

At Mercedes-Benz stores operated by a dealer group with nearly 200 multiple brand outlets, customer traffic at showrooms has dwindled markedly since mid-June, when a stock market slide that saw indexes plunge by as much as a third began.

A senior manager at that dealer chain said customer traffic at some of its Mercedes-Benz stores was “down 20 percent to 30 percent” compared with last year’s levels over the past month.

Sales were still increasing at some stores, but it was taking a lot more effort and often heavy discounting to move them off the lot, he said.

A China-based spokesman for Mercedes-Benz owner Daimler AG could not immediately be reached for comment.

Dealing with a similar fall-off in customer traffic and orders, a dozen BMW stores run by another dealer group are being forced to provide increasingly steep discounts to entice customers, according to the head of the chain with showrooms across China.

He said business had already been weak, due to China’s slowing economic growth and a corruption crackdown that has weighed on sales of flashy cars, and his stores had to offer a 5 percent discount to grease sales last year.

The stock market has some impact on the car sales as it hurts cash flow Dong Yang, China Association of Automobile Manufacturers

Over the last week or two, as the stock market rout pummelled the net worth of potential buyers, many of those stores were forced to offer steeper discounts on cars such as the BMW X6 crossover SUV, according to the dealer group chief.

“The business has been slow for the last 18 months, but lately we have had to discount even more,” the dealer operator said, asking for anonymity because he did not want to damage his group’s relationship with BMW. “When people walk into a showroom now, with anything less than 15 percent discount they would not even consider opening their wallets.”

BMW said in a statement it understood it was “necessary to support the dealers effectively in a volatile market” and had implemented a number of support measures, including reducing shipments to help

dealers reduce inventory levels and “various” measures to help dealers’ cash flows.

The company was also offering its dealers help in developing after-sales services and used cars businesses to enhance profitability, as well as launching new models, it said.

The average “maker suggested retail price” (MSRP) for all passenger cars remains relatively high in China, at around 280,000 yuan (US$45,000), according to research firm JATO Dynamics.

But actual prices customers pay when buying cars have fallen steadily since 2012 to slightly less than 170,000 yuan, chiefly because of heavy discounting by dealers, according to JATO.

Sales forecast cut

In the first sign that turmoil in the stock market could affect spending in the real economy, China’s automakers’ association on Friday slashed its 2015 forecast for vehicle sales growth to a meagre 3 percent.

The China Association of Automobile Manufacturers (CAAM) previously predicted combined sales for passenger and commercial vehicles to grow 7 percent to 25.1 million this year.

“The stock market has some impact on the car sales as it hurts cash flow,” CAAM chief Dong Yang told reporters on Friday, adding he was confident sales would pick up in the second half.

Defending the double-digit operating margins that the China car market provided just a few years

ago is not easy as the economy cools to its slowest pace in growth in a quarter century, and auto dealers in China are tightening their belts to keep margins from falling further.

The BMW dealer group chief said his outlets, which employ about 200 people at each location, had put a hold on new hires.

“We have not instituted pay cuts, but we have actually frozen salary increases as well,” he said.

The dealer group chief was also trying to persuade the German brand to lower the bar for bonuses and rebates - a primary source of profitability for most dealers - by reducing its sales volume objectives for his stores.

“If the factory actually lowered our targets, we wouldn’t have so much pressure to discount in trying to achieve our targets,” he said.

Several automakers, including General Motors Co and Volkswagen AG, have already readjusted their pricing strategies in China by pushing down MSRPs closer to prevailing transaction levels.

GM’s Shanghai-based spokeswoman Irene Shen said by email the Detroit automaker was not considering lay-offs or big productions cuts.

“GM is committed to China and intends to continue to grow and enhance our business working with our partners in China,” she said. “We have made no major moves to curtail production. We regularly manage our production volumes to maintain inventories within a healthy range.”

Reuters

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Market blow-out has HK basking in financial hub glow The notion that Shanghai or Shenzhen can play a role as a major international financial hub has been put back potentially by some years after markets plunge

L

ess than a year after huge street protests prompted a re-think about investing in Hong Kong, a wild four-week ride in mainland China’s stock markets makes the city’s financial hub look like a beacon of seasoned stability.

China’s many-pronged state intervention in its markets, aimed at steadying share indexes that plunged by close to a third, has played to Hong Kong’s strengths as a proven, transparent market - and a safer entry point for those wanting a piece of China in their investment portfolios.

Amid the carnage on mainland markets, Hong Kong’s appeal has returned - with its decades as a thriving investment hub, rule of law, free market policies and independent judicial system.

Beijing’s careful measures in recent years to open up its economy to global investors and internationalise its yuan currency - and a doubling in its stock market value in just a few months had begun to cast a shadow over Hong Kong’s role as the gateway to China.

But the policy bazookas lobbed at rescuing investors nursing losses of more than US$3 trillion suggest Beijing is far from ready to let markets loose.

Safer pair of hands

China’s heavy-handed market management - cutting interest rates, suspending IPOs, easing margin lending and collateral rules, corralling brokerages into buying stocks and major shareholders into not selling

them - serves to underscore Hong Kong’s reputation for a Westernstyle business environment, built on a deep pool of financial experience and expertise.

As more than half of China’s listed companies suspended trading in their shares and cowered on the market side-lines, Shanghai stocks gyrated. Hong Kong’s Hang Seng index remained relatively stable, though its weekly decline of 4.5 percent was its biggest since midMarch last year.

By Friday’s close, China’s frantic efforts appeared to be gaining traction, with the CSI300 index of the largest listed companies in Shanghai and Shenzhen up around 12 percent in two days.

The market turmoil may also prove a setback for Beijing’s lobbying for Chinese shares to be included in global indices such as MSCI’s Emerging Markets Index, which would draw in foreign capital.

China will eventually get things right, but for now has lost some credibility, said the head of equity capital markets at a foreign bank in Hong Kong, who didn’t want to be named.

In comments to reporters on Friday, Hong Kong’s financial secretary John Tsang emphasised how the city’s markets were operating in a smooth and orderly manner.

In Shanghai, the mood is bruised, but not down.

Reuters

Tech manufacturing accounts for a third of all Taiwan's industrial output, but two years ago, the NDC recognised growth in this sector was plateauing as firms lose out to cheaper, Chinese rivals.

In June, exports shrank by the most in more than two years - and for the fifth consecutive month - as shipments of tech goods and demand from major trading partner China fell sharply.

In a bid to stabilise trade and make the economy more "creativity intensive", the NDC a year ago set up HeadStart, a project dedicated to creating a local Silicon Valley by relaxing regulations for registering start-ups, matching funds invested into projects and creating tech hubs.

An educated and young population also work in Taiwan's favour: during a visit in March, Jack Ma, the founder of Chinese e-commerce giant Alibaba Group Holding, said he wanted to set up a T$10 billion fund to support Taiwanese entrepreneurs, rankling the authorities as political ties with China remain uneasy.

China’s government is not worried about the situation with the Chinese stock market, Russian President Vladimir Putin said on Friday following talks with President Xi Jinping. “Chinese authorities are reacting to this calmly,” Putin told reporters. “I think that China will remain an engine of the global economy.” Putin added that Russian economic fundamentals are strong and able to withstand the country’s economic crisis.

Listed companies unveil plans to stabilize stocks Nearly a quarter of China’s listed companies have come up with plans to stabilize their stock prices, the country’s securities regulator said. As of Thursday, 655 companies had announced measures to increase share holding of or repurchase their own stocks from the market, after a period in which the market plunged by 30 percent from its June 12 peak, according to the China Securities Regulatory Commission (CSRC).

On Wednesday, the CSRC encouraged major shareholders, directors, supervisors and senior managers of listed companies to buy more shares to help maintain steady prices.

Authorities eye industrial urbanization in 60 zones

Tech manufacturing accounts for a third of all industrial output

C

Beijing on Saturday announced that it would speed up construction of a “subsidiary administrative centre” while promising to limit its population to 23 million people.

The announcement was made as the city on Saturday concluded a plenary session of its party committee, during which a guideline was passed on promoting the integration of Beijing with its neighbouring Hebei Province and Tianjin Municipality.

The city’s “subsidiary administrative centre” would be “focused” on Tongzhou, a suburban district to the southeast, and its construction must have “remarkable progress” by 2017, according to the guideline.

Putin says China to remain “engine” of global economy

Taiwan courts tech start-ups to drive economic growth ompanies such as electric motor scooter firm Gogoro could hold the key to Taiwan's economic growth.

In just three years, the start-up, which counts Japan's Panasonic Corp as a strategic partner and Cher Wang, the founder of local smartphone maker HTC Corp as a key investor, raised US$150 million to develop the smartphone-synched bike, and a charging network for it.

The Smartscooters went on sale last month, starting at around US$4,100.

Gogoro's success in creating a home-grown, innovative product is precisely what Taiwan's government wants to foster as it seeks to reduce the export-driven economy's reliance on the island's world-class tech manufacturing sector.

These tech firms, which include HTC, the world's biggest contract chip maker Taiwan Semiconductor Manufacturing Co Ltd and iPhone maker Hon Hai Precision Industry Co Ltd, also give Taiwan an advantage over the many other countries seeking to nurture tech start-ups.

Beijing plans second administrative centre

Taiwan's big tech firms make it fertile ground for tech start-ups, said John Fan, who co-founded PicCollage, the most downloaded app from Taiwan.

He said many entrepreneurs create a start-up, work for a big company for a while when their business is acquired, and then leave to set up on their own again. "They are always thinking about the next thing. That's the default lunchtime conversation," said Fan, who previously worked at Qualcomm.

HTC, once one of the world's biggest smartphone makers, also inadvertently gave the local startup scene a boost: it hired several entrepreneurs during its heyday, but many have since left to set up on their own as HTC lost its competitive edge.

Gogoro's co-founders Horace Luke and Matt Taylor are former HTC executives. John Wang, who left HTC in 2012 after creating the firm's "Quietly Brilliant" marketing slogan, has also set up his own firm, which is preparing to launch a smartwatch.

Reuters

China will choose around 60 zones to lead the nation’s efforts in promoting industrial urbanization, the nation’s top economic planner said. The National Development and Reform Commission (NDRC) said that the selected areas will coordinate and integrate industrial and urban development, which will lead to complementary regional economies. It did not specify which areas would be chosen, but said that they will be based on existing industrial zones or parks. It added that the industrial urbanization drive will convert industrial parks to more comprehensive functions required of a city economy.

Xinjiang improves international connection Xinjiang Uygur Autonomous Region is becoming better connected with the international community after the implementation of the Silk Road Economic Belt.

Trade volume at Alataw Pass, the region’s largest land port on the Kazakhstan border, reached 25 million tonnes last year, after an average annual growth of 27 percent since 1991, according to port officials.

The Alataw Pass bonded area, the first specialized trade area in Xinjiang, which started operation in June last year, began to import vehicles this month.

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Indonesia eyes return to OPEC as oil crisis looms Observers also say Ecuador has set a precedent for Indonesia, by suspending its membership in 1992 and rejoining in 2007 Olivia Rondonuwu

I

ndonesia is seeking to rejoin OPEC to get access to cheaper oil supplies as demand soars and domestic production falls, but critics say the move is an unwelcome distraction from efforts to overhaul the country’s troubled energy sector.

Resource-rich Indonesia, Southeast Asia’s largest economy, was part of the Organization of the Petroleum Exporting Countries (OPEC) for almost 50 years until suspending its membership in 2009 after becoming a net oil importer.

The switch to becoming an importer came as domestic demand soared and output dropped due to a lack of investment from foreign companies, put off by complex regulations, corruption and growing economic nationalism.

With oil imports surging as the economy booms and the energy sector still in urgent need of reform, the government is looking for cheaper supplies and has taken the unusual step for an oil importer of requesting to rejoin the 12-member exporting cartel.

“It is only natural that we should build relations with exporters,” Energy Minister Sudirman Said said before heading to an OPEC meeting at the organisation’s headquarters in Vienna last month, where he

We understand the application is viewed favourably because Indonesia would again provide OPEC with a member nation in Asia and thus broaden the geopolitical base of the group Ann-Louise Hittle, vice president, Macro Oils research

was seeking to have the suspension lifted.

After the meeting, the energy ministry said that some OPEC members had backed Indonesia rejoining.

OPEC has refused to comment but analysts said the group, which has members from the Middle East, Latin America and Africa, is likely to welcome an applicant from Asia.

“We understand the application is viewed favourably because Indonesia would again provide OPEC with a member nation in Asia and thus broaden the geopolitical base of the group,” Ann-Louise Hittle, vice president of Macro Oils research at Wood Mackenzie, told AFP. The OPEC statute states that “any country with a substantial net export of crude petroleum” can become a full member. But it also says associate membership is possible for countries who do no qualify as full members, the course Indonesia is likely to pursue, analysts believe.

‘Just giving up’

But some observers questioned the wisdom of the move, suggesting that trying to rejoin OPEC and source cheaper supplies from outside Indonesia could slow the momentum

of the government’s attempts to reform the corruption-tainted, domestic oil and gas sector.

When reform-minded President Joko Widodo took power last year, he set up a team to look at overhauling

Pacific Rim trade deal pending on Canada Japan and other leading countries said they were awaiting action

by U.S. Congress before moving toward the final stage of the talks Richard Cowan

T

he United States, frustrated over the lack of progress with Canada over new rules for agriculture trade, is weighing “contingencies” that could include completing a Pacific Rim trade pact that excludes Canada, according to two sources familiar with the issue.

One official familiar with the 12-nation Trans-Pacific Partnership trade negotiation said Canada is not coming forward with plans to lower its

barriers to agricultural trade.

Meanwhile, several U.S. senators who met with U.S. Trade Representative Michael Froman on Thursday urged him to “move forward on TPP without Canada unless a serious offer on dairy, poultry, and agriculture market access” was made, a U.S. Senate aide said.

According to the aide, Froman responded that he preferred to move forward with Canada, but added that

the United States is “preparing for all contingencies.”

Max Moncaster, a spokesman for Canadian Trade Minister Ed Fast, told Reuters: “We continue to work with all TPP partners to conclude an ambitious agreement that will create jobs and prosperity for Canadians.”

But Moncaster added that Ottawa will “continue to promote and defend Canadian trade interests across all sectors of our economy, including

supply management.”

The United States is set to host a meeting of TPP trade ministers in Hawaii July 28-31.

The Obama administration is hoping to wrap up in coming weeks the negotiations that would establish a massive trade pact encompassing 40 percent of the world’s economy, ranging from Japan to Chile.

The negotiations got a boost last month when the U.S. Congress approved “fasttrack” authority for President

Barack Obama, which allows him to negotiate trade pacts knowing that Congress can approve or reject such deals, but not amend them.

Japan and other leading countries in the 12-nation negotiation said they were awaiting action by Congress before moving toward the final stage of the talks.

Now, Canada’s agriculture industry is the focus of negotiators’ attention, in addition to many other details that still have to be settled.

Canada’s dairy and poultry industries are worth tens of billions of dollars.

Canadian farmers are afraid that TPP would endanger the supply management system, which keeps dairy and poultry prices artificially high by restricting supply.

Cheaper supply could come from the United States but also potentially from New Zealand and other countries.

Reuters

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Asia

the sector, which critics have said is plagued by a shadowy “oil mafia” who skim off huge, illicit profits.

Some progress has been made. In May, state-owned energy company Pertamina said it would disband

its oil-trading arm Petral, which supplies one third of the country’s daily oil needs but has been dogged for years by concerns about a lack of transparency.

But the reform team, which

undertook a six-month assignment to assess the sector, made other recommendations, such as shifting to a newer type of cleaner burning, more efficient petrol, and there are fears such efforts could be stymied by the new focus on OPEC. “What is the use of Indonesia approaching OPEC, even if only as an observer?” wrote Faisal Basri, the former head of the government’s reform team, on his blog, and added the country appeared to be “just giving up”.

Reform is seen as urgent. During its heyday in the 1990s Indonesia produced close to 1.6 million barrels of oil per day, which easily covered demand and left plenty more for export.

But by last year, Indonesia was importing 689,000 barrels a day to cover its domestic needs, the bulk of which was for transport, Benjamin Tang, a senior analyst for Wood Mackenzie’s Asia Pacific Refining research service, told AFP. Some have called for Indonesia to wean itself off oil to help ease the looming supply crisis -- but there seems little chance of that, with many new cars and motorbikes hitting the roads every day as the middle class rapidly expands.

To make matters worse, decades of generous government subsidies have made Indonesians used to cheap fuel.

The pay-outs were slashed almost entirely this year, as low global oil prices naturally helped to keep pump prices down, but there are already suspicions the government is quietly reintroducing small subsidies as oil prices creep back up.

While some fear the move towards OPEC could hamper reforms, others believe it simply makes no sense for a net oil importer.

“If you want to join a car club,” said Komaidi Notonegoro, head of energy research group ReforMiner Institute, “You have to have a car.”

AFP

Australia orders energy fund to shun wind power

India’s factory output misses estimates Factory output rose less than economists estimated, boosting pressure on policy makers to revive investment in Asia’s third-largest economy. Industrial production rose 2.7 percent in May from a year earlier after a revised 3.4 percent gain in April, the Central Statistical Office said in a statement on Friday. That compares with a 4 percent rise predicted by the median of 32 estimates in a Bloomberg survey of economists. Manufacturing output climbed 2.2 percent, electricity 6 percent, mining 2.8 percent and capital goods production rose 1.8 percent.

Consumer goods fell 1.6 percent.

Myanmar to announce underwriter licenses Myanmar’s Securities and Exchange Commission will announce winners of underwriters’ licenses later this month as part of its process in establishing the country’s first ever stock exchange, official media reported yesterday. So far, 20 private security companies out of 57 have applied for underwriters’ licenses since January, while 30 for consultants or advisers and seven for brokers and dealers. Myanmar’s first Yangon Stock Exchange with the abbreviation YEX is originally scheduled to debut in October but has been postponed to late November or early December to make way for the country’s upcoming general election set for November 8.

Thai institution lowers growth forecast The University of the Thai Chamber of Commerce (UTCC) has slashed its economic growth projection for 2015 to less than 3 percent, on the grounds that prolonged drought has incurred economic losses. The previous projection was 3-3.5 percent, Thanavath Phonvichai, Director of the UTCC’s Economic and Business Forecasting Centre, was quoted by the Nation newspaper as saying on Friday. According to a UTCC survey, which was conducted among 1,200 farmers nationwide, the lingering drought has stricken more than 92.2 percent while the rest, mostly in the southern part, remain unaffected.

Prime minister has shown limited enthusiasm to join the U.S. IMF, S&P trim Philippine and China in broader global efforts to address climate change growth forecast David Stringer

W

ind farming in Australia suffered another setback with the government banning its A$10 billion (US$7.4 billion) renewable energy fund from investing in the industry.

The government sent a letter to the Clean Energy Finance Corp. outlining proposed new investment priorities, including a shift away from wind power, Trade and Investment Minister Andrew Robb said yesterday in an interview on Sky News television The fund should be “investing in new and emerging technologies and certainly not existing wind farms,” Prime Minister Tony Abbott later told reporters in Darwin. His government’s policy is to eventually abolish the fund, he said.

Last month, the government outlined plans to appoint a commissioner to oversee wind farms and is backing research into whether

they damage people’s health. Abbott has labelled wind farms as ugly and noisy.

The decision to prohibit new wind investment is “an extraordinary and prolonged attack on a viable industry,” Australian Wind Alliance National Coordinator Andrew Bray said in an e-mailed statement. Abbott is “hammering in the final nail to the coffin of wind-energy investment himself,” he said.

The fund has a mandate to focus on innovation in “the renewable energy space, and not on mature technologies like wind, which can source funds in the commercial market,” Robb said. Plans to change the fund’s investment mandate were first reported earlier by The Age newspaper.

Global efforts

Abbott has shown limited enthusiasm to join the U.S. and China in broader global efforts to

address climate change. Australia, the biggest coal exporter, has been urged by France to set an ambitious target to curb greenhouse gas emissions before a global deal to be signed in Paris in December.

An announcement by Australia last month of a new renewable energy target will unlock investments of more than A$10 billion in new renewable projects, according to General Electric Co. The country will seek to produce 33,000 gigawatt hours of electricity from large-scale renewable energy projects by 2020.

About one-third of all proposals to Australia’s clean energy fund relate to wind technology, according to its website. The corporation has acted as a debt provider with other lenders for wind projects including the AGL Energy Ltd.-operated Macarthur wind farm in Victoria state, it said.

Bloomberg News

It is almost certain that the Philippines would not be able to attain its target of 7 percent to 8 percent gross domestic product (GDP) growth this year after the International Monetary Fund (IMF) and Standard & Poor’s (S&P) slashed their growth forecasts for the country in 2015.

Media reports said the IMF has lowered its GDP growth for the Philippines from its earlier forecast of 6.7 percent to 6.2 percent for this year and 6.5 percent for next year. Weak global demand and dry weather would be a drag on the country’s economic growth.

Multination coal-fired power plant in Myanmar Firms from Myanmar, India and Singapore forming a public-private joint venture will build a coal- fired power plant in Kyauktan township, south of Yangon, an official report said yesterday. The firms will build the plant on 243 hectares’ plot in the township, aimed at meeting the region’s rising power demand. Once the project is approved by the regional government, the construction of the plant will start in 6 to 12 months and is targeted to complete within three years, the developers were quoted as saying.

14 | Business Daily

July 13, 2015

International ArcelorMittal asks S.Africa for steel tariff protection Africa’s largest steel maker, ArcelorMittal South Africa, has asked the government to impose a 10 percent import duty on steel and in return it may offer shares to black empowerment partners, a newspaper reported yesterday. Shares in the unit of the world’s largest producer of steel are trading around their lowest levels in more than a decade and the company has said South Africa’s high labour costs, poor rail infrastructure and slowing economy have forced it to consider cutting back operations and jobs.

Chile’s president says reform drive to be curtailed

Yellen says expects rate hike this year Despite the improvement of recent years, she said labour markets remain out of line, with high levels of part-time work and weak participation rates

Chile’s President Michelle Bachelet (pictured) on Friday scaled back expectations for her ambitious reform drive, saying her government will have to prioritize some policy decisions as an economic slowdown has eaten into fiscal resources. Bachelet came into office for a second non-consecutive term in March 2014 promising a raft of social reforms, such as comprehensive changes to the education system, overhauling the tax system and upending the nation’s constitution, which was put in place during Chile’s 1973-1990 dictatorship. A softer-than-expected economic recovery is squeezing government revenue.

IMF downgrades world economic growth The International Monetary Fund (IMF) downgraded its global economic growth projection to 3.3 percent for 2015 from a forecast of 3.5 percent it made in April. The weaker-than-expected U.S. economy is the culprit of the lower projection, the fund said in its update of the World Economic Outlook, its biannual flagship report of the world economy. The U.S. economy’s unexpected contraction in the first quarter dragged down growth in neighbouring countries such as Canada and Mexico, the Washington-based lender said. The IMF maintained its projection of the world economic growth in 2016 at 3.8 percent.

Investors lost US$390 mln at Nairobi bourse Investors at the Nairobi Securities Exchange (NSE) lost about US$390 million last week as the market recorded a major decline. Data from the NSE received Saturday indicates that market capitalization, which measures shareholders wealth, dropped from US$22.73 billion to US$22.34 billion. It is one of the biggest losses in recent weeks as foreign investors’ participation remained stifled, with many selling their stocks in search for better opportunities elsewhere, particularly, in Egypt and Nigeria securities exchanges. However, not only market capitalization declined this week, other key indices of the bourse also dropped.

Federal Reserve chair Janet Yellen said she expects the Fed to raise interest rates at some point this year, but pointed strongly to her concerns that U.S. labour markets remain weak and that more workers could be encouraged back into the job market with stronger growth.

In her speech Yellen gave no direct hint about whether she anticipates more than one rate hike over the Fed’s four remaining meetings of 2015.

But her focus on domestic economic developments looked beyond recent market turbulence over Greece and China, and keeps the Fed’s plans on track.

She said she expects the economy should grow steadily for the remainder

of the year, allowing the Fed to move ahead with its first rate hike in nearly a decade.

“I expect it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy,” Yellen said in a speech to the City Club of Cleveland, a civic group that sponsors high-level speakers.

“But I want to emphasize that the course of the economy and inflation remains highly uncertain...We will be watching carefully to see if there is continued improvement in labour market conditions, and we will need to be reasonably confident that inflation will move back to 2 percent in the next few years.”

Sustainable Development Goals financing extended The private sector is playing an increasing role in financing goods, services and infrastructure

M

ultilateral development banks (MDBs) and the International Monetary Fund (IMF) unveiled plans to extend more than US$400 billion in financing over the next three years to back the Sustainable Development Goals (SDGs).

The SDGs are set to relay the U.N. Millennium Development Goals (MDGs) this year.

The banks, including the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, InterAmerican Development Bank and World Bank, vowed to work more closely with private and public sector partners to help mobilize the resources needed to meet the historic challenge of the SDGs.

According to a multilateral statement, the ambitious SDGs plan to tap the “billions” of dollars in current official development assistance (ODA) and all available resources to attract, leverage and mobilize “trillions” in investments of all kinds -- public and private, national and global.

ODA, estimated at US$135 billion a year, provides a fundamental source of financing, the statement said.

“Meeting the staggering but achievable needs of the SDG agenda requires everyone to make the best use of each dollar from every source, and draw in and increase public and private investment,” said the statement.

“The MDBs - the engines of development finance -- are looking to a range of options for scaling up,” it noted.

Analysts saw Yellen’s comments deviating little from the central bank’s recent policy statement.

Though global markets have been turbulent in recent weeks since the Fed’s June meeting, Yellen focused on U.S. growth she feels is likely to continue and will push the economy closer to the Fed’s full-employment and 2 percent inflation goals.

It is a step that will have global implications, putting the Fed on a path separate from central banks in Europe and Japan that continue fighting economic crises, and potentially drawing capital out of developing economies.

Reuters

Additional steps to leverage more resources include the development of new approaches and tools to help developing countries play a stronger role in harnessing national resources, according to the statement.

The MDBs and the IMF are partnering with countries on, for example, the introduction of a new toolkit to assess and improve tax policies and expanding instruments such as e-procurement to achieve better government spending.

Increasing external resource flows to developing countries for investment are essential to achieving the SDGs, but these flows can be expected to materialize only in circumstances where countries have coherent development strategies and macroeconomic stability, and the key public sector services and a business environment supportive of growth are ensured.

The MDBs are committed to engaging differently with private sector partners on a wide range of interventions, including connecting investors with opportunities, helping countries make investments more attractive, and building local financial markets.

When adopted in September 2015 by governments, the SDGs will succeed the MDGs that come to a close this year.

Xinhua

Business Daily | 15

July 13, 2015

Opinion Business

wires

The Paris climate-change spectacular

Leading reports from Asia’s best business newspapers

Neth Daño

Asia Director at the ETC Group

Pat Mooney

Executive Director at the ETC Group

TAIPEI TIMES KMT lawmakers advised Chinese Nationalist Party (KMT) presumptive presidential candidate Hung Hsiu-chu to focus on internal affairs and economic policies. KMT Legislator Lo Shu-lei said the lunchtime discussion was about public policy. “I told her that a nation’s leader is unworthy of the title if they cannot provide young people with a vision, make housing affordable and encourage them to have children,” Lo said. “[Hung] agreed, so she should now begin to work on issues concerning the economy, internal affairs and how to enhance people’s well-being, including by narrowing the wealth gap,” Lo said.

PHILSTAR Foreign direct investments (FDIs) were cut by half in the first four months of the year after plunging 43 percent in April amid the negative global sentiment, data from the Bangko Sentral ng Pilipinas (BSP) showed. Net FDI inflows reached US$1.23 billion from January to April this year or 48.3 percent lower than the US$2.38 billion registered in the same period last year. Data showed net equity capital investments fell 50.5 percent to US$279 million in the first four months from US$564 million in the same period last year.

THE KOREA HERALD Six South Korean banks made the global top 100 banks list, a Britain-based financial industry tracker said yesterday, although none of them were included in the top 50 bracket. In Asia’s fourth-largest economy, KDB Financial Group, KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group and Nonghyup Financial Group placed in the top 100, the data compiled by The Banker showed. KDB Financial outpaced other South Korean rivals at 62nd, up 16 notches from a year earlier. KB Financial climbed three steps on-year to the 65th spot.

THE STRAITS TIMES Saving for retirement is the top priority among affluent Singaporeans, well ahead of putting cash aside for a rainy day and education, according to a recent online poll.

It found that the ideal retirement nest-egg is estimated to be about S$1.38 million, although respondents varied in how they arrived at this figure. About 55 per cent sought professional financial advice before investing while 13 per cent derived it from the media. Friends Provident International conducted the poll in May of around 500 affluent and aspiring-affluent investors in Singapore and a similar number in Hong Kong.

T

he United Nations Climate Change Conference in Paris in December will feature all the tightly choreographed production values of a Hollywood blockbuster. The cast will be huge: presidents and prime ministers at centre stage, supported by thousands of extras, including protesters, riot police, and busloads of media. The script may still be under wraps, but the plot has already leaked: This time, in sharp contrast to the failed negotiations in Copenhagen in 2009, the planet is going to win.

It is a seductive plot, but one that does not quite hold together. Goodwill and hard bargaining, the world will be told, paid off. Governments have agreed to voluntary reductions in greenhouse-gas emissions that will prevent the planet from heating more than 2° Celsius. Then, in a stunning deus ex machina, it will be revealed that the world’s largest fossil-fuel companies – the so-called super majors – have agreed to bring net emissions to zero by 2100, by capturing carbon at the source, sucking it out of the atmosphere, and storing it underground. The planet will have been saved, and the economy will be free to flourish. Cue the music and roll the credits.

The trouble is that the script is fiction, not documentary. The technology required has yet to be invented, and bringing net emissions to zero simply is not possible. And, like a Hollywood production, the Paris conference’s message will have been heavily influenced by those who have the most money.

The math is not difficult to follow. The world’s energy infrastructure – finely tooled for the use of fossil fuels – is worth US$55 trillion. The paper

value of the fossil-fuel reserves – most of them owned by the super majors – is some US$28 trillion.

The fossil-fuel industry’s influence is evident in the fact that governments worldwide are expected to spend some US$5.3 trillion this year subsidizing it, including the massive outlays necessary to counteract its adverse health and environmental effects. In other words, the governments meeting in Paris spend more subsidizing the causes of climate change than they do on global health care or, for that matter, on climate-change mitigation and adaptation.

But that will not be part of the story in Paris. There, the global public will be presented with a narrative premised on two unproven forms of “geoengineering,” proponents of which seek to manipulate the planetary system. The effort that will receive the greatest amount of attention is bio-energy with carbon capture and storage (BECCS). In May, the United States Department of Energy convened a private meeting to discuss this technology, which will be the fig leaf used by the super majors to protect their assets.

Deploying BECCS, however, would require the world to maintain an area 1.5 times the size of India, full of fields or forests capable of absorbing vast amounts of carbon dioxide, while still providing enough food for a global population that is expected to exceed nine billion by 2050.

By then, the technology’s advocates promise, biological sequestration will be joined by programs that capture emissions as they are released or pull them out of the air to be pumped into deep subterranean shafts – out of sight and out of mind.

The governments meeting in Paris spend more subsidizing the causes of climate change than they do on global health care or, for that matter, on climatechange mitigation and adaptation

Fossil-fuel producers promote carbon capture to allow them to keep their mines open and pumps flowing. Unfortunately for the planet, many scientists consider it technically impossible and financially backbreaking – especially if such technology is to be deployed in time to avert chaotic climate change.

Preventing temperatures from rising out of control will require a second geoengineering fix, known as solar radiation management. The idea is to mimic the natural cooling action of a volcanic eruption, by using techniques like the deployment of hoses to pump sulphates 30 kilometres into the stratosphere to block sunlight.

The United Kingdom’s Royal

Society believes that the need for such technology may be unavoidable, and it has been working with counterparts in other countries to explore ways in which its use should be governed. Earlier this year, the US National Academies of Science gave the technique a tepid endorsement, and the Chinese government announced a major investment in weather modification, which could include solar radiation management. Russia is already at work developing the technology.

Unlike carbon capture, obstructing sunlight actually has the potential to lower global temperatures. In theory, the technology is simple, cheap, and capable of being deployed by a single country or a small group of collaborators; no UN consensus is required.

But solar radiation management does not remove greenhouse gases from the atmosphere.

It only masks their effects.

If the hoses shut down, the planet’s temperature will soar.

The technology could buy time, but it surrenders control of the planetary thermostat to those who hold the hoses. Even the technology’s advocates concede that their computer models predict that it will have a strong negative impact on tropical and subtropical regions. Climate change is bad, but geoengineering has the potential to make it worse.

The story that the Paris conference’s producers will ask viewers to believe relies on technologies that are no more effective than smoke and mirrors. It is important that we learn to see past them.

The curtain will rise on a set of false promises, and it will close with policies that can lead only to mayhem – unless the audience gets into the act.

Project Syndicate

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July 13, 2015

Closing Cambodian opposition to boycott NGO draft bill

Sri Lanka’s ruling party signs coalition deal for polls

The opposition Cambodia National Rescue Party (CNRP, leaders pictured) announced yesterday that its 55 lawmakers will boycott a parliamentary session today, which is scheduled to debate and pass a draft law on Associations and Non-Governmental Organizations (NGOs). “All CNRP lawmakers will boycott a parliament’s plenary session on July 13, 2015, which is stated for the adoption of the draft law on Associations and NGOs,” said a party’s statement. The statement called on the parliament to scrap the government- proposed draft bill, claiming that it would put pressure and impose restrictions on the freedoms of associations and NGOs.

Sri Lanka’s ruling party, the United National Party (UNP), yesterday signed a Memorandum of Understanding (MOU) with its partners in a newly formed political alliance to contest Parliament (pictured) elections scheduled for next month.

The United National Party signed the MOU with its new partners, formally creating the United National Front (UNF) for Good Governance. UNP leader and Prime Minister Ranil Wickremesinghe, UNP Chairman and UNP General Secretary signed the MOU on behalf of the UNP. Members of the opposition Sri Lanka Freedom Part breakaway faction and civil society members also signed the MOU with the UNP.

Cuba’s potential attracts European and Chinese entrepreneurs A Shenzhen delegation led by Mayor Xu Qin visited Havana earlier this month

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he market-oriented reforms in Cuba and its improved ties with the United States have made the Caribbean country an attractive destination for business delegations from Europe and China in the past few weeks.

Spain’s Minister for Industry, Energy and Tourism Jose Manuel Soria, and Italian Vice Minister for Economic Development Carlo Calenda visited Cuba this week with business groups, following delegations from France, Britain and the Netherlands.

A delegation from China’s first and most successful special economic zone Shenzhen City visited the island from June 30 to July 1.

Soria, who was here to boost his country’s trade and investment in Cuba in various sectors, said that the economic reforms launched by Cuban President Raul Castro is “marking the correct path.”

Raul Castro introduced measures to reform the national economy soon after taking office in 2008, in a bid to build Cuba into a “prosperous and sustainable socialist nation.”

Cuba’s Council of Ministers agreed to “extend the experiment to private sectors” at a meeting in June.

The aim of the Spanish minister’s visit, together with 75 business representatives, was to support Spanish companies interested in establishing themselves in Cuba.

“A new era full of opportunities is beginning in Cuba and Spanish companies can contribute their accumulated experiences in various fields such as industry, tourism, energy, telecommunications and infrastructure,” said Soria.

In June, the Spanish Company of Financing and Development (COFIDES) decided to provide Spanish companies with 40 million euros (around US$44 million) before 2017 for them to invest in Cuba and more fund will be available in the future, said Jaime Garcia Legaz, Spain’s Secretary of State for Trade, who came together with Soria.

Spain is Cuba’s third largest trading partner after Venezuela and China and has around 200 enterprises mainly in the island’s tourism sector.

Italy, also aspiring to explore business potential in Cuba, sent a delegation of 150 businessmen to Cuba earlier this week, led by the country’s Vice Economic Minister Carlo Calenda.

It is the largest group of Italian entrepreneurs to have ever visited Cuba, Cuban news agency Prensa Latina (PL) cited Calenda as saying.

Like Europe, China also holds an optimistic view as to the potential of the Cuban economy.

For China, Cuba is not only a market full of opportunities, but also essential to a greater Latin American

Fosun’s Guo says market deficiency partly behind stock rout

Cuba’s capital Havana

market given Cuban’s geographical location, said Chinese Ambassador to Cuba Zhang Tuo. A Shenzhen delegation led by Mayor Xu Qin visited Havana earlier this month to further strengthen cooperation in several key fields, including investment, biotechnology, public transportation and infrastructure.

During the visit, Shenzhen-based battery maker and electric vehicle producer BYD won its biggest order since it entered the Cuban market last year: 719 gasoline-powered cars.

The delegation also met with Carlos

Chinese police find signs of futures manipulation

Billionaire Guo Guangchang said deficiencies in designing China’s financial infrastructure were partly behind the slump that wiped out almost US$4 trillion from the nation’s stock markets.

The equity market is young and going through an “adolescent period,” the founder and chairman of Fosun Group, China’s largest closely held conglomerate, said in a speech at a Shanghai forum on Sunday. Without elaborating on the deficiencies, he said even mature markets have made mistakes.

Guo, 48, defended government intervention to stop the stock rout, saying the slump had become “irrational.”

China’s stock market shows “how crucial value investing is,” Guo was quoted as saying on the company’s official WeChat public account on July 8. “Amid a sheer panic in the market, we should be brave and act in the opposite of the crowd.”

Guo has previously indicated he likes to mimic Warren Buffett’s approach at Berkshire Hathaway Inc. as a value investor, taking large long-term stakes.

Police have found signs that some firms had manipulated the trading of stock-market futures, Xinhua reported, without saying where it got the information.

A team of investigators led by Vice Minister of Public Security Meng Qingfeng is continuing probes after arriving in Shanghai on Friday, the official news agency reported, without providing further details.

The Ministry of Public Security is helping the China Securities Regulatory Commission investigate evidence of “malicious” short selling of stocks and indexes as the government works to stem a stock plunge that erased almost US$4 trillion in market value.

The move comes after the securities regulator pledged to “strictly” punish market manipulation and China’s state-run media blamed short selling, rumour-mongering and foreign meddling for fueling the stock slide.

The government has halted IPOs and banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months. As of Friday, about 1,365 companies had suspended trading, locking up about US$2.4 trillion worth of stock.

Bloomberg News

Bloomberg News

Manuel Gutierrez Calzado, president of BioCubaFarma, the biggest biotechnology and pharmaceutical group in Cuba, to discuss the details of further cooperation.

Preceding the Shenzhen delegation, Chinese Vice Premier Wang Yang visited the island late June, when he called for strengthened planning in cooperation between the two countries on infrastructure, bio-tech, agriculture and renewable energy, as well as efforts to explore industrial and investment cooperation potentials.

Xinhua

Food safety watchdog orders checks for smuggled frozen meat China’s food safety watchdog has called for local authorities to be on the lookout for smuggled frozen meat after a large amount of smuggled meat, some of which have been frozen for four to five years, was seized by customs.

Meat processors, storage businesses and catering companies should refrain from buying or selling meat with unidentified origins, the China Food and Drug Administration (CFDA) said in a statement published on its website yesterday.

Enterprises should notify the authorities if they have handled such meat since July 2014, it said, adding they must not fabricate or tamper with records.

According to the statement, all the seized frozen meat, including pork, beef and chicken wings, has been destroyed. The General Administration of Customs and the Ministry of Public Security will continue to investigate the illegal meat.

Around 800 tonnes of frozen meat worth about 10 million yuan (US$1.61 million) was seized in Hunan Province in June. A total of 20 people were detained.

Xinhua