Environment needs joined up plan: campaigner
Year I Number 221 Monday February 18, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00 www.macaubusinessdaily.com
Official efforts to protect Macau’s environment are hampered by a lack of coordination between government departments suggests green campaigner Joe Chan Chon Meng. In an interview with Business Daily, Mr Chan, president of Macau Green Students Union, says the city urgently needs a strong environment protection system given the likely impact of new infrastructure projects.
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uch of the limited 2013 supply of new private housing is likely to be injected in one big dollop – thanks to imminent rules on unfinished property sales designed to protect home buyers. The rules were framed months ago when the market was cooler and the main threat was lack of capital liquidity among builders. Some were executing presales off-plan and then not completing.
But with so much hot money – some of it from mainland investors thwarted by rules curbing speculative investment at home – a rush on any new supply is expected. Ricacorp (Macau) expects “three or four” to pre-sell unfinished housing projects between March and April prior to the new rules. The average housing price per square metre in December was 70,407 patacas (US$8,815). More on page 3
Cashless casino gives lie to Hainan denials Hainan keeps denying it, but it looks as though the Chinese holiday island is inching ever closer to creating something very like a casino industry. A mainland investor has opened a so-called “cashless” casino in the main resort Sanya. Hoffman Ma Ho Man, an investor in Macau’s Ponte 16 casino hotel resort, told Business Daily it could be a study to test the impact of the “real” thing. Page 5
CNY gaming revenue ‘steady’: regulator
New measures to control Gongbei crowds
The city’s casino regulator says gaming revenue during the Lunar New Year period will “maintain last year’s level”. That’s despite more visitors coming to Macau in the holiday week this year than in the equivalent period in 2012. Manuel Joaquim das Neves, head of the Gaming Inspection and Coordination Bureau, predicted the daily revenue to be above one billion patacas (US$125 million) in the seven-day holiday period. Page 4
The authorities have pledged to improve crowd control at the busy Gongbei border crossing to and from Zhuhai, namely by introducing visitor screening and giving priority to those with special needs. The Public Security Police admitted to media last Tuesday that they encountered an “unexpected” passenger traffic peak in early evening, when the size of the crowd waiting to leave Macau sparked safety concerns. Page 2
business daily February 18, 2013
New measures to control Gongbei traffic Land borders with mainland China busiest crossing point during Chinese New Year Stephanie Lai
he authorities have pledged to improve crowd control at the busy Gongbei border crossing to and from Zhuhai, namely by introducing visitor screening and giving priority to those with special needs. The Public Security Police admitted to media last Tuesday that it encountered an “unexpected” passenger traffic peak in early evening, when the size of the crowd waiting to leave Macau sparked safety issues. Since then the police say they have sent more officers to man the borders. They have introduced crowd control measures to restrict the number of people allowed to enter the immigration checkpoint building. The PSP added they have also given priority to elderly, children, pregnant women and people with disabilities in crossing the border. “In future we will announce the passenger traffic [figures] at the borders via radio or online platforms so as to better inform tourists to pick their time to cross the border,” said the cabinet of the Secretary for Security, Cheong Kuoc Va. In a statement released on Friday, the authorities also said visitors would be screened and divided into those allowed to use the electronically operated barriers, or e-channels, and those who cannot. Gongbei Port recorded 467,215 visitors during February 10 to 13, the first three days of Lunar New Year holiday. As expected, it had the heaviest traffic of any crossing point. During that period, the city as a whole recorded a total of 524,477 passengers entering from mainland
Tourists leaving after Lunar New Year holiday jostled and pushed at Gongbei border
China by land, police figures reveal. The city’s ferry terminals were the second most popular entry point for tourists arriving and departing, data from the Maritime Administration suggest. From February 10 to 13, a daily average of 105,000 passengers came in or out of Macau by ferries via the Outer Harbour Maritime Ferry Terminal or the two other terminals located at Taipa’s Pac On and the Inner Harbour. The number of ferry passengers using one of the three terminals during February 10 to 13 was 80 percent higher than on regular days,
business as usual
Predictable nightmares Paulo A. Azevedo firstname.lastname@example.org
he government has been advised over and over again about the consequences for the city of the growing number of visitors. For more than a decade several voices have pointed out the inadequacy of the infrastructure to cope with the incredible growth of certain kinds of business here. The limitations that we are all aware of prevent the city from absorbing so many tourists, and this is evidently detrimental to the healthy development of Macau, these voices have said. You do not need to be a genius to work it out. And yet we still see images of thousands of visitors jostling and pushing to get back across the border to mainland China. On the other hand, we are glad that 36 new hotels are on the way, according to official data. Eleven are under construction and the Land, Public Works and Transport Bureau is considering the plans for 25 more. So we should try to prevent the rapine practices of some hotels whenever there are holidays such as Lunar New Year. To see rooms in three-star and four-star hotels being advertised on hotel reservation websites at rates of about HK$6,000 (US$773) per night is absolutely unacceptable. Somebody must put a stop to the practice of inflating room rates during holidays. You do not have to be a genius to see why. But how do you explain the lack of will to act among the people that should be putting a stop to it?
the Maritime Administration stated. Macau International Airport had 79,875 passengers from February 10 to 14, an annual growth of 15 percent, the airport operator said.
According to Macau Government Tourist Office, from February 5 to 15 the city welcomed over 1.35 million visitors, up by 13.5 percent from last year’s Golden Week.
February 18, 2013 business daily | 3
Developers prime sales as presale curbs loom Estate agents say a wave of new flats may reach the market before a law regulating the sale of unfinished homes comes into force Tony Lai
Freakonomics Macau-style Michael Grimes
he real estate market is heading into a busy period and could heat up as unfinished homes go on sale before legislation regulating their sale comes into effect, estate agents say. Ricacorp (Macau) Properties Ltd managing director Jane Liu Zee Ka expects three or four developers to put homes in unfinished projects up for sale between March and April. “This estimate is based on the fact that this period is usually a season dominated by sales of new homes, and it could be also a step to avoid the impact of the eventual passing of the new law on unfinished flats,” Ms Liu told Business Daily. A bill to regulate the sale of unfinished housing is now going through the Legislative Assembly. Assembly member Kwan Tsui Hang said last month that the assembly may pass the bill in the first quarter. Ms Kwan chairs the Legislative Assembly committee dealing with the bill. Once enacted, the legislation would come into effect 30 days after being published in the Official Gazette. Midland Realty (Macau) Ltd chief executive Ronald Cheung Yat Fai said the developers of two high-end projects, One Oasis and Pearl Horizon, could release flats soon in a bid to avoid the new curbs on presales. “The construction of other projects is almost done, or conforms to the requirements of the bill, but only these
two projects may not be able to catch up,” Mr Cheung said. The legislation would allow the sale of unfinished homes only after the foundations of the building containing them had been laid.
Market rebound Ms Liu and Mr Cheung gave no estimates of how many homes in One Oasis and Pearl Horizon might be up for sale, saying it was up to the developers. Mr Cheung said one block of the 12 buildings in One Oasis, near Cotai, had yet to be put up for sale, the others having already reached the market. But more homes in Pearl Horizon, a project by Hong Kong’s Polytec Asset Holdings Ltd in Areia Preta, could be
Average price a square metre for housing in December
put on the market. Latest data from the Land, Public Works and Transport Bureau show that by the end of last month the developers had sold only 1,891 of the more than 5,200 flats in the 18 Pearl Horizon blocks. Flats in Pearl Horizon and One Oasis could go for between 6,000 patacas (US$750) and 7,000 patacas a square foot, records of completed sales kept by Centaline (Macau) Property Agency Ltd indicate. Neither Mr Cheung nor Ms Liu would forecast what difference the sale of unfinished flats in the next couple of months would make to the number homes sold and the prices they fetched. “What I can say is that we expect a healthy rebound in March from the stagnant market during Lunar New Year because buyers have some purchasing power and do not mind buying more expensive units,” said Mr Cheung. The sale of more than 270 homes, mostly in Pearl Horizon, drove up the price of housing on the peninsula to a record of 71,159 patacas a square metre in December, according to the Financial Services Bureau. Latest official data show that 834 homes were sold in December, onethird fewer than in November, but the average price per square metre rose by 6.8 percent to 70,407 patacas. The record average price per square metre, reached in October, is more than 72,700 patacas.
The housing market is set to rebound after the Lunar New Year holiday, estate agents say (Photo: Manuel Cardoso)
ot all human behaviour can be explained by economics. But the social science can in my view be a useful starting point for understanding why people hold certain views or beliefs. Macau’s new tourism boss Maria Helena de Senna Fernandes was quoted on Friday as saying of last Tuesday’s troubling scenes at the Gongbei border – when police had to intervene as tourists attempting to leave started pushing and scuffling: “We cannot simply use this holiday season to evaluate the overall tourism capacity of Macau.” She perhaps has a point. One can’t necessarily engineer a system to cater for the exceptions rather than the general rule. That’s why temperate Britain’s airports are woefully underequipped to deal with snow compared to those in chilly Nordic countries. It just doesn’t happen often enough to justify the spending. And when Ms Senna Fernandes makes her point it’s not I imagine because she is unconcerned about public safety or the image of Macau. Nor could the city be accused of failing to spend cash to improve public infrastructure. Major improvements have been made to boost Gongbei’s capacity on both sides of the border. But judged in terms of the economics of incentives, her statement makes sense. Simply put, it’s cheaper to compensate a Chinese family for the death of a relative than it is to compensate a Western one. Legislators here recently debated increasing work accident compensation,. Under Decree Law 40/95, updated in 2006, the maximum payment for a work-related death by accident or disease is 500,000 patacas (US$62,600). Thankfully in the years since the handover from Portuguese administration, there has not been a major public safety disaster in the city so there’s been no precedent created in terms of public accident compensation. But when 21 people died in crowd crush at the Love Parade music festival in the German city of Duisburg in July 2010 – including a 38-year old Chinese woman living in Germany – the event’s insurer AXA set aside 10 million euros (US$13.5 million dollars) to compensate the families. That works out to US$643,000 per death – more than ten times the cash available for work-related deaths in Macau. There is another aspect to public safety aside from the possibility of paying compensation when things go wrong. There are political risks attached to a disaster. In February 2012 Duisburg’s mayor Adolf Sauerland was voted out of office in a local referendum called specifically on the question of his failure to resign over the Love Parade disaster. In most communities around the world when something goes badly wrong, someone or something is singled out to take the blame. Mainland China has many examples of officials who lost their jobs because of man-made disasters on their watch. It’s encouraging therefore to hear over the weekend that the Cabinet for the Secretary of Security says lessons have been learned regarding last week’s scenes at Gongbei. The spokesman said in future a ‘triage’ system would be used to separate those entitled to use the electronic barriers, people who are elderly or are travelling with young children, and the rest of those waiting to cross. Whether that will address the issue of the sheer numbers trying to travel at certain times only time will tell. It will be interesting in the light of last week’s events to see whether Macau’s request for a 24-hour crossing point will receive a more enthusiastic response from Beijing officials next time around.
It’s cheaper to compensate a Chinese family for the death of a relative than it is to compensate a Western one
business daily February 18, 2013
macau Ho Ion Sang confirms re-election bid
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Incumbent legislator Ho Ion Sang confirmed to media on Saturday that he will be seeking re-election at the upcoming Legislative Assembly voting later this year. Mr. Ho, who is seeking his second term in the office, is a member of the pro-establishment Macau General Union of the Neighbourhood Associations, which gives heavy emphasis to grassroots benefits. He said the neighbourhood union would continue to pair up with the Women’s General Association of Macau for the election. The candidate list will be announced soon, Mr Ho added.
HOSPITALITY Cargo crash lands Political arithmetic spurred the development of Macau International Airport. At the time, there were no direct flights between the mainland and Taiwan. Connections needed intermediate stopovers. That political reality created a business opportunity that fitted in well with the government’s strategy. Improving relations between the mainland and Taiwan and, in particular, the advent of direct flights substantially altered the equation. The number of passengers in transit has dropped considerably. There is another aspect that has been less frequently looked into: air cargo. The changes brought about by détente are seen most strikingly in the amount of airfreight from Taiwan.
Gaming revenue stable in CNY: regulator Daily gross above MOP1 bln during lunar holiday period The volume of cargo flown into Macau from Taiwan is now less than 10 percent of what it was in 2008 and 2009, when the effects of the international financial crisis were most strongly felt. Volume has declined from nearly 14,000 tonnes in 2008 to about 1,000 tonnes in 2011 and last year. Airfreight from Taiwan made up more than 80 percent of the cargo handled at the airport in 2008 and 2009, and the crash in the volume from Taiwan meant the total volume contracted substantially. The total volume last year was just 30.2 percent of what it was in 2008. The mainland is now the main source of cargo handled at the airport. Starting from a low level in 2008, the amount of airfreight from the mainland has increased more than sevenfold. Cargo from the mainland now makes up two-thirds of all cargo passing through the airport. Airfreight from outside Greater China never had a significant share of the total. But cargoes from outside Greater China have declined by about two-thirds since 2008, and currently makes up about 15 percent of all cargo handled at the airport. J.I.D.
Drop in air cargo volume from Taiwan since 2008
Macau’s gaming top regulator, Manuel Joaquim das Neves
he city’s gaming regulator said gaming revenue during the Lunar New Year period will “maintain last year’s level”. That’s despite the fact more visitors came into Macau in the first seven days of the seasonal holiday in 2013 than in the equivalent period in 2012 according to government data. Manuel Joaquim das Neves, head of the Gaming Inspection and Coordination Bureau, predicted the daily revenue to be above one billion patacas (US$125 million) in the sevenday holiday period. He gave the figure in an interview with Chinese-language newspaper Macao Daily News. Visitor arrivals in the seven days from February 10 this year – the first day of the Year of the Snake – to Saturday February 16 inclusive – rose by 15.2 percent compared to the first seven days of the Lunar New Year in 2012 according to Macau Government Tourist Office. In 2012 there were 860,533 arrivals in the relevant period, while in 2013 there were 991,113 visitors. In 2012 the Lunar New Year holiday was in January.
Grant Govertsen, a Macau-based analyst at Union Gaming Research, noted that visitation levels during the festive period were above expectations, which is a “good sign” for the mass-market gaming segment. “The mass-market story during Chinese New Year and for all of 2013 is going to be very strong,” he told Bloomberg. Final gaming revenue figures for the holiday period and for the whole month are yet to be published. Last month gross gaming revenue grew by 7.3 percent year-on-year to 26.9 billion patacas. Mr Neves also said the bureau is closely supervising casinos’ operations and planned to employ more on-site inspectors in addition to its current 350 inspectors. The bureau director also commented on suggestions in a British newspaper of a post-holiday crackdown on junkets by the mainland authorities. On February 5, The Times in London reported the possibility as part of an ongoing campaign against
official and business corruption reportedly ordered by China’s incoming leader Xi Jinping. Mr Neves said foreign media did not have a clear grasp about what’s going on in the city. Some media “selectively report negative news,” he added. Without the option of adding more traditional tables, casino operators are searching for other ways to accommodate more players without exceeding the government’s city-wide cap on the number of live gaming tables. Sands China Ltd opened recently four new tables for Fast Action Baccarat, which has 28 betting positions, allowing up to 60 gamblers to play. The city’s top regulator told the Macao Daily Times the government “cannot impose too many restrictions on casinos’ operations”. The new type of tables would be counted as one live gaming table as long as there was only one drop box for cash bets and one result each time, he said. T.L.
February 18, 2013 business daily | 5
Cashless casino gives lie to Hainan’s gaming denials Possibly study to check impact of ‘real thing’ says Macau casino boss Hoffman Ma Michael Grimes email@example.com
n May Hoffman Ma Ho Man, an investor in Macau’s Ponte 16 casino hotel resort, told Business Daily that a “casino licence has actually been approved for Hainan”. At the time a spokesman for the government on Hainan – mainland China’s sub-tropical holiday island 504 kilometres (313 miles) southwest of Macau – appeared to dismiss the notion. He told us: “The chairman of Hainan’s People’s Congress Wei Liu Cheng reiterated that Hainan is not looking at opening casinos or other gambling activities such as horse racing.” Now it seems Mr Ma was closer to the truth than Hainan officials might like to admit. A mainland investor has opened a so-called “cashless” casino in the main resort Sanya. Reuters reports that players at Jesters casino bar, part of the newly opened Mangrove Tree Resort World on Sanya Bay, play with cash but cannot win it back – only points that they can use to pay for accommodation and luxury goods on sale at the resort. “Our casino bar is the first in the country. The government is monitoring, it’s a test,” Zhang Baoquan, a mainland-based art, film and real estate entrepreneur behind the scheme told Reuters. Yesterday Hoffman Ma concurred with that view. He told Business Daily: “It could possibly be a study to see what the impact would be of introducing ‘real’ casinos.” Given the Chinese love of gambling – 261.52 billion yuan (US$42 billion) was staked just on the mainland’s two legal lotteries last year aside from the US$38 billion
Mangrove Tree Resort World, Sanya Bay
casino gross revenue generated here – it seems unlikely that Macau can permanently retain its monopoly as the only part of continental China where casino gaming is legal. Taiwan is mooting building one or more casinos on outlying islands, with the express purpose of appealing to mainland players. Singapore has made no secret of the fact it wants foreigners – including mainland Chinese – to be the main customers of its two casino resorts.
Pragmatic approach Hoffman Ma says that the Chinese government – rather than
trying to change human nature and stop its citizens from gambling in casinos – would rather keep the money ‘in the family’ – i.e. within the Chinese economy. Indeed at a gaming conference in November, when a delegate asked why Macau International Airport didn’t have better connectivity with Singapore and other regional centres, Mr Ma responded: “I don’t think the Chinese government wants very strong ties between Macau and Singapore because of the privacy laws in Singapore. I think the Chinese government is quite afraid of people going from Macau to Singapore, because if they take
money there it will be hard for China to keep track of that.” There have been rumours for years that casinos are coming to Hainan. The property market heated rapidly in early 2010 on speculation there would be one or more casino licences. “To some extent, the approval of gaming on Chinese soil is inevitable,” says Gary Pinge, head of consumer and gaming research at Macquarie Securities Group in Hong Kong. “With regional markets already vying for a share of the Chinese gambling wallet, unless China brings gaming onto its own shores, it will not only lose tax revenues to other countries, but also the ‘multiplier effect’ from the consumption spend,” he added. MGM Resorts International – a 51 percent stakeholder in MGM China Holdings Ltd, operator of the MGM Macau casino resort – opened a hotel in Sanya last year. Fellow U.S. casino operator Caesars Entertainment – which has long harboured ambitions for a gaming presence in Asia – is set to open a hotel-only operation in Sanya in 2014. Referring to the cashless casino venture, an MGM spokesman said the company had no plan to introduce “anything of this kind”. In November Macau and Hainan province signed a deal to promote multi-destination tourism. Were however Hainan to become a direct competitor to Macau for casino gaming, then Macau Government Tourist Office might wish to reconsider such cooperation. With Farah Master, Reuters
Portugal seeks Chinese investors in real estate
newly created consortium, PTCN – Portugal-China Business Mission, is preparing for its first foray into Macau with hopes of attracting investments in Portugal’s real estate market. The Portuguese-language newspaper Ponto Final quoted the consortium’s chief, Y Peng Chow, as saying a PCTN delegation would come to Macau in April, after visiting mainland cities such as Shanghai, Beijing, Guangdong and Zhejiang. Mr Y, who is also president of Portugal’s leading Chinese association, said the purpose of the trip was to try to lessen the “hardships” of the construction industry in Portugal. PTCN was formed in January by a group of 13 companies, financial institutions and law firms. In wooing investors, the PCTN delegation will introduce the Golden Residence Permit programme the Portuguese government introduced in October. Under the scheme, Portugal will grant residence permits to non-EU citizens that invest there. Investors must transfer at least 1
Portuguese maker of kids’ clothes plots new opening
Chinese investment could be a tonic for Portugal’s troubled economy
million euros (10.6 million patacas) to Portugal, open a business that creates a minimum of 30 jobs or purchase property worth a minimum of 500,000 euros. Mr Y said the delegation was also seeking Chinese partners for
industrial joint ventures and to promote Portuguese food in the mainland. The delegation will also seek investment in technology from mainland businessmen. V.Q.
Portuguese manufacturer of children’s clothing Metro Kids Co is preparing to open a showroom here in March, pioneering a programme of expansion in Asia based on franchising and multibrand shops. Portuguese news agency Lusa quoted Metro Kids director Alexandre Cunha as saying the company would open an outlet here in partnership with a Macau representative. Lusa said Metro Kids expected the showroom to generate “within two years a business volume similar to the one in Portugal” of about 4.2 million euros (44.8 million patacas) a year. The expansion plan envisages the opening of 12 franchised and multi-brand shops in Hong Kong and the mainland, and three outlets in Macau by 2016.
business daily February 18, 2013
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Into the red Macau’s external trade has displayed a couple of persistent trends in the last few years. On the side of imports, the general trend has been upwards. That is the natural result of several factors: namely, a growing population, rising numbers of visitors, higher average and median incomes. On their side, exports seem to have stabilised in the last three years. But that apparent stabilisation hides an important structural change. The overall figures, which actually even rose slightly in 2012, hide the fact that their stability is mostly the result of reexports substituting for domestic exports. The latter are in a longer-term decline path.
The chart illustrates well the recent evolution. Imports rose significantly, by 60.8 percent from 2010 to 2012. The biggest slice of this rise took place between 2010 and 2011, confirming a fast recovery of economic activity. Conversely, exports were virtually unchanged in those two years, and most of their rise happened from 2011 to 2012. In absolute terms, the size of exports relative to the size of imports has also been rising. In 2010 that ratio was 6.3; in 2012 it topped 8.7. As a result of this changes the trade balance deteriorated in a way that mirrors, essentially, the growth of imports. In the short period represented it rose by 68.9 percent, with the strongest growth taking place from 2010 to 2011. In that year alone the deficit rose by 48.9 percent. On current trends, rising re-exports notwithstanding, in 2013 the foreign trade coverage ratio is likely to drop below 10 percent. J.I.D. The content of this column is the work of Business Daily’s journalists.
Green campaigner urges speedy legislative reform The government is moving too slowly to protect the environment, held back by outdated legislation, red tape and overlaps among its bureaus, says president of the Macau Green Students Union, Joe Chan Chon Meng. Mr Chan has gained prominence as the spokesperson for the Save the Egrets Movement, a coalition that banded together to lobby against development in the wetlands near the Taipa Houses-Museum last year. He told Business Daily that Macau urgently needed to reinforce its environmental protection laws before potentially damaging construction projects went ahead, including the Hong Kong-Zhuhai-Macau Bridge. Having recently resigned from the vice-presidency of the Macau Ecological Society owing to differences between his goals and those of the president, Mr Chan says he has no political ambition but is ready to help, if asked Luciana Leitão
Photo by Manuel Cardoso
foreign trade coverage ratio in 2012
What’s your evaluation of the government’s environmental protection record? Generally speaking, the government is trying to do its best to enforce a green culture in Macau’s society, among the citizens, but they are just doing it
on a basic level. Maybe the system is not easy to change because the law relating to environmental protection is too old and outdated. The legislation was created 20 years ago but up to now it has never changed. We have had many changes in Macau and the impact
is big. I think the government is not doing enough. In the past few years they just established the Environmental Protection Bureau but it is still very young compared to other government departments. Also, the power and authority of the
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After the bridge linking Hong Kong, Zhuhai and Macau is finished, with the heavy load of visitors and cargo, the impact will be big
bureau is very limited. It can only focus on education and advising other departments but it has no right to interfere. The government has no concrete right to enforce its recommendations. For example, we have been doing recycling for 15 years, but you can see efficiency is still very low. When you check recycling bins, people always mix up different materials. Also, recycling campaigns are held by two different government departments, the Environmental Protection Bureau and the Civic and Municipal Affairs Bureau, which do not collaborate very closely. Each uses very different advertisements. Even if they are related, there are different cleaning companies collecting the garbage. Macau is a very small city and society. If we really want to take effective environmental action it is very easy, but the biggest obstacle are the regulations, which are too old. We have to tear up all the rules to set up a new system. The Civic and Municipal Affairs Bureau is a very big department, so it is also doing environmental education. The Environmental Protection Bureau is doing environmental education as well, but in a different way. Some citizens are confused. Generally speaking, the environment protection situation is improving, but that is still not enough. With so many government departments involved in environmental protection and no supervisory body, are there inefficiencies? Yes. Actually, environmental protection is always related to different government departments, but they should have closer and overall collaboration under a strong authority. Not only are they doing separate work but you also cannot see a clear timeframe for what they are actually planning for the future. The Environmental Protection Bureau has already set the direction for the next 10 years but then you can see they are just blinding us with science. They will try to clean up the air but
they cannot cooperate closely with different government departments. The need is urgent. After the bridge linking Hong Kong, Zhuhai and Macau is finished, with the heavy load of visitors and cargo, the impact will be big, so we should build a very effective environmental system. You can predict the upcoming threat of pollution. We should slow down the pace of the city’s development. The Environmental Protection Bureau is trying the revise the legislation in areas such as environmental impact assessment. Is it on the right track? It is inadequate because the pace of development is too quick. Also, they spend two or three years drafting a bill and maybe they enact it four years later, but in the meantime many construction projects are finished. They should try to limit the impact of building projects on our fragile environment, even if the law is not yet implemented. The government should have those kinds of values and use them to try to judge different companies trying to build a project. Also, the environmental protection law has been divided into different parts – noise, air pollution – and the bureau is just trying to reform the easiest parts. It is not reforming them all together. I’m not optimistic. You’ve been fighting against the construction of five artificial lagoons next to the Taipa Houses-Museum. What are your main concerns? We still have many different solutions. If the government gave scientific views and the public agreed with the solution, we would also agree with them. The main problem with this project is the government’s attitude. We just want to voice our worries and give suggestions on how to improve the situation. We know the project is already finished but up to now we have been unable to have any further communication with the Civic and Municipal Affairs Bureau. They have refused to meet us and many other eco-friendly citizens. We worry about the future. They could use the same mindset in dealing with our natural resources. We try to do our best to tell the government that we should try to protect our fragile environment. It is not just the government making the decisions, as they can cooperate covertly with businessmen. Look at the building projects on Coloane. In future, we will keep a closer eye on them. The mangroves are just the basis of our campaign because we are doing environmental education and the mangroves are a great place to tell people about environmental changes. Next time, the government may think differently and offer public consultation. We don’t want them to do it so secretly. The government has a duty to tell us more and to monitor the whole situation. Are we seeing the first signs in Macau of concern about environmental protection versus economic development? I’m studying biology and one of the major topics is ecology, in which you need to keep a balance between development and nature. We are not against any development. We are not trying to oppose all development projects. We are just trying to limit their impact.
About the five lagoons project, the government tried to clean up the water to deter visitors from throwing garbage in the lake. The motive is good, but is it the only way? We do not oppose new buildings, for instance on Coloane, but we just want to limit the height and their impact. We try to balance development with the benefits for nature. You’ve recently stepped down from the vice-presidency of the Macau Ecological Society. Was it because your name was on a list of candidates for indirect election without your knowledge? I care about how to build up a green culture in this small society. One of the reasons I left is because I don’t have the same goals, ideas as the president. They are trying to do academic research and also do different kinds of events every year, but they lack the function of education. I have different values and I want a different direction. I’m not against the society but I want to do more for environment education and also help others promote a green culture in Macau. As for the Legislative Assembly elections, I’m not that kind of person. But if anyone needs my help I will help. I don’t have time. I’m a full-time secondary education teacher and I use my spare time to campaign and do my best. I’m tired. Ten years ago, I tried to do my best to make people use fewer plastic bags. We persuaded the government to designate two days
a month as plastic-bag-free days. Up to now, we still have only two days a month. Ten years have passed and nothing has changed. Also, the Macau Ecological Society is arranging very big events and seminars but has missed what should be its fundamental goal, to arouse people’s concern. In 2008 I founded the Macau Green Students Union with many eco-friendly people, many of whom who do not belong to any political association. They really care about the environment. They do not have any political background. So your decision to leave had nothing to do with the fact that your name was on the list of candidates? Partly, but that was not the main reason. The main reason was how we see the development projects on Coloane. I’m worried. For Mr Ho [Wai Tim, president of the Macau Ecological Society], Coloane has to be developed as an urban area, but in my view, we should keep it safe and green. We can allow some limited development, but not big changes to the area. It is a big difference. You have no political ambitions whatsoever? At this moment, no. I don’t have any intention of joining the Legislative Assembly. It is too complicated for me. But I will try to be a supporter of any legislator or political group that really wants to improve Macau’s environment, and I will do whatever I can to help run any educational project.
business daily February 18, 2013
GREATER CHINA EU airline emissions deal ‘possible’ China believes it can agree with the European Union on ways to limit airline emissions without relying on the emissions trading system, National Development and Reform Commission vice chairman Xie Zhenhua said. “We have lot of options besides the emissions trading system to achieve emission targets in the aviation sector,” Mr Xie said in an interview in the south Indian port city of Chennai. “For example, to save energy, improve energy efficiency, to improve the level of management. All can work together and the emission trading system can help.”
ConocoPhillips to resume production at Penglai ConocoPhillips received approval to resume production at the Penglai 19-3 oilfield off the northeast coast of China, which was closed in 2011 after an oil leak. A development plan and environmental assessment report for the oilfield have been approved, China’s State Oceanic Administration said in a statement on its website. The administration ordered operations to shut down after at least 3,200 barrels of oil and fluids leaded into Bohai Bay. ConocoPhillips and its Chinese partner Cnooc Ltd. have cleaned up the spill and agreed to pay about US$160 million in compensation to fishermen.
New Year retail sales slow on frugality drive Business was below expectations as Xi Jinping’s call for moderation was heard
Saudi’s Kingdom Holding buys stake in online retailer Kingdom Holding Co, the international investment firm of Saudi billionaire Prince Alwaleed bin Talal, and a consortium of investors have bought a 1.5 billion rial (US$400 million) stake in Chinese online retail firm 360buy Jingdong, the company said. Kingdom Holding’s investment in the deal came to 470 million rials, the firm said in a statement on Saturday. “Our deal solidifies the strategic relationship between Saudi Arabia and China,” Prince AlWaleed was quoted as saying in the statement, which did not mention the identities of the other investors in the consortium.
GM paid US$119 mln for 1 pct stake in joint venture General Motors Co paid US$119 million in September to buy back a 1 percent stake in its joint venture with its top Chinese partner SAIC Motor Corp. The deal pushed GM’s ownership in Shanghai GM back to 50 percent, the American automaker disclosed in a filing with the U.S. Securities and Exchange Commission on Friday. However, SAIC retains a 51 percent share in the sales side of the business. In the run-up to its 2009 bankruptcy filing, GM sold the 1 percent share to SAIC for $85 million.
French auction house scraps sale of historic seal A French auction house has cancelled the sale of a historic Chinese seal for 1.1 million euros (US$1.4 million) after threats of legal action alleging it may have been stolen from Beijing’s Forbidden City in 1860. Artcurial cancelled the December sale due “to the emotions provoked in China,” a spokesman told AFP on Friday. The Association for the Protection of Chinese Art in Europe had urged Artcurial to withdraw it from the sale saying it was taken by Anglo-French troops when they pillaged the Summer Palace.
Domestic card transactions during the New Year holiday jumped 43 percent
hop and restaurant sales in China during the week-long Lunar New Year festival rose at the slowest pace in four years as a government crackdown on extravagant spending by officials limited outlays on food and drink. Retail sales at outlets monitored by th e Mi n i s tr y o f C o m m er ce increased 14.7 percent in the February 9-15 period from the year-earlier break to 539 billion yuan (US$86 billion), according to a statement on its website on Friday. That was down from a 16.2 percent pace in 2012 and the least since a 13.8 percent gain in 2009, according to previously released figures. Sales may have been damped by a campaign started by Xi Jinping, the new head of the Communist Party, to rein in lavish spending while rising incomes are prompting more Chinese to travel overseas. “The slower growth, manifested in the restaurant business, was partly a result of the government crackdown on corruption and
the anti-waste campaign,” Leon Zhao, a Shanghai-based analyst at researcher Frost & Sullivan, said in a telephone interview. “We expect overall retail sales and consumption to rise again along with the improving economy in the second and third quarters.”
Accelerating growth An improving economic outlook may help boost store receipts. China’s gross domestic product rose 7.9 percent in the final three months of 2012 from the same period a year earlier, halting a seven-quarter deceleration. The World Bank forecasts economic growth will quicken to 8.4 percent this year, more than four times the pace of the United States. Steeper discounts, longer promotion periods and Valentine’s Day falling during the 2013 festival were expected to help drive purchases, especially of gold and jewelry, Candy Huang, a Hong Kong-based analyst with Barclays
Plc, said before the holiday. The New Year break was in January last year. Jewelry sales jumped 38.1 percent over the week-long break compared with a 16.4 percent increase in 2012, according to commerce ministry figures. Food sales rose 9.8 percent, down from a 16.2 percent pace the previous year. The increase in garment sales slowed to 6.3 percent from 18.7 percent, the data showed.
Restaurant sales Sales of “high end” electronics, including Apple Inc.’s iPad and iPhone, jumped 36 percent in shops monitored by the ministry in the eastern city of Nanjing, according to the statement. In contrast, spending at “highend” restaurants in the eastern province of Zhejiang dropped by more than 20 percent, the ministry said. A report by the official Xinhua News Agency on Saturday said many hotels and restaurants saw business decline over the holiday.
February 18, 2013 business daily | 9
Govt spending foiled hard landing: official
hina’s economy averted a steep slowdown and is poised to grow “reasonably fast” as incomes in the most-populous nation rise, a former adviser to the country’s central bank said. Li Daokui, an economist at Tsinghua University who was an adviser to the People’s Bank of China from 2010 to 2012, said in an interview with CNN that China’s decision to speed up construction projects kept its rate of growth from slowing more than it did. “A soft landing is there,” Mr Li said in an interview with CNN’s “Fareed Zakaria GPS” aired yesterday,
according to a transcript. “A hard landing has been already avoided. I’ve been talking about this for the past two years – maybe two and a half years – that is the growth rate will slow down a little bit and then pick up.” China’s gross domestic product grew by 7.9 percent in the final three months of the year, halting a sevenquarter deceleration. Growth was fuelled by government efforts that drove a rebound in industrial output, retail sales and the housing market. Mr Li said the government helped buoy the economy by speeding up work on railroad projects and new
Card payments in jewelry shops surged 119 percent, boosted by Valentine’s Day, while transactions in shopping malls climbed 44 percent, the company said in a statement on its website Saturday. In contrast, payments in restaurants increased 17 percent, it said.
The five-star Liuzhou Hotel in the southern city of Liuzhou, frequently used for government receptions, saw consumption of abalone, lobster, Moutai liquor and imported wines drop “drastically,” it said, citing an employee who declined to be identified.
Produce and meat prices were “relatively stable” during the holiday, the commerce ministry said. The price of pork gained 0.9 percent during the holiday period from the preceding week, mutton rose 1.9 percent, beef 1.3 percent and a basket of 18 vegetables rose 0.6 percent. Tourist arrivals in 39 key cities in China, including Beijing, Shanghai, Harbin and Sanya, climbed 15 percent to 76 million during the holiday compared with last year’s break, the National Tourism Administration said on its website Saturday. Travel agencies handled more than 4 million tourists visiting overseas, a 14 percent gain on last year, with Thailand, South Korea and Hong Kong among the hottest destinations, the administration said. In a separate statement, the agency said tourism revenue over the festival rose 15 percent from last year to 117 billion yuan. With holidaymakers due to return to work, the Ministry of Railways estimated it handled more than 7.4 million passengers on Friday and deployed 783 temporary trains to cope with the rush. A total 224.5 million trips were made on railways during the festival, representing a daily average of 5.61 million, Xinhua reported, citing the ministry.
steel factories. With the country’s per-capita income 18 percent of that in the United States, Mr Li said China will continue to grow quickly as its economy bridges the gap with the rest of the world. “The economy is still a poor economy,” he said.
”So there’s a long way to go for the Chinese economy to catch up. So that fundamentally, there are still basic forces, both on the demand side, supply side, so on and so forth, to push the economy to grow reasonably fast.” Bloomberg News
Activist takes Hong Kong ID card database offline Possible probe raises further fears over financial centre’s transparency
Hong Kong activist who posted an identity card database online in protest at a proposed law that would restrict access to information on company directors has removed the file from his website. Corporate governance activist David Webb said he decided to take down the database of over 1,100 names, including some of the city’s leading tycoons, on Friday after authorities said they were investigating his activities. Hong Kong’s privacy watchdog, the Office of the Privacy Commissioner for Personal Data, said it was looking into a “possible personal data breach”. Mr Webb, who compiled the database from publicly available information said he was astonished at the decision, in a message on his website. “Our first, internal reaction was – are you serious? For information that anyone could legally have found online?” “All of this aims to increase transparency and accountability, and to reduce corruption, corporate fraud, money-laundering, identity
fraud and other activities which are facilitated by a lack of transparency,” Mr Webb said. “This has been a dark day for transparency in Hong Kong.” The database contained the identity card numbers of the two sons of Asia’s richest man, Li Ka Shing, as well as billionaire Sun Hung Kai Properties chairman Thomas Kwok Ping Kwong, who is involved in the city’s biggest graft scandal. Under the proposed privacy law, corporate directors could apply to have their residential addresses and full identity card or passport numbers removed from the territory’s registry of companies. Such details were used in recent investigative reports by the New York Times and Bloomberg that alleged that the families of Chinese premier Wen Jiabao and president-in-waiting Xi Jinping had accumulated billions in hidden assets. Nearly 1,800 reporters, students and journalism professors have urged the government to withdraw the bill, saying it would infringe on press freedom.
Flagging spirit Demand for fireworks to celebrate the Year of the Snake also fizzled as residents became more aware of their impact on the environment after toxic smog engulfed northern China last month. Statistics from the Beijing government showed sales of fireworks in the city during the holiday fell 45 percent from last year to 313,000 boxes, Xinhua said. China UnionPay, which operates the country’s bankcard network, said the value of domestic card transactions during the New Year holiday jumped 43 percent from a year ago and overseas purchases gained 33 percent.
RMB 539 bln
retail sales during february 9-15
A controversial law proposes to restrict access to information on company directors
business daily February 18, 2013
Hyun named Finance minister as South Korea seeks growth Fiscal stimulus expected to promote recovery in slowing economy
outh Korea’s president-elect Park Geun Hye appointed Hyun Oh Seok as finance minister as she installs a new government to boost economic growth and tackle a strengthening currency. Mr Hyun, currently head of the state research center Korea Development Institute, will also become deputy prime minister for economy, a signal that Ms Park will make spurring growth in Asia’s fourth-biggest economy a top priority. Kim Yong Jun, head of Ms Park’s transition team, announced ministerial appointments yesterday in Seoul at a briefing televised by broadcaster YTN. South Korea’s incoming leadership, set to take office on February 25, will oversee an economy that last year expanded at its slowest pace since 2009, when growth slumped during the global financial crisis. Outgoing Finance minister Bahk Jae Wan said last month that officials might do more to ease currency volatility as the rising won saps export growth amid Japanese policies that are weakening the yen. “The short-term challenge is how to secure a rapid economic recovery,” Mr Hyun said at a briefing in Seoul yesterday, without commenting on the currency. “The long-term challenge is how to coordinate between growth and welfare and improve our growth potential.” Ms Park also appointed Yoon Sang Jick, currently vice minister for industry and technology, as minister in
charge of trade, industry and energy. Jeong Kim, president of Bell Labs and chief strategy officer of Alcatel-Lucent, was named science minister and Ryoo Kihl Jae as unification minister. The appointees are subject to a parliamentary hearing at the National Assembly, where Ms Park’s New Frontier Party has a majority. “The new finance minister, now elevated to deputy prime minister, will have unusually strong power, probably unseen since Park Chung Hee’s regime, encompassing all economic policies from budget to international trade,” Lee Sung Kwon, an economist at Shinhan Investment Corp. in Seoul, said before the announcement. He was referring to the incoming president’s father, who oversaw South Korea’s economic rise through the growth of automaking, steel and shipping until his assassination in 1979. “We’re facing another currency war, which requires a financial chief who can really navigate the tough waters for South Korea,” Mr Lee said.
’Greatest responsibility’ Becoming finance minister and deputy prime minister for economy “is the greatest responsibility of my career, especially at a time when the global economy is in such a difficult situation,” Mr Hyun said. “I will contribute to the new Park government’s commitment to revive the middle class through the virtuous circle of growth and welfare.”
His appointment comes after Mr Bahk resisted pressure from lawmakers last year for additional spending to support growth, submitting a 2013 budget that targets a fiscal deficit amounting to 0.3 percent of gross domestic product, the lowest in six- years. Three global credit-rating companies upgraded the nation’s sovereign rankings last year, citing fiscal soundness and economic resilience. “The new finance chief will face pressure to introduce a supplementary budget as fiscal stimulus is set to play a bigger role in Korea’s recovery,” Ronald Man, a Hong Kong-based economist at HSBC Holdings Plc, said before the announcement. Park’s government has allocated 72 percent of the budget in the first half of the year to aid recovery. South Korea’s economy expanded 2 percent in 2012, the slowest pace since annual growth fell to 0.3 percent in 2009. Gross domestic product increased 1.5 percent last quarter from a year earlier, less than analysts forecast, as a 23 percent gain in the won against the yen over the past six months threatens to restrain exports this year. The Bank of Korea reduced its projection for 2013 growth to 2.8 percent from 3.2 percent on Januart 11 and kept interest rates on hold at 2.75 percent on Thursday, highlighting obstacles to a rebound that include record household debt and a stronger won. Bloomberg News
Diesel prices were partially freed from state control last month
India has little room for monetary easing: governor Trade deficit, inflationary pressure limit odds of interest rates cut
ndia’s central bank governor Duvvuri Subbarao signalled inflation risks would limit the extent he can reduce interest rates to bolster an economy expanding at the weakest
pace in a decade. “There is room for monetary easing, but that room is limited and we have to make a careful judgment on how to use that limited room,” he said at
a briefing Saturday. Mr Subbarao estimated economic expansion of 5.5 percent for the 12 months through March 2013, above the Central Statistics Office
projection of 5 percent. India last month became the first major Asian nation to cut interest rates this year after benchmark inflation eased, as the central bank moved to back government efforts to boost the economy. The country’s finance minister, who unveils the annual budget on February 28, has vowed spending curbs to help reduce the chance of a resurgence in price pressures. The improvement in economic growth “is going to be gradual, the improvement will depend on the number of factors, but I believe that largely perhaps, the worst is behind us,” Mr Subbarao said. The governor said he would assess the quality of the government’s fiscal adjustment. The Reserve Bank in a January 28 report indicated a push to pare the deficit that increasingly relies on sales of shares in state-owned companies and one-off auctions of telecom permits may be unsustainable.
Deficit widened The central bank lowered the repurchase rate to 7.75 percent from 8 percent on January 29. At the same time, Mr Subbarao said that while there’s space to ease monetary policy, “it’s going to be quite limited.” Among the constraints is a deficit in the current account, the broadest measure of trade, which swelled to a record US$22.31 billion in the quarter ended September 30. This fiscal year’s gap will be higher than last year, Mr Subbarao said
February 18, 2013 business daily | 11
Global growth hit by currency manipulation Australian treasurer against currency devaluation, refuses to target Japan
yesterday, adding that the depreciation of the rupee isn’t helping exports in the short term. The shortfall has weighed on the rupee, which has fallen more than 8.5 percent against the dollar in the past year. Prime minister Manmohan Singh has changed policies since mid-September, seeking to revive investment after corruption allegations against officials and parliamentary gridlock hurt his development agenda. The steps included partially freeing diesel prices from state control last month to limit fuel subsidies. Recent reports showed wholesale prices rose 6.62 percent in January from a year earlier, the slowest in 38 months. That pace remains above the central bank’s 5 percent comfort zone. A separate measure of inflation based on consumer prices reached 10.79 percent in January, one of the highest levels in the Group of 20 major economies. Increases in coal and electricity prices may add to inflation, Mr Subbarao said at Saturday’s briefing.
overnments that manipulate their currencies are a hindrance to global growth, Australian treasurer Wayne Swan said at the meeting of Group of 20 finance ministers in Moscow. “Market-based exchange rates, fiscal and monetary policies supporting jobs and growth; that’s the core of the G-20 agenda,” Mr Swan said in a Bloomberg Television interview on Saturday. “To have people artificially target their exchange rates completely repudiates that approach.” Mr Swan and his peers in Moscow have sharpened their stance against governments trying to influence exchange rates, as they seek to tame speculation of a global currency war without singling out Japan for criticism. With the yen near its lowest level against the dollar since 2010, policy makers are attempting to soothe concern that some countries are trying to weaken exchange rates to spur growth through exports. Mr Swan has been attempting to reduce the negative effects that the high Australian dollar has had on domestic exports and the manufacturing and service industries. But he declined to specify that Japan had manipulated the yen to his nation’s detriment. The yen’s devaluation was “a matter for the market,” he said. “The Japanese approach is one to stimulate their domestic economy. That is also good for the global economy.” Australian policy makers are
aiming to rebalance Australia’s two-speed economy, where mining regions in the north and west thrive off of Chinese demand while manufacturers and retailers in the south and east struggle under the strength of the local currency. Prime minister Julia Gillard, whose ruling minority Labor government trails in polls ahead of the September 14 election, announced a A$1 billion (US$1.03 billion) program in Melbourne today designed to spur manufacturing. It included A$500 million to establish 10 “industry innovation precincts” and A$350 million toward the Innovation Investment Fund in a bid to boost start-up companies. Demand for Australia’s resources such as iron ore, coal and natural gas has helped drive up Australia’s currency 27 percent since June 2010. Still, in the past year, weaker commodity prices and the elevated currency have prompted miners to put off projects and cut jobs, while a construction slump forced companies to reduce payrolls. G-20 finance ministers were also starting to look at ways to close loopholes that allow multinational companies to avoid or reduce their tax payouts, Mr Swan said. “What we need is a global approach to dealing with this problem,” he said. Tax dodging “puts a great burden on taxpayers in those countries and indeed on taxpayers around the world.”
US 22.31bln india’s trade deficit
World needs ‘global approach’ against tax loopholes: Wayne Swan
Banks to boost staff as Dubai stocks rally
l Mal Capital PSC, a Dubaibased investment bank whose shareholders include members of Abu Dhabi’s ruling family, will boost staff by 20 percent in 2013 as the economy recovers, deputy chairman Naser Nabulsi said. “The first phase was to swim and survive, and we survived,” Mr Nabulsi said in an interview in Dubai last week. “2013 is going to be a good year for companies who prepared for the next cycle.” Investment banks in the United Arab Emirates are rebuilding their businesses more than four years after the global financial crisis triggered a real estate crash in the country and an exodus of foreign investment from the nation’s stock exchanges. To cope with the slowdown, Al Mal cut its staff to below 20 from more than 100 and shut its securities brokerage in the last three years, helping cut yearly costs by 80 percent, Mr Nabulsi said. Volume on local bourses has picked up and the city’s equities index jumped 16 percent in January, the best start to a year since the exchange started operations in 2000, according to data compiled by Bloomberg. Property prices in the emirate, which is home to the world’s tallest skyscraper, rose in some neighborhoods last year after the crash sent them tumbling more than 60 percent from peaks in mid-2008. Dubai’s economy probably expanded 5 percent in 2012 due to a rebound in tourism, hotel and restaurant industries, according to government estimates. Bloomberg News
business daily February 18, 2013
MARKETS Hang SENG INDEX NAME
CHINA UNICOM HON
BANK OF CHINA-H
BANK OF COMMUN-H
BANK EAST ASIA
BOC HONG KONG HO
HANG LUNG PROPER
HANG SENG BK
HENDERSON LAND D
AIA GROUP LTD
CATHAY PAC AIR CHEUNG KONG CHINA COAL ENE-H CHINA CONST BA-H
CHINA LIFE INS-H
CHINA PETROLEU-H CHINA RES ENTERP
CLP HLDGS LTD
COSCO PAC LTD
HENGAN INTL HONG KG CHINA GS
POWER ASSETS HOL
SANDS CHINA LTD
SINO LAND CO
SUN HUNG KAI PRO
TINGYI HLDG CO
WANT WANT CHINA
HONG KONG EXCHNG
HSBC HLDGS PLC
IND & COMM BK-H
LI & FUNG LTD
52W (H) 23944.74
NEW WORLD DEV
CHINA RES POWER
PING AN INSURA-H
INDEX 23444.56 HIGH
CHINA RES LAND
(L) 18056.4 8-February
Hang SENG CHINA ENTErPRISE INDEX NAME
AIR CHINA LTD-H
CHINA RAIL CN-H
CHINA RAIL GR-H
BANK OF CHINA-H
BANK OF COMMUN-H
BYD CO LTD-H
CHINA CITIC BK-H
CHINA COAL ENE-H
CHINA COM CONS-H
IND & COMM BK-H
CHINA CONST BA-H
CHINA COSCO HO-H
PICC PROPERTY &
PING AN INSURA-H
CHINA MERCH BK-H
CHINA LIFE INS-H
CHINA NATL BDG-H
NAME YANZHOU COAL-H ZIJIN MINING-H
INDEX 11845.2 HIGH
52W (H) 12354.22 11610
(L) 8987.76 8-February
Shanghai Shenzhen CSI 300 PRICE
CSR CORP LTD -A
SANY HEAVY INDUS
DAQIN RAILWAY -A
DATANG INTL PO-A
BANK OF CHINA-A
EVERBRIG SEC -A
SHANG PHARM -A
BANK OF COMMUN-A
GD POWER DEVEL-A
SHANXI LU'AN -A
AIR CHINA LTD-A
ANHUI CONCH-A BANK OF BEIJIN-A
BANK OF NINGBO-A BAOSHAN IRON & S
CHINA CITIC BK-A
CHINA CNR CORP-A
CHINA COAL ENE-A
CHINA CONST BA-A
HONG YUAN SEC-A
BBMG CORPORATI-A BYD CO LTD -A
CHINA COSCO HO-A
CHINA CSSC HOL-A
HUAXIA BANK CO
YANGQUAN COAL -A
CHINA EAST AIR-A
IND & COMM BK-A
CHINA INTL MAR-A
INNER MONG BAO-A
CHINA LIFE INS-A
INNER MONG YIL-A
CHINA MERCH BK-A
NINGBO PORT CO-A
PANGANG GROUP -A
CHINA STATE -A
PING AN BANK-A
PING AN INSURA-A
CHINA VANKE CO-A
POLY REAL ESTA-A
PRICE DAY %
PRICE DAY %
52W (H) 2791.303 (L) 2102.135
FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP
TPK HOLDING CO L
HON HAI PRECISIO
HOTAI MOTOR CO
HUA NAN FINANCIA
CHANG HWA BANK
CHIMEI INNOLUX C
YULON MOTOR CO
MEGA FINANCIAL H
CHINA STEEL CORP
NAN YA PLASTICS
CHUNGHWA TELECOM COMPAL ELECTRON
DELTA ELECT INC
FAR EASTERN NEW
SYNNEX TECH INTL
FAR EASTONE TELE
TAIWAN GLASS IND
FIRST FINANCIAL FORMOSA CHEM & F FORMOSA PETROCHE
CHINA DEVELOPMEN CHINATRUST FINAN
TAIWAN MOBILE CO
AU OPTRONICS COR
CHENG SHIN RUBBE
PRICE DAY %
ASUSTEK COMPUTER CATCHER TECH
INDEX 5546.28 HIGH
52W (H) 5621.53 5490
(L) 4719.96 4-February
February 18, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange)
WTI CRUDE FUTURE Mar13
BRENT CRUDE FUTR Apr13
GASOLINE RBOB FUT Mar13
GAS OIL FUT (ICE) Apr13
NATURAL GAS FUTR Mar13
HEATING OIL FUTR Mar13
Gold Spot $/Oz
Silver Spot $/Oz
Platinum Spot $/Oz
Palladium Spot $/Oz
LME ALUMINUM 3MO ($)
LME COPPER 3MO ($)
LME NICKEL 3MO ($)
WHEAT FUTURE(CBT) May13
SOYBEAN FUTURE May13
AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE
20.8 Max 21.05
COFFEE 'C' FUTURE May13
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
1.035 1.5489 0.9228 1.3329 92.7 7.9875 7.7548 6.2372 54.225 29.86 1.2368 29.562 40.61 9670 95.949 1.22999 0.86053 8.3196 10.6461 123.56 1.03
0.1936 -0.0774 0.0325 -0.0225 0.7335 0.0013 -0.0026 -0.0738 -0.544 -0.0335 0.097 0.3349 0.0492 -0.1448 0.5367 0.0504 -0.05 0.369 0.0263 0.7527 0
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1.0857 1.6381 0.9972 1.3711 94.46 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 97.439 1.25692 0.87169 8.4957 10.9254 127.71 1.0314
0.9582 1.5269 0.8931 1.2043 77.13 7.9824 7.7498 6.2105 48.8525 29.63 1.2152 28.913 40.54 8983 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS NAME
DAY % YTD %
SUGAR #11 (WORLD) May13
AMAX HOLDINGS LT
COTTON NO.2 FUTR May13
BOC HONG KONG HO
CHOW TAI FOOK JE
CHEUK NANG HLDGS CHINA OVERSEAS
World Stock MarketS - Indices NAME
DOW JONES INDUS. AVG
NASDAQ COMPOSITE INDEX
FTSE 100 INDEX
HANG SENG BK
HSBC HLDGS PLC
LUK FOOK HLDGS I
MELCO INTL DEVEL
HUTCHISON TELE H
HANG SENG INDEX
CSI 300 INDEX
MGM CHINA HOLDIN
TAIWAN TAIEX INDEX
NEW WORLD DEV
SANDS CHINA LTD
SHUN HO RESOURCE
SHUN TAK HOLDING
S&P/ASX 200 INDEX
FTSE Bursa Malaysia KLCI
NZX ALL INDEX
SJM HOLDINGS LTD
PHILIPPINES ALL SHARE IX
JAKARTA COMPOSITE INDEX
CURRENCY EXCHANGE RATES
WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
STOCK EXCH OF THAI INDEX
HO CHI MINH STOCK INDEX
BOC HONG KONG HO
Laos Composite Index
GALAXY ENTERTAIN INTL GAME TECH
JONES LANG LASAL LAS VEGAS SANDS
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
MGM CHINA HOLDIN
MGM RESORTS INTE
SJM HOLDINGS LTD
WYNN RESORTS LTD
business daily February 18, 2013
Ponzi schemes built on people always crash too William Pesek
Bloomberg View columnist
and it eventually bursts when population growth stalls. Incomes top out, high debt crushes consumption and investment, the need for public assistance rises, environmental degradation increases and angry people take to the streets.
ingaporeans are raring to do something extraordinary: protest. That might not seem like a big deal with the Arab Spring uprisings; Chinese journalists taking to the streets; and thousands of typically docile Japanese rallying against government policies. But tropical Singapore is the land of quiet brooding, where mass street demonstrations are as common as snowstorms. What has people so riled up? Well, people. The impetus for the February 16 march is a report that the tiny island’s population may rise by as much as 30 percent to 6.9 million by 2030. This seems to be the government’s answer to the question of how to sustain prosperity in one of the most crowded and expensive cities in the world. The signs of overcrowding and urban stress are palpable to any visitor. Prices are surging, public services in a nation famed for nannystate tendencies are slipping and some of the finest infrastructure anywhere is bucking under the strain. Locals blame the influx of immigrants, which Prime Minister Lee Hsien Loong’s ruling party touts as one key to Singapore’s success in the
years to come. The city-state, with about half the area of New York City, has 3.3 million citizens and 2 million foreign residents, many of whom have contributed greatly to Singapore’s growth in finance and construction. Yet complaints that overseas workers deprive locals of jobs and drive up housing prices fill the air. Singapore is the third-mostexpensive Asian city and ranks as the sixth most costly in the world, according to an Economist Intelligence Unit ranking of 131 cities.
said the number of people will be “significantly” lower than the report suggests. Will Singaporeans buy that? “The new population policy is anti-Singaporean and it threatens our existence and livelihoods,” says Gilbert Goh, 51, an advocate for unemployed citizens and an organiser of the protest that took place last week.
Case study Singapore may well serve as a case study for what happens when leaders try to offset slowing economic growth with immigration and increased birth rates. There are lessons that Japan or Italy would do well to study. All of it is turning into a political liability for Lee, the son of Lee Kuan Yew, who is regarded as the father of modern Singapore. The erosion in his party’s popularity is accelerating after the release on January 29 of a white paper that contained the 6.9 million figure, which it calls a projection, not a goal. Lee Hsien Loong has since
Just as economies such as Japan and South Korea are seeing the limits of their export-led models, Singapore’s formula has run its course
Sadly, some of the rants one reads in the media and online veer toward xenophobia. If Singaporeans are so livid, they should stop supporting Lee’s party. After all, isn’t the government, by seeking to import more human capital, telling its own people that they lack the skills to compete? Anyone who doubts Singapore is serious only has to look at accelerating efforts to reclaim land from the sea for development, giving the city the room for population growth. The real question, as public angst rises, is whether the opposition is justified. Former United Nations demographer Joseph Chamie says it is. To Chamie, the view that it’s almost always better to have more and more people is the human equivalent of what Bernard Madoff did with money, something he calls “Ponzi demography”. The human-pyramid scheme works like this: Population growth, either through births or immigration, boosts demand for goods and services, increases borrowing, boosts tax revenue and adds to corporate profits. Everything seems grand and leaders take a bow. It’s a bubble, though,
As households are left to pick up the tab once Ponzi demography runs its course, government leaders issue dire warnings about economic decline if the flow of fresh talent stops. This will sound familiar to Singaporeans as Lee’s People’s Action Party sketches out a dystopian future without adding wealthy bankers and lowincome workers to the nation’s ranks. Singapore needs to find another way. The era of easy growth is over. Just as economies such as Japan and South Korea are seeing the limits of their export-led models, Singapore’s formula has run its course. Raising the productivity of its current workforce would be more potent for a developed, open economy looking to compete in a region dominated by the cheap labour and manufacturing of China and India. Singapore should focus as much energy on incentives for its existing residents to innovate and start new businesses as on adding more bodies. Not only is Singapore toying with liberalised immigration, it’s also revving up a campaign to persuade Singaporeans to wed younger and reproduce. It is an odd push for Lee. Four decades ago, concern about overpopulation prompted his father to urge a delay in nuptials and to have smaller families. Today, amid a birthrate of about 1.3 children per woman, efforts to encourage bigger families border on the offensive. Singapore’s addiction to population growth sends a simple and disconcerting message: The country has run out of ideas to increase economic vitality, aside from encouraging people to procreate or immigrate. Ponzi demography, indeed. Bloomberg View
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February 18, 2013 business daily | 15
China without North Korea
Leading reports from Asia’s best business newspapers
Professor of Contemporary Chinese Studies and Director of the China Policy Institute at the University of Nottingham
Wall Street Journal Singaporean property developer Mapletree Investments Pte. plans to raise up to 1.68 billion Singapore dollars (US$1.36 billion) by listing a China-focused real-estate investment trust in Singapore, in what would be city-state’s largest initial public offering in two years. The planned flotation would be Singapore’s largest since Hutchison Port Holdings Trust raised US$5.5 billion in March 2011. Mapletree Investments’ China-focused REIT plans to sell at least 776.6 million units to institutional and retail investors at an indicative price range of S$0.88-S$0.93 each, according to a preliminary prospectus filed with Singapore’s central bank.
Asahi Shimbun Bank of Japan Governor Masaaki Shirakawa defended the central bank’s aggressive monetary expansion, saying it was aimed at reviving the economy not at weakening the yen, as the country came under fresh international criticism during the G20 gathering. The yen’s fast-paced declines have stirred an international debate over whether Japan was effectively using money printing to steer the yen lower. “The BOJ is conducting monetary policy to achieve stability in Japan’s economy. It will continue to do so,” Mr Shirakawa was quoted as saying.
Korea Herald Foreign banks operating in South Korea appear to have scrapped their plan to offer more generous dividend payouts to main shareholders in the face of alleged opposition from the nation’s regulatory officials. Among the lenders are Standard Chartered Bank Korea and Citibank Korea, according to the Financial Supervisory Service. “Paying huge dividends to main shareholders – more specifically to their parent groups in the U.S. and U.K. – is spurring concerns about massive capital outflow and the local units’ financial soundness,” a senior FSS official was quoted as saying.
Jakarta Globe Singapore Telecommunications Ltd, Southeast Asia’s biggest phone company, wants to focus on wireless services in Myanmar as it vies for the right to operate in one of the world’s last untapped mobile markets. SingTel sent in its expression of interest for a phone licence in the nation last month and is awaiting further details on the bidding process and terms of the permit, chief executive Chua Sock Koong was quoted as saying. “While the market potential is very attractive, we would need to understand what the terms of the licence issuance would be,” he added.
orth Korea’s third nuclear test is a game changer not only for the United States and Japan, but also for the regime’s last ally, China. The official Chinese reaction to North Korea’s latest provocation was stern: China is “strongly dissatisfied and resolutely opposed” to the test, and it is calling for the resumption of international talks. But China’s stance lacks meaningful bite, because its leaders fail to recognise that they no longer need to succumb to their unruly neighbour’s blackmail. In carrying out the test, the North Koreans have once again compromised China’s national interests. The international community is again firmly focused on China’s relationship with its rogue ally, and expects that, as an emerging superpower seeking to reassure the world of its peaceful rise, China will play a constructive role. However limited China’s influence may be, the North Korean regime can sustain itself only with Chinese backing. With North Korea’s latest nuclear test coming so quickly after its rocket launch in December, the United Nations has good reason to ask China, a permanent Security Council member, to take the diplomatic lead. It is simply not enough for China to call, as its official statement does, for the resumption of the Six-Party Talks with South Korea, China, the U.S., Japan, and Russia. That framework has been thoroughly discredited by North Korea’s repeated violation of past agreements. China must warn North Korea that it will not be pressured into providing support even when Chinese national interests have been undermined. Indeed, China should make clear that, much as it would prefer North Korea to survive and prosper, it could
afford to allow its erstwhile ally to implode. Simply put, the conventional wisdom that North Korea’s collapse would be disastrous for China is misconceived. Any crisis sparked by North Korean refugees fleeing across the Chinese border would be short-lived, and international assistance would be readily available.
Korean nation Likewise, China need not fear a South Korea-led unification of the peninsula. China already enjoys a smoother relationship with the South than it does with the North. Unification would occupy the Korean people for the next two decades, with J a p a n a n d t h e U . S . compelled to inject a huge amount of aid to rebuild and reintegrate the North. This hardly runs counter to China’s interests as it continues its own advance toward becoming the world’s largest economy. Indeed, if this process were to unfold, the U.S. rationale for keeping its own military forces in South Korea would disappear. A phased reduction of the American presence would follow. If the U.S. wished to maintain bases in Korea in the longer term, it would have to secure permission from a proud and newly united Korean nation – hardly a forgone conclusion. Moreover, a united Korea will have inherited the North’s nuclear weapons. This will pose challenges to U.S.-Korea relations, which should work to China’s advantage. The U.S. will remain committed to de-nuclearizing the peninsula, while the Korean government will be tempted to retain the North’s nuclear capabilities. This strain further reduces the risk of having U.S. troops stationed on the Korean side of China’s border. China must also consider
China must warn North Korea that it will not be pressured into providing support even when Chinese national interests have been undermined
the implications of North Korea’s actions on its own fractious relations with Japan. Chinese President Xi Jinping’s top foreign-policy priority is to force the Japanese government to acknowledge, if not accept, China’s territorial claims in the two countries’ dispute over the Diaoyu/Senkaku
islands in the East China Sea. Chinese naval ships have already trained their weapons on a Japanese destroyer and a Japanese naval helicopter. In these incidents, the single most important reason for Japanese restraint has been its military’s own rules of engagement. Under current law, Japanese security forces are forbidden from firing their weapons unless clearly fired upon, which means that the country’s Maritime SelfDefence Force vessels can do little when targeted by Chinese naval radar. And revising the rules to allow Japan’s military to, say, destroy a North Korean missile before it reaches Japanese air space would increase the risk of conflict between Chinese and Japanese naval and air forces. If the Chinese leadership can think beyond its usual default response to North Korean misbehaviour – abstract condemnation followed by a call for dialogue – it can apply real pressure on the North Korean regime in full view of the international community. North Korea’s last ally should give it one last chance. And then it should be prepared to pull the plug. © Project Syndicate
business daily February 18, 2013
CLOSING LPG dealers drop matched price updates Top legislator to mark Basic Law anniversary Starting this month, the Macau Fuel Industry Association will no longer announce synchronised adjustments in the price of liquefied petroleum gas (LPG), association president Lai Weng Wa told Business Daily yesterday. Each of Macau’s eight fuel dealers will publicise its own price changes, he said. Mr Lai added that the aim of this decision is to “dispel consumers’ doubts on joint price-fixing” in the Macau. The new price announcement policy will be reviewed in May to see if any amendments should be made, the president noted.
China’s top legislator, Wu Bangguo, is scheduled to visit Macau from Wednesday to Friday to mark the 20th anniversary of the signing of the territory’s Basic Law. Mr Wu, chairman of the Standing Committee of the National People’s Congress, will attend commemorative activities at the invitation of the Chief Executive Fernando Chui Sai On. The Basic Law was signed on March 31, 1993 and took effect with the 1999 handover. The senior official will also attend a session on Macau’s urban development and the celebrations of the Macau Chamber of Commerce’s 100th anniversary.
Former SAC portfolio manager Mathew Martoma could face fraud charges
SAC clients pull out amid insider trading probe Major hedge fund takes hit as government investigation unfolds
AC Capital Advisors LP’s clients are pulling US$1.68 billion from the hedge fund, more than estimated, as Steven A. Cohen’s firm is being investigated for alleged insider trading, according to a person familiar with the matter. SAC is one of the most prominent hedge funds in the world and is known for its aggressive market plays, including
frequent and rapid trading. About US$660 million will leave the US$15 billion fund at the end of March and the remainder in the following three quarters, said the person, asking not to be named because the information is private. SAC told some employees and advisers last month it expected client redemptions of at least US$1 billion. “As we have been saying, the
Iraq, Saudi Arabia cut oil sales as Venezuela raises
raq and Saudi Arabia cut crude oil exports in December for a second month, while fellow OPEC member Venezuela boosted shipments to their highest in more than four years, according to the Joint Organizations Data Initiative. Iraq, the biggest producer in the Organization of Petroleum Exporting Countries (OPEC) after Saudi Arabia, curtailed exports by 10 percent to 2.35 million barrels a day, data posted today on the initiative’s website showed. The Saudi kingdom shipped 7.06 million barrels a day in the month, down 1.3 percent from November, according to the data. Venezuela increased crude
shipments in December by 19 percent to 1.97 million barrels a day, the most since July 2008, when it exported 2.24 million, according to statistics that member governments submit. OPEC supplies about 40 percent of the world’s oil. Nigeria boosted shipments by 14 percent during the month to 2.29 million barrels a day, and Angola raised exports by 5.6 percent to 1.7 million a day. Kuwait’s exports in December were little changed at 2.06 million, data showed. Algeria’s shipments slipped 5.5 percent to 685,000 barrels a day. Iran, Libya and the United Arab Emirates didn’t submit monthly data. Bloomberg News
redemptions will have no significant impact on our funds,” Jonathan Gasthalter, a spokesman for SAC, said in an e-mailed statement. Twenty-seven percent of the outside capital is being redeemed, according to the person. Mr Cohen and other employees account for more than 60 percent of the firm’s assets. SAC this week reached a deal with
Blackstone Group LP that gives all clients three more months to decide whether to stay in the fund. The hedge fund was told by the United States Securities and Exchange Commission in November that the agency is considering pursuing civil fraud claims against it, related to alleged insider trading in two drugmakers by former portfolio manager Mathew Martoma. The allegations against Mr Martoma marked the first time prosecutors linked Mr Cohen to trades at the center of an insider case. Blackstone and other SAC investors are awaiting more news on the criminal case against Martoma, who was arrested on November 20 for playing a key role in what prosecutors called a record-setting insider-trading scheme that netted as much as US$276 million in profits and averted losses. Mr Martoma, 38, who worked at SAC’s CR Intrinsic unit, discussed two drug stocks with Mr Cohen in 2008, advising him to sell shares before bad news about a drug’s prospects was announced, according to the government, which referred to the “hedge-fund owner” in court papers. The five-year statute of limitations covering trading in the shares expires at the end of July. Mr Martoma pleaded not guilty to illegal trading at a court hearing in New York last month. Mr Cohen, 56, hasn’t been accused of any wrongdoing. Bloomberg News
Okada fails to block Wynn shareholders meeting
azuo Okada failed to persuade a federal judge to halt a shareholders meeting Wynn Resorts Ltd. has scheduled for Friday to vote the billionaire off its board of directors. Judge James C. Mahan, at a hearing Friday in Las Vegas, denied Mr Okada’s request for a preliminary injunction to prevent the meeting. “I don’t think this solicitation is false and misleading,” Mr Mahan said. “An injunction is an extreme remedy.” Mr Okada’s appeal was the latest front in his fight with Wynn Resorts chairman Steve Wynn. He has said Mr Wynn wants him out because he opposed a US$135 million gift to the University of Macau.
Wynn Resorts accused Mr Okada of making illegal payments to Philippine gaming regulators and forcibly redeemed his 20 percent stake in the company. Mr Okada claims Wynn Resorts’ call for the shareholders meeting included false and misleading statements. The judge said at the hearing that “an appropriate remedy would be a counter-solicitations.” Marc Sonnenfeld, a lawyer for Mr Okada, said they would assess their options. “The company is very grateful the shareholders will be able to vote on such an important issue,” Robert Shapiro, a lawyer for Wynn Resorts, said. Bloomberg News