MB77 | September 2010

FULL POCKETS INVESTMENT IN SECURITIES REACHES RECORD LEVELS

ISSN 1812-6855

TWISTED LOGIC We track deals that placed land for the airport in the hands of a Hong Kong developer

RIGHTS WRONGED

Government wants to shut down protests SPLASHY BET

Melco big on non-gaming thrills

Macau MOP 35 • Hong Kong HK$ 40 Mainland China RMB 35

SPEAK UP FLYING FEARS

Airlines alarmed by delay regulations

Sands’ top guns show their game

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Illustration: Rui Rasquinho

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Economy & Finance

24 Bulging portfolios Investment by residents reaches new heights 26 Pataca peg stays put The monetary authority’s five reasons to keep the peg 28 Living with Number Two The impact of China’s growth on Macau

Politics

34 Statute of limitations Govt wants to set new limits on demonstrations 37 Leaving home Francis Tam and Lau Si Io will relocate their offices 38 Raising the bar Macau to start debating a minimum wage 39 Voting for democracy Poll finds residents want to vote for their political leaders 41 Feeling the heat Commission Against Corruption slams Labour Affairs Bureau 44 ‘Gravegate’ haunts Florinda Lease of grave plots puts secretary under siege 46 Foundations of a private career Vitor Ng moves from the Macau Foundation to the Science Centre SEPTEMBER 2010

Property

50 Market watch Luxury market remains robust 56 Ties to the land Complicated government-led deal puts land in the hands of private developers

Gaming

60 The billions race Annual gross gaming revenue in 2010 heading for new record 62 Stock watch Gaming operators post positive half-year results 66 A long wait Half of the local gaming operators still out of Cotai 70 No holding’em back Texas Hold’em poker growing by the day 71 Taking the plunge “The House of Dancing Water” opens this month 74 The three musketeers Exclusive interview with Sands China’s top guns 78 Suit move Company creates deck of cards with Chinese twist 79 Eyes on Japan Japan’s tentative step towards legalising casinos 80 Belle époque Harrah’s close to grabbing the rights for Manila casino

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81 Essential

81 Golf Your guide to putting in style

Retail 97

Perfect timing Omega to open more shops in Macau

Corporate Social Responsibility

116 Chipping in for charity Macau Business Charity Golf Tournament has raised more than MOP1.5 million in the past three years 118 The gift of sight Orbis’ Action Blue 2010 campaign wants you

Tourism

Entertainment

Transport

Opinion

98 Passenger power New regulations granting minimum rights to passengers on the way

100 Second chance TCM gets a role in the new public transport system and drops court case

Security

106 Creeping concerns Investigations into privacy breeches are up 109 BlackBerry ban unlikely Macau is not afraid of encrypted messages

Arts & Culture

110 Tuned in All about the Macao Orchestra’s new season 114 Before your very eyes The World Press Photo exhibition is back SEPTEMBER 2010

120 Shining light The annual International Fireworks Display Contest takes to the waterfront once more

08 From the publisher’s desk Paulo A. Azevedo 11 Editorial Emanuel Graça 29 Rubbery figures, weak analysis José I. Duarte 33 Is low-wage China disappearing?

Fan Gang 48 A hole new tourist attraction Keith Morrison 59 How much transparency is too much?

Peter Singer 103 The China investment challenge Orville Schell 126 Busyness kills business!

Ricardo Andorinho

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Irresponsibility in labour affairs It is time we saw action from Fernando Chui Sai On WHO DOES SHUEN KA HUNG THINK HE IS TO GO public with the first nonsense that pops into his head?

Who in the Macau government still permits discretionary attitudes that verge on xenophobia from a top official who insists on threatening the city’s development?

Why is Fernando Chui Sai On’s administration silent while facing the complete silliness of the Labour Affairs Bureau’s decisions regarding the (lack of) strategy on hiring of imported manpower?

And, finally, why does nobody question the fact that whichever government department wields its apparently discretionary power over the hiring of manpower, they do so as if there was a blank cheque waiting to be signed?

The chief executive cannot and should not continue to pretend that this is not his responsibility. If Macau persists on endangering its development thanks to the blindness of government officials, the blame will always lie first with Mr Chui since he was not able to rein in his team.

On this issue, Mr Chui has hesitated.

He either did not want to, or did not know how to say that the buck stopped with him.

His actions could have prevented what began as a silly case from becoming a trend that has already surpassed the limits of what is tolerable.

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The Labour Affairs Bureau lies through its teeth when it guarantees that there is enough local manpower to fill all necessary positions – it lies intentionally.

The bureau lies and gets away with it because, apparently, nobody in Macau has the courage or the shame to get rid of these people.

You want examples? There are dozens of them. Countless companies ask the bureau for workers and all are left empty handed or get just a small number of employees.

On Cotai lots 5 and 6, Sands China recently asked for thousands of workers.

Most of them didn’t even bother to show up. In the end, little more than 200 workers were accepted because more would be impossible. Many seemed to have been hired simply to permit the company to hire more competent people from outside the SAR’s borders.

Perhaps tired of the nonsense, and just to make a point, it seems, the company asked for 20 workers willing to clean the washrooms. We understand the bitter humour in Sands China’s request because it wasn’t hard to predict its outcome. Not a single person showed any interest and not one hire was made.

So, Mr Shuen, who will clean the washrooms? Who will serve the tables in

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There is no policy for importing labour. There are no ideas, no solutions nor plans, not even the right knowledge of our exact needs or the kind of labour we have to offer. If this wasn’t such a serious problem, we would be laughing about how ridiculous it is.

restaurants whose clientele is not necessarily Chinese? Who will fill the posts for which some locals are not aware they need relevant skills?

Previously, I have been critical of Sands China for delaying work on lots 5 and 6 alleging financial reasons, although it had filled its pockets from the company’s IPO and strong results in Macau.

But I cannot disagree with the latest delay.

Sands China is right because, when it comes to these matters, we are in the hands of civil servants who seem to have their own agenda.

Of course, Sands is not alone. Galaxy makes similar complaints. As does Ponte 16.

Right across the business spectrum, they all do.

There is no policy for importing labour.

There are no ideas, no solutions nor plans, not even the right knowledge of our exact needs or the kind of labour we have to offer.

If this wasn’t such a serious problem, we would be laughing about how ridiculous it is.

One final piece of advice to Mr Shuen: to publicly say that imported workers should accept the rules or go home is a gross insult to all those workers who have greatly contributed to the development of Macau.

Don’t forget, Mr Shuen, that more than half of the imported labour population has come from the mainland and, supposedly, they are your compatriots – despite the indifferent treatment you seem to reserve for them.

Growing importance of companies with a heart WE ARE HAPPY TO NOTE THAT, IN THE PAST FEW MONTHS, many companies have keenly embraced their social corporate responsibilities. Macau Business was one of the first media companies to create initiatives to bring together companies and social causes, much as the Chinese-language Macau Daily has done for many years with its charity “Walk for a Million”.

The three editions of our golf tournament have contributed MOP1.5 million (US$187,500) to a number of charity institutions. That money is donated by private entities and without asking the government for a cent.

This year, we decided to take it further and expand the event to two days and, for the first time, bring together both golf courses – the Macau Golf and Country Club and Caesars.

We were the first to have all the gaming operators – all of whom have increased their support of public causes – at a single event, as well as many others from banking, services and other sectors.

The battle to bring the benefits of Macau’s development to all its citizens is not yet over. There are still companies that resist. They feel they should be here to reap the greatest benefits and please their shareholders.

That thinking has no place in Macau and we strongly advise any corporate citizen thinking along those lines to radically change their position.

From a business perspective, the greatest reward from the growth of a company comes from the public’s recognition of its positive role in improving the society in which it operates.

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Emanuel Graça Editor-in-Chief

emanuel.graca@macaubusiness.com

Get smart or lose out

A public administration that delivers proper results in a timely and correct fashion is of no minor importance. In a small economy such as ours, the administration plays a role disproportionate to bigger jurisdictions in making sure businesses grow and prosper

If Macau Business was to theme its issues, this edition might take the rather unsexy title of “The Macau Public Administration’s Black Issue”.

A look at this month’s line-up of reports, and particularly those in our Politics section, paints a far from pleasing image of Chief Executive Fernando Chui Sai On’s team.

We certainly did not set out to prepare the “Black Issue” but there have been several breaking stories over the past few weeks that focus on the way the public administration handles itself in important circumstances.

The Commission Against Corruption dealt the government harsh criticism when it issued its judgement on the Labour Affairs Bureau raid for illegal workers at a television station’s headquarters.

There was additional criticism when the commission wanted to know how a MOP32 million contract for an exhibition in Beijing went to a company with strong ties to the government, with very little justification.

The way the government abruptly reversed gear regarding the new public bus service tender has also raised eyebrows.

Much the same could be said about Vitor Ng’s swift move from leading the Macau Foundation to becoming fulltime president of the Macau Science Centre or Secretary for Administration and Justice Florinda Chan’s “Gravegate”.

The bottlenecks in manpower supply created by the government’s imported labour policies have also been questioned recently. The delays in the opening of Sands China’s projects on Lots 5 and 6 in Cotai are the most recent expression of that policy.

Creaky machinery Looking at the bigger picture, these problems are linked to the way the Macau administrative machine works.

Read the Commission Against Corruption reports and it becomes clear that several senior officials are not fully aware of how to properly follow administrative procedures, sometimes

adopting ad hoc solutions that don’t meet the rules.

Questionable options can create “suspicion of ‘behind-the-scenes scheming’ wholly damaging to the reputation of the administration,” as the commission stressed in the inquiry into Primedia’s MOP32 million contract.

It would be easy to apply any number of motives to these administrative mistakes but the reason our government officials most often use is that the former Portuguese administration didn’t adequately prepare them for handling the territory’s matters after the handover.

Whether that is true or not, a decade has passed and a new generation of civil servants is making its way through. It is time to drop the excuses and – in cases of gross error – begin holding people accountable.

Investment in danger A public administration that delivers proper results in a timely and correct fashion is of no minor importance. In a small economy such as ours, the administration plays a role disproportionate to bigger jurisdictions in making sure businesses grow and prosper.

At a time when both the Central Government and Mr Chui are stressing the need to diversify the economy, a slick administrative machine is extremely important in attracting investors.

Casino operators are in no position to complain about the existing administrative bottlenecks. If they do, they endanger their presence in the world’s biggest gaming market.

But what of the industries that the government is fostering to diversify the economy; the convention operators, entertainment companies or cultural industries promoters? In these sectors the territory is competing against Hong Kong, Singapore and the mainland.

For smart investors, the rule of thumb is to evaluate the efficiency and reliability of the public administration, before making any investment. By that measure, Macau loses out.

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VOL.1 Nº77

Editorial Council Paulo A. Azevedo, Albano Martins, Duncan Davidson, Herman He Founder and Publisher Paulo A. Azevedo pazevedo@macaubusiness.com

Editor-in-Chief Emanuel Graça emanuel.graca@macaubusiness.com

Executive Director Business Development Luis Pereira pereiraluis@macaubusiness.com

Essential Supplement Coordinator Catarina Morgado morgado.catarina@macaubusiness.com

Property Editor Alan Tso tsoalan@yahoo.com.hk

Senior Analyst José I. Duarte

Letters to the editor

Advertising Xu Yu, Irene

Hong Kong Bureau Michael Hoare (Chief), Anil Stephen

irene@bizintellingenceonline.com

michael.hoare@macaubusiness.com

Subscriptions

Europe Bureau Joyce Pina (Chief) jpina@macaubusiness.com

Paula Joyce Macau Headquarters Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, No. 679 Av. do Dr. Francisco Vieira Machado Tel: (853) 2833 1258 / 2870 5909 Fax: (853) 2833 1487

Special Correspondent Muhammad Cohen

pub@macaubusiness.com

maria_belchior@yahoo.com.br

Hong Kong Bureau 20th Floor, Central Tower, 28 Queen’s Road, Central, Hong Kong Tel: (852) 2159 9423 Fax: (852) 2159 9688 Hong Kong Distributor Far East Media (HK) LTD. Unit 1902, 19/F, Hing Wai Centre, Nº7 Tin Wan Praya Road, Tin Wan, Aberdeen, Hong Kong Tel: (852) 2555 0431 Fax: (852) 2873 6807 shonee@feml.com.hk

Bangkok Bureau 37 Charoen Nakorn, Klongsan, Bangkok 10600 Tel: (66) 02437 4932/02437 7329 Fax: (66) 02438 3098

SEPTEMBER 2010

Regular Contributors Branko Milanovic, David Cheung, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfield, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang

jid@macaubusiness.com

editor@macaubusiness.com sub@macaubusiness.com

Contributing Editors Alexandra Lages, Carlos Picassinos, Christina Yang Ting Yan, Derek Proctor (Bangkok), Island Ian, João Francisco Pinto, José Carlos Matias, Kahon Chan, Lois Iwase, Luciana Leitão, Ray Chan, Sofia Jesus, Steven Chan, Tiago Azevedo, Wu Yu

info@muhammadcohen.com

Beijing Correspondent Maria João Belchior Manila Correspondent Max V. de Leon maxdeleon_080975@yahoo.com

Assistant to the Publisher Weng Fung weng.fung@macaubusiness.com

Art Directors Connie Chong, Luis Almoster design@macaubusiness.com

Photography António Falcão, António Mil-Homens, Carmo Correia, John Si, MSP Agency, Agencies Illustration G. Fox, Rui Rasquinho

Advertising Agents Bina Gupta binagupta@macaubusiness.com

Fátima Cameira

fcameira@macaubusiness.com

José Reis

jreis@macaubusiness.com

Media Relations GRIFFIN | Consultoria de Media Limitada Translations Stephanie Chu, PROMPT Editorial Services Agencies AFP, Lusa Exclusives Gambling Compliance, Hoje Macau, Project Syndicate Printed in Macau by Welfare Ltd Published every month in Macau.

All Rights Reserved.

Macau Business magazine is a media product of De Ficção - Multimedia Projects

Disclaimer: In Macau Business magazine, the translation of MOP amounts into US$ amounts (and vice-versa) is made at the rate of MOP8.00 to US$1 for the purposes of illustration only.

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Find us in Macau Airlines

Autos

Hydrofoils and Ferries

Chambers of Commerce

Macau Business Official BlackBerry Carrier

Hotels/ resorts & lounges

Official Host Publication

SEPTEMBER 2010

Official Show Publication

Convenience stores

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We Deliver Decision Makers

NEWSSTANDS AND SUPERMARKETS (Macau Peninsula) 43 Av. Infante D. Henrique 643 Av. da Praia Grande 3 Av. Dr. Mário Soares 221 Alm. Ribeiro 271 Alm. Ribeiro 317 Alm. Ribeiro 327 Alm. Ribeiro 7b Lrg. do Senado 17 Lrg. do Senado 31 Lrg. do Senado 13 Rua de S. Domingos Rua de Horta e Costa 27A Cheng Chong Kie Rua de Coelho de Amaral Av. do Dr. Rodrgo Rodrigues 30C Rua de Entre Campos 54 Rua da Barca Iong Vai Bldg.

5 Estrada de Adolfo Loureiro 73 Rua de Almirante Costa Cabral Av. do Ouvidor Arriaga Rua do Francisco Xavier Pereira Rua do Almirante Costa Cabral Av. do Sidónio Pais

Alm. Dr. Carlos d’Assumpção Mei Kui Koung Cheong (Phase I) Vai Choi Garden Block C KIOSK - Mandarin Oriental Hotel NEWSSTANDS AND SUPERMARKETS (Taipa) Rua de Bragança (Mei Keng Garden Blk. 1 Taipa) Est. Gov. Albano de Oliveira (Mercearia Fruta Man Yip Taipa) Av. Dr. Sun Yat Sen (Mercearia Fruta Man Yip Taipa) Rua de Seng Tou (Supermercado Pou Ip Taipa) Av. Dr. Sun Yat Sen (Seng Cheong Supermarket Taipa) BOOKSHOPS Portuguese Bookshop - Largo do Senado BOOKACHINO- NAPE, Macau TIMES Bookshop - Shop 2526, 2200 (The Grand Canal Shoppes Venetian Macao) Culture Plaza Bookshop - Rua do Campo

Find us in Hong Kong BOOKSHOPS Aberdeen Marina Holdings Ltd. Ah Lo Magazine Co. Bookazine Ltd - Canton House Bookazine Ltd - Far East Finance Bookazine Ltd - Jardine House Bookazine Ltd - Prince’s Building Bookazine Ltd - Shui On Bookazine Ltd - Tsim Sha Tsui Chaip Coin Co Ltd Cham Kee Cosmos Book Co Cosmos Nathan Road The Commercial Press - Jordan The Commercial Press - King Road The Commercial Press - Sha Tin The Commerical The Commercial Press - Yee Woo Nobletime Ltd (c) DFS - Int’t FC (c) DFS - Prince’s Building Exchange Mall Great Food Hall

Hong Kong Book Centre - City Plaza Hong Kong Book Centre - On Lok Yuen Hits Media Centre Jumbo Grade - City Plaza II Jumbo Grade - Grand Century Jumbo Grade - Int’l Finance Ctr Jumbo Grade - Pacific Place II Jumbo Magazine House Kelly & Welsh Ltd Kelly & Walsh - Exchange Square Kwong’s Mandarin Hotel Mannings New Mall - Discovery Bay Page One - Time Square Page One - Central Page One - Kowloon Tong Page One - TST Park’n Shop Swindon - 370 Ocean Centre Swindon - Lock Road Tung Son Magazines Co Variety Worldpac Ltd Y.M.C.A. of Hong Kong Dymocks

Restaurants

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Playing cat-and-mouse Government attack on illegal inns backlashes n the first 16 days since the law on “Prohibition of Providing Unlicensed Accommodation” took effect on August 13, a total of 43 suspected illegal inns have been dismantled, the government

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announced. However, these actions have also initiated a wide debate on whether Macau has enough accommodation for budget travellers.

The Tourist Office vice-director, Maria Helena de Senna Fernandes,

admits that there is room to expand the budget accommodation offer.

However, she dismisses setting up licenses for bed and breakfast (B&Bs).

Ms Fernandes stresses that there are currently 43 two-star hotels as well as two-star and three-star guesthouses in Macau. Meanwhile, there are two two-star hotels and three guesthouses in the pipeline.

However, according to Ms Fernandes, this kind of accommodation is far from being overwhelmed with customers: from January to June this year, the average occupancy rate of two-star hotels was 76.54 percent, while that of the guesthouses was 54.82 percent.

According to the information provided by the travel trade to the Tourist Office, during the peak season of the Chinese New Year Golden Week this year, the average room rate for two-star hotels was MOP636 (US$80), while the average room rate for guesthouses was MOP347.

Copyright law goes digital

Not enough English here: British consul

The Macau government has just finished revising the copyright law in order to extend the protection to Internet and digital technology. The law proposal will now be sent to the Legislative Assembly, the spokesperson of the Executive Council, Leong Heng Teng, announced last month. However, legislators will only look into it after October 15, when their summer recess is over. According to the proposal, punishment for the infringement of copyright using the Internet for commercial purposes will go from a penalty of 120 days to four years in jail. The new regulation will also prohibit shops from unlocking gaming machines electrical boxes or decoders for paid television programs.

Macau’s copyright law was enacted in 1999.

The British Consul-General to Macau and Hong Kong, Andrew Seaton says there is a lack of information available in English in the territory. “It is an issue as the economy develops and the business community becomes more international”, Mr Seaton explained in an interview with Macau Daily Times. According to him, the local government “is aware” of the problem, “but we wish the process could be pushed a bit faster.” Mr Seaton also talked about Britain’s priorities towards the territory, with an emphasis on the economic and business agenda. He mentioned the growing relationships between Britain and Macau in a number of business sectors including infrastructure, construction, architecture, gaming, retail, the creative industries and project management.

Light railway only next year The construction of the Macau light railway will only start in early-2011, the director of the Bureau for Transport Infrastructure (GIT) said. The Macau Post Daily reported that the winner of the public tender for construction of the light railway would be announced in the final quarter of 2010. The light railway is expected to cost MOP7.5 billion, according to 2009 figures, and in the first stage will be 21 kilometres long and have 21 stations.

It will be able to transport a maximum of 8,000 passengers per hour in each direction between Macau and Taipa.

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Terrorism danger zone “Macau’s position as a major international gambling centre makes it a potential site for money laundering and terrorist financing activities,” says the US State Department. In its latest “Country Reports on Terrorism 2009”, published last month, the US State Department notes several progresses made by the Macau authorities to fight back money laundering and terrorist financing activities, but stresses that there is still a lot to do. “The threshold reporting limits remain well above international norms,” it is said in the report. The territory also “does not have reporting requirements for cross-border currency movements”.

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Cloudy skies Viva Macau misses instalment payment iva Macau has missed a second deadline to repay the first instalment of a MOP200 million (US$25 million) government loan.

Meanwhile, the defunct company’s creditors will gather this month to decide what to do with the company’s assets.

The Economic Services Bureau confirmed that no payment had occurred

by August 9. The bureau also confirmed the loan guarantors are the airline’s main shareholders.

The loan was made to budget airline Viva Macau through the Industrial and Commercial Development Fund. It was disbursed in instalments between 2008 and last year and was meant

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to help the company face the problems caused by the global financial crisis.

The government grounded Viva Macau in March because it was seemingly unable to pay its fuel bills.

Macaulay resigns from Shuffle Master Andrew Macaulay resigned early last month as executive vice president, Asia for Shuffle Master. Mr. Macaulay, who was based in Macau, joined the company in July 2008. He “has driven some significant achievements in our Asian business, including the opening of a Singapore office and growth of our electronic table games business in Asia,” Shuffle Master said in a staff announcement note. “Due to Andrew’s seniority and the commercially sensitive nature of the role of an executive vice president, we have accepted Andrew’s resignation effective immediately,” it added.

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According to the loan contract, Viva Macau had to pay back an initial instalment of MOP40 million by July 1. The company missed that deadline, which was then extended for 30 days.

The Court of First

Instance has informed the government about the Viva Macau creditors’ meeting on September 13-14, which will be attended by a representative from the Industrial and Commercial Development Fund.

Thailand encourages investment Thailand’s Minister for Foreign Affairs, Kasit Piromya, has invited local businessmen to increase their investment in the country’s food processing industry, stressing that Thai agricultural products, especially rice and fruits, are popular among the Macau population.

The remarks were made late last month, during a courtesy call with a group of Macau businessmen led by Lino Ho Weng Cheong, president of the Macau-Thai Chamber of Commerce. In 2009, the trade volume between both sides amounted to US$20.79 million.

More planning needed in law drafting: Legislative Assembly president The president of the Legislative Assembly, Lau Cheok Va, stressed last month that the government should improve its legislative planning.

Mr Lau noted that, this year, the government submitted 17 bills to the Legislative Assembly. However, eight were submitted at once, and less than two months before the summer recess, which meant an unbalanced distribution of work among the legislators, he stressed. Mr Lau also said the government should establish a legislative coordination mechanism, since the different government departments “have been working independently and lacking coordination when drafting bills.”

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Gaming tax revenues boost

Rise in personal housing loans Domestic loans to the private sector grew 3.3 percent in June from the previous month to MOP112.0 billion (US$14 billion), official data shows. Personal housing loans increased quarterto-quarter at a rate of 11.4 percent, while loans to trade (wholesale and retail) and manufacturing industries loans rose 16.5 percent and 10.8 percent, respectively. Loans to gaming and restaurants, hotels and similar dropped 12.5 percent and 12.4 percent respectively. External loans increased 2.2 percent in June, to MOP111.7 billion.

Workers earning less In the second quarter of 2010, the median monthly employment earnings of the employed decreased by MOP500 from the previous quarter to MOP 8,500 (US$1,063), official data shows. The median monthly employment earnings of the local residents held stable at MOP10,000. For the unemployed that were searching for a new job, analyzed by industry previously engaged, 33.4 percent had worked in construction and 17.3 percent in recreational, cultural, gaming & other services.

SEPTEMBER 2010

Photo: Luís Almoster | mspagency.org

Macau registered a budget surplus of MOP24.9 billion (US$3.1 billion) in the first seven months of 2010, with direct taxes from gaming increasing 63 percent yearon-year. The surplus represents a year-on-year growth of 75.5 percent. Direct taxes from gaming totalled MOP35.1 billion, representing 84 percent of the public finance revenue between January and July, provisional data from the Finance Services Bureau shows. In the first seven months of 2010, the government’s total revenue rose 40.5 percent year-on-year to MOP 41.5 billion. Meanwhile, the government’s total expenditure increased 8.1 percent, to MOP16.6 billion.

Air cargo surges Outward air cargo grew significantly by 59 percent year-on-year to 16,366 tonnes in the first half of 2010, according to official data. The main destination was Taiwan that accounted for 72 percent of the total. Concurrently, inward air cargo surged by 63 percent to 8,342 tonnes, with those from Taiwan taking a predominant share of 87 percent. However, transit air cargo fell by 49 percent year-on-year to 3,193 tonnes. Commercial flight movements at the Macau International Airport also dropped by seven percent year-onyear, to 17,380 in the first half of 2010.

Crime rate plunges The global crime rate in Macau plunged by 11.8 percent in the first six months of 2010 year-on-year, the government announced. Between January and June, local authorities registered a total of 5,685 crimes. Violent criminality dropped by 17 percent, to a total of 279 cases. A total of 1,958 people were sent to the Public Prosecutions Office by the local authorities, 10 percent less than in the first half of 2009.

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Macau gets 778 new companies in Q2 A total of 778 new companies were incorporated in Macau in the second quarter of 2010, up by 18.4 percent year-on-year, official data shows. The total value of registered capital surged by 66.9 percent to MOP136 million (US$17 million).

Among these new companies, 300 were operating in wholesale and retail, with the registered capital amounting to MOP55 million; meanwhile, 120 were operating in business services and 103 in real estate. In the second quarter of 2010, number of companies in dissolution totalled 125 and the value of registered capital amounted to MOP66 million, of which the registered capital of 57 wholesale and retail companies in dissolution accounted for 7.7 percent.

Forex reserves expanding Macau’s foreign exchange reserves amounted to MOP165.7 billion (US$20.7 billion) at the end of July 2010. The reserves rose by 1.2 percent from MOP163.7 billion for the previous month, official data shows. When compared with a year earlier, the reserves increased by MOP25.0 billion or 17.7 percent. Macau’s foreign exchange reserves at end-July 2010 represented 33 times the currency in circulation.

Investing more in China Macau investments in the mainland totalled US$420 million in the first half of 2010, up 36.8 percent year-on-year, China’s Ministry of Commerce (MOC) said last month. The mainland signed 6,580 projects and labour contracts worth US$790 million with Macau during the period, a statement posted on the MOC website said, quoted

by Xinhua news agency. Some 45,864-mainland workers were in Macau at the end of June, the statement said.

Yuan credit cards double Yuan denominated credit cards surged by 109.35 percent year-on-year in the second quarter of 2010, to 18,509, the Monetary Authority of Macau said. The total number of personal credit cards in circulation was 383,246 at the end of June 2010, up 4.11 percent from three months ago. The introduction of MOP/ RMB dual currency credit cards by local banks in the second half of 2009 largely accounted for the marked increase in RMB cards. In the second quarter of 2010, the credit card turnover decreased by 1.79 percent quarter-to-quarter to MOP1.78 billion (US$223 million).

Macau unemployment goes up

Exports decrease

The unemployment rate for May-July 2010 was 2.9 percent, up slightly by 0.1 percentage point over the previous period (April-June 2010), official figures show.

The number of unemployed people increased by about 300 from the previous period to 9,600. With more graduates entering the labour market, the proportion of fresh labour force entrants looking for the first job rose by 3.7 percentage points over the previous period to 11.2 percent.

Analyzed by industry, employment of the manufacturing sector and retail trade saw a decrease, while employment of construction registered an increase.

In the first half year of 2010, the total value of merchandise exports fell by 7.1 percent year-on-year to MOP3.62 billion (US$453 million). Meanwhile, the total value of merchandise imports grew by 20.9 percent to MOP20.48 billion. The trade deficit for the first half of 2010 widened by 29.3 percent year-on-year to MOP16.86 billion, while the exports/ imports ratio went down by 5.3 percentage points year-on-year to 17.7 percent.

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JUST FOR FUN Sands China has a commitment to responsible gaming, ensuring people go to casinos for the right reasons – to have an unforgettable positive experience

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very day, thousands of people flock to the entertainment on offer at Macau’s casinos. They come seeking fun and excitement, while making the most of the magnificent infrastructure that has been built.

To ensure that everyone only gets the best of casino entertainment, Sands China has taken a proactive approach to combat the social issues arising from problem gambling.

Their responsible gaming programme provides information

SEPTEMBER 2010

on the issue and teaches the company’s staff how to direct guests to find help.

Brochures are available at the entrances, lobbies and cashiers’ desks of its properties. They include contact details for organisations providing counselling services for problem gambling and information about responsible gaming.

Additionally, every new Sands China employee is required to take a responsible gaming training course,

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Sponsored Feature

which takes in the company’s programme, learning about the problem and understanding their role in promoting responsible gaming. By end of last year, more than 17,000 Sands China employees had taken the course.

A problem defined Problem gambling – also known as gambling addiction or pathological gambling – is a progressive condition similar to alcohol or drug addictions. Sufferers have difficulty controlling their gambling, even when it has serious negative consequences for themselves and their families.

Their gambling behaviour will increase over time, both in frequency and the amount wagered.

Most experts agree that there is no certain way to identify a problem gambler. However, some warning signs include gambling more than planned and until the last dollar is gone, using income or savings to gamble while letting bills go unpaid or borrowing money to finance gambling. Problem gamblers typically feel depressed and remorseful after gambling.

Problem gambling affects a small minority of those who go to casinos. Most people gamble without serious consequences. They make careful decisions about spending their time and money, and their gambling does not negatively impact themselves or those around them.

To gamble in a responsible way, there are a couple of rules of thumb. For instance, one should not gamble for investment and should only use money that is not meant for basic needs. It is also good to set time limits and a budget.

Community partners Sands China’s efforts to tackle problem gambling go beyond its responsible gaming programme. By filling out

a single form, any player, at any time, may request to be denied access to casinos operated by the company.

Sands China also works in partnership with local experts, scholars and counselling centres, striving to reduce the incidence of problem gambling-related behaviours.

The company has donated MOP1.5 million throughout these years to sponsor five non-governmental organisations to carry out relevant services, research and surveys in Macau. By working together with these NGOs, Sands China deepens the promotion of responsible gaming.

The Sheng Kung Hui Counseling Service for Problem Gamblers is one of the Sands China’s partners. Launched in 2007, its services include professional counselling to both problem gamblers and their families.

The service has already handled about 140 cases. Close to 90 percent of the problem gamblers assisted were in debt, with the average amount between MOP400,000 and MOP500,000. In one case, the person had debts totalling MOP8 million.

Comeback kings Kong (not his real name) knows how it feels to be a problem gambler. “I’ve wasted ten golden years on gambling. I won’t waste my time and let my family down again,” the 30-year-old pathological gambler says. His addiction to betting in casinos and on football led him to steal money from his parent’s café to finance his addiction.

“Though I don’t gamble now, I still need to manage how to resist the temptation, as it will be a long hard journey to finally give up,” he says.

Preventing hardship and cases such as Kong’s are the motivation for Sands China to invest in its responsible gaming programme. With the help of caring and knowledgeable counsellors, the company wants to make sure its casinos are used the right way; just for fun.

Sands China employees taking a responsible gaming training course

SEPTEMBER 2010

24

Economy & Finance

Bulging portfolios It was a bullish year for Macau in 2009, with investment by residents reaching a record MOP116.3 billion by market value here there is a threat, there is an opportunity. That must have been the motto of Macau investors last year. Although the global financial crisis was still unfolding in 2009, investment in securities saw a notable increase.

According to the Coordinated Portfolio Investment Survey (CPIS), at the end of last year the market value of investment in securities by Macau residents – including individuals, the government and other legal entities, but excluding Macau’s foreign exchange reserves – amounted to MOP116.3 billion. This was “due to a significant improvement in investment sentiment in financial instruments and an upsurge in asset prices,” the

W

The mainland is becoming an increasingly attractive alternative to Hong Kong SEPTEMBER 2010

CPIS report said.

The amount was markedly higher – by 41.6 percent – than the revised MOP82.2 billion invested at the end of 2008, and was the highest since the inception of the CPIS in 2002.

The survey, jointly conducted by the Monetary Authority of Macau and the Statistics and Census Service, collects information about investment by Macau residents in securities issued by unrelated non-residents, and sorts it by market value and by where it goes.

Banking on banks Although there are two licensed securities firms operating in Macau, the majority of resident investors still prefer to

manage their portfolios, especially the equity securities component, via banking institutions.

Investment by individuals and non-bank enterprises in securities, using banks as custodians or middlemen, amounted to MOP48.9 billion. Of this total, 92.2 percent or MOP45.1 billion was invested in equity securities. Mutual funds and investment trusts accounted for MOP4.4 billion of this sum. The other 7.8 percent was invested in long-term debt securities.

In contrast, the majority of portfolio investment by Macau banks was in debt securities.

As expected, securities issued

by Hong Kong entities were the most

25 Chart 1

Macau Residents’ Portfolio Investment Major Geographical Distribution 2008

20.2%

2009

17.5%

16.4%

sought-after by Macau residents in 2009, with a market value of MOP23.5 billion, 74.5 percent or MOP10.0 billion more than a year before. This amount represented approximately one-fifth of Macau residents’ portfolio investment abroad.

The mainland attraction

14.0% 11.1% 8.8%

7.7%

8.0%

5.7% 3.6%

6.8% 6.4% 5.0% 4.7%

4.4% 4.0%

Chart 2

Macau Residents’ Portfolio Investment Distribution by Type

37.8%

52.2%

9.5% 4.6% 52.8%

42.9%

Equity securities (including mutual funds/investment trusts) Short-term securities Long-term debt securities

Chart 3

Geographical Distribution of Macau Residents’ Portfolio Investment Equity Securities* Ireland Bermuda 3.4% 7.0% Luxembourg 8.1% United Kingdom 8.7%

Others 9.7% Mainland China 30.5%

Hong Kong 23.6%

Cayman Islands 9.1% * Including mutual funds/investment trusts

However, the mainland is becoming an increasingly attractive alternative to Hong Kong, as the 2009 figures show.

The share of the total invested in securities issued by mainland entities (including those listed in non-mainland exchanges) rose by 3.5 percentage points from a year earlier to 17.5 percent. The market value surged by 77.4 percent to MOP20.4 billion. Investment in equity securities rose by a hefty 96.6 percent to MOP18.6 billion, accounting for the biggest share – 30.5 percent – of total investment in equity securities.

Following the sharp increase in investment in equity securities last year, long-term debt securities are no longer the favourite of resident investors.

“After the eruption of the financial tsunami in 2008, prices of equity securities had fallen sharply around the world. Major exchanges, however, witnessed notable gains in price indices and transaction volume in 2009, when the global economy started picking up,” the CPIS report noted.

Goodbye, debt The change in market conditions pushed the proportion of equity securities in Macau residents’ total external portfolio investment up by 14.8 percentage points to 52.5 percent. At the end of 2009 local investors held equity securities worth MOP61.1 billion, 96.9 percent more than at the end of 2008.

Although the value of long-term debt securities rose by 15.1 percent to MOP49.9 billion, their share of total portfolio investment plunged by 9.8 percentage points to 42.9 percent. The other 4.6 percent was invested in shortterm debt securities.

“It appeared that resident investors shifted from short-term to longterm investments [in debt] in the prevailing low-interest-rate environment, with the market value of short-term debt securities shrinking by 31.7 percent from end-2008 to MOP5.3 billion,” the report said.

SEPTEMBER 2010

26

Economy & Finance

Photo: Luís Almoster | mspagency.org

Pataca peg stays put With renewed opposition to the indirect peg between the pataca and the US dollar, the Monetary Authority of Macau has five reasons why it favours the status quo

t has been like this for the past few years: every time prices rise, concerns about the exchange rate policy are aired. Some legislators have said it is essential to peg the pataca to the yuan because most imports come from the mainland.

The pataca has long been pegged to the Hong Kong dollar, which is linked to the US dollar.

I

With the inflation rate rising once again - the Composite Consumer Price Index (CPI) for the first seven months of 2010 increased by 2.22 percent year-on-year - the usual concern is being voiced. But the Monetary Authority of Macau has stressed that the present exchange rate policy will continue.

Macau’s de facto central bank has made a list of five reasons for not changing the peg.

1 YUAN NOT TO BLAME

2 WEAK MEANS COMPETITIVE

The authority says inflation is caused by both external factors and internal factors.

The external factors include increases in the prices of imported goods, such as food and fuel, which are affected by exchange rate fluctuations. Internal factors include a lack of excess production capacity, economic growth and strong aggregate demand that drive costs such as rent, wages and fees for services.

It is these internal factors have become the main causes of inflation in Macau in the past few years, the authority says.

The inflation rate was 5.6 percent in 2007, of which one percentage point was attributable to more costly imports. It was 8.6 percent in 2008, of which only three percentage points were attributable to more costly imports.

“Therefore, there is no obvious correlation between the exchange rate of the pataca and inflation,” the authority says, noting that the pataca’s value against the yuan has slid by a single percentage point so far this year.

“If foreign currencies rise against the pataca, it will in one way or another enhance the competitiveness” of the local economy. That is to say, if mainland purchasing power rises, eventually mainland visitors will spend more while in Macau.

“The tourism services industry is our economic pillar, which has a locomotive effect on the development of the other local economic sectors,” the authority says. More than half of all jobs in Macau depend directly or indirectly on tourism.

SEPTEMBER 2010

3 ASSET BUBBLE RISK Next, “if we peg the pataca to the yuan, it may possibly trigger asset price inflation”, the authority warns. “When international investors are generally expecting the yuan to be on a long-term rising trend vis-à-vis other foreign currencies, if a mechanism is adopted to peg the pataca to the yuan, international investors will look to the pataca as a ‘proxy currency’ for the yet-to-be-freely-convertible yuan. A huge amount of liquidity will flood the local market... to speculate on the potential appreciation of the yuan.”

These funds will most likely go into the local real estate sector, the authority says, probably accelerating “the overheating of the local property market and creating an asset bubble.”

27

“There is no obvious correlation between the exchange rate of the pataca and inflation,” the monetary authority says, noting that the pataca’s value against the yuan has slid by a single percentage point so far this year 4 YUAN DOES NOT FLOAT “If the pataca was to hook up with a currency which is not freely convertible, apart from impairing the convertibility of the pataca, it would pose a grave technical problem in the management of our exchange reserves,” the authority says.

5 HONG KONG DOLLAR WELCOME The final point in the authority’s argument, states “it is noted that Hong Kong dollar deposits, valued at the equivalent of more than MOP110 billion, account for 55 percent of the total deposits of our residents. There is no obvious increase in the proportion of deposits denominated in other currencies.” This reflects the fact that when it comes to choosing freely convertible foreign currencies, Macau residents have a long-term predilection for Hong Kong dollars.

“On top of that, over 60 percent of our bank loan portfolio is denominated in Hong Kong dollars,” the authority says.

Bond trial T

he People’s Bank of China, the mainland’s central bank, has launched a trial programme that will permit overseas institutions – including Macau lenders – to invest in the mainland interbank bond market. The move is designed to promote yuan cross-border trade settlements.

Yuan clearing banks in Macau and Hong Kong, overseas banks engaged in yuan cross-border trade settlements and foreign central banks or monetary authorities that have signed currency swap agreements with China will be permitted to invest, the bank said. During the trial, yuan accumulated overseas can be used to invest in the country’s interbank bond market, it said.

“It’s a big boost for the offshore yuan market,” Steve Wang, a credit strategist for Bank of China International Securities in Hong Kong, told Bloomberg. It “would allow offshore holders of yuan to invest the money directly in China rather than going through middlemen. It’s a step in the right direction that really opens the domestic securities market,” he said.

The mainland’s interbank bond market now trades more than 10 different kinds of bonds, including treasury bonds and bonds issued by the country’s policy banks, according to the Xinhua news agency.

SEPTEMBER 2010

28

Economy & Finance

Living with Number Two China’s nominal GDP figure has surpassed Japan’s, making the country the world’s second-largest economy. What does it mean for Macau?

BY LUCIANA LEITÃO

acau’s economy is on the rise. With China becoming the world’s second-biggest economy in terms of nominal Gross Domestic Product or GDP, it will mean more money for the SAR, two economists say.

Henry Lei, assistant professor of business economics at the University of Macau, says the fact that China has overtaken Japan as the second-largest economy in the world means that the income of its inhabitants has increased. Given that the mainland is the main source of tourists for Macau, it is “good news”.

“Generally speaking, if our tourists are richer, they may spend more and bring benefits for Macau’s economy,” says Mr Lei. Another economist, José Luís Sales Marques, agrees, with one qualification.

“Whether China is or isn’t graded as the world’s secondbiggest economy makes no difference. Most important is

M

SEPTEMBER 2010

the big picture. Statistics by themselves mean nothing.”

For Mr Marques, what is significant is that “the Chinese economy is getting stronger and there have been increases affecting consumption trends. There is a larger number of families with the ability to consume.”

Let’s drink to it Macau’s tourism and gaming sectors can turn the boom in their favour, he says. Besides

this, Macau is a “gateway [to the mainland] for some products and services - for instance, wines,” notes Mr Marques.

But not every consequence is positive. The mainland’s economic growth “could bring inflation to Macau”, Mr Lei says.

Mr Marques admits the mainland’s expanding economic power could create a tendency for salaries to increase across the border, affecting the cost of goods and, consequently, their prices.

“Given that Macau imports from the mainland, this may have an effect on its economy in the long run,” he says.

Generally speaking, the effect of the mainland’s growth should be analysed in the light of the increasing integration of the mainland, Macau and Hong Kong, he says. “From the international point of view, this process will make this group a great regional economic bloc in the world,” Mr Marques points out.

Up for debate That China is the world’s second-biggest economy became clear after Japan announced its economic growth numbers for the second quarter, but the currency regulator in Beijing announced in June that the economy was bigger than Japan’s. The latest figures value China’ s economic output at US$1.337 trillion (MOP10.7 trillion) and Japan’s at US$1.288 trillion.

There has been some dispute among leading economists about the achievement of overtaking Japan. Some say nominal GDP is not the most appropriate gauge for comparing economies. Some say that quarterly comparisons are tricky because they do not take into account different seasonal patterns in each economy.

Japanese are still much wealthier than mainlanders, with GDP per head last year amounting to US$37,800 in Japan and just US$3,600 in China.

29

JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - jid@macaubusiness.com

Rubbery figures, weak analysis STATISTICS ARE OFTEN ABUSED TO WARP REALITY, JUST AS IN THE CASE OF CHINA “SURPASSING” JAPAN TO BECOME THE WORLD’S SECOND BIGGEST ECONOMY s the end of August approached, the news was everywhere; China had overtaken Japan as the second biggest economy in the world. An Internet search will confirm that the news spread like wildfire, taken up by the major news outlets and helping feed a flurry of commentary.

The typical speculation followed: how long would it be before the mainland overtakes the United States to become the world’s leader, what are the geopolitical consequences, is there a “Chinese model” of economics, and so on.

These are heavy subjects, requiring more thought than can be managed by this commentator and more depth than can be squeezed into this column.

But this recent “news” seems a bit overdone. Let me explain.

A

Not the best measure

With one single exception that I could find, although it was a less than exhaustive search, most articles and commentaries failed to mention what was actually being measured.

There are several measures of the size of an economy, each with various levels of appropriateness. In this case, we are talking about nominal Gross Domestic Product or GDP. I will spare you the pain of the debate surrounding what is the best measure of the size – not to mention relative wealth – of a country’s economy. GDP is certainly the most common and easily available, and its convenience probably compensates for most of its shortcomings.

GDP appears in different guises, depending on several factors. Nominal GDP is arguably an inadequate indicator to either compare countries or to track the evolution of a single economy over time. So, to be very brief, this indicator cannot be used to measure what the news seems to imply it is measuring.

It does not measure real wealth because it is sensitive to prices and, therefore, inflation. When making comparisons between countries, any comparison is complicated by exchange rates that further distort the figures.

Measures such as the GDP at purchasing power parity or PPP and constant prices are used to try to overcome these limitations. They produce estimates that limit price and exchange rate distortions. They are not perfect and have limitations of their own but they are the best we have.

Size isn’t everything

According to these measures, the Chinese economy bettered the size of the Japanese economy almost 10 years

ago – in 2001 to be precise – according to the World Bank’s statistics.

So what exactly are we talking about in this case?

There are a few particularly annoying angles to this obsession with size and ranking. First, rankings are extremely reductionist and mechanical: size and growth explain everything, “are” everything.

By a strange inversion, or so it seems to me, the how and why countries develop and how that translates into the well-being of their citizens appears to explain everything. It is as though measured growth was “the” objective and economic size explains it all.

From there, not infrequently, we jump to predictions that are usually based on nothing more than the crudest extrapolations about future outcomes – as if they were already predefined.

Less than you might think

The mainland’s evolution in the past 30 years is extraordinary by almost any measure. But we should not forget the fact that for a country with the size and population of China – or India for that matter – the abnormal situation is not being the biggest economy.

Moreover, if we take the GDP per capita based on PPP and at constant prices, the picture changes dramatically. The average mainlander is still, after all these years of growth, noticeably poorer than the average Japanese citizen. They have less than one-fifth of the wealth of their Japanese counterpart. There are about 130 other countries and territories where the average wealth of their citizens also surpasses that of the typical mainlander.

By this measure, the mainland draws level with countries like Turkmenistan and Namibia, according to the most recent estimates available, from last year.

We could develop this theme further but I think the point has been made.

We are dealing with matters that are far more complex than we sometimes seem to believe, and about which we understand less than we would be happy to confess.

These should be strong enough reasons to justify less sensationalism in the way news is conveyed and more rigor, if not modesty, in its analysis.

If you are an occasional reader, please forgive me for this outburst.

SEPTEMBER 2010

30

Economic Trends by José I. Duarte Demographic projections

TABLE 1 - Population Growth Scenarios Actual Pop

High Projection

Medium Projection

Low Projection

900,000

800,000

700,000

600,000

The Statistics and Census Service published a small report in 2008 that projected Macau’s population until 2031. It considered three scenarios; high, medium and low population growth. This is - or should be – an important document, used as a basis for public policy development, as well as for companies planning their future activities. Although the report does not precisely outline the assumptions it is based on, one thing is clear, the document is already completely out of step with reality.

TABLE 1

500,000

400,000 2000 2002

2004 2006 2008

2010 2012

2014 2016

2018

2020 2022 2024 2026 2028

2030

TABLE 2 - Population projection errors (2007-10) High Projection

Medium Projection

Low Projection

70,000

As Table 1 makes clear, the expected trends have failed to materialise. Hardly two years since its publication, very significant deviations, both in absolute and relative terms, have emerged from its findings.

Note that the actual projection is made in five-year intervals, starting in 2006. Note also that to make the lines continuous, the intermediate points were estimated using the implicit growth rates.

TABLE 2

60,000 50,000 40,000 30,000 20,000 10,000 0 -10,000 2007

2008

2009

2010

Table 2 shows that, by the middle of this year, the difference between the expected population and the actual population can be roughly set at between 45,000 and 70,000 people.

That represents, in broad terms, 10 to 15 percent of the total population.

That error cannot be attributed to mistakes in calculating natural growth. Its values are low and any errors there would be of little significance. Most of the deviation must be traced to the assumptions made about net migratory flows.

The results for this year refer to the first half, with estimates obtained by averaging the figures for that and the previous year.

TABLE 3

TABLE 3 - Net Migration estimated deviation Nat Growth

Medium Projection

Net Flow Error

60,000 50,000 40,000 30,000 20,000 10,000 0 -10,000

2007

2008

SEPTEMBER 2010

2009

2010

If we deduct the natural growth for the total deviation, as we do in Table 3, we see the extraordinary overestimation of migratory flows – currently more than 55,000 people.

Assuming the Statistics and Census Service did not conjure up the values from thin air, the question is pertinent: why such a big gap?

And more, what trust can be placed in essential projections and forecasts that can only be provided by the administration when their accuracy fails to perform in such a poor fashion?

31 Visitor trends

TABLE 4 - Visitors Visit & BC

Visitors

Tours

IndVisa

30,000,000 25,000,000

20,000,000

Up to 2007 the registered number of visitors included the holders of blue cards, which distorted the number of actual visitors. That situation was corrected in 2008 but with a price, the series was broken. Is it possible for the Statistics and Census Service try to reconstruct the previous figures so as to make available a longer set of compatible figures?

15,000,000 TABLE 4

10,000,000 5,000,000 0 2004

2005

2006

2007

2008

2009

2010

Table 4 shows the aggregate arrival figures up to 2007 and then, for the last years, the number of visitors.

For this last period it displays two important subsets: the number of tourists in an organised tour group, stable at slightly more than 50 percent; and the number of visitors with individual visas, which have decreased in relative terms to about one-fifth of visitors last year.

TABLE 5

TABLE 5 - Hospitality indicators: relative change index (Base 100=2004) Guests

Rooms

Occupancy

Hotels

Avg Nights

220 200 180 160 140 120 100 80 2004

2005

2006

2007

2008

2009

2010

TABLE 6 - Visitors characteristics Visitors

Tours

Guests

IndVisa

7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000

Let us now look at the relative changes of various related indicators from the past few years. For this year’s data, we can only compare numbers from the first half. There are some positive trends. Taking 2004 as the base year, the number of rooms more than doubled following the opening of big hotels, which served to increase numbers by about one-third.

The number of guests has grown more slowly than room availability but was still significant with an 80 percent increase in the period. The average stay per guest has also increased, even if, in absolute terms, it is still somewhat low. Occupancy rates, as a result of the combination of these trends, have stayed relatively stable without notable oscillations.

TABLE 6

Table 6 compares, on a quarterly basis, the number of visitors, group tourists, visitors with individual visas and hotel guests. Half of Macau’s arrivals are group tourists, they don’t stay overnight. Of those who stay, a significant number, about one-third, do not stay in hotels. That means an estimated one million people each quarter stay overnight but do not use hotels. This is a town that never sleeps. The number of visitors travelling on individual visas has declined noticeably, from around onethird at the beginning of the period to less than one-fifth at the end. The figure highlights that the link between individual visas and casino revenues is, at best, weak.

1,000,000 0 08Q1

08Q2

08Q3

08Q4

09Q1

09Q2

09Q3

09Q4

10Q1

10Q2

SEPTEMBER 2010

32

Economic Trends

by JosĂŠ I. Duarte

Output and expenditure 2009 (in MOP) GDP current

169,343

million

Consumption

41,601 31,580 13,739 - 39,274 121,695 169,342

million

Investment

Economic Activity

Government Trade balance: goods Trade balance: services GDP constant (2002)

million million million million million

% var

Latest (in MOP)

- 2.4 5.7

47,402 10,703 4,353 2,562 - 11,381 41,164 42,234

- 39.0 12.6 - 5.1 9.1 - 2.4

million million million million million million million

Notes

% var

24.4 4.5

Q1

- 37.0 - 3.9 27.0 50.0 30.1

Q1

% var

Notes

Q1

Q1 Q1 Q1 Q1

Money and prices 2009 M1 (in MOP) M2 (in MOP) Credit (in MOP) Deposits (in MOP) IPC/Inflation rate(*) AMCM base

30,608 million 212,153 million 101,064 million 207,247 million 101.40 base - 2008 0.50 %

% var

23.8 11.8 10.1 11.8 1.16 --

Latest

33,602.3 million 216,096.5 million 108,589.1 million 211,058.8 million 104.39 base - 2008 0.50 %

27.2 7.1 16.9 7.1 2.68 --

May May May May June June

Population/Labour force

Labour force Median wage rate (in MOP) Unemployment

% var

542,200 329,200 8,500

- 1.3 - 1.5 6.3 - 0.1

3.0 %

Latest

544,600 326,000 8,500 2.8 %

Notes

% var

0.1 0.1 -- 0.8

Q2 Q2 Q2 May

Construction 2009

228,874 Finished 1,406,242 Cement (Apparent consumption) 276,710 Transactions/Commercial (in MOP) 2,976 Transaction/Residential (in MOP) 21,517

Major sectors

Started

m2 m2 tons million million

% var

- 57.1 40.7 - 56.9 - 1.9 - 27.7

Latest

851 28,127 14,119 2,855 3,319

m2 m2 tons million million

Notes

% var

- 95.5 - 55.6 - 39.8 1034.9 103.9

June June June June June

Gaming 2009 Gross revenue (in MOP) Casinos Tables Machines

120,383 33 4,770 14,363

million

% var

Latest

9.6 2 18.7 21.1

13,757 33 4,828 14,659

% var million

93.4 0 1.2 2.0

Notes June Q1, var, ytd Q2, ytd Q2, ytd

Tourism 2009

21,753,000 Average expenditure (in MOP) - 1,616 Average stay 1.10 days Hotel rooms 19,259 Occupation rate 71.60 % Average Hotel stay 1.50 nights Visitors

% var

- 5.1 - 6.5 -9.8 -2.9 0.6

Latest

1,904,000 1,575 1.52 days 19,573 79.0 % 1.47 nights

% var

Notes

30.6 3.0 0.13 11.4 9.9 - 0.02

June

%var - % change on homologous period; var - absolute variation; ytd - % change, year-to-date; x - discontinuous series APRIL 2010 (*) Important note: The inflation base period has changed ( New base: April 2008 to March 2009 = 100) SEPTEMBER 2010

Q2 Q1 May Q1 May, var

Sources: DSEC (Statistics and Census Service), AMCM (Monetary Authority of Macau), DICJ (Gaming Inspection and Coordination Bureau)

2009 Population

33 FAN GANG PROFESSOR OF ECONOMICS AT BEIJING UNIVERSITY AND THE CHINESE ACADEMY OF SOCIAL SCIENCES

Is low-wage China disappearing?

CHEAP LABOUR HAS BEEN A KEY FACTOR IN GENERATING HIGH GROWTH BUT IT HAS ALSO CONTRIBUTED TO PROFOUND INCOME DISPARITIES eports about labour shortages, wage disputes, and wage increases for migrant workers in China have abounded of late.

They naturally raised concerns, or expectations, that China’s labour-cost advantages may be disappearing.

It is my hope that China’s comparative advantage as a low-wage producer does disappear – the sooner the better.

But why should I, a Chinese economist, wish to see China’s competitiveness reduced through rising labour costs? After all, when a country still lacks real advantages, such as higher education, efficient markets and enterprises, and a capacity for innovation, it needs something like low wages to maintain growth.

R

Cheap is bad While cheap labour has been a key factor in generating high growth over the past three decades, it has also contributed to profound income disparities, especially in recent years. And persistent, widening inequality might cause social crises that could interrupt growth and damage competitiveness. China must avoid such a scenario, and if wages could increase in some meaningful way, it would indicate that the economy might finally reach the next stage of development, during which income disparities would be narrowed.

Unfortunately, China has not yet reached that point – and will not any time soon. Agriculture remains the main source of income for more than 30 percent of China’s labour force, compared to less than two percent in the United States or six percent in South Korea. Another 30 percent of the labour force comprises migrant workers, who have doubled their incomes by moving from agriculture to the industrial and service sectors.

Although migrant workers earn only about US$1,500 (MOP12,000) per year on average, the income gap between them and agricultural labourers provides a powerful incentive for the latter to try to find better-paid non-farm jobs. Naturally, this competition in the labour market suppresses non-farm wages: whereas labour productivity in non-farm sectors increased by 10-12 percent annually in the past 15 years, migrant workers’ real wages have increased by only 4-6 percent per year. As a result, income disparity between low-end labour, on the one hand, and professionals and investors, on the other, has also increased.

Long March All this means that the process of industrialization in China still has a long way to go. To reduce farm labour to 10 percent of the labour force (the point at which, judging by historical experience elsewhere, China may achieve worker-farmer wage equilibrium), the economy needs to create about 150 million new non-farm jobs.

Even if the economy continues to grow at eight percent per year, China might need 20-30 years to reallocate agricultural labourers and reach “full employment.” But this requires generating eight million new jobs every year, including five million for farmers leaving the countryside.

During this long process of industrialization, wages will increase gradually, but it is very unlikely that they will grow at the

same rate as labour productivity. This is bad news for reducing income inequality, as capital gains and high-end wages may grow much faster. But it should be the good news for competitiveness, because Chinese wages will remain relatively low in terms of “wage efficiency.”

Indeed, the wage increases of recent years have not changed the basic cost structure of Chinese companies. An analysis by Goldman Sachs shows that, despite real wage gains, the share of labour costs in total manufacturing costs is lower than it was in 2001 – a trend that continued in the first half of 2010.

To prevent serious social tension, China’s government (at various levels) has begun to intervene by enforcing higher minimum wages, in addition to investing in a social safety net for the poor. In some provinces, minimum wages have increased by more than 30 percent. But the minimum wage is normally much lower than the effective wage, and thus has not changed the fundamental relationship between wages and labour productivity.

Nevertheless, artificial wage increases enforced by government policies could slow down the process of labour reallocation and make some “surplus labour” permanent. Income disparities will not be fundamentally altered until the market equilibrium wage inches upwards sufficiently to create labour demand at decent wage levels.

Wage cost isn’t everything So will companies, both multinationals and Chinese, leave for Vietnam, Bangladesh, or Mozambique? Perhaps. But that will happen only if the other countries’ wages are relatively more efficient (i.e., productivity there is ultimately higher than in China), and not just because Chinese nominal wages go up. For now, however, this does not seem to be the case in general.

Evidence that China’s wage efficiency remains high relative to other developing countries comes in the form of continued growth in inflows of foreign direct investment over the past 12 months, despite wage increases. In July, for example, FDI increased by 29.2 percent year on year, much higher than the global average. There may be many factors behind China’s strong FDI performance, but it does mean that the nominal wage increase itself may not lower the capital gains that concern investors most.

In any case, the Chinese wage story is much more complicated than it might seem. Nominal wages may increase, while real wages stagnate, owing to higher inflation. Even if real wages increase in some coastal cities, “surplus labour” could keep the national average flat. And even a real wage increase on the national level will not undermine competitiveness if labour productivity grows still faster.

So the conclusion seems to be that wage growth will not threaten China’s competitiveness in the next 10 or even 20 years. As China will not complete the process of reallocating workers from agriculture to more modern economic sectors any time soon, it should remain a cost-competitive economy for the foreseeable future.

SEPTEMBER 2010

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Politics he government wants to change the law that regulates the right of freedom to assembly and demonstrate.

The move comes after two recent defeats at the Court of Final Appeal, which has rejected several efforts by the administration to have protests called off. With no room to circumvent the judicial decisions, the government is now attempting to go back to the root of the problem and change the law itself.

Sources have told Macau Business that the goal is to impose more restrictions on the right of assembly and to prevent demonstrations.

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Small victory On the eve of Workers’ Day this year, labour activist Ng Sek Io saw the Civic and Municipal Affairs Bureau deny his association’s request to organise a rally that was to start in the city’s north.

It had happened before. Both the bureau and the security authorities had taken advantage of the law to cordon off Avenida Almeida Ribeiro, widely known by its Chinese name of San Ma Lou, in the city centre.

Mr Ng decided not to accept the decision and promptly appealed to the Court of Final Appeal. He disagreed with being assigned another route for the protest, noting that the bureau had only to receive prior notice of a protest or demonstration but had no power to authorise it or call for its cancellation.

The Court of Final Appeal upheld the appeal.

A second loss

Statute of limitations

The government wants to make it easier to cancel or introduce changes to peaceful protests, placing new limits on the right to freedom of assembly and to demonstrate

BY PAULO A. AZEVEDO SEPTEMBER 2010

Mr Ng’s request has not been the only one to be turned down by the Civic and Municipal Affairs Bureau. One of the leaders of the grassroots New Macau Association, Au Kam San, has also had his public meeting shut down.

Mr Au, a local legislator, informed the bureau of his intention to hold three meetings in three public squares to discuss the government’s Policy Address for 2010.

A day later he was met with a refusal. The bureau stated there were already actions scheduled for the locations requested – Leal Senado Square among them. The bureau went on to say that the trio of public places were not meant for those purposes.

A displeased Mr Au also appealed the decision. On May 4, the Court of Final Appeal stated the government could

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SEPTEMBER 2010

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Politics

not restrict the use of public spaces for assembly and demonstration – a clear rebuke of the government.

The law that regulates the right of freedom of assembly and demonstration dates back to 1993. Just two years ago, this right was considered by the Legislative Assembly as of “the greater dignity and importance to guarantee the rights and freedoms of individuals in Macau’s legal ordinance.” It is also enshrined in the Basic Law, the mini-constitution governing Macau, which also protects the freedom of expression.

Back to basics Overruled in the courts, the government is now attempting to go to the source of the problem: the law itself.

“There’s a need and opportunity for legislative action,” it claims.

The objective, as sources told Macau Business, is to apply more limits to the right of freedom of assembly and demonstration to prevent more headaches for the government and the police.

According to an assessment obtained by Macau Business that was issued by the office of the Secretary for Security Cheong Kuoc Va, it is time to consider “imposing restrictions of special scope when, on reasonable grounds, one fears serious injury to

“Over the past ten years, there’s been a setback with regard to fundamental rights,” says legislator Pereira Coutinho public order and peace, and the safety of persons and property because of the inadequacy of the locations for assembly or demonstrations.”

The document is dated May 7, just three days after the Court of Final Appeal’s decision on Mr Au’s case.

Sensitive issue The government assessment notes the issue is of “great social impact and sensitivity in the context of fundamental and political rights.”

Any legislative action “furthermore following the recent events of May 1 [clashes between the police and protesters], may be interpreted as

Landmark amendment

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n an unusual move in 2008, a group of legislators presented a single amendment to the law governing freedom of assembly and demonstration.

Their goal was to allow protesters to appeal directly to the court without a lawyer. Previously, protesters had tried to appeal decisions from the Civic and Municipal Affairs Bureau that called off or changed the routes of demonstrations, but had failed because of not being able to get a lawyer in time.

The amendment helped circumvent criticism that the authorities were clamping down on the right of freedom of assembly and was approved in late December of that year.

SEPTEMBER 2010

an exercise in shaping the law according to the convenience of the security authorities and government and, as such, subject to some radicalisation that could lead to a more or less serious unrest and social and political instability.”

The document justifies the need for change on the grounds that the current law was based on regulations penned and published in 1974, when Portugal was living through a revolution to move from dictatorship to democracy.

Still, the cabinet doesn’t see a total defeat in the judiciary’s decisions, since the courts “dealt only with the area of jurisdiction of the Civic and Municipal Affairs Bureau in what pertains to places of demonstration and assembly”.

In other words, it “doesn’t appear to us that, in the future, the same court will annul or thwart the decisions of the CPSP [police corps] in what concerns, according to their competencies, alterations to the routes of the demonstrations.”

The reason for such optimism? “Because there are still sufficient grounds in the law

to give them the necessary legality, based on reasons of public order and safety”.

Opposition promised Legislator José Pereira Coutinho stands opposed to the proposed changes if there is no justification for the amendment. “Over the past ten years, there’s been a setback with regard to fundamental rights,” Mr Coutinho said.

For Mr Coutinho, who chairs the Macau Civil Servants Association, it is now up to the Legislative Assembly, “given the information conveyed by the media” to “ask the government for information and answers.”

“I’m surprised and concerned,” he said.

The president of the New Macau Association, Jason Chao Teng Hei, said he would wait before promising any action. “We have yet to confirm this intent and check it in detail,” he told Macau Business.

“As a principle, we are against any change that might diminish the right of freedom of assembly and demonstration and, hence, free speech.

But we’ll wait.”

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Leaving home

Two heavy-hitters are leaving the Secretaries’ Building at government headquarters, providing space for Chui to add aides to his team he building that houses the chief executive and most government secretaries will soon lose two of its key players, Macau Business has learned.

The Secretary for the Economy and Finance, Francis Tam Pak Yuen, and the Secretary for Transport and Public Works, Lau Si Io, have packed their bags and are likely to relocate their teams to the Bank of China building, opposite the Hotel Lisboa, after ruling out “working spaces in the NAPE area”, a source said.

With the departure of the two secretaries, the so-called Secretaries’ Building will undergo extensive refurbishment and it is anticipated that the chief executive will have

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more space for an expanded team of aides.

As reported by Macau Business, somewhat unexpectedly, Chief Executive Fernando Chui Sai did not immediately occupy the office reserved for the head of government. Until recently, former leader Edmund Ho remained in the office on the sixth floor of the Secretaries’ Building.

Mr Ho now has his own facilities in the Penha district, built with public funds.

Mr Chui granted the former chief executive all the logistical support necessary to carry out his new role as the vice-president of the Chinese People Political Consultative Conference.

The Secretaries Build-

Photo: Luís Almoster | mspagency.org

BY PAULO A. AZEVEDO

ing, behind the Praia Grande Palace and integrated into the complex housing government headquarters, will continue to house Mr Chui, Secretary for Administration and Justice Florinda da Rosa Silva Chan and Secretary for Social Af-

fairs and Culture Cheong U. The Secretary for Public Security, Cheong Kuok Va, was up to now the only senior leader with a portfolio located outside the government’s nerve centre. His head office is at the São Francisco Barracks.

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38

Politics provisional minimum wage commission will propose to set the minimum wage at around HK$28 to HK$29 per hour.

One step at a time

Raising the bar Hong Kong approved its first minimum wage law in July. Macau may follow, eventually leven years after the topic first made it onto the public agenda, Macau is seriously looking at the possibility of introducing a law that establishes a minimum wage.

The process has already begun, however, there is still a long way to go.

The standing committee for the coordination of social affairs will tackle the question of a minimum wage in its forthcoming meetings.

“Some members asked to discuss the minimum wage and we decided that in the next meetings the issue will be included on our agenda,” the committee’s coordinator, Shuen Ka Hung, told

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reporters.

Mr Shuen, who also heads the Labour Affairs Bureau, expects employers and employees to reach a consensus next year. “At least, both parties have to show a willingness to gather to discuss the issue and to find a way to set wage levels, as well as accept that there would be a law for that,” he said.

Hong Kong passed its first minimum wage law in July after a heated debate among legislators that took more than 40 hours. The new law is set to take effect next year, although the government has yet to announce the minimum wage level – news reports say that the

Stay for more neglect or go home

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he director of the Labour Affairs Bureau, Shuen Ka Hung, says imported workers who are not happy with their employment conditions in Macau can always go back home.

“If the worker thinks the conditions that the employer is offering them are not sufficient or if they feel they are being mistreated, they can always go back to their homeland to find another job,” Mr Shuen told the Portuguese news agency Lusa.

He made the comment during a rebuttal of assertions that the new imported labour law was unfair to Blue Card holders because it neither grants them residence in Macau nor allows them to freely change jobs.

SEPTEMBER 2010

Reaching a consensus between employers and workers is just the first stage in Macau. “Afterwards, we need to see if that consensus allows us to go forward with the implementation of a minimum wage, since [such a law] still needs to have the approval of the Legislative Assembly,” Mr Shuen told the Portuguese news agency Lusa.

“The workers want a minimum wage, but employers feel that it will affect their business. If the level is set too low, the minimum wage won’t be able to protect financially distressed workers; if it is set too high, it may impact small and medium enterprises, which have lower levels of competitiveness, and in extreme situations lead to their end.”

The government set an hourly rate of MOP21 for employees of companies to which it outsources cleaning and security work in 2007. Mr Shuen said this was an “adequate reference value” but that some employers might feel it is too high.

Imported labour Another question the law will have to answer is whether domestic servants should be covered by a minimum wage.

A domestic worker in Macau earns an average of MOP2,000 a month.

It is likely that a minimum wage law in Macau would include imported workers. “The Labour Law stipulates equality of wages [between resident and imported workers] and the employer should follow this regulation,” Mr Shuen said.

A minimum wage law would be the last in a series of reforms. Last year, a new labour law was implemented and in the same year the Legislative Assembly approved the new imported labour regime, which started this April.

Last month legislators made changes to Macau’s 20-year-old retirement system. The system is still a far cry from a compulsory pension scheme but it does aim to provide a safety net for older people unable to support themselves financially in their retirement.

The elderly can get a MOP1,700 subsidy each month, an amount that is expected to increase, as is the value of the regular contributions from workers (MOP15) and employers (MOP30).

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Voting for democracy New poll finds almost two-thirds of residents want the right to vote for their political leaders

BY KAHON CHAN

he Chief Executive and Legislative Assembly should be elected by popular vote, say more than two-thirds of the 1,240 residents surveyed in a new public opinion poll.

According to the survey, conducted by the recently established New Vision of Macau Association and the Macau New Chinese Youth Association, more than 70 percent agree it is necessary for the government to draw up a roadmap and a timetable for achieving direct universal suffrage.

The survey is said to be the first to focus only on democratic and electoral reforms in Macau since Fernando Chui Sai On became chief executive.

A total of 778 respondents chosen at random were questioned face to face in 12 places in Macau on July 24, while another 462 were contacted by telephone on the same day. The results were released last month.

The survey was inspired by Hong Kong’s passing of a hotly debated constitutional reform package that broadens the number of elected lawmakers but stops well short of full elections.

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Debate urgently needed About one-third said they were “satisfied” with the present methods of electing the legislature and the chief executive, another third said they were “not satisfied” and the rest said they had “no opinion”.

However, 49 percent said there was an urgent need to start a debate about electoral reform and 65 percent said they hoped

Too ‘immature’, says government “The Macau government doesn’t have enough conditions to draft either a roadmap or proposal” towards a higher degree of democratisation “before a social consensus” on this issue is reached, according to the Secretary for Administration and Justice Florinda da Rosa Silva Chan.

She says a consensus should be achieved through “rational discussions”.

Ms Chan told the Legislative Assembly last month that it “would be irresponsible to present any proposal or to compromise with any kind of goal when the current conditions are still not mature enough.”

In his maiden policy address last March, Chief Executive Fernando Chui Sai On mentioned the goal of pushing a public consultation on the democratisation of the political system but set no timetable.

During the debate, outspoken lawmaker António Ng Kuok Cheong asked Ms Chan why it was possible for the population to vote for the names of the pandas offered to Macau by Beijing, but not for their own chief executive.

Lawmaker Paul Chan Wai Chi, also from the New Macau Association, asked Ms Chan how she could know there was “social consensus” about progressing towards universal suffrage “without holding a public consultation”.

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for direct universal suffrage in both elections. An overwhelming 73 percent want the government to draw up a roadmap and a timetable for the introduction of direct universal suffrage.

Nevertheless, respondents were divided about the focus of such a debate. Regarding the Legislative Assembly election, the debate should be about the direct election of all lawmakers, about 37 percent of respondents said. Others want the focus to be on partial measures, such as more directly elected seats (preferred by 20 percent), fewer indirectly elected seats (8 percent) or fewer nominated seats (13 percent).

At present the legislature has 29 members, 12 of them directly elected, 10 indirectly elected and seven that are nominated by the Chief Executive.

Chief concern As for the debate about the election of the chief executive, 47 percent say the discussion should concentrate on universal suffrage, while 17 percent wanted it to concentrate on the expansion of the electoral committee. Around 12 percent said there should be discussion about making it easier to become a candidate.

At present the Chief Executive is elected by a committee composed of 300 people. Of these, 100 represent the industrial, commercial and financial sectors; 80 the cultural and education sectors or other occupations; 80 the labour, social services, religious and other sectors; and 40 the Macau deputies to the National People’s Congress, the Macau members

Survey results Are you satisfied with the current composition of the Legislative Assembly?

33%

Yes

32%

No

35%

No opinion

Are you satisfied with the election method of the Chief Executive?

33%

Yes

36%

No

31%

No opinion

Do you hope for direct universal suffrage in Macau?

65%

Yes

14%

No

21%

No opinion

of the National Committee of the Chinese People’s Political Consultative Conference and the members of the Legislative Assembly.

The survey results show that for each question between 21 percent and 35 percent of respondents gave “don’t know” answers. Li Lue, president of the board of the New Vision of Macau Association, believes this is because they were unfamiliar with the topics raised by the poll.

Step by step Mr Li said these people might take a more active part in the debate about democracy as it unfolds. But he also remarked that many people typically do not care about the common problems of the building they live in, showing a lack of enthusiasm for democratic participation.

Mr Li urged the government to start working on political reform now, before there is an eruption of public discontent.

He believes many people would accept a slow, step-bystep approach to universal suffrage.

The Macau New Chinese Youth Association, which fielded candidates in the 2005 Legislative Assembly elections, said it had no preconceived notions about political reform.

Sandro Kou, vice-director-general of the association, said it was clear that the public wants changes and that the government should begin consulting the public as soon as next year, instead of just asking for last-minute public approval of a predetermined proposal. The clock is ticking.

SEPTEMBER 2010

41

Anti-graft body turns blowtorch on the Labour Affairs Bureau for acting incompetently and without evidence in botched raid for illegal workers at TV station

Feeling the heat

BY VANESSA AMARO

he heavy-handed Labour Affairs Bureau (DSAL) is again under fire, this time from the Commission Against Corruption, in a damaging critique of a failed raid on the headquarters of Macau Asia Satellite TV (MASTV).

The TV station filed a complaint with the anti-graft commission shortly after the six-hour raid on March 18 that failed to uncover any illegal workers.

The station questioned the raid’s legitimacy, asking if it was “a blow against freedom of the press”.

The commission’s findings, in a report made public last month, are scathing: the bureau acted without evidence, misled the media over the trigger for the raid and were incompetent in handling the case.

Throughout the 38-page Portuguese version of the report, the commission is

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critical of every action made by the bureau in handling the case. “The DSAL staff doesn’t possess sufficient sensitivity, and must improve the way it handles different situations and its ability of executing the law; it has also revealed a lack of prudence and detailed analysis while reviewing cases,” the report said.

Other criticisms of the bureau’s handling of the case include: “It’s clear that there are numerous problems throughout the course of the proceedings”; “The inspection was done without much thought”; “it was carried out just for the sake of doing something”; and “instinctive methods” were used.

Tip-off to a wild goose chase The report pinpoints an anonymous letter received by the bureau in July last

year as the opening of the case. The letter alleged the station had hired illegal workers, ignored the government’s labour ratio between residents and nonresidents, and was not paying employees on time.

About eight months later, police and bureau staff raided the TV station near the Macau Polytechnic Institute, identified every staff member present and left empty-handed.

Although exceptionally critical of the bureau, the report said it was clear there were flaws in the legal framework, particularly in the rules regarding inspections which “are imperfect and there are several weaknesses.”

The report stressed the need for a revision but slammed the bureaus’ handling of the investigation, from the way it handled the letter to the statements

“We already think that the Labour Affairs Bureau is incompetent in fighting unlawful employment, but now the only mechanism it has to do so is dismissed by the Commission Against Corruption’s accusations,” says legislator Kwan Tsui Hang SEPTEMBER 2010

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Politics

made to the media by bureau director Shuen Ka Hung. Mr Shuen said the broadcaster was selected randomly for inspection. The commission found that “was not true”.

Paper trail

“The inspection was done without much thought,” says the Commission Against Corruption

More than three months after receiving the letter, the bureau asked the TV station to list all employees and deliver papers proving it had made payments to the Social Security Fund. After their submission, a bureau inspector recommended interviews with eight, randomly selected station staff, including three Macau residents and five non-residents, to ascertain if there were outstanding wages.

All eight interviewees “stated there hadn’t been any untimely payment of wages”, the report says.

By February 24, the bureau understood that the number of employed residents and non-residents met the government’s quota restrictions. A division chief concluded that “no situation of violation of law had been discerned” and recommended the case be closed.

In an undated letter, a second division chief issued a differing opinion, recommending an inspection. Despite the conflicting opinions, the bureau sent

seven of its inspectors and six police agents to the station on March 18.

Lack of evidence The report claims the entire investigation was flawed, from the time the bureau received the tip-off. “The DSAL did not, in fact, carry out any preliminary follow-up work pertaining to the alleged situation of the presence of illegal workers, but merely decided to carry out the inspection on site based solely on an anonymous tip,” it said.

The commission’s findings – based in part on 212 pages of documents supplied by the bureau – say the anonymous letter mentioned six possible illegal workers but the bureau did not follow “the data pertaining to the mentioned names”. The report also states the bureau

Seven deadly sins

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ccording to the anti-corruption commission, the labour bureau has made seven critical mistakes: - A “lack of credible and complete elements to justify the decision” to raid the company’s headquarters; - A lack of any preliminary follow-up work on the claim regarding the hiring of illegal workers by MASTV, with the focus instead on the alleged delays in paying wages; - “No investigation action was undertaken within a period of more than seven months” regarding the illegal workers issue, showing the bureau’s “lack of time control and of orientation in the way it conducted the preliminary investigation”; - No difference in action for anonymous or identified complaints; - “Not enough consideration for the nature of the place to be raided” by not adopting measures to minimise any negative impact; - Providing incorrect information to the public when DSAL director Shuen Ka Hung told reporters the company was randomly chosen to be raided, which “was not true” as the raid was conducted on the basis of an anonymous letter; and - No proper regime to regulate illegal labour investigations.

SEPTEMBER 2010

32 million questions The job to arrange an exhibition in Beijing marking 10 years since the handover never went to public tender, raising the eyebrows of the Commission Against Corruption

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Corruption complaints on the rise I

n 2009, the Commission Against Corruption (CCAC) received a total of 923 complaints, a 16 percent yearon-year increase. According to CCAC’s annual report, released today, the rise is presumably related with to the fact that 2009 was an electoral year in Macau.

Of the 923 complaints, 768 were criminal complaints (38.9 percent year-on-year increase) while 155 were administrative complaints.

However, only 262 complaints were qualified for handling by the CCAC, accounting for 28.4 percent of total complaints recorded.

In 2009, there were 48 cases commenced for investigation (36 in 2008), including 44 criminal cases (31 in 2008) and four cases of administrative complaints (five in 2008).

Last year, the CCAC referred 28 cases to the Public Prosecutions Office, almost two times more than in 2008.

acted promptly to have the raid cleared “without, however, making the decision to process and collect evidence”.

Mincing no words, the commission considered that the period of about eight months between the reception of the complaint and the raid made the inspection “questionable”. The bureau must establish “a thorough mechanism for the treatment of anonymous communications, rather than adopt instinctive mechanisms to this end.”

In a win for the bureau and the government, the commission rejected the claim that the freedom of the press was impaired by the raid, but said a lack of evidence to support the process “easily causes doubts about the reach of such an act”.

Bureau will mend ways, lawmakers worried hy did the Government Information Bureau not call for a public tender for a MOP32 million contract for an exhibition in Beijing marking the 10th anniversary of the Macau SAR? Apparently there is only one company capable of taking on the project, an unconvincing answer that has led to a ticking-off for the bureau from the Commission Against Corruption.

The affair dates back to September 2008, when the then chief executive instructed the bureau to assume responsibility for organising the event. There was no public tender and the contract was awarded to Primedia, a company owned by Eva Lou, an aide to Fernando Chui Sai On during his campaign for election as chief executive.

The contract between the bureau and Primedia was only made public in August 2009, after Mr Chui’s election, although contact between the parties to the contract started in October 2008.

The bureau did not act according to the rules and based its decision solely on its own wishes, the anti-corruption body says in its annual report.

“The procedure should be objective and transparent so as to avoid suspicion of ‘behind-the-scenes scheming’ wholly damaging to the reputation of the administration”, the report says.

The bureau said it decided against calling for a public tender “because there were no other companies on the market with the capacity and experi-

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“The procedure should be objective and transparent so as to avoid suspicion of ‘behind-the-scenes scheming’”, stresses the anti-graft body ence to execute the task” and because it was an “urgent matter”. However, that reasoning was “not enough to clearly show [that Primedia] was the only available option”, according to the commission.

The bureau should have also submitted a proposal to the chief executive requesting exemption from the public tender procedure, it said.

The bureau, under the leadership of Victor Chan Chi Ping, received a letter from the commission “suggesting that it should learn from the experience of this case,” avoiding more “irregularities” in the future.

In response to the reprimand, the bureau issued a written statement saying that it had accepted the recommendations. The bureau gave an assurance that when it sets up the SAR 10th anniversary exhibition in Macau in November, it will rigorously follow the necessary procedures.

The CCAC has ordered the case to be shelved.

The Labour Affairs Bureau agrees with the criticisms levelled in the Commission Against Corruption report on its handling of the labour raid but some lawmakers fear the bureau will be rendered toothless.

The bureau has committed to “revising, changing and actively perfecting” its practices in the wake of the report. But directly elected lawmaker Kwan Tsui Hang is concerned.

Ms Kwan, who is also the vicepresident of the board of directors of the influential Macau Federation of Trade Unions, said labour groups had traditionally demanded the government raid businesses with suspected illegal workers, even without a complaint.

“Illegal workers do not have their status marked on their foreheads and the only way to find them is to check their identification documents,” she said. “To comply with the commission’s suggestion of sufficient proof before action, the DSAL may need to send undercovers prior to raids.”

“Currently, we already think that the DSAL is incompetent in fighting unlawful employment, but now the only mechanism it has to do so is dismissed by the commission’s accusations.”

Lawmaker Au Kam San, from the New Macau Association, is another who is wary of the commission’s report. He says the commission seems more intent on finding problems in procedure with respect to the Public Administration than it is in fighting corruption.

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‘Gravegate’ haunts Florinda

Secretary for Administration and Justice Florinda Chan is under siege over the perpetual lease of 10 grave plots in 2001.

Ms Chan says there was no wrongdoing and she was not involved, but some legislators aren’t so sure

BY VANESSA AMARO

he affair simply rose from the grave. The perpetual lease of 10 plots at the São Miguel Arcanjo Cemetery in December 2001 is haunting Secretary for Administration and Justice Florinda da Rosa Silva Chan.

The leases were granted by the Provisional Municipal Council of Macau, which was then under Ms Chan’s supervision.

The affair came to light last month, after TDM reported that a resident had lodged a complaint with the Public Prosecutions Office. The accusation is against a senior official who acquired

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SEPTEMBER 2010

the grave plots through an administrative procedure, “tailor-made” by the provisional council, two weeks before the provisional council was dissolved and replaced by the Civic and Municipal Affairs Bureau.

According to the TDM report, some of the perpetual leases were given to one of Ms Chan’s close aides.

The complainant, whose identity was not revealed, has also lodged a complaint with the Commission Against Corruption and in January asked Chief Executive Fernando Chui Sai On to prevent Ms Chan from par-

ticipating in any administrative process connected with the case or its investigation.

A written denial Shortly after TDM broke the news, Ms Chan’s office released a written statement saying the leases were granted legitimately and that she had nothing to do with them.

The statement disputed TDM’s assertion that the administrative procedure through which the leases were granted was in effect for only a couple of weeks, saying it was in effect “for over

45

A demand for action

Photo: Luís Almoster | mspagency.org

“It’s necessary that the chief executive immediately orders the secretary to inhibit herself and requests the opening of an inquiry by an independent body or by a magistrate to allocate responsibilities. Ms Chan’s statement is in no way enlightening and omits a lot of information.”

José Pereira Coutinho, legislator

two years”, until the end of 2003.

Since then, requests for perpetual leases have had to go through the office of the chief executive. In the past three years, there has been one such request, which has been denied twice. The request is believed to have been made by the resident who is now complaining about Ms Chan.

In another written statement, issued in a personal capacity, Ms Chan dismissed news reports saying that one of the 10 graves in question now holds her father’s remains.

The Public Prosecutions Office

said it had received “several criminal complaints” this year concerning the 10 grave plots. However, the prosecutions office said that, so far, “there aren’t yet the legal conditions to open criminal proceedings”.

The Commission Against Corruption has said it is looking into the matter. Both the government and the Civic and Municipal Affairs Bureau have stressed already that they will cooperate with the anti-graft body.

Until the investigations are over, they will not comment anymore on this issue.

“At present we do not know enough to determine what happens next. We were just informed that the Public Prosecutions Office is working on the case but it’s uncertain whether the investigation focused on abuse of public authority by the secretary. We also don’t know who benefited from the permanent allocation of the 10 grave plots.

The government should actively clarify who benefited from this allocation.

Explaining the procedures doesn’t help much at this moment in time. This is the right time for the [government] spokesperson to come out and clarify the facts, since the controversy is building up in the media and [in the court of] public opinion. But the spokesperson, once again, is in hiding.”

Au Kam San, legislator “It’s not appropriate to comment on whether Ms Chan committed a crime because there’s insufficient evidence and we must be patient and wait for the outcome of the investigation. This case also shows that both the public and the media are very concerned with the behaviour of those in power, now and in the past, because it may end in an injustice.

This awakening is a positive phenomenon since an increasing concern about conduct and the law is a sign of the development of a civic society. It would be strange for the chief executive to start an internal investigation, considering the monitoring mechanism among the three branches [of government – legislative, executive and judiciary]. A parallel investigation would raise questions”.

Sunny Chan, associate professor at the Public Management School of the Macau Polytechnic Institute SEPTEMBER 2010

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Politics

Foundations of a private career Vitor Ng quits the Macau Foundation to devote himself to leading the Macau Science Centre full-time, but leaves unanswered questions in his wake

BY VANESSA AMARO

itor Ng Wing Lok closed the door to the chairman’s office at the Macau Foundation for the last time on July 10 and on July 12 became full-time president of the Macau Science Centre.

The same day, Chief Executive Fernando Chui Sai On laid down new rules setting out the circumstances in which senior figures in the administration would be temporarily barred from going to work in the private sector. The

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foundation is the majority shareholder in the privately owned science centre.

At first glance, Mr Ng’s move to the science centre raises a lot of eyebrows, namely whether it would be allowed under the new rules.

However, the rules took effect the day after Mr Ng started his new fulltime job, so they do not apply. Anyway, nobody in the government seems to know if the rules cover the chairman of the Macau Foundation.

Mr Ng declined to have his appointment as head of the foundation renewed, for what he described as personal reasons.

From May 2006 until July, Mr Ng was both chairman of the Macau Foundation and president of the science centre, although he held the centre’s presidency only part-time. In view of this precedent, it would have made sense for the new head of the foundation, Wu Zhiliang, to have become the science centre’s part-time president.

Chief Executive’s high praise for Ng

A new chapter

hief Executive Fernando Chui Sai On gazetted a dispatch praising Vitor Ng Wing Lok’s performance as head of the Macau Foundation on July 14. Mr Chui remarked that Mr Ng was the foundation’s chairman for almost a decade, “showing strong leadership and management skills”, as well as “high commitment to the public cause, great professionalism, loyalty, honesty and unsurpassed dedication.” The Chief Executive said Mr Ng’s “dedication, loyalty, and remarkable competence contributed decisively to fulfilling the mission committed to the Macau Foundation.”

“Yes, Vitor Ng is the president of Macau Science Centre SA. He moved in on Monday, July 12, to his new office. After completing his functions at the Macau Foundation, Mr Ng has decided to pursue a new chapter in his career, with us,” the centre’s public relations officer Bonnie Fung told the Portuguese-language daily Hoje Macau.

The day Mr Ng settled into his new

C

SEPTEMBER 2010

47

What is the Macau Foundation?

T

Photo: António Falcão | Bloomland.cn

he Macau Foundation is a corporate public body with autonomous administration, finance and asset management. The foundation comes under the supervision of the Chief Executive. It was established in 2001 to replace the previous Macau Foundation and the Foundation for Cooperation and Development of Macau.

Its purpose is to facilitate the development of culture, the economy and science, and to promote Macau, mainly through the granting of subsidies to local associations. In the second quarter alone, it granted more than MOP218 million to more than 100 associations and individuals.

Funding for the foundation comes from the casinos, which are taxed 1.6 percent of gross gaming revenue for “cultural, social, economic, educational, scientific, academic or philanthropic actions”.

going into the private sector until sitting out a six-month “cooling-off period”.

The “cooling-off period” also applies, “with the needed adaptations”, to members of the boards of directors, executive councils or similar bodies of bureaus and autonomous funds, according to the law.

Macau Business asked both the Macau Foundation and the government if the rules apply to the chairman of the foundation. Neither seemed to know.

A Macau Foundation spokesperson said it was governed by its statutes, which predate the legislation that the new rules are meant to clarify; and that the statutes therefore do not take account of this legislation. Whether the law applies to the foundation is still “under analysis” by the government, the spokesperson said.

Laying down the law

Macau Business asked both the Macau Foundation and the government if the “cooling-off period” rules apply to the chairman of the foundation. Neither seemed to know office, Mr Chui gazetted the principles and criteria determining the refusal to consent to the exercise of private activities that govern bureau directors, department heads, division chiefs and supervisors who leave their posts.

The rules complement a law passed last year and list five sets of circumstances in which senior figures in the administration will be prevented from

The legislation sets “general rules for bureau directors, department heads, division chiefs and supervisors” and says “the holders and former holders of senior positions who wish to pursue private activities within six months of termination of their service commission must request prior authorisation from the Chief Executive to that effect.”

The new rules say the six-month provision applies to those that have, during the previous year, “participated in providing financial or tax incentives to the entity where they intend to exercise the private practice”. The rules say the six-month provision also applies to those that have “exercised supervisory, control or managerial functions,” or “represented the administration in contracts celebrated with the entity”.

And the provision applies to those who have “participated in the formulation and elaboration of any policies or decision-making pertaining to the en-

tity” or “obtained, due to their functions, data, documents, and other elements that give them advantage over the competition”.

Macau Foundation has made regular grants to the science centre over the last years and has been closely involved in the progress of the project.

The legislation says that if a former senior official asks to go into the private sector before six months is up, the decision on the case should be gazetted. No such decision on Mr Ng’s move to the science centre has been published.

Patron of science Mr Ng seems to have played a crucial role in the science centre’s creation. The Macau Foundation was one of the major investors in the project. In October 2001, Mr Ng set up a study group to evaluate the feasibility of a science museum. Less than a year later, he travelled to the United States to invite architect I. M. Pei to design the building. Mr Pei accepted.

In June 2005, the Macau Science Centre SA was incorporated. Mr Ng became the company’s part-time president.

In December, then-Chief Executive Edmund Ho laid the foundation stone and the building was opened late last year.

The centre’s present shareholders are the Macau Foundation; the Macau Productivity and Technology Transfer Centre, a non-profit organisation jointly established by the government and the private sector; and the Science and Technology Development Fund, an institution with a role similar to the Macau Foundation but which focuses on science and technology.

Both Macau Business and Hoje Macau tried to reach Mr. Ng, but the new president of the science centre was not available for comment.

Additional reporting by Emanuel Graça

SEPTEMBER 2010

48

KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com

A hole new tourist attraction SUMMER CAN ONLY MEAN TWO THINGS: UNUSUAL BEHAVIOUR AND A TOURISM FESTIVAL OF PUBLIC WORKS. MACAU’S BUSINESS IS THE HOLE BUSINESS Late summer is the silly season and, true to spirit, Macau has gone on an annual digging frenzy.

Nowhere is spared. Roads, footpaths, pavements, busy arterial roads, city streets and suburban backwaters, roundabouts and junctions, short and long stretches of road are all dug up to enchant the most ardent digging and hole enthusiast.

What a crowd-puller for Macau’s tourists; it is holes everywhere. There’s a piece of clear road. Quick, let’s dig it up.

We have silly little holes, intriguingly wide holes, monstrously deep holes, holes that echo, holes full of water, dry holes, iron-clad holes, holes with ladders inside, noisy holes with machines in them, quiet holes sunbathing undisturbed, whimsical holes dug for no apparent purpose, serious holes with pipes and wires, ornamental holes and boringly practical holes, holes to stand in, holes to sit in, holes to disappear into, holes simply to look at, holes in a military-style line, disorganised holes, shamefully uncared for holes, and neat little holes. Macau is a glory of holes and digging. A digger’s paradise.

And even better, for the archenthusiast, most of the holes have no workers in sight, so the keen visitor can inspect them at his or her leisure. You can climb in and out all day long without harassment, and indulge your inner mole to your heart’s content. For that special moment – seeing a worker actually working in a hole – surely a newspaper announcement is in order.

A festival feel Here you will find hole-working machines to satisfy the tastes of the world’s most ‘outré’ and exotic digging fetishists. What a wonderful parade of such machines the tourists can see; all shapes and sizes, from huge, long-armed monsters to a common shovel, smart new machines to sad, rusty, tired-out senior citizen machines. We have road-breaking, road-mending, road-surfacing machines, funny little machines that you can sit in and dig a shallow groove, great earthgrabbing beasts, machines that can slice SEPTEMBER 2010

a thin wafer off a road, and those that guzzle thick concrete in an instant.

And then we have the roadwork barriers. What a feast to charm the thrilled spectator: witches’ hat bollards, bits of old plastic tape, broken down wire mesh, sheet metal fences, rusty girders, bits of rotten wood, bare metal to dazzle the driver, and polythene to wrap itself around the unsuspecting motorcyclist in the slightest breath of wind.

For the most upper-class holes we have iron barriers, brightly painted in yellow and trimmed with red here and there. The very best barriers even have their owner’s identifying markings; not for them the ignominy of an undisclosed owner or being just anybody’s hole.

To crown it all, the very best holes sometimes even have a uniformed police officer guarding the prized exhibits, sentinels of the great pit, charged with protecting the monstrous cavern for all time.

Oh yes, hole watching can become the spectator sport of the season.

Macau’s holes are a spectacle that truly beggars the carnival in Rio.

What about the tourist?

In short, if you are a tourist seeking a festival of earth, a digging spectacular, or the world’s most gruelling test of holedodging, then here in Macau we have

everything to satisfy your every whim.

Can you stay upright without slipping? Can your coach driver deliver a hole-free ride? Even better, does your tour guide know where the deepest, most fashionable, most exquisitely cordonedoff holes are? Has he or she given you the tourist guide to the Macau hole trail, so that you can tick-off those you have visited, with marks awarded for the most holes seen, and a prize for the tour group’s winner?

To attract the true, dedicated fanatic, Macau can boast being the world’s first hole honey pot site, the digging and hole capital of the world. Gaming, hotels, heritage or history? Keep them. Macau’s business is the hole business.

So, come on tourists, enjoy the hole season in Macau while it lasts. Roll up, roll up; a hole-fest to end them all. Holes everywhere; digging all over town.

Whilst summer might be a good time to dig holes, can there not be some moderation here? Why is it that, at the height of the tourist season, Macau is suddenly dug up, becoming a nightmare for pedestrians and motorists alike, an unsightly mess of sprawling machines and piles of dug-up road? And where are the workers in all of this? Hiding down a hole somewhere. What a monumental nonsense of urban planning. Foresight?

Fallen into a hole.

49

October 15th

Caesars Golf Macau

October 22nd Macau Golf & Country Club For more information visit macaubusiness.com or write to golf@macaubusiness.com

SEPTEMBER 2010

50 50

Property | Market Watch

Bling is big Market observers see the luxury property market remaining robust, with both prices and the number of sales increasing

BY ALAN TSO

he average value of home sales in Macau rose steeply in the second quarter of the year.

According to the latest official data, the average price of residential units sold in the three months to June hit a record high of MOP32,026 (US$4,003) per square metre of usable area - a 19 percent increase over the previous quarter.

Prices per square metre have now been rising for five successive quarters.

A breakdown of the statistics indicates that the average value of homes in the second quarter was pushed up mainly by the launch of One Oasis Cotai South, an upmarket project in Coloane overlooking the Cotai Strip. The prices fetched by area in One Oasis mean Coloane has surpassed Praia Grande as the most expensive part of Macau.

The average price of homes in Coloane surged to MOP59,509 per square metre.

But while the luxury housing market remains baking hot, the mass residential market seems to be cooling.

T

SEPTEMBER 2010

Residential units sold per record of stamp duty* NUMBER OF TRANSACTIONS

Value of residential units sold per record of stamp duty YEAR

MONTH

2009

January

VALUE (10^6 MOP)

YEAR

MONTH

2009

January

172

February

235

February

372

March

394

March

594

April

580

April

May

775

May

1,156

June

922

June

1,627

July

1,339

July

2,767

August

1,730

August

2010

976

299

980

September

1,366

September

3,161

October

1,185

October

2,130

November

1,360

November

2,643

December

2,003

December

4,057

January

1,297

February

January

3,140

1,084

February

1,995

March

1,503

March

2,806

April

2,202

April

6,180

May

1,627

May

4,281

June

1,543

June

3,319

* Note: The data includes transactions of residential units valued below MOP3 million, which are exempt from stamp duty.

2010

Source: DSEC

51

The total number of buyers in residential transactions in the first 6 months of 2010:

Proportion tion of buyers rs

12,734 The total value of residential transactions in the first 6 months of 2010:

MOP

11% 89%

Non-Residents

Residents

Proportion ion of buyers rs

21,722,000,000

20% 80%

Non-Residents

Residents

According to many real estate agencies, the sale of mass-market residential units in the secondary market has dropped noticeably since the end of the government’s housing loan interest rebate scheme earlier this year. Expect further corrections in the next few months but limited supply will cushion the impact on prices.

Luxury key to numbers The red-hot housing market is being stoked by brisk sales and often at the high-end.

Government statistics show 5,372 homes were sold in the second quarter of 2010, 38.3 percent more than in the first. Together these homes were worth MOP13.78 billion, 73.5 percent more than in the previous quarter.

It is noteworthy that about one-fifth of these homes are luxury properties that come with a price tag of more than MOP4 million each.

The construction of 1,801 residential SEPTEMBER 2010

Property | Market Watch

52

Average transaction value of residential properties Value (10^3 MOP) 3000 2500 2000 1500 1000 500 0

Apr

May

Jun

Jul

Aug 2009

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr 2010

May

Jun

Average transaction price of residential units per square metre Value (MOP)

3500 3000 2500 2000 1500 1000 500 0

Q2

Q3 2007

Q4

Q1

Q2

Q3 2008

SEPTEMBER 2010

Q4

Q1

Q2

Q3 2009

Q4

Q1

Q2 2010

units was completed in the second quarter, greatly boosting the supply of new homes on the market.

It is already clear that this year’s housing sales will beat those of 2008 and last year but sales will probably be less than 2007, when a record 21,628 homes were sold. The transaction value of homes sold this year may yet beat 2007’s record of MOP42.06 billion.

Big draw Market observers believe the price of high-end properties will climb further this year, as demand remains strong. Their forecast is based on the better-than-expected performance of One Central Residences, which sold two penthouses in July for more than MOP50 million each. The staggering price means the two homes are worth MOP12,000 per square foot.

Executive director of Ricacorp (Macau) Properties Jane Liu says the luxury housing market has proved to be a big draw for investors from neighbouring regions because Macau’s regulations for the sale of off-plan properties are less strict than Hong Kong’s.

Property | Market Watch

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF RESIDENTIAL UNITS

BY DISTRICT AS PER STAMP DUTY RECORDS

Source: DSEC

MOP District

2009 Annual

Q1

Q2

Q3

Macau

23,235

17,112

18,928

Macau Peninsula Ilha Verde Tamagnini Barbosa Areia Preta and Iao Hon Areia Preta new reclamation zone (NATAP) Mรณng Hรก and Reservoir Fai Chi Kei Lamau Docks Horta e Costa and Ouvidor Arriaga Barca Patane and Sรฃo Paulo Conselheiro Ferreira de Almeida Ferreira do Amaral (Guia) ZAPE NAPE and Praia Grande Bay reclamation area Downtown Macau Barra / Manduco Praia Grande and Penha

22,803 18,993 15,084 16,385 26,621 18,876 17,536 28,171 20,906 16,942 16,538 16,852 19,294 18,030 49,271 14,414 13,491 20,147

14,436 11,940 8,222 9,528 17,569 8,483 10,575 24,119 13,040 9,050 10,707 14,389 10,889 14,438 28,490 11,559 8,243 13,809

Taipa Ocean Gardens and Taipa Pequena Downtown Taipa University and Pac On Bay Pac On and Taipa Grande City and Jockey Club

24,681 25,050 24,472 20,113 48,973 15,682

Coloane

18,360

Q4

2010 Q1

Q2

24,154

25,631

26,845

32,026

17,794 15,418 10,181 11,155 22,859 13,799 13,475 23,988 16,231 11,473 12,013 13,093 18,584 17,659 39,577 11,631 9,121 16,954

24,158 18,043 13,333 14,845 26,866 18,617 16,565 30,006 21,308 15,805 17,739 16,100 19,661 17,873 51,296 13,945 13,280 17,561

25,415 22,988 20,225 20,123 30,199 21,637 21,180 28,727 23,033 23,457 18,330 19,712 22,541 18,776 52,266 16,814 15,749 24,523

26,674 22,182 19,942 19,812 32,307 20,993 22,744 28,151 25,261 19,396 19,107 21,020 20,308 16,011 59,793 19,931 16,556 21,153

27,603 23,108 25,141 22,857 34,413 25,145 24,895 29,157 25,745 18,875 20,538 20,476 25,713 19,620 48,445 19,383 26,676 24,888

24,871 21,107 23,826 17,719 ~ 10,553

22,366 21,838 22,685 17,794 ~ 15,339

23,897 24,851 23,980 18,711 34,361 14,912

26,432 27,733 26,055 21,611 49,628 17,594

27,342 27,893 27,255 20,774 54,776 15,876

28,372 29,608 28,366 21,897 50,445 27,062

13,823

20,588

17,188

20,120

25,778

59,509

Notes: 1. Including transaction of residential units valued MOP3,000,000 or less that were exempt from the payment of Stamp Duty according to law 2. The division of districts is solely for statistical purposes. ~ No figure provided

AVERAGE TRANSACTION PRICE PER SQUARE METRE OF OFFICE UNITS

BY MAIN DISTRICT AS PER STAMP DUTY RECORDS District

Macau ZAPE NAPE and Praia Grande Bay reclamation area Downtown Macau Praia Grande and Penha

Annual

Q1

2009 Q2

21,650 18,787 23,561 12,605 15,671

22,228 15,091 23,164 ~ ~

19,556 18,054 21,230 ~ ~

53

Q3

Q4

Q1

MOP 2010 Q2

20,049 20,213 22,778 11,043 ~

23,177 19,793 25,233 14,309 16,540

23,740 18,869 28,486 23,186 ~

22,169 16,896 22,252 28,838 ~

Note: Only covers office buildings with ten storeys or higher. ~ No figure provided

SEPTEMBER 2010

54

Property | Market Watch

Notable residential property rentals - 16/07 to 15/08, 2010

Source: Centaline, Midland & Ricacorp.

District

Building/Street

Unit

Macau Macau Macau Macau Macau Macau Macau Macau Macau Taipa Macau Taipa Macau Macau Taipa Taipa Macau Taipa Taipa Taipa Taipa Taipa Macau Taipa Macau Macau Macau Taipa Macau Macau Taipa Taipa Macau Taipa Taipa Taipa Macau Macau

L’Arc Macau L’Arc Macau L’Arc Macau One Central One Central One Central L’Arc Macau One Central One Central Flower City One Central Estrada da Aldeia One Central Edf. Lung Tou Kok Nova City Flower City La Cite Supreme Flower City Flower City Nova City Kings Ville Hellene Garden Wan Yu Villas Nova City La Cite La Baie Du Noble La Cite Edf. Nova Taipa Garden La Cite La Cite Nova City Nova City Edf. Lei Kei Iau Lei Garden Jardins do Oceano Jardins do Oceano Edf. Yuet Tak Luen San Square

H/F, unit J M/F, unit B H/F, unit A H/F, unit B Block 7, H/F, unit E Block 7, H/F, unit H H/F, unit C Block 1, H/F, unit B Block 7, H/F, unit F H/F, unit D Block 1, M/F, unit A Whole Block M/F, unit C M/F, unit A H/F, unit A H/F, unit C H/F, unit E Block 3, M/F, unit I M/F, unit C M/F, unit C Block 3, M/F, unit G Block 1, M/F, unit A L/F, unit G Block 13, L/F, unit E Block 2, H/F, unit D Block 1, H/F, unit F Block 4, H/F, unit E Lotus Court, L/F, unit B Block 5, H/F, unit C Block 1, M/F, unit C Block 8, L/F, unit F Block 10, M/F, unit D M/F, unit D L/F, unit F Peach Court, L/F, unit B (with car park) Cherry Court, M/F, unit J H/F, unit E Block 1, M/F, unit G

Floor area (sq. ft)

Rent price (HK$)

2,803 2,803 2261 1,359 1,349 1,178 1821 1359 1301 2060 1273 3,000 1,273 1,800 2,505 2060 1634 2,060 2060 1,973 1,422 2,073 1,810 1,628 1,696 1,589 1,631 1,388 1,207 1,066 1,340 1,045 1,350 996 1,228 1,030 630 720

30,000 28,000 19,000 18,000 18,000 18,000 17,000 17,000 17,000 16,000 16,000 15,000 15,000 14,000 13,000 13,000 13,000 12,500 11,000 11,000 11,000 10,000 10,000 10,000 9,000 8,500 8,000 8,000 8,000 8,000 7,500 7,000 6,800 6,800 6,500 6,500 4,500 4,200

Price per sq.ft.

(HK$) 10.70 9.99 8.40 13.25 13.34 15.28 9.34 12.51 13.07 7.77 12.57 5.00 11.78 7.78 5.19 6.31 7.96 6.07 5.34 5.58 7.74 4.82 5.52 6.14 5.30 5.35 4.90 5.76 6.63 7.50 5.60 6.70 5.04 6.83 5.29 6.31 7.14 5.83

Note: L/F - Low floor; M/F - Middle floor; H - High floor

Notable commercial property rentals - 16/07 to 31/07, 2010 Type

Property

Unit

Shop Office

Chino Plaza, Block 2 Edf. Comercial Si Toi

Shop L/F, unit D

Source: Centaline

Floor area (sq. ft)

Rent price (HK$)

Price per sq.ft. (HK$)

7,251 960

80,000 7,000

11.03 7.29

Note: L/F - Low floor; M/F - Middle floor; H - High floor

SEPTEMBER 2010

55 Notable residential property transactions - 16/07 to 15/08, 2010 District

Building/Street

Unit

Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Macau Taipa Macau Taipa Macau Macau Taipa Taipa Macau Taipa Macau Taipa Macau Taipa Taipa Macau Macau Taipa Macau Taipa Taipa Macau Taipa Macau Taipa

One Central One Central One Central One Central One Central One Central One Central One Central L’Arc Macau L’Arc Macau L’Arc Macau L’Arc Macau Lake View Mansion L’Arc Macau L’Arc Macau Nam Van Peninsula L’Arc Macau One Oasis Cotai South L’Arc Macau The Residencia Macau Jardim da Penha One Central One Central Flower City One Central Supreme Flower City La Cite One Central Flower City Nova City The Praia Nova City Edf. Jardim Nam Ngon The Pacifica Garden The Pacifica Garden Nova City One Oasis Cotai South La Cite La Cite Nova City The Bayview Nova City One Oasis Cotai South The Bayview Flower City The Bayview Nova City

Block 5, H/F, unit A Block 5, H/F, unit B Block 2, H/F, unit K Block 3, M/F, unit A Block 5, H/F, unit B Block 4, M/F, unit A Block 5, H/F, unit A Block 4, M/F, unit A H/F, unit G H/F, unit G H/F, unit D H/F, unit F M/F, unit G H/F, unit G H/F, unit E L/F, unit E H/F, unit F L/F, unit A H/F, unit A Block 1, M/F, unit B Block 15, L/F, unit A (with car park) Block 1, H/F, unit B Block 7, H/F, unit A M/F, unit B (with car park) Block 1, H/F, unit B Block 2, M/F, unit G (with car park) Block 3, H/F, unit E (with car park) Block 7, H/F, unit B M/F, unit A Block 5, H/F, unit C Block 1, H/F, unit A Block 15, L/F, unit A L/F, unit P Block 2, M/F, unit G Block 3, H/F, unit N Block 16, L/F, unit F Block 4, M/F, unit B Block 2, M/F, unit C Block 3, M/F, unit B Block 13, M/F, unit C Block 5, L/F, unit F Block 12, H/D, unit B Block 4, L/F, unit B Block 3, M/F, unit E Lei Mau, H/F, AD Block 4, M/F, unit F Block 14, M/F, unit E

Source: Centaline, Midland & Ricacorp.

Floor area (sq. ft) 4,669 4,371 4,623 2,636 2,332 2,326 2,318 2,326 2,411 2,411 2,411 2,161 2,334 2,411 2,261 3,150 2,261 2,251 2,261 1,693 2,191 1,359 1,269 2,087 1,359 2,060 1,850 1,272 2,060 1,975 1,571 1,729 2,160 1,750 1,558 1,309 1,177 1,582 1,515 1,343 1,582 1,314 1,177 1,603 1,475 1,582 1,318

Sale price (HK$) 56,028,000 52,452,000 46,230,000 16,343,000 16,324,000 16,282,000 16,000,000 14,653,800 14,466,000 13,983,800 13,260,000 12,317,700 11,800,000 11,572,000 11,531,000 11,340,000 11,191,950 9,828,000 9,383,000 9,026,000 8,800,000 8,500,000 7,868,000 7,500,000 7,300,000 7,100,000 7,000,000 6,996,000 6,800,000 6,700,000 6,000,000 5,500,000 5,400,000 5,380,000 5,250,000 4,350,000 4,310,000 4,280,000 4,280,000 4,280,000 4,270,000 4,250,000 4,250,000 4,200,000 4,180,000 4,180,000 4,000,000

Price per sq.ft.

(HK$) 12,000 12,000 10,000 6,200 7,000 7,000 6,903 6,300 6,000 5,800 5,500 5,700 5,056 4,800 5,100 3,600 4,950 4,366 4,150 5,331 4,016 6,255 6,200 3,593 5,372 3,446 3,783 5,500 3,301 3,392 3,819 3,181 2,500 3,074 3,370 3,323 3,662 2,705 2,825 3,187 2,699 3,234 3,611 2,620 2,834 2,642 3,035

Note: L/F - Low floor; M/F - Middle floor; H - High floor

Notable commercial property transactions - 16/07 to 31/07, 2010 Type

Building/Street

Unit

Shop Shop Shop Shop Shop Shop Shop Industrial Industrial

Dynasty Plaza Centro Comercial Grupo Brilhantismo Edf. Dynasty Garden Edf. Lei Fai Nam Wa San, Block 5 Edf. Venceslau de Morais Rua de Afonso de Albuquerque Edf. Industrial Wan Tak Edf. Industrial Wan Tak

Shop Shop Shop Shop Shop Shop Shop L/F, unit C L/F, unit D

Source: Centaline

Floor area (sq. ft)

Sale price (HK$)

Price per sq.ft. (HK$)

3,000 3,286 3,000 2,500 1,593 1,083 1,606 1,800 1,805

36,000,000 30,000,000 29,400,000 21,680,000 5,880,000 5,800,000 5,600,000 3,100,000 3,100,000

12,000 9,129 9,800 8,672 3,691 5,355 3,486 1,722 1,717 SEPTEMBER 2010

56

Property

TIES TO THE LAND

A complicated government-led land deal involving companies once run by former Chief Executive Edmund Ho, has seen public land destined for development at the airport move into the hands of private developers

BY TIAGO AZEVEDO

parcel of land originally granted to Macau International Airport has ended up in the possession of private developers, after passing through the hands of an offshore company and a group of private companies that boasted the government as the majority shareholder.

Among the companies involved was a firm founded by former Chief Executive Edmund Ho Hau Wah, who later gave the final approval for the deal.

In December 1990, the government granted Macau International Airport Company or CAM a lot of about 2 million square metres, of which only a por-

A

SEPTEMBER 2010

tion was used for the airport. The land parcel includes a part of the hill opposite the airport, where a residential complex with 25 towers is now being built (see story in these pages).

What is intriguing about the project are the details of the business deals that eventually led to the land being put into the hands of the developers of the complex.

Public-private holding After the original lot was granted to CAM, land not required for the airport was divided into smaller parcels and transferred to various companies be-

tween 1995 and 1997.

Since the official notices about these sales were not posted online by the government printing bureau, it was not possible to find out how much each of the companies paid – if they even paid anything – for the land or what purposes the parcels were meant to be used for.

Most of the land ended up in the hands of five private companies, all founded in 1995. The common feature of the five, private companies is that the government was the majority shareholder in all them.

In each and every company, the government held 88 percent, CAM and

57

The tower kings

C

hinese Estates Group, controlled by billionaires Thomas and Joseph Lau, is a leading property developer in Hong Kong that specialises in mid- to high-end commercial and residential developments.

The group has a land bank of approximately 2.8 million square metres to be developed in Hong Kong, Macau and the mainland, according to the company’s website.

Chinese Estates paid HK$1 million (MOP1.03 million) to acquire a 70.01 percent interest in the offshore company Moon Ocean in 2005. A year later, Moon Ocean paid MOP1.36 billion for five parcels of land in Macau with a combined area of 78,742 square metres, where it is building a residential mega-complex.

Construction has only just started, even though the first phase of the project was supposed to be finished this year. Macau Business tried to get in touch with Chinese Estates several times, as well as with other parties involved in the project, but got no response.

its founders; former Chief Executive Edmund Ho and businessman Ng Fok.

Opaque and overseas

Stanley Ho Hung Sun’s Sociedade de Turismo e Diversões de Macau (STDM) each held 5 percent and Tai Fok Wah Investment held 2 percent.

The principal shareholder in CAM is also the government, with a 55.24 percent share. The next biggest stake is held by STDM, with 33.03 percent. The remainder belongs to other institutions, businesses and individuals from the mainland.

The smallest shareholder in the airport land deal is Tai Fok Wah. The company was created in 1990 and was already connected to the airport project.

What is notable about Tai Wok Wah is

In 2006 the five private companies sold all their parcels to Moon Ocean, an offshore company registered in the British Virgin Islands. Moon Ocean paid MOP1.36 billion (US$170 million) for the five parcels with a combined area of 78,742 square metres - the best proposal amongst the several companies that presented a bid, although there was no public tender.

Since the sale was made by private companies, the government did not have to comply with the disclosure rules that must be followed in conducting any public business.

A source familiar with the process told Macau Business: “Choosing to set up private businesses to sell land belonging to the public domain has no justification in law.”

Moreover, the government representatives appointed to all five companies were always officials under the supervision of the Secretary for Transport and Public Works, when normally the Financial Services Bureau oversees these operations, sources told Macau Business.

The project includes the construction of 24 residential blocks and one block of serviced apartments, to be developed in four phases. It will yield around 3,500 units, the company says on its website.

The 25-tower complex, with a height limit of 108 metres, “is going to offer around 100,000 square feet of clubhouses and over 700,000 square feet of landscaped gardens,” the company says.

The construction cost for the project is estimated to be between HK$5 billion and HK$7.5 billion, former executive director Lau Ming Wai told Bloomberg in 2007.

In January that year, Chinese Estates announced that Moon Ocean had signed a HK$1.6 billion syndicated loan agreement with seven banks to finance the first phase.

It was due for completion this year, with the next three phases to be ready by 2013.

With the delay in the first phase, the project may be completed much later than planned.

The bottom line is that the shareholders in the five private companies made good money from the sale of the parcels, taking into account the initial investment (see table).

Take the example of minority shareholder Tai Fok Wah, which overall paid less than MOP50,000 for its stakes of two percent in each of the five companies (according to the companies’ registered capital).

There is no publicly available information about the dividends collected by the government from its participation in the five companies. Even the 2009 SAR budget, when four of the five companies were shut down, shows no information regarding these businesses.

However, another source familiar with the process told Macau Business that this was probably the way the government found to support the airport’s development, adding, “it was all done according to the law”. Actually, he continued, the land was supposed to be sold much earlier than it really was.

Building in code According to the Official Gazette, Mr Ho, as chief executive, approved all asSEPTEMBER 2010

58

Property sessments by the Land Commission before the deal with Moon Ocean was given the green light.

The Official Gazette says the five parcels bought by Moon Ocean were meant to be used for the construction of buildings of maximum permitted heights of between 76 and 108 metres. The buildings were meant to be used for various purposes: residential, commercial, office, industrial, public facilities and parking. There was even supposed to be a four-star apartment hotel.

However, the Land, Public Works and Transport Bureau now says the buildings may be “approximately 150 metres” in height.

The bureau “is following the construction work,” a spokesman told Macau Business. “According to the project that was approved, all the plots will be developed as one, where a residential complex with several towers with different heights will be built.”

The bureau gave no further details.

Overlap and out

Sales cycles A

mong the five private companies that took over parcels of the Macau Airport lot, Tai Lei Loi Development was the only one which, at least up until a few months ago, had not yet been wound up.

Apart from having the government, CAM, STDM and Tai Fok Wah as shareholders, Tai Lei Loi also had businessman Ng Fok as a manager, appointed by Tai Fok Wah. Besides being involved in the sale of the parcels once owned by CAM to offshore company Moon Ocean, Tai Lei Loi had a second lot of 3,701 square metres, which had also previously belonged to Macau Airport.

The difference in price between the two lots sold is marked. Tai Lei Loi sold Moon Ocean 4,012 square metres for MOP77.36 million in 2006, Company

Parcel

when the land was officially valued at MOP38.13 million.

A year later, Tai Lei Loi sold its second, smaller lot to Kam Pou Loi for MOP73 million, when the land was officially valued at MOP72.02 million.

The land sold to Moon Ocean fetched a price more than double its assessed value, while the land sold to Kam Pou Loi fetched a price about the same as its assessed value. Note also that the assessed value per square metre went up significantly.

At the time of the sale the second lot was intended for the construction of a 24-storey building, comprising a three-star hotel and parking.

The other interesting thing about the second lot is that the company that bought it, Kam Pou Loi, was presided over by Mr Ng, a manager of the company that sold it.

Official land valuation

Selling price

Lei Tin Development

33,848 sqm

MOP252.9 million

MOP529.9 million

San Hou Kong Development

18,707 sqm

MOP182.6 million

MOP289.5 million

San Hung Fat Development

13,425 sqm

MOP147.3 million

MOP232.1 million

San Vai Ip Development

8,750 sqm

MOP145.9 million

MOP239.1 million

Tai Lei Loi Development

4,012 sqm

MOP39.1 million

MOP77.4 million

78,742 sqm

MOP767.8 million

MOP1,368 million

Total

SEPTEMBER 2010

Each shareholder in the five private companies was entitled to appoint an administrator. Mr Ho was appointed as Tai Fok Wah’s representative in three cases (San Vai Ip, San Hou Kong and Lei Tin companies), while Mr Ng was appointed as the representative in the other two (San Hung Fat and Tai Lei Loi).

In anticipation of his assumption of the post of chief executive on December 20, 1999, Mr Ho made arrangements to stop performing the functions he had in various companies. But according to one source, making these arrangements took longer than usual in the case of the companies that got a piece of land from CAM. Officially, Mr Ho stopped performing his functions in these companies on January 18, 2001 - more than a year after becoming chief executive.

Mr Ho held no position or stake in any of the five companies at the time they sold the land to Moon Ocean. In October 1999, Mr Ho had already transferred his interest in Tai Fok Wah to Sunning Estate Mediator, represented by his then-business partner, Mr Ng. Four of the five companies were wound up last January. The only exception was Tai Lei Loi, a company that is linked to another peculiar land deal (see box).

However, the records show that when these companies were wound up, the only thing left to be shared by the partners was the funds that would be used to manage each of the companies until they were completely shut down.

59 PETER SINGER PROFESSOR OF BIOETHICS AT PRINCETON UNIVERSITY

How much transparency is too much?

A MORE TRANSPARENT COMMUNITY IS LIKELY TO BE A BETTER ONE – AND THE SAME APPLIES TO A MORE TRANSPARENT WORLD ransparency seems to be the word of the day in a wide array of policy domains. But is greater transparency always good?

Ever since the financial crisis erupted in 2008, there has been a call for “greater transparency” in financial services.

The financial-reform law passed by the United States Congress in July requires improved transparency from banks and other financial-services firms.

Moreover, thanks to the hard work of Oxfam America and the Publish What You Pay coalition, the law also requires oil and mining companies – both US and foreign – that want to raise capital in the US to disclose their payments to the governments of countries in which they operate.

For many poor countries, wealth in natural resources is a curse rather than a benefit. Corrupt rulers can use the billions they receive from oil and mining corporations for personal extravagance, or to buy arms for troops to crush democratic resistance movements.

Of course, transparency alone cannot prevent this, but it will show everyone how much the rulers are getting, and who is funding them. This, one hopes, will change the attitude of corporations that enrich themselves by paying dictators for the right to extract valuable resources that belong to the whole country.

Throughout the world, to receive what one knows are stolen goods is a crime – except, it seems, when the goods are stolen by dictators from the people they dominate.

T

Wikileaks case A different form of transparency has received much more attention recently.

Wikileaks, which describes itself as “an anonymous global avenue for disseminating documents the public should see,” released 92,000 documents related to the war in Afghanistan, including military reports on incidents, and intelligence reports.

Wikileaks has, over the past three years, published a variety of sensitive documents, ranging from the American military’s manual for operating its prison in Guantánamo Bay to evidence of

corruption in Kenya and the dumping of toxic chemicals off the coast of Africa. It also published a list of Web sites that the Australian government proposed blocking, the extreme-right British National Party’s membership roll, an analysis of a major Icelandic bank’s default risk, and video footage of a US helicopter attack in Baghdad that killed 12 people, including a Reuters journalist and photographer. But posting the Afghan war reports was its most controversial move yet.

“The New York Times”, together with “The Guardian” and “Der Spiegel”, was given a chance to study the documents before they were released, and decided to publish some of the material. Its editors argued that while the decision to publicize secret material is always difficult, these documents were of “significant public interest” and “illuminate the extraordinary difficulty of what the United States and its allies have undertaken in a way that other accounts have not.” US Senator John Kerry, a leading Democrat who supports the war, has said that the documents may “underscore the stakes” in the conflict, and make it more urgent to “make the calibrations needed to get the policy right.”

Gone too far?

Wikileaks founder Julian Assange has suggested that the documents could form the basis for prosecuting war crimes committed by US forces against Afghan civilians. Others, including President Barack Obama, have said that the documents “don’t reveal any issues that haven’t already informed our public debate on Afghanistan.”

There is a clear parallel between the recent Afghanistan leaks and Daniel Ellsberg’s release in 1971 of the Pentagon Papers, which helped the American public understand how the war in Vietnam was really being conducted.

On its Web site, Wikileaks quotes the US Supreme Court ruling in that case: “only a free and unrestrained press can effectively expose deception in government.” Wikileaks also asserts that its leaks have already been the catalyst for “hundreds of reforms,” and that

“[o]pen governance is the most effective method of promoting good governance.”

But even some supporters of open government think Wikileaks goes too far.

Steven Aftergood, head of the project on government secrecy at the Federation of American Scientists, counts Wikileaks among the enemies of an open society because of its failure to respect the rule of law and the rights of individuals.

Although Wikileaks says it has withheld an additional 15,000 documents on the Afghan war in order to remove names and other means of identifying individuals who might be placed at risk, the “Times” of London revealed that in some cases sufficient identifying details were in the documents already released.

Assange has said that he deeply regrets any harm that the released documents may cause, but has defended the release nevertheless. And the Wikileaks Web site points out that while openness may lead to some highly visible bad consequences, what we fail to see are the consequences of not publishing, and the way in which a climate of openness makes it more likely that governments and corporations will act more ethically.

Measuring transparency But how much openness is too much?

In Latvia, an artificial-intelligence researcher in the University of Latvia’s computer science department who earlier this year leaked confidential records on the income of bank managers has been praised as a modern “Robin Hood,” because otherwise the public would not have known how much some people were continuing to be paid while their banks were being bailed out with public funds. Each year in Norway, the government publishes the income and wealth of almost every taxpayer. Is that too much transparency? If so, why?

In a world in which terrorists have committed atrocities and threaten to commit more, to seek complete government transparency is utopian.

Sometimes it is possible to do good only in secret. Yet on the whole, a more transparent community is likely to be a better one – and the same applies to a more transparent world.

SEPTEMBER 2010

Gaming | Billions Race

60

Billions race

Heading for the record books

ross gaming revenue from the city’s casinos has again posted a monthly two-digit figure for year-on-year growth.

There was some indication of a slowdown however, with the 40 percent growth rate being the lowest recorded so far this year. It was a cooling that was widely expected and appears likely to continue as the comparison for the remainder of this year includes the stellar final results from last year.

Macau’s casino gross gaming revenue reached MOP15.77 billion (US$1.97 billion) last month, the third highest ever, according to data released by the Gaming Inspection and Coordination Bureau.

The total casino gross gaming revenue for the eight months through to August rose 63.2 percent year-on-year to MOP117.9 billion. That is almost as much as the local casinos racked-up overall last year – MOP119.4 billion.

There was a significant change in terms of market share, sources told

G

Portuguese news agency Lusa; Melco Crown Entertainment jumped to third on the league table of operators, with a market share of 16 percent and Wynn Macau has dropped to fourth place, with a 14 percent market share.

Stanley Ho Hung Sun’s Sociedade de Jogos de Macau continues to lead the rankings, with a market share of 29 percent, down three percentage points from a month earlier. Sands China held onto second spot, with a 20 percent piece of the pie.

At the other end of the table there were no significant shifts. Galaxy Entertainment, with 13 percent, remains fifth and MGM rounds out the ranking with a market share of eight percent.

Gaming analysts quoted by Lusa forecast the industry will rack up MOP180 billion for the year – a figure that is 50 percent above the previous yearly record, set last year.

Galaxy Entertainment’s vicechairman, Francis Lui, has made similar predictions.

Gaming Results: Gross Revenue

“An increase of over 50 percent for what is already the biggest gaming market is already more that we can ask for,” he told reporters.

According to analyst David Katz from Jefferies & Co in New York, the August revenue figures are “relatively in line with expectations”. In a note to investors, he stressed that “Macau gaming revenues will continue to be strong throughout 2010 from a year-on-year growth perspective, despite a modest cooling of the Chinese economy”.

CLSA analysts Huei Suen Ng and Aaron Fischer expect the gross gaming revenue in Macau to increase 34 percent in the second semester of 2010 year-on-year.

Meanwhile, Deutsche Bank analyst Karen Tang has warned September could be somewhat more bearish than the previous months: “We think September could be softer given that visitors tend to delay their travel plans ahead of the Golden Week holidays in October.”

In Million MOP (1HKD:1.03MOP)

18,000

17,075

16,000 14,000 12,000

11,268

10,000

12,600

12,215

Oct 2009

Nov 2009

10,943

13,937

13,445

13,569

Jan 2010

Feb 2010

Mar 2010

14,186

16,310 13,642

15,773

11,347

8,000 6,000 4,000 2,000 0 Aug 2009

Sep 2009

SEPTEMBER 2010

Dec 2009

Apr 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

61

Gaming Results: Market Share Per Operator 2010

2009 Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

SJM

26%

31%

31%

32%

31%

30%

32%

34%

33%

32%

30%

32%

29%

Sands China

24%

20%

24%

21%

22%

22%

20%

20%

21%

20%

22%

19%

20%

Galaxy

10%

10%

12%

12%

13%

10%

10%

11%

11%

11%

10%

12%

13%

Wynn

13%

14%

12%

12%

17%

13%

15%

13%

14%

16%

17%

15%

14%

MPEL

16%

17%

13%

13%

12%

16%

14%

13%

13%

14%

13%

15%

16%

MGM

11%

7%

8%

9%

7%

9%

9%

8%

7%

7%

8%

7%

8%

TOTAL

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

40

SJM

Sands China

Galaxy

Wynn

MPEL

MGM

30 20 10 0

Aug 2009

Sep 2009

Oct 2009

Nov 2009

Dec 2009

Jan 2010

Feb 2010

Mar 2010

Apr 2010 May 2010

Jun 2010

Jul 2010

Aug 2010

*Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total.

Loveman talks about Macau mistake

Casinos to have “independent treatment” on smoking ban

Gary Loveman, the CEO of Harrah’s Entertainment Inc., opened up the book to Bloomberg Businessweek’s about his worst decision ever: his 2006 refusal to bid on a US$900 million (MOP7.2 billion) gambling concession in Macau. “The quantification on Macau took me in the opposite direction,” he said. “You had to have a kind of intuitive courage and I am not well suited to those kinds of decisions.” “Big mistake. I was wrong, I was really wrong,” Mr Loveman added. But he still believes he can turn the tables around. “There are two scarce resources in Macau,” he says, “land and gaming licenses. If you wish to have a resort in Macau, you need to have access to those two things. We have one of them [Caesars Golf Macau golf course, in Cotai].”

The casinos will have an “independent treatment” regarding the anti-smoking law, the president of the Legislative Assembly second standing committee Chan Chak Mo said last month.

The lawmakers and the Macau government are discussing the creation of specific smoking areas in gaming venues or setting up a grace period for the implementation of smoking bans in casinos, but the details are yet to be decided. The government will now approach all local gaming operators before presenting a new version of the anti-smoking law proposal, Mr Chan said.

Ponte 16 phase III with no schedule yet Ponte 16 still has no date to start its phase III expansion, said Ambrose So, chairman of Ponte 16.

Phase III will include an entertainment, retail and recreational complex and a waterfront promenade, but it is still at the design stage, Mr So told reporters. “We are at the design stage and we have some legal things to settle with the [plot’s] occupant. I think the project depends on that to go ahead with the planning,” he said. “I think the court has already ruled in our favour and there is a pending appeal from the tenant over there,” Mr So stressed.

David Chow settles with investors Businessman David Chow agreed to pay stakeholders including Merrill Lynch & Co. and US hedge funds Och-Ziff Capital Management Group LLC and TPG-Axon, 32 cents for each dollar of the US$390 million (MOP3.1 billion) they invested in Macau Legend Development Ltd. back in 2007, the South China Morning Post reported, quoting two people familiar with the deal. Mr Chow bought the stakeholders out for US$125 million in late July. The deal was made through is wife, local legislator Melinda Chan Mei Yi. Macau Legend Development Ltd. includes the Fishermen’s Wharf theme park, Macau Landmark hotel and its Pharaohs casino.

SEPTEMBER 2010

62

Gaming | Billions Race

Gross revenue from different gaming activities 2Q 2010

1Q 2010

4Q 2009

45,219 44,902 32,368 8,310 2,028 856 541 266 161 55 52 43 41 30 24 20 22 9 0.2 0.3 0.4 n/a 110 91 102 12 1 0.001

41,248 40,951 28,761 8,024 1,948 869 594 273 135 55 48 45 39 29 28 19 19 8 2 1 0.5 n/a 124 91 52 27 2 0.0002

36,476 36,161 24,976 7,259 1,820 779 509 262 257 45 42 42 37 27 28 13 26 7 1 1 0.5 n/a 102 110 80 21 1 0.001

3Q 2009

2Q 2009

1Q 2009

4Q 2008

25,619 25,408 16,287 5,898 1,533 638 432 223 125 40 32 39 42 23 37 8 20 5 2 2 0.4 n/a 71 60 68 11 1 0.001

26,252 26,019 16,828 5,804 1,533 687 489 174 150 47 32 44 18 21 52 10 24 6 3 4 0.5 n/a 90 45 72 55 2 0.000

24,358 24,078 15,616 5,186 1,478 654 503 182 177 42 20 45 1 13 49 9 25 6 2 7 0.5 n/a 126 53 83 17 1 0.001

-2.4% -2.3% -3.2% 1.6% 0.0% -7.1% -11.7% 28.2% -16.7% -14.9% 0.0% -11.4% 137.1% 9.5% -28.8% -20.0% -16.7% -16.7% -33.3% -50.0% -20.0% n/a -21.1% 33.3% -5.6% -56.0% -50.0% -1100.0%

7.8% 8.1% 7.8% 11.9% 3.7% 5.0% -2.8% -4.4% -15.3% 11.9% 60.0% -2.2% 1358.3% 61.5% 6.1% 11.1% -4.0% 0.0% 50.0% -42.9% 0.0% n/a -28.6% -15.1% -13.3% 47.1% 100.0% -110.0%

-7.0% -7.3% -9.5% -2.7% 3.6% -9.8% -3.3% 5.8% 24.6% -12.5% 5.3% -8.2% 20.0% -23.5% -3.9% -40.0% -7.4% 0.0% -33.3% 0.0% 25.0% -100.0% 20.0% 0.0% 59.6% 183.3% -50.0% n/a

Macau Patacas (Million)

Total Games of Fortune (total) VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

32,036 31,781 21,742 6,536 1,616 723 473 253 161 53 39 49 45 22 36 12 23 6 2 2 0.4 n/a 70 111 60 12 1 0.000 QoQ%

Total Games of Fortune VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

9.6% 9.6% 12.5% 3.6% 4.1% -1.5% -8.9% -2.6% 19.3% 0.0% 8.3% -4.4% 5.1% 3.4% -14.3% 5.3% 15.8% 12.5% -90.0% -70.0% -20.0% n/a -11.3% 0.0% 96.2% -55.6% -50.0% 400.0%

13.1% 13.2% 15.2% 10.5% 7.0% 11.6% 16.7% 4.2% -47.5% 22.2% 14.3% 7.1% 5.4% 7.4% 0.0% 46.2% -26.9% 14.3% 100.0% 0.0% 0.0% n/a 21.6% -17.3% -35.0% 28.6% 100.0% -80.0%

Source: Gaming Inspection and Coordination Bureau SEPTEMBER 2010

13.9% 13.8% 14.9% 11.1% 12.6% 7.7% 7.6% 3.6% 59.6% -15.1% 7.7% -14.3% -17.8% 22.7% -22.2% 8.3% 13.0% 16.7% -50.0% -50.0% 25.0% n/a 45.7% -0.9% 33.3% 75.0% 0.0% 150.0%

25.0% 25.1% 33.5% 10.8% 5.4% 13.3% 9.5% 13.5% 28.8% 32.5% 21.9% 25.6% 8.4% -4.3% -2.7% 50.0% 15.0% 20.0% 0.0% 0.0% 0.0% n/a -1.4% 85.0% -11.8% 9.1% 0.0% -60.0%

ost Macau-based casino operators have announced betterthan-expected results for the first half of 2010 – with some posting three-digit rates of growth.

The exceptional results are on the back of a low base coming off last year’s downturn and are in contrast to speculation that some operators would go the markets to raise capital.

There was plenty of expectation that MGM Macau would launch its IPO in Hong Kong in the third quarter, but no official announcement has been made yet.

The outlook for the second half is largely muted, with slower growth expected compared to last year’s bumper end. Several analysts are still forecasting 2010 will be a record year for revenues.

M

SJM turnaround SJM Holdings (800.HK), Macau’s biggest casino operator by revenue and controlled by casino mogul Stanley Ho Hung Sun, recorded significant turnaround in its operation and profitability for the first half.

The company’s top line was up 79 percent over the same period a year earlier to HK$26.72 billion, with adjusted EBITDA (earnings before interest income, and expense, tax, depreciation and amortisation) soaring by 141 percent to HK$2.23 billion on Hong Kong Generally Accepted Accounting Principles basis.

At the same time, the EBITDA margin expanded to 8.4 percent from 6.2 percent a year earlier.

Importantly, the company’s VIP gaming revenue grew by more than 114 percent to HK$17.68 billion, or two-thirds of total revenue.

The house-win percentage of VIP gaming operations was up slightly to 2.9 percent from 2.83 percent.

The board recommended a dividend of HK$0.05, suggesting a 16 percent payout

Gaming | Stock Watch

63

Game on

Casino operators post exceptional earnings results for the first half ahead of a predicted slowdown in growth

BY RAY CHAN

ratio. In terms of profitability, the company issued a basic EPS (earnings per share) of HK$0.31, compared to $HK0.07 in last year’s interim result, an increase of 359 percent. Overall, profits increased by 364 percent yearon-year to HK$1.57 billion.

Beyond SJM’s interim result, the company appointed Hong Kong Legislative

Council member Timothy Fok Tsun Ting as a new executive director. Mr Fok is the son of philanthropist Henry Fok Ying Tung and sits on the trust committee of the Henry Fok Foundation, an SJM stakeholder.

Melco shaves losses Melco International (200.

HK) said its net loss for the

six months ended June 30 was HK$218 million, down from HK$811.9 million in the same period last year, making it the worst performer among the Hong Kong-listed casino stocks. The company is currently underperforming the index and its peers, down 13 percent year-to-date.

Melco International did not recommend a dividend.

Alleged scam involving Melco Crown shares

A

t least one investor in Belgium has been offered shares in Melco Crown Entertainment at a 10 percent discount by callers claiming to be part of Mitsubishi Group. This follows claims from a group of three Norwegian businessmen who said they had also been approached with a similar offer. Mitsubishi Group announced last month it was investigating the scam and Melco Crown said it would consider taking action after studying the case, spokeswoman Maggie Ma told Bloomberg.

According to the Belgium investor, who wished to remain unnamed, the calls were followed up by emails and documents linked to the “Mitsubishi Group”. The documents stressed that the minimum expected return on the investment was above 150 percent. It was proposed that the investor buy 1,500 shares worth US$5,302 (MOP42,000). In the documents, Melco Crown is identified as a “star company”, “the term we use to describe the gems that our analytical endeavours tend to discover from time-to-time”. Included in the papers was a telegraphic transfer form for a beneficiary account at a Taiwanese bank.

The EPS improved to a loss of HK$17.75 cents from a loss of HK$66.14.

Melco International owns a 33.43 percent stake of gaming operator Melco Crown Entertainment.

Wynn Encore hits the stage Wynn Macau (1128.HK) reported improved top-line and earnings growth of 52 percent and 111 percent.

The company’s EPS more than doubled to HK$0.37 a share, up from HK$0.18 a share, mainly due to the opening of Wynn Encore, for which the investment costs were approximately HK$4.3 billion. The company posted a net profit of HK$1.91 billion, up from HK$903.7 million a year ago.

As of June, the company saw an EBITDA of HK$2.6 billion, up 75 percent from SEPTEMBER 2010

Gaming | Stock Watch

64

HK$1.5 billion a year before. The com- for the six months ended 30 June, representing an increase of 153 percent pany did not recommend a dividend. over the corresponding period last Sands’ record year, after adjusting for a one-off gain Sands China generated an all-time or loss from the bond buybacks. half-year record of HK$4.3 billion of The group achieved a net profit atadjusted EBITDA across all the group tributable to shareholders of HK$475 properties, a year-on-year increase of million. The first half included a one64.2 percent. off loss of HK$133 million, and last Total net revenues for the first six year’s first half included a one-off months of 2010 increased 32.0 per- gain of $819 million from bond buycent to HK$15.4 billion and profit rose backs.

329.7 percent to HK$1.9 billion, comEPS fell to HK$0.12 a share, pared with the first half of 2009. That down from HK$0.27 a share. led to a jump in EPS to HK$0.24 from Revenue was HK$8.6 billion, HK$0.07 a year earlier. representing an increase of HK$3.2 The board of directors of Sands billion or 61 percent over the correChina Ltd. also announced that Luis sponding period last year. For the first Nuno Mesquita de Melo has been re- half, the company’s adjusted EBITDA placed by Anne Maree Salt as the joint was HK$990 million, representing a company secretary of the company. rise of HK$473 million or 91 percent over the corresponding period last Galaxy EPS shrinks year.

Galaxy Entertainment (27:HK) anThe company did not declare a nounced a profit of HK$608 million dividend.

US casino stocks by market capitalization Melco Crown-ADR

6%

Wynn Resorts Ltd.

Las Vegas Sands

29%

53%

MGM Resorts International

12%

Macau casino stocks performance year-to-date (Base=HK$10) 18

SJM Holdings Ltd.

17 16

Galaxy Entertainment Group Ltd.

15 14

Wynn Macau Ltd.

13 12

Sands China Ltd.

11 10

Melco International Develop.

9 8 7 Dec-09

Jan-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Macau casino stocks performance Year-to-date vs Hang Seng Index (Base=HK$10) 23,000

SJM Holdings Ltd.

22,000

Galaxy Entertainment Group Ltd.

21,000

Wynn Macau Ltd.

20,000

Sands China Ltd.

17

15

13

11

19,000

9

Melco International Develop.

Hang Send Index (RHS)

7

18,000 Dec-09

Jan-10

Mar-10

SEPTEMBER 2010

Apr-10

May-10

Jun-10

Jul-10

Aug-10

65

US casino stocks by sales

Macau casino stocks by market capitalizaiton

Melco Crown-ADR

9%

Macau casino stocks by sales

Melco International Development

Melco International Development

2%

1% SJM Holdings Ltd.

16%

Las Vegas Sands

Wynn Resorts Ltd.

31%

20%

Sands China Ltd.

Galaxy Entertainment

Sands China Ltd.

30%

10%

42% MGM Resorts International

Wynn Macau Ltd.

40%

30%

SJM Holdings Ltd.

39%

Wynn Macau Ltd. Galaxy Entertainment

16%

14%

US casino stocks performance year-to-date (Base=US$10) 18

MGM Resorts

17 16

Wynn Resorts

15 14

Las Vegas Sands

13 12

Melco Crown Entertainment

11 10 9 8 7 Dec-09

Jan-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

US casino stocks performance year-to-date vs S&P 500 Index (Base=US$10) 1,250

MGM Resorts

17

1,200

Wynn Resorts

15

1,150

Las Vegas Sands

1,100

Melco Crown Entertainment

19

13 11 1,050

9 7

1,000 Dec-09

Jan-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

SEPTEMBER 2010

66

Gaming

A long wait Cotai is the new El Dorado of the global gaming industry but half of the local casino operators are waiting to get a piece of the action rom a channel of water to one of the world’s most attractive destinations for casino operators, much has changed in the area between Coloane and Taipa over the past few decades, but for three of the six Macau

Illustration: Rui Rasquinho

F

SEPTEMBER 2010

gaming operators, gaining a foothold in Cotai has proven to be far from easy.

Land is the issue holding back Wynn Macau, SJM or Sociedade de Jogos de Macau, and MGM Grand Paradise. Although several sources note that,

sooner or later, they all are expected to have their own piece of El Dorado, the question is how long will that take and what will they lose on the way.

The Secretary for Transport and Public Works Lau Si Io has confirmed

67 there are three Cotai gaming projects from three different operators waiting for formal land grant approval. The projects have areas of 200,000 square metres, 70,000 square metres and 70,000 square metres, respectively, he said.

The proposals were submitted during Edmund Ho Hau Wah’s term as chief executive and Mr Lau has repeatedly refused to name the gaming operators waiting for land.

But he doesn’t need to – the word has been on the street for a long time.

Wynn is in Wynn Macau is the player in the trio that is closest to achieving its goal. The company fenced its new site in Cotai a

long time ago and is now readying design plans.

Wynn Macau has applied for a land concession of about 210,000 square metres and “is awaiting final approval”.

“We continue to work on the concept and design of this property, but cannot prepare a final timeline or budget” until the land grant has been received, the company wrote in its results report released last month. The company’s boss, Steve Wynn, said recently that he expects to break ground in 2011 and to have the property ready in 2014.

However, getting in first comes with a cost. When officially granted the land by the government, Wynn will have to pay MOP400 million to an undisclosed

third party for “relinquishment of certain rights in and to any future development” on the land.

SJM in no rush Stanley Ho Hung-sun’s SJM is another operator negotiating a land grant in Cotai. In this case, not just one but two parcels. The company has also entered into discussions on potentially cooperating with the owners of a site adjacent to one of the parcels, the company said.

While there were no more details provided, the company is most likely in talks with the feuding team behind the Macau Studio City project. The owners of the development-to-be, which would include a casino managed by Melco

SEPTEMBER 2010

68

Gaming

Crown Entertainment, have been locked in a legal dispute that has stalled development and cost potential partners. SJM could provide a solution that would be viewed positively by the government.

But SJM appears to be in no hurry to get to Cotai. The company is still “studying carefully the overall progress and prospects of Cotai” and “does not estimate when it will undertake development” of the two sites it is requesting from the government.

“We look forward to being awarded a piece of land in Cotai so that we can concentrate our effort on the design, market positioning and what we want to do there,” SJM chief executive officer Ambrose So said. Mr So stressed, how-

Galaxy speeds up G

alaxy Entertainment is accelerating the development schedule of Galaxy Macau, the next property to open in Cotai, early next year.

Accordingly, the company announced an additional investment of HK$0.8 billion that will be spent on increasing room capacity at launch by over 50 percent to 1,400 rooms, a full opening for the Banyan Tree and Okura hotels, readying a full complement of more than 50 F&B outlets, as well as the complete fit-out, expansion and enhancement of the resort’s facilities.

This additional commitment will see the total investment in Galaxy Macau reach HK$14.9 billion.

Like Sands China, the company has also faced labour shortages.

The cost implications are being evaluated but the group says it is “currently confident these will cause no material impact on its financial performance”.

“We definitely would be emphasising more on the mass market because the entire resort destination has been built to attract the mid-income customers from overseas, Hong Kong and mainland China,” said Galaxy’s vice-chairman Francis Liu.

SEPTEMBER 2010

ever, that, even in Cotai, the company would keep its focus on gaming.

MGM wants in, fast MGM Grand Paradise, the joint venture between MGM Resorts International and businesswoman Pansy Ho Chiu King, has an urgent need to put the shovel to dirt.

“We cer tainly have aspirations to have more than one casino in Macau,”

MGM Resorts International chief executive officer Jim Murren said last month.

He stressed that getting land in Cotai “would be a determinant factor” for launching MGM Grand Paradise’s IPO on Hong Kong stock exchange.

“We have made it clear we want to have an opportunity in Cotai” and “we are working with the government” in that direction, confirmed MGM Macau president Grant Bowie. The MGM property is

The Secretary for Transport and Public Works Lau Si Io has confirmed there are three Cotai gaming projects from three different operators waiting for formal land grant approval

69

Race Course

THE FUTURE OF COTAI MPEL City of Dreams LVS Venetian LVS Macao Shangri-La/ Traders LVS MGM Four Cotai Seasons LVS Sheraton LVS Far East Consortium LVS Site 7

Galaxy Galaxy Macau Galaxy Grand Waldo

SJM Cotai 1 “Pearl”

Lotus Bridge

Macau Studio City

Existing property pro Pipeline property pro

Wynn Cotai

SJM Cotai 2

LVS Site 8

Immigration

Cotai Source: Union Gaming Research

Caesars Golf Macau - Phase I (Harrah’s)

Macau Golf & Country Club

Coloane the company’s only Macau casino.

While a proposal for the new property was submitted in 2007, Mr Bowie stressed MGM Grand Paradise was “financially safe and secure” after signing a

five-year refinancing loan worth US$950 million (MOP7.6 billion) in July.

Regarding the company’s Cotai project, it would be a “high-end integrated resort”. The company is looking at a

range of other possibilities to build into the development, with convention space, medical tourism facilities, entertainment and retail areas just some options. But first, the company needs land.

Sands delays openings abour shortages have forced Sands China to delay the opening of the first phase of Cotai parcels 5 and 6 until the fourth quarter of next year. The delay adds another three months to the completion timeline. Phase two is expected to open six months later.

“Due to matters beyond the company’s control, we have faced challenges acquiring the construction labour that we need quickly enough to be able to meet our original development and opening deadlines,” Sands China said.

The company has been struggling to comply with the government’s compulsory 1:1 ratio for hiring residents and non-residents in construction roles.

Since June, it has organised 15 recruitment actions to hire local construction workers. But fewer than one-fifth of the 4,674 candidates selected have appeared for an interview. Of those, 268 were admitted. From April to July, Sands subcontractors hired 1,889 local workers.

The company’s chief executive officer, Mike Leven, has said Sands China will need 10,000 to 11,000 at the peak time for the construction works.

Meanwhile, Sands approved a US$100 million (MOP800 million) increase in the development budget for the construction of parcels 5 and 6. The additional funds will be used for,

L

among other things, improving the design and fit-out of the casino and hotel rooms and enhancing the layout of the convention, exhibition and meeting room spaces.

Looking further ahead, Sands’ land parcels 3, 7 and 8 in Cotai have no specific timing regarding their development.

Site 3, which is already owned by the company, will be the next developed, after parcels 5 and 6 are complete, Mr Leven said. He told Macau Business that the company is still assuming that the memorandum signed in 2006 with Far East Consortium International for the development of 3,000 rooms on parcel 3 would be valid.

The development would consist of five hotels of different brands, a shopping and entertainment complex and two serviced apartment buildings. In addition, Far East Consortium would build the shell of a combined casino and theatre that will be sold to Sands once built.

However, the terms have been in dispute, with Far East Consortium International threatening to seek damages and an entitlement to an ownership interest in parcel 3 due to delays. Sands has dismissed the claims.

Sands China has already invested more than US$160 million in sites 7 and 8, anticipating the government will grant those parcels to the company too.

SEPTEMBER 2010

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Gaming

No holding’em back It’s worth just a thin slice of gambling revenue but Texas Hold’em poker is hot and the game’s popularity is growing by the day

BY EMANUEL GRAÇA

the game in Asia. “When it first started, very few players in the region were playing poker and very few players outside the region were aware that poker had started here. It has been a natural growth,” Mr McDonagh says.

University of Macau associate professor of business economics Ricardo Siu agrees that poker has had a very good run so far. “Promoting a new game is an ongoing long-term strategy to test if there is any new business opportunity.

Texas Hold’em poker is one of the games being tested and it was pretty successful last year,” he says.

Mr Siu believes the game could still “have good growth in the coming years.” He notes that in absolute terms its contribution to Macau’s gross gaming revenue is very limited, accounting for slightly above 0.1 percent in the second quarter this year. But Texas Hold’em may compete with roulette and blackjack in the future, Mr Siu concedes.

Risk free

uestion: What is the only table game in Macau from which gaming revenue has never shrunk quarter-on-quarter since it was made legal? Baccarat? No. Texas Hold’em poker.

Since it was authorised in local casinos less than three years ago, Texas Hold’em has been on a winning streak.

Gross revenue from the game jumped from MOP4 million (US$500,000) in the first quarter of 2008 to MOP52 million in the three months to June this year.

Macau has more than 50 Texas Hold’em tables and most casino operators offer the game. The Grand Lisboa leads, having the biggest poker room in Asia, with 12 permanent cash tables and 21 permanent tournament tables, in partnership with leading international online poker company PokerStars.

The Grand Lisboa poker room made

Q

SEPTEMBER 2010

history last month when the PokerStars Macau Millions five-day tournament smashed the record for the number of players in an Asian poker tournament, with 741 contestants. The previous Asian record of 679 was held by the PokerStars.net Filipino Poker Tour at the Metro Card Club.

Asian hub Danny McDonagh, the Asia-Pacific manager of live poker operations for PokerStars, notes that poker is expanding in Macau. “Originally, it was [growing] slowly but it’s really building. Our special events are really getting popular, not just in Macau. We had great numbers from Hong Kong, Japan, Taiwan and mainland China,” Mr McDonagh told Macau Business.

With Texas Hold’em not yet legal in Singapore, Macau is the biggest hub for

The number of participants in PokerStars events is a gauge of the growth of Texas Hold’em in Macau. The first Macau Poker Cup, in May 2008, had only 18 players. In March this year the Macau Poker Cup attracted 321 players.

Mr McDonagh thinks this growth rate will continue, at least in the near future. “More casinos will look at poker.

Baccarat will always be the number one growth source, but Texas Hold’em is a great alternative to have,” Mr McDonagh says. The reason is that it is “a norisk game to the casino operators - they run the cash games, where they take a commission out of the pot,” he says.

PokerStars wants to increase the number of poker players flocking to Macau. The company aims to attract more participants in its own events, while expanding the player base in the region. “We want to continue to make our special events bigger,” Mr McDonagh says.

“We also have affordable events, ladies’ events and very low satellites to qualify to the main events. We want to start looking at world records or other marks when we are doing our special events in the future.”

71

TAKING THE PLUNGE City of Dreams is betting big on nongaming facilities and entertainment; later this month it opens the long-awaited “The House of Dancing Water”

t’s set to make a splash; City of Dreams’ “The House of Dancing Water” makes its world premiere this month (September 17). But some analysts are concerned Melco Crown Entertainment has splashed out HK$2 billion (MOP2.06 billion) on a production that does not bring much in the way of value to the property. “‘The House of Dancing Water’ is believed to contribute to City of Dream’s brand appeal to the mass market,” says Sunny Yu, vice-president of entertainment and projects at Melco Crown. “The show is tailor-made for the vast Chinese and Asian market by drawing creative inspiration from Chinese culture.”

Not everyone is so bullish. With Cirque du Soleil’s “Zaia” at the neighbouring Venetian Macao resort failing to meet expectations, analysts fear the same fate for the water show.

Designed and performed by the Franco Dragone Entertainment Group, the show will increase operating costs at City of Dreams by about 10 percent to US$1.1 million (MOP8.8 million), CLSA analyst Huei Suen Ng wrote in a recent report.

“The House of Dancing Water” has a pricing strategy that is similar to “Zaia” for adults but for children, the Venetian show offers cheaper tickets.

Ticket prices for the 70-minute show at the City of Dreams range from HK$380 to HK$1,280 for adults and HK$270 to HK$1,280 for children.

No goals have been made public regarding the attendance numbers for the first year of operations.

I

Big numbers The production will be housed in a specially designed, 270-degree theatre-in-theround with approximately 2,000 seats.

The world’s biggest commercial pool forms the stage. To fill the 50-metre diameter, eight-metre deep pool, it takes more than five times the volume of an Olympic-sized swimming pool. The pool includes 258 automated fountains and 11 10-tonne elevators that convert the aquatic stage to a solid floor in seconds.

The show’s cast includes 77 international performance artists. Faye Leung, who was Hong Kong Ballet’s principal dancer from 2001 until early last year, has the leading female role. Backstage there is a team of about 130 production staff, technicians and professional divers.

72

Gaming

The show’s plot tells the story of a princess who is imprisoned by her evil step-mother once her father dies. Her rescuer is a young European stranger, washed ashore during a storm. The man falls for the princess, vows to set her free and then defeat the queen.

Bullish Dragone The plot is an original from Franco Dragone, a creator who spent 12 years with Cirque du Soleil before leaving in 2000 to found his own entertainment company.

In Macau, he says he has built something great. “‘The House of Dancing Water’ will be the world’s largest waterbased show,” Mr Dragone told Macau Business.

But he admits it has been a long ride. “Dealing with water is the hardest part,” he said. “Also, creating a fusional encounter and relationship between the human performers and the extraordinary and complex machinery and technology offered by the theatre.”

Mr Dragone “absolutely” believes that the show can be a key element to

“We don’t view ‘Zaia’ as competition. In fact, having two international shows on the Cotai Strip is actually complimentary to Macau as an entertainment destination,” says Franco Dragone

promoting non-gaming entertainment at City of Dreams. It “represents the live entertainment centrepiece of City of Dreams’ overall leisure and entertainment offering.”

The “Zaia” show across the road is something Mr Dragone says he is not worried about. “We don’t view ‘Zaia’ as competition. In fact, having two international shows on the Cotai Strip is actually complimentary to Macau as an entertainment destination,” he said, adding that his show was “tailored to meet the needs of Asian audiences.”

The Italian-born, Belgium-raised artist dismisses any comparison with “O”, a Cirque du Soleil permanent water show in Las Vegas that he helped to create. Although both are permanent, water-based shows, “The House of Dancing Water” actually “represents the largest of its kind ever developed in the world,” he said. “The scale is much bigger, the show is therefore more dramatic in its scope and scale.”

The beginning The new show is the first of a set of three non-gaming attractions that City of

SEPTEMBER 2010

73

Dreams has in the pipeline. The next attraction is nightclub Club Cubic, which was until recently based in AIA Tower.

It is scheduled to move soon but no official date has been made public. Once in its new home, Cubic will triple it size and become a 2,800 square metre live

entertainment venue.

“We are confident that Club Cubic at City of Dreams will bring our clubbers even more fun and excitement, and we intend to continue to shake up the night life of Macau and be the ‘must experience’ hotspot,” said Cu-

bic’s CEO John Choi.

The third non-gaming attraction is the Hard Rock Café, which City of Dreams aims to roll out later this year.

That ends the cycle of investment in big, non-gaming facilities. The question is whether the bet will pay off.

More changes at the top

E

xecutive vice-president and chief financial officer Simon Dewhurst has resigned from Melco Crown Entertainment as the company spills more top management.

“As Melco Crown Entertainment transitions from a development company to one focused primarily on maximising its operational profitability, and as a logical next step in the management reorganisation announced last month [July], the company’s intention is to identify a CFO who, in addition to having solid financial and operational experience, also possesses skills that are aligned with the current needs of the company,” Melco Crown said in a press release.

Leanne Palmer, the current vice-president, financial compliance, has assumed the role temporarily while the company “conducts a global search for a suitable candidate with exceptional calibre to fill the CFO position.”

Geoffrey Davis has been promoted to deputy CFO and treasurer on a permanent basis and will be based in Macau. Prior to joining Melco Crown Entertainment as senior vice-president, corporate finance in 2007, he was the lead equity research analyst at Citi Investment Research covering the gaming industry.

SEPTEMBER 2010

74

SEPTEMBER 2010

Gaming

75

The three musketeers Sands China has three top guns to lead the company against new challenges. In an exclusive interview with Macau Business, Mike Leven, Edward Tracy and David Sisk spell out the future

BY EMANUEL GRAÇA AND CARMO CORREIA (PHOTOS)

I

n Alexandre Dumas’ classic novel, they are Athos, Porthos and Aramis. In Macau, in 2010, their names are Michael Leven, Edward Tracy and David Sisk.

Unlike the original plot of “The Three Musketeers”, their motto is not “All for one, one for all”, but “All for Sands China, Sands China for all”.

The trio have a difficult task leading a mammoth corporation that has posted record results for the first half of 2010, but that has delayed the opening of its next projects in Cotai due to a lack of manpower.

Weaver, a contender Just as in the Dumas novel, our three Sands’ musketeers are actually four. The more experienced Stephen Weaver replaces the young and reckless d’Artagnan.

Mr Weaver, who was previously Sands China’s president of Asian development, was brought back as an adviser in July, as Mr Leven was appointed as Sands acting chief executive officer to replace dismissed Steve Jacobs.

The future may bring him more.

He left due to a tense relationship with Mr Jacobs but Mr Weaver “could be” an option to become the company’s next permanent CEO, Mr Leven told Macau Business.

“We have talked about it. He has got to make a personal decision about where he wants to live and how. I don’t intend to interrupt his family situation and what family situation he wants. But he really enjoys living here and he likes the people. He has good relationships with the government,” said Mr Leven, who is leading the selection process.

STEPHEN WEAVER “COULD BE” AN OPTION TO BECOME THE COMPANY’S NEXT PERMANENT CEO, SAYS MICHAEL LEVEN. “I WOULDN’T SAY HE IS NUMBER ONE BUT HE COULD BE A CANDIDATE IF HE WISHES TO BE A CANDIDATE”

“I wouldn’t say he is number one but he could be a candidate if he wishes to be a candidate.”

Instability no issue Mr Leven dismissed claims that Sands China’s C-Level ranks are unstable. “We have been here for seven years and we have had two or three changes at the top.

I don’t really believe that is such an abnormal scenario,” he said.

Another who may be coming back is lawyer and legislator Leonel Alves, the company’s former legal adviser, who left the company under a cloud. “We are having some conversations with him,” Mr Leven said. “We would certainly welcome him to come back.” Mr Alves has confirmed there are talks ongoing.

While bringing in Mr Sisk and Mr Tracy, Sands China has split its operations into gaming and non-gaming, respectively, rather than into properties.

“If you look at our business, on the gaming side, you are talking about five casinos once parcels 5 and 6 open. It is a business in itself,” he said.

“On the operating side, you are talking not only about the Venetian and the Sands, but about asset managing operators at the Sheraton, the Shangri-La, Traders and the Four Seasons.”

“It is an enormous job, plus the SEPTEMBER 2010

76

Gaming

LESSONS LEARNED I

Mike Leven

amount of food and beverage, the amount of MICE business we intend to do. You can’t combine that into one person. It is just too much.”

The new CEO’s role will be in-part management of the two top executives, Mr Leven said. “He will be more of a government relations person, potentially a financial executive,” he said.

“Someone who has got a proven track record of working in Asia successfully with an Asian community and in an environment where we have a higher degree of cultural sensitivity.” An Asian candidate would be perfect, Mr Leven added.

The non-gaming man While waiting for his future permanent CEO, Sands China’s new president and chief operating officer, Mr Tracy, has a clear vision for the future.

“We want to change the perception” that Sands China is just a gaming company,” he said. “It is an extraordinary experience as an operator to have a set of assets like these, with comprehensive integration of everything nearly any traveller could ever want. So, what we intend SEPTEMBER 2010

t was a unique moment. Last month, during a media gathering, Sands China’s acting CEO Mike Leven looked back at the company’s track record in Macau and admitted it could have done a better job.

“We sort of learned as we went along as opposed to having people who were experienced with the local population, local government and things of that kind,” he said.

In his view, the problems encountered in Macau were due to the lack of Sands’ international experience, a problem that has now been overcome.

“One has to remember that Las Vegas Sands was a company of one product in Las Vegas in 2004. That property is now 11 years old. Then, we opened the Sands in Macau and we were very successful,” he told the media, adding that “sometimes success is a predecessor to not paying attention to what we have to pay attention to.”

There were mistakes across the board, he said. “On the financial side, we made some errors in building properties where we didn’t have the financing in place, which caused a problem. We wouldn’t do that again,” he said.

“On the convention side, we actually got a fair start when the Venetian opened and then it dropped off because we didn’t pay attention to it, didn’t work hard enough on it, and didn’t market it well.”

“I don’t think we have done a good job with our employees, either.”

to do is to find ways to more effectively communicate all those assets to all the different market segments.”

With more than 20 years of handson management and development experience in the gaming and hospitality industry, Mr Tracy first came to Macau in 1989. He admits he was among the sceptics when he first heard Las Vegas Sands’ plans for Cotai and he agrees that maybe the company was slightly ahead of its time.

“But as time goes by, we will have the opportunity to start filling the assets we built, which are ahead of the curve, probably by four or five years in a nor-

AFTER RAPID EXPANSION, SANDS CHINA HAS “TO BECOME MORE OF AN OPERATING COMPANY,” SAYS EDWARD TRACY

malised economy,” he said. After rapid expansion, he noted Sands China has “to become more of an operating company.”

In his vision, that also means further cooperation with the competition to increase critical mass, especially in Cotai.

“We need to work in cooperation with the other hospitality companies here and make sure the infrastructure is in place so when the guests arrive, the experience is great from the minute they step off the plane. I don’t think we are quite there yet,” he said.

Shuffling the deck Mr Sisk, Sands China’s new gaming head, also knows Macau from before the handover and understands the importance of VIP players in this market. He rejected media reports the company was looking at reversing its direct VIP model, which represents around 20 percent of its VIP business. “Our mix is to get as much business as we can from both sides,” he said.

Like a poker player, Mr Sisk carefully measures his moves and words.

“My piece here over the next few months

77

Edward Tracy

is to try to learn as much as I can and then develop a strategy,” he said.

He stressed he is not blindly focused on increasing Sands’ slice of gross gaming revenue. “I don’t view market share necessarily as a good or bad thing. It is just one metric,” he said. “I want to

David Sisk

maintain the incredible levels of profitability that we have seen so far.”

That may be affected by government restrictions on the number of new tables, limited to 5,500 until 2013. “We need to re-evaluate and position the tables in the right resorts. And go back and

modify that, perhaps each year or over a period of six months. That is a continual process, it is itinerate, it is constantly evolving in what you do here,” he said.

Just as in “The Three Musketeers”, this is a story far too juicy to condense into a single volume.

THE JACOBS’ JOB S

lowly, the details of Steve Jacobs’ dismissal from the job as Sands China’s CEO are becoming clearer.

Mr Jacobs “went out because he was here for a particular purpose [implement a cost cutting programme]; he accomplished that purpose and then it was difficult to see how he would grow the business from where he was,” the company’s acting CEO, Mike Leven said.

While that may be the official line, there is more to Mr Jacobs’ dismissal in July. He was handed the responsibility of hiring the two new top executives to lead gaming and non-gaming operations. Those positions were empty for “six or seven months” and were filled just a few days after his dismissal. Several résumés were given to Mr Jacobs, Mr Leven said.

“At the end of the day, he didn’t feel they were appropriate, or didn’t want to feel they were appropriate,” he

said. “It was symptomatic of a certain style of management.”

“I wouldn’t say it was the reason [for Mr Jacobs’ dismissal] – there was no single reason – but it was part of the package that caused the discomfort in the relationship.”

Mr Jacobs’ comments on the opening of casinos in Japan were also part of the souring relationship. Sands China’s chairman Sheldon Adelson criticised the comments since that was an area not under Mr Jacobs’ jurisdiction.

“That came up towards the end. I don’t think that particular statement was at any time a significant reason,” said Mr Leven.

Mr Sisk’s and Mr Tracy’s résumés were not among those given to Mr Jacobs, according to Sands China´s acting CEO. “We were fortunate to find both reasonably quickly when we knew that the decision on Mr Jacobs was going to be made,” he said.

SEPTEMBER 2010

78

Gaming has mahjong and feng shui parameters, the wind directions and also the dragon,” adds Mr Wong.

The new mahjong Along with the Dragon Deck, other new games were developed. One of the main innovations is the Q Mahjong game.

Simplifying real Mahjong, it opens the door to all the family to play, including children.

“The old Mahjong game has a bad stigma as a gambling game. Q Mahjong is a shorter version, but still carries most of the characteristics of the traditional one,” Mr Wong says.

He says Q Mahjong is not designed to overthrow the traditional game but make it suitable for modern China.

It uses seven cards instead of 13 tiles, making the game easier and faster, says Mr Wong.

Suit move

In a bold business gamble, a US-based company is about to challenge 400 years of history by introducing a new pack of playing cards

BY LUCIANA LEITÃO

he move by Gamelot brings East and West together to create 52 cards – with Chinese characteristics. The Dragon Deck takes inspiration from mahjong tiles, as well as ying and yang and feng shui parameters.

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Decade in the making Gamelot president Jacob Wong says the project has been developing over the past 10 years, but it is only now that they have decided to announce it to the world.

“Up to now, we didn’t want anybody to know about this. It has had a very limited circulation for three years already.

Now we’re getting the money, this is the time,” he says.

The idea is clear. Despite the growing international status of the East with the rise of China and India, one thing is missing: an Eastern deck of cards.

“It had to be designed in such a way that it could be compared to the West.

That’s why there’s 52 cards. The differSEPTEMBER 2010

Eyeing casinos There are 15 family games in total including Three Fishing and Houdini.

Some can also be played online and downloaded from Smart-Phones. But along with these, Gamelot has also been creating casino games.

“That will take more time [to be implemented]. Casinos are very conservative. Anything that doesn’t make money right away, they’re not interested in. So it takes longer to prove that you have new games,” says Mr Wong.

Also on offer in terms of casino games is Taraccab (an equivalent to Baccarat) and Yangtze Hold’em (the equivalent to Texas Hold’em).

“They’re a little different, because we put more luck into our games,” adds Mr Wong.

Big dream

Jacob Wong

ence is that it has to reflect the cultural essence of the East,” adds Mr Wong.

Ten years and US$3 million later, the Dragon deck is ready to roll: “It

After launching across Asia in Mainland China, The Philippines, Vietnam, Thailand, Burma, Japan and Korea, Gamelot intends to launch their range in the US, Europe and Mexico.

In the short-to-medium term, they hope to organise tournaments with the new games.

“My dream is to organise a sort of World Series of Poker, where six of the best Texas Hold’em players in the West go against six of the best Yangzte Hold’em players in the East. They mix and six of them will play Texas and Yangzte and we’ll see who wins: the East or the West,” adds Mr Wong.

79 et Hollywood theme,” Megawide said in a written statement. “The hotel and condo towers shall sit on top of the casino podium. Lot area is 3.5 hectares, expandable to five hectares. Total construction area is about 300,000 square metres.”

Who does what?

Belle époque

Harrah’s pulls into pole position to grab the rights to operate Manila’s Belle Hotel Casino

BY MAX V. DE LEON IN MANILA

arrah’s and two other groups are in the thick of a fight to operate what is being touted as the next big gaming facility in the Philippines, the Belle Hotel Casino.

The integrated resort in the Bagong Nayong Pilipino Manila Entertainment City complex on Manila Bay involves three companies: the SM Group controlled by shopping mall tycoon Henry Sy, high-end property developer Belle Corporation, and Leisure and Resorts World Corporation (LRWC). All three are listed on the Philippine Stock Exchange.

Contractor Megawide Construction says the cost of construction alone is

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about US$30 million (MOP240 million).

Leisure and Resorts World Corporation’s head of investor relations, Freddie Reyes, told Macau Business that the total cost including fit-out could reach US$350 million.

The casino gaming areas and a hotel tower should be ready in one year’s time.

The casino will have three gaming floors and will feature a floor-to ceiling height of between seven and nine metres, up to three times greater than usual.

“The casino will be patterned after those operating in Las Vegas and will also incorporate Macau’s Venetian-type finishing, while the hotel will have a Plan-

Belle, controlled by shareholder SM, owns the land. But the Sy family does not want to be directly involved in gaming and has Leisure and Resorts World Corporation to manage or lease the facility, Mr Reyes said. Final details of the tripartite deal are yet to be finalised but Leisure and Resorts World Corporation is a logical partner since it operates the bingo halls in SM malls, he said.

The deal needs one player — the casino operator — to complete the cast.

Mr Reyes said hooking up with a foreign operator with a wide international network was important, since a big chunk of the revenue would come from junket tourists or big groups.

Negotiations are ongoing with Harrah’s and two other operators, who have not been named.

“Local grind will be enough to maintain expenses but the bigger part of the picture will be the junket market. Harrah’s has a very good system,” Mr Reyes said. “They have extensive knowledge of their players and running a casino is part of their expertise.”

At the moment Harrah’s is the one likely to bag the deal. “It is almost sure. But as we all know, unless everything is written, nothing is final yet,” Mr Reyes said.

Belle vice-chairman Willy Ocier declined to give details about the negotiations.

“We are not quite ready to talk about our casino project. Let’s do one in a couple of months,” Mr Ocier said in reply to Macau Business’s interview request.

SEPTEMBER 2010

SEPTEMBER 2010

GOLFING IN ASIA We suggest the best places to go!

TAKE IT FROM THE PROS Tips from Butch Harmon and a different academy in Macau GOODIES IN THE BAG For her and for him

BREAKDOWN

BY THE NUMBERS

FACING REALITY

BY THE NUMBERS...

1898 year the Haskell (golf) ball was invented

2 and a half cm measurement of a golf ball

MOP61,000,000 the purse for the 2009 Masters

4 rounds number of rounds of 18 holes each in the Masters

3 number of females that have competed in a men’s golf tournament: Babe Zaharis, Annika Sorestam and Michelle Wie

8,540 yards long that makes Jade Dragon Snow Mountain Golf Club in China, the world’s longest golf course 82

“Golf is a cruel game. It is so exacting that even its masters never master it, so intricate that most golfers never achieve consistency”.

These words are from Jon Winokur and Kent H. Barton on the book “How to Win at Golf: Without Actually Playing Well”.

Undoubtedly golf is a difficult game, and undoubtedly it attracts a large proportion of devotees whose only qualification for playing it is their devotion. But it is not on these grounds alone that one can explain the pathetic failure of the average golfer’s life, or the tragic comedy that is always being enacted by golfing contortionists over the links of the world. One must seek other causes. One must consider, not only the subject and the pupil, but the teacher.

The teachers of golf are either professional golfers or enthusiastic amateurs. In the main, the enthusiastic amateur knows neither how to teach it nor how to play it. Sometimes, the professional golfer knows how to play golf, but not how to teach it but there are some exceptions. This month we focus on learning Golf.

Butch Harmon is one of the strongest names when it comes to instructing golf. Tiger Woods, Phil Mickelson, Darren Clarke and Ernie Els, were trained by this amazing teacher, so why wouldn’t you deserve such lessons in golf? While you’re waiting for Butch Harmon to get back in Macau for a few lessons take some tips from the Pro about the Ceasers Golf Macau course!

Golf academies are also one of the best ways to evolve your swing. Nuts for golf, as we are, Macau Business has launched a Golf Academy. We talk about the project with some of the students and of course the main instructor, who also suggests us what a beginners female golfer bag should have in it. Whether your a She or a He, we offer you a handful of suggestions of fashionable things to buy before hitting the golf course.

Also, we’ve chosen the places in Asia where you should go for the game from Vietnam, to Cambodia, South Korea, Brunei and Taiwan.

Golf might be a cruel game, but we give you more than ten reasons why golf is better than sex. And we’re taking it really seriously!

Day Golf

Golf is a game designed to be played in the sun and the wind and even the rain at times, but not the dark.

Either white or yellow, it’s a golf ball!

It’s really frustrating to lose the balls in the middle of such an immense green...but it sure happens more than you wish it did!

Playing during the day means sunburn at the end of the day!

And that’s the hurtful part of the game.

Night Golf

Not seeing what’s happening around you may not only seem strange, but even a little spooky.

The glitter ball gives it a twilight zone feeling...not comfy!

Surprisingly few balls are lost.

They glow, remember?!

Playing after sundown is cooler, meaning no harmful UV’s.

If you’re working the whole week, you only have the weekends to get to the course and enjoy a good practice, unless you have a very good excuse to skip work!

It allows people to play after work, so you don’t lose track in practice. Plus, you don’t need any excuse to skip work!

The day is done. For any reasonable golf player it’s time to get something to drink at the country club bar.

A floodlit course allows the golf nut to play after the sun sets when any sensible player would be in the bar.

7 DEADLY SINS PRIDE: Have you ever seen a prancing golfer so confident in his or her ability that you wish you could actually be around when they took the proverbial fall?

Don’t overestimate your abilities nor underestimate your opponents.

ENVY: It is impossible to excel at every aspect of the golf game. Trying too hard to play like someone else and to achieve something you cannot master, will lead to frustration and will ruin the game you do have. Play within your means – and with the game you brought that day.

GLUTTONY: What’s more difficult to resist than a banquet table laden with every kind of food imaginable? However, what and when you eat can kill a golf game faster than any swing flaw. Lean is mean. Eat lightly or take a carry-out box with you and graze as you go.

LUST: It is said that sports can often induce a similar

euphoria to falling in love. Less is more and you can have too much of a good thing. Resist those lustful urges to have everything you see in the golf shop!

ANGER: When anger creeps into your game, let the demon come but let it go away just as fast. No one is saying that you are perfect and can never get mad; just deal with it and make it work for you. Never, ever quit.

GREED: Be hungry enough to want to win but don’t let greed consume you. Think of all the consequences before you play the shot.

SLOTH: Golf victories will not come to you just because you are a great person, want to win with all your heart, and are usually lucky. Remember PGA and Senior Tour star Gary Player’s famous quote when he holed out three sand shots in a row to win a bet: “The harder I practice the luckier I get.”

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FEATURE

CAMBODIA

Angkor Golf Resort

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he world class Faldo designed Angkor Golf Resort is the newest golf course in Cambodia and will in time prove to be the best. The six-time major winner Nick Faldo himself, received a blessing from local monks and then opened the golf course in December 2007, his first golf course in Cambodia. The golf resort will greatly add to bringing Cambodia onto the international golf destination map.

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The course is a fair test of golf for all players and requires thinking and strategy on every hole to score well. For example, the strategically placed bunkers and water hazards are tricky, but easily seen from each tee box. The greens have plenty of subtle undulations and they reward and encourage a variety of approach shots. On the other hand each hole´s difficulty can be moderated daily by specific pin positions, easy or challenging. Furthermore, various tee

box locations allow for both low and mid handicappers to choose the right course length for their game.

The final 3 holes make up some of the most challenging, but fun holes on the Angkor Resort golf course. The par 5, 16th is a 588 yard monster that is probably not reachable in two shots except for very long hitters. The angle of the green together with the water on the left of the hole, poses a real challenge for those wishing to get their approach shots close. A cautious lay

BIG SPENDER

Demanding the best

up, away from the water, on the second shot will leave a very demanding pitch over a deep bunker to a pretty shallow green. Hole 17 is the longest par 3 on the course and plays to a green guarded by water on the right side.

The back pin locations, in particular, will demand a very well-hit, accurate tee shot. The 440 yard par 4 finishing hole is as good as they come and will certainly lead to some dramatic finishes, a Faldo signature! The hole is a slight dogleg to the left. However,

water runs down the left side affecting both the tee shot and the approach.

The best tee shot must challenge the water on the left to open up the approach onto the green.

Don’t miss Angkor Golf Resort’s 300 meter long driving range; a great practice facility to tune up before your next round! An integrated resort is planned for the Angkor Golf Club and once completed will offer a relaxed golf holiday in the heart of Cambodia’s most popular tourist destination.

Japanese company Maruman claims to have developed the first metal wood, and even if there might be some disagreement in the industry, one thing is for sure: they can certainly claim the priciest set of irons you’ve ever heard of.

Their flagship range is the Majesty Series, which features the Prestigio men’s iron set, made from a combination of stainless and maraging steel that has been strengthened from the previous model to minimize energy loss at impact.

According to Maruman “the ´Majesty Series´ is the realization of every technological innovation pioneered

by Maruman, Golf’s equipment engineering technology leader for over 35 years”.

The Majesty’s Nano-Technology Titanium Face and Fullerene Composite Shaft work together to open up new levels of performance, prestige and quality for discriminating golfers around the world who insist on only the best life has to offer. The extraordinary distance and optimal trajectory that the Majesty Series provides will reward those who seek and demand the finest in luxury, quality and beauty.

And since you’re spending MOP50,000 you might as well get the Majesty Prestigio Driver (MOP20,000) and a Fairway Wood (MOP13,000) just for good measure!

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GOLF The COURSES places IN ASIA to go!

VIETNAM

Danang Golf Club - Dunes This course is amazing and a must play.

Greg Norman designed the entire course, using all of the remarkable and picturesque details. The #16 par 3 signature hole overlooks China Beach and on the right of the green is a machine gun bunker from the French and Vietnam war that has been converted into a very unique step down beverage bar. Off shore of the 16th hole you can see an island with a beautiful mountain on the South China Sea. Bring your camera with you for this hole. To the left is Hole #10 which has Marble Mountain as a back drop, emerging from the sand dunes, making this place truly magical!

BRUNEI

Pantai Mentiri Golf Club Pantai Mentiri Golf Club is located 15.5km along Kota Batu Road and enjoys a scenic view of Brunei Bay. It is easily accessible from Brunei International Airport, just a short 10 minutes drive away.

Pantai Mentiri Golf Club is the venue for many organised tournaments including the 20th SEA Games in 1999.

For seasoned golfers and professionals it is a straightforward 6,105 metre, par 72 course. For golfers with a 10 handicap and above the course will provide enough challenge to make a net par score difficult. The challenge of Pantai Mentiri Golf course is centred on the golfer’s ability to avoid the many water hazards which form the main feature of the course.

The greens, with well manicured and contoured aprons, are amongst the best in South East Asia. The first nine holes, the Bakau nine, being 3,006 metres long from the blue tee boxes, are considered by many to be the “easier” nine.

The inward Membangan nine measure 3,099 metres, while the ladies` red tee boxes provide lengths of 2,556 metres and 2,651 metres respectively.

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SOUTH KOREA

Pinx Golf Club, Jeju Island The first Korean course to make the 100 best courses list compiled by U.S. Golf Digest and U.K. Golf World, Pinx golf course offers 27 holes with a spectacular view of Halla Mountain and the blue ocean. The course is specifically designed to preserve nature by keeping volcanic cones spread across the island on a grassy plane.

Not only the greens, but also the fairways are made of synthetic grass so that even in the winter, the course does not lose its green colour.

For the average male golfer and professional women players, the distance from the regular tee to the hole is 324 meters. The distance from the blue tee is not that far either, 349 meters, but because the fairway slopes downward and is angled right to left,

if players hit a shot towards the centre, the ball will most likely fall into the left bunker, or in more severe situations, the water hazard.

But if players hit the tee shot too far to the left, the ball ends up in a long, deep rough. In this case it is wise to forego reaching the green in two and aim for a three-on by laying up with the second shot to land the ball in front of the creek hazard in front of the green.

Pinx is a private country club, but tee times are open to visitors from time to time if reservations are made early enough. Your chances are better if you book through a luxury hotel concierge desk. The Podo Hotel run by the golf club is highly recommended if you’re looking for a calm and Zen-like atmosphere for a night or two.

The award-winning boutique hotel has 26 rooms with panoramic views of the ocean or traditional Korean-style garden views.

TAIWAN

Sunrise Golf & Country Club A golfer’s paradise, Sunrise Golf & Country Club is a championship golf resort with a world-class reputation, designed by one of the world’s most famous golf course architects Robert Trent Jones Jr. Opened in October 1992, Sunrise Golf & Country Club has become known as the ‘best’ course to play in Taiwan and the club is a multi functional country club with international conference facilities and fine restaurants. More than a golf course, it is both a family gathering and business meeting place that offers breath-taking scenery, relaxation, and uncompromising recreation that will ensure every visitor’s time is unforgettable.

Sunrise is a beautiful mountaintop course with a nice layout and it has played host to the Sunrise Cup and has been the qualifying grounds for the Asia-Pacific players in the World Alfred Dunhill tournament.

The course at Sunrise Golf & Country Club circulates around one of the higher hills in Northern Taiwan, providing natural elevation changes which have been worked into many of the holes. The elevation also exposes the fairways to some persistent breezes. Golf is often played into a one or two club breeze here, sometimes even more. In addition to these natural elements, Trent Jones Jr. has deployed the full panoply of man-made hazards. The course has a fair claim to be the toughest in Taiwan.

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PLAY GOLF IN MACAU

Macau learns the game

G

olf is continuing to grow especially based on the economic boom not just in mainland China but also in Macau. There are more and more Chinese being introduced to the game and with the help of the Macau Professional Golfers Association which was established in 2007, this will continue.

Simon Grunwell has been a professional golfer for thirteen years. Founding member of the Macau Professional Golfers Association and Head Golf Professional at the Macau Golf & Country Club, he is responsible for managing the pro-shop, teaching and running of golf operations. “The only issue with Macau is the availability of land to build more golf courses, but in my opinion this will change in the future especially when they start to develop on Hengqin Island where there are plans to build new resorts including a 36-hole project”, Simon Grunwell says.

In August of 2009, Macau Business launched the first Charity Golf Clinic becoming an active agent in getting more people into golf. “People who maybe would not normally have the opportunity to learn to play, now have the possibility with activities like this one. The students can learn in a very relaxed atmosphere with friends or work colleagues, and on completion of the course all students are prepared to go to the golf course to start playing golf which is the goal from the beginning”, Simon adds.

Bruno de Ascensão was one of the participants in this Golf Academy and he highlights the fact that this activity has “enabled me to correct certain basic movements, which are essential for sustained progress in the performance of this game, namely the grip and address”. Also, this academy changed Bruno de Ascensão perspective about the sport. “The academies are undoubtedly a factor in the dissemination and development of the sport. However,

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there is a widespread perception that golf lessons are an expensive option. This idea should be hit by those involved, which should seek to inform the extent to which the academy will improve the level of play of the golfer”, Bruno suggests.

Most of the students enrolled in the Macau Business Golf Academy are professional people from different areas including; banking, law, the hotel industry, the casino industry and the media. Most are males aged between 25 and 45 years of age from Macau, Hong Kong, Portugal, Australia and the US. Some of the students have already participated in different sports, which can in some cases make it easier for them to learn to play golf. “The feedback from participants is very positive both from the level of coaching they have received to the actual skills they have learnt and come away with. The students learn a variety of different skills including how to swing the golf club, chipping, pitching, putting, bunker shots, rules and etiquette, and how to play on the golf course. Each session lasts for 1 hour 15 minutes which as one student confirmed “is just a perfect amount of time to learn and then practice what has been discussed during the lesson”, Simon Grunwell explains.

In fact, the development of golf in Macau must engage an understanding spirit underlining the need for rules that will safeguard the welfare of a community. “Unfortunately, most of the time, teaching rules of conduct designed to respect is a Herculean task in Macau, yet an essential one. In this sport, it goes side by side with performance techniques and rules. And this will be reflected in society!”

Bruno de Ascensão argues.

The Golf Academies are very important when it comes to attracting junior golfers involved in the game from an early age. As Simon explains, that target will

SIMON GRUNWELL BE SUGGESTS PREPARED WHAT SHOULD BE IN YOUR BAG, IF YOU’RE AN ASPIRING FEMALE GOLFER

Drivers

No driver, first learn to use the fairway woods 3 and 5

Fairway Woods:

3 and 5 woods as the shafts are shorter and they have more loft on the clubface so are easier to use

Irons:

5 – SW graphite shafts as they are lighter and easier for ladies to control. The heads should be cavity back which makes the head more forgiving and gives a bigger hitting area

Rescue:

20 or 24 degree rescue with graphite shaft

Wedges:

The standard wedges (PW & SW) which are included in the iron set are fine, no need to purchase any extras

“hopefully give Macau the opportunity to have a super star golfer to grace the fairways of the world in the future and put Macau on the golfing map”.

But before that super star comes along, take this bit of advice. “All beginners to the game should go and take some lessons from a PGA pro. This way they will learn the right way and enjoy the game much more. It’s the same when buying equipment, always go and get advice from a PGA pro who can point you in the right direction on what is and is not suitable for your game. I always ask the question: if you are sick would you go and see a doctor or car mechanic? It’s the same when playing golf, take advice from the professionals!” Simon Grunwell concludes.

Putter:

Buying a putter is very personalized.

The golfer should try 5 to 6 different models before choosing. I would suggest a putter which is face balanced. This basically means the face of the putter stays straighter when hitting the ball. Putters also come in lots of different shaft lengths and head designs, so try before you buy.

Once a golfer tries out some different models, they will soon find the one which suits their game

Bag:

Again it’s a personal preference as bags come in lots of different shapes, sizes and colours. Most golfers in Asia don’t carry their bag when on the golf course so buying a bigger bag may be an advantage as they have more storage space. Or some golfers prefer the lighter carry bags which also come with a stand so the bag does not need to be laid on the ground

Brands:

The first Macau Business Charity Golf Clinic took place in August 2009

For lady beginers I would suggest Callaway’ model X-22 and the diablo edge for the fairway woods. From Taylor Made I would choose the model burner superlaunch and from Macgregor the MX-L model that even comes in pink 89

TIPS FROM THE PROS

A day in school

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he Butch Harmon School of Golf is one of the most challenging experiences in Macau. After the 2009 experience at Ceasers Golf Macau, the Butch Harmon School of Golf will be back this year for signature clinics, professional clinics and also individual tuitions.

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With a very innovative teaching philosophy the school provides both indoor and outdoor practice areas with technological equipment that helps the student get a more concrete notion of their golfing skills. Since the instruction is individualized, it can work not only for accomplished players but also for amateurs, at any age or level of ability.

BUTCH HARMON´S NOTES FOR SECRET TIPS A GOLFER FOR CAESARS GOLF MACAU PHASE ONE

The course at Caesars Golf Macau Phase One is perfect for a relaxing day out due to it being relatively flat; however it offers golfers variety in the form of unexpectedly challenging holes, particularly Hole 12, its Par 3 Signature hole. Here are my tips for players on the lookout to side-step some of these surprises.

Hole #3

Par 4 – 470 yards This very long hole usually plays directly into the prevailing wind, with the entire left side skirted by water. It will require a well struck drive to avoid the two bunkers along the right of the fairway. The drive should ideally be aimed towards these bunkers to allow for right-to-left undulations to guide your ball back to the middle of the fairway.

This will leave a fairway wood or long iron shot to be carried over water to a slightly elevated green. It is important to choose the correct club for your approach as there is a large swale running through the middle of the green, making any mid-range putt very tough.

Hole #8

Par 4 – 400 yards

The teacher B

utch Harmon has been involved in the golf arena over 42 years. Harmon followed in his father’s footsteps by becoming an accomplished player on the US PGA Tour in the early 1970s. In 1971, his final year on the PGA Tour, Harmon won the BC Open.

Currently, Harmon is the President of Butch Harmon School of Golf in Las Vegas, Nevada, and he travels around the country playing in corporate and charity golf outings.

Harmon is a leading analyst for British Sky Broadcasting which covers the US Masters, US Open, US PGA Championship and the TOUR Championship. He was named the 1995 Sports Illustrated Teacher of the Year. Also voted Golf Digest’s Teacher of the Year in the United States on multiple occasions since 2002, he has been a teaching instructor to several US PGA Tour players, including Tiger Woods, Greg Norman, Davis Love, Darren Clarke, Fred Couples, Adam Scott and Justin Leonard.

Harmon’s students have combined for over 100 US PGA, European and Champions Tour victories while under his tutelage.

This hole offers beautiful views of Macau’s Cotai Entertainment District, and is a wonderful example of the simultaneous risks and rewards of golf. The more aggressive players will enjoy flirting with the dangers offered by fairway bunkers on both the left and right sides of the driving zone. The aggressive play should be followed up with a short iron or a wedge to enable a skilful approach to the very small obliquely-angled green. Any shot that misses the green is likely to end up in one of the three large bunkers surrounding it, offering more ‘danger zones’ for players.

Hole #12 Signature Hole of Caesars Golf Macau Par 3 – 211 yards

A tough yet straightforward hole, the tee shot presents the player with the 190-yard challenge of forcing the ball over a body of water to a deep and narrow, but relatively flat putting green. With Out Of Bounds running along the left side of the green that will catch most drawers, and a bunker to the right side of the green that will catch any shot that leaks to the right, club selection is a premium. Under or over clubbing will leave the golfer with a long putt of over 60 feet.

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GOLF TRENDS

FOR HER

SWINGING IN STYLE Golf is definitely in the swing of things right now and any self respecting golfer (or wannabe golfer) knows that you can’t show up in your ripped jeans and baby tee.

Serious golf clothes can be a bit drab, but occasionally you can find some gems.

Lija Style is a women’s golf wear line that has recognized a need in the women’s golf market for a more fashion driven line of apparel that can meet the increased demands of a younger, more style-conscious demographic that are starting to play golf.

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Chanel The bag and the golf clubs are proof that Chanel is a true lifestyle brand.

Whatever the sport, whomever you’re competing with, whatever course you are on, Chanel will definitely be the best choice!

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GOLF TRENDS

FOR HIM Humm...it makes you wonder!

What could go better with your game? How about driving the first proportionally correct golf car styled after the famous gas-guzzler? Features include 15-inch custom-built wheels, an aluminum I-beam chassis, a genuine Hummer chrome grill, headlights, fog lights, and turn signals for when you detour off the fairway. Plus it will seat your entire foursome. You can add options like a DVD entertainment system, running boards or leather interior.

Must-have-shirt

The final touch

Antigua Golf is a top leading designer of apparel and accessories in the golf industry. Antigua offers an assortment of golf apparel that is specifically designed to help make you more comfortable on the golf course.

If you’re looking for a wind shirt, rain suit, polo, or something to keep you dry, Antigua golf has it.

When Tiger Woods appeared on the course with this Bally bag it immediately became “the item to have”. For us of course, this is not the main reason to buy it, because it looks absolutely amazing regardless of who’s carrying it!

In Any Colour You Want FootJoy says “If you can’t find the exact style to suit your unique personality, use your imagination to visualize more than 2.5 million style combinations available through the MyJoys program!”. So use your imagination and choose the ones that you fit your favorite color combination.

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SEX AND GOLF

2010 Ryder Cup Both European and American teams will be back this year in Wales for the Celtic Manor traditional competition. If you have tickets to watch it on location, make sure to have the right outfit designed by Ashworth. If you don’t have tickets and you’ll be watching it on TV in Macau, make sure to have it anyway!

You can leave you’re cap on Whether in black, white or blue, the Titleist cap is sure to match any golf course in the world. And be assured that if it looks good on the pros, it will suit you perfectly!

Vintage Look Nothing will match your golf fashion style better than these classic vintage shades from Dunhill. All Dunhill designs are so classic and gentlemanly, but these ones are sexy and beautiful beyond imagination. And yes, they’re our favourites!

Some Reasons Why Golf Is Better Than Sex....

You can have a golf calendar on your wall at the office, tell golf jokes and invite co- workers to golf with you without getting sued for harassment.

If you want to watch golf on television, you don’t have to subscribe to a premium cable channel.

You don’t have to sneak your golf magazines into the house.

If you are having trouble with golf, it is perfectly acceptable to pay a professional to show you how to improve your technique.

The Ten Commandments don’t say anything about golf.

If your partner takes pictures or videotapes of you golfing, you don’t have to worry about them showing up on the Internet when you become famous.

Attitude and Style Although it comes in a most classic navy blue this Cutter and Buck is really an eyecatchy suggestion. Edgy and energetic, the golf apparel from Cutter and Buck combines a modern attitude and the best performance fabrics.

Your golf partner won’t keep asking questions about other partners you’ve golfed with.

It’s perfectly respectable to play golf with a total stranger.

When you see a really good golfer, you don’t have to feel guilty about imagining the two of you playing golf together.

Stripes and more stripes Paul & Shark never goes wrong. This stripe tee-shirt it’s not only classical and elegant, but also daring and fun to wear for its colour match choices.

If your regular golf partner isn’t available, he/she won’t object if you play golf with someone else.

You don’t have to go to a sleazy shop in a seedy neighbourhood to buy golf stuff.

Nobody expects you to promise to play golf with just one partner for the rest of your life.

Your golf partner will never say, “What? We just played golf last week! Is that all you ever think about?”

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Fashion

Grand Canal Shoppes, The Venetian Macao 5cm Abiste agnès b.

Aigle Aimer Alqvimia Anteprima Apothecary Armani Exchange Arté Madrid Artini Ashworth Autore b+ab Bauhaus Belle Blancpain Blush Boucheron Boutique di Gondola Breil Brooks Brothers Butani BVLGARI Canudilo Caran d’Ache Carat Carl F. Bucherer Century Chai CHARRIOL Chevignon Choi Wai Jewellery Chopard Cirque du Soleil Boutique City Chain CK Calvin Klein Clarins Club Monaco Coach Corona Crocodile Damiani Davidoff Deicae Demandor Derain DG Lifestyle Store Diesel Dilys’ Don Gilato Dooney & Bourke Ecco Edelweiss Jewellery Elle Jewellery Elov Emphasis Jewellery Emporio Armani Emporio di Gondola Enzo EQ:IQ Expressions Fabio Caviglia Fables Fancl Fila Fiorucci Florsheim Folli Follie Fossil Francesco Biasia Franck Muller French Connection Furla Geox; Joy & Peace girls talk Giviea Glashütte Original Godiva Göessele Grossé Guess Accessory Guess Jeans H&B Medicine Shop Hatta Fine Jewelry Hearts On Fire Herborist Hogan Home of Swallows Hugo Boss Orange Label i.t innée

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Izod Izzue Jaquet Droz JC Versace Jean Scott Jipi Japa Just Gold Kaltendin Kego Kilara & Ceu Killah Lacoste Lancel Laneige Le Saunda Levi’s Links of London LLadró L’Occitane Luisa Cerano Luk Fook Jewellery Lush M Missoni Malo Clinic & Spa Manchester United Mango Marisfrolg Marjorie Bertagne Marlboro Classics Massimo Dutti Maud Frizon Paris Max&Co. Mercato Michel René Michele Mikimoto Millie’s Mirabell Miss Sixty Mocca Moiselle Montagut Montblanc Moreline Murano Murphy & Nye NaRaYa Natural Beauty Mix Nautica Next Nike Nine West Normana O’Che 1867 Omega Optica Boutique Optica Fashion Optical 88 Osim Oto Outdoor Fashion Passion Play Patchi Paul & Shark Piaget Piquadro Promod Q’ggle Rado Raffles Rayure Replay Rich Jade Richard Mille Rimowa Rockport S. Culture S.T. Dupont Samsonite Shiseido Sisley Sisley Paris Soft & Intimate Sparkling Color ST GE Staccato Stefanel Stella Luna Stone Market Sulwhasoo Swarovski Swatch Tasaki Thomas Sabo Tie Rack / Bric’s

2423 2613 2523b 2001 2433 2102a 2113 2017a 2402a 2306 2306a 2508a/ 2403 2701 2409 2210a 2425 2608a 2013c 2608 2622 2018 2636a 2630 3015 2215 2321 2619 2648 2509 2442 2650 2623 2508 2703 2621 2011 2405 2658 2438 2322 2607 2525a 2002 2639 2652 2702 2212 2128 2709 2211 2432a 2605 1020 2426c 2003a 1010 2005a 2019 2106 2120 2523a 2300b 2111a 2007 2013 2023b 2316 2216 2006a 2119b 2606a 2427 2117 1002 2708 2203 2300 1022 2527a 2017 2310 2630a 2527 K9 2612a 2319a 2421 2026 2402b 2617 2415 2426a 2101 2426b 2435

Tiffany & Co. TISSOT Tommy Hilfiger Tonino Lamborghini Tourneau Toywatch Triple Five Soul Triumph and Hom TSL Tumi U-Boat United Colors of Benetton Valente Venilla Suite Verri Vertu Vilebrequin What For Wolford Y Nan Yes Zara Zydo

2003 2411 2710 2646a 1003 2417 2436 2220 2022 2707 2426 2308 1021 2600 2703a 2006b 2623a 2205 2626 2625 2023 2313 2013b

DFS Galleria, The Four Seasons

Armani Bally Burberry Cartier Celine Chanel Chaumet Chloe Chopard Clinique Debeers Dior Dior (Beauty Zone) Dunhill Estee Lauder Fendi Folli Follie Gucci Hermes IWC Jurlique Kiehl’s The City of Dreams Lancome L’Occitane Level 1, The Boulevard Alfred Dunhill Loewe Level 1, The Boulevard Bally Louis Vuitton Level 1, The Boulevard Burberry Omega Level 2, The Boulevard Cartier Prada Level 2, The Boulevard Chopard Ralph Lauren Level 2, The Boulevard Chow Tai Fook Salvatore Ferragamo Level 1, The Boulevard Coach Shiseido Level 2, The Boulevard Hublot Swarovski Level 1, The Boulevard Hugo Boss Tag Heuer Level 1 and 2, The Boulevard Tod’s i TO i Level 1, The Boulevard Insider Tumi Level 2, The Boulevard IWC Vacheron Constatin Level 1, The Boulevard LeSportsac Van Cleef & Arpels Level 2, The Boulevard Longines Level 2, The Boulevard PENACHE Shoppes at Four Seasons Level 1, The Boulevard Ralph Lauren Level 1, Hard Rock Hotel Rock Shop Abiste Level 1, The Boulevard Salvatore Ferragamo Alain Mikli Level 1, The Boulevard Swarovski Altea Milano Level 2, The Boulevard Tag Heuer Aquascutum Level 1, The Boulevard The Bubble Shop Armani Collezioni Level 2, The Boulevard Timeless Audemars Piguet Level 1, The Boulevard Tumi Autore Level 1, The Boulevard Valentino Bottega Veneta Level 1, The Boulevard Vivienne Westwood Brioni Butani The Esplanade, Wynn Macau Canali Cerruti 1881 16 Alfred Dunhill Chic Elegance 3 Bvlgari Coach 5 Chanel Cole Haan 12 Christian Dior David Yurman 17 Ermenegildo Zegna Diamond SA 10 Fendi Diane Von Furstenberg 21 Ferrari Dilys’ 8 Giorgio Armani Ed Hardy / Christian Audigier 25 Gucci Gieves & Hawkes 18 Hermes Giuseppe Zanotti 23 Hugo Boss Givenchy 6 Louis Vuitton GoldVish S.A. 11 Miu Miu Guess by Marciano 4 Cigar Imporium H&B Medicine Shop 9 Piaget Hugo Boss 27 Prada Jimmy Choo 13 Sundries Juicy Couture 4 The Signature Shop Kate Spade 7 Tiffany & Co. Kent & Curwen 24 Van Cleef & Arpels Kenzo 26 Versace Kwanpen 22 Vertu La Perla Lancel Grand Lapa Hotel Mango Tree Marc by Marc Jacobs 13 Bally Marni 1 Burberry Max Mara 12 Cartier On Pedder 11 Christian Dior Optica Privé 17 Cigar Imporium Renaissance Arts Gallery 10 Alfred Dunhill Roberto Cavalli Class 9 Emporio Armani and Cesare Paciotti 2 Ermenegildo Zegna Samsonite Black Label 16 Florinda Jewelry Shamwari South African Diamonds 8 Hermes Shanghai Tang Hugo Boss Orange Label 5 Shiatzy Chen 4&5 Louis Vuitton Shimansky 6 Omega St. John 7 Salvatore Ferragamo Stefano Ricci 15 Valentino Stuart Weitzman tsesay Valentino Versace

1112 1123 1110 1125 1109 1117 1101/41 1123a 1101/43 1101/22 1101/42 1120 1101/23 1106 1101/20 1102 1101/37 1108 1116 1101/44 1101/26 1101/21 1101/28 1101/25 1121 1115 1101/45 1126 1111 1113 1101/29 1101/38 1101/33 1105 1101/31 1101/39 1101/40

1208 1212 2835b 2836 2805 & 2806 1130 & 1131 1129 2845 2802 1223 2850 2801a 1207 2856 2812 2801 2816 2846 1211 2820 2835a 2847 2851 1226 2858 1215 2807 2838 2859 2829 2837 2840 2817 2849 2857 2813 2831 2841 2808 2848 2823 1213 2800 2825 2818 2839 2833 2821 & 2822 2809 1128 2850a 2832 2842 2853 & 2855

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Gaming

Eyes on Japan

of a Japanese casino liberalisation after share prices at Korean casino operators Paradise and Kangwon Land tumbled last month.

“We believe casino introduction in Japan is almost impossible, and even if it becomes possible, it will be a very long time from now,” Han said.

Casinos are strictly prohibited in Japan, and Han argued it would take “drastic legislative measures” to legalise them, whether it was through revisions or enacting a special law.

“Without any circumstantial factors that may cause a change of attitude on the part of the pachinko industry, the proposed draft to introduce casinos in Japan is also highly likely to founder,” he added.

Han suggested that the current Democratic Party of Japan (DPJ) government lacked the political will to push through the legislation in the face of pachinko opposition.

Political uncertainty

Japan took a tentative step towards legalising casinos last month when the casino advisory group released a proposed draft bill that would license at least two casinos, although some analysts concluded it was “almost impossible” the proposals would be accepted

BY DANIEL MACADAM*

tock market rumours circulated last month to the effect that a bill allowing casinos to open in Japan had been put before the country’s parliamentary assembly (National Diet), and that long-delayed casino legislation could now be just around the corner.

Instead the proposals were the cross-party casino advisory group’s provisional outline for a casino act, and not a formal submission to parliament.

Toru Mihara, a gaming expert at the Osaka University of Commerce involved in the group’s efforts, told GamblingCompliance that the draft was “still a skeleton one” released to kickstart debate.

“We still anticipate months of discussion with stakeholders and government officials which commence from September onward,” Mihara said.

The aim after that, he said, was for

S

SEPTEMBER 2010

the working group to have draft legislation ready for the next National Diet session due to start in February 2011.

What’s on the table Under the proposals, two sites would initially be licensed by the government and, depending on their success, a maximum of eight other sites will be considered.

The draft bill also suggested a twophase selection process, first mooted in 2007, in which the state will set the basic selection procedure for casino sites and local governments will choose the operators.

But Ikhee Han, an analyst at Korean-based Hyundai Securities, said in a research note that legal roadblocks and opposition from the pachinko industry meant the proposed legislation was highly unlikely to succeed.

Han also played down the rumours

Kazuaki Sasaki, an academic at Nihon University in Tokyo, suggested that pachinko opposition was not as strong as before, though, and said that the political uncertainty surrounding the government was more of a problem.

Sasaki told GamblingCompliance that, although casinos would probably be legalised in the near future, it was impossible it would happen this year because of the “very unstable” political situation.

Since the DPJ was elected last year, after nearly 50 years out of power, it has been beset with problems. The party lost majority control of parliament’s upper house in July’s elections, and Naoto Kan, who took over as Prime Minister in June, faces a re-election contest for the party leadership on September 14.

Despite the upper house results, Bill Lerner at Union Gaming said in a research note in July that a casino measure continued to make progress.

“As we believe there is bipartisan support in parliament for gaming expansion, it does not appear that the DPJ would need to control both the upper and lower houses of parliament for gaming expansion to become a reality.

“Further we think that public consensus already in favour of casinos could strengthen if the populous believes gaming expansion is a viable alternative to a consumption tax,” Lerner said. *Exclusive GamblingCompliance/Macau Business

Retail

97

“We don’t want to compete on price,” he said, instead emphasising customer service. The brand boutiques are an example of that strategy. Each has a watch technician, to provide fast and personalised assistance.

Double-digit growth

Perfect timing With luxury retail sales expanding at double-digit rates, Omega sees service as the path to further boost sales at its expanding chain of boutiques wiss luxury watchmaker Omega wants in on the remarkable growth of the luxury retail sector in Macau. The Swatch Group affiliate company opened another flagship store in the territory late last month, in the City of Dreams complex.

Since opening its first shop in Macau in 2004, the brand now has five flagship stores and plans to continue expanding.

“Based on the potential of Macau market, which relies very much on Chinese tourists, we are planning to open some more boutiques in Macau, at selected locations,” said Jimmy Mak, vicepresident of Omega for Macau, Hong Kong and Taiwan.

“We are being approached by some shopping malls, to see whether we are interested to open. We are doing some market analysis. I see huge potential for us to do more business in Macau.”

Although bullish, the watchmaker has no target in terms of the number of stores it wants to operate in Macau. “We don’t want to over-distribute, there is no point in that,” he said.

Besides developing its boutiques, Omega is not looking to broaden distribution channels in Macau.

S

“We are planning to open some more boutiques in Macau, at selected locations,” says Jimmy Mak, vice-president of Omega for Macau

Watch sales have been expanding strongly in Macau over the past few years. The value of watches, clocks and jewellery retail sales globally increased by 50 percent year-on-year in the second quarter to MOP 1.64 billion (US$205 million).

Although he won’t disclose the bottom line on Omega’s performance in Macau, Mr Mak says the company is enjoying a similar upward trend locally.

“So far for 2010, the Macau market has been showing a two-digit growth as of July compared with the same period last year,” he said. “I am looking for the same kind of growth rate for 2011.”

Not fussed by fakes Counterfeit luxury goods, easily accessible just across the border, always pose a potential threat to legitimate retail operations in Macau. Mr Mak admits that fakes can hurt the brand but he is not afraid customers will buy replicas instead of a real Omega.

“Every successful brand is facing the same problem,” he said. “But if we position our brand in the right way, I think these [counterfeit products] are less important for us, since we are targeting the top-tier customers.”

The consumers that buy counterfeit watches “are not our target customers anyway, they are not looking for quality products,” he said. “What we care about is brand positioning and customer service. Naturally, business will come.”

Part of Omega’s success in Macau is related with the brand’s strong image on the mainland, where the Swiss luxury watchmaker made its first appearance more than a century ago. The company won a popularity boost by recruiting movie star Zhang Ziyi as a brand ambassador in 2008.

“Chinese customers rely on the influence of famous artists,” said Mr Mak. “So, when choosing some of the international stars [to become brand ambassadors], we also look for Chinese artists of international level, like Zhang Ziyi.

She is Chinese but she is also an international star.”

SEPTEMBER 2010

Tourism

Passenger power The Civil Aviation Authority pushes ahead with new regulations granting minimum rights to passengers stranded by flight delays or cancellations; the airlines are not smiling ery soon passengers may be compensated if their flights leaving Macau are cancelled or delayed for lengthy periods. The Civil Aviation Authority has drafted new regulations that it says increase protection for air passengers.

The draft regulations are now at a one-month consultation stage. The authority expects the draft regulations to be enacted next year and says they will “further enhance the quality of service of Macau’s aviation and consolidate Macau’s image as a tourism city.”

The flight cancellation rate at the Macau International Airport last year was 8.8 percent or 1,711 flights, according to official data. From January to July this year, the rate was 4.9 percent or 504 flights. There were 20 complaints from stranded passengers in 2008, 26 last year and 13 in the first seven months of this year.

The new regulations spell out a passenger’s minimum rights when they are prevented from boarding or when a flight is cancelled or delayed (see table). The proposals also say that if a flight lands at an airport other than its original destina-

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SEPTEMBER 2010

tion, the airline should pay for the cost of the transfer to the original destination.

Penalties for breaching the regulations range from MOP10,000 (US$1,250) to MOP350,000. The rules apply to all flights departing Macau. They also cover incoming flights, if operated by airlines registered in the SAR and if the passengers were neither assisted nor compensated at their point of origin.

The regulations aim to provide immediate and appropriate assistance to passengers, the AACM says.

Beyond control The draft laws have been criticised by the aviation sector. “It will have an impact on airlines,” said the head of

Photo: Luís Almoster | mspagency.org

98

ground operations for Tiger Airways, Daniel Soh. “It will hurt us badly,” said the general manager of TransAsia Airways, Mike Lam, who called for the cancellation notification period to be reduced to 72 hours from 15 days.

Some airlines point out that most flight delays are caused by factors beyond their control such as the weather and air traffic controllers.

António Rato, an adviser to Macau International Airport, worries that the new regulations might discourage foreign airlines from flying to Macau, since neighbouring airports like Shenzhen and Hong Kong don’t impose that kind of compensations to passengers. “There

“There is a real risk of losing airlines while trying to protect passengers,” warns António Rato, an adviser to Macau International Airport. “The intentions are good but the result could be bad. In the end passengers will lose out because they will no longer be able to fly to Macau”

99 is a real risk of losing airlines while trying to protect passengers,” he warned.

“The intentions are good but the result could be bad. In the end passengers will lose out because they will no longer be able to fly to Macau.”

The lack of available hotel rooms in Macau, especially during holidays in the mainland, is another concern for the airlines, said Air Asia Macau’s station manager Angus Ng. The Civil Aviation Authority has defended the proposals, with President Simon Chan Weng Hong saying the new regulations would ultimately benefit both passengers and airlines. He said some local and foreign airlines already had policies that in some cases offered passengers better protection than the new regulations.

The authority says it will study appropriate amendments so regulations protect passengers and are practical for the airlines.

Air Macau’s delay rate over 30 percent L

ocal flag carrier Air Macau says that more than 30 percent of the company’s flights suffer from delays.

However, its cancellation rate is very low, around one flight per month, it adds.

According to the airline’s executive committee president, Zheng Yan, that is mostly due to air traffic control problems, mainly in Mainland China.

Other reasons are internal, namely due to capacity and maintenance problems, he noted.

Although the company has such a high delay rate, Mr Zheng assured that Air Macau would comply with the new regulations granting minimum rights to passengers stranded by flight delays or cancellations.

Meanwhile, Mr Zheng stressed that Air Macau is poised to post a profit this year, following years of losses. Air Macau lost MOP257 million (US$32 million) in 2009, down almost 40 percent on the MOP416 million it lost in 2008.

The company is preparing to open new routes to Mainland China, while increasing the number of flights to Thailand, Japan and South Korea.

The proposed regulations Denied boarding

Flight cancellation

Flight delay

1. The airline should seek passengers willing to accept a change in their bookings in return for benefits.

2. If the number of volunteers is insufficient the airline must: - Reimburse the full retail price of the ticket, for the part or parts of the journey not made, and for the part or parts already made if the flight no longer serves any purpose in relation to the passenger’s original travel plan and, when relevant, arrange a return flight to the first point of departure, at the earliest opportunity.

- Provide meals and refreshments on par to the time the passenger has waited.

- Provide hotel accommodation if the passenger needs to stay more than one night.

- Provide transport between the airport and the hotel.

- Allow the passenger two free phone calls, telexes, faxes or email access.

Unless the airline informs the passenger of the cancellation of a flight 15 days before departure time, the airline must: - Reimburse the full retail price of the ticket, for the part or parts of the journey not made, and for the part or parts already made if the flight no longer serves any purpose in relation to the passenger’s original travel plan and, when relevant, arrange a return flight to the first point of departure, at the earliest opportunity.

- Provide meals and refreshments on par to the time the passenger has waited.

- Provide hotel accommodation if the passenger needs to stay more than one night.

- Provide transport between the airport and the hotel.

- Allow the passenger two free phone calls, telexes, faxes or email access.

If a flight is delayed for more than 30 minutes, the airline must: - Tell the passenger why the delay occurred.

If a flight is delayed for more than three hours, the airline must: - Provide meals and refreshments on par to the time the passenger has waited.

If a flight is delayed for more than five hours, the airline must: 1. Offer to reimburse the full retail price of the ticket, for the part or parts of the journey not made, and for the part or parts already made if the flight no longer serves any purpose in relation to the passenger’s original travel plan and, when relevant, arrange a return flight to the first point of departure, at the earliest opportunity.

2. If the passenger declines this offer, and the delay stretches beyond eight hours into an overnight stay, the airline must provide: - Hotel accommodation.

- Transport between the airport and hotel.

- Two free phone calls, telexes, faxes or email access.

SEPTEMBER 2010

100 100

Transport

The government grants bus company TCM a role in the revamped public transport system – through a direct contract – to settle a legal battle with the company

BY KAHON CHAN

he government has awarded one of the five route groups in the reorganised public bus system to Sociedade de Transportes Colectivos de Macau or TCM, in return for the company dropping a series of lawsuits against it.

The Franco-Macau joint venture company that was supposed to get the routes now granted to TCM, Sociedade de Transportes Públicos Reolian, said it has accepted the “political decision” and will now focus on its future. The third bus operator, Transportes Urbanos de Macau (Transmac) said it understood the need to avoid the social cost of further delaying the start of the new bus system.

Some lawmakers have backed the government’s decision but pro-democracy legislator António Ng Kuok Cheong asked if it was truly in the public interest.

T

Dividing the pot TCM was disqualified from bidding in the reorganised bus system because it was allegedly four minutes late in handing

in its proposal. The Court of Second Instance ruled in favour of the government’s decision in July, but TCM appealed, delaying the roll-out of the new service as both parties sought an out-of-court settlement.

An agreement was reached between all parties on August 13. In exchange for TCM dropping all lawsuits that contest the government’s handling of the tendering process, TCM was handed part of the service.

Reolian will get the two most desirable groups of routes but its third group was awarded directly to TCM. Transmac has two route groups, even though its bids were considerably higher than Reolian’s. Transmac managing director Chan Hio Ieong said the company expected a sharp increase in drivers’ wages and needed to fund its employees’ pension scheme.

To get its routes, TCM had to make a bid slightly less than Reolian’s and guarantee a superior service. TCM made a MOP811 million (US$101 million) bid to serve 13 routes.

A F UR-MINUTE DISPUTE 2009

2010

Sept 23 The public bus system open tender starts. The bus routes are split into five groups.

Nov 24 The tender collection ends at 5pm. TCM allegedly delivers its proposal four minutes late.

SEPTEMBER 2010

Nov 26 The Transport Bureau declines to accept TCM’s proposal because, it says, it was late. The Transmac and Reolian proposals are accepted. TCM files an administrative appeal to the chief executive.

Jan 5 The Transport Bureau confirms that TCM’s appeal to the chief executive has been dismissed.

Jan 18 The tender assessment committee finishes evaluating the two accepted proposals.

Reolian is given three groups

of routes and Transmac is given two.

Jan 26 The Transport Bureau stops all work on the tender process because TCM asks the Court of Second Instance to suspend the chief executive’s decision to reject its proposal.

101

Win some, lose some TCM GAIN: Stays in business without the risk of losing its legal appeal LOSS: Will eventually shrink; its bid for the routes it was awarded was based on non-operating factors TCM buses will serve 13 routes under its new contract.

“After serious thinking and negotiation, TCM decided to abandon any judicial appeal and accept the government’s proposal,” the company said.

TCM said its workforce would not undergo any significant changes when the new public bus system starts. It will be the smallest bus operator in Macau.

Transmac GAIN: Of the three bus operators, it is the least affected by the new agreement LOSS: Because of the court case between the government and TCM, it delayed the acquisition of new buses it needs to comply with new requirements; some of its present buses, which are still new, will be underutilised in the future because they do not meet the new requirements.

The government will pay around MOP4.7 billion to the three operators to run their services for seven years. The fares will go to the government and because no fare increases are scheduled, revenue is expected to cover only half of the cost.

Compromise deal Regulations in the public bus service tender allow the government to award a contract directly if it is in the public interest. Transport Bureau director Wong Wan said the direct award to TCM was in the public interest because it would eliminate uncertainty about when the new bus system would start, preserve the job security of 300 TCM employees and improve the quality of the new system. Mr Wong is adamant that the settlement with TCM is not meant to circumvent the courts.

When Transmac and Reolian were first

Transmac buses will serve 21 routes, 15 fewer than at present. However, the size of its operations and workforce will be little changed because of higher frequencies on all routes.

Unlike Reolian, it does not lose anything from the deal between TCM and the government.

Reolian GAIN: It will start operating and getting revenue earlier LOSS: It is deprived of 13 routes that will now be served by TCM Buses run by Reolian, a joint venture between France’s Veolia Transportation and Macau’s H. Nolasco, will serve 24 routes.

Cedric Rigaud, an executive of Veolia and the future general manager of Reolian, said the company hoped to start operating sooner than it had expected.

“Of course, we would prefer to have three groups of routes, but this is a political decision and we respect the government,” Mr Rigaud said, “so even if we lost one section, we are happy to have two and to become one of the main operators.”

He is confident the company will find the 400 bus drivers it needs to start its services.

March 3 The Court of Second Instance rules against TCM. The company appeals.

starts negotiating with TCM, while consulting Reolian and Transmac.

May 7 The chief executive authorises the Transport Bureau to award one group of routes direct to TCM in an effort to settle the dispute. The bureau

May 14 The Court of Final Appeal rules in favour of TCM, suspending the chief executive’s rejection of the company’s proposal.

July 29 The Court of Second Instance decides that the government acted correctly in rejecting TCM’s proposals.

Aug 13 The Transport Bureau has a meeting with TCM, Transmac and Reolian and all agree to TCM being awarded one group of bus routes.

Aug 12 TCM appeals against the Court of Second Instance’s decision.

Aug 19 The Transport Bureau announces the deal and TCM agrees to drop all legal proceedings.

SEPTEMBER 2010

102

Transport

informed of the deal, Mr Wong said the bureau received some “negative reactions”. But with court cases potentially pushing back the launch of the new bus system – scheduled for October – by more than 15 months, Reolian accepted the deal in view of the cost of sustaining itself without revenue for more than a year. The company has made no comment.

The new bus system could potentially start as soon as the middle of next

‘‘If the court had approved TCM’s appeal, the Transport Bureau would have had a great excuse to grant the company the contract, to push the new system ahead. But that didn’t happen,’’ says legislator António Ng Kuok Cheong

SEPTEMBER 2010

year. Until then, the two current operators, TCM and Transmac, will have their current contracts extended.

Bids for each route group

Losing interest

Reolian – MOP832 million Transmac – MOP1.163 billion*

Legislator António Ng Kuok Cheong doubts that the direct award to TCM is the best solution or that it puts the public interest first. Mr Ng said the court had already backed the government, so an agreement with the company did not appear to be necessary.

“If the court had approved TCM’s appeal, the Transport Bureau would have had a great excuse to grant the company the contract, to push the new system ahead. But that didn’t happen,” he said.

But other members of the Legislative Assembly support the deal. Ung Choi Kun said while it was totally appropriate for disputes to be settled in court, the proceedings had been contrary to the best interests of the public, who had suffered poor bus services for a long time.

Legislator Kwan Tsui Hang also backed the deal, because she believes nothing similar will happen in future tenders for public services.

Group One

Group Two

Reolian – MOP838 million* Transmac – MOP1.19 billion

Group Three

Reolian – MOP813 million Transmac – MOP1.08 billion TCM – MOP811 million**

Group Four

Reolian – MOP773 million Transmac – MOP1.16 billion*

Group Five

Reolian – MOP801 million* Transmac – MOP1.17 billion Note: * Denotes winning bid ** The bids made in the open tender

by TCM for each group of bus routes were never made public because its proposal was never officially opened. The value of its successful bid for group three was arrived at by negotiation.

103 ORVILLE SCHELL DIRECTOR OF THE CENTRE ON US-CHINA RELATIONS AT THE ASIA SOCIETY

The China investment challenge THE US HAS NOT YET SHOWN ITSELF TO BE A PARTICULARLY HOSPITABLE ENVIRONMENT FOR CHINESE INVESTMENTS hina now sits atop US$2.4 trillion in foreign-exchange reserves, the largest stockpile of any country in the world (Japan stands in second place with US$1 trillion). But this bounty comes with one big headache: where should Chinese Communist Party officials park all that money?

International bankers estimate that roughly two-thirds of Chinese reserves have been invested in dollar assets. In other words, China owns a huge chunk of America’s ballooning debt. Chinese reserves invested in these conservative financial instruments are relatively safe, but they yield little return. They have, however, helped support China’s economy by allowing Americans to run up consumer debt by buying more Chinese goods than they rightfully need.

A moment of truth is looming for both sides of this codependent, and ultimately dysfunctional, economic relationship.

First, there are limits to how many trillions of dollars China can, and should, put into US Treasury bills. After all, should the dollar depreciate, China does not want to have too many eggs in the US basket. Investors should diversify their risk, and so must China.

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Is the euro an option?

But with so much capital, the options are limited. Until the euro weakened recently, Chinese bankers had been buying more euro-denominated assets, no doubt recognizing that, despite the frailty of the Euro zone economy, Chinese exporters also need European consumers to keep buying their goods. But the reality is that neither the euro nor the yen is capable of soaking up China’s growing foreign-exchange reserves.

It is hardly surprising, then, that Chinese officials have begun to seek more diverse and profitable investment possibilities worldwide. While we have become familiar with China’s ardent interest in natural resources such as oil, coal, steel, copper, and soybeans, we are far less acquainted with other kinds of Chinese investments, including outright acquisitions of foreign companies.

Here the US has not yet shown itself to be a particularly hospitable environment for Chinese investments. This has been especially true when Chinese state-owned enterprises (SOEs) have aspired to buy, or buy into, iconic US corporations that have a blush of national-security significance about them.

The wrong foot Things got off to a poor start in 2005, when the China National Off-Shore Oil Corporation (CNOOC) tried to buy Unocal. Even though almost all of the oil produced by Unocal would have ended up on world markets rather than back in China, the US Congress’s skittishness assured that Unocal was sold to homegrown Chevron.

Although Chinese investors have since made numerous lower-visibility plays in US markets, the failed Unocal deal left a legacy of bitterness. So it is hardly surprising that gun-shy (and miffed) Chinese investors are wary about making further major

efforts in the US. Huawei’s recent failed bids for 2Wire and Motorola will only have rekindled this bitterness.

Indeed, a case similar to Unocal arose this summer. The Anshan Iron and Steel Group, a Chinese SOE, tried to buy a 20 percent interest in the Mississippi-based Steel Development in the hope of setting up a re-bar plant in the US. News of the pending deal caused 50 Congressional Representatives from the US steel caucus to write a letter to Treasury Secretary Timothy Geithner calling for an investigation of the threat the deal posed to US national security and American jobs.

A trust issue When it comes to China, the US does, of course, have legitimate reasons to worry about national-security issues. It was precisely to assess the impact of deals with countries like China on national security that Congress established the Committee on Foreign Investment in the US. Even though relations with the US have improved, the People’s Republic is far from being trusted. Indeed, it is still unclear where China’s amazing evolution will ultimately lead, so it would be naïve for American leaders to assume that China’s intentions will always be friendly and constructive, or that the two countries are inevitably destined to grow closer.

Nonetheless, this most recent spurning of Chinese efforts to invest in the US comes at a time when capital-poor and job-scarce America (where unemployment is over 10 percent) could truly benefit from more receptivity to investment from capital-rich China.

Consider a few facts. According to ‘The Wall Street Journal’, since December 2007, the US has lost 16 percent of its manufacturing jobs (many to China), leaving it with the lowest employment in this sector since before World War II. Of those workers still in the private sector, almost 5 percent, or 5.5 million, are employed by global companies whose headquarters are abroad. These same companies not only pay higher salaries than their American counterparts, but account for 11.3 percent of capital investment in the US and provide 14.8% of its privatesector R&D. Given this, one might think the US government would be actively courting Chinese investment, not scaring it away unnecessarily. If American officials do not begin to recognize the realities of today’s globalised world, the US may unwittingly (and self-destructively) find itself cut off from the kinds of new foreign investment flows that are sorely needed to revitalize its manufacturing and infrastructure sectors.

The bitter new reality is that the US and “old Europe” have recently edged closer to becoming “developing countries.”

Indeed, it may be a painful recognition, but America’s share of worldwide foreign direct investment is now half of what it was two decades ago. If the Obama administration and EU officials cannot figure out the proper mix between economic engagement and protecting national security, investment capital from China will go elsewhere. That is a strategy that will leave the US and the EU weaker, not stronger.

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Date: Event:

September

Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Website: E-mail:

14th – 17th

PATA Travel Mart 2010

The Venetian Macao-Resort-Hotel Macau Government Tourist Office | PATA Unit B1, 28th Floor, Siam Tower, 989 Rama I Road, Pathumwan, Bangkok 10330, Thailand (66) 2 658 2000 (66) 2 658 2010 membership@PATA.org www.pata.org th

14 – 17

th

8th European Conference on Gambling Studies and Policy Issues Radisson SAS Palais Hotel, Vienna, Austria European Association for the Study of Gambling NL - 1006 AD, Amsterdam, The Netherlands (31) 206896418 www.easg.org conference@easg.org 21st – 26th

The Freight Summit 2010

The Venetian Macao-Resort-Hotel Raueber & Walle Solutions Ltd. Unit 2601, 26th Floor China Insurance Group Building, 141 Des Voeux Road, Central, Hong Kong (63) 2892 0642 (63) 2892 4438 http://www.thefreightsummit.com gianne.beltran@rwsolutions.com 24th

Delta Inter Chamber Conference

Mandarin Oriental Macau Macau Business/ Delta Bridges/ WIP 9/F Flat H, Block C, Nam Fong Ind. Bld., 679 Av Dr Francisco Vieira Machado, Macau (853) 28331258 (853) 28331487 www.macaubusiness.com dice@macaubusiness.com 24th

The Women in Gaming Awards

Hilton Park Lane, London, UK Clever Duck Media Ltd. Suite 105 Park Plaza, Point South, Hayes Way, Cannock, WS12 2DB, UK (44) 0 1543 57 86 89 www.gaming-awards.com/wig colin@gaming-awards.com

October

Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

5th – 7th

Asian Casino & Gaming Congress

Marina Bay Sands, Singapore Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.asiangamingcongress.com/ info@BeaconEvents.com SEPTEMBER 2010

12th – 14th

Gaming Executive Summit Australasia 2010

Venue: Etihad Stadium, Melbourne, Australia Organiser: Terrapinn Address: Level 14, 111 Pacific Highway North, Sydney, NSW 2060, Australia Tel: (61) 2 9021 8808 Fax: (61) 2 9281 5517 Website: www.terrapinn.com/2010/ges E-mail: enquiry.au@terrapinn.com Date: Event:

15th

IV Macau Business Charity Golf Tournament (1st Round)

Venue: Caesars Golf Organiser: MB Events Address: 9/F Flat H, Block C, Nam Fong Ind. Bld., 679 Av Dr Francisco Vieira Machado, Macau Tel: (853) 28331258 Fax: (853) 28331487 Website: www.macaubusiness.com E-mail: golf@macaubusiness.com Date: Event:

18th – 20 th

2nd Annual Asian Casino Symposium

Venue: Macau, venue TBC Organiser: T.U.N Address: 16 Jalan Kilang Timor, Redhill Forum, #03-07, Singapore 159308 Tel: (65) 6376 3178 Fax: (65) 65 6271 9029 Website: www.tun.sg E-mail: swati@tun.sg Date: Event: Venue: Organiser: Address: Tel: fax: Website: E-mail:

18th – 20 th

CIO & CFO Asia Summits 2010

The Venetian Macao Marcus Evans 4 Battery Road, 13-01 Bank of China Building, Singapore 049908T (65) 6720 0620 (65) 6720 0621 www.asianciosummit.com | www.cfoasiasummit.com WebEnquiries@marcusevanscy.com

Date: Event:

19 th – 21st

Venue: Organiser: Address: Tel: Fax: Website: E-mail:

Bella Center, Copenhagen, Denmark Clarion Gaming Earls Court Exhibition Centre, London SW5 9TA, UK (44) 0 20 7370 8579 (44) 0 20 7370 8561 www.eigexpo.com yeemay.huang@clariongaming.com

Date: Event:

The 9th Annual European iGaming Congress and Expo

21st – 24th

15th Macau International Trade & Investment Fair (MIF)

Venue: The Venetian Macao-Resort-Hotel Organiser: Macau Trade and Investment Promotion Institute Address: Av. da Amizade No 918, Edf. World Trade Centre, 1-4 andar, Macau Tel: 853 2882 8711 Fax: 853 2882 8722 Website: www.mif.com.mo E-mail: info@mif.com.mo

TBA : To be advised |

: A Macau Business partner event

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If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: calendar@macaubusiness.com In the subject bar, type in “List me as an event”.

Date: Event:

22nd

IV Macau Business Charity Golf Tournament & Gala Dinner

Venue: MGCC/ Westin Resort Organiser: MB Events Address: 9/F Flat H, Block C, Nam Fong Ind. Bld., 679 Av Dr Francisco Vieira Machado, Macau Tel: (853) 28331258 Fax: (853) 28331487 Website: www.macaubusiness.com E-mail: golf@macaubusiness.com Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

28th – 30 th

Wine & Gourmet Asia 2010

The Venetian Macao-Resort-Hotel Koelnmesse Pte Ltd 152 Beach Road, #25-05 Gateway East, Singapore (65) 6500 6712 (65) 6294 8403 www.wineandgourmetasia.com l.how@koelnmesse.com.sg

November

Date: Event: Venue: Organiser: Address:

15th – 18th

Date: Event: Venue: Organiser: Address:

24 – 26th

Global Gaming Expo (G2E)

Las Vegas Convention Center AGA | Reed Expo 1299 Pennsylvania Ave., NW, Suite 1175, Washington, D.C. 20004 Tel: +1 203 840 5626 Fax: +1 203 840 9626 Website: www.globalgamingexpo.com E-mail: info@globalgamingexpo.com

6th International Hotel Expo

The Venetian Macao Coastal International Exhibition Co., Ltd. Room 2106, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Tel: (852) 2827 6766 Fax: (852) 2827 6870 Web Site: www.coastal.com.hk E-mail: general@coastal.com.hk SEPTEMBER 2010

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Security

Creeping concerns IInvestigations ti ti iinto t privacy i b breeches h are up by b one-third thi d nquiries into potential misuse of personal data by corporations and government-linked bodies leapt by 200 percent last year, to 602, with the Office for Personal Data Protection opening a record number of investigations.

There were 47 new cases investigated last year – a 34-percent rise year on year – and 29 were concluded (some still from 2008). Of those, three were found to have been truthfully presented.

Last year, for the first time, the of-

I

SEPTEMBER 2010

fice acted against a government agency, fining the Consumer Council MOP4,000 for releasing the details of an individual’s ID document.

Sharp rise The office’s annual report, released in late July, said casinos, finance institutions and telecommunications companies were among the worst offenders in 2009, accounting for more than one third of the 38 complaints levelled at

private-sector institutions. There were 17 complaints against individuals and 11 against the government.

Prior to last year, the office had opened just 57 cases since its foundation in 2007. In the short-term there will be no change in the way the office operates. The office “is poised to proceed along the lines of ‘awareness first, penalty second’ in its work,” says director Chan Hoi Fan. In its action against the Consum-

107 er Council, the office levied a MOP4,000 fine for misusing personal data. In September 2008, a woman alleged that the council had improperly provided copies of her ID document to another person, who then used her details to break the law.

In other actions last year, shops were obliged to take down surveillance camera pictures of suspected shoplifters. Although no fines were imposed, the office ruled that the practice was illegal.

Telecommunications company CTM was also investigated last year. The office advised the company to make it clearer to fixedline phone customers they can opt out of the Macau Residential White Pages without paying a fee.

Banks under scrutiny

The office is investigating whether any of the banks operating in Macau have sold personal data of customers to third parties

Currently, the Office for Personal Data Protection is following a Hong Kong case that saw the personal data of 600,000 customers sold by six Hong Kong banks to insurance companies.

A statement by the office said Macau residents were likely to be among those affected.

Last month, the Hong Kong Monetary Authority revealed that the banks had each sold lists of between 30,000 and 120,000 clients to insurers since 2005. Among the data sold were details of the customers’ savings and credit card accounts. HSBC, Standard Chartered Bank of China, DBS, Hang Seng Bank and Chong Hing Bank denied they were involved.

The office is investigating whether any of the banks operating in Macau have sold personal data of customers to third parties. The office has stressed that customers must carefully read the contracts regarding the handling of their personal data before signing them.

The Monetary Authority of Macau (AMCM) announced it has no information pointing to the sale of the personal data of customers by local banks. “We have been given to understand that such practices have not been applied to bank customers in Macau,” the AMCM stressed.

Hong Kong Octopus busted in data sale

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ong Kong e-payment operator Octopus Holdings has admitted selling the personal data of more than two million clients to six other companies for HK$44 million (MOP45 million).

The scandal and public outcry over the company’s violation of its customers’ privacy led to the resignation of chief executive Prudence Chan last month.

The sale of personal data for profit without the subject’s consent is not a crime in Hong Kong but the scale of the scandal and level of public concern has forced the authorities to amend the law.

The Octopus card is a stored-value card ubiquitous across Hong Kong to pay public transport fares, taxi charges, operate vending machines and pay for fast food, among others.

There are more than 17 million accounts in operation.

While its standard version can be bought anonymously for cash, there are other personalized versions offering a wider range of services.

Macau says ‘No’ to Google Street View

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acau’s Personal Data Protection Office last month announced that it will not allow Google to resume the image collecting activities in the territory for its Street View online services until the authorities find out if these activities breach the privacy law or not.

Google Greater China has made a request to the office, asking to resume the image collecting activities in September. The process would take four to six weeks.

Google promised that its data collecting cars would not collect WiFi data in the process, which has occurred before.

The office decided to turn down Google’s request since it is still investigating the legitimacy of the company’s image collecting activities.

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Security

BlackBerry ban unlikely Asian nations have gone to battle against securely encoded BlackBerry services but Macau says there’s little chance of a ban

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cess to BlackBerry servers for fear that BlackBerry devices can be used by terrorists and militants to communicate for purposes that threaten national security.

Similar discussions have been going on in countries with like concerns that are not apparent in Macau for the time being,” a spokesperson for the Bureau of Telecommunications Regulation told Macau Business.

“Yet, as a regulator, we will keep closely monitoring the global discussions about this issue to keep track of any potential triggers of irregularities brought about by BlackBerry smartphones, with consideration given to the balance of sovereign security concerns with citizens’ privacy.”

“In Macau, communications are legally protected in terms of privacy and inviolability. Except in circumstances where government or judicial departments within their jurisdictions are granted the right to access communication information, communications are secured,” stressed the spokesperson.

Super secure

he governments of several Asian countries have stressed concerns about BlackBerry services, with India being the latest on a list that includes Indonesia, the United Arab Emirates and Saudi Arabia. In Macau, the government says it is monitoring the situation but has no plans to request access to BlackBerry’s servers.

Research In Motion (RIM), the maker of the BlackBerry, is facing international criticism because some of its services use a proprietary encryption that does not allow intelligence agencies to tap email traffic in the name of national security.

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Typical smartphones route email through telecommunications carriers, who can intercept data. BlackBerry devices use a system that updates a user’s inbox by sending encrypted messages through company servers abroad, including the company’s home country, Canada. There were 46 million subscribers globally at the end of May, according to a June earnings statement.

Aware, not alarmed The government does not think that the impossibility of intercepting data poses a threat to the SAR’s security.

“Some countries have demanded ac-

“The BlackBerry security model is very different from other phones,” Kevin Mahaffey of mobile security fi rm Lookout told Agence FrancePresse. “It is end-to-end, and the encryption is so strong nobody knows how to monitor it.”

RIM has its own platform for corporate customers that encrypts BlackBerry email messages and routes them in a way that keeps the data inaccessible from even the telecommunications carriers that transmit them. However, people who use BlackBerry handsets as personal smartphones do not have this protection; it is available only to companies that have a contract with RIM. The company says the phone’s security is designed to let business users “transmit information wirelessly while also providing them with the necessary confidence that no one, including RIM, could access their data”.

The company also stresses that “the use of strong encryption in wireless technology is not unique to the BlackBerry platform. It is unquestionably an industry-wide matter.”

“They have such good security that I think some countries are uncomfortable with the fact that they can’t intercept it,” said Lookout chief executive John Hering.

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Arts & Culture

TUNED IN The Macao Orchestra opens its new season with a concert featuring violinist Sarah Chang.

The orchestra also has some intriguing new series up its sleeve

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Sarah Chang

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he Chinese believe that eight is the luckiest of numbers and the Macao Orchestra is hoping this will be the case as it opens its eighth concert season. The first performance, the Gala Concert, on September 19, features young Korean-American violinist Sarah Chang.

Ms Chang made her debut in Macau earlier this year but will return to the SAR this time to share the stage with the Macao Orchestra. She has appeared in the music capitals of Asia, Europe and the Americas and has collaborated with most major orchestras, including the New York Philharmonic, Philadelphia Orchestra, Chicago Symphony, Berlin Philharmonic and Vienna Philharmonic.

Born in Philadelphia to Korean parents, Ms Chang began her violin

The Macao Orchestra The Macao Orchestra is a professional ensemble, organised under the auspices of the Cultural Affairs Bureau. For more than 25 years, it has played an important role in the musical life of the city.

Since September 2003, the orchestra has included several concert series in every season, presenting both Western and Chinese masterpieces.

The orchestra’s roots go back to 1983, when Father à ureo de Castro of the St Pious X Academy of Music and a group of music lovers founded the Macao Chamber Orchestra. In 1984, it was incorporated into the Cultural Affairs Bureau and benefited from a succession of musical directors: Stuart Bonner, Doming Lam and Veiga Jardim.

After an overhaul in 1995, it became the only professional orchestra in Macau, under the baton of Yuan Fang.

In 2001, the Cultural Affairs Bureau expanded the chamber orchestra into a medium-size orchestra with double winds. It was renamed the Macao Orchestra in 2002 and En Shao became its first music director and principal conductor.

The arrival of first-rate musicians from all over the world in 2003 and the gala concert that September, marked a new chapter in the development of the orchestra. Another turning point was in September 2008, when Lu Jia took over as music director and principal conductor.

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Arts & Culture

studies at the age of four and enrolled in the Juilliard School of Music. Within a year she had performed with several orchestras in the Philadelphia area.

Since then, nothing has held her back.

Masterpieces In this new concert season, the Macao Orchestra’s music director and principal

conductor, Lu Jia, will present several masterpieces in conjunction with a number of acclaimed artists. Among them is the piano first prize winner in the 1986 International Tchaikovsky Competition, Barry Douglas. The Irish pianist will be playing at the seasonclosing concert on July 30.

However, until the end of the

Man with the baton Lu Jia, the Macao Orchestra’s music director and principal conductor since September 2008, has music running in his veins. Born into a musical family in Shanghai, Mr Lu began learning piano and violin from his parents at a very young age. He later studied conducting at the Central Conservatory of Music in Beijing and in Germany.

He has conducted 2,000 concerts and operas in Europe and the Americas, and has cooperated with more than 100 opera houses and orchestras. Mr Lu was the first Chinese conductor ever to lead the Chicago Symphony Orchestra and to record the complete works of German composer Felix Mendelssohn.

Opera has always played a special role in his career. In Italy and Germany, homelands of the European opera tradition, he has directed nearly 50 operas.

Mr Lu is also music director of the Arena di Verona, the world’s largest open-air opera theatre, and artistic director of the Symphony Orchestra of Tenerife in Spain.

SEPTEMBER 2010

season there is plenty of music to enjoy.

For instance, internationally renowned Chinese cellist Wang Jian – another return to Macau – will be joining the orchestra for a “romantic” performance to be held on October 9.

Other artists invited for the new season include young Chinese violinist and violin second prize winner at the 2002 International Tchaikovsky Competition, Chen Xi, on March 26, and Italian violinist Paulo Morena in June. They will be joined by young Chinese pianist Zuo Zhang in May, Chinese soprano Wu Bixia on September 25 and a trio comprising the associate concertmaster of the Hong Kong Philharmonic Orchestra, Wong Sze-hang, the orchestra’s principal cellist, Richard Bamping and Hong Kong pianist Warren Lee Wai On in January.

Highly regarded Appearances will be made by a number of highly regarded guest conductors, including the principal conductor and music director of the Taiwan Philharmonic Orchestra, Lu Shao-chia on March 26; Chinese conductor Wang Jin on December 23; the music director of the Orchestra Academy at China’s Central Conservatory of Music, Hu Yongyan on February 14; the director of the Shanghai Opera House, Zhang Guoyong in September; young Venezuelan conductor Jose Luis Gomez on June 18; and Australian violinist, conductor and concertmaster of the Hong Kong Philharmonic Orchestra John Harding on April 8.

The Taipei Philharmonic Chorus will once again perform in Macau for both the Christmas and Easter concerts.

For the new season the orchestra will from time to time leave the comfort of conventional venues and hit the streets of Macau. Three free concerts will take place in the historic centre of the city.

The series is called ‘Music Journey into the Heritage Sites’ and is the first of its kind undertaken by the Macao Orchestra. The venues have yet to be announced but the dates are October 23, April 30 and June 11.

Another novelty this year, the ‘Music Promotion Series’, is a special programme designed for people who

113 wish to better understand classical music and enhance their personal sense of the artistic. Two shows are scheduled. The first is on November 20 when, guided by conductor Francis Kan, the orchestra will present a family concert.

Opera series Another highlight of the season is the orchestra’s performance in the 22nd Macau Arts Festival, which will feature local works. The concert, scheduled for May 14, will include the world premiere of commissioned works by famous composer Ye Xiaogang and the Macao Orchestra’s composer-in-residence Lam Bun Ching, as well as the latest works by local Chinese composer Doming Lam and internationally renowned ChineseAmerican composer Bright Sheng.

The ‘Opera Series’ is another must of this concert season. The four-act opera “Il Trovatore” by the great Italian composer Giuseppe Verdi, penned at his peak, will be staged on October 15 to 17 and the classic three-act “Dido and Aeneas”, written by Englishman Henry Purcell during the baroque period, will be staged from November 5 to 7, both during the Macau International Music Festival.

The season will also include other series, such as the ‘Chamber Music Series’ and the ‘Education Series’, which are regular features of the programmes.

2010-2011 Season Gala Concert Sarah Chang and Macao Orchestra

Date: September 19, 8pm Venue: Macau Tower Auditorium Programme: J. Brahms (1833-1897) Violin Concerto in D Major, Op. 77 L. van Beethoven (1770-1827) Symphony No. 3 in E-flat Major, Op. 55 “Eroica” Performing group: Conductor - Lu Jia Sarah Chang (violin), Macao Orchestra Tickets: MOP150, MOP120, MOP80 Tickets available through the Kong Seng Ticketing Network

SEPTEMBER 2010

Arts & Culture

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Before your very eyes The World Press Photo exhibition returns to Macau for the third time, providing a unique opportunity to see firsthand the photos that make the news

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ast year will be remembered for many different reasons: the election in Iran, Barack Obama’s swearing-in and the continuing fallout from the global financial crisis. Those events will be brought to life in Macau, at the World Press Photo 2010 exhibition.

Casa de Portugal again brings the world’s biggest photojournalism event to Macau, with the city joining a list of more than 100 global venues. Until September 22, the photos that won the 2009 World Press Photo Contest will be displayed at the Casa Garden. There is no entry fee.

All eyes will be on Pietro Masturzo’s work. The freelance photographer from Italy won the World Press Photo of the Year award with a shot showing women shouting in protest from a rooftop in Tehran on June 24. The winning photograph is part of a story depicting the nights following the contested presidential election in Iran, when people shouted their dissent from roofs and balconies after daytime protests in the streets. The story as a whole was awarded first prize in the People in the News category.

“The photo shows the beginning of

something, the beginning of a huge story.

It adds perspectives to news. It touches you both visually and emotionally, and my heart went out to it immediately,” said jury chairman and vice-president of Reuters Ayperi Karabuda Ecer.

The jury gave prizes in 10 categories to 62 photographers of 22 nationalities, including mainland photographers.

In two weeks of deliberations, the jury viewed a record number of photographs, with 101,960 images submitted by 5,847 photographers from 128 different countries.

World Press Photo of the Year | PIETRO MASTURZO, ITALY Women shout their dissent from a Tehran rooftop on June 24, after Iran’s disputed presidential election. The result was victory for President Mahmoud Ahmadinejad over opposition candidate Mir Hossein Mousavi, but there were allegations of vote-rigging. In the following weeks, violent demonstrations took place in the streets. At night, people shouted from the roofs, an echo of protests that took place during the 1979 Islamic Revolution.

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1st prize Spot News Singles | ADAM FERGUSON AUSTRALIA, VII MENTOR PROGRAM FOR THE NEW YORK TIMES A woman is rushed from the scene of a suicide car bombing in Kabul, Afghanistan on 15 December. The bomb exploded near a hotel in the Wazir Akbar Khan neighbourhood, home to many embassies and Western aid groups and one of the most heavily guarded areas of the city. At least eight people were killed and around 40 injured in the blast.

1st prize General News Stories | MARCO VERNASCHI, ITALY, FOR PULITZER CENTRE A score between small drug dealers is settled. In the end, the captive was abandoned, but not killed. Guinea-Bissau, one of the poorest nations in the world, has become a hub for cocaine trafficking, as South American drug cartels seek new smuggling routes to Europe. With over 100 islands off its coast and a navy with no working boats, Guinea-Bissau offers a haven for drop-offs, storage and movement of cocaine.

1st prize Contemporary Issues Stories | EUGENE RICHARDS USA, REPORTAGE BY GETTY IMAGES/ THE SUNDAY TIMES MAGAZINE/PARIS MATCH Nelida Bagley helps her son Jose PequeĂąo from his bed at the West Roxbury Veterans Medical Centre in Massachusetts. He lost 40 percent of his brain when a grenade exploded in his vehicle while on patrol in Ramadi, in central Iraq. By the end of 2009, over 4,300 men and women from US military forces had been killed, and some 30,000 maimed or wounded since the beginning of the conflict in Iraq.

1st prize General News Singles | KENT KLICH, SWEDEN Light enters through a hole in the roof of a house hit by a tank shell, in Tuffah, northern Gaza. The family that lived in the house had fled during Operation Cast Lead, the Israeli attack on Gaza that began at the end of December 2008.

Mohammed Shuhada Ali Ahmed, 39, had gone back to fetch clothes for his children, and was killed when the shell struck.

1st prize Sports Features Stories | ELIZABETH KREUTZ, USA American Lance Armstrong, 37, made his second comeback to professional cycling with the express intent of participating in the 2009 Tour de France.

Armstrong won the world’s most famous cycle race for a record-breaking seven consecutive years, from 1999 to 2005. He took part in the 2009 event, coming third overall. Armstrong waves to media after coming fifth in stage 20 of the Tour de France, which is acknowledged as the most difficult.

1st prize Portraits Singles | LAURA PANNACK, UNITED KINGDOM, LISA PRITCHARD AGENCY FOR THE GUARDIAN WEEKEND MAGAZINE Graham has suffered from anorexia nervosa since he was 14, after becoming infatuated with a girl in his class and trying to lose weight to attract her. By the time he was 15 he weighed just over 30 kg, but after retraining himself to eat managed to double that weight over the next six years. Now 24 and working as an actor, he sees himself as still recovering from anorexia.

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Corporate Social Responsibility

THE ANNUAL MACAU BUSINESS CHARITY GOLF TOURNAMENT AND GALA DINNER HAS RAISED MORE THAN MOP1.5 MILLION FOR THE NEEDY IN THE PAST THREE YEARS

CHIPPING IN FOR CHARITY SEPTEMBER 2010

117 harities and projects to help needy and disadvantaged children all over the Pearl River Delta have received more than MOP1.5 million (US$187,500) raised by the first three annual Macau Business Charity Golf Tournaments and Gala Dinners.

In each tournament, each team nominates a charity of their choosing to receive their cheque should they reach the winners’ podium. The tournament’s total prize money of MOP200,000 is split between the team finishing with the best gross score and the team finishing with the best net score.

Previous beneficiaries have included the Macau Special Olympics, Tung Sing Tong, the Macau Child Development Association, Caritas Macau, the International Ladies Club and the Cradle of Hope Association.

Funds are also raised at a charity auction held at the Gala Dinner. Memorabilia from the world of music, sport and entertainment, such as guitars used by rock legends and tennis rackets used by all-time greats, are put up for auction.

About MOP910,000 has been raised in auctions held so far by event organiser Macau Business SK Events (MBSK).

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Support from afar The Macau Business Charity Golf Tournament and Gala Dinner was originally a one-day outing, but the fourth event will be a two-day, two-round extravaganza played on two courses.

“The extension of the tournament to a two-day event was very well received by sponsors and patrons alike,” the event’s co-managing director Paulo A. Azevedo told the media.

In turn, MBSK Events co-managing director, Stefan Kuehn, said “the response of sponsors and teams show how important this event has become in the last three years and clearly indicates it as the top event of its kind in the region - we want to push it to the next level.”

Event sponsors come from across the business spectrum, from the gaming, entertainment and hospitality industries to banking and finance, from the consumer products industry to professional services.

Previous supporters of the event have already pledged their continued

support this year. Local gaming concessionaire and responsible corporate citizen Melco Crown Entertainment, which has backed the charity golf contest since its inception, has already committed itself to being a major sponsor of the fourth tournament. Another consistent backer, the Westin Resort, Macau, has also renewed its commitment.

One sign of the event’s lengthening reach is that sponsors have been secured from as far away as Australia. Tabcorp Holdings, Australia’s premier gambling and entertainment group and one of the world’s biggest publicly listed gambling companies, has pledged its support for the fourth instalment of the event. Tabcorp operates, among other properties, Star City Hotel and Casino in Sydney and Jupiter’s Hotel and Casino on Australia’s Gold Coast.

The organisers have said one of

this year’s goals is to attract 25 teams.

The second and third contests drew 20 teams.

When and where The first round of the fourth annual Macau Business Charity Golf Tournament will be held at Caesar’s Macau on October 15. Players will face specially designed challenges in completing the 18 holes. The following Friday, October 22, the competition moves to the Macau Golf and Country Club.

The fourth annual Macau Business Gala Dinner will be held later that day at the Westin Resort’s Pool Loggia, where the winners will be announced. The evening’s programme includes a charity auction and traditional raffles.

For more information go to www.macau-event.com or email golf@ macaubusiness.com

THE BREAKDOWN Tournament beneficiaries in 2007 Macau Special Olympics: MOP100,000 from Team Aristocrat Macau Child Development Association: MOP70,000 from Team BNU Tung Sing Tong: MOP30,000 from Team Wynn Macau Tournament beneficiaries in 2008 Caritas Macau: MOP100,000 from Team SJM Macau Child Development Association: MOP100,000 from Team MBSK Tournament beneficiaries in 2009 International Ladies Club: MOP100,000 from Team MBSK Cradle of Hope Association: MOP100,000 from Team BNU Total tournament prize money won to date: MOP600,000 Auction beneficiaries Casa de Portugal: MOP78,000 Art for All: MOP20,000 Zhuhai Child and Art Development: MOP25,000 Andrew Stow Foundation: MOP25,000 Redfords Holding Foundation via Helping Hands Hong Kong Society for the Protection of Children Operation Breakthrough Kely Support Group Amity Foundation Animal Asia Foundation Rotary Club of Wanchai Rotary Club of Golden Miles: MOP759,500 Total auction proceeds to date: MOP907,500 Total funds raised to date: MOP1.51 million

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Corporate Social Responsibility

The gift of sight Orbis is calling for companies to help end preventable blindness in developing countries an a pin help a blind mainland infant to see? The answer is yes. For the fifth year, Orbis Macau is organising a signature event to raise donations to fund its activities.

The charity is asking for support from companies and individuals alike for its Action Blue 2010 campaign. Donations can be sent to Orbis until the end of this month.

Upon enrolment in the campaign, donors will receive an “action pack”, which includes an Orbis commemorative pin to be worn on World Sight Day on October 14 in support of the fight against preventable blindness. The pin is specially designed in the shape of an eye, reminding those who possess healthy eyesight to help to the blind.

The pack also includes a “gift-of-sight postcard”. The goal is to invite people to pass on Orbis’ eye-care message.

Photo: ORBIS International

C

Salima

Zhao Xu

BANGLADESH

THE MAINLAND

Eleven-year-old Salima led her blind sister on a six-hour bus journey to a paediatric eye care centre that Orbis established in Bangladesh. A successful operation restored her baby sister’s vision and eased Salima’s responsibilities as caregiver. About 40,000 children in Bangladesh are blind and 1.3 million suffer from severe refractive errors. The country has just 16 paediatric ophthalmologists.

Zhao Xu, 12, developed congenital glaucoma when he was four, becoming surly and unsociable when his eye went purple because of neglect.

Luckily, a blind woman heard of Xu’s plight and took him to an Orbis-trained surgeon, who fitted an artificial eyeball that transformed both Xu’s looks and his life.

Without this treatment, his eyeball could have burst. Now Xu dreams of becoming a scientist when he grows up.

SEPTEMBER 2010

Photo: Dr. Timothy Lai

Photo: Tim Soter | ORBIS International

Photo: ORBIS International

Photo: Geoff Oliver | Bugbee | ORBIS International

Their stories Victor Casa Grande

Timothy Lai

PERU

HONG KONG

Victor Casa Grande is now an amateur painter but six months before Orbis came to his aid, he could not see.

Corneal disease aggravated by diabetes had robbed him of his vision. The father of two had been through this before, when cataracts stole his vision 12 years earlier. Surgery restored his sight then but this time the problem was harder to solve.

Although corneal transplants were performed in northern Peru at the time, tissue was expensive and not readily available. Eventually, after two years in darkness, Victor received a cornea transplant as part of an Orbis programme.

Timothy Lai is an associate professor in the Department of Ophthalmology and Visual Sciences at the Chinese University of Hong Kong. As a volunteer medical expert, Mr Lai spent five days in Jaipur, India, last September training and assisting doctors in the treatment of some very complicated cases of retinal diseases. “It was very meaningful,” he says. Next month, he will participate in a similar programme, this time in the Indian city of Dogra.

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WHO IS ALREADY HELPING? Banco Weng Hang: “Besides making corporate donations, Banco Weng Hang also actively solicits donations from staff members and customers, and organises staff volunteers to participate in Orbis’ charity activities,” says Veronica Leung, head of wealth management development and product marketing at the company.

Canon: “The corporate philosophy of Canon is ‘kyosei’, which means ‘living and working together for the common good’,” says Edwin Chiu, chief representative of the Japanese brand in Macau.

Canon will donate MOP1,000 to Orbis with selected purchases of multifunction printers until the end of October.

Photo: ORBIS International

CEM: “CEM hopes their staff can understand the need for quality eye-care treatments in developing countries in order to harness efforts to support Orbis’ sight-saving mission,” says CEM communications and public affairs office manager Cecilia Nip. CTM: “We will utilise our telecom network At the end of October, to wrap-up the campaign, a media event will be held to recognise the support of major sponsors and the top five fundraising organisations.

Last year the Action Blue campaign raised around MOP360,000 (US$45,000) for Orbis’ work. More than 2,700 people joined the campaign.

Vivan Lo, the Orbis Macau senior development manager, says participating is a way for businesses and associations “to demonstrate the effectiveness and importance of corporate social responsibility.” It will also “motivate employees and their families to support helping the blind.”

“Among all the health problems, the cure for preventable blindness is actually one of the cheapest. We want more people to know about this fact.”

What is Orbis?

Orbis is an international non-governmental organisation that works to prevent avoidable blindness around the world. Since 1982 it has created a global network of over 500 medical volunteers and fulltime staff, who have treated more than 9.7 million people in 87 countries, including the mainland. It has also trained about 262,000 eye-care medical professionals around the world.

The Macau office was set up in 2006 to promote the organisation’s sight-saving mission and raise funds from the general public. Donations have been used to support the organisation’s projects around the world for adult and child patients, for surgery and training, for community eyesight education and for capacity building at local hospitals.

“Currently, funds raised in Macau are all used in developing countries such as China, Vietnam, India, Bangladesh and Ethiopia,” said Ms Lo. “‘Caring for your eyes’ and ‘everyone has the right of sight’ are two main concepts that we convey at Macau schools.”

as a communication channel to spread the message of sight-saving to the Macau community.

Moreover, we will continue to offer customers a convenient platform to make donations to Orbis,” says Eliza Chan, general manager of corporate communications for CTM.

HSBC: “Orbis Action Blue is one of the key projects that we have been taking part in over the past three years. We also feel obliged to strengthen our colleagues’ awareness about keeping healthy eyesight for a brighter future,” says Teddy Kwong, chief executive of HSBC Macau.

Mocha Clubs: “We hope that by encouraging staff participation in related activities, we can further their understanding of Orbis and eventually the sharing of their feelings with their families and friends,” says Constance Hsu, President of Mocha Clubs.

Sands China: “This is the fifth consecutive year Sands China Ltd has supported Orbis via a fund-raising exercise, demonstrating our continuing dedication to collaborate with the community to care for and help those in need,” a company spokesman said.

WHAT A GIFT CAN BUY allows one patient to receive cataract surgery MOP600 treats a child’s strabismus MOP1,000 provides free eye screening services to 1,000 poor farmers MOP300

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Entertainment

Shining light Ten fireworks displays are set to thrill spectators as the annual International Fireworks Display Contest takes to the waterfront once more

BY ALEXANDRA LAGES

SEPTEMBER 2010

121 he sky over the Macau Tower will become a battlefield this month – a shining battle of fireworks with ten countries and regions fighting for victory.

The 22nd Macau International Fireworks Display Contest, organised by the Macau Government Tourist Office, will be held on September 11, 18, 22, 25 and October 1. Each display will last for approximately 18 minutes, with two displays every evening at 9pm and 10pm, respectively.

Most of this year’s competitors have fought it out in previous editions but the competition welcomes three newcomers this year. Teams from Britain, Taipei, the Philippines, Australia, Portugal, Korea, Japan, France, Italy and the mainland are featured.

Sound systems will again be installed at the waterfront of the Macau Tower Outdoor Plaza and at the square in front of Kun Iam Statue, on Avenida Dr Sun Yat Sen so that the public can enjoy the soundtrack synchronised to the spectacular show.

Radio Macau will also broadcast the shows live on FM100.7.

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Learning curve Philippines contestants Platinum Fireworks join the competition for the third time. Receiving an invitation to be part of the contest is always special, even as second runner-up last year.

“Just like any other participants, we want to get the Championship Trophy this time. More importantly, our goal is to give a safe and a magical experience for everybody,” the company’s president Joel Santaana told Macau Business.

“It is very important for us to have international experience and to win this contest because we get to prove our worth in pyrotechnics shows, more importantly in pyromusicals.

“We also learn a lot from the other competing companies and [we can] bring this back home to improve [our quality] and allow our people to experience international calibre shows.”

East versus West Britain’s Pyro 2000 Fireworks has also been invited to be part of the competition for the third time. In 2000, Pyro 2000 grabbed second prize but the team is eager to improve on that performance.

“Our main goals for this year are to put on a display that is both visually entertaining and musically appealing to the audience. It would also be nice to improve on our last visit and maybe get into the top three,” said team representative Graham Wilkinson.

What makes Macau the biggest challenge in the world for the contestants is the city’s unique mix of cultures, says Mr Wilkinson.

“We feel it is very important to take part in this festival as it is the only festival that really has the ‘East meets West’ feel about it. As there is quite a varied selection of teams from around the world, this makes it more of a challenge,” he said.

Pyroart up from Down Under Australian Infinity Pyrotechnic took part in the competition in 2008 and left carrying only good memories. This year, the company is shooting for a victory.

“The experience we gained from this unique competition in the first year was immeasurable. All displays are important to us, but the Macau International Fireworks Display Competition is one of a kind,” said Australian Infinity representative Sandy Corbett.

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“All of the competitors are of a very high standard, and we are very proud to be a part of the competition once again.

Our main goals this year are to showcase our pyrotechnic talents, our pyromusical show design techniques, our advanced technical use of the FireOne Digital Firing System, and to go home with a trophy.”

France’s Sodip Pyrotechnie also return, following their debut in 2003. The team regards Macau as an opportunity to test new products and music.

Hometown heroes Together with newcomers from Korea and Italy, Chinese team Panda Fireworks Group will have a chance to thrill SEPTEMBER 2010

spectators. The Guangzhou group aims to promote Chinese fireworks and displays at an international environment.

“Our main goal is to show the technical level of Chinese modern fireworks displays, the newest Chinese fireworks products and manufacturing techniques in the process of fireworks design layout and display shows. We publicise the art of Chinese culture,” team creative director Xuegeng Meng told Macau Business.

Expect a very Chinese fireworks display from Panda, inspired by the classic love story “The Cowherd and the Girl Weaver”.

“The ‘Qixi Festival’ has something to do with this love legend and it has become the Chinese Valentine’s Day,” he said.

“Our main goal is to show the technical level of Chinese modern fireworks displays, the newest Chinese fireworks products and manufacturing techniques,” says team creative director Xuegeng Meng

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Money to fire he Macau Government Tourist Office is again providing a subsidy and covering some expenses for each of the Fireworks Display Contest’s participating teams, but participants say they spend much more ensuring they win applause and the judges’ votes.

The tourism bureau’s budget is MOP8 million (US$1 million), which includes a US$20,000 fireworks production subsidy for each participating team. Shipping is also supported, as well as the team’s travel and accommodation expenses.

Mainland entrants Panda Fireworks estimates the total investment exceeds US$100,000. “We use the technique of chip-timing on some shells that have special effects, which make the products cost double that of regular products,” said team creative director Xuegeng Meng.

“In addition, in order to achieve the exact composition of the picture, we have specially made a lot of brackets for this contest and added a container to transport them.”

The Philippines team will allot an additional US$10,000 for the event to cover “materials and other pyrotechnics effects to be able to become at par or have the edge over other participants,” says Platinum Fireworks boss Joel Santaana.

Time is money and other teams expressed that a lot of preparation work goes into their participation.

Infinity Pyrotechnic’s Sandy Corbett said the company has been working on its display since the invitation came through in February. “Our artistic team has spent many hours in preparation to make sure that our display is the best of the competition,” she said.

“A lot of time is invested in the development of a display of this calibre; from preparing documents, to product and music selection, to the programming of the display. It is a lot of work.”

The teams battle it out for a cash prize of US$8,000 for first, while prizes to the first and second runners-up are US$4,000 and US$2,500 but, just like the money and time invested, the taste of victory is priceless.

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“There was a Chinese group that used it [in Macau] in the past two years.

However, our work is unique and we have an exclusive take on the plot design, music performance, product and live explanation. We are sure it will draw new feelings from the audience.”

A big bang The Macau International Fireworks Display Contest began in 1989 with five participating teams. In the past six editions it has grown to an eightteam format with two different teams putting on a show every night.

More than 100 teams have had the chance to take part, a prestigious achievement since places are

by invitation only.

“We must check their profiles to see whether they have enough experience in international fireworks displays as well as participation in large-scale events, if they have won any international fireworks competitions, their detailed history and background,” a spokesman from the tourism board explains.

This year’s contest will be more interactive than ever before. Telecommunications company CTM will introduce an SMS game and residents can vote for their favourite team after each night’s displays in return for the chance to win tickets to the Macau Grand Prix.

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1

Most of this year’s competitors have fought it out in previous editions but the competition welcomes three newcomers this year.

Teams from the mainland China (1), Britain, the Philippines (2), Australia, Portugal, Korea, Japan, France (3), Italy and Taipei (4) are featured

2

3 SEPTEMBER 2010

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THE LINE-UP Britain and Taipei SEPTEMBER 11

Established in 1996, Pyro 2000 has participated in various fireworks displays and competitions around the world. The team staged a fireworks display for the closing ceremony of the World Cup Cricket Final in 2007 and pocketed the second prize at the Macau International Fireworks Display Contest 10 years ago.

Wan Dar Fireworks is a veteran at the Macau International Fireworks Display Contest. The team first took part in 1989 and won third prize two years ago.

Philippines and Australia SEPTEMBER 18

Platinum Fireworks from the Philippines and Infinity Pyrotechnic from Australia will compete for higher honours this year. Platinum was the second runner-up last year and Infinity took part in 2008, finishing ninth.

Portugal and South Korea SEPTEMBER 22

Pirotecnia Lanhelas from Portugal were better known as Gaspar Fernandes & Irmão before 2008 and have taken part three times, winning second prize in 1989.

Woori Fireworks makes its Macau debut this year. It has taken part in several domestic and international fireworks competitions, including the display at the jointly held Korea-Japan World Cup in 2002.

Japan and France SEPTEMBER 25

Tamaya Kitahara Fireworks from Japan won the championship in 2004, 2005 and last year, as well as the second prize in 2008. Their unique technique that produces perfectly spherical firework shells is one of their signatures.

Sodip Pyrotechnie from France, with a history of 60 years, uses cutting edge technology to design and display fireworks patterns accompanied by classical or robust music. The team came fourth in 2003.

Italy and the mainland OCTOBER 1

4

Both teams from Italy and the mainland are taking part in Macau’s fireworks contest for the first time. Amazingly, Protecnica Morsani celebrates its 130th anniversary this year.

Panda Fireworks Group staged the fireworks display to mark the 10th anniversary of the Macau SAR, took part in the fireworks extravaganza at 2008 Beijing Olympics and has won Sweden’s Stockholm International Pyromusical Competition.

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RICARDO ANDORINHO BUSINESS DEVELOPER | MB INTELLIGENCE CONSULTANCY LIMITED (“MBI”) andorinho@mb-intelligence.com

Busyness kills business! ssuming that we are complying with the eight hours of sleep that most doctors recommend, we have 16 hours a day to fill in with activities. From the 16 hours we have, eight of them have to be spent at work and, if we are lucky enough, we have eight remaining hours to juggle between our partner, our kids and other family members and friends.

A

Add value, not chores It would definitely be easier to restrict the “busyness analysis” to our work functions only, but doesn’t the busyness standard affect all roles we play in life? Can we actually segregate our roles, or do we believe in the holistic and interdependent dimension of human existence?

Everyone must have felt overwhelmed or scared by the five or six roles which each of us needs to perform regularly. But, have you thought that busyness might be one of your biggest enemies? Don’t you believe that busyness kills business?

Busyness means paperwork with the appearance of work but which doesn’t add or deliver value, or in other words, it means urgent but nonimportant activities with which people fill their days.

So, if a business is being run by busyness standards, it means that the really “important activities” are left behind. Consequently, in the long run, busyness leads to the death of the business and the reasons behind such a fact might be one of the following: a lack of vision, mission, strategic goals or values or, simply a lack of good managers!

But if you want to run away from busyness and substitute it with really important activities, here are some tips: 1. Analyse your routines and write down the activities which you spend your time on; 2. Determine which activities are important and not important in relation to your goals or objectives; 3. Stick to the important activities, and stop wasting time with busyness and trivia or pleasant activities; 4. Among the important activities, start working on the urgent ones doing each one of them until they are done; 5. Set aside some weekly time to deal with the important but nonurgent activities such as self-development, relationship building and envisioning or planning the future; 6. Try to apply this framework to each and every role you play in life (parent, student, employer, employee, etc).

Most to least There are definitely too many tasks or activities that we need to “tidy up” in each of our twenty-four hour periods. To stay away from busyness, we should be measuring and prioritizing each activity with reference to both its importance and its urgency.

We understand that sometimes it might be difficult to draw the line between urgency and importance, but don’t worry, with practice you should be able to put first things first using as a weighing scale your own vision, mission and goals! By that time, we believe you will start experiencing some quality-of-life results!

SEPTEMBER 2010

AMAZING FORESIGHT Leaking thousands of pages of top-secret information from the US army might be seen as a great scoop but Wikileaks has what appears to be a far juicier document available in its archive – at least from Macau’s point of view.

“China and the Reversion of Macau: Background and Implications” is a 1999-era document from the US Congressional Research Service that “examines factors which might be relevant for US policy towards Macau after it reverts to Chinese administration on December 20, 1999.”

Unfortunately the 16-page document doesn’t quite reach the giddy heights the title promises.

In a less-than-chilling prediction, Uncle Sam’s boys note that “after December 1999 the PRC may well take steps to increase revenues from gambling, probably by attempting to reduce crime in the colony and thus make Macau a safer place for tourist-gamblers to visit, and also to diversify the economy of Macau, perhaps by increasing the emphasis on the manufacturing and export sector.”

Frozen Spy is disappointed. Was this the best that the Congress’ “think tank” with a current staff of about 700 could dig up about Macau’s future? Shame on you.

Maybe next time the US Congress could hire Frozen Spy to get some real insight on Macau.

A COLOURFUL PROTEST That Macau is full of strange people is no surprise to anyone who has lived here for more than a couple of days. But Macau is now home to at least one more colourful protester, Cheong Weng Fat. Mr Cheong, the head of the tiny Self-Help Workers Union, was taken for questioning by police three times in three days last month because he chose to protest by throwing liquid – allegedly “black dog blood” – and stinky stuff – allegedly “dog excrement” – at photos of the Secretary for Administration and Justice, Florinda da Rosa Silva Chan, and of the director of the Transport Bureau, Wong Wan. For the record, he was attempting to make legitimate protests against illegal labour, a lack of motorcycle parking spaces, and to demand a statutory minimum wage in the territory.

Frozen Spy wonders if he has achieved his goals.

One positive to come out of the incident is that Mr Cheong has agreed to stop using “dog blood” in future protests. Our animal friends thank you, Mr Cheong.

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OFF-FENCING LAND RIGHTS

NEW MARKETING STRATEGY FAILS

Wynn Macau has had a fence around a plot in Cotai for a while but the government has yet to explain how that could be possible, since the gaming operator has still not been officially granted the land.

Then there’s the company operating an unlicensed and potentially dangerous fuel depot in Ilha Verde that occupied a parcel of land for several years without authorisation. According to the Lands, Public Works and Transport Bureau, that wasn’t such a big deal since there were no other projects slated for that particular piece of land.

Frozen Spy is pleased to know this is how Macau allocates its land grants.

We have already ordered a few kilometres of fencing so we can section off a chunk of the government’s proposed land reclamation, somewhere nice, near the waterfront.

We all know the authorities are stepping up their efforts to fight illegal immigration in Macau. What seems intriguing is that they have decided to take the fight right to the heart of the city: Leal Senado Square.

Last month, police agents asked for identification from several passers-by in the area. We wonder if it is part of a new marketing campaign to make tourists feel welcome.

MEDIA QUESTION TIME Over the past few weeks, the Macau government has repeatedly stressed how it loves and respects press freedoms. Frozen Spy would never have doubted it for a second.

It seems, however, that some government departments and agencies did not get the memo.

The most recent example comes from the Civil Aviation Authority of Macau. On a media registration form to attend a meeting to look at the draft regulations for “Minimum Air Transport Passengers Rights in Case of Denied Boarding and Cancellation or Delay of Flights”, the bureau asked reporters to send their questions in advance.

Frozen Spy wonders why that was necessary. Perhaps it was to make sure no reporter would ask boring questions regarding defunct airline Viva Macau or about the future of Air Macau?

CASE CLOSED It was one of the hottest scandals last summer, the Government Information Bureau’s decision to outsource the preparation of the exhibition to celebrate the SAR’s 10th anniversary in Beijing to Primedia. Primedia was owned by Eva Lou, an aide during Fernando Chui Sai On’s election campaign for chief executive.

The company won the MOP32-million contract without a public tender.

The deal was only made public after Mr Chui was elected.

Almost one year later, the Commission Against Corruption has now made public its recommendation that the bureau could have better handled the deal and that bureau director Victor Chan Chi Ping should have submitted a request to the chief executive to hire Primedia without public tender.

For the record, the bureau replied with something like “thank you very much, we will definitely do that in the future.” Case closed.

Meanwhile, Primedia got the fat contract and no one was sanctioned.

Macau style? Yep, pretty much folks.

PREMIER POWER NOW PAUPER Macau Cable TV or MCTV once enjoyed the exclusive rights to broadcast football matches from the English Premier League in Macau.

Some Macau-based unlicensed antenna providers were also broadcasting these matches, taking their broadcast from a Thailand channel.

So MCTV sued for infringement of copyright, the court ruled in their favour and the companies stopped broadcasting Premier League matches.

It was a situation that pleased MCTV but not too many residents who lost their English football broadcasts.

This season, perhaps in an effort to promote harmony, the governmentbacked TDM has bought – for an undisclosed amount – the broadcast rights for Premier League matches.

It is a deal that has pleased unlicensed antenna providers too, since they can again show Manchester United and Chelsea without upsetting too many people.

As for MCTV, it has suffered a heavy defeat, all funded with taxpayers’ money.

The twist in the tale? Well, MCTV’s owners today were once providers of illegal antenna services.

Yep, Macau-style again. Don’t you just love this town?

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Advertisers

September 2010

index

7 Luck Casino

BC

www.7Luck.com

Aristocrat

Page 10

www.aristocratgaming.com

Aspect Gaming

Page 05

www.aspectgaming.com

Bally

Page 07

www.ballytech.com

BNU

Page IBC

www.bnu.com.mo

Camões Restaurant

Page 79

www.legendalehotel.com

CEM

Page 51

www.cem-macau.com

Galaxy Entertainment

Page 19

www.galaxyentertainment.com

Macau Daily Times

Page 108

www.macaudailytimes.com.mo

Macau Post Office

Page 102

www.macaupost.gov.mo

Melco Crown Entertainment

Page 17

www.melco-crown.com

Melco Crown Entertainment

Page 35

www.melco-crown.com

MGM Macau

Page 13

www.mgmmacau.com

MGTO

Page IFC

www.macautourism.gov.mo

Morton’s The Steakhouse

Page 37

www.mortons.com

Our Dental Clinic

Page 28

www.ooioc.com

PokerStars Macau

Page 01

www.pokerstarsmacau.com

Sands China

Pages 22-23

www.sandschinaltd.com

SJM

Page 27

www.sjmholdings.com

Star City Hotel & Casino

Page 02

www.starcity.com.au

Zung Fu Motors – Mercedes

Page 03

www.zungfu.com.mo

SEPTEMBER 2010