MB 80 | December 2010

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90 Economy & Finance 30 Business language Beijing wants to increase Macau’s role in Sino-Lusophone trade 32 You can bank on Ho Geocapital gearing up to open local bank 34 Your mother told you City needs to improve its ethics, say businessmen

Politics 39 No surprises Policy address for 2011 brings little change 44 Keep it clean, warns Wen Chinese premier tells local officials to promote a transparent government

Special 45 Are we better off?

11th anniversary of the establishment of the Macau SAR

Property 66 Market watch Policy address brings no new measures to curb the property market 70 Two into one won’t go Property transaction figures from two government bodies don’t add up 76 No fear Shun Tak is betting on Macau’s real estate market DECEMBER 2010 NOVEMBER

Gaming 78 Billions race Casino gross gaming revenue’s double-digit growth continues 79 Back to square one Nevada court overturns judgment against Las Vegas Sands 81 Stock watch November was a month of ups, downs and more ups 84 Laying down the law Jorge Oliveira breaks his silence 87 Speak to my accountant The government took MOP250 million in taxes on junket commissions in 2009 88 Cotai, interrupted The government rejects Sands China’s application for parcels 7 and 8 90 Bunny fizziness Playboy arrives Macau 93 Play now, pay later Responsible gaming is still a new concept in town 113 Change in the wind Interview with Pagcor’s new boss 114 Industry reborn Sri Lanka bets on casinos

Essential 97 Christmas Your guide to indulgence

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SEPTEMBER NOVEMBER DECEMBER 2010

Photo: Carmo Correia

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Business

136 Rare talent Spain’s National Dance Company to perform at the Cultural Centre

115 Meaty business Morton’s eyeing expansion in Asia 117 Mile-high rollers Rimowa opens new flagship store

Corporate Social Responsibility

Tourism

139 Going fast to make it better IGT organises charity karting race

119 At your service IFT head shares strategies to ease a shortage of graduates in the hospitality sector 122 Family time Theme park announced for Cotai

Entertainment

Education 126 In US education, we trust More Macau students are studying in the United States

Technology 128 In the clouds Government wants to introduce cloud computing into public administration

Arts & Culture 133 Art unappreciated A look at the artworks on display at local casinos 135 Blazing glazing Qing imperial porcelain visits Museum of Art

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140 Great Grand Prix Macau Grand Prix draws 50,000 spectators

Opinion 14 From the publisher’s desk Paulo A. Azevedo 17 Editorial Emanuel Graça 35 Wage fixations Max J. Zenglein 42 Wake-up call José I. Duarte 118 There is a difference between the tinsel and the tree Keith Morrison 127 China and India exposed Pranad Bardhan 138 Jailing the messengers Susan Jakes 142 Walk that talk!

Ricardo Andorinho

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SEPTEMBER DECEMBER OCTOBER 2010

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Blocking forces THE AWFUL TRUTH ABOUT WELL INTENTIONED but ill-prepared governments – or governments that are trapped in dealing with their political inheritance – is that they are not able to keep their promises.

It is not that they don’t want to, but the so-called “blocking forces” and other anomalies that have been generated down the years become immovable unless the status quo is ruptured.

Since these ruptures are cataclysmic – typically happening during radical social and political upheaval or revolutions – the leaders are trapped, unable to function.

In Macau’s case, the government is trying to balance its pledges against the power of blocking forces, even if these compromises attack the most liberal of promises; those of transparency, modernity and procedural legality.

Chief Executive Fernando Chui Sai On did not authorise his predecessor, Edmund Ho Hau Wah, to take the stand in one of the trials related to the corruption scandal that disgraced former Secretary for Transport and Public Works, Ao Man Long.

We understand the decision. It would be almost unbearable to have the first Chief Executive as a witness in the biggest post-handover scandal, one that has shaken the pillars of the SAR. As such, Mr Chui used whatever tools he could.

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In a criminal case, the Chief Executive has the power to authorise the disclosure of confidential or reserved information by former holders of political posts in court.

Mr Chui’s blocking action was based on the fact that confidential information might be disclosed during Mr Ho’s testimony.

So far, so good, was it not for this damned incapacity to do things properly in Macau, of not having an impartial judgment on things and the inability of seeing beyond the here and now.

Unlike across the border, Macau seems unable to take a broader perspective and to prepare for the future in a timely fashion.

The fact is, since the handover, there has been a legal vacuum regarding the ability to classify matters as reserved or confidential.

In Macau’s case, the government is trying to balance its pledges against the power of blocking forces, even if these compromises attack the most liberal of promises; those of transparency, modernity and procedural legality

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The law used during the Portuguese administration became inconsequential on the dawn of December 20, 1999. No one since has thought it was a problem that was important enough to fix.

The result has been typically Macau.

Obviously, Mr Chui’s decision will prevail – there is a historical precedent for it – but only because it is politically convenient, not because it has any legal support.

What this case shows us, as if we needed further evidence, is that there is an enormous distance between word and deed.

Graft buster alive and kickin’ There are times when an opinion maker has to bite his tongue. I hope I can do so while mentioning the Commission Against Corruption.

A few months ago, I criticised the body’s silence since judge Vasco Fong became the boss. The commission has since proven that it is still active, particularly when it comes to good intentions. Judging by the opinions and reports made public in the past few weeks, it’s not only active but righteously so.

It had reason on its side when it censured the Bureau of Telecommunications Regulation for its role in failing to resolve a dispute between the company that holds the cable

TV monopoly and the city’s unlicensed satellite TV signal providers, which shamelessly steal the signals and sell them back to the population.

The telecommunications bureau has long since divorced itself from its responsibilities in this matter. This sign of weakness would only be tolerated in a city such as Macau, where incompetent people perpetually keep their posts for reasons that defy imagination.

The anti-corruption commission is also right to criticise the Labour Affairs Bureau for acting incompetently and without evidence in a botched raid at the headquarters of Macau Asia Satellite TV. It is especially right when – although it could have been less polished – it made public a study that concluded all officials holding some sort of decision-making power should be obliged to make public their investments.

Unlike some who held tremendously responsible posts and who support an exactly contrary position, we feel that those with great responsibility have the greatest obligation to keep their portfolios free of any potential conflicts. If that is not the case, who is most likely to profit from opacity when it comes to issues of transparency?

In our books, people with nothing to hide have nothing to fear. But we could be wrong.

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Emanuel Graça Editor-in-Chief

emanuel.graca@macaubusiness.com

Playing it too safe

Macau is a city in a unique financial position.

It has most of the ingredients to allow it to aspire to more than mediocrity.

Unfortunately however, it lacks true leadership

CHIEF EXECUTIVE FERNANDO CHUI SAI ON delivered a lacklustre policy address last month. Instead of using his speech to set a new strategy for Macau, Mr Chui mostly played it safe.

It is true that there was some unexpected news, namely a MOP5,000 training subsidy and a reduction in the size of the cash handout scheme. But the policy address was mostly a repetition of previously announced measures that are yet to be implemented.

Unlike in the past, this time the world was listening to the Chief Executive’s speech and his words had some impact overseas.

Take the example of Mr Chui’s announcement that the government would intensify the control over the gaming industry. A lack of detail left international investors in a panic.

This led to an immediate sharp drop in the share prices of all casino operators with a footprint in Macau. It was only a short-term reaction, luckily.

Lacking clarity

The reaction of the stockmarket was a clear demonstration of how open to foreign investment the economy has grown in the past decade, which is not a bad thing.

It also demonstrates how the official political language has not evolved to meet these changes. Official speeches continue to be mostly a long array of sentences with few clear ideas.

No one is arguing that Mr Chui’s policy address should aim to please the financial markets. Macau’s financial position is sound enough to make that unnecessary.

A policy address should lay down the framework for the next year politically, economically and socially. For investors, it is a roadmap for investment.

In that regard, Mr Chui’s words about the gaming industry were unwise, to say the least. Taking only one minute to talk about Macau’s economic engine, mentioning in passing that the government wants further control – without adding detail – is not good policy. Especially since the government was already preparing to reject Sands China’s application for parcels 7 and 8.

The government needs to come clean on how it intends to achieve additional “control”. The companies that have poured billions into the territory are entitled to that.

The lack of clarity and planning in the policy address for 2011 is not limited to the gaming industry. The same could be said about plans to diversify the economy.

Poor people skills

On human resources, Mr Chui’s speech was also unclear on the issue of importing labour.

Instead, the government proposed to further develop local talent by offering a training subsidy. Nothing wrong with that, besides the fact that it again seems as if the government is just throwing money at problems. Training is inexpensive in Macau and some companies already reimburse the costs of relevant training courses.

At issue is the quality of training. Often it is poor and just a means to achieving a goal – a certificate that leads to a promotion.

How training issues would be tackled was not covered in Mr Chui’s speech.

In his policy address, Mr Chui did not meet the wider expectation that there would be new measures to curb inflation and rising property prices. That, coupled with the cuts to the cash handout scheme, left many unhappy.

Being a leader requires being able to read the fears and worries of the people around you. Leading is not waiting for consensus to emerge naturally, as many in Macau would advocate, but to build it. Nor is good leadership reflected in only reacting after prices go up wildly.

Former Chief Executive Edmund Ho Hau Wah was good at reading his people. So too is Chinese Premier Wen Jiabao, whose comments and down-to-earth politics earned praise during his recent visit. Unfortunately, Mr Chui has yet to show similar skills.

“Politics is the art of the possible,” Otto von Bismarck, a famous German statesman of the late 19th century once said. Macau is a city in a unique financial position. It has most of the ingredients to allow it to aspire to more than mediocrity. Unfortunately however, it lacks true leadership.

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VOL.1 Nº80

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 Luciana Leitão leitao.luciana@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

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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), Filipa Queiroz, Joana Freitas, 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, Greg Mansfield, John Si, MSP Agency, Agencies Illustration G. Fox, Rui Rasquinho

Advertising Agents Bina Gupta binagupta@macaubusiness.com

José Reis

jreis@macaubusiness.com

Media Relations GRIFFIN | Consultoria de Media Limitada Translations Stephanie Chu, PROMPT Editorial Services, Poema Language Services Ltd 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 to US$1 for the purposes of illustration only.

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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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Gaming leads FDI Inward foreign direct investment up in 2009 fficial data shows that inward foreign direct investment (FDI) to Macau amounted to MOP22.12 billion (US$2.8 billion) in 2009, up

by MOP1.34 billion over 2008.

Investment in the gaming sector accounted for 70.7 percent of the

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New partner The circulation of Macau Business continues to grow and so does our network of partners.

The latest to join is the newest hotel in town. Your magazine of reference is now available in Mandarin Oriental Macau.

total, at MOP15.64 billion, followed by that in the financial sector (MOP3.49 billion) and the wholesale and retail sector (MOP1.54 billion).

Analyzed by investors’ place of usual residence, investment came mainly from the United States (MOP8.86 billion),

Hong Kong (MOP7.23 billion) and the Cayman Islands (MOP2.28 billion).

In addition to a disinvestment of MOP5.66 billion of outward FDI by local enterprises, Macau registered a net FDI inflow of MOP27.77 billion in 2009.

Fresh rules for Macau firms in the mainland The central government published a new regulation on the registration administration of resident representative offices for foreign companies. The regulation will also apply to the representative offices set up on the Chinese mainland by companies from Macau, Hong Kong and Taiwan. According to the regulation, to become effective in March 1, 2011, such representative offices are not allowed to conduct business in China, but they can perform market surveys, product or service displays and promotion, and liaise on behalf of their parent companies.

CEM gets power supply contract extension

Hengqin border targeting 24-hour crossing

The Macau government and CEM - Companhia de Electricidade de Macau signed a power supply contract extension for 15 years. The new terms of the contract mean CEM will face a significantly reduction in the permitted return rate from 12 percent to 9.5 percent.

That will mean an estimated revenue loss of MOP100 million per year for CEM. The new terms also allow for the government to open up the power generation market. CEM will maintain the monopoly regarding power supply. The new contract provides for higher compensation to customers in case of power outages under CEM’s responsibility. The new contract terms came into effect on December 1.

Macau and Zhuhai have requested the central government to consider allowing the Hengqin Border crossing between the two cities to stay open 24 hours. According to the Macau government spokesperson, Alexis Tam Chon Weng, a decision could be reached this month or by early 2011. Cars from Macau would also be allowed to enter Hengqin without any restrictions, namely the need of a Chinese license plate. “Everything is ready right now except the permission from the central government,” Mr Tam told reporters. Expectations are that the scheme will later be extended to the Barrier Gate border, Macau’s busiest checkpoint.

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Cruising speed Air Macau to launch new route to Heifei. Company bullish about 2010 results direct flight between Macau and Heifei, Anhui’s capital city, will open on December 18. An Air Macau Airbus 315 will travel from Macau to Heifei and return each Monday, Thursday, and Saturday.

Meanwhile, the company will raise the fuel surcharges from December 1 on routes linking the mainland and Macau. The fuel surcharges will increase to US$27.50 (MOP220) from US$25 per passenger to offset increasing jet fuel costs.

Air China, Air Macau’s main shareholder, will do the

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same for its routes linking the mainland and Macau.

Although prices will increase, the company’s president of the executive committee, Zheng Yan, restated that the airline company would finally post a profit this year, following years of losses.

Mr Zheng told reporters that Air Macau expects to post a profit of MOP100 million-plus (US$12.5 million) for the whole of 2010. Air Macau lost MOP257 million in 2009, down almost 40 percent on the MOP416 million it lost in 2008.

Macau Business among IGA Awards finalists For the third year in a row, Macau Business is among the finalists at the International Gaming Awards. Macau Business is among the finalists in the Casino Journal/Magazine Offline/Online category. Macau Business is the only non-gaming publication nominated as well as the only Asian publication. The International Gaming Awards secretariat received nearly 300 entries in 18 categories from land-based and online gaming operators and suppliers. The winners will be announced in London on January 24, 2011.

Closer to Laos The Civil Aviation Authority of Macau and its counterpart in Laos renewed the bilateral air services agreement between the two places last month.

Among other changes, the new deal lifted the old capacity restrictions, “paving a more favourable business environment for the operation of scheduled air services between Macao and Laos,” a press release from the Civil Aviation Authority of Macau said. “No airlines have operated the route between Macau and Laos after the establishment of the old air services agreement” in 1997, according to the president of the Civil Aviation Authority of Macau, Simon Chan Weng Hong.

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No religious problems in here: US report The US State Department’s latest report on freedom of religion once again notes that Macau is a place were religious beliefs are not at risk. In the 2010 Report on International Religious Freedom, the State Department says that “the government generally respected religious freedom in practice” and that “there was no change in the status of respect for religious freedom” during the last year.

“There were no reports of societal abuses or discrimination based on religious affiliation, belief, or practice,” the report says.

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Let’s play fair United States wants Macau government to handle applications for imported labour fairly

he U.S. consul general for Hong Kong and Macau, Stephen Young, has urged the Macau government to be more transparent and fairer in the handling of applications for imported labour filed by foreign investors.

For foreign investors to be successful in Macau, they must be “treated fairly and in a transparent manner,” Mr Young said, quoted by Dow Jones Newswire.

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Mr Young said U.S. companies have invested more than US$8 billion (MOP64 billion) in Macau in the last six years, and currently employ tens of thousands of local workers.

Earlier last month, Las Vegas Sands said it could “currently not determine with certainty” the opening of parcels 5 and 6 in Cotai until it was authorized to import workers to finish the construction.

Government wants to improve e-taxation

And the winner is...

The new director of the Finance Services Bureau (DSF), Vitória Alice Maria da Conceição, says she wants to improve e-taxation services in Macau, in order to reduce the bureaucracy. Ms Conceição was sworn in last month. She was already the bureau’s acting director since February, after Orieta Lau Ioc Ip was removed from the post.

Ms Lau was dismissed following a Commission of Audit report on the spending of the Commission for Motor Vehicles Evaluation, which she chaired. According to the report, MOP3.4 million on attendance fees could have been saved if the number of meetings of the committee had been “reasonable”.

The Hong Kong-Zhuhai-Macau Bridge Authority announced that the consortium led by China Communications Construction Co. has won the tender for the design and build contract for the artificial islands and the 6.7-kilometre tunnel of the massive infrastructure project. The team members of the joint venture include AECOM Asia Company Ltd., Shanghai Urban Construction (Group) Co., China Highway Planning and Design Institute Inc., COWI A/S, Shanghai Tunnel Engineering and Rail Transit Design and Research Institute and CCCC Fourth Harbor Engineering Investigation and Design Institute. The contract will tentatively commence this year for completion by the end of 2016.

BBAM looking for entrepreneurs The British Business Association (BBAM) is launching its Business Angels program, to help entrepreneurs to get funding to create new businesses in Macau. The winner will be announced in February 2011 and will receive MOP60,000 in an interest-free loan to be repaid in two years.

Applicants will receive free legal consultation and will be able to apply for special loans at HSBC bank.

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Loans to gaming skyrocket

More MICE events A total of 323 MICE (Meetings, Incentives, Conventions & Exhibitions) events were held in Macau in the third quarter of 2010, up 24 percent year-on-year, according with official data. The average duration rose from 2.1 days in the third quarter of 2009 to 2.3 days, while the total number of participants and attendees reached 365,111, an increase of 44 percent year-on-year. The majority of those MICE events focused on commerce, trade and management (126), IT and other technology (44), as well as education and training (31).

Domestic loans to the gaming sector increased by 72.1 percent quarterto-quarter, to MOP4.17 billion, in the three months ended in September, according to official data. Overall, domestic loans to the private sector stood at MOP119.6 billion in September, of which MOP42.61 billion referred to personal housing loans, a 7.2 percent quarter-to-quarter increase. Meanwhile, total deposits with the banking sector grew 2.5 percent in September from the previous month to MOP324.7 billion.

Imported labour on the rise

Illegal workers arrested A total of 52 illegal workers were caught in Macau in October. More than 300 sites and companies where raided by the local authorities. Last month, 21 illegal workers were found during a raid on the Galaxy Macau construction site.

This is not the first time that illegal workers have been found there.

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The number of imported workers has increased for the third month in a row. In September 2010, the total number of non-resident workers in Macau stood at 74,525, up by 806 people in comparison with the previous month. In September 2008, Macau had a total of 104,281 imported workers, but since then the number has continually fallen month-to-month until it rose back again for the first time in June 2010. Overall, the population of Macau was estimated at 549,500 as at 30 September 2010, up by 4,900 from end-June, attributable to the increase in mainland immigrants and non-resident workers.

Median wage grows

Median monthly employment earnings increased by MOP500 in the third quarter of 2010, according to official data.

The overall median monthly employment earnings reached MOP9,000, while that of local residents held stable at MOP10,000. The principal indicators of employment for the third quarter of 2010 such as the unemployment rate (2.9 percent) were published in October.

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Retail jumps 35 percent Retail sales for the third quarter of 2010 amounted to MOP7.54 billion (US$943 million), up notably by 35 percent year-on-year. Retail sales of watches, clocks and jewellery (MOP1.92 billion) took the largest share of the pie (25 percent), followed by sales of goods in department stores (14 percent) and leather goods (10 percent). In comparison with the revised figure (MOP6.86 billion) in the second quarter of 2010, the value of retail sales for the third quarter increased by 10 percent. In the first three quarters of 2010, the cumulative value of retail sales reached MOP21.33 billion, up by 35 percent year-on-year.

Forex reserves up

Macau’s foreign exchange reserves amounted to MOP175.1 billion (US$21.92 billion) at the end of October 2010. The reserves rose by 3.2 percent from the revised value of MOP169.7 billion for the previous month, according to preliminary official data. When compared with a year earlier, the reserves increased

by MOP32.9 billion or 23.2 percent.

Macau’s foreign exchange reserves at end-October 2010 represented 33 times the currency in circulation.

Credit cards mushroom The total number of personal credit cards in circulation in Macau at the end of September 2010 was 402,715, up 5.08 percent from three months ago. Renminbi cards posted a 23.54 percent increase quarterto-quarter, to 22,866. The delinquency ratio, i.e. the ratio of delinquent amounts overdue for more than three months to credit card receivables, was 1.26 percent. In the third quarter of 2010, credit card turnover increased by 12.50 percent quarter-to-quarter to MOP2.0 billion. The cash advance turnover amounted to MOP0.12 billion, accounting for 6.04 percent of total credit card turnover.

Industrial Production Index soars The Industrial Production Index (IPI) of Macau increased notably by 41.0 percent over the second quarter to 37.8 points in the third quarter of 2010, on account of the increase in electricity generation. On the other hand, the sub-index of the manufacturing sector increased by 6.4 percent over the previous quarter, the first rebound since the second quarter of 2008. Compared with the third quarter of 2009, IPI for this quarter went up by 1.3 percent.

Increase in new companies A total of 782 new companies were incorporated in the third quarter of 2010 in Macau, up by 20.1 percent year-on-year. The total value of registered capital surged by 1.8 times to MOP206 million (US$26 million). Among the new incorporations, 25 were operating in financial services, 312 in wholesale and retail, 123 in business services and 92 in real estate. Of these, 496 new companies were incorporated with registered capital under MOP50,000, accounting for 63.4 percent. In the third quarter of 2010, the number of companies in dissolution totalled 120.

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Economy & Finance

Business language Beijing wants Macau to step up and become a conduit for business between the mainland and Portuguese-speaking countries

BY EMANUEL GRAÇA

he central government wants to increase Macau’s role in business exchanges and cooperation between the mainland and Portuguese-speaking countries. A series of recently announced measures includes the creation of a training centre in Macau for Portuguese speakers from overseas. Macau will also contribute an undisclosed amount to a new US$1 billion (MOP8 billion) financial cooperation fund, announced last month.

“Macau is becoming an important platform for economic cooperation and trade between China and the Portuguesespeaking countries,” Chinese Premier Wen Jiabao said during his Macau visit in mid-November. “It has sound infrastructure, a sophisticated financial services system, a free and open business environment and a reservoir of Chinese-Portuguese bilingual professionals.”

Mr Wen took part in the third ministerial conference of the Forum for Economic and Trade Cooperation between China and the Portuguese-Speaking Countries. It was his first visit to Macau and his first appearance at a forum meeting (For more on his visit, see story in the Politics section).

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He was the star draw among the more than 1,500 senior officials and business leaders from the mainland, Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Portugal and East Timor at the forum. São Tomé and Principe was the only Portuguese-speaking country absent. It is not a member of the forum because it maintains diplomatic relations with Taiwan.

Human resources Mr Wen told delegates that since the forum’s creation in 2003 “economic and trade ties between Macau and the Portuguesespeaking countries have also been strengthened”. The premier said “companies from Macau are now active in all the Portuguese-speaking countries”, while these countries are making more and more direct investments in Macau.

He said companies in the Portuguese-speaking world had already set up factories in Macau to process coffee imports from Brazil and East Timor that was exported to mainland China, “reaping handsome returns”.

At the ministerial meeting the premier announced the creation of a centre in Macau to train up to 1,500 officials and

31

“Macau is becoming an important platform for economic cooperation and trade between China and the Portuguese-speaking countries,” said Chinese Premier Wen Jiabao technical personnel from developing Portuguese-speaking countries in Africa and Asia.

The Secretary for Economy and Finance Francis Tam Pak Yuen said the University of Macau would house the centre.

He said the centre would also enhance human resources cooperation between China and Portuguese-speaking countries, boosting exchange.

Mr Tam dismissed concerns the centre would fail to meet its objective because the city was already stretched for talent.

There were no further details on the centre’s curriculum or opening date.

There was also a commitment from China and the Portuguese-speaking countries about using Macau as an arbitration centre for commercial disputes between firms from both sides.

Cash injection Mr Tam challenged small and medium-size enterprises (SMEs) to make the best use of the US$1-billion cooperation fund.

“The great goal of the fund is to deepen the relations between China and the Portuguese-speaking countries. We hope that local SMEs can give a hand to improve the role of Macau as a platform,” he said.

Newspaper reports that the government has already earmarked a US$50-million contribution were not officially confirmed. The Economic Services Bureau and the Macau Trade and Investment Promotion Institute are assessing the contribution to the fund.

“We did say that we can afford to inject US$50 million, but how much we will eventually put into the fund depends on the views from the Portuguese-speaking countries,” Mr Tam said.

Ambitious goals

Macau and Cape Verde ink tax agreement

M

acau and Cape Verde last month signed an agreement to avoid double taxation and prevent tax evasion.

In Macau, the agreement will cover professional tax, complementary income tax, and investments, making life easier for companies operating in both markets. This is the fifth tax agreement signed by Macau, after having inked similar deals with mainland China, Portugal, Belgium and Mozambique. The government is currently negotiating similar agreements with other Portuguese-speaking countries and Asian jurisdictions.

The ministerial conference set some ambitious goals for developing trade ties. It was agreed to raise the value of trade between the mainland and Portuguese-speaking countries to US$100 billion by 2013. In the first three quarters of this year, trade was worth US$68.2 billion, up 57 percent from this time last year.

Beijing announced it would make RMB1.6 billion (MOP1.9 billion) in concessional loans to developing Portuguese-speaking countries in Africa and Asia. Also announced were full funding and support for an agricultural cooperation project in each of these countries, while providing each with medical equipment worth RMB10 million. A total of 1,000 one-year government scholarships to study in China where also offered.

East Timor’s President José Ramos Horta described the forum as a flexible mechanism for cooperation that had brought immense benefits to the peoples of the countries involved. The prime minister of Portugal, José Sócrates, said the forum offered a unique opportunity for China and Portuguesespeaking countries to promote bilateral trade and investment.

The forum’s fourth ministerial conference is scheduled to take place in Macau in 2013.

DECEMBER 2010

32

Economy & Finance

You can bank on Ho

Stanley Ho’s Geocapital prepares to launch a new investment bank catering exclusively to Chinese-Lusophone trade

BY EMANUEL GRAÇA

s early as next year a new investment bank could be opening its doors in the territory - at least that is what Macau-based Geocapital Holdings is hoping.

The investment holding company plans to launch a bank here, in partnership with Angola’s Banco Privado Atlântico.

“We are in negotiations with the Monetary Authority,” said Geocapital’s chief executive officer Jorge Ferro Ribeiro. “We think, and it is our wish, that over the next few months the matter will be resolved.”

However, Mr Ribeiro said the new bank would not compete in Macau’s internal banking market, instead it would target investment banking be-

A

DECEMBER 2010

33 tween China and Portuguese-speaking countries.

Geocapital is also planning to open a bank in Timor-Leste early next year.

“We have already signed a protocol with the Timor government and are meeting the outlined schedule,” Mr Ribeiro said.

The next target market is Brazil.

Portuguese bet Geocapital is a joint project between Mr Ribeiro and gaming tycoon Stanley Ho Hung Sun. It was launched five years ago

Geocapital is already launching bio-fuel production projects. In Cape Verde, the firm has established a partnership with the government to set up a businessbased international centre for bio-fuels research.

To match the expansion, Geocapital is also looking for new shareholders.

“2011 will be a year of consolidation of Geocapital’s shareholder base and the strengthening of its existing partnerships,” said Mr Ribeiro.

“The strengthening of the share-

holders’ base will be effected by way of addition of investors from Macau, China and some Portuguese-speaking countries as new shareholders.”

“Establishment of new partnerships should focus on the increasing economy and financial capacity of the whole group, namely through the association with other credit institutions and investment fund managers, from Angola, Brazil, China, Macau and Portugal and on the development of specific projects,” he said.

“We are in negotiations with the Monetary Authority,” said Geocapital’s chief executive officer Jorge Ferro Ribeiro.

“We think, and it is our wish, that over the next few months the matter will be resolved” to take advantage of investment potential created by the Forum for Economic and Trade Cooperation between China and Portuguese-Speaking Countries.

The company already has a presence in the banking and financial sectors of Angola, Mozambique, GuineaBissau, Cape Verde and Portugal.

“The first five years of the Geocapital project corresponded to the cycle of Geocapital’s initial assertion, by establishing a footprint in the Portuguesespeaking countries and the construction of a common financial platform,” said Mr Ribeiro.

“The priority positioning in the financial system in each of these countries and territories provides Geocapital with a panoramic view of and a comprehensive intervention in the heart of the economy of each of these countries.”

Next stage Going forward, Geocapital is now considering new business ventures in infrastructure, energy, natural resources and agriculture. Mozambique and Guinea-Bissau are two countries where DECEMBER 2010

34

Economy & Finance

Your mother told you Businessmen warn that the city must improve ethics to ensure sustainable development

BY LUCIANA LEITÃO

he economic indicators have been pointing upwards for several years. But the fast growth rates are leaving economists wondering if the pace of expansion is sustainable.

Businessmen say business ethics, as much as the ability to make the right choices, may be what will keep the economy healthy.

With 40.2 percent growth in the first half of the year, the president of MGM Macau, Grant Bowie, is afraid that Macau’s economy “is just too good to be true”. The key to preventing unpleasant surprises in the future may be business ethics, he believes.

T

“Ethics is what my mother told me, we all have it in our core,” Mr Bowie said.

He believes that more regulations designed to promote integrity can prevent the negative economic impact of flaws such as greed or jealousy, and so lead to sustainability. Besides more rules, proper policies to protect the social and economic environment are also important, he noted.

The chairman of the British Business Association of Macau, Henry Brockman, says more corporate social responsibility programmes should be implemented in Macau. “People need

“People need reminding from time to time,” says Henry Brockman

DECEMBER 2010

reminding from time to time,” he said.

In Mr Brockman’s opinion, such programmes alert people and organisations about ethical issues.

Act before it is too late The former president of the Association of Chartered Certified Accountants of Hong Kong, Charles Fung, stresses the impact that a lack of ethics can have on the real economy. He recalls that it was “reckless lending, government deregulation, the mortgage-related products, the parallel banking system such as hedgefunds and the unregulated credit rating practices” that caused the credit crunch in 2008.

“The crunch had a relatively low impact on Macau, because here there are simple banking businesses,” he said. But that does not mean a lack of ethics is unheard of in Macau, as shown by the case of the disgraced former secretary for transport and public works, Ao Man Long.

Professor Hans van Ginkel, chairman of the Kofi Annan Business Schools Foundation, says accountability, credibility and ethicality are “closely linked concepts”. High standards in these three areas are “good for business”, in particular in the long term, as these “contribute to sustainable business”, he stated.

One good example of where business ethics pays is the stock market. Surveys conducted by McKinsey & Co indicate that institutional investors are willing to pay an average premium of 20 percent for shares in companies with good corporate governance.

Academic studies point in the same direction. According to a 2006 study by John Nowland, overall board governance in East Asian companies is more likely to be improved during a period of poor stock market performance, and any improvement is followed by a year of improved operating performance.

35

MAX J. ZENGLEIN ECONOMIST AT THE GERMAN CHAMBER OF COMMERCE SOUTH CHINA

Wage fixations DEBATE OVER THE INTRODUCTION OF A MINIMUM WAGE MUST BE BALANCED AGAINST AN UNDERSTANDING THAT BY ITSELF, IT DOES LITTLE TO IMPROVE FAIR DISTRIBUTION OF INCOME ebates on minimum wages are often driven by ideology and conviction. Commonly, a minimum wage is associated with higher pay for workers, meaning higher labour costs for employers. Thus, typically, employers will shun a minimum wage debate while workers will welcome it.

Any supporter of a free-market economy believes that the market should regulate itself. A wage rate fixed by the government will threaten low-skill jobs, which are deemed unproductive at the artificial wage. Wages, therefore, should be determined by supply and demand, making any government intervention redundant.

Advocates of a minimum wage, on the other hand, argue that minimum wage rates are needed to protect workers at the bottom of the socio-economic ladder. By imposing a nonmarket-determined wage rate, all workers should be able to make a decent living from their earnings.

Unfortunately, the minimum wage debate is not that black and white.

Studies making a case for either opinion are abundant.

Economics, however, is not a natural science and touches on aspects beyond pure analysis of numbers. It is as much about social equality and perceived fairness within a country’s industrial relations system.

After all, minimum wages were established after exploitation in the early 20th century caused discontent in the workforce.

Attempting to balance industrial relations and counter threats to social stability, governments responded to pressure from their constituencies by bringing in minimum wages.

In present times, governments in greater China are hearing similar demands. Though not really comparable, the mainland and the SARs are seeing a widening wealth gap in their populations, who are urging their governments to think of solutions. The mainland, Macau and Hong Kong all have Gini coefficients greater than 0.4, which typically indicates highly uneven income distribution.

D

Institutional role

Minimum wage regulations must be seen within the entire institutional setting. Hence, what works in one area may not work in another. As a result, there is no dominant minimum wage regime worldwide and the effects of policies differ greatly.

Introducing a minimum wage alone may not achieve any of its desired outcomes. For example, neither Germany nor Sweden has a national minimum wage rate. Yet both countries have a Gini coefficient that is far below the critical 0.4.

In simplified terms, both countries negotiate wage floors through collective bargaining between bodies representing employers and employees in various industrial sectors, regions or both. However, this is possible only because both countries have strong representative institutions. Even then, not all workers are covered.

Of course, this wage determination mechanism is not the sole reason for higher income equality. It is complemented by a set of supporting institutions that cannot be seen in isolation.

Industry’s concerns

The mainland has just seen an increase of around 20 percent in the minimum wage in Guangdong, while Hong Kong will introduce a minimum wage of HK$28 (MOP29) per hour on May 1 next year, as recommended by the Provisional Minimum

Wage Commission. Macau, too, is set to establish the legislative framework for a minimum wage next year.

In neighbouring parts of the mainland, minimum wage increases have put pressure on less sophisticated, labourintensive industries employing a mainly unskilled workforce.

As labour is in short supply and the municipal governments in several Guangdong cities aim to upgrade the composition of the industrial base, this worries local companies more than it does policy makers. On the contrary, policy makers encourage these industries to move to less developed areas within the province, freeing resources for more desirable industries.

No help to harmony

Looked at in the light of the central government’s goal of maintaining “social harmony” and reducing the income gap, minimum wage regulations in the mainland seem to have had little, if any, success. The regulations require the minimum wage rate to reach between 40 percent and 60 percent of the prevailing average wage rate.

Guangdong, including Guangzhou and Shenzhen, fail to reach even the lower target after recent adjustments. Given the weakness or near absence of social security measures, the social purpose is not even close to being achieved. As a result, minimum wage regulations in the mainland may be more successful as an industrial policy tool than as a means of closing the wage gap.

Macau and Hong Kong have little worry that manufacturing will move out because of rising labour costs. In both regions, manufacturing is of marginal importance. Any remaining manufacturing enterprise will be well advised to seek a stronger competitive advantage rather than low labour costs.

Macau’s main industries will find it hard to move out or replace the labour force with machines. Macau’s shortage of labour and the dominance of service industries make negative employment effects unlikely.

Greater threats may be a burgeoning of illegal employment or a reduction in service quality. Macau’s economy relies on high standards of service, and any debate on a minimum wage should make sure that this standard is not threatened.

Reducing the number of cleaning or security personal or similar positions would be a harmful development.

Clarity needed

These are potential problems that can be solved only by close consultation. Negotiating minimum wage rates requires honest and open discussion among all parties involved.

Macau should be clear on what it aims to achieve through minimum wage regulations. As important as discussing the minimum wage rate is a clear vision of what the purposes of any such legislation are, and how they can be best achieved within the given institutional framework.

More equal income distribution cannot be achieved by introducing a minimum wage alone. Changes in social security, healthcare, housing and education arrangements are far more useful. But a minimum wage can be a tool to ensure a better livelihood for people at the bottom, by providing the weakest segment of the labour market with better income possibilities.

Minimum wage regulations are a fairly easy to implement.

However, they should not be used to cover up shortcomings in other areas, and need to be seen in the context of the economy’s entire institutional setting.

DECEMBER 2010

36

Economic Trends by José I. Duarte Gambling revenue

TABLE 1 - Gambling Revenue, current and constant prices (106 mop)

Revenue current

Revenue constant

18,000

16,000 14,000

The gambling sector’s share of the local economy is so great that the topic deserves interpretation frequently. Looking back over the period of the global financial crisis and immediately after, what are the big picture trends in the sector’s performance?

TABLE 1

12,000

10,000

8,000 6,000 Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

TABLE 2 - Gambling Revenue, homologuous months (106 mop)

2008

2009

2010

18,000 16,000

14,000

The graph shows the total gaming revenue recorded by the government from the start of 2008 until the end of the third quarter. There is a clear decreasing trend throughout 2008.

It was followed by what could be characterised as a stabilisation phase in the first half of last year.

Since then, the trend has been upwards in a mostly sustained way. These movements suggest that the uncertainty in the financial markets and the tightening of credit, have a direct impact on Macau’s gambling sector. Even if, overall, the figures suggest that the effect has been relatively mild. Increasingly relevant to any future analysis will be mounting inflation pressures. The past few months have seen prices of consumer goods rise, resulting in a gap between the monetary and “real” size of gaming revenues. The latter have been deflated here using the consumer price index.

TABLE 2

This graph breaks down the previous series according to year, looking for some seasonal fluctuation in the data.

The overall, greater trends mentioned above are even more obvious.

But there is no clear suggestion of seasonal behaviour. If the first halves of 2008 and last year hinted at a developing pattern, that was clearly absent this year.

12,000

10,000

8,000

6,000 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

TABLE 3 - Gambling Revenue, cumulative (2008-present) (106 mop) 400,000

300,000

200,000

100,000

0 Jan 08

Mar 08

May 08

Jul 08

Sep 08

DECEMBER 2010

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

TABLE 3

One trend, however, is comforting: the cumulative revenues since the beginning of 2008 seem so well behaved that the trend line on the graph has an r2 in excess of 0.985.

An r2 is a measure of goodness-offit of a linear regression. It seems the public finances will only face the prospect of growing surpluses, as tax income appears to be rising faster than our ability to devise ways to spend them wisely or not.

37

Gambling revenue and visitors

TABLE 4 - Gambling Revenue and Visitors, month-on-month variation (%)

Visitors

Revenue

30 20 10

Here, the relationship between gambling revenues and the number of visitors is graphed. It is a somewhat surprising relationship. Intuitively, there must be some relationship between those two variables and, random variations or omitted variables aside, it could be assumed it would be a direct one.

TABLE 4

0 -10 -20 -30 Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

That is not apparent when we look at revenue and visitors’ series together in Table 4. On one hand, the relationship is inverted in about one-third of the observations, which seems a high frequency. On the other, their ratios vary wildly. It is apparent there are other factors influencing the relationship between revenues and variations in tourist arrivals and they appear to be “hidden”.

TABLE 5

Table 5 takes the arrival numbers and breaks them down further into the number of visitors on organised tours and Chinese nationals travelling on independent visas. Combining the two and deliberately using only line charts, it becomes clear how difficult it is to gauge any stability in the relationship between them. In fact, if we compute the series averages, which are close to zero, and the standard deviations showing very high multiples of the average, the values suggest a highly random factor is at play.

TABLE 5 - Gambling Revenue: Group Tourists and Individual Visa Visitors, month-on-month variation Revenue Group Tourists Visa (%) 60 50 40 30 20 10

TABLE 6

0 -10 -20 -30 -40 -50 Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

TABLE 6 - Gambling and Visitors, month-on-month variation (%)

China

Revenue

Hong Kong

30 20 10 0 -10 -20 -30 Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

The two biggest source markets for tourism arrivals to Macau are the mainland and Hong Kong. As in the case of Table 4, the casual observer would expect there to be a relationship. Again, the analysis of Table 4 could be repeated here almost word for word. Of note are these somewhat puzzling and extreme cases. In July 2008, visitors from Hong Kong and the mainland increased by 30 percent and 21 percent respectively, and yet revenue fell by seven percent.

In May last year, Hong Kong visitors decreased by 20 percent and mainland arrivals by 12 percent, while revenues increased by six percent. Macau’s revenue engine seems not to be in the number of visitors but lies somewhere else. Contrary to what might have been thought previously, expectations about high visitor arrivals do not seem to be driving the sector. One final note is that the analysis here does not make a distinction between high-rolling, VIP visitors to Macau and regular visitors.

It has long been understood in the gaming industry that this sector provides a substantial proportion of the “big money” in gaming, right across Asia.

Unfortunately there are no reliable statistics available for either high roller arrivals or the volume of money they spend at Macau’s casinos. The VIP segment may possibly be the “hidden” factor at play in the relationship between gaming revenues and arrivals.

DECEMBER 2010

38

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

- 2.4 5.7 - 39.0 12.6 - 5.1 9.1 - 2.4

Latest (in MOP)

54,794

million

11,089 6,343 3,549 - 10,979 44,790 48,080

million

Notes

% var

41.2 9.8

Q2

- 29.0 8.3 22.4 63.3 75.9

Q2

% var

Notes

34,711 million 17.38 230,228 million 10.8 117,062 million 22.5 225,146 million 10.9 105.07 base - 2008 3.95 0.5 % --

August

million million million million million

Q2

Q2 Q2 Q2 Q2

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

August August August October October

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

Notes

% var

549,500 329,000 9,000

1.5 1.5 5.9

2.9 %

- 0.8

Q3 Q3 Q3 August

Construction 2009

Major sectors

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

m2

Finished

m2 tons million million

% var

- 57.1 40.7 - 56.9 - 1.9 - 27.7

Latest

4,703 164,816 16,614 577 3,687

m2 m2 tons million million

% var

Notes

157.7 - 10.0 - 21.3 70.60 16.6

September September September September September

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

15,383 33 4,838 14,316

% var million

39.6 0 1.4 - 0.3

Notes September Q3, var, ytd Q3 Q3

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

2,093,000 1,648 0.90 days 19,767 78.9 % 1.49 nights

% var

Notes

7.5 1.7 - 0.20 8.7 5.40 0.04

October

%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) DECEMBER 2010

Q3 Q2 August Q3 August

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

2009 Population

Politics

No surprises Little to change in policy or government direction after the 2011 policy address rawing a blueprint for future development” was the title of the government’s 2011 policy address. However, Chief Executive Fernando Chui Sai On’s speech came with very few forward-looking plans for the future and no surprises at all.

One of the key pieces of news was a 5-percent raise for all public workers next year. It was a move that was widely expected.

Mr Chui also announced a threeyear training subsidy of MOP5,000 for each resident aged 15 and up to upgrade their skills. The subsidy is being viewed as one way to short-circuit quality labour shortages. The government expects to spend MOP500 million on this programme.

Surprisingly, a review of the Labour Law was also mentioned in passing, even if this legislation was enacted only two years ago. There were no further details on the government’s legislative plans for human resources.

D

Broken record The bulk of the speech was a repetition of goals previously announced but yet to be achieved, such as the establishment of a food safety centre and a fund for the cultural and creative industries.

The same can be said about the accountability system for high officials, which Mr Chui promised would be ready by the end of this month.

The usual jargon was used when mentioning the need to diversify the local economy, develop new tourist markets or review the law that grants land to casino developers.

As in previous years, the government mentioned the project to develop a night market. New to the project this year is the location, a trial at the underground mall at Sai Van Lake Square.

Minimum debate Mr Chui said the government was planning to start working on a minimum wage next year, after a basic consensus is reached between employers and emDECEMBER 2010

39

40

Politics

ployees’ representatives. Both parties started discussions last moth.

There were no additional measures to cool the real estate market. Instead, Mr Chui stressed the government’s commitment to the measures rolled out in September. He refreshed the government’s promise to build 19,000 public housing units between 2007 and 2012.

With regards to the importation of workers, Mr Chui said he would help speed up the immigration applications from small and medium sized companies for imported workers. But that does not mean changes to the current imported labour policy, the Secretary for Economy and Finance, Francis Tam Pak Yuen said.

According to Mr Tam, the government has set a two-month limit for the processing and approval of imported labour requests beginning next year.

Fighting inflation The government is also worried about rising inflation. The Composite Consumer Price Index in October registered a 3.95 percent year-on-year increase.

In an attempt to break the connection between the appreciation of the yuan and inflated food prices, the government is set to hold talks with mainland authorities concerning diversification of the sources of the city’s food supply, in order to break monopolies for some products and stabilise prices.

Students will have a 33 percent discount on bus fares and people living in social housing will be exempt

Casino control I

n the 2011 policy address, Chief Executive Fernando Chui Sai On said the government would intensify the control over the gaming industry and promote orderly and planned development. It was a promise that sent casino stocks listed in Hong Kong into an immediate tail-spin, shedding anywhere between four and seven percent in the day. Prices have since recovered and research firm Union Gaming said tighter controls would not impact on MGM Macau and Wynn Macau’s plans for developments in Cotai. The government plans to create a database to record data of junket promoters and their associates.

The government will also revise the gaming-related laws in order to promote responsible gaming, Mr Chui said.

The Secretary for Economy and Finance, Francis Tam Pak Yuen noted that the government is already controlling the expansion of the gaming industry through the 5,500-cap on the number of gaming tables until 2013.

“The increase [on the number of tables] should not be over three to five percent a year if the gaming sector is to be properly regulated and developed in an orderly way,” he said. Mr Chui and Mr Tam’s remarks came after premier Wen Jiabao mentioned the need for the government to make sure the gaming industry develops in an orderly way, during his visit to Macau.

DECEMBER 2010

from paying rent for the first three months of 2011.

The healthcare subsidy scheme will be retained, as will the existing livelihood subsidies. All the tax exemptions in place in 2010 both for individuals and companies will be extended to 2011.

Mr Chui also announced a 25 percent reduction in personal income tax for all employed citizens, coupled with an increase in the basic allowance for personal income tax to MOP144,000.

The profit tax allowance was increased from MOP32,000 to MOP200,000.

Mr Chui said the government would reduce the cash handout scheme and begin the program earlier in the year, rather than during the summer months.

The drop in payments is steep. Each Macau permanent resident will receive MOP4,000 while each non-permanent

41

Budget forecasts gaming contraction T

he Macau government is expecting to take MOP57.4 billion (US$7.2 billion) in direct tax from gaming next year, according to budget documents.

The direct gaming tax in Macau stands at 35 percent of casino gross gaming revenue and the government is predicting total gross gaming revenue for the year to come in at MOP164 billion. Oddly enough, that estimate would represent a yearon-year contraction of the gaming sector.

Secretary for Economy and Finance Francis Tam Pak Yuen admitted the forecast was a “conservative” one, maintaining the government’s tradition of low-balling the numbers from gambling.

Mr Tam pledged to increase the rate of execution of the public investment plan, although he said the most recent rates were not that bad.

From 2007 to 2009, they stood at 46.9 percent, 41.3 percent and 46.1 percent, respectively.

The government is expecting MOP79.61 billion in revenue next year, with expenditure of MOP57.47 billion, leaving an estimated surplus of MOP22.14 billion.

Chui Sai On said the government would reduce the cash handout scheme and begin the program earlier in the year, rather than during the summer months

resident will MOP2,400 – about onethird lower than this year.

The surplus funds from the annual handout will be injected into each account of the central savings system, a part of the new two-layer social security model. Permanent residents, the only people covered by this measure, will have MOP6,000 credited to their account.

Thinking green The environment is on the public agenda for next year. The government will create a MOP100-million fund for environmental protection and energy conservation, to help small and medium sized enterprises to improve their green footprint.

The government pledged to give a MOP60,000 tax break for buying green

cars. It is timely considering that last month, electricity utility CEM - Companhia de Electricidade de Macau and the Transport Bureau launched Macau’s first charging station for electric cars.

Mr Chui also announced the intention to transform the Macau-Zhuhai Cross-Border Industrial Park into a “Cross-Border Cooperation Zone”. He did not elaborate further on this point however.

Mr Chui added the government would strive to solve the long-existing conflict between Macau Cable TV and the public antenna companies within the next three to six months. That followed a probe report from the Commission Against Corruption that criticised the Bureau of Telecommunications Regulation for its inability and poor leadership in dealing with the issue.

DECEMBER 2010

42

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

Wake-up call PREMIER WEN JIABAO URGED THE GOVERNMENT TO STEP UP ITS WORK RATE DURING HIS RECENT VISIT AND THE INDICATIONS ARE IT WASN’T LISTENING t was interesting that last month saw the coincidence of two unrelated events. On one hand there was the Forum for Cooperation between China and the Portuguese-Speaking Countries, attended by Chinese Prime Minister Wen Jiabao. On the other, there was Chief Executive Fernando Chui Sai On’s policy address for 2011, followed by those of the various government secretaries.

Both events were rare chances to bring to the fore matters of vision and strategy. Let us not delve into the details of each meeting or their associated political and media agendas. That is better done elsewhere. Let us focus here on a few general issues that are of lasting concern.

What did the forum bring us?

By coming here to reiterate, among some of his foreign peers, Beijing’s commitment to a special relationship with the Portuguese-speaking countries and confirm the unique role granted to Macau in that endeavour, Mr Wen could not have been clearer: enough talk, guys – let’s get the job done. In the process, two especially relevant pronouncements were made. The first was that the central government is putting in real money and expects Macau, which is also awash in money, to stump up its share. It also signalled it is time for Macau to begin acting like a real intermediary, namely by providing the research and training facilities and services needed to support and stimulate cooperation.

On the sidelines of the forum, Mr Wen followed his own very public and mediasavvy agenda. He was not shy about sending what were generally understood as messages to Macau’s power-brokers, even if they were couched in sufficiently general terms so as not to be seen as interfering with autonomy.

little time to take on some of the hints the premier dropped. As in previous years, the policy address was mostly a recycled package of pious intentions, politically correct principles, repeated promises, roughly defined commitments and few specific actions. It is difficult to blame the government alone for this state of affairs.

As it happens, the Legislative Assembly appears only too happy to go through this somewhat wearisome ritual.

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A message delivered

By displaying an understanding of the problems of the common citizen and expressing concern for their predicament, the message was clear: a government is a provider of services to the community and governing implies providing those services. One can discuss what specific services the government should provide and their DECEMBER 2010

Your move, Macau

When will we get a policy address that states plainly the government’s main objectives for the next year? specific terms, but there is no question that once social problems are identified they become a matter for government.

A second message was that inaction – or a kind of perpetual procrastination – is not an option, especially when you are awash in money. Studies are certainly necessary, reflection and caution are “de rigueur”, and government over-activity may be as pernicious as no activity at all – if not more so. But it is high time – or so the message seemed to imply – to get things done.

What a pity that the policy address was so soon after Mr Wen’s visit, leaving

When will we get a policy address that is only one-third as long? It could probably be even shorter without any loss of substance. When will we get a policy address that states plainly the government’s main objectives for the next year, followed by a list of specific, tangible, verifiable, measurable actions and targets?

When will we get a policy address that contains an assessment of whether the pledges made the year before have been fulfilled or that contains lessons learned from the failure to fulfil them?

All of this raises another question: if the premier’s hints can be interpreted as a call to action, what can we expect to happen next? It is clear there is a need to deal with significant social and economic issues: housing, labour and social security, to mention just a few. The government’s inaction or unsteadiness in some of these areas has contributed to the deepening of problems associated with them. As the social and political pressure is there, action will surely have to be taken. Money is certainly no object.

But here a worry creeps in. Years of studies, surveys, inquiries and the like have been unable to shape a clear vision and strategy – not even a list of reasonable courses of action. With so much money available, and in the face of increasing social and political demands, the government may feel the temptation to scatter some patacas here and there to appease the most vocal or active sectors of society – which are not necessarily the most deserving.

This approach may well buy time. It is less clear whether it will prevent a buildup of social strains or make the problems more intractable in the future.

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It’s your daily business

DECEMBER 2010

44

Politics

Chinese Premier Wen Jiabao practises traditional Tai Chi moves on his visit to the Mount Fortress

Keep it clean, warns Wen Chinese premier tells local officials to promote a transparent government

hinese leaders visiting Macau have a history of critiquing the leadership of their southern SARs, that is rich in significance.

When President Hu Jintao visited in 2005 to mark the fifth anniversary of the handover, he gave a scathing appraisal of then Hong Kong leader Tung Chee Hwa. Mr Tung was out of a job four months later.

Fast forward five years and Chinese Premier Wen Jiabao has delivered a message with tough overtones to Macau’s leadership – twice.

While here for a two-day trade forum (see Economy and Finance section), Mr Wen also toured schools, businesses and made tourist stops along the way, offering advice and hints for Macau’s government.

“Power must be exercised under the sun,” he told community leaders, in a clear pitch for transparent government.

“Being clean is particularly important in Macau. Only when you are clean do you have authority. If you say one thing on the stage and behave differently behind the scenes, you do not have authority.”

He also told officials that improving living standards and sharing wealth should be their priority.

For legislator Pereira Coutinho, Mr

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DECEMBER 2010

Wen’s words on the need for local officials to be clean were the highlight of the premier’s visit.

“Mr Wen’s visit to Macau, shortly before the policy address, was both a sign of support for the government and a warning call, so that officials don’t forget that they need to be honest, have transparent policies and use the public money in an unconcealed way for the benefit of the population,” Mr Coutinho told Macau Business.

“Mr Wen’s words will have a lot of impact in the future.”

There was also an indication in Mr Wen’s comments that the government’s emphasis should be on the orderly development of the gaming industry. The Secretary for Economy and Finance Francis Tam Pak Yuen said the government was controlling the expansion of the gaming industry by capping the number of tables at 5,500 until 2013, with an annual growth of only three to five percent allowed in the future.

Words of advice Mr Wen’s comments were not restricted to government transparency. He also visited tourist spots and made several remarks about economic development.

Among them was the need to diversify

the territory’s economic base.

Mr Wen said building the tourism, creative, and the meetings, incentives, conventions and exhibitions industries was one way to achieve diversity.

Mr Wen suggested that the Macau government should rely more on small and medium-size enterprises (SMEs) to promote the Macau brand in the global market. The growth of creative industries, led by SMEs, was important in achieving Macau’s ambition to become a world travel and leisure hub, he said.

Minister of Commerce Chen Deming, who was also in Macau for the trade forum, said the city could use its privileged relationship with Portuguesespeaking countries to diversify.

Of significant relevance to most in Macau were Mr Wen’s comments on the inflated real estate market.

Mr Wen commented on the difficulties young people in Macau had in buying a home due to high real estate prices.

Showing no small amount of empathy for struggling families, Mr Wen said the government had the responsibility to help house low-income families by speeding up the construction of public housing and spending more on improving people’s livelihoods.

45

of the

establishment of the

MACAU SAR

ARE WE BETTER OFF? DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 46

SIGN OF THE TIMES Post-handover Macau is certainly different and, in several areas, better than the colonial version t would appear that the Macau SAR’s first 11 years have been a success. Economically, the territory is more sound than ever before, and substantial improvements have been made on infrastructure, health and education, to name a few.

Nevertheless, there are big delays in the courts for those seeking justice, civil awareness still lags and the streets are often blocked with traffic. The gap between the rich and poor is widening and real estate prices are making homeownership increasingly inaccessible.

Unfortunately, Macau is also perceived as more corrupt now than it was just a few years ago.

The city is increasingly oriented toward the mainland in matters of commerce and politics. Businessmen still dominate the Legislative Assembly and fewer women are now among Macau’s

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DECEMBER 2010

principal officials than ten years ago.

These are just a few of the dichotomies that have arisen in the last 11 years.

For the population and government alike, it has not been an easy ride.

small committee of 300 still have that responsibility.

What has grown is the human resources of the public administration.

Modern-day Macau has more than 22,700 civil servants. The number has increased by one-quarter in the past five years. There has also been considerable investment in infrastructure to improve the efficiency and productivity of the administrative machine.

The government is now spending more from a bigger public purse, swelled by tax revenues due to the gaming boom.

In 2003, the government spent a total of MOP15.7 billion. That had more than doubled by last year to MOP35.4 billion.

Spending on health, education and social security has increased significantly.

Crime rates rise Better, not best In the political sphere, almost nothing has changed 11 years after the Chinese flag was hoisted over government headquarters. The number of legislators has increased from 23 to 29, following what was agreed between China and Portugal in the SAR’s Basic Law. On December 20, 1999, the Legislative Assembly was composed of eight legislators elected by direct vote, eight by indirect vote within associations, and another seven were appointed by the chief executive. The current ratio is 12:10:7.

No changes have been made to how the chief executive is selected. A

Although Macau continues to be regarded as a safe city, rising crime is a problem.

In 1998, the city registered 8,487 criminal offences. Last year, the reported figure was 12,406 offences, a number that had decreased from the highs of the previous two years.

Of course, the territory has come a long way from the bad old days prior to the handover, when violence carried out by organised crime syndicates was a troublesome issue for the Portuguese authorities to handle.

The number of homicides dropped from 42 in 1999 to ten last year. But

47 the number of assaults has increased by almost two-thirds and sexual offences have quadrupled.

The city also has a tarnished international reputation, with the US State Department singling out the city as a destination for human trafficking and a potential centre for money laundering.

Reflecting a period of great development, there are more noise complaints dealt with by the police, quadrupling between 1999 and last year, almost 3,900 offenses.

More jobs, more money Unemployment has dropped drastically, from 6.3 percent in 1999 to less than 3.0 percent today, according to the latest available data. And the monthly median wage has improved, almost doubling to MOP9,000 in September.

In education, there are several positive indicators, from the rising number of teachers to the class promotion rates and the number of students going on to university.

Perhaps more significant is the number of people in adult education.

If you believe the statistics, one in four marriages ends in divorce, while 11 years ago the rate was one in five Between 1998-1999 and 2008-2009, the quantity of courses available has more than doubled, as has the number of enrolled students.

We’re growing The city’s population has grown to almost 550,000 – up more than 120,000 people in 11 years – but Macau now has almost 40 percent more green areas.

There are more cars and motorcycles on the roads, and the density of vehicles on public roads has jumped from 353 vehicles per kilometre of road in 1999 to 460 last year. That has meant added pressure on infrastructure.

Air quality has improved in the past

three years, but the territory is now consuming water and electricity at a rate like never before and producing more domestic garbage.

With so much growth taking place, the territory itself has become bigger, with the land reclaimed since than handover adding 5.7 square kilometres to the 23.8 square kilometres Macau had in 1999.

Despite the added pressure on the environment, we are all living longer and the number of doctors per 1,000 heads has increased over the past 11 years. However, the number of hospital beds per 1,000 people in the territory – 2.0 as of last year – is still bellow the international average of 3.0.

The marriage rate has increased every year since the end of 2005. The birth rate has grown alongside it, with a baby boom underway. Divorce rates have also risen, peaking last year. If you believe the statistics, one in four marriages ends in divorce, while 11 years ago the rate was one in five.

But the question remains, are we better off? It is your call.

DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 48 JACKY HONG ASSOCIATE PROFESSOR OF MANAGEMENT, UNIVERSITY OF MACAU

VERONICA FONG PHD CANDIDATE, UNIVERSITY OF MACAU

Revitalizing SMEs in Macau: Challenges and opportunities LOCAL SMALL AND MEDIUM-SIZED ENTERPRISES NEED TO STEP UP THEIR GAME AND BET ON INNOVATION he Macau SAR will soon be celebrating the 11th anniversary of its handover to China on December 20, 1999. Over the past 11 years, we have witnessed a number of major economic, political and social changes occurring in the society, but one cannot deny the fact that the liberalization of the gaming industry in 2002 appeared as one of the major turning points for the recent development of Macau.

Apart from generating robust growth of gaming revenues and stimulating remarkable increases of tourist arrivals in Macau(1), the new gaming operators also brought new technology, capital and management practices into the local business environment, which have helped consolidate the role and status of Macau as a major tourism destination in Asia.

While it is undisputable that the future economic development of Macau will depend very much on the tourism sector and its gaming industry, in particular, there has been a strong call from various sectors in society over the past several years to further diversify its economy, a reminder that was also given by Premier Wen Jiabao during his maiden visit to Macau recently. In order to achieve this objective, we need to devise a balanced approach to develop the local business environment in which the potential contributions of small and medium-sized enterprises (SMEs) should not be ignored.

It is our hope, that while continuing to enjoy the fast economic growth due to the rapid development of the tourism and gaming sectors, the Macau SAR government can provide sufficient aid and support to the local SMEs so as to create enough space for them to survive and flourish.

T

Challenges In order to assess the difficulties facing the local SMEs, the first author and other colleagues from the Faculty of Business Administration, at the University of Macau, carried out an exploratory study in 1999(2). In the study, we conducted a survey of the local small and medium sized manufacturers, trying to identify the major business and operational problems they encountered. They all claimed that “a decline in profit”, “strong competition” and “fluctuation in raw material prices” were the three major problems affecting their daily operations, whereas “labour shortages” appeared as the most severe concern in the labour issue.

In a more recent study conducted by the second author and other colleagues sponsored by the Macau Foundation(3) to investigate the impact on SMEs after the liberalization of gaming industry, it was found that they faced similar challenges as before in terms of “labour shortages” and “insufficient policy support”. However, the “risk of unbalanced economic growth and related impact” was somehow perceived as an additional concern by the local SMEs since they had been operating in DECEMBER 2010

a highly competitive environment for both market share and resources.

Comparing the results of the above two exploratory studies on SMEs over the past decade, it is obvious that the local SMEs have been less likely to enjoy the benefits brought about by the liberalization of gaming industry, due to lack of resources and the negative impact of the changing landscape of the business environment. However, their long-term survival should not be determined by these factors alone. Instead, a more proactive approach should be undertaken in order to revitalize the sector and exploit the hidden opportunities.

Opportunities On the positive side, local SMEs can strive to maintain a high degree of flexibility due to their small scale of operations and lower organizational barriers. Competing on low cost will no longer be a viable strategic option in the future, and they need to abandon this traditional mindset by embarking on the path of innovation and moving up the value-added chain.

In a recent seminar hosted by the Science and Technology Development Fund of Macau, Professor Kazuyuki Motohashi from the University of Tokyo argued the need for the local SMEs to engage in service innovation by teaming up with domestic and foreign institutions in order to develop a “system of innovation”.

Of course the implementation of this networked approach of innovation requires a collective and well-coordinated effort among various entities, namely multinational firms, government funding agencies, universities and local SMEs. But coupled with a strong entrepreneurial drive from the business sector and support from the Macau SAR government, we are confident that this vision can be achieved.

As a concluding remark, Macau has transformed itself into a service-based economy with a particular emphasis on the tourism and gaming industries in the past decade. Despite the remarkable economic achievements, it is time for us to reconsider which model of sustainable development is suitable for Macau. Regardless of what final model will be adopted, it is always necessary to have the involvement of local SMEs and other institutions.

- http://www.dsec.gov.mo/default.aspx - Antonio, N., Hong, J. & Lam, T. (1999) ‘Reassessing the Realities and Hopes for Small and Medium Enterprises in Macau’, Euro-Asia Journal of Management, 17: 49-72.

(3) - Veronica H.I, Fong & Anthony I.K. Wong. (2009) ‘The Imperative of Human Resource in Macau’s Sustainable Development: Problem and Solution’, a research project supported by Macau Foundation.

(1)

(2)

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DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 50

WE’VE COME A LONG WAY

Eleven years after the handover, Macau has done better than survive economically; it has flourished. Now diversification from the casino-led economy is the priority

BY FILIPA QUEIROZ

“

rowth” is the word that springs most readily to mind when considering Macau’s economy since the handover. And any consideration of the last 11 years must take into account the changes in the business environment. Businessmen have witnessed the most dramatic changes since the establishment of the Macau SAR on December 20, 1999.

“Scale difference is one of the main things that you notice,” says Henry Brockman, the chairman of the British

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DECEMBER 2010

Business Association of Macau. “It’s now possible for businesses to get more efficient because it’s all on a much bigger scale than 11 years ago.”

Telecommunications is one example, he says. “Macau now has three mobile phone operators, whereas in 1999 it only had one. That’s because there has been growth in the communications traffic, which means more efficiency and lower costs for everybody.”

The British Business Association is itself a product of the post-handover boom, having been created in 2006 to

represent British business interests. “A decade ago we could never have formed this association because we would only have had about 10 or 15 members,” notes Mr Brockman. Nowadays the association has more than 200 members.

“New sectors are also open to British investment, such as construction,” he says. “Before it was pretty much a closed market but now you have such major projects going on in Macau that the owners of those projects want the very best internationally. That has poured in foreign investment.”

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DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 52

The Statistics and Census Service recorded MOP557 million (US$70 million) of inward direct investment in the construction sector in 1999. By 2009, the last year for which data is available, this figure had risen to MOP2.9 billion.

“There is no recession and investment is coming from all sides, which is very good for the business community, as are the very low taxes,” says Jackson Tsui

From all sides The president of the Macau Exporters and Importers Association, Jackson Tsui Wai Kwan, is sure about one thing: “The economy of Macau is now quite free”.

“There is no recession and investment is coming from all sides, which is very good for the business community, as are the very low taxes.”

Macau’s exports – mainly textiles and garments, footwear, toys and electronic goods – were worth MOP17.6 billion in 1999. Imports amounted to MOP16.3 billion.

It is a far different story today. In the first nine months of the year, the value of exports was MOP5.3 billion and imports were worth MOP31.9 billion.

“Since the handover, all the imports and exports are now much simpler. It is easier to have goods from all over the world and to export goods from Macau to everywhere too,” says Mr Tsui, who is also a legislator.

The president of the Association of Building Contractors and Developers, Tommy Lau Veng Seng, thinks Macau has had “a really successful decade”, esDECEMBER 2010

pecially in the property sector.

“Real estate is one of the most popular ways to invest in Macau,” he says.

Mr Lau, also a legislator, says growth in the real estate sector has been partly due to foreign investment.

He has a “quite positive” view of the evolution of the local business environment over the past 11 years. “The very substantial economic growth is the obvious change. Once we opened up the gaming industry, the numbers beat all previous records,” he says.

He harbours some concerns. He stresses there is a need for economic diversification and laments the shortage of quality labour.

Casino economy In 1998, 44.5 percent of government revenue came from direct taxes on gaming.

The proportion increased sharply after the handover, with the liberalisation of the casino industry. Nowadays, the percentage is around 83 percent.

New players in the gaming industry mean more tax revenue and more tour-

ists. Almost 22 million tourists visited last year, 15 million more than in 1999.

By the end of last year, 51 percent of arrivals were from the mainland. A decade prior, most were from Hong Kong. Visa restrictions made it much harder for mainland Chinese to visit.

By the end of 2006, Macau had overtaken Las Vegas in terms of casino gross gaming revenue. The figure has increased every year and Macau will post another new record this year of somewhere around MOP180 billion.

“Gaming has evolved in volume but also in terms of quality and service diversification,” says economist José Morgado. The industry’s liberalisation has “allowed more money to enter Macau, as well as new operators, namely Americans, which gave more quality to the supply”.

The industry has even greater potential, if it is developed in the right way, he says. There should be more attention paid to meetings, incentives, conventions and exhibitions or MICE. While government data records 323 MICE events in

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DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 54

Congratulations on the 11th Anniversary of the Macau SAR

DECEMBER 2010

the third quarter, and a year-on-year increase of 44 percent in participant numbers, the sector has seen its share of ups and downs.

Patchy development Mr Morgado, who is the chief executive of BES Oriente bank, says the banking sector has also profited from the entry of new players in the gaming industry. It has provided investors with loans for their projects and other financial services.

“It has all been very positive,” he says.

But there are shortcomings.

Initially, Mr Morgado recalls, there was a degree of public investment, but after the corruption case involving the disgraced former Secretary for Transport and Public Works, Ao Man Long, the government has poured less money into public infrastructure. “The economic boom cooled down a bit,” he says.

Mr Morgado believes it is imperative that public investment keeps up with private investment.

Although Macau is richer overall, there are areas that have seen few benefits from the boom, such as health, education and working conditions, says Mr Morgado.

For Henry Lei, assistant professor of business economics at the University of Macau, the region’s “very positive situation” does not mean everyone is better off.

Mr Lei points out that construction workers face competition from imported labourers. There is also a “serious problem with the appreciation of the renminbi and the depreciation of the US dollar” and “overdependence on the gaming sector and the rising property prices”, he says.

Simply a lot more Nevertheless, Mr Lei is satisfied with the achievements since the handover.

“The economy is going quite well.

We’ve doubled growth, we have more job positions and income levels have increased quite a lot,” he says.

“We simply have a lot more than 11 years ago.”

Mr Lei and Mr Morgado agree that there is still much to be done. For instance, development has created a need for more qualified workers.

In the background, there is a new chapter starting, one of growing economic integration with the mainland.

Mr Lei says support from the central government for projects on Hengqin Island, the new University of Macau campus and the Chinese medicine park, is a very positive sign for the future.

He believes it is possible for Macau to develop innovative industries and new businesses that will ensure prosperity and reduce the economy’s dependence on bets placed at gaming tables.

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DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 56 LEONARDO (DON) DIOKO PROFESSOR AT THE INSTITUTE FOR TOURISM STUDIES (IFT) AND DIRECTOR OF THE INTERNATIONAL TOURISM RESEARCH CENTRE, IFT

Eleven years of extraordinary tourism growth: wealthier, yes, but happier?

THE GROWTH OF THE TOURISM INDUSTRY HAS COME AT A COST FOR LOCAL WORKERS. THE QUESTION IS WHETHER WE WANT TO KEEP THAT MODEL FOR THE YEARS TO COME OR AIM AT A BETTER LIFE QUALITY FOR THE FUTURE t is difficult, if not impossible, to sum up the remarkable story of Macau’s post-handover tourism growth in just a few hundred words. On the one hand, there is no need to re-state the obvious changes we have seen around us - we are all witnesses to the unfolding events set in motion in the last decade.

My observations are no more valid than the next person’s about a remarkable period for which we all have something of relevance to say. After all, we have been participant-observers in this change and there is virtually no aspect of our lives that hasn’t been touched by tourism.

On the other hand, I see reductionism as a useful intellectual exercise. How can one best capture the essence of arguably one of the most momentous period in Macau’s history in a few words? Historians often need to elucidate significant periods of time by distilling voluminous records and data.

Doing so, they enable future generations to comprehend and grasp the sentiments of those that walked before them and the reasons behind their actions.

Instead of writing words at length, however, I thought it more instructive if we relied on just a few key figures to capture the tremendous change in Macau’s tourism:

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7.5 million Visitor arrivals 1999: 7.4 million

Visitor arrivals 1991:

For years before the handover, the needle hardly moved in terms of tourism. But this was about to change: Visitor arrivals 2000: 9.1

million

(likely overstated under old calculation method then used)

Visitor arrivals 2009: 21.7

million

Macau’s return to the Motherland and the liberalization of the gaming industry have of course proved to be the key events.

But other events were just as significant: a rising middle class in a more open and economically stronger China, the rise of low-cost regional carriers, and greater integration in transport infrastructure in an increasingly globalized world. One particular event was a ‘black swan’: the onset of SARs in 2003 and the subsequent central government’s response of loosening the independent travellers’ regime to aid Macau’s recovery. The overall effect on Macau’s prosperity has been so unbelievably enormous that we should be pinching ourselves: Macau

OECD

Per capita GDP 1999 (US$):

13,844

23,187

Per capita GDP 2009 (US$):

38,968

33,455

DECEMBER 2010

Wealth at a cost

If you pinched yourself and it hurt, it did so for two reasons. The first is because Macau’s rise in GDP is indeed real - we aren’t dreaming. The second is because such wealth comes at some cost on a personal level.

I shall highlight three figures beginning with a macro view.

Over the last 11 years, while per capita GDP has increased, the proportion of GDP accounted for by private expenditure has actually declined.

Take a look at the accompanying figure. A lot of the GDP increase indeed came from investments in building new gaming and entertainment facilities and from our exporting tourism (gaming) services. But it appears little of these stayed around long enough for residents which, over the same period, did not seem to enjoy the proceeds of this growth.

In other words, residents seem to be earning more but their spending has actually declined, wilfully or otherwise. Another way to put it is that over the last decade, Macau residents have successfully built a city of leisure and entertainment but possibly at the expense of their own leisure and entertainment: Average weekly worked hours, OECD countries, 2009:

38.4

Average weekly worked hours, South Korea, 2009:

46.6

(among OECD highest)

Median weekly worked hours, Macau, 2009:

46.3

Macau workers are putting in more work hours compared to developed economies and working just as much as South Korean workers on average. To be fair, the above figures show the same pattern in 2001. So one can say that Macau workers, like South Koreans, have always been hard at work. But do remember that the Koreans have gone on to produce high definition digital televisions in addition to fuel-efficient cars and hi-tech gaming consoles, while in Macau, we have worked harder at the same tasks as before.

The need to run more and better

This reminds me of what the Queen said to Alice: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

In Macau, we are going very fast, it seems, to nowhere. By nowhere, I mean a future not far different from what we can already glimpse in the glittering gaming resorts we now see around us - a future that will be more of the same.

Quality of life is a third figure I’d like to highlight. This is a frequently measured, mentioned and debated concept and

57 Macau’s position varies a lot depending on the list one reads.

At the Institute for Tourism Studies, we have been measuring residents’ satisfaction with their quality of life yearly since 2003, a time before the advent of the new casinos: Satisfaction with quality of life, 2003: 3.77 (on a 5-point scale with 5 being the highest) Satisfaction with quality of life, 2009: 3.41 Here is the rub: economies that have become wealthier, with the exception of those based on oil, have done so by creating, innovating and efficiently producing goods or services of high value. Think of countries that produce technology products in clean energy or communications, or those that innovate in areas such as furniture design, fashion or personal care products, or those with efficient industries capable of building cars and biotechnology. Even a few small states have built fortunes around information-based services such as finance or international trade and exchange.

Unfortunately for us in Macau, tourism requires huge personal and lifestyle demands on the workers of destinations built around it, as it is a labour intensive industry. It seems an irony, therefore, that successful tourism destinations will need to import workers to carry out jobs that after a while no longer appeal to residents, given their higher income.

Labour importation is a pattern discernible in other countries with high tourism growth, redefining those countries’ relationship with its neighbours: Thailand’s with that of its neighbours in the Mekong area and Myanmar, the United States with Mexico and Central American States, rich Western Europe with those in the East, and Mediterranean countries with those of North Africa.

Time to choose

I am not advocating that we abandon tourism or that the architects of Macau’s great decade of tourism expansion erred

on the speculative side. Nevertheless, while it is more difficult to prognosticate about the future of Macau’s tourism, I believe a couple of future scenarios are apparent.

Should we maintain present levels of growth, the more likely of the two scenarios, Macau residents and workers should envision a home and personal lifestyle far removed and very different from the present. We will be living amongst new immigrants and working with a more diversified labour pool, making Macau a truly global city. The exigencies of tourism growth will ensure this. We must prepare for this future in terms of welcoming and protecting all workers even as we ensure Macau residents’ interests are prioritized.

Barring the importation of migrant labour, residents should prepare to work even longer hours in jobs they will deem less satisfying. As a consequence, I imagine sales staff at shops to be less courteous then they already are (it is hard to smile if you think your life quality is poor) and I will see less of my wife at home in the evenings (she works in the tourism industry.)

The other scenario envisages our using some of the proceeds of this decade to plant the seeds for new industries in which Macau’s workers can participate, either by innovation, efficient production, or other value enhancing activities. There is something fulfilling on a personal level in a diversified economy that allows individual workers to pursue different careers or economic activities, even if the financial outcome is uncertain, because it draws on the diversity of a population’s pool of talent and skills.

A diversified economy can be likened to a fertile field in which all sorts of seeds can be planted and thrive. I can imagine under such a scenario Macau’s per capita GDP to be no longer among the highest, but subjective assessments of one’s quality of life to be much better and workers creating and innovating products or services of value, without having to surrender most of their family and private lives.

We have been incredibly lucky to be living in Macau in the last 11 years and we have much to be thankful for. Condensing this period in a few words, however, I would quote Dickens: “It was the best of times, it was the worst of times.”

Are we enjoying the fruits of our labour?

Per capita GDP (USD) (see left vertical axis)

Private (household) consumption expenditure % of GDP (see right vertical axis)

DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 58

TALES OF TWO SOCIETIES

Prosperity after the handover has created a community divided by wealth and that uses technology to voice its alienation he Macau SAR’s explosion of wealth in these first 11 years has inevitably meant a social transformation. The results of economic growth, increasing urbanisation and the dominance of the gaming industry can be seen everywhere.

How has the community coped with the changes? Opinions are split.

“I would like to use one sentence to describe it. Too much, too narrow and too fast,” says Cecilia Ho, a sociologist at the Macau Polytechnic Institute. Ms Ho believes Macau’s society is increasingly divided into the haves and the have-nots.

“The poverty gap is widening. There is too much emphasis given to the development of Macau as a world entertainment hub, while social and cultural aspects are neglected,” she argues.

T

She is particularly sensitive to the plight of non-resident workers. Last year she directed a documentary that tells the story of a female migrant worker who left Indonesia to work as a domestic helper in Macau. Since the documentary’s release, a new law on the employment of non-resident workers has taken effect but problems remain. “There is still a lot of exploitation by recruitment agencies, especially for the Indonesian domestic helpers. Their minimum monthly salary is still MOP2,500,” she says.

Government data reveals there were almost 74,000 nonresident workers in the city at the end of August – more than double the number in 1999.

There were 5,694 employed in manufacturing and 15,797 in domestic services, both low-paid occupations. Most were from the mainland, the Philippines, Vietnam and Indonesia.

With no minimum wage for either resident or non-resident workers, many struggle to make a decent living.

Reaching out Victoria Lei is assistant professor of English literature at the University of Macau and former president of the Macao New Chinese Youth Association. She says that when she looks back to 1999, she feels nostalgic.

“A lot has changed. I feel proud of what we have achieved but very anxious too,” she says.

Her view is that Macau is paying too high a price for its development, sacrificing its natural and cultural heritage. Although environmental concerns are high and the landscape has changed, there are positives.

“Now, young people have more opportunities and for the first time they actually feel that their dreams can come true,” she notes.

The chance to interact more deeply with foreign students means “we can learn from each other,” she adds. Ms Lei says she hears mainlanders speaking in the university corridors, helping residents with Mandarin, while improving their own Cantonese.

At the end of 1999, about 10,000 students were in higher education in Macau. Last year there were more than 21,000.

Angus Cheong thinks society is adapting to the new form of government and the renewed bond to the mainland. Mr Cheong is the research director of e-Research Lab and director of the Macau Internet Project, an organisation that researches Internet usage in Macau.

Mr Cheong says the past 11 years were a fascinating period that saw people start to get in touch with the outside world, using the web as their main medium.

DECEMBER 2010

59

DECEMBER 2010

Anniversary of the establishment of the MACAU SAR 60

“I see the young challenging the government in the next couple of years for being too much in favour of the business sector and the casino people,” says political analyst Larry So “Macau is [now] one of the most mature places for using the Internet in the world,” he says.

Finding a voice The results of his last survey indicate that more than one-third of Macau’s Internet users use online forums as platforms to express their feelings and opinions. Young people are not shy about using them to discuss and criticise government policies, he says.

“Together with Facebook, forum users advocate a culture of monitoring society and the government, expressing also their emotions and thoughts about their daily life,” he comments.

“Users evaluate and criticise government policies without exposing themselves in the traditional media. Activists use them to promote their points of view, while others use them as a place to organise social activities.”

It comes as no surprise to Larry So, one of Macau’s leading political analysts. “I see the young challenging the government in the next couple of years for being too much in favour of the business sector and the casino people,” Mr So says.

A changing attitude was obvious in the last two elections, with more votes going to trade unionists and pro-democracy candidates as the electorate, and candidates, got younger.

He recalls the vision of former Chief DECEMBER 2010

Executive Edmund Ho Hau Wah. “Policy started to change and he knew how to push up the economy, for example, opening up the immigration policy so that other people could come to Macau and stay here,” he says.

“If we look back, there was an addition of 100,000 people from that time until now, which is quite a lot.”

According to Mr So, “2004 - 2005 was the turning point of Macau, the take-off stage in economic terms”.

But politics have failed to follow suit, as most of the leading politicians were more deeply engaged with economic matters than with political beliefs, he says. “Until now nothing has changed.”

Higher purpose Agnes Lam, assistant professor in the University of Macau’s Department of Communication and chairman of Macau Civic Power, believes that people lack something to believe in besides money and casinos.

“People in Macau are suffering from some kind of identity crisis,” she says. Ms Lam says the SAR has failed to evolve in a healthy way and that its institutions should have been made stronger before the liberalisation of the gaming industry.

She acknowledges that the quality of life has improved. “People have more money to go to study abroad, to travel,

and the young can earn substantial salaries when they graduate,” she notes.

The problem is that, once in the workforce, young people do not have enough career options, she says. “If a person wants to earn enough money, the best solution is to go to work in a casino or some other related industry.”

Ms Lam believes wealth has created tensions between established residents and newcomers. “Macau people were always very open to others, namely in the 1960s and 1970s, when a lot of people came to Macau. Now I feel that there are tensions,” she observes.

A higher average standard of living means little to those on low incomes who have been left behind, says Caritas Macau secretary-general Paul Pun Chi Meng.

“Those people spend more time working and, even so, it’s not enough to fulfill their expectations and pay for their basic needs,” he says.

The head of the largest non-profit charitable organisation in the territory, with 60 years of history and more than 1,000 staff and volunteers, believes that the population needs to feel that the energy they’re spending gets “a reasonable return”.

“The problem is that, mainly, we think of those who have, and forget those who do not have,” he says. “In 10 years Macau won’t have enough homes for the elderly or schools for everybody.”

61 RICARDO C.S. SIU ASSOCIATE PROFESSOR OF BUSINESS ECONOMICS, UNIVERSITY OF MACAU

The marvel and dilemma in the progress of Macau’s casino industry IS THE THIRD-PARTY OPERATED ROOM BUSINESS MODEL A GOOD THING FOR THE LOCAL GAMING SECTOR OR IS IT, COUPLED WITH HIGH TAXES, HINDERING NON-GAMING FROM EXPANDING? etermination of the Macau SAR Government to conclude the monopoly structure of its casino industry in 2002, followed by approving a total of six independent legal entities running on the three new casino licenses issued in February 2002, has given rise to dramatic changes in the industry’s scale, business organization, as well as performance.

Restructured by the major world-class casino resort operators, Macau’s casino industry has been revived from its chaos in the second half of the 1990s, and turned into a shining business in the world’s casino gaming markets.

Driven by the accelerating volume of capital investment in the industry’s gaming and non-gaming facilities, as well as the full support from the Central Government under the ‘One-Country, Two-Systems’ policy, its reported gross gaming revenue in 2010 was eightfold that of 2002 (representing a 30 percent compound annual growth rate in eight years).

In terms of gross gaming revenue, Macau’s casino industry has been crowned as the largest market in the world.

Nevertheless, the “champion” in gross gaming revenue may not necessarily imply the “best” in such dimensions as service quality, competitive edge, or sustainability.

Indeed, rapid expansion of this industry since the opening of the first Vegas-based casino in 2004, and the other subsequent large-scale property developments, has not only boosted up the planned scale and turnover of the industry, but has also led to a number of conflicts within the industry, as well as clashes with other local economic sectors. Throughout the development of the casino industry over nearly a decade, a number of strategic issues are found to be puzzling in the practice of this business, which definitely warrant cautious review by the related public policy makers, industry, or even Macau society as a whole.

D

The third-party business model issue

Among the intricate issues, the traditional and evolving thirdparty operated gambling room business segment (commonly labelled as “VIP baccarat”) remains at the top of the list.

Despite the handsome amount of turnover (or the volume of rolling chips) contributed by this segment to the overall income of the gambling room operators and government taxation, the net margin of returns derived by this segment (e.g., earnings before interest, depreciation and amortization as a percentage of gross gaming revenue) to the formal casino license holders, is not necessarily painting the same positive picture.

Indeed, the impact of this share of the business segment on the industry’s gross gaming revenue is twofold. While the upside is evidently its contribution to the industry’s gross gaming revenue, the downside is mostly to do with the structural risks associated with market concentration of the industry. Even worse is the fact that diffusion of this puzzle may have de-motivated the public to look into underlying reform of the casino industry as a catalyst to the economy’s moderate diversification.

Analyzing it from a business point of view, a key to the success of the modern casino resorts as a high value-added economic sector, is largely dependent on its capital investment in high quality non-gaming animations/attractions and services.

A high volume of customer flow could hence be attained to generate casinos’ turnover. In turn, considerable volume of gross gaming revenue as derived from the casino operations would contribute as a major source of funding for the industry’s renovation and reinvestment over time, hence sustaining its competitive edge and long-term growth.

In other words, under this business model, it is largely the efforts of the casino license holders to attract customers directly, instead of paying high “agency fees” (e.g. the 1.25 percent commission paid to the gaming agents) to independent third parties to bring in both mass-market and high-end players, that will ensure long-term success.

The need for upgrade

Indeed, such a model was consistent with the common market belief/anticipation when the new licenses were granted by the Macau SAR Government to the Vegas-based casino resort operators in 2002. As a matter of fact, shortly after the opening of the first Vegas-style casino in 2004, the reported share of the third-party operated gambling room segment did decrease, from 77 percent of Macau’s casino gross gaming revenue in 2003 to 72 percent in 2004, and further to 63 percent in 2005.

Nevertheless, the traditional gambling room model also progressed and has regained its share since 2006, returning to 72 percent in the third quarter of 2010.

Subject to significant “agency fees” and a total of 40 percent gaming tax for running a gaming business in Macau, profitability and a real incentive for casino license holders to constantly invest in the non-gaming segments could be a challenge, hence suppressing Macau’s desire to fashion the city as the world’s tourism and leisure centre, as well as to diversify its economy moderately.

As a consequence, preserving the existing competitive edge of the casino gaming segment via sustained capital reinvestment should not be seen as any direct or straightforward solution to addressing the issue.

Nevertheless, under the economic development framework as stated in the Central Government’s Reform and Development of the Pearl River Delta Plan (2008-2020), and the upcoming Twelfth Five-Year Plan, Macau’s participation in the region’s economic cooperation by further upgrading itself as the world’s tourism and leisure centre has been escalated and mapped out as a strategic target at the national level (as opposed to at the Macau SAR level). In congruence with the foreseeable changes in the external environment, the progress of Macau’s casino industry in the coming decade will undoubtedly be an interesting subject to be observed by all the related parties.

DECEMBER 2010

62

Signing on for more than a job Sands China Ltd is committed to oering the best to its most valuable assets through a series of programmes oered by its human resources department DECEMBER 2010

Sponsored Feature

63

T

housands of people cross through the entrance of The Venetian Macao-Resort-Hotel and Sands Macao every day, ready for another workday. Another workday?

Think again.

The centrepiece of Sands China Ltd’s strategy is a set of employment engagement programmes called the “my” series, that boost staff morale through interactive activities. The initiatives were established with the sole purpose of building a stronger connection between team members, while also reminding them they are Sand’s most important assets.

The company currently runs 11 employee engagement programmes.

Sands’ also offers unique, one-off initiatives from time to time.

Each programme is designed specifically for team members. From the perspective of Sands’ management,

they demonstrate a commitment to looking for ways to inject fun and added enjoyment into the workplace and confirm its dedication to become the employer of choice in Macau.

Sands introduced its first employment engagement programmes in November 2009 with the launch of “Thanksgiving Days in Venetian Style”, a campaign to show its appreciation for the company’s staff. Besides roast turkey dinners and flowers, there was also a lot of fun.

It was just the start.

More employment engagement programmes have since then been launched and the “Thanksgiving day” has become a fixture in Sands China’s calendar.

Welcome to the club Part of Sands China’s employment engagement programme is the myClub

initiative, a series of membership-based interest groups designed to help staff to chill out. It has proven to be a valuable way to provide avenues for team members to relax, refresh and recharge after work.

On the myClub menu is a range of recreational and sports activities that help achieve a real work-life balance. As well as the chance for team members to engage in sports and other activities that they are enthusiastic about, the programme also serves as a platform for staff to meet new people and for staff to share their experiences and thoughts with like-minded colleagues. There is also the opportunity to participate in in-house tournaments or represent the company here in Macau and overseas.

Sands myClub team members also enjoy exclusive discounts on a wide variety of goods and services in more than 150 selected outlets in Macau DECEMBER 2010

64

myClub through the myDiscount employment engagement programme. The discounts take effect when staff show their card when shopping, dining or unwinding.

The company’s human resources team also coordinates with vendors to set up booths in Sands Macao and Venetian Macao-Resort-Hotel backof-the-house areas on a regular basis, offering attractive discounts and privileges to team members.

Celebrating diversity Being one of the biggest companies in Macau, Sands China employs a culturally diverse team.

The company celebrates that diversity though its myRecipe and myFestival employment engagement programmes.

MyRecipe invites staff to share their own recipes for festive occasions.

This year’s winning recipe was served in both Sands Macao and The Venetian team member dinning rooms on November 25, in celebration of the company’s “Thanksgiving day”.

Jointly brought together by the food and beverage, human resources and visual media teams, myFestival offers staff a regular dining experience at Sands Macao and The Venetian team member dining rooms.

Held on a regular basis, myFestival

lets team members experience another culture through the culinary delights of their colleague’s home country. During festivals such as Christmas and Chinese New Year, festive foods are served at both dining rooms. Adding to the festive mood, thematic activities are rolled out in both venues and attractive prizes up for grabs.

Another employment engagement programme available at Sands China is myWorkshop. Jointly organised by human resources and a rotation of departments within the company, the programme is a series of free workshops dedicated to enriching team member’s life experience, offering them

myRecipe DECEMBER 2010

Sponsored Feature

65 the chance to acquire basic know-how about topics of their interest.

Ear to the ground Sands China’s employment engagement programmes are also focused on improving communication between staff and management.

MyIdeas is a platform for team members to share their views on, for instance, ways to achieve service excellence, boost revenue and reduce energy consumption.

A quarterly offering, myIdeas creates an opportunity for employees to express views on the crucial aspects of the company’s operations and to make a real impact.

In a similar way, myMag is a project led by the human resources department that brings team members the latest news from around the company in both English and Chinese.

The massive, quarterly undertaking relies on the support of other departments at Sands, including community relations, hotel operations, public relations and visual media.

Apart from keeping staff ahead of the news on the company’s key milestones and activities, myMag allows readers to keep up to date with fellow team members’ outstanding achievements in sports and culinary competitions. Information about recent developments and programmes launched in pursuit of service excellence are also featured. They help team members understand more about the company and its vision.

MyVoice is an open platform

for team members to express their viewpoints at work. It was launched on July 2010 and includes topics like coaching management.

In addition, Sands China has an online publication – myNews.

The email newsletter is a one-page, bilingual newsletter that informs team members of the latest happenings in the company’s properties in Macau, as well as events and benefits that are exclusive to staff.

To stay close to the team, Sands China’s human resources and information technology departments have launched media and information services at staff members’ fingertips.

One-stop info hub MyNet, for example, is an intranet site dedicated to providing staff with a variety of information at a glance. The platform also allows employees to submit their own enquiries or suggestions to improve service.

Available in English and Chinese, myNet is a convenient resource for staff to retrieve information, such as key company policies, team member benefit plans, publications and the latest news and events.

The ultimate employment engagement programme put in place

by Sands China is myTV. No matter whether staff are on the go across the properties or taking a break, they can stay posted on the latest happenings across the company through this special, in-house television channel.

myFestival Presented with the combined support of the audio-visual, entertainment, information technology and visual media teams, myTV feeds staff with a diverse range of information including news, health and safety tips and videos clips of special events across the back-of-thehouse areas in both properties.

It is informative and brings team members promotional offers, such as quizzes to win complimentary tickets to live performances at the company’s properties.

With so much on offer for staff to enjoy, one of the hardest choices that Sands China team members face is making a choice.

myWorkshop

Thanksgiving Day DECEMBER 2010

66

Property | Market Watch

A steady hand The policy address brought no new measures to curb the property market, bringing new meaning to the phrase ‘no news is good news’

BY ALAN TSO

he government’s 2011 policy address has come and gone, and much to the relief of investors in property, there were no new measures to curb home prices.

The government’s annual policy blueprint offers few fresh ideas on housing but it does reaffirm a determination to strike a balance between the private and public housing sectors (see the report in this edition’s Politics section).

Speaking to reporters after delivering his policy address, Chief Execu-

T

DECEMBER 2010

tive Fernando Chui Sai On said about 72 percent of Macau’s population were homeowners and most were repaying a mortgage. He said the government was concerned about ever-rising housing prices on the one hand, but does not want to harm the interests of those who already own properties.

Analysts believe the Chief Executive’s comments reflect that the government is treading carefully through increased regulation of the housing market because it does not want to see its solu-

tions lead to new problems.

“A string of tightening measures aimed at curbing speculation was introduced earlier,” said University of Macau economist Kwan Fung. “At this point, the government is unlikely to roll out any more stringent measures. This is because the real estate industry is, after all, a major pillar of Macau’s economy.”

Middle-class focus The government’s immediate focus, according to many commentators, is to

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

YEAR

MONTH

2009

January

172

February

235

March

394

April

580

May

775

June

922

July

1,339

August

2010

976

September

1,366

October

1,185

November

1,360

December

2,003

January

1,297

February

1,084

March

1,503

April

2,202

May

1,627

June

1,543

July

1,204

August September

940 1,505

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

Value of residential units sold as per record of stamp duty* YEAR

MONTH

2009

January

More harm than good he measures to restrain galloping property prices and curb speculation will have a limited impact on the market, says Rose Lai, associate professor of finance at the University of Macau.

“The policies implemented by the government, one after another or one replacing another within short periods of time, have done more harm than good to the market,” says Ms Lai, who researches real estate finance and economics.

She says government action has only added volatility to a market that is already inconsistent. Coupled with “hot money” from mainland and overseas investors, prices have risen.

She especially dislikes the government’s approach to the rising demand for affordable housing. The official response relies mainly on increasing the supply of public housing for rent and for sale. “[This solution] seems to create fairness when actually it creates unfairness,” Ms Lai says, adding it would affect prices in the private market.

The academic said the likelihood of a real estate bubble in Macau is “increasing”, signalled by a widening gap between housing prices and wages.

But she admits that the new measures introduced by the government will “definitely” cool the real estate market in the short term.

The Monetary Authority is more optimistic. A spokesman told Macau Business that restrictions on mortgage loans announced in September “will create a more favourable environment conducive to transparent and rational transactions in the real estate market of Macau”.

BY JOANA FREITAS

2010

299

February

372

March

594

April

T

VALUE (MOP million)

980

May

1,156

June

1,627

July

2,767

August

1,730

September

3,161

October

2,130

November

2,643

December

4,057

January

3,140

February

1,995

March

2,806

April

6,180

May

4,281

June

3,319

July

2,642

August

1,889

September

3,687

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

Source: DSEC

DECEMBER 2010

Property | Market Watch

68

Average transaction value of residential properties Value (MOP thousand)

3000

Total number of buyers in residential transactions in the first nine months of 2010:

17,673

2500 2000

Proportion ion of buyers rs

1500 1000

0

9% 91%

Non-Residents

500 Jul

Aug

Sep

Oct 2009

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun 2010

Jul

Aug

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

3500

Residents

Sep

Total value of residential transactions in the first nine months of 2010:

29,940,000,000

MOP

3000 2500 2000

Proportion on of buyerss

1500 1000

18% 82%

Non-Residents

Residents

500 0 Q3

Q4 2007

Q1

Q2

Q3

Q4

2008

ensure the housing market’s healthy development while helping middle-income earners to get onto the property ladder.

The market is on the upswing after

Q1

Q2

Q3 2009

Q4

Q1

Q2 2010

Q3

a period of stagnancy after the global financial crisis. According to the Statistics and Census Service, there were 12,905 residential transactions in the first nine

House hunting harder over the border

C

hina’s Ministry of Housing and Urban Rural Development announced that purchases of housing by overseas organisations and individuals will be capped or restricted. Among the moves to combat speculative investment, individuals from Macau, Hong Kong and Taiwan will now need to provide documents proving they are working, studying or residing on the mainland when they buy a home, the official news agency Xinhua reported. Qualified buyers are eligible to buy one flat for their own use.

DECEMBER 2010

months of the year worth MOP29.94 billion. In fact, the number of residential transactions in the first nine months of the year is 14 percent higher than that for the whole of last year.

The number and value of transactions were down by 31.9 percent and 37.1 percent in the third quarter, however it followed the year’s best performing period. The second quarter set records for both the number and value of transactions, thanks to the pre-sale launch of several high-end projects, including One Oasis in Coloane.

The average home price stood at MOP30,347 per square metre in the third quarter, a 5.2 percent decrease quarter-on-quarter. According to the statistics bureau, the result was due to a drop of 93.4 percent in the number of units bought and sold in Coloane.

There is consensus within the industry that the housing market has cooled, with anecdotal evidence that some homebuyers have put their purchases on hold in the wake of the government’s recent tightening measures. Many suspect the pent-up demand will be released early next year with the government stating clearly it has no intention to intervene further in the market.

69

DECEMBER 2010

70

Property | Market Watch

Two into one won’t go

The government has moved to make the real estate market more transparent but, confusingly, property transaction figures from two of its own bodies do not add up

BY EMANUEL GRAÇA

he six measures announced by the government in September to curb the sharp rise in property prices are starting to have an effect and there is now detailed information on property transactions available each month.

However, different agencies within the government are providing different figures, potentially further confusing buyers.

T

The Financial Services Bureau and the Statistics and Census Service have posted clashing numbers, although both base their data on the same stamp duty records.

The Financial Services Bureau says 1,346 homes were sold in September, while the Statistics and Census Service says the number was 1,505. The bureau says 11,222 were sold in the first nine

months of this year, while the statistics service says the number was 12,905.

The Financial Services Bureau gave Macau Business two reasons for such a discrepancy.

First, the figures reported by the bureau are computed based on the number of actual applications of stamp duty on property transfers filed by the taxpayers, as well as the number of tax bills sub-

Macau Business now comes to you ur inbox with free daily updates from our newsroom Go now to macaubusiness.com and sign up for our e-newsletter

DECEMBER 2010

71 bureau is discarding “statistical outliners” in order “to provide more accurate results”.

These outliners often include cases in which the values of the properties reported by the taxpayers are “far below their reasonable market values,” the spokesperson said.

“As on a monthly basis, the total number of applications filed by the taxpayers is not large enough, had such abnormal cases been included, it would have had a negative effect on the validity of the final statistical results. All these abnormal cases will be subject to further re-valuation by the Stamp Duty Committees.”

All in the detail

sequently issued (through the settlement procedures) during the reporting month, while the figures reported by the statistics service are based on the number of actual payment of tax bills previously issued.

“There is, as a result, a certain time lag in between,” a spokesperson for the Financial Services Bureau said.

The second reason is because the

The Financial Services Bureau says 1,103 residences were sold in October for an average price of MOP34,793 per square metre. Late last month the bureau began posting on its website highly detailed information about residential property transactions in the preceding month.

From the sublime to the ridiculous, the available information has passed from opaque to complicatedly transparent.

The bureau divides Macau into 23 neighbourhoods. Homes in each neighbourhood are then further divided into four distinct age categories. Age categories are subdivided into two categories, tall and short buildings.

If fewer than three apartments are sold in a sub-category, they are not included in the data made available by the

bureau for reasons of “privacy”. This may also go part-way to explaining the discrepancy.

Tell me, honestly Such detailed information was previously available quarterly and it was provided by the Statistics and Census Service.

The service released monthly figures after a two-month delay and they were limited to the number of residences sold and their value.

Besides giving more detailed information about residences, the government is also prodding developers to be more honest about the size of apartments.

From January 1, the developers of all private construction projects must give details of both the construction area and the actual saleable area per dwelling. This information will be accessible on the Land, Public Works and Transport Bureau’s website, along with details about the process of constructing the building.

Starting this month, the loan-tovalue ratio for bank mortgages will also be tightened. Buyers of properties worth more than MOP3.3 million will be able to get a loan of a maximum of 70 percent of its value. If the property is cheaper, the maximum loan will be 90 percent of its value, but only for Macau residents and only up to a limit of MOP2.31 million.

Monthly mortgage payments should not be more than half of the buyer’s income and the loan period should not go beyond the borrower’s normal retirement age.

DECEMBER 2010

72

Property | Market Watch

Notable residential property rentals - 16/10 to 15/11, 2010

Source: Centaline, Midland & Ricacorp.

District

Building/Street

Unit

Floor area (sq. ft)

Macau Macau Macau Taipa Macau Macau Macau Macau Macau Taipa Macau Macau Macau Macau Macau Coloane Taipa Taipa Taipa Macau Taipa Macau Macau Taipa Macau Macau Macau Macau Taipa Taipa Taipa Taipa Macau Taipa Macau Macau Macau Taipa Macau Taipa Macau Taipa Taipa Taipa Macau Macau Macau Macau Macau Macau Macau

One Central One Central One Central Jardins do Oceano La Oceania One Central One Central One Central One Central The Pacifica Garden One Central One Central One Central The Praia L’Arc Hellene Garden The Pacifica Garden Prince Flower City Flower City La Baie Du Noble Nova City The Praia The Praia The Pacifica Garden The Praia La Cite La Cite The Praia Prince Flower City Prince Flower City The Pacifica Garden The Pacifica Garden The Praia Treasure Garden The Praia L’Arc The Praia Jardins do Oceano La Cite The Pacifica Garden The Residencia Nova City Nova City Nova City La Cite The Residencia One Central La Cite La Cite La Cite La Cite

Block 6, M/F, unit A Block 6, M/F, unit B Block 1, H/F, unit E Cypress Court, L/F, unit B (with car park) M/F, unit C Block 7, M/F, unit G Block 7, H/F, unit F Block 1, M/F, unit B Block 7, H/F, unit H Block 2, L/F, unit G Block 1, M/F, unit D Block 1, H/F, unit C Block 3, M/F, unit E Block 1, H/F, unit F H/F, unit A Block 3, L/F, unit F M/F, unit J Block 1, H/F, unit D M/F, unit D Block 2, M/F, unit G Block 15, M/F, unit C Block 3, M/F, unit N (with car park) Block 3, H/F, unit N Block 1, M/F, unit C Block 3, M/F, unit M Block 1, H/F, unit D Block 3, M/F, unit D Block 3, M/F, unit N Block 1, H/F, unit D Block 2, H/F, unit F Block 1, M/F, unit F H/F, unit C Block 1, H/F, unit B Block 1, H/F, unit A Block 3, H/F, unit P H/F, unit C Block 3, M/F, unit N Edf. Carnation, M/F, unit H Block 5, H/F, unit E Block 2, H/F, unit H Block 5, H/F, unit C Block 10, L/F, unit E Block 12, M/F, unit F Block 12, L/F, unit F Block 1, H/F, unit A Block 5, H/F, unit A Block 7, H/F, unit F Block 5, H/F, unit A Block 1, H/F, unit D Block 2, M/F, unit D Block 3, M/F, unit C

2,261 2,261 1,833 3,269 2,204 1,178 1,301 1,359 1,235 1,725 654 918 1,728 1,571 1,803 2,530 1,543 1,665 2,066 2,236 1,338 1,558 1,558 1,226 1,558 1,500 1,504 1,558 1,665 1,685 1,188 1,226 1,239 1,406 1,426 1,515 1,558 1,563 1,647 1,205 1,207 1,318 1,339 1,340 1,427 1,450 1,450 1,451 1,515 1,696 1,522

Rent price (HK$) 34,000 34,000 28,000 19,000 18,000 17,000 17,000 17,000 16,000 15,000 13,000 13,000 12,800 12,000 12,000 12,000 11,000 11,000 11,000 11,000 10,000 10,000 10,000 9,800 9,800 9,500 9,500 9,500 9,500 9,500 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 8,800 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,200

Price per sq.ft. (HK$) 15.04 15.04 15.28 5.81 8.17 14.43 13.07 12.51 12.96 8.70 19.88 14.16 7.41 7.64 6.66 4.74 7.13 6.61 5.32 4.92 7.47 6.42 6.42 7.99 6.29 6.33 6.32 6.10 5.71 5.64 7.58 7.34 7.26 6.40 6.31 5.94 5.78 5.76 5.46 7.30 7.04 6.45 6.35 6.34 5.96 5.86 5.86 5.86 5.61 5.01 5.39

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

Notable commercial property rentals - 16/10 to 15/11, 2010 Type Shop Shop Shop

Property Millennium Court Rua dos Mercadores Macau Ginza Plaza

Unit Ground Floor Shop Shop

Source: Centaline

Floor area (sq. ft) 966 800 138

Rent price (HK$) 34,800 18,000 7,900

Price per sq.ft. (HK$) 36.02 22.50 57.25

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

DECEMBER 2010

73 Notable residential property transactions - 16/10 to 15/11, 2010 District

Building/Street

Unit

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

One Central One Central L’Arc One Grantai Vista Magnifica Court One Central One Central One Central One Central One Central One Central L’Arc L’Arc One Grantai One Grantai L’Arc L’Arc One Grantai One Grantai One Grantai L’Arc L’Arc L’Arc One Grantai Lake View Mansion Villa de Mer Villa de Mer One Grantai The Lakeview One Oasis Cotai South One Central Macau Ginza Plaza Supreme Flower City One Central Nova City Macau Ginza Plaza One Central One Central One Central One Central Nova City Macau Ginza Plaza L’Arc La Baie Du Noble Supreme Flower City Supreme Flower City One Central Nova City The Praia Nova City Lai Chun Kok Supreme Flower City

Block 3, H/F, unit B Block 3, H/F, unit B H/F, unit C Block 4, M/F, unit O L/F, unit G Block 5, M/F, unit B Block 5, M/F, unit A Block 5, M/F, unit B Block 4, L/F, unit B Block 4, M/F, unit B Block 4, L/F, unit B H/F, unit G H/F, unit G Block 3, M/F, unit L Block 3, L/F, unit K H/F, unit G H/F, unit D Block 4, M/F, unit Q Block 5, L/F, unit U Block 5, L/F, unit V H/F, unit D H/F, unit D H/F, unit B Block 5, M/F, unit U Block 2, L/F, unit J Block 1, H/F, unit A Block 1, H/F, unit A Block 5, L/F, unit V M/F, unit O Block 2, L/F, unit B Block 7, H/F, unit E L/F, unit C Block 1, M/F, unit B (with car park) Block 7, H/F, unit H Block 9, M/F, unit D L/F, unit A Block 7, H/F, unit G Block 7, H/F, unit G M/F, unit B Block 1, M/F, unit B Block 5, M/F, unit D L/F, unit E H/F, unit C Block 4, M/F, unit Q Block 3, H/F, unit J H/F, unit K Block 1, H/F, unit A H/F, unit C Block 1, H/F, unit F Block 11, M/F, unit C (with car park) H/F, unit B Block 1, M/F, unit B (with car park)

Source: Centaline, Midland & Ricacorp.

Floor area (sq. ft) 3,006 3,006 3,557 3,025 4,914 2,312 2,262 2,312 2,585 2,585 2,585 2,411 2,803 2,062 2,211 2,411 2,411 2,180 2,165 2,518 2,411 2,411 2,803 2,165 3,435 1,703 1,703 2,158 1,899 2,072 1,301 1,757 2,060 1,178 2,503 1,977 1,181 1,181 1,359 1,359 2,505 1,851 1,821 2,236 2,060 2,060 1,273 1,974 1,571 1,975 2,060 2,060

Sale price (HK$)

Price per sq.ft. (HK$)

24,380,000 24,048,000 19,564,000 18,588,000 17,500,000 17,000,000 16,000,000 15,380,000 15,000,000 14,863,750 14,605,250 14,000,000 13,454,000 13,403,000 13,270,000 13,020,000 12,778,000 12,578,000 12,124,000 12,085,000 12,055,000 12,055,000 12,053,000 11,908,000 11,000,000 10,491,040 10,157,840 9,926,800 9,400,000 8,800,000 8,457,000 8,433,000 8,430,000 8,180,000 8,100,000 8,066,000 8,031,000 8,031,000 8,000,000 8,000,000 8,000,000 7,800,000 7,648,000 7,600,000 7,300,000 7,200,000 7,150,000 7,080,000 7,000,000 6,580,000 6,500,000 6,300,000

8,110 8,000 5,500 6,145 3,561 7,352 7,073 6,652 5,802 5,750 5,650 5,807 4,800 6,500 6,002 5,400 5,300 5,770 5,600 4,799 5,000 5,000 4,300 5,500 3,202 6,160 5,946 4,600 4,950 4,247 6,500 4,800 4,092 6,944 3,236 4,080 6,800 6,800 5,887 5,886 3,194 4,214 4,200 3,399 3,543 3,495 5,616 3,587 4,455 3,331 3,155 3,058

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

Notable commercial property transactions - 16/10 to 15/11, 2010 Type

Building/Street

Unit

Shop Shop Shop Shop

Edf. Jardim Nam Ngon Rua do Comandante Mata e Oliveira Rua do Almirante Costa Cabral Estrada do Arcol

Shop Shop Shop Shop

Source: Centaline

Floor area (sq. ft) 10,500 800 1,000 300

Sale price (HK$)

Price per sq.ft. (HK$)

53,000,000 4,500,000 3,000,000 680,000

5,407 5,626 3,000 2,266

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

DECEMBER 2010

74

Property

Luxury Living at Cotai South acau is arguably one of the most outstanding success stories in the 21st century. The city has seen a sustained economic boom and a gradual improvement in the quality of life since the liberalisation of its gaming industry in 2002. Macau’s GDP per capita has already surpassed Hong Kong’s since 2006. The figure hit MOP 311,131 in 2009, one of the highest in the Asia Pacific region.

After the launch of the Reform and Development Plan of the Pearl River Delta, Macau’s long-term development has been given a new impetus in the context of closer regional cooperation.

Under the plan, Macau is positioned as a “world travel and leisure hub” and major cities in the Pearl River Delta are in the process of building a “quality living circle”. With better regional traffic connections, Asia’s gaming mecca will be accessible within an hour to a population of over 25 million people.

Against this backdrop, the Macau Government will accord more importance to developing the tourism, leisure, entertainment and cultural industries in order to foster economic diversification.

Apart from robust economic growth, Macau has undergone a social and cultural renaissance in recent years thanks to its inscription on the UNESCO World Heritage List and the Government’s promotion of the cultural industry. The po-

M

tential of the city’s emerging cultural and creative industries was reaffirmed by the Premier of the State Council, Mr. Wen Jiabao, in mid-November 2010 during his first official visit to Macau. According to the Premier, Macau is a place steeped in culture and traditions, which is another important element turning the city into a world-class leisure destination.

Prosperous city development Looking ahead, Macau is set to embark on a new phase of sustainable growth. Its growth momentum will be underpinned by a string of infrastructure projects, including the Hong KongZhuhai-Macau Bridge, Macau Light Rapid Transit (1st & 2nd phases), the Macau University campus in Hengqin and the land reclamation plan.

The gaming industry, needless to say, will continue to play an active role in Macau’s development. And the Cotai Strip, which has established itself as a bustling centre of activities in the local gaming scene with its impressive international entertainment and hospitality facilities, will be an important player in the process.

All these favorable factors have increased the inflow of capitals, investors, and professionals from different regions around the world to Macau. Furthermore, together with the rise of the purchasing

power of Macau people, the demand for up-market homes is set to increase accordingly. Property prices in Macau are expected to rise by 15-20% in 2010 as a result of these favorable conditions.

A new gem in posh properties One Oasis is the first large-scale comprehensive luxury residential development launched in Macau this year, comprising residential apartments, deluxe villas, a central clubhouse, a onestop lifestyle shopping centre, a hotel and landscaped gardens. The first phase of One Oasis includes five residential towers offering 870 apartments (ranging from studio, four-bedroom to duplex units). Its launch has generated phenomenal response at home and abroad, with almost all of its units snapped up in the first phase.

Bordering an international-standard golf course and boasting 50 million DECEMBER 2010

Sponsored Feature

75

square feet of greenery, One Oasis is also in close proximity to a treasure trove of entertainments at the Cotai Strip. With such an unrivalled location, One Oasis is able to offer its residents the best of both worlds in city living and resort living.

Indeed, the most sought-after leisure and entertainment offers in Macau are right at the doorstep of One Oasis. And the project is designed to create an upscale, thriving community in a prime area of Macau and to set a new gold standard in the local high-end residential market.

Another prominent feature of One Oasis is its southern European style clubhouse and landscaped gardens. Its exclusive clubhouse, Club Oasis, brings over 100 facilities and services under one roof and boasts Macau’s largest outdoor infinity pool. The vast lush spaces will ensure that One Oasis is above all a green community, offering its privileged residents a healthy living environment. Savills—a world-leading property consulting com-

pany, is appointed as One Oasis’ property management consultant, thus giving its residents an ease of mind. Among the many tailor-made services provided by the expert management team at One Oasis are advanced security services, 24-hour concierge, housekeeping, shuttle bus and limousine services, just to name a few.

A comprehensive transportation network will enable residents at One Oasis to travel effortlessly around Macau, Hong Kong, Mainland China and the world. In neighboring Hengqin, billions of dollars’ worth of investment led by the Central Government of China are being funneled into the development of a variety of landmark projects, and One Oasis is set to benefit from the positive knock-on effect of Hengqin’s growth. The property’s convenient strategic location also means that it will lie at the heart of Macau’s future development in the wider regional context.

One Oasis is being developed by a

joint venture of well-established property developers including ITC Properties Group, Linkeast Investments Ltd, Nan Fung Group, ARCH Capital and Success Universe Group. Its strong team of developers, with their ample experience and proven records in large-scale property investment, development, and management, will no doubt guarantee the success of the project.

As its name implies, One Oasis will prove to be the one and only luxury home amid the hustle and bustle of Macau, and embrace a unique lifestyle international community. With its first phase scheduled to be completed in the second quarter of 2013, One Oasis is certainly a sure bet for both end-users seeking a quality home and investors pursuing better returns on their money. The sales launch of the second phase of the project in first half of 2011 is expected to draw an equally overwhelming response from local and overseas buyers.

DECEMBER 2010

76

Property

No fear Shun Tak expects the government’s measures to restrict property speculators will have no effect on the bottom line as it launches its serviced apartments at One Central

BY EMANUEL GRAÇA

onglomerate Shun Tak is betting on Macau’s real estate market.

Although the government is set on curbing rising property prices, the company’s managing director, Pansy Ho Chiu King says she is not concerned about the effect it will have on demand.

“I don’t believe that will be the case, but the contrary,” Ms Ho says. According to her, what the government needs to do is to “find [an] equilibrium” between supply and demand.

“Sometimes, compressing on future supply by way of reducing the square footage to be built because of various restrictions on height, on plot ratio, may not immediately be a good answer.”

“In certain cases... you see the exact opposite. You are only sending a message to the general public that in the future there will be less [housing] to be supplied” which can push prices even higher, she says.

“Macau has proven its resilience and immense potential in 2009 and 2010. Its property market has been experiencing

C

DECEMBER 2010

healthy and encouraging growth backed by solid demand.”

Among the Macau projects in the pipeline for Shun Tak are phases four and five of the Nova City project in Taipa, already approved by the government.

Nova City phase four will be comprised of three 39-floor residential towers containing floorspace of more than 680,000 square feet, about 63,000 square metres. Phase five is likely to have about 2.3 million square feet of residential space in eight towers with a maximum height of 43 floors, all situated above a big shopping centre.

The last stone Last month, Shun Tak launched The Residences & Apartments at Mandarin Oriental, completing the last major stage of the One Central mixed-use complex.

Construction of the joint development between Shun Tak and Hongkong Land began in 2005. It also includes a residential component, a luxury retail

mail opened last December and a Mandarin Oriental hotel opened in June. One Central has a direct pedestrian connection to the MGM Macau hotel-casino.

This is the first Mandarin Oriental residential project to open in Asia and the first luxury hotel-branded resident and apartment block available for sale with property title in either Hong Kong or Macau, according to Shun Tak. Although the concept may be foreign to buyers, Ms Ho says she is confident that the 92 units available “will be extremely well-received by the market”.

“We have already received positive interest from purchasers around the world,” she says.

According to the developers, the indicative price for the serviced apartments is HK$10,000 per square feet.

They expect that half of the units will be sold to buyers from Greater China.

Sands China has a similar project planned for its Four Seasons apartmenthotel in Cotai. But, if authorised by the government, the company will have to

77 use a co-op model for the sale, since it has not been authorised to go ahead with a property title model.

In a housing co-op arrangement, a corporation usually owns a building and each shareholder has the right to occupy one housing unit. The shareholders do not own the real estate, only a share of the legal entity that does.

Still waiting Shun Tak has a project similar to One Central for the Macau Tower surroundings. Called Harbour Mile, it is earmarked as a luxury residential development with about 4.3 billion square feet of gross floor area. Commercial outlets such as retail facilities, serviced apartments and hotels are also under consideration.

The company has spent years waiting for the government go ahead. Now, the project is under review as part of an overall master plan for the Nam Van lakefront area development. No dates for the groundbreaking have been set.

“We are still all waiting. I suppose that after the policy address, hopefully, after all the explanations given to the Legislative Assembly, I believe that then there will be a more crystallised idea as to, in future, how they would approve our applications,” said Ms Ho. Shun Tak also holds a 79 percent interest in a columbarium project in Taipa, designed to offer about 50,000 niches.

Construction and fit-outs are progressing with completion scheduled for the second quarter next year, according to Shun Tak’s 2010 interim report.

The group also holds a 100 percent interest in a Cotai project earmarked for an ultra-deluxe hotel. Shun Tak has entered into a management agreement with the Jumeirah Group to operate the property.

The plan is currently under government review.

Real estate and hospitality are not Shun Tak’s sole source of income. The Hong Kong-listed conglomerate’s core businesses encompass transportation and investment. It has a presence in both SARs. The company posted a HK$266 million profit for the first half, a year-onyear drop of 84 percent. Excluding substantial one-off and accounting gains in the same period last year, first-half underlying profit for the first six months of 2010 increased 97 percent to HK$61 million.

New bids for the bank S

hun Tak may be among the bidders for a land plot the government intends to auction later this month. “We will need to look back exactly at the location and what we can build on it and whether the current pricing is in meeting with our expectations,” says the company’s managing director, Pansy Ho Chiu King. “We do have land in our land bank. So, we have to see whether it replenishes for us or it complements our own land bank provision.” The date of the auction and exact location of the lot has not been made public. However, it is understood that the land is located in Fai Chi Kei and covers an area of about 3,400 square metres.

Any development of the land will include at least 500 flats covering about 800 square feet or 74 square metres each. The government has ruled out a ceiling price for the land flats. This will be the first land auction in Macau since 2008.

DECEMBER 2010

78

Gaming

Billions race Casino gross gaming revenue continues to post high double-digit growth

he government’s formula to control the local gaming industry by capping gaming tables seems to be having very few effects – if any.

Casino gross gaming revenue continues to post strong year-on-year increases, continuing a trend that has been constant throughout the entire year.

It was back in March when the Secretary for Economy and Finance Francis Tam Pak Yuen announced that in the next three years, the number of gaming tables in Macau would be capped at a maximum of 5,500. “The government is adjusting the gaming industry’s size to promote suitable development,’’ Mr Tam said.

Since the end of March, the number of gaming tables in Macau has increased only marginally, from 4,811 to 4,838 at the end of September, according to the latest government statistics.

In the same period casino gross gaming revenue has posted monthly increases of at least one-third every month.

It is an extraordinary rate of growth which, in comparison to the bumper second half of last year, has decreased. Make no mistake, the gaming industry is on a roll.

Last month was no exception. Monthly casino gross gaming revenue reached MOP17.35 billion (US$2.16 billion), a 42.1 percent increase in year-on-year terms.

This was the second-highest monthly total, exceeding analysts’ expectations.

“Gaming activity picked up later in the month after the Grand Prix weekend,” CLSA analyst Huei Suen Ng said in a note to clients.

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DECEMBER 2010

Ms Huei said gambling revenue for 2010 was likely to rise 56 percent over 2009.

Wells Fargo analyst Carlo Santarelli forecasts casino gross gaming revenue will grow 38.6 percent year-on-year in December.

The total casino gross gaming revenue for the eleven months through to November is up 56.9 percent year-on-year to MOP169.46 billion. That is more than all of last year’s take of MOP119.4 billion.

Wynn up; Sands down Information compiled by Macau Business indicates that Wynn Macau has performed strongly through the month of November, taking the second spot on the league rankings of market share from Sands China.

Steve Wynn’s gaming operator grabbed a 17 percent market share, while rival Sands dropped to 15 percent from the previous month. The turnaround is extraordinary considering the difference in scale between the two operators.

Wells Fargo analyst Carlo Santarelli says Sands China has suffered from some bad luck.

Lawrence Ho’s Melco Crown Entertainment was marginally behind with a market share slightly below 15 percent.

At the head of our rankings is Stanley Ho Hung Sun’s Sociedade de Jogos de Macau. Their November market share sat at 31 percent.

MGM Macau was fifth, with a market share of about 11 percent, followed by Galaxy Entertainment Group that closed out the ranking with a 10-percent market share.

79

Gaming Results: Gross Revenue

In Million MOP (1HKD:1.03MOP)

18,869

19,000

17,075

18,000 16,000 14,000

12,215

12,000

13,937

13,445

13,569

Jan 2010

Feb 2010

17,354

16,310

14,186

13,642

15,773

15,302

Jul 2010

Aug 2010

11,347

10,000 8,000 6,000 4,000 2,000 0

Oct 2009

Nov 2009

Dec 2009

Mar 2010

Apr 2010

May 2010

Jun 2010

Sep 2010

Oct 2010

Gaming Results: Market Share Per Operator 2010

2009 Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

SJM

32%

31%

30%

32%

34%

34%

32%

30%

32%

29%

30%

33%

31%

Sands China

21%

22%

22%

20%

20%

21%

19%

22%

19%

20%

20%

18%

15%

Galaxy

12%

13%

10%

11%

11%

11%

11%

10%

12%

13%

12%

11%

10%

Wynn

12%

17%

13%

15%

13%

14%

16%

17%

15%

14%

12%

13%

17%

MPEL

13%

12%

16%

14%

13%

13%

14%

13%

15%

17%

17%

14%

15%

MGM

9%

7%

9%

9%

8%

7%

7%

8%

7%

8%

10%

11%

11%

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

Nov 2009

Dec 2009

Jan 2010

Feb 2010

Mar 2010

Apr 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

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

Back to square one he Nevada Supreme Court has overturned a US$58.6 million (MOP469 million) judgment against Las Vegas Sands in a dispute over efforts to obtain a casino licence in Macau. The court partly reversed decisions made by a district court in May 2008, saying it should not have

T

Fresh advice

D

avid Fleming has been appointed general counsel and company secretary of Sands China. He will take up these posts in January. Mr Fleming has worked as legal counsel for major entities in the public and private sectors, including the Hong Kong SAR government, the Kowloon-Canton Railway Corporation and the Mass Transit Railway Corporation.

Mr Fleming will replace Anne Maree Salt as the company secretary. Ms Salt replaced Luis Mesquita in August.

admitted a hearsay statement during the trial. The case now returns to the district court for retrial.

Hong Kong businessman Richard Suen and his company sued Las Vegas Sands and two of its executives for remuneration for arranging meetings in Beijing in July 2001 between Las Vegas Sands executives and high-level Chinese officials, including former vice-premier Qian Qichen.

Mr Suen asserted that he had been promised remuneration in the event that Las Vegas Sands won a gaming licence. He said the Beijing meetings were essential to achieving that goal.

During the trial, the court heard that William Weidner, a Las Vegas Sands executive at the time, originally offered Mr Suen US$5 million and two percent of the net profits from the company’s Macau casinos.

In June last year, Las Vegas Sands paid US$42.5 million to three men after they dropped a similar suit against the company.

DECEMBER 2010

80

Gaming | Billions Race

Gross revenue from different gaming activities 3Q 2010

2Q 2010

1Q 2010

47,723 47,384 34,047 8,884 2,236 884 528 255 154 52 52 52 38 33 20 23 34 8 1 n/a 0.4 n/a 107 85 134 11 1 0.001

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

4Q 2009

3Q 2009

2Q 2009

1Q 2009

4Q 2008

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

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

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%

-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

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 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

5.5% 5.5% 5.2% 6.9% 10.3% 3.3% -2.4% -4.1% -4.3% -5.5% 0.0% 20.9% -7.3% 10.0% -16.7% 15.0% 54.5% -11.1% 400.0% n/a 0.0% n/a -2.7% -6.6% 31.4% -8.3% 0.0% 0.0%

Source: Gaming Inspection and Coordination Bureau DECEMBER 2010

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%

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%

Gaming | Stock Watch

81

Motion sickness November was a month of ups, downs and more ups for gaming stocks in Hong Kong

BY RAY CHAN

ver the course of the month, investors remained bullish about equities in the Hong Kong and mainland markets, although the heightened military tension between the two Koreas, lingering concerns about the European debt crisis and China’s moves to curb inflation and real estate speculation all affected the markets.

For gaming stocks, November was a roller-coaster month. Several gaming counters rose on third quarter earnings announcements but later dropped as the Macau government announced it would further control the growth of the industry. At the end of the month many were showing signs of recovery.

It was noteworthy that SJM Holdings (880 HK), the largest gaming operator in Macau by revenue, became one of the constituents of the MSCI Hong Kong, which serves as a benchmark index for the fund management industry.

O

The company announced that its net profit for the third quarter, at HK$867 million (MOP893 million), was 528 percent higher than a year before. It raked in HK$13.99 billion in gaming revenue, a 69 percent increase. The company posted adjusted earnings before interest,

taxation, depreciation and amortisation (EBITDA) of HK$1.18 billion, an increase of 135 percent.

On November 9, SJM Holdings chief executive Ambrose So and the company’s executive director Ng Chi Sing exercised stock options and sold

Sands’ affiliate finned

A

Las Vegas Sands’ wholly foreign-owned enterprise is facing a RMB10.8 million penalty from the Chinese government.

According to Las Vegas Sands’ latest quarterly report, the State Administration of Foreign Exchange (SAFE) in China has “recently issued a preliminary penalty decision notice that it would impose a penalty of approximately RMB10.8 million” against one of the company’s wholly foreign-owned enterprises.

According to Las Vegas Sands, those companies “were established to conduct non-gaming marketing activities in China and to create goodwill in China and Macau for the company’s operations in Macau”.

SAFE’s decision “will become final shortly”, unless contested, said Las Vegas Sands.

SAFE regulates foreign currency exchange transactions and other business dealings in China.

DECEMBER 2010

82

Gaming | Stock Watch

67 million shares in the company for HK$2.1billion, or HK$11.8 per share.

The sale was at the lower end of the range of the transaction arranged by Deutsche Bank.

Macau casino stocks performance year-to-date vs Hang Seng Index 35 30 25

Maiden dividend

20

Sands China (1928 HK), controlled

by Las Vegas Sands (LVS US), said its third quarter net profit was US$199 million (MOP1.6 billion). Revenue rose 27 percent to US$1.08 billion.

Sands China’s rival, Wynn Macau (1128 HK), reported another eye-catching result. Its third quarter net profit was US$114 million, rising from US$73 million. And Wynn Macau is paying a dividend for the first time – becoming only the second gaming company after SJM Holdings to do so. The special dividend is HK$0.76 per share and the board said it would consider paying recurring dividends in future.

Melco Crown Entertainment (MPEL US) also announced results, posting a net profit of US$15.8 million.

Last year it made a net loss of US$39.5 million. Its adjusted EBITDA was a record US$136.3 million, compared to US$55.6 million a year before.

The chairman and chief executive of MGM Resorts International, James

15

DECEMBER 2010

(Base=HK$10)

10 5 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

SJM Holdings Ltd. Sands China Ltd.

May 2010

Jun 2010

Jul 2010

Aug 2010

Galaxy Entertainment Group Ltd. Melco International Development

Sep 2010

Oct 2010

Nov 2010

Wynn Macau Ltd. Hang Seng Index

US casino stocks performance year-to-date vs S&P 500 Index

(Base=US$10)

40 35 30 25 20 15 10 As of November 26

5 0

Jan 2010

Feb 2010

Mar 2010

Las Vegas Sands Corp.

Penn National Gaming Inc.

Apr 2010

May 2010

Jun 2010

Jul 2010

Wynn Resorts Ltd. Melco Crown Entertainment-ADR

Aug 2010

Sep 2010

Oct 2010

Nov 2010

MGM Resorts International S&P 500 Index

83

M

elco International Development Limited’s board has decided to grant a total of 51,600,000 share options to the directors of the company, including Chairman and Chief Executive Officer Lawrence Ho, who will receive 38,000,000 share options, a stock filing said. All of the options granted are conditional on independent shareholders’ approval of the options granted to Mr. Lawrence Ho. Among the reasons for the grant to Mr Ho, the company stated his “financial support and sacrifice”.

“When the company went through the difficult period after the Asian Financial Crisis”, Mr Ho “lent financial support to the company and made a financial sacrifice” for Melco, namely by waiving interest on convertible loan notes amounting to HK$1.18 billion and extending repayment dates.

During the period from December 2007 to October 2009 alone, Mr Ho personally lent HK$250 million on an unsecured basis to the company.

He agreed not to receive any salary from Melco starting from November 2008 until the company started to generate profits continuously for at least two years.

Melco’s board also declared a special cash dividend of HK$1.5 cents per share.

Melco is one of the two controlling shareholders of Macau-based gaming operator Melco Crown Entertainment.

Murren, said its MGM Macau unit was aiming to sell about 20 to 25 percent of its capital in an initial public offering in Hong Kong, the China Daily reported. The newspaper gave no details regarding the selling price or size of the offering.

MGM Macau is a joint venture between MGM Resorts International and businesswoman Pansy Ho Chiu King. According to Ms Ho, the company is planning to launch the IPO in the first quarter of 2011.

MGM Macau recorded a third-quarter operating profit of US$61 million, a 22 percent rise. The result includes depreciation expenses of US$22 million.

Divining the future Despite the political and economic headwind from the mainland, massive liquidity and low interest rates seem to have driven the stock markets in November. But a correction before the Lunar New

Year is likely, and would be healthy.

This is assuming that increases in interest rates and reserve requirements remain the principal tools used by mainland policymakers to curb inflation and excess liquidity, so that consumer inflation stays around 3.5 percent to 4.0 percent this year; and that growth in bank lending remains about the same next year as this year, with lending hitting the central government’s target for the year of RMB7.5 trillion.

Shares in Macau gaming operators are extremely sensitive to the mainland’s monetary and other policies, so what happens across the border is likely to affect their prices. Casino operators performed admirably this year, mainly because of the huge influx of affluent tourists from the mainland.

There are no signs for now that new visa restrictions will be introduced in the near future.

14-day Relative Strength Index SJM Holdings Ltd. 90 80 70 60 50 40 30 20 10 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

Galaxy Entertainment Group Ltd. 90 80 70 60 50 40 30 20 10 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

May 2010

Jun 2010

Jul 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

Aug 2010

Sep 2010

Oct 2010

Nov 2010

Sands China Ltd. 90 80 70 60 50 40 30 20 10 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

Wynn Macau Ltd. 90 80 70 60 50 40 30 20 10 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

Melco International Development 90 80 70 60 50 40 30 20 10 0

Jan 2010

Feb 2010

Mar 2010

Apr 2010

Overbought

May 2010

Jun 2010

Jul 2010

Neutral DECEMBER 2010

Oversold

As of November 26

Share options for Lawrence Ho

84

Gaming

Jorge Oliveira breaks his silence and announces he is planning a comeback.

In this exclusive interview, the Gaming Commission’s former legal affairs chief says more laws are needed to regulate the casinos and he calls for an overhaul on junket regulations

BY PAULO A. AZEVEDO

LAYING AYIN DOWN THE LAW fter 21 years as a senior government official, Jorge Oliveira resigned in September amid a media storm whipped up after the government awarded an exclusive contract for gamingrelated legal services to consulting firm Soconsult - Sociedade de Consultadoria Lda. Breaking a three-month silence, Mr Oliveira told Macau Business in an exclusive interview that the Soconsult affair was not what made him leave. He also spoke more broadly, saying Macau needed to improve regulation of the gaming industry.

Mr Oliveira said he had wanted to leave the government since 2008. “I had [already] expressed to the Macau gov-

A

DECEMBER 2010

85 ernment my intention to go into private practice. It was not possible then, since there were challenging tasks that required my presence in the civil service, and I was asked to stay,” he said.

“I had several approaches to become a consultant or a director, in some cases from gaming operators, in other instances from financial entities.

“I always discouraged such approaches from gaming operators, as I felt it was inappropriate to pursue them whilst having an active role in the Gaming Commission.”

Mr Oliveira was head of legal affairs at the Gaming Commission until February, when the government revamped the commission. However, he remained in government, and continued in charge of the secretary for administration and justice’s International Law Office, until his resignation.

he finds out of the ordinary. “In the last 20 years, more than 300 legal advisers and other graduate staff that served the Macau government ... worked under me, with me or were recruited by me,” he said.

“In my work at the Gaming Commission I had to interface with several of the most important Macau and Hong Kong law firms. If I were to feel inhibited every time I dealt with someone I knew whose services the Macau government might be interested in requesting, the pace of change would have been very different from what it was in the last decade.”

Furthermore, he adds, the exclusivity clause of the gaming-related legal services contract “excluded many potential candidates, such as the main Macau law firms”.

Clearing the air

Mr Oliveira does not consider that his resignation was inevitable once Mr Chui

Soconsult is a private consultancy created in 2008, during Edmund Ho Hau Wah’s second term as chief executive, to give the government exclusive gaming-related legal advice, for which it received annual fees of between MOP9 million and MOP10 million.

Chief Executive Fernando Chui Sai On’s government scrapped Soconsult’s contract at the end of June, after a public debate about its terms. Cancelling the contract cost the government MOP20 million. In September, the government hired the newly created Newpage Consultadoria, headed by former PricewaterhouseCoopers gaming practice director, David Green. Its MOP1.8 million short-term contract is not exclusive.

“In 2008, the Macau government decided to outsource services in the legal field,” Mr Oliveira said. “The process, conducted in strict accordance with the law, led to the decision in favour of Soconsult.”

Last year, the government and Soconsult signed a contract, renewable every six months, which contained an exclusivity clause, he said. “All this is part of the normal management decisions that take place in every field of government. It was just more noticeable because of the significance of the gaming sector in Macau,” he said.

The fact that two figures in Soconsult had worked under Mr Oliveira in the Gaming Commission and at the International Law Office is not something that

Pride, no prejudice

OLIGOPOLYY M MONEY J

orge ge O Oliveira lilive veiira ira co cont continues nttinue inuess to to rresist esist the idea that Macau should fully open its casino industry, although he points out that this is mainly a “political” decision.

There are currently three gaming concessionaires and three gaming subconcessionaires.

“At the end of 2002 or early 2003, it seemed clear that sub-concessions were useful in allowing a larger number

became chief executive just because he was seen as a close aide to Mr Chui’s predecessor.

“In the 21 years I served in the Macau government, I worked with several secretaries and, despite some divergences on a few matters, I’ve always found that there was interesting work to be done in serving Macau’s public interest,” he said.

He said the conflicts reported in the media between himself and Secretary for Administration and Justice Florinda Chan and Secretary for Economy and Finance Francis Tam Pak Yuen were “just urban legends”.

While he cares for his ill father in Portugal, Mr Oliveira is pondering

of casino operators within an oligopolistic framework,” he said.

“More competition, now between six operators, took place but the Macau SAR still grasped to maintain the benefits,” Mr Oliveira said, adding that taxation revenues have benefited significantly.

“At that specific moment in time tti m the opening to three subtime, con co c o concessions coincided with very rrelevant ele mergers in the casino gam gaming industry. Thus Macau bro brought into its tent several of the larg largest casino gaming groups.”

If the policy had been different, he said, “these groups would have continued to endeavour to find an operational base in the Far East, with great risk for Macau, at least until several large integrated resorts had been built and Macau was transformed into a truly integrated entertainment centre”.

Mr Oliveira thinks the present oligopoly that limits the casino market to only a few operators works well and allows the government to maintain a high level of gaming taxation. And significant investments have been made on the assumption that this arrangement will continue, he said.

“If there is even the slightest suspicion or hint that consideration is being given to opening Macau’s market to more casino operators, either by amending the law or by using legal engineering, Macau and its most important companies will suffer dearly in terms of financing available,” he said.

It would “also have disastrous consequences in terms of the muchneeded legal certainty that financial markets expect and require,” Mr Oliveira said.

DECEMBER 2010

86

Gaming

the alternatives to restart his career in Macau. The Portuguese lawyer has a wealth of experience here.

“Until December 1999, I was in charge of the main tasks in the legal field regarding the handover. In less than 10 years we had to set up literally dozens of projects, law making and others, to restructure Macau’s legal system into a modern one, business friendly and adapted to local realities and needs,” he said.

“It was also necessary to localise hundreds of laws adopted from Portugal and to ensure that the core 200 international multilateral treaties that apply in the developed world would be applied to Macau.”

His verdict: “To guarantee the continuity of the legal system was not an easy task, but I think everyone would agree today that it was a success story.”

Regrets on gaming However, Mr Oliveira regrets that political circumstances and the absence until

“I am certainly among those that are fearful of the consequences of allowing economic concentration led by casino operators,” says Jorge Oliveira casino gaming sector,” he said.

“Those who follow this field closely know that it was not easy to manage the expectations created and to balance the several significant interests involved in those exciting and thrilling times.”

However, he has some regrets. “We were not able to make a more comprehensive regulatory framework on casino gaming,” he said. “The Macau legal regulatory framework still lacks laws and regulations on the special gam-

the gaming industry would generate a much needed debate on the casino gaming policy, he said, drawing focus to the medium and long term.

“I continue to consider that regulations on junkets must be reviewed in order to treat different realities with different requirements,” he said.

“Small junkets should not be subject to the stringent requirements imposed on large junkets. And such a review should create the conditions for the large junkets to get properly listed on stock exchanges instead of the thus far more common backdoor listing.”

Looking at the wider picture, Mr Oliveira said the big question was whether public policy should encourage the concentration of more economic activities in the hands of casino operators. This was the case with Stanley Ho’s Sociedade de Turismo e Diversões de Macau (STDM) before the handover, with its operations ranging from property to media, and aviation to gambling, among others.

STUDIOO C CITY A B ‘BUSINESS D DISPUTE’

C

ould the government have avoided the kind of problems that brought the Macao Studio City project to a standstill? Jorge Oliveira thinks not.

He considers it a “normal business dispute”.

New Cotai bought into the Macao Studio City project in December 2006, when it paid eSun about HK$1.3 billion (MOP1.34 billion) for a 40 percent interest and the right to develop a casino on the property. Now the partners in the joint venture are fighting each other in court.

But didn’t the government become

involved when it gave an express authorisation for the joint venture deal?

“It was not the first or the tenth case where express authorisation for such agreements was given,” Mr Oliveira said.

“Ultimately, if the land development does not go ahead, the government will certainly be forced to review the land allocation.”

Whatever the reasons for the delay in the project, in Mr Oliveira’s view, the land concession contract has already been breached because the plot has not been developed.

1995 of a clear policy, prevented the approval of important laws and regulations on human rights, notably social rights.

“In spite of that, it was possible to extend [to Macau] the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights and all the major international treaties on human rights, to localise and adapt dozens of laws and regulations and to approve the main codes.”

Mr Oliveira is particularly pleased with his achievements in the gaming sector after the handover, although he stresses that there is still a lot to be done.

“I am proud of doing several tasks legislative, regulatory, policy, financial - involved in the liberalisation of the

ing tax, gaming chips, gaming areas, crimes related to gaming operations, disciplinary offences, key casino employees, et cetera.”

Mr Oliveira said drafts covering all these areas had been submitted for government approval long before he left the Gaming Commission. “But due to the political-timing, management was too cautious and ultimately led to consecutive delays.”

He said he particularly regretted “that an unfortunate management of political timing did not allow for a much needed amendment” of the Gaming Industry Regulatory Framework law (L aw 16/2001).

It is an area that requires good policy, he said.

“I am certainly among those that are fearful of the consequences of allowing economic concentration led by casino operators,” he said. “The liberalisation of Macau’s casino gaming was not undertaken so that in the medium term we will have not one but six STDMs.” Such a concentration would create “distortions that are unfair for other businesses” and also affect politics, Mr Oliveira said, citing Nevada as an example.

But he would make an exception for transport, such as ferry and low-cost air services. “The integration of such ventures with the integrated resorts will be crucial for their success,” he said.

DECEMBER 2010

Gambling up for debate A revision of the laws that regulate

87 implies that junket commissions last year amounted to around MOP36 billion.

A spokeswoman for the Gaming Inspection and Coordination Bureau says it is not as simple as that. She says the 5-percent withholding tax is not levied on the gross value of commissions and other remuneration paid by the gaming operators to the junket promoters.

The taxable amount is “well below” the gross value, she says.

According to Wynn Macau, only around 20 percent of the gross value of junket commissions finds its way into the accounting ledger.

Payment in kind

Speak to my accountant The government took MOP250 million in taxes on junket commissions last year. The Gaming Inspection and Coordination Bureau explains why it is not more

BY EMANUEL GRAÇA

he government pocketed MOP250 million (US$31 million) in taxes on commissions paid by casinos to junket promoters last year, according to the 2009 budget execution report. In contrast, casino gross gaming revenue was MOP119 billion. The MOP250 million in taxes on junket commissions last year was 4.4 percent more than in 2008 – growing at half the rate of casino gross gaming revenue.

The casual observer might think the amount was too little, but the accounting involved here is more complex that one might imagine.

A final withholding tax of 5 percent is levied on commissions paid by gam-

T

ing operators to junket promoters. The amount of tax collected last year implies that casino operators paid MOP5 billion in commissions.

Conventional wisdom is that almost 70 percent of gross gaming revenue comes from VIP gambling, which is driven mainly by junkets. If this is true, then the amount paid in commissions would have been much higher and generated more tax revenue.

In theory, for each HK$100 (MOP103) in VIP gross gaming revenue, HK$40 goes to the government in gaming taxes and premiums. The casino gets the rest. However, about HK$44 goes to junket promoters in commissions. This

“Approximately 80 percent of these commissions are netted against casino revenues because such commissions approximate the amount of the commission returned to the VIP players by the gaming promoters, and approximately 20 percent of these commissions are included in other operating expenses [as gaming promoter’s commissions], which approximate the amount of the commission ultimately retained by the gaming promoters for their compensation,” Wynn Macau said in its 2009 annual report.

The gaming bureau spokeswoman said: “The chief executive may authorise a total or partial exemption from taxation on commissions or remunerations that are paid in kind, such as transportation, accommodation, food and beverages, and entertainment, which are conveniences offered to patrons.

“Since the above payments in kind are just examples, the Macau government has consequently established an agreement with the junket promoters on defining, in compliance with the law, what payments in kind are justified as forms of commission or remunerations to be exempted from taxation.”

The amount of commissions netted against casino revenues at Wynn Macau last year was HK$3.8 billion.

Wynn Macau reported the payment of HK$854.7 million in gaming promoters’ commissions, three percent more than the year before.

According to Sands China’s 2009 annual report, the company paid US$186.7 million in gaming commissions last year. The other gaming companies in Macau publish no detailed information about their spending on junket commissions.

DECEMBER 2010

88

Gaming

Cotai, interrupted

The government rejects Sands China’s application for parcels 7 and 8 in a tremendous blow to development in Cotai

he news could not have been any worse for Sands China: the government has rejected the company’s application for additional land in Cotai on the sites known as parcels 7 and 8.

Sands China had already invested US$102.4 million (MOP819 million) on pre-construction work on the sites by the end of September. The land is the final piece of the company’s Cotai Strip project.

The company informed investors that the Macau goverment had rejected its application on December 2. Under the government’s development process, Sands has 15 days following receipt of the notification letter to apply to the Chief Executive for a review. The company has

T

DECEMBER 2010

30 days to appeal the decision in court.

The company said it “is considering all options available,” but its legal adviser Leonel Alves told Macau Daily Times Sands China has already applied to have the decision reviewed.

The Lands, Public Works and Transport Bureau confirmed the government has rejected the application. However, the bureau said Sands China’s application procedure for parcels 7 and 8 “is not fully completed”.

The government will announce the decision details “in the most convenient time,” it added.

It is likely that the government’s statement refers to Sands China’s right to appeal the decision.

“The Macau SAR [government] has always been concerned about the management and usage of land resources and the procedures in granting lands have always been in strict accordance to the Land Law and other relevant laws,” the office said.

Chain of events The timing of the decision comes shortly after the government’s policy address in which escalating control over the gaming industry was flagged in order to promote orderly and planned development of the city’s gambling industry. It caused a violent reaction on the Hong Kong stock exchange (see our report in this edition).

89 delayed construction and the opening of the first phase of development on Cotai parcels 5 and 6.

“Until adequate labour quotas are received, the timing of the completion of phases I and II [of parcels 5 and 6] is currently not determinable with certainty,” the company’s parent, Las Vegas Sands, said last month.

The recent rejection follows news of former Sands China chief Steven Jacobs suing Las Vegas Sands, accusing chairman Sheldon Adelson of ordering him to use “improper leverage against senior government officials of Macau”.

According to the court documents, Mr Jacobs said Mr Adelson sought approval to proceed with the planned “strata-title” sale of the Four Seasons apartment hotel in Cotai, as well as favourable treatment with regards to labour quotas and table limits.

The documents mention the alleged poor personal relationship between Mr Adelson and the local authorities. According to Mr Jacobs, when he began at Sands China in May last year, government officials in Macau “would no longer meet with Mr Adelson owing to his rude and obstreperous behaviour”.

Commenting on the “improper leverage” case, the Secretary for Economy and Finance Francis Tam Pak Yuen said

The revelations in the policy address came just days after comments by premier Wen Jiabao on transparency and diversifying the economy during a visit to Macau.

Earlier this year, officials warned they were preparing to take back more than 20 undeveloped plots of land from developers who had failed to deliver completed projects.

In August, Sands China’s acting chief executive, Mike Leven, told Macau Business that the government had not discussed the possibility of rejecting the application for parcels 7 and 8.

According to information made public by Sands, there was no timeline for development on parcels 7 and 8.

However, the company had already invested in the site, anticipating the government would grant it those parcels.

It is not unusual in Macau for the government to reach ad hoc agreements with developers on land use, or for land to be officially granted to a developer only after construction work is well under way. Development of The Venetian Macao, Grand Lisboa and City of Dreams followed a similar pattern.

Another loss This is just the most recent blow for Sands China. Labour shortages have

“any person who wants to use improper means to achieve the goal of getting more... imported workers must not be able to succeed”.

Land rush It is unclear what will now happen to land parcels 7 and 8.

If a Sands’ appeal fails, the two plots might be distributed to rival operators, assigned for non-gaming use or be left vacant.

“With the Macau government getting more vocal/concerned about additional supply, we wouldn’t be surprised if the government sits on the land for the time being,” Steven Wieczynski, an analyst at Stifel Nicolaus and Company, said in a client note.

Rival casino operators are circling, however.

SJM Holdings made public its interest in parcels 7 and 8 in September.

Stanley Ho Hung Sun’s company had previously made a formal approach to the government for the land.

Melco Crown Entertainment is another gaming concessionaire potentially eyeing parcels 7 and 8. The company’s chief executive Lawrence Ho recently told Macau Business that Melco Crown wants to expand its footprint in Cotai beyond its City of Dreams development.

Race Course

THE FUTURE OF COTAI Galaxy Galaxy Macau

SJM Cotai 1 “Pearl”

Lotus Bridge

Macau Studio City

Existing property pro Pipeline pro property

Wynn Cotai

SJM Cotai 2

Site 8

Immigration Caesars Golf Macau - Phase I (Harrah’s)

Source: Union Gaming Research

Galaxy Grand Waldo

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

Macau Golf & Country Club

Coloane DECEMBER 2010

90

Gaming

With its newly opened Playboy Club, Sands China is hoping it has found a lucky charm to build its entertainment business

BY EMANUEL GRAÇA

DECEMBER 2010

91 pparently female-friendly, the world’s second Playboy Club has opened on the top floor the Sands Macao Hotel, complete with waitresses in the familiar Bunny outfit.

The club opened its doors on November 20, following the unveiling of the Las Vegas club in 2007, and Macau will be followed by clubs in Cancun and London.

“Macau is being positioned as the entertainment hub of Asia and the arrival of the Playboy Club in Macau further strengthens this positioning,” said Edward Tracy, Sands China’s president and chief operating officer.

Mr Tracy says the property has “raised the bar in nightlife entertainment for people living in and travelling to Macau”.

The club is no pale imitation of American decadence. It will incorporate Asian flavours by having the bunnies wear special Lunar New Year costumes, for example – which is timely, considering next year is The Year of the Rabbit.

The 12,000-square-feet club features a VIP gaming area, lounges and sells a range of Playboy merchandise, while pitching for business as diverse as parties and events.

“We are very excited about it,” Playboy Enterprises’ chief executive, Scott Flanders, told Macau Business in an exclusive interview.

A

Appealing prospect “We already know [the Playboy brand] appeals to mainland Chinese because it is our single largest market” for Playboy retail products, Mr Flanders said.

“Our brand really associates very strongly with gamblers.

We think the club will do well.”

The club is owned and operated by Sands China. Under the deal, Playboy receives a licensing fee and a percentage of the non-gaming revenue, Mr Flanders said.

A second Playboy outlet in Macau could open as soon as next year on Sands’ parcels five and six in Cotai, a much larger 30,000-square-foot club. “[The Cotai project] will be bigger and grander in every respect. It will be our first [Playboy] mansion replica in the world. It is targeted to open in 2012 but, of course, that depends on the progress they make in finishing off those parcels,” Mr Flanders said.

With another club on the horizon, demand would be a concern for most executives. Not so for Playboy.

“Macau has continued to defy expectations in terms of its ability to absorb the capacity that has been built here,” Mr Flanders said.

Playboy had plans to go to Cotai long before joining forces with Sands China. The company had an agreement with the Macao Studio City developers to open a club there, but backed out last year.

“They weren’t making the kind of progress we wanted to see. So we had to change partners and go with the Sands.

We signed with the Sands in May and six months later we are open. That speaks to how competent a partner they are,” said Mr Flanders.

Original party animal

The local bunnies

The original Playboy Club, in Chicago, opened in 1960 and quickly became one of the world’s most successful nightclub chains, selling nearly 2.5 million membership keys worldwide and employing more than 25,000 bunnies.

DECEMBER 2010

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The club’s general manager, Reggie Martin

In the 1980s, the clubs lost their lustre. Chicago closed in 1986 in the face of criticism the clubs were demeaning to women. The last club, in Manila, was shut down in 1991.

Now there seems to be a revival.

“The Playboy rabbit head is hotter that it has ever been,” said Mr Flanders. “It is cool again. It is more popular and recognised.”

Asia is one of the regions where the company’s results are hopping. The brand is a retailing success story on the main-

Avoiding the double dip

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layboy received more than 600 applications from women all over the world wanting to be bunnies at the Sands Macao club. Reggie Martin, the general manager of the club, says just 20 were hired, including from Australia, the Philippines, Hong Kong and Macau.

Tiffany DeLeon, an experienced American bunny, flew in from the Las Vegas club to train her new colleagues.

“Being a bunny is not a day-to-day job,” she says. “We are representing the brand.”

There are a lot of rules about appearance, how to put on makeup and how to serve a drink, Ms DeLeon says.

One of the things she had to teach the new recruits was the “bunny dip”. Basically, it is a technique in leaning over to serve a drink without letting their breasts pop out of their bunny costumes. It is not easy, she says.

DECEMBER 2010

land, despite the magazine being banned there. “[Playboy] is very much a fashion brand in Asia, no question about it,’ said Mr Flanders.

“The magazine is what built the awareness but it is a brand that doesn’t need explaining. People understand that it stands for adult, fun, sophisticated entertainment, and that seems to travel across all borders and all nationalities.”

Asian invasion “Asia is our biggest market and it is our fastest-growing market,” he said. Playboy expects sales in the mainland alone to exceed US$10 million (MOP80 million) this year.

Playboy is now looking to grow its retailing arm in Asia.

More clubs are an option and Singapore is on top of the list.

“We don’t think it is as important a market as Macau but we think it can be a very attractive market for us. Again, it has gaming, and that is one of the keys for us,” said Mr Flanders.

Be it in retailing, clubs or the magazine, the company’s strategy is to bet on multiple partners. The goal is to reduce the business risk for the loss-making company, while continuing to control all content and the way the brand is positioned.

“Although we are a very big brand, we are a small company. We have learned that we have the greatest success when we partner with others as the operators,” said Mr Flanders.

“We bring the party, the image and the lifestyle.”

“We are a business in transition towards becoming a brand management company.”

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Play now, pay later Responsible gaming is a concept that is new to Macau. With increasing pressure to promote healthier gambling, the question of who should bear the cost is still unanswered

BY EMANUEL GRAÇA

lthough it is a city that has long depended on the bets placed at its casinos, Macau is only just beginning to promote responsible gaming, experts say. But with the number of pathological gamblers rising locally, there is increasing social demand for programmes to instill responsible behaviour in gamblers.

The University of Macau’s Institute for the Study of Commercial Gaming is preparing new research on the percentage of Macau citizens that fall into the “probable pathological gambler” category. The final figures are not yet ready but the preliminary figures show an increase when compared with the results of the last study.

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DECEMBER 2010

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“The problem gambling rate in Macau increased from 2.6 percent in 2007 to somewhere between 2.6 and 3.0 percent,” the institute’s director, Davis Fong Ka-chio, told Macau Business. “The percentage of problem gamblers is increasing but the growth rate is a bit lower compared with the previous study.

In 2003, the percentage of problem gamblers was 1.8 percent.”

Worldwide, the percentage of pathological gamblers in any given society varies between one and five percent of the adult population.

There should be a law In Mr Fong’s opinion, the data suggest Macau needs legislation to promote responsible gaming as soon as next year. “We already have some level of confidence in saying that responsible gambling works in Macau,” he said.

The legislation should provide an integrated exclusion programme and increase the minimum age for admission to casinos from 18 to 21, Mr Fong says. There is also a need to regulate advertising materials produced by casino operators, both to mandate warning messages and to ban misleading ads.

Some of Mr Fong’s concerns are set to be addressed with the revision of the Gaming Industry Regulatory Framework law, as reported by Macau Business in June. The makeover will increase the minimum age for admission to casinos, provide for a list of voluntarily and involuntarily excluded gamblers and allow “preventive interdiction” of players. While the law already mentions preventive interdiction, the concept has raised doubts among legal experts.

Singapore safety net S

ingapore opened its first two casinos earlier this year but it has already invested in promoting responsible gaming, with priority given to Singapore citizens and permanent residents.

The strategy puts in place several safeguards to prevent players from turning into problem gamblers, says Tan Kian Hoon, who chairs the subcommittee for responsible gambling of Singapore’s National Council on Problem Gambling.

“In our case, social safeguards come by way of imposing an entry levy for locals,” Mr Tan said. Awareness and prevention are also important, along with making counselling “very accessible”, he says.

“Another social safeguard that we have adopted is to come up with three exclusion measures,” he says. These are self-exclusion, which can be arranged through the Internet, at no charge; family exclusion, where a close relative can apply to exclude a person; and third-party exclusion, for those that are bankrupt or receiving financial aid from the government.

What is the role of gaming operators in all this? “It is part of the licensing condition that gaming operators have to put in place responsible gambling measures as part of their day-to-day operations,” he says. “We are working with them, maintaining constant dialogue to see how we can give meaning to the concept of responsible gambling. We have asked them to provide electronic messages, to allow self-limits [on the amount of money wagered] and to have on-site counselling. We are still looking at this last part.”

DECEMBER 2010

The revision proposal is already being analysed by the Executive Council, the Government advisory body. After getting the body’s thumbs up, it will go to the Legislative Assembly, to be voted on. There is no expected timeline for the makeover’s final approval.

Inform the players Even under the present legal framework, casinos should do more, says Mr Fong. “They provide some leaflets and information but that is far from good enough. They could do more on the casino floor, where there is limited promotion of responsible gaming,” he said.

Mr Fong would like to see a code of practice for the promotion of responsible gaming that is common to all gaming operators. Casinos should make available leaflets explaining the odds for each game to help players to make informed decisions.

Promoting responsible gaming is a task that goes beyond Macau’s borders. “We are not just targeting the local population, we are also targeting tourists. But when they go back home, we cannot do anything,” he says.

To help combat the problem, the institute signed a memorandum of understanding with Peking University in August on the promotion of responsible gaming in the mainland. The first step will be to undertake a study that takes a snapshot of problem gambling there.

Shared responsibility “Responsible gambling really is a series of initiatives designed to provide consumer protection, to assist people to gamble within their affordable levels,” says Alex Blaszczynski, director of the University of Sydney’s Gambling Treatment Centre, who was recently in Macau for an international conference on the subject.

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Seiko Lee Wai Wah of the Sheng Kung Hui Counselling Service for Problem Gamblers, agrees that “problem gaming is increasing”

where Australia was in the mid-1990s. Macau has a long way to go to catch up with worldwide standards in terms of responsible gambling provisions.”

Seiko Lee Wai Wah of the Sheng Kung Hui Counselling Service for Problem Gamblers, agrees that “problem gaming is increasing.”

“According to our experience, we were established in 2007, in the beginning there were only very few cases but nowadays they total up to 140,” she says. “Although this is not a big number as compared with Hong Kong, more people are getting addicted to gambling.” Worryingly, among these people are an increasing number of young adults and women.

Ms Lee blames the rising trend on several factors, notably the number of people working in the industry that have close contact with players winning big amounts of money. Then there is also misleading advertising.

Another problem is that when it comes to treatment, many people shy away from asking for help. In Chinese society, Ms Lee says “it is not easy to disclose [the problem] to others, especially to third parties. It is seen as a shame on their family as well.”

Her counselling centre has no statistics on recovered cases.

“It is not easy to talk about recovered problem gamblers. We can only say they have successfully stopped gambling on the day they pass away,” she says. “But, in some of our cases, they have successfully stopped gambling for a long time already and they have settled their problems with their relatives.”

“The responsibility for that lies with the government - for consumer protection and to make sure that the regulations are in place; with the industry - to ensure that the consumer has appropriate information, that there are no unfair inducements, misleading advertisement or promotions of gambling behaviour; and also the community and the individuals - to understand what gambling is about,” Mr Blaszczynski told Macau Business.

But who should foot the bill for promoting responsible gaming?

“It is an interaction between all three parties,” he says.

“The government profits significantly from gambling, the operators benefit from gambling and the community benefits from gambling as well. But on the other side, there is a proportion of the community that does suffer and the cost of that is borne by the industry and by the government as well.”

The British Columbia Lottery Corporation’s director for corporate social responsibility, Paul Smith, thinks otherwise.

“Everybody has a different mandate. The casino operators, their job is to make money for their shareholders. The government’s job is to receive the [gaming tax] revenue and to make sure it is dispersed back into good for the community,” Mr Smith says.

“The operators’ role is to help to identify those people [who are likely to be problem gamblers] and encourage them to access the resources that are available for treatment,” he says, referring to the resources of non-governmental organisations.

Problem? What problem?

What is clear is that gaming operators in Macau are not doing enough, says Mr Blaszczynski. “Having a look at some of the casinos here, the responsible gambling measures are probably DECEMBER 2010

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Guess who’s back AERL announces deal to acquire VIP room at the Venetian MacaoStanley Ho receives the Grand Bauhinia Medal

JM Holdings boss, Stanley Ho Hung Sun reappeared in public after several months of absence on November 20, to receive the Grand Bauhinia Medal from the hands of Hong Kong’s Chief Executive, Donald Tsang.

“I am greatly honoured to receive Hong Kong’s highest award,” said Mr Ho. “Like the Hong Kong people, I have a fighting spirit. I do not say ‘No’ and back away from challenges, no matter how difficult the problem.”

The Grand Bauhinia Medal, the highest award under the HKSAR honours and awards system, recognises the selected person’s lifelong and highly significant contribution to the well being of Hong Kong.

Mr Ho is the only person to be awarded the highest honour by the governments of both HKSAR and Macau SAR. He was awarded the Grand Bauhinia Medal by the HKSAR government in 2010 and the Grand Lotus Medal of Honour by the Macau SAR government in 2007.

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Talk it over

Leven gets new contract

Disputes between the two shareholders in the Macao Studio City project should be resolved through mediation, a Hong Kong judge has advised both parties. Otherwise, any unreasonable refusal to try to settle would result in a reduced award at the end of a trial, High Court Judge A.T. Reyes said, quoted by Bloomberg. Mr Reyes’ comments were made last month at a hearing on petitions

by East Asia Satellite Television (Holdings) Ltd. and New Cotai, for the other to be ordered to drop their interest in the Macao Studio City project.

Las Vegas Sands Corp. announced last month that President and Chief Operating Officer Michael A. Leven has signed a new contract which will see him continue to operate the company until November 2012. Mr Leven is the acting CEO of Sands China, Las Vegas Sands’ subsidiary for Macau. Mr. Leven joined the company’s board of directors in 2004 and in March 2009 took the reins as president and chief operating officer.

Gaming more important to economy Gross value added of gaming in Macau, which measures the sector’s contribution to the economy, rose by seven percent year-on-year in 2009 to MOP71.75 billion (US$8.97 billion). Gross fixed capital formation surged by 220 percent to MOP2.95 billion on account of rising investment in gaming facilities, according to official data. Information from the Statistics and Census Service indicates that total receipts and total expenditure of the gaming sector amounted to MOP121.58 billion and MOP63.32 billion, up by 9 percent each year-on-year.

Harrah’s cancels IPO Harrah’s Entertainment Inc. has cancelled its initial public offering.

Harrah’s operates 53 casinos in six countries and owns the World Series of Poker. In Macau, it owns Caesars Golf Macau.

The company cited market conditions as the main reason for cancelling the IPO. DECEMBER 2010

DECEMBER 2010

A TASTY INTERVIEW

Wynn chefs reveal the holiday season menu for this year. Think chocolate!

GIFT IDEAS

Our suggestions for stylish and expensive gifts SEASON GOURMET

Your options for a peaceful Christmas meal outside home

BREAKDOWN

BY THE NUMBERS

ALL KINDS OF DETAILS ABOUT THIS HOLIDAY SEASON IN MACAU, IN ASIA AND IN THE WORLD - CHRISTMAS KNOWS NO BARRIERS

7

The number of golden awards that Hong Kong (five) and the mainland (two) were given by the International Council of Shopping Centers, at the Asia Shopping Centre Awards 2010 competition.

These are the most stylish options in the region for you to buy your Christmas gifts

6

MOP3,888

The price of the Deluxe Hamper that is being presented as a gift idea at Grand Lapa Hotel. The basket includes a selection of wines, ham, cakes and chocolates for fellow businessmen, colleagues and friends

The number of public holidays to be enjoyed during this season and that includes Chinese as well as Christian holidays: the Feast of Immaculate Conception on December 8, the MSAR Establishment Day on the 20th, the Winter Solstice on the 22nd, Christmas Eve on the 24th, Christmas on the 25th and New Year’s Day on January 1st

368,615

MOP1,288

The price of an exquisite New Year’s Eve dinner, at Aurora restaurant, in Altira. It includes a six course dinner and one glass of champagne

The number of people that visited Macau during last year’s Christmas holidays, a yearon-year drop of 0.73 percent, according to official figures. Still, a very good figure for retail – that is, if these tourists do more than just gamble

US$1.5 million US

It’s the t return of the sevenfigure figu price tag on the Neiman Marcus Ma Christmas Book, a USbased ba luxury specialty retail department d store. This year, for f “only” US$1.5 million, you can have a personalized glass installation by artist Dale Da Chihuly, for the bottom of your swimming swi pool 98

A year has flown by and it’s that time of the year already, when you celebrate with your family and friends the end of 2010 and hope for the best for 2011. But first comes Christmas and you have a lot to plan, buy and eat.

In this Essential Christmas edition, we interview the Chef de Cuisine of Ristorante Il Teatro and the Pastry Chef at Wynn Macau and learn about their holiday season menu, how to adjust a Christmas menu to Asian tastes and how to combine desserts with main courses.

Getting interested?

While we’re at it, we go a little further and look for food and beverage options in Macau, just in case you prefer to spend Christmas and New Year’s outside your home, and we find some great promotions that may relieve you from the stress of cooking during the holiday season. This will definitely help you enjoy the days even more!

Furthermore, we take a look at The Leading Hotels in the World recommendations for a holiday escape and discover one really nearby: The Chedi Chiang Mai Hotel and Resort. Relax with your family in an historical place, benefiting from all the commodities of a luxury resort.

As for the gifts part, if you’re already having anxiety attacks about the possibility of facing shopping centres, relax. We search Macau and Hong Kong and find several ideas for him, for her and for the home. You just need a generous wallet.

In our search we even discover a more creative, different and expensive present.

Instead of a gift or an experience, you can offer membership at the Metropolitan Polo Club. It may cost between RMB380,000 and RMB10 million, but it offers a whole new lifestyle. If this doesn’t surprise your friend, lover, wife, or husband, then nothing will!

In short, Essential solves all your problems for this season. Maybe now you can really enjoy it.

Christmas in the West

Christmas in China

Christmas is an official holiday in most Western countries especially those where Christians are the majority. The main cities start dressing up for the occasion as soon as November arrives, stressing out those who still have lots of Christmas shopping to do.

Christmas is a public holiday in Macau and Hong Kong, but not in the mainland. So there are some celebrations in the two SARs, and only now are mainlanders starting to really take an interest.

It marks the birth of Jesus Christ, having religious significance.

Usually, people attend a mass on the evening of Christmas Eve. However, over time, even non-Christians have come to celebrate it.

When celebrated in China, it does not have religious significance, being seen purely as a holiday for shopping and giving presents.

In most Western capitals, coloured lights decorate the city centres and shops, while people light up their houses and decorate artificial Christmas trees with all kinds of lights, paper and plastic ornaments.

Traditional Christmas carols will be playing on the radio and at shopping centres, almost to the point of driving you insane.

The Chinese celebrate by lighting their houses with beautiful paper lanterns and decorating their Christmas trees, which they call “Trees of Light”, with paper chains, paper flowers, and paper lanterns.

Traditional Christmas carols will not be playing on the radio and in shopping centres, at least not with the same frequency of that in the West, and some are Chinese versions of the English songs.

Most work places organize a Christmas gathering one week before the occasion. Time to become friendly, even if you’re not.

Most workplaces don’t organize Christmas gatherings, unless there are some foreigners in the company.

Christianity still has a major role in the West, with Christmas being considered the main winter holiday.

Since the vast majority of Chinese are not Christian, the main winter festival in China is Chinese New Year that takes place in January/ February.

It depends on the country, but usually there is turkey and potatoes; in Italy, there is fish. In Germany, France and Austria, goose and pork are favoured. In Portugal, cod is the favourite Christmas dish.

The food on the table may take the form of roasted barbecue pork, chicken and soup with wood ears. It has more to do with the Chinese New Year’s banquet than with a traditional Christmas dinner.

Father Christmas (or Santa Claus, depending on the country) is expected to visit children and give them presents. He is an old man with a long white beard, red coat, and a bag of toys.

For those who do celebrate, Dun Che Lao Ren, the Chinese gift giver, is expected to visit children and wish everyone a long and happy life.

Usually, he is portrayed with some oriental traits.

TEN COMMANDMENTS FOR A JOLLY CHRISTMAS 1 Send Christmas cards to family and friends wishing Season’s Greetings. It’s a way to make peace with everyone, even if it’s only temporary.

2 Have an artificial (think green!) Christmas tree in your home as soon as December arrives, decorated with ornaments and lights. It will get you in the mood for Christmas.

3 Have mistletoe in a doorway. It’s a good way to get kissed, at least according to some Western countries’ traditions.

4 Buy gifts for family and friends, and pile them under the tree. That’s imperative especially if you have children. Yes, let’s not teach them materialistic values, but…who can resist their smile?

5 Ask your children to write a gift list. It will save

you time, money and point you in the right direction when you and Santa Claus are lost in toy world.

6 Don’t play any other kind of music at home apart from Christmas carols. “Silent Night” and “Jingle Bells” are mandatory when it comes to getting in the spirit, even if by Christmas time you’re already regretting it.

7 Have turkey, ham, stuffing and vegetables on your Christmas table. Of course, every country in the West has its own food traditions for this season.

8 Don’t forget why Christmas exists. The more traditionalists take Christmas as a Christian holiday and attend church on Christmas Eve. Even if you’re not religious – as this is a holiday for the non-religious too – just don’t forget the values behind it.

9 Don’t get swamped in retail. This season is about giving and that may simply take the form of love.

10 Don’t think there is only one tradition during Christmas time.

Around the world there are different traditions, different names for Santa Claus and different foods at the Christmas table. Confusing, to say the least...

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FEATURE

A FIVE STAR GIFT S

ome people say that Christmas is a season to stay at home, but tradition isn’t really what it used to be. So why don’t you offer yourself – and your loved ones – a gift and go to Thailand to spend those special days at the Chedi Chiang Mai Hotel and Resort? It will definitely be a season to remember.

This resort was included on this year’s suggestions of The Leading Hotels in the World – an organization that includes over 430 of the world’s finest hotels and resorts – as one of the most appealing destinations. A good idea for those in Macau who wish to spend Christmas away, but not too far away.

The resort is a mix of modern design with British colonial style. With its 84 rooms and suites, that include private courtyards, open balconies and exquisite views, the stylish amenities are set to provide guests with a relaxing environment.

BIG SPENDER

A king’s lifestyle Christmas always means a big headache to find perfect presents. This is even truer if you are trying to surprise someone who already has everything. Gifts are over-rated and giving out experiences is no longer new. What about going a step further and offering... a new lifestyle? Why not a Metropolitan Polo Club membership, that costs between RMB380,000 and RMB10 million?

Just opened last month, an hour’s drive southeast of Beijing, the Tianjin Goldin Metropolitan Polo Club is aiming to become one of Asia’s most exclusive circle of members. Anchored around polo, the so-called ‘Sport of Royalty’, it features state-of-the-art equestrian facilities including two international-sized polo fields and stabling for 150 horses.

The facility was launched with 60

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You can enjoy the luxury and comfort during the night, while during the day you can explore the mountain trails, elephant sanctuaries and gold-domed temples of Chiang Mai. The resort is located in the heart of the historical Thai city.

You can take advantage of a Christmas package, which starts at US$1,643 (MOP13,144), single or double occupancy, including three nights’ stay, daily breakfast and roundtrip airport transfer by hotel limousine. Adding to that, you can enjoy a special dinner on Christmas Eve and free-flowing mulled wine, followed by lunch on Christmas Day with free-flowing sparkling wine or mojitos. The final touch is a sunset river cruise complete with tapas and champagne, and a three-hour spa package. The package is only valid from December 24 to 27. So, think again...isn’t Christmas at home over-rated?

thoroughbred polo horses from Australia. Around a dozen came from the Ellerston breeding operation, owned by James Packer, co-chairman of Melco Crown Entertainment and a polo player himself.

Besides polo facilities, the club offers a 167-room, members-only hotel, including several restaurants and a wine cellar boasting over 10,000 bottles of vintage wines, mostly French. And that’s not all: members also have access to a private jet based in Tianjin airport and to a yacht.

International members can use the club as their registered business address in mainland China. There, staff will take care of their basic administrative needs, like handling mail and phone calls.

This is just the first stage for Hong Kong-listed developer Goldin Properties Holdings Limited. The company has plans to build even bigger clubs in Shanghai and Shenzhen that all

members will be able to use.

Goldin is also buying serviced apartments in London and New York, a spa resort in Hokkaido (Japan) and a wine chateau in the French Bordeaux region for the use of club members.

“We are building a community, we are not just building a club,” says Rowland K. Wong, president of Tianjin Goldin Metropolitan Polo Club and Hotel.

Being a member comes at a cost though. The club offers four types of membership: social members, equestrian members, polo members and polo team members. Prices range from RMB380,000 for social members to RMB10 million for patron owners of polo teams.

According to the management, membership will be very exclusive and mostly by invitation. However, candidates can propose themselves, with the club’s board of governors having the final say.

INTERVIEW

ANTHONY ALAIMO IS THE CHEF DE CUISINE AT RISTORANTE IL TEATRO, IN WYNN MACAU. LUC CAPUS IS THE EXECUTIVE PASTRY CHEF AT THE RESORT. WORKING AS A TEAM TO PREPARE THE DELICACIES FOR CHRISTMAS AND NEW YEAR, THEY UNVEIL THE MUCH ANTICIPATED MENU AND REVEAL SOME OF THEIR TECHNIQUES TO PROVIDE A TRULY JOLLY SEASON

hat will the highlights be on the Ristorante il Teatro menu?

Anthony Alaimo (AA) – I kept this one mostly fish, because I’m trying to carry on tradition a little bit. In Italy, usually people eat fish for Christmas.

What do you aim at when you prepare Christmas desserts in Macau?

Luc Capus (LC) – I like to work with tradition for Christmas. I don’t mean old fashioned, but I don’t like to go too crazy. In Europe, when you celebrate it, there are a lot of things you remember and I try to play with this feeling. So, when you taste my desserts you have to remember something you tasted already in your childhood.

How do you keep tradition and satisfy your guests here?

AA – A couple of the dishes I have on the menu are traditional.

It depends on where you’re from. I’m from New York, but my family is Italian. We usually have seven different types of fish on Christmas’ Eve - that’s a classic Italian Christmas dinner and normally we’ll have goose. But, for this menu, it’s a little bit different. I want the guests to have a whole nice tasting experience, so I’m not just giving them seven types of fish, because if they don’t eat fish, they won’t enjoy it.

What do you recommend from the Christmas desserts you’re preparing?

LC – For the deli shop [Café Esplanada], I will do a chestnut log, which is a traditional French Christmas dessert. For this, I use chestnut that I get from Turin, in Italy – it’s a special kind and strong enough. At Ristorante il Teatro, for Christmas, I will do a chocolate tart and I pair it with something a bit acid. For New Year, I’ll do an Italian coffee cake with stracciatella.

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The Italian American Anthony Alaimo is Chef de Cuisine at Wynn Macau’s signature Italian dining establishment, Ristorante il Teatro.

Anthony joined Wynn Macau in February 2007, as Senior Sous Chef for Ristorante il Teatro.

As an Italian American growing up in Brooklyn, New York, he was introduced to Italian cuisine by his family and started working in local neighbourhood Italian restaurants at the age of 15. He moved to Las Vegas and learned all the techniques with several chefs, after which he was appointed Executive Sous-Chef at the multiple award-winning Azul at the Mandarin Oriental Miami.

Chef Anthony joined Wynn Las Vegas in 2006 and from there came to the company’s property in Macau.

Is there any element you use in the United States that Asian customers in Ristorante il Teatro do not like?

AA – Mainly the comments that we’ve had are that some ingredients are very strongly flavoured. Italian food is very strong – garlic, anchovies, capers. A lot of times, guests will say that this is too salty. But there is no extra salt in it and it’s probably the capers or the clams. I don’t necessarily take it off the menu. So, once they get an understanding of why it tastes the way it does, I find that they enjoy it.

Given that Christmas is not a Chinese tradition, are the desserts you’re preparing at Wynn Macau much different from the ones you would prepared while working in France and Las Vegas?

LC – Yes. The taste is very different. For instance, here is not as cold as Europe. During Christmas in Europe I would go for something rich, with a little bit of alcohol inside. Here, the temperature will never go below 0ºC, so you need to have a different approach. I will make it a little bit less sweet and lighter, but I still want to keep the Christmas taste. That’s why I don’t want to get too crazy and really get out of Christmas.

How does the cooperation with Chef Luc Capus work?

AA – We talk about it first and we’ll come up with a couple of ideas and then we’ll both put it on paper and he’ll create it in the pastry shop. I’ll come up and taste it and say: “I think we can use this or maybe we can use that.” For the most part, I trust Luc and in his expertise to make the desserts. If I feel I want to put some ingredient from Italy, I ask him to incorporate it on the seasonal menu and we’ll put something together.

What techniques do you use to adjust to Asian tastes?

LC – I taste a lot and I talk a lot with the people just to understand. The chefs de cuisine usually say that I’m wearing a lot of heart, because whenever there is a tasting I try to be here as much as possible. Each chef de cuisine is different and I first want to understand their character. I’m basically here just to help them at the end of the meal and to try to finish the meal in a beautiful way. For instance, with Hiro [Hirofumi Imamura, Executive Chef at Okada], I’m trying to learn how to work with almost no sugar and with no products.

What will the highlights be for the New Year’s Eve menu?

AA - The veal tenderloin with crispy sweet bread and the osso bucco. The osso bucco is kind of an Italian dish and I played it a little unconventionally. I like to incorporate classical dishes and use different methods of preparing them so people can associate it with having that classical feel of Italian food, but just when it arrives at the table it’s a little different than what they had expected. The same with the lobster and the eggplant cannelloni – the cannelloni is usually baked in an oven, but I bread it and it’s with lobster.

The chocolate magician Luc Capus is Executive Pastry Chef at Wynn Macau, responsible for the full range of pastries available at the resort’s eateries including Café Esplanada, Ristorante il Teatro, and Okada, as well as banqueting.

Chef Luc joined Wynn Macau in August 2006, transferring from Wynn Las Vegas, which he joined as part of the hotel opening team in 2004.

Born in France, it was in his home country that he developed his skills. He started training at culinary high school at the age of 15, which was followed by three years as an apprentice cook, including one year specializing in pastry. Finally, he worked with chocolatier Jean Francois Castagne and his team to learn pastry and the best chocolate techniques.

Keeping tradition is your goal for the Christmas menu.

How about for the New Year’s menu?

LC – For New Year I’m looking for something interesting in terms of the taste and something light. The goal is to have a big experience – when you finish with the dessert, you will like to have one more and you’ll have to wait one year to have it again.

Is the Christmas and New Year menu different every year or do you have any dish that is always served?

AA – The Christmas menu always changes, because our guests come back every year. So, I like them to try something different. The only thing that is always on the New Year’s Eve menu is the lentil soup. In Italy, lentils are always eaten on New Year’s Eve.

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SHOPPING LIST

FOR HIM

Usually it’s all about her. But this time we also thought of the men, their needs and desires. That’s why we bring you a male shopping list that includes the things you never even realized you wanted but definitely need. Here they are

Zwiesel 1872 decanters iPad

It is marketed for consumption of online media such as books and periodicals, movies, music, games, web and e-mail access. Apple’s iPad is the 700-gram tablet computer all men desire. Its size, weight and software make it one of the most sophisticated gadgets around.

Price: HK$4,888 (16GB), HK$5,688 (32GB), HK$6,488 (64GB) Where: The Venetian Macao Grand Canal Shoppes, The Macao Square, City of Dreams

Famous for producing wine accessories, Zwiesel 1872 launches a series of decanters of different shapes, to facilitate different wine tasting. It’s the perfect option for those who enjoy entertaining at home.

Price: HK$1,390-3,230 Where: Global Hotelware Ltd. and Exclusivitès in Hong Kong

Clef du Vin

by Peugeot

This clever measuring instrument reveals your wine’s ageing potential. When you dip it into the wine for one second, it represents the wine aged for one year.

Perfect for those interested in wines.

Price: HK$960-2,900 Where: Exclusivitès in Hong Kong

Rimowa Topas Titanium Cabin Multiwheel

Now coming in the precious metal colour, titanium, the Topas trolley is Rimowa’s suggestion for Christmas. This suitcase is ideal for businessman. Why? Because it’s very tough and offers more room for business suits.

Price: MOP9,810 Where: One Central, The Venetian Macao Grand Canal Shoppes

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This set includes an eau de toilette and a shampoo & shower gel from Bulgari.

Especially designed for the holiday season, this kit belongs to you, the man that likes the smell of elegance.

Price: HK$755 Where: Wynn Esplanade, The Venetian Macao Grand Canal Shoppes

Louis Vuitton Tambour In Black

With its modern, sporty design integrating a dashboard-inspired dial, the Tambour in Black Power Reserve enables you to check at a glance the power level remaining in the watch. It’s a great gift for businessmen who prize discretion.

Price: HK$53,500 Where: DFS The Shoppes at Four Seasons, One Central

Christmas

Aqva Pour Homme kit from Bvlgari

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Omega Seamaster Aqua Terra Annual Calendar

A perfect union of design and 21st century watch-making technology, with its bi-coloured blend of stainless steel and 18 carat red gold, this watch has a special feature: an annual calendar that automatically recognizes months with 30 and 31 days and needs to be manually corrected only once a year, on March 1st. It’s the perfect time-saver.

Price: MOP98,700 Where: Grand Lapa, DFS The Shoppes at Four Seasons

t is the oldest trick in the book – if you don’t have a clue about what Christmas gift to offer to a male friend, go for whisky. It is always a winner.

Nevertheless, some scotches are a true treasure, deserving a special place under the Christmas tree.

This is the case for Chivas Regal 25 Year Old Original.

Carefully crafted by Master Blender Colin Scott, using the same traditions and techniques the legendary Charles Howard used for the original, every cask is handselected and individually nosed.

With up to 50 different single malt and grain whiskies in each blend, the blender’s challenge was akin to conducting an orchestra, requiring experience, inspiration and patience – a subtle mix of science and art.

The final tune was a multi award-winning Chivas Regal

25 Year Old Original.

The new blend pays homage to the first ever Chivas Regal blend, also a 25-year-old scotch, first shipped from Aberdeen to New York in 1909.

Produced in limited quantities only, Chivas Regal 25 Year Old Original is aged for a minimum of 25 years.

Each individually numbered bottle reflects the heritage of the liquid inside.

The rich golden whisky shows enticing fruity aromas of sweet orange and peach to the nose, followed by notes of marzipan and nuts. In the mouth, the savour hints of rich milk chocolate orange, and fondant creaminess give the blend its unique identity, followed by a smooth, rounded and luxuriously long finish.

Chivas Regal 25 Year Old Original is available at stores in Macau, for MOP2,180.

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SHOPPING LIST

FOR HER

How about the ladies? What are their choices for this Christmas? Here’s our selection

Blv Eau de Parfum kit, by Bvlgari

A Bvlgari Christmas gift for her. The kit includes eau de parfum and body lotion joining forces to make her more beautiful.

Price: HK$935 Where: Wynn Esplanade, The Venetian Macao Grand Canal Shoppes

Valentino Rockstud bag

This bag represents the synthesis between Valentino’s sophisticated heritage and the darker attitude of Maria Grazia chiuri and Pier Paolo Piccioli’s vision. For women who are inspired by the rock universe, here comes their bag, in malleable and traditional calf leather.

Price: HK$12,400 Where: Grand Lapa, The Shoppes at Four Seasons, City of Dreams

The Rockstud shoes,

by Valentino

Here is Valentino’s suggestion for this Christmas: the Rockstud shoes. They are a delicate 6-centimeter kitten-heel sling-back, with thin straps, combining rock and style.

Price: To be announced Where: Grand Lapa, The Shoppes at Four Seasons, City of Dreams

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Goebel’s Mucha vase

The vase features the pattern Der Tanz, which is an Alphonse Mucha’s painting, and displays graceful female postures and beautiful faces.

From one of Europe’s largest manufacturers of handcrafted gifts, it is a more traditional object with artistic inspiration that will appeal to women.

Price: HK$2,960 Where: Exclusivitès in Hong Kong

Louis Vuitton Monogram Résille Large Pendant

Using the Louis Vuitton monogram, this large pendant in yellow gold is the brand’s suggestion for this Christmas. Discrete and elegant.

Price: MOP36,600 Where: DFS The Shoppes at Four Seasons, One Central

Monogram Résille Round Flower Ring

Inspired by Louis Vuitton’s Monogram lace, which intertwines Monogram flowers with the LV initials, this wide band ring in yellow gold is an elegant piece.

Price: MOP29,700 Where: DFS The Shoppes at Four Seasons, One Central

Tambour Disc Amarante,

by Louis Vuitton

This elegant watch features a dial in amaranth lacquer, with a distinctive diamond-paved disc that stands out in contrast. It is available in three sizes (S/28 mm, M/34mm, L/39.5mm). Diamonds really are a girl’s best friend.

Price: MOP41,000 (S), MOP87,500 (M), MOP112,000 (L) Where: Grand Lapa, DFS The Shoppes at Four Seasons, Wynn Esplanade, One Central

Balcon du Guadalquivir box from Hermès

Inspired by the patterns of Spanish culture, the Balcon de Guadalquivir porcelain box is joyous and festive. In its red attire, it is also the perfect colour for China.

Price: HK$1,490 Where: DFS The Shoppes at Four Seasons, Wynn Esplanade, Grand Lapa, Exclusitivitès in Hong Kong

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SHOPPING LIST

FOR THE HOME

There are certain things that are nice for him or her, such as objects that help you host with elegance. Here are our ideas for a home Christmas gift Peugeot Ressort 19th century spring corkscrew The corkscrew is made of metal with the colours silver and gold. Such an elegant and vintage outlook will make a wonderful Christmas gift.

Price: HK$2,400 Where: Exclusivitès in Hong Kong

La Via Lattea set of cheese knives, from Alessi

It’s a knife for hard cheeses, a knife for semi-soft cheeses and a spreader for soft cheeses. In polished mirror stainless steel, picture these cutting the cheese to go with a smooth wine.

Price: HK$3,840 Where: Lane Crawford, Pacific Place Home Store, Times Square, all in Hong Kong

Etagere from Rosenthal

Tignanello Vertical Pack This set of 12 bottles can be a great Christmas gift.

Summergate’s wine provider brings you Antinori Tignanello 1971, 1988, 1990, 1995, 1997 and 2000.

The set has two bottles of red wine from each vintage and will definitely contribute to some very nice dinner parties.

Price: MOP29,850 Where: Summergate Fine Wines

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These two plates are based on the theme “Christmas in Your Heart”, featuring gold areas with floral patterns and classical nettings, accentuating the festive character.

Price: HK$2,740 Where: Exclusivitès in Hong Kong

Sambonet coffee pot, water pitcher and sugar bowl

With its shining golden colour, this set of coffee pot, water pitcher and sugar bowl with a cover will be a hit in any elegant home.

Price: HK$2,390 - coffee pot, HK$3,500 - water pitcher, HK$1,510 - sugar bowl Where: Exclusivitès in Hong Kong

X’MAS AND SEX

Blow up wall clock, by Alessi

It’s a gift to remember. Included on Alessi’s Christmas suggestions, this wall clock designed by the Brazilian Campana brothers, is created by the play of shapes and spaces generated by the steel rods put together almost at random. An explosion of good taste.

Price: HK$2,300 Where: Lane Crawford, Pacific Place Home Store, Times Square, all in Hong Kong

Alessi’s Mediterraneo Fruit Bowl Emma Silvestris put her imagination into a centrepiece, composed of cut and moulded metal and epoxy resin. More than a fruit bowl, it’s a piece of art.

Price: HK$690-880 Where: Lane Crawford, Pacific Place Home Store, Times Square, all in Hong Kong

Onze de Coeur by Haviland

Designed by French princess Tania de Bourbon Parme, this heart-shaped pattern tea set reveals the romance and elegance of royalty.

Price: HK$3,410 - 10,870 Where: Exclusivitès in Hong Kong

Getting it right This time, this column is male-oriented and about men’s choices for Christmas gifts. In the family season, we help you find the one right present to spice up your relationship. Or, at least, not cool it down.

Have you ever gone out looking for the best gift for your girlfriend, lover or wife and ended up choosing a washing machine or a coffee maker?

“Oh honey, I know you really needed it,” you explain. Needless to say, you’ll probably get a furious look or even a cry from your partner.

Take some advice. You should never offer an appliance to your partner. Instead, offer something to pamper her, something that she will definitely enjoy. Avoid things like rice cookers or dishwashers because these definitely will not make her feel attractive.

If you want to choose the right gift, the best way is to think sexy. For instance, you can offer the traditional flowers, chocolates, a beautiful piece of jewellery or just some sexy lingerie. These will be good for her and, subsequently, for you.

But if you really want to gain some extra points, try to be original: a romantic getaway is a good option. If you cannot take days out from work, you can offer something not so faraway: choose the best and most exquisite hotel in town and book the two of you a weekend there. Just getting away from routine will be perfect for her.

Now, you’re probably thinking: “What about me?

Why are the Christmas gifts all about women and never about men?” Well, because men just don’t care. They won’t cry if their partner doesn’t get them the right gift nor will they be less interested in the relationship because of that.

Take our advice: If you care about your relationship, just think sexy when giving a gift to your partner. It will definitely earn you some extra credits and keep you tuned in under the bed sheets.

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CHRISTMAS GOURMET

How many times have you wished that you could skip the stress of cooking during Christmas? Well, your wish could come true... Here are some options for a truly peaceful holiday season

International treats At StarWorld

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tarWorld hotel-casino offers a series of promotions in its restaurants to help you to enjoy the holiday season.

For instance, Temptations restaurant is offering a Christmas buffet that includes a series of international cuisines, on December 24, 25 and 31, as well as January 1. The food highlights include lobster, seafood and truffle terrine, homemade goose liver and pistachio pate with duck gelatine, ham with melon as well as grilled salmon fillets with shrimps. Furthermore, during lunch on December 24 (MOP168) and December 25 (MOP198) as well as during dinner (MOP408) there will be a clown performance, while Santa Claus hands out Christmas candies.

Michelin recommended Japanese restaurant Inagiku will also be offering its own special Christmas buffet on December 24 and 25, for MOP580. The highlights include crabmeat jelly and

juicy beef rolled with enoki, as well as US beef steak and crispy tonkatsu of kurobuta pork. For MOP668, you can have unlimited toasts of sake with your friends.

Also, from December 13 to 31, you can enjoy a four-course Christmas dinner for MOP138 with treats from all over the world at Sensations restaurant. The menu includes special delicacies such as spicy turkey and cucumber salad, Russian borsch with sea conch, grilled cod with honey sauce and baked tiger prawn stuffed with onion and mushrooms.

The NewYear party will be held at theWhisky Bar.On the evening of New Year’s Eve, there will be a live band show and countdown session, together with a mambo session. As usual in Macau, you can even leave on January 2 with as much as HK$1,888,888, if you win the Grand Draw. Who knows? You might get lucky!

Christmas à la carte At Sands Macao

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ou can have seafood, meat, alongside several dessert experiences. At Sands Macao, you can savour different holiday season meals in the restaurants spread around the hotelcasino. You just have to choose according to your taste.

For instance, at 888 Gourmet Place Buffet Restaurant, you can have a buffet with different types of dishes at your disposal, on December 24 (MOP108/320), 25 and 26 (MOP218). There will be a seafood counter with mussels, fresh prawns, sea crabs, together with other dishes, such as lobster bisque.

At the Copa Steak House restaurant on Christmas Eve for MOP580, you can have a more north-American style menu that includes a traditional roasted US turkey served with truffle

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mashed and buttery chestnut. Menus on December 25 and 26 will also feature seared foie gras with lime and creamy kobacha pumpkin soup with spicy crab bites.

For a Christmas experience you can also try the restaurant Pérola and for MOP400, on the evening of December 24, you can taste roasted slices of festival turkey accompanied by mashed sweet potatoes and baby veggies. On December 25 and 26, for MOP350, the dinner will include different treats such as roasted turkey with cranberry sauce accompanied by winter vegetables and pumpkin dressing. The grand finale will be the chestnut roll and gingerbread parfait and spiced chocolate.

Chocolate and veggie delicacies At Wynn Macau

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he holiday season’s highlights at Wynn Macau are at Café Esplanada and Ristorante il Teatro. Italian meals, chocolate treats and ginger bread cookies are just some examples of what you can taste.

On December 24 and 25 you can enjoy the Christmas Eve Dinner Buffet, at Café Esplanada, for MOP498, while at Ristorante il Teatro you can enjoy a five course Christmas Eve dinner set for MOP980. For vegetarians, there is even a special menu for you.

As for New Year’s Eve, there will also be some special treats , such as grilled main lobster with crispy eggplant and pecorino Toscana, cannelloni, lobster coral sauce and pan roasted veal tenderloin with braised osso bucco. On December 31, there will be a buffet, for MOP408/488, at Café Esplanada, while you can have a four-course gala dinner at Ristorante il Teatro, for MOP888/1,280.

For those that can hardly wait for the desserts, Café Esplanada will satisfy your desires, featuring during the holidays chocolate, chocolate and more chocolate. So, forget about dieting: this is really not the right time.

European traditions At MGM Macau

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uring the holiday season, it’s Europe that dictates the traditions - at least, at MGM Macau. If you want to spend Christmas and/or New Year’s Eve outside home, then the restaurants Rossio and Aux Beaux Arts Brasserie have thought of you.

At Aux Beaux Arts Brasserie, for MOP788, from December 24 until December 30, you can have a seven course tasting menu for dinner that includes French delicacies such as the presse de foie gras, duck liver terrine with black cherries and Parisian brioche, as well as filet de Saint Pierre, John Dory filet in a potato crust, leek and truffle compote “Parmentier style” and Pithiviers (oven baked burgundy snail Pithiviers with tomato puree and port wine sauce). For dessert, you can count on a Buche de Noel, a hazelnut praline and sour cherry log cake on iced pistachio.

The menu will be different at Rossio. Serving a Christmas Brunch Buffet Menu on December 25, for MOP450, here you

can taste delicacies such as country pate style terrine with dried fruit and nut compote, turkey carving, salmon fillet cured and marinated with citrus, vodka and pink peppercorns well as some seafood, including desserts such as the classic gingerbread pudding with stout beer sabayon and blueberry chantilli or tiramisu log cake.

Chocolate will also be a noted presence with cookies and sweets for those who cannot resist.

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Next month look for Chinese New Year 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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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 Alfred Dunhill Level 1, The Boulevard 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

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Gaming

Change in the wind

Cristino Naguiat

A Macau gaming operator is in negotiations with Pagcor of the Philippines about a role in Pagcor’s Manila Bay project

BY PAULO A. AZEVEDO

he new boss of the Philippine Amusement and Gaming Corp, Pagcor, wants to take the powerful regulator and operator in a different direction. It is time to bring more foreign gaming investors into the Philippines, including one from Macau, said the public corporation’s chairman and chief executive, Cristino Naguiat.

Mr Naguiat also wants deadlines for their investment projects to be met, standardised online gaming contracts and Pagcor’s eventual withdrawal from gaming operations, so it can focus on regulatory duties.

Five months after taking office, Mr Naguiat chose to outline the new strategy for casino and online gaming in the Philippines in an exclusive interview with Macau Business.

He has two main objectives for stateowned Pagcor: to improve its casino operations and enhance the US$10-billion

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(MOP80 billion) Manila Entertainment City project, in which two more operators are being invited to join the present four. One is from Macau.

Mr Naguiat said Pagcor had contacted a Chinese gaming operator in Macau and a Korean operator. He said both were “very, very interested”.

If the deals go ahead, they will join Malaysia’s Genting, Japanese businessman Kazuo Okada – who is the boss at Aruze and calls Steve Wynn a business partner – and two Philippine companies in the massive gaming and entertainment development, to be built on 72 hectares of reclaimed land in Manila Bay.

Right ingredients “Everybody is interested in joining the gaming scenario in the Philippines after seeing [the example of] Singapore,” Mr Naguiat said.

But he wants a new approach to the

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project and is not interested in anything less than a US$1 billion investment from each of the gaming operators. It is not the only change the new gaming boss wants.

Before he took over “there was no time reference, no time frame for the investment commitment”, Mr Naguiat said. “I want everything to be done in three or four years.”

Pagcor’s main aim now is integrated resorts, as in Singapore and Macau, instead of simple casino operations.

“Integrated resorts should have all the ingredients of entertainment,” Mr Naguiat said, with casinos being just one piece of the puzzle.

Pagcor is considering new casinos in Clark, just to the north of Manila, in Laoag, further to the north, and in the central Philippine city of Cebu.

Pagcor is also upgrading its own casinos. “We are buying new machines and software, renewing furniture, basically improving our casino operations and efficiency,” said Mr Naguiat.

Legislative hurdle The long-term goal is the privatisation of Pagcor casino operations, as promised by the new government of President Benigno Aquino, a close friend of Pagcor’s new boss. “I think in due time we will become more a regulator than an operator,” Mr Naguiat said.

“That is why we want [foreign operators] to come in with the investments and to attract foreign tourism.

We don’t want them to focus on local tourism. Once they have done that, Pagcor will have no role any more in operating casinos.”

It could take some time to achieve because the law will have to be amended, he said.

Complicated arrangements between Pagcor and the multiple operators of online gaming – there are around 180 e-game cafes in the Philippines –are under review, he said. “I am so confused, also, with all those different sharing schemes.” Standardised online gaming contracts are now Pagcor’s aim instead of separate revenue-sharing deals with various partners.

Pagcor’s gaming revenue in the first nine months was nine percent lower this year than last. But Mr Naguiat expects revenue to increase next year, since Genting’s Resorts World is now fully operational.

DECEMBER 2010

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Gaming

Industry reborn A Sri Lankan bill that hands the government regulatory power over the country‘s casinos is a winner for the island nation but won’t change Asia’s gaming scene

BY MUHAMMAD COHEN

ri Lanka bet on a sure thing when it legalised casinos but it is a long shot that the island nation – better known for beaches, elephants and tea – will have a significant impact on Asia’s gaming landscape.

The parliament passed the Casino Control Bill last month, giving the government the power to regulate gaming facilities. The law, introduced by recently re-elected President Mahinda Rajapaksa’s governing United People’s Freedom Alliance, recognises the reality that a handful of casinos are already operating in Colombo, the capital and biggest city, and endeavours to bring them under increased supervision.

The bill received a hostile reception from religious leaders in the predominantly Buddhist country of 22 million.

The opposition United National Party charged that casinos would undermine

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Sri Lanka’s cultural, social and religious fabric and become de facto red-light districts for prostitution. Government supporters noted that casinos first appeared when the fervently free-market UNP held power and that the party proposed legalising prostitution within designated districts in 2004.

Despite the raucous debate, legislators approved the measure by a vote of 114 to 33. Amending a Gaming Bill passed one day earlier, the final legislation includes provisions that permit the government to restrict casinos to specified zones. The law gives the authorities until the end of next year to establish a full set of regulations, to take effect on January 1, 2012.

Limited local market Environment Minister Anura Priyadharshana Yapa told reporters in Colombo

Colombo, capital city of Sri Lanka DECEMBER 2010

that the government’s aim was to regulate and control casinos, not to turn Sri Lanka into “another Las Vegas”, despite local media reports of a US$100 million (MOP800 million) lakeside “integrated resort” in the works.

“Our company would hesitate to invest unless full details are known, although I have been involved in two of the five-star hotels in Colombo,” the chairman and managing director of India’s Advani Hotels, Sunder Advani, told Macau Business. “I doubt if they would affect casinos in the region. They may not do much for tourism.”

Platform Asia´s managing director Felix Ling said: “Sri Lankans are just too poor to gamble, so there’s no domestic market. Even Indians won’t go there. India has casinos already.”

Small casinos have existed in Colombo and beyond thanks to a legal loophole that allows them to operate as private clubs that cater predominantly to tourists. The properties have two dozen tables or fewer, offering mainly baccarat, blackjack and roulette, with betting limits ranging from 50 rupees (MOP3.58) to 500,000 rupees (MOP35,800). Casinos usually feature bars, music and prostitutes. No gaming revenue figures are available.

Revenue grab Legalising casinos allows Sri Lanka’s cash-strapped treasury to take a share of gaming revenue. The government is facing a yawning budget deficit. Last year’s public spending of US$10.4 billion exceeded revenue by more than US$4 billion. The government needed a US$2.6 billion International Monetary Fund credit facility to restore confidence and avert a balance-of-payments crisis.

After winning the three-decade-long war with ethnic Tamil separatists last year, the government can cut military spending. But it may need more money to rebuild the country and assist an estimated 300,000 refugees displaced by the fighting.

The end of the war has led to dramatic growth in tourism as many countries cancelled warnings against travel to Sri Lanka. In the first nine months of this year, arrivals reached 445,228 visitors, up 44 percent from 2009. The New York Times recently placed Sri Lanka at the top of its annual list of places to visit, and tourism officials forecast 700,000 visitor arrivals next year.

Photos: Carmo Correia

Business

Meaty business

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Christopher Artinian

Morton’s The Steakhouse is planning an aggressive expansion throughout Asia, rolling out the same menu and service that has made the restaurant so famous

BY JOÃO FRANCISCO PINTO

hicago-based Morton’s Restaurant Group is preparing for allout expansion in Asia. There are no plans for a second restaurant in Macau but Morton’s president and chief executive, Christopher Artinian, is happy with the performance of the existing outlet.

“We have been here for three years and we have been doing quite well. I think we will continue to grow like Macau has,” he told Macau Business in an exclusive interview.

Mr Artinian took the helm at Morton’s in February. He joined the com-

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pany in 1995 and has been responsible for expanding the Morton’s The Steakhouse chain.

The decision to invest in Macau was taken in light of the market’s explosive growth. The restaurant is at The Venetian Macao, among other food outlets, some of which have had to close their doors. Mr Artinian says his company is totally committed to Macau, unlike some of the competition.

The Morton’s group is the world’s largest owner-operator of upscale steakhouses. It first opened in Chicago in

1978 and has subsequently expanded throughout the United States and abroad.

It now has 77 steakhouses, all but a few in the US. All have a similar menu, style, concept and decor. Macau’s restaurant, like most, has private dining and meeting facilities called “boardrooms”.

Morton’s Macau differs in that it is on the Venetian’s gaming floor, with its entrance facing gamblers. “I do not see it as a minus, I see it as a plus,” Mr Artinian observes. He says the steakhouse complements the casino, allowing DECEMBER 2010

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Business players to enjoy a “nice meal or a wonderful cocktail” while taking a break.

Morton’s has significant experience operating in casinos, since its restaurant in Atlantic City, New Jersey, is adjacent to Caesars Palace. “It is one of our most successful operations in the United States and the things that work in Atlantic City work wonderfully here in Macau,” he notes.

Flying beef Logistics are a significant hurdle for Morton’s in Asia, since most of the products served in its restaurants are imported from the US. “We fly our beef from the Midwest because it is the best beef anywhere,” Mr Artinian says.

The restaurant managers spend “a lot of time and effort to make sure that we have the ingredients that we know will make our recipes perfect, so that we can deliver quality to our guests”.

“I think we will continue to grow like Macau has,” says Morton’s president and CEO, Christopher Artinian

Growing muscle in Asia M

orton’s Restaurant Group is considering opening new restaurants on the mainland, and in Hong Kong, Taiwan, South Korea and Japan. “There are terrific opportunities in Asia,” says the company’s president and chief executive Christopher Artinian.

“We feel that this is where our focus is. There are several locations that we can build up in Asia.”

Morton’s has recently opened its first outlet in Shanghai, the fourth in Asia overall.

The chain is looking at a number of sites, including a second restaurant in

DECEMBER 2010

Shanghai and Hong Kong.

The chain opened its first Asian restaurant in Singapore in 1998, its second in Hong Kong a decade ago and its third, in Macau, in 2007.

Mr Artinian says opening a new restaurant requires an investment of between US$3.5 million (MOP28 million) and US$5 million to acquire the premises, and to hire and train staff.

For Mr Artinian, expansion in Asia is natural. “We realised that great American steakhouses work great in Asia, and we’ve proved it for the last 12 years,” he says.

Unlike other foreign investors, Morton’s management is not complaining about Macau’s tough rules for hiring overseas staff. “We have been very fortunate and we are very pleased with the staffing level that we have,” he says. “We really haven’t had a challenge.”

Morton’s is trying to get more involved with the community here. It has accepted interns from the Institute for Tourism Studies and trained them. A charity golf tournament held in partnership with the local International Ladies Club has raised about MOP146,000 over the last two years.

The group is recovering from a difficult past year in the US. “Morton’s, being tied up with business travelling in the United States, was more exposed to the economic downturn,” Mr Artinian says.

Its figures started to improve at the end of last year. Third quarter revenue this year was US$66.2 million (MOP530 million), up 3.9 percent on last year. “Things are starting to pick up this year again, and we have started looking for new sites in the United States,” he comments.

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Mile-high rollers German suitcase manufacturer Rimowa opens a new flagship store

BY LUCIANA LEITÃO

uxury luggage maker Rimowa has opened a new flagship store in the city at the One Central shopping mall. The German firm launched in Macau almost four years ago and the new shop reflects its intention to grab a piece of the city’s fast growing luxury retail market.

The president and chief executive of Rimowa, Dieter Morszeck, believes Macau is becoming popular as a destination. “It’s very important for our customers that they find our products here,” he says.

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One of Rimowa’s obvious targets is mainland tourists who flock to Macau to gamble. But Mr Morszeck predicts more sales from a diverse range of customers at Rimowa’s stores in Macau.

“We expect to also see people from Taiwan, Korea and Japan. Macau is a melting pot, with so many international guests,” he observes.

The German brand opened its first store in Macau in 2007, at the Venetian Macao. “It’s a success,” he announces. The brand is also available at the New Yaohan

“Retail has good future” in Macau, says Rimowa’s boss, Dieter Morszeck department store.

The boom in retailing in Macau is a natural consequence of the city’s development as a tourist destination.

“When you’re at the Venetian, you see the people are in a good mood... they come for holidays and vacations. They gamble and like to shop,” he says. “Retail has a good future, no doubt about it.”

Since his first visit to Macau in the 1980s, Mr Morszeck has noted big changes that have taken place.

“When I came here 25 years ago, it was under Portuguese rule and it was different. The growth is amazing and we had to see it to believe it.”

A case for travel Rimowa has used gracious air travel as its inspiration for the new flagship store and divided the space into Solid and Vintage sections. At the same time, the brand is introducing two new collections for each section.

Aviation-quality aluminium is the hallmark of the Solid collection, complete

with solid telescoping handles. The Vintage collection, available from January, is a tribute to the first Rimowa aluminium grooved suitcase, launched in the 1950s.

Only 1,950 cases will be sold worldwide, each with its own serial number.

Rimowa is known for manufacturing sturdy trolleys. The company has been operating since 1898, starting by making wooden trunks.

Only after 1937 did it start making luggage from aluminium. Since 2000, new products have been made from polycarbonate, an indestructible plastic.

The company’s products are in high demand in Germany, Japan, the United States, Italy, Hong Kong and France. In Asia, the brand headquarters is in Hong Kong but Rimowa also has stores in the mainland, Japan, Taiwan, Singapore, Malaysia, South Korea, Thailand and the Philippines. Over the past three years, the number of mainland stores has grown from five to 20.

DECEMBER 2010

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

There is a difference between the tinsel and the tree THINK ABOUT YOUR ORGANISATION’S EXCELLENCE FROM THE ROOTS UP, RATHER THAN LAYERS OF MEANINGLESS, SHINY BAUBLES ON THE CHRISTMAS TREE his story about quality begins with a chance meeting with a former student from Macau. On her own initiative she had saved up enough money to move to Britain, where she studied to improve her English. Indeed it had improved dramatically.

After we spoke, I sent a small note to congratulate her. I told her that if she were my daughter I would be very proud of her. Her reply stopped me dead in my tracks. “You know, in my life, I have never had people proud of me,” she wrote. I was so touched.

How often do people’s endeavours go unnoticed? They try and try, but their efforts and achievements are simply passed over in silence.

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The pursuit of paper Look into many organisations and businesses in Macau and you will be struck by the display cabinets full of trophies, prizes, plaques, certificates, awards, shields and artefacts – all public signs of organisational success.

Every little thing that an organisation does is up for an award. There are the ISO certificates, Total Quality Management awards, the Baldrige Awards, European Quality Awards, the Deming Award, the Six Sigma Awards – all indicators of quality and excellence that are hungrily sought by so many organisations.

For some, these awards are a paper chase. Piles of documents assure the public that an organisation is excellent and reliable, its work fits a purpose, it is environmentally friendly, invests in people, is secure, manages its staff well, is competitive, offers good client service, has procedures for every wretched thing imaginable, and on and on.

For others, quality awards are a cash cow for “credentialising” organisations and accreditation agencies. You pay your money and, when you have paid enough, you get your award. In a few years’ time, you fork out more money to renew it. You’re hooked. You have been successfully “fished”.

For some, quality awards are mechanistic levelling down to control and compliance, with little relationship to quality as excellence.

For others, they are only suitable for commerce or manufacturing industries, but not for health, education or social services, as human services are not to be sullied by a concern for quality.

What arrant nonsense.

Take a closer look There are some cases where the awards bear little relationship to what actually happens inside the organisation. A company

DECEMBER 2010

can gain an award for teamwork and outstanding management, yet the staff can be at each others’ throats, the communication and consultation lousy, morale at rock bottom, and the invisible leader a mere delegator of everything to a deputy, the ‘Why Have a Dog and Bark Yourself Syndrome’.

Look again at some of these awards. Many are full of human-centred criteria.

Take the ISO 9004:2009 quality management standard. It says a lot about valuing people, including: - Provide resources to identify, support and meet people’s needs; - Communicate effectively, establish feedback and share knowledge; - Have a shared vision and involve people in decision-making; - Provide a supportive work environment; - Develop people and their careers by continuous learning; - Have a reward and recognition system; - Provide mentoring and coaching; and - Respect people.

These are criteria that cannot be dismissed lightly.

An award’s promise and reality clash when achieving certification is an exercise on paper, or a few statements from bosses about what the organisation does for its staff, or forced compliance with an externally imposed system.

Bottom-up, not top-down This confuses causes with consequences, where achieving the target – the external quality award or the glittering prize in the trophy cabinet – is the sole purpose or cause of all the fuss about quality.

Rather, the award should be the natural consequence of internal quality that is already flowing through the organisation.

As Robert Pirsig’s best-selling “Zen and the Art of Motorcycle Maintenance” stated about 35 years ago: “Quality isn’t something you lay on top of subjects and objects like tinsel on a Christmas tree”.

Quality starts within a person or within an organisation that values people, not from an external or imposed system. “You want to know how to paint a perfect painting? It’s easy. Make yourself perfect and then just paint naturally,” Pirsig wrote.

Quality is about valuing and developing people.

Returning to the exchange with my former student, quality is about making people feel good about themselves when they have made the effort and achieved something worthwhile.

That’s more than a passing fancy – a Christmas present at Christmas. It’s a lifelong organisational commitment.

Tourism

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At your service The president of the Institute for Tourism Studies shares some out-of-the-box strategies to ease a shortage of graduates in the hospitality sector

BY LUCIANA LEITÃO

here were 581 students in last month’s graduating class at the Institute for Tourism Studies. It may seem a big number but it is still not enough to meet demand from the tourism industry.

Institute president Fanny Vong

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says she has a blueprint to address the lack of quality professionals in the tourism sector.

For starters, it has to involve more than just the institute, she says. “The whole higher education sector, actually, the whole education sector, including high schools, vocational schools, universities, institutes, has to maintain quality to ensure the people going through different levels of education receive a good quality of education.”

Quality is one problem, quantity is another. As of the end of September 2010, the hotels and restaurants sector had 4,630 vacancies, a year-on-year increase of 840, according to official data.

Ms Vong thinks there should be policies to increase the number of people wanting to work in the hospitality sector.

“You also have to look at the population, at the migration strategy,” she says.

“Are we going to attract more talent from other countries? How? Do we have attractive terms? When they come in, do we have support [to give them]? When they come in with kids and spouses, do we have international schools for them?”

The hotel and restaurant sector had 49,550 employees at the end of September, up by 4.7 percent year-on-year. More than 32,000 were working in hotels.

Average earnings of full-time employees stood at MOP10,220 (US$1,278), up by 2.6 percent year-on-year. Waiters and waitresses earned an average of MOP7,850 and MOP5,830 respectively, while housekeeping staff earned MOP6,100.

Ms Vong believes Macau could DECEMBER 2010

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Tourism

learn from the expertise of outsiders brought in to work here. “The catch is how you’re going to ensure that local people do not perceive this as a threat.”

“At the same time, I also think that local people have to be more open-minded. They cannot just wait and think that people are coming here to take their job. They have to act by trying as much as possible to engage in continuing education,” she says.

Ms Vong stresses Macau requires not only hardware, such as high-standard hotels to compete for tourists, but also staff with skills like proficiency in foreign languages.

“Local people have to be more open-minded.

They cannot just wait and think that people are coming here to take their job. They have to act by trying as much as possible to engage in continuing education,” says Fanny Vong “It is a very important quality you have to possess because if Macau is to prosper as an international destination, then you can expect to receive visitors from different countries and regions with different languages and cultures,” Ms Vong says.

“At IFT we’re trying to help students develop their skills as well as a mindset that is open to different cultures.”

She notes the number of graduates has been increasing, even though it is far from enough. “We cannot double or triple the number of students because we have to ensure good quality. So we have been managing our growth in a way that does not jeopardise the quality,” she says.

The institute is keen on introducing new programmes. A degree course in culinary arts is being considered.

Also, it has done a deal with the University of Nevada in Las Vegas to allow the American university to bring its Master of Hospitality Administration Executive Programme to Macau.

The first intake is already in class.

DECEMBER 2010

Meet the Class of 2010

Cherry Ma

Eric Cheang

TOURISM EVENT MANAGEMENT GRADUATE

TOURISM BUSINESS MANAGEMENT GRADUATE

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E

23 years old

he tourism industry and the meetings, incentives, conventions and exhibitions industry are still developing but the infrastructure needed to support the sector – especially transport – is still weak, says Cherry Ma. To become a more competitive tourist destination Macau must have more activities and events, Ms Ma says.

The Institute for Tourism Studies graduate believes there is still a lack of quality labour but says the institute has worked hard to improve to workforce. “The IFT has equipped me with a lot of skills, like the ability to serve, and language proficiency.”

Ms Ma says she will continue her job with an international food and beverage company because she feels her newly acquired tourism event management skills can be applied in any segment of the hospitality industry.

23 years old

ric Cheang is already working at a travel agency. He sees no need to import labour. “Many people worry that for high qualifications we need to look overseas or outside,” Mr Cheang says. “In fact, we can find professionals within Macau. There is no need to import.”

He admits there are challenges workers have to face to become more competitive. For instance, they need to improve their knowledge of foreign languages.

“In Singapore and the Philippines they also have casinos, but they can speak Mandarin, Cantonese, English,” he says.

“In Macau, we need more training to improve our English skills.”

Photos: Carmo Correia

121

Kenny Chio

Tomas Mou

Nyon Lam

HOTEL MANAGEMENT GRADUATE

HERITAGE MANAGEMENT GRADUATE

HOTEL MANAGEMENT GRADUATE

K

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O

22 years old

enny Chio is working at a travel agency.

To thrive in the hospitality industry, confidence, the ability to communicate and a taste for adventure are important, he says.

He is keen to improve his skills knowing that workers in Macau must have a more open mind and a better grasp of foreign languages and cultures. The industry needs to embrace new ideas and different concepts, he stresses.

23 years old

omas Mou is concerned about the lack of vacancies in his area of expertise. In fact, he is now working in property management, a completely different field.

Mr Mou would like to deepen his knowledge of local cultural traditions as a researcher but there are few positions available.

He became interested in heritage management when Macau’s historical centre was listed as an UNESCO site. “The heritage sites are very well preserved by the government but there are many local traditions, such as the Drunken Dragon Festival, that are being forgotten by local residents,” he says.

“I want to discover traditional culture and preserve it well.”

24 years old

ne of the things that Nyon Lam learned during his six-month internship in the United States was that Chinese and Americans relate differently to their work.

“In the United States, the people are more enthusiastic about food and drink because people want to ‘work happy’. In Chinese culture, we like earning money from work,” Mr Lam says, adding that he feels he is becoming more like an American.

The trainee at the Four Seasons Hotel admits it is hard to attract qualified staff to the tourism sector because of the low salaries. Trips abroad showing people how exciting the industry can be and explaining the love of serving guests and customers could help change their attitude, he says.

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Tourism

Family time

An investment group led by Angela Leong plans a MOP10.4 billion family-oriented theme park in Cotai nvestors with strong links to the city’s casino industry are ready to place a MOP10.4 billion (US$1.3 billion) bet on a family entertainment development.

Macau Theme Park and Resort announced a plan to build a 200,000 square metre theme park in Cotai, by the Macau Dome. The price tag does not include the cost of land, which should be above MOP2 billion.

Local businesswoman and legislator Angela Leong On Kei, who is Stanley Ho Hung Sun’s fourth wife, is heading the venture. Ms Leong is also a director of casino operator SJM Holdings. “The gaming industry is developing, and nongaming tourism projects need diversification,” says Ms Leong. “Now is the right time to start.”

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DECEMBER 2010

Although no gaming will be offered, the promoters are still expecting to attract over 2.5 million tourists per year. The park is to be built next to one of the two plots that SJM is applying for to expand its casino operations into Cotai.

The developers say the park will be a “large, integrated, family-theme-oriented, tourist, amusement park, leisure, hotel and resort project” and be pivotal in increasing the average length of time a tourist stays in Macau, currently below 1.5 nights.

The resort, which is still waiting for government approval, will be developed in three phases. The first could be ready in two to three years. The project will take nine years to complete.

The Industrial and Commercial Bank of China (ICBC) has already agreed to lend MOP1 billion for the project. “Capital is not a problem,” says Ms Leong. “Some diehard investors, who want to build a prosperous tourism industry in Macau, have already shown interest in the project. The banks are our biggest support.”

Half now, half later About 7,500 jobs will be created in the construction phase and as many as 9,000 jobs are expected to be created once the complex is in full operation.

The plans call for MOP1 billion to be spent on developing the theme park.

The remainder is earmarked for hotel development.

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Although no gaming will be offered, the promoters are still expecting to attract over 2.5 million tourists per year Macau Theme Park and Resort first applied for a 200,000 square metre site in 2004 but, owing to the size of the project, was asked to divide the development into two, with one area for the hotel and another for the theme park.

It was granted 106,000 square metres of land for hotel development in 2006, with a premium of MOP230.97 million,

according to the Official Gazette. The other 94,000 square metres for the development of a theme park has still has not been officially granted to the firm, although the project manager, Chan Chak Mo, says the company is sure it will get the land.

The company is full of high-profile local businesspeople and legislators. Be-

sides Angela Leong and Chan Chak Mo, government-appointed lawmaker Vong Hin Fai is the legal adviser to the company. Legislator Chui Sai Cheong, the elder brother of Chief Executive Fernando Chui Sai On, was among the founding directors of the company. However, he reportedly left the company last summer.

THE THREE STAGES OUTLINED FIRST PHASE

• Cost: MOP4.4 billion • One five-star hotel and one four-star hotel with a combined total of 1,900 rooms • Children’s play centre • Shopping mall • Restaurants • Souvenir street • Convention and banqueting facilities • Indoor beach with wave pool, water slides and amusement rides SECOND PHASE

• Cost: MOP3 billion • Two four-star hotels with a combined total of 1,700 rooms • Shopping mall • Restaurants • Souvenir street • 4-D theatre • Performance plaza • Additional amusement rides THIRD PHASE

• Cost: MOP3 billion • One four-star and one three-star hotel with a combined total of 2,475 rooms • Equestrian centre with stables, carriage trail and hippodrome Water sports performance centre DECEMBER 2010

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Tourism

Wynn Macau

Altira

Five-star stuff

Wynn Macau and Altira awarded

by Forbes Guide AERL announces dealTravel to acquire VIP room at the Venetian Macao ynn Macau and Altira have once again received Altira Macau has also been awarded the Forbes Five

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Forbes Five Star Awards. The 2011 Forbes Travel Guide marks the third consecutive year in which Wynn Macau and its spa have received these honours.

Ian Michael Coughlan, president of Wynn Macau, said: “These prestigious hospitality awards recognize the commitment made to achieving hospitality excellence by all of my colleagues at Wynn Macau.”

Star ratings in both lodging and spa categories for the second consecutive year.

Lawrence Ho, co-chairman and CEO of Melco Crown Entertainment that owns the property, said: “The awards reinforce our role in the transformation of Macau into an international travel and leisure destination for the most discerning guests.”

More hotel guests

Visitor arrivals soar

A total of 588,962 guests checked into Macau’s hotels and guest-houses in September 2010, up by 8.4 percent year-on-year. The majority came from the mainland (46.8 percent of total) and Hong Kong (21.8 percent). The average occupancy rate of hotels and guest-houses stood at 74.1 percent, up by 2.0 percentage points year-on-year. The number of guests reached 5,739,936 in the first nine months of 2010, up by 19.5 percent over the same period of 2009. In the first three quarters of 2010, visitorguests of hotels and guest-houses accounted for 60.5 percent of the total number of tourists.

Total visitor arrivals to Macau in October were 2.09 million, a 7.5 percent year-on-year increase. Same-day visitors accounted for 54.7 percent of the total visitor arrivals, with 627,649 coming from the mainland. Total visitor arrivals reached 20.68 million in the first ten months of 2010, up by 16.0 percent year-on-year. The majority of visitors were from the mainland (10.9 million) and Hong Kong (6.2million).

Open wallet Per-capita spending of visitors to Macau (excluding gaming) increased by two percent year-on-year to MOP1,648 (US$206) in the third quarter of 2010, according to official data. Analyzed by place of residence, per-capita spending of mainland visitors topped out at MOP2,530. Per-capita spending of tourists (MOP2,821) and same-day visitors (MOP729) went up by 21 percent and 34 percent year-on-year. The average length of stay of visitors stood at 0.9 days, down by 0.2 days over the third quarter of 2009.

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January

Date: Event:

February

21st

III DICE Delta Inter Chamber Event

Venue: TBC Organiser: Macau Business | Delta Bridges | Work in Progress 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.deltainterchamber.com/ E-mail: dice@macaubusiness.com

Date: Event:

21st – 23rd

World Game Protection Conference and Casino Surveillance Technology Exhibition

Venue: M Resort, Las Vega Organiser: World Game Protection Address: 9480 S. Eastern Ave., Suite 105, #92, Las Vegas, Nevada 89123 Tel: (1) 702 407 9900 Website: www.worldgameprotection.com E-mail: willy@worldgameprotection.com Date: Event:

22nd – 24th

Gaming Executive Summit Latin America

Venue: Marriott, Panama City Organiser: Terrapinn Address: 96 Spring Street, 4th Floor, New York, NY 10012 Tel: (212) 379 6320 Fax: (212) 379 6319 Website: www.terrapinn.com/2011/geslatam/ E-mail: michael.weinberg@terrapinn.com March

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: Date: Event: Venue: Organiser: Address: Tel: Website: E-mail:

24th

Gaming Awards 2011

Jumeirah Carlton Tower, Knightsbridge, London Clever Duck Media Ltd Suite 105 Park Plaza, Point South, Hayes Way, Cannock, WS12 2DB, UK (44) 01543 57 86 89 www.gaming-awards.com colin@gaming-awards.com 25th – 27th

IGE 2011

Earls Court, London Clarion Gaming Warwick Road, London, SW5 9TA, UK (44) 020 7370 8182 www.clarionevents.com info@clarionevents.com

Date: Event:

1st – 3rd

iGaming Asia Congress

Grand Hyatt, City of Dreams, Macau Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.igamingasiacongress.com info@BeaconEvents.com 3rd – 5th

7th Guangzhou International Game & Amusement Exhibition

China Import & Export Fair Pazhou Complex Guangzhou Grandeur Exhibition Service Co., Ltd 2nd Floor, No.318 Chebei Road, Guangzhou, 510660, China (86) 20 22106418 (86) 20 82579220 www.chinaamusement.com sales@grandeurhk.com March 30 th – April 1st

Asia’s GEM-Gaming and Entertainment plus Leisure Expo Manila

Venue: SMX Convention Centre Organiser: Asia GEM and Tourism Foundation, INC. Address: 3rd Floor, Rm. 304 LTA Building, 118 Perea St., Legaspi Village, Makati City 1129, Philippines Tel: (63) 2 750 13 69 Fax: (63) 2 893 40 97 Website: www.asiangemphil.com E-mail: agem@asiangemphil.com

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”.

TBA : To be advised |

: A Macau Business partner event DECEMBER 2010

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Education

In US education, we trust More and more Macau students are studying in the United States, following the lead of their mainland counterparts hile the mainland may be running fast to overtake the United States as the world’s largest economy, when it comes to education, American universities are still unmatched by their mainland counterparts.

A sign of this is the growing number of foreign students flocking to the US for higher education. Students from Macau are no exception.

According to Open Doors 2010, the annual report on international academic mobility published by the Institute of International Education in New York, 468 Macau students were enrolled in US higher education institutions in the 2009/10 academic year, a rise of 9.1 percent over the previous 12 month period.

This is the fourth consecutive increase, following a rise of 1.9 percent in 2008/09. In contrast, there were no US students in higher education in Macau in 2009/10 and just four the year before.

About 68 percent of students from Macau in America in 2009/10 were studying for a first degree and 14.36 percent for a higher degree, while 6.4 percent were in non-degree study programmes and 10.7 percent in optional practical training.

The institute’s Hong Kong director, Ann White, says the US remains among the preferred destinations for students from Macau who want to study abroad “because of the quality and prestige associated with an American degree”.

Another contributing factor is the “increasing activity from United States colleges and universities to attract stu-

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DECEMBER 2010

dents from Macau,” she says.

This year’s Open Doors report shows that there were a record 690,923 foreign students at colleges in the US in 2009/10, three percent more than the year before. “The United States continues to host more international students than any other country in the world,” says Allan Goodman, president of the institute.

Business attraction This year’s growth was primarily driven by a 30 percent increase in mainland student enrolments. There were about 128,000 mainland students in the US in the past 12 month, accounting for more than 18 percent of the foreign student population – more than any other nationality.

Business and management remains the most popular field of study for foreign students in the US, attracting 21 percent of students, followed by engineering with 18 percent. No detailed data on the most popular fields of study among Macau students is available.

Higher education is among the major exports of the US service sector, as foreign students provide significant revenue not just to the host campuses but also to the economies of the cities where they study.

Foreign students contribute nearly US$20 billion (MOP160 billion) a year to the US economy in spending on tuition and living expenses, according to the US Department of Commerce.

That is almost has much as casino gross gaming revenue in Macau so far this year.

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PRANAD BARDHAN PROFESSOR OF ECONOMICS, UNIVERSITY OF CALIFORNIA AT BERKELEY

China and India exposed THE GLOBAL MEDIA SHOULD BEGIN TO EXAMINE THE MANY FEATURES OF THE RISE OF CHINA AND INDIA THAT DEPART FROM THE SIMPLISTIC NARRATIVE OF THE TRIUMPH OF MARKET REFORM hinese Premier Wen Jiabao’s forthcoming trip to India, following hard on the heels of President Barack Obama’s recent visit, will provide another opportunity for the media to gush about the growing global economic clout of China and India. We can be sure that the soft underbellies of both economies will be kept hidden from view.

After a couple of centuries of relative stagnation, these two countries, containing nearly two-fifths of the world’s population, have experienced remarkably rapid income growth in the last three decades. In manufacturing and services (particularly software, business processing, etc.), respectively, China and India have made huge strides internationally, and their acquisition of global companies has attracted considerable attention.

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Misconceptions But some dubious assertions have, through constant repetition in recent, often breathless, accounts about the two economies, become part of conventional wisdom. Much of what really goes on inside these two large countries is often left out.

For example, in terms of value added (the value of output after deducting the cost of materials and components), China, contrary to popular impression, is not yet the manufacturing centre of the world. The Chinese produce about 15 percent of value added in world manufacturing, while the United States contributes about 24 percent and the European Union about 20 percent.

Similarly, while India’s information technology-enabled services have gained an international reputation, the total number of people employed in this sector is less than 0.5 percent of India’s workforce. As such, it cannot, by itself, transform the Indian economy.

Chinese growth is widely regarded as furiously exportdriven, but domestic investment has in fact been the major component. Even at the height of global trade expansion in 2002-2007, exports (in value-added terms) accounted for only a little more than one-quarter of GDP growth, whereas domestic investment contributed a substantially larger share.

Moreover, contrary to popular belief, much of the dramatic poverty reduction in China over the last three decades was due not to integration into the global economy, but to domestic factors like growth in the agricultural sector (where mass poverty was concentrated). This is attributable largely to public investment in rural infrastructure, and, in the initial period, to institutional changes in agrarian production organization and an egalitarian distribution of land-cultivation rights.

Expansion of exports of labour-intensive manufactures has nonetheless lifted many Chinese out of poverty. That is not true of India, where exports are still mainly skill- and capital-intensive. Economic reform clearly has made the Indian corporate sector more vibrant and competitive, but most of the Indian economy is not in the corporate sector (public or private). Indeed, 92 percent of the labour force is employed in the informal sector.

Indian poverty reduction has been significant, but not substantial. However, in terms of non-income indicators of poverty – for example, child mortality, malnutrition, and school dropouts – India’s performance has been dismal (in some respects worse even than in sub-Saharan Africa).

A long way ahead In the financial media, China and India have become poster children for market reform and globalization, even though in matters of privatization, property rights, deregulation, and lingering bureaucratic rigidities, both countries have in many ways departed from economic orthodoxy. According to the USbased Heritage Foundation’s widely cited Index of Economic Freedom, China and India are relegated to the group described as “mostly unfree.” Out of a total of 157 countries in 2008, China ranked 126th and India 115th.

Although socialist economic policies in both countries inhibited initiative and enterprise, a positive legacy of that period cannot be denied. It is arguable, for example, that Chinese socialism provided a strong launching pad for growth, particularly in terms of a solid base of education and health, rural electrification, a safety net enabled by equitable distribution of land rights, regional economic decentralization, and high female participation in the labour force. Moreover, a major part of the socialist legacy in both countries is the cumulative effect of the state’s active role in technological development.

Blurred boundaries Unlike in India, where the private corporate sector is the most dynamic sector, in China state-controlled companies are some of the globally more successful. Even in famous private Chinese companies like Lenovo and Huawei Technologies, the ownership structure is highly convoluted, and the boundaries of state and private control rights blurred. The recent purchase of Volvo by the private Chinese automaker Geely generated much publicity, but most of the money was put up by municipal governments.

Powerful political families run many Chinese stateowned enterprises. Indeed, there is some evidence that the overwhelming majority of multi-millionaires in China are relatives of high-ranking Communist Party officials. And, thanks to the large pool of savings generated by Chinese households and state-owned companies, the Chinese economy can for the time being bear the waste and misallocation implied by such crony capitalism.

Without political reform, the long-run viability of such a system is in doubt. Premier Wen himself indicated as much in a speech in August that was widely noted abroad, but largely blacked out in Chinese media. The global media should now go further, and begin to examine the many features of the rise of China and India that depart from the simplistic narrative of the triumph of market reform.

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Technology

IN THE CLOUDS

Cloud computing is a new IT trend the government wants to introduce into public administration, potentially putting confidential data in the hands of a third party

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echnology is not usually on the political agenda in Macau.

An exception was made last month, in the policy address for 2011, in which the government announced that it wanted to use cloud computing in public administration.

The government wants to use it to provide several internal services and to share resources among different bureaus. The goal is to increase efficiency and scalability and ultimately lower costs.

Cloud computing allows businesses convenient, on-demand access to servers, storage, applications and other IT resources by using the Internet. In other words, cloud computing virtualises IT resources, with companies no longer needing to have their own servers, storage or networks, which are now available in the “cloud�.

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Illustration: Rui Rasquinho

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Technology

In today’s electronic economy, data is the lifeblood of the system. Cloud computing tries to satisfy increasing demand from businesses for cheaper and more flexible storage and processing capacity.

The amount of electronic data worldwide will grow by about 50 percent a year between 2009 and 2014, with unstructured data such as email, images, audio and video files growing at 10 times the rate of structured data, the market intelligence firm IDC forecasts. In the healthcare industry alone, the amount of data being generated is expected to quadruple every two years.

The operational cost of managing this increasing volume of data accounts for more than 65 percent of the cost of storage. With cloud computing, businesses take advantage of virtual storage and services through the Internet, saving money on infrastructure, support, power and space. This system allows businesses to rent storage or processing capacity from an IT provider as needed.

Turn on the tap Most cloud computing services offered

by IT providers are scalable, allowing a pay-as-you-go arrangement for users.

This means that users with a sudden need for greater capacity can simply increase their use of cloud services instead of investing in more hardware and software and expanding in-house data centres. It is a bit like electricity or water: you only pay for what you use.

Casinos already use it. Cloud computing can be a powerful tool for gam-

In today’s electronic economy, data is the lifeblood of the system.

Cloud computing tries to satisfy increasing demand from businesses for cheaper and more flexible storage and processing capacity

AT YOUR SERVICE: THE CLOSE-UP ON CLOUD COMPUTING CLOUD SOFTWARE AS A SERVICE The capability provided to the consumer is to use a provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a client interface such as a web browser. Webbased email is an example.

The consumer does not manage or control the underlying cloud infrastructure, including network, servers, operating systems, storage or individual application capabilities, with the possible exception of limited userspecific settings.

CLOUD PLATFORM AS A SERVICE The capability provided to the consumer that sees applications or data deployed in the cloud, is created using programming languages and tools supported by the provider.

The consumer does not manage or control the underlying cloud infrastructure, including network, servers, operating systems, or storage, but does have control over the deployed applications and possibly application hosting environment configurations.

CLOUD INFRASTRUCTURE AS A SERVICE In this example of cloud computing, the consumer is provided processing, storage, networks and other fundamental computing resources on which it runs arbitrary software, including operating systems and applications.

The consumer is not involved in caring for the cloud infrastructure but has control over almost everything else, including some limited control of networking components, for example, firewalls.

Source: US National Institute of Standards and Technology, Information Technology Laboratory

DECEMBER 2010

ing companies. Harrah’s Entertainment was one of the early adopters of this technology in the casino industry. In 2008 it started to move key business applications to cloud computing platforms managed by third parties.

In Macau, City of Dreams has one of the largest virtualised operations. The Melco Crown Entertainment property joined forces with IBM to make a private cloud for the company.

Cloud computing could also be an answer to the lack of qualified human resources in Macau. The ability to access cloud services through the Internet allows companies to outsource operations elsewhere.

Early cloud computing models were sometimes criticised for being less secure, less reliable and less available than private in-house systems. However, improvements have been made in the performance of public clouds, and they are now much more secure than before.

Not so fast Private clouds, which operate like inhouse platforms except that the computing is done off-site, claim to offer security that is equal to or even better than in-house systems.

Hitachi Data Systems, a wholly owned subsidiary of Hitachi, is one of the IT providers pushing the cloud computing concept in Macau. This year, the company launched its new Hitachi Virtual Storage Platform.

“Our customer base [in Macau] is still quite small and mostly in the gaming industry,” the Hitachi Data Systems

In Macau, City of Dreams has one of the largest virtualised operations.

The Melco Crown Entertainment property joined forces with IBM to make a private cloud for the company

131 general manager for Hong Kong and Macau, Andrew Sampson, told Macau Business. “Macau is still a challenge for us in terms of developing our business there. We are not growing as fast as we would like.”

Tina Tong, the Hong Kong and

Macau channel director for Hitachi Data Systems, says one of the reasons for this is that until recently many casinos adhered to Las Vegas standards and so used IBM platforms. It is changing, she says.

Mr Sampson considers that there is a lot of potential for cloud computing in

Macau, starting in the gaming industry, where operators could create a cloud for shared use. “That would help them to share costs and also share expertise and best practices,” he says. “With encryption, firewalls and partitioning, there shouldn’t be any issue with data security.”

SEEDING A CLOUD: DECODING THE TERMS PRIVATE CLOUD: Infrastructure is operated solely for an organisation.

It may be managed by the organisation or a third party and exist on- or offpremises.

COMMUNITY CLOUD: The cloud infrastructure is shared by several organisations and supports a specific community that has shared concerns. Again, it can be self-managed or controlled by a third party, on or off their premises.

PUBLIC CLOUD: The cloud infrastructure is made available to the general public or big industry group and is owned by an organisation selling a service.

HYBRID CLOUD: The cloud infrastructure is a composition of two or more clouds that remain unique entities but are bound by technology that allows the data and applications to be transferred. For example, cloud bursting for sharing the load between clouds.

Source: US National Institute of Standards and Technology, Information Technology Laboratory DECEMBER 2010

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Arts & Culture

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Art unappreciated The city’s hotel-casinos house a stock of valuable artworks by world-renowned artists but few properties are keen on displaying them to their advantage

BY ALEXANDRA LAGES

f you pay enough attention, at the entrance to MGM Macau you will find a Salvador Dali sculpture in the middle of the lobby. If you want to see Chinese antiques, forget the museum ticket and just head straight to the Grand Lisboa.

Macau’s hotel-casinos offer tourists and residents some first-class art to appreciate, if you know where to look for it.

Some of the gaming tycoons with a presence in Macau are also big art collectors. Steve Wynn and Stanley Ho Hung Sun, for example, have spent millions on art and often take part in international auctions.

Their properties are showcases for their personal collections. Strolling around hotel lobbies, visitors can take a look at some exceptionally valuable pieces, but, in many cases, there is little information about them.

Of the six gaming operators in Macau, four accepted the challenge of guiding Macau Business through their collections, Galaxy Entertainment said it did not have any artworks in its flagship StarWorld property and Sands China did not respond.

City of Dreams is the perfect destination for art lovers. Not only does it have eye-catching works but it also offers information about them.

Shortly after the property’s opening last year, Melco Crown Entertainment announced the opening of its ‘Art of the City’ collection. To make things easier, the casino operator even published a handbook to guide visitors through the collection.

City of Dreams has more than 150 pieces on display. The guide offers indepth information about 22 of the pieces and about the 18 artists whose work is represented in the collection. These include Xue Song, Marion Borgelt, Wu Shaoxiang, Chen Yu, Liu Ye, Danny Lee, Bo Yun and Wang Yehan.

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Contemporary and classic Melco Crown Chief Executive Lawrence Ho is passionate about Chinese art. He is particularly interested in Chi-

‘LEGACY MANTLE’ BY SUI JIANGUO AT CITY OF DREAMS Epitomises the past century for modern China and is a symbol for ethnic Chinese around the world.

nese contemporary art. At the opening of the City of Dreams collection, Mr Ho said he wanted the property to reflect the same excitement and diversity that contemporary Asian art showed. He consid-

ers the ‘Legacy Mantle’ by Sui Jianguo to be the most striking piece.

The collection at Wynn Macau and Encore has more European flavours.

Nevertheless, the highlight is a crystal sculpture of a flying dragon. This unique piece cost more than MOP1 million and was specially created for Wynn Macau’s signature Chinese restaurant, Wing Lei. It took nine months to make.

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Arts & Culture

The surreal feel

In Las Vegas, several pieces from Mr Wynn’s extensive collection are usually displayed on site but sadly not in Macau.

The reception areas here once housed two French impressionist paintings by Henri Matisse and Pierre-Auguste Renoir that have since been removed.

In December 2006, Wynn Macau donated an early Ming dynasty vase to the Macau Museum. The company purchased the vase in May 2006 for approximately US$10.1 million and it was on public display at Wynn Macau prior to its donation.

Wynn Encore has a number of European art pieces and antiques. In front CRYSTAL FLYING DRAGON SCULPTURE BY UNIDENTIFIED ARTISTS AT WYNN MACAU With its five claws on each foot, it represents a lucky dragon, according to Chinese culture. The work is composed of more than 90,000 crystals and 2,400 lights.

DECEMBER 2010

‘DALINIAN DANCER’

BY SALVADOR DALI AT MGM MACAU This vibrant dancer moves to the intense and passionate rhythms of the Spanish flamenco. Her skirt twirls in a spontaneous display of vitality and ecstasy.

of the VIP reception desk there is a chandelier by American designer Todd Lenahan, who founded the Las Vegasbased ABA Design Studio in 1999. On the walls, brown silk embroidery by leading fashion designer Oscar de La Renta is a refined setting for mirrors and two original works by an unidentified artist, ‘Godspeed 1’ and ‘Godspeed 2’.

A painting inspired by Venetian artist Paolo Veronese hangs in Café Encore, as well as a Venetian cherub from the late 17th century. At Bar Cristal there is a 19th century French Empire crystal chandelier.

MGM Macau’s collection also shows European influences. The highlights are pieces by the father of Surrealism, Spanish artist Salvador Dali, and a ceiling-hung glass sculpture by Dale Chihuly, ‘Fiori di Paradiso’. There are about 1,000 glass pieces in the sculpture. They were hand-blown by Chihuly’s team and shipped to Macau, where they were painstakingly welded together in midair. The creation is unique in that it is the biggest asymmetrical free-flowing ceiling sculpture Chihuly has ever made.

MGM Macau also has the ‘Drawing Wall’, which includes 42 original drawings by the Dale Chihuly Studio. It is in the lobby area, where visitors also can find Dali’s ‘Dalinian Dancer’. Another Dali sculpture, ‘Alice in Wonderland’, is on display outside the hotel, in the middle of the fountain near the main entrance.

A turquoise and gold Chinese imperial throne catches visitors’ eyes in the Hotel Lisboa lobby. Climbing the spiral staircase reveals an oil painting by Pierre Bodard, a French artist from the 19th century. Unless you are an expert in European art, visitors would never notice the painting, which is unlabelled, as are many other works in the public areas of the Hotel Lisboa and the Grand Lisboa.

Looted antiquity The two hotel-casinos have an array of artworks and antiques on display but the company’s marketing department has no information about any art pieces in the properties, nor how many there are.

Mr Ho is a devotee of Chinese antiques. In 2007, he paid a record HK$69.1 million for a Qing Dynasty bronze horse-head sculpture, which he donated to China. It was part of one of the 12 animals of the Chinese zodiac looted by the British and French from a water-clock fountain in the Summer Palace in Beijing. It is on display near the Grand Lisboa’s main entrance.

None of the casino operators would give details about the value of the art displayed in their properties. However, the SJM Holding’s annual report says that at the end of last year, the company’s collection of art and diamonds was worth HK$289 million. As for Wynn Macau, its collection of art and diamonds was worth HK$130.6 million, according to the company’s 2009 annual report.

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Already a tradition, at the end of each year, art lovers indulge in exhibits of imperial treasures at the Macau Museum of Art. And this year will be no different.

In cooperation with Beijing’s Palace Museum, the Museum of Art will present more than 130 pieces of porcelain produced by imperial kilns between 1661 and 1796.

The “Fire and Colour” exhibition runs from December 18 to March 20.

The exhibit is divided into four themes: the beauty of emblazonry, the beauty of craftsmanship, the beauty of glaze and the beauty of shape.

The Palace Museum, in the Forbidden City, has a collection of more than one million items, including paintings, pottery, bronze ware, toys, clocks and court documents – and one of the most comprehensive arrays of porcelain produced by imperial kilns.

Porcelain produced in the reigns of Emperors Kangxi (1661-1722), Yongzheng (1722-1735), and Qianlong (1735-1796) represents the pinnacle of Qing Dynasty ceramics in terms of quality and diversity. The imperial kilns operated under rigid supervision and everything, including the decoration, was strictly regulated.

Imperial ware from this period ranges from the most simple in form and colour to the most extravagantly decorated pieces, some modelled on ancient containers.

Some of the finest overglaze painted enamel porcelains were made during the reigns of Yongzheng and Qianlong. Pink enamel was invented near the end of the reign of Kangxi, but the full famille rose palette was not brought together until the reign of Yongzheng.

You can see them all for yourself at the Museum of Art from the middle of this month.

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Arts & Culture

The Cultural Centre hosts some of Europe’s finest talent next month when Spain’s National Dance Company perform works choreographed by Nacho Duato

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abels such as “genius” are thrown around liberally in the world of the arts. A spectrum of performers from the wunderkind, in their breakthrough to the mediocre with the odd flash of brilliance in a lifetime’s work, are likely to attract the label.

It is a shame. It devalues the work of brilliant talents such as Nacho Duato – a shining light of European contemporary ballet.

Recognised as a major choreographic force throughout the world, Mr Duato’s deft touch will be clear to all when the Compañia Nacionial de Danza, the

DECEMBER 2010

National Dance Company of Spain, performs a triple bill in Macau on January 25. The 130-minute performance includes 1988’s “Arenal”, “Por Vos Muero” and “White Darkness”.

The work conveys multiple elements from the cheerfulness of the Mediterranean personality in the face of hardship, through to the musical influences of Iberia in the 15th and 16th centuries.

Intricate work

While Mr Duato has only recently moved on after 20 years with the Spanish

institution leaving the artistic direction to Hervé Palito, the troupe still shares Mr Duato’s DNA. He is one of the foremost European creators of contemporary dance. His work with companies around the world stretches from North America to Britain, and across Europe.

A body of work that now stretches into three decades has led to international recognition, grand awards and the welldeserved “genius” label.

The company, founded in 1979, enjoys a reputation as “one of Europe’s premier contemporary dance companies” according to The New York Times. It is a company considered to be at the highest level in terms of beauty, homogeneity and discipline.

The group are not strangers to Asia, having performed in Hong Kong as recently as four years ago.

The balletic trilogy from the National Dance Company of Spain will be performed on January 25 in the Grand Auditorium of the Macau Cultural Centre.

Tickets range in price from MOP80 to MOP250 and are available from the centre’s box office or through the Kong Seng network.

Discounts are available for groups, seniors, students, CCM Friends and earlybird purchases.

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THE RHYTHM OF THE MEDITERRANEAN he best-known of the trio of pieces the National Dance Company of Spain will bring to Macau is “Arenal”.

The accessible, folkinspired piece shows the uninhibited cheerfulness of the Mediterranean personality contrasting with the everyday struggle of life. The choreography

by Nacho Duato makes the contrast clear.

On the one hand, there is the dancing of a group of men and women motivated by the pure joyfulness of music. Its jubilation is reflected in the clear movements of the dancers to Greek songs translated into Catalonian and Majorcan work songs.

The contrast of a lone female dancing to four a capella songs gives the piece a brooding, heartfelt touch. Clad in black, the soloist dominates the piece, contrasting sombre movements against the brighter dances by the group.

Her movements are nearer to the ground, expressing the influence of the land and the dominant influence in this work. Throughout, the colour, choreography and movement are undeniably Mediterranean. The piece also resurrects a rich Majorcan musical and lyrical tradition which has all but vanished in modern Spain.

Speaking about the work, Mr Duato once described the ballet as vital and lively, “faithful to the inner rhythm of the songs themselves, without abandoning the worlds of people and of work”.

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BACK TO THE BAROQUE or Vos Muero”, For Thee I Die, is a powerful blend of choreography inspired

by Spanish music of the 15th and 16th centuries together with some of the most beautiful verses of the Renaissance-era Spanish poet Garcilaso de la Vega.

Riding over the contemporary interpretation of a period of great importance to the Spanish is lush Baroque music.

Again choreographed

by Mr Duato and making its world premiere in Madrid in 1996, “Por Vos Muero” pays tribute to the important role that dance played in every sort of social event during the period. Dance was part of the cultural expression of people, including all social hierarchies. Dances of the time are viewed as an accurate reflection of the broad sweep of culture of that time.

By folding in ornate social dances, the dancers’ movements delicately suggest a romantic world of secret trysts and ornate ritual.

Elements of classic and contemporary combine in a powerful display, fully revealed by the stripped down costuming of the company.

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OUT OF THE DARKNESS he most recent work in the trilogy for Macau is “White Darkness”. It is also the most confronting, exploring the world of hard drugs and addiction.

In the piece, a soloist reflects the pain and elation involved in the complex relationship with drugs. Her solos, dispersed with duets, form the basis of the work which is stark and at times disturbing – thanks primarily to the staccato soundtrack and angular movements – but never anything less than intimate and engaging.

Visually, the wonderful spectacle of white powder streaming down over the female dancer as she sinks into her own addiction is the finale, but the “powder” is a constant theme throughout. The duets revolve around the symbolism of the ritualistic sharing of the powder.

The piece debuted in Madrid in 2001 and has won acclaim for its expressive dance. Mr Duato’s work here researches choreographic formulae through the movement, beginning with a deep musical knowledge.

These choreographic formulae enlarge his vocabulary departing always from his dancers’ potential expressiveness.

The music – described as “urgent” – is composed by Karl Jenkins, the classically trained Welshman who found fame performing in the 1970s progressive rock band Soft Machine. As a composer, his breakthrough 1995 work, “Adiemus”, is featured in “White Darkness”.

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138

SUSAN JAKES DOCTORAL STUDENT IN CHINESE HISTORY AT YALE UNIVERSITY

Jailing the messengers WE OUGHT TO PAY EQUALLY CLOSE ATTENTION TO ANOTHER JAILED CHINESE ACTIVIST, ONE WHOSE PLIGHT AT THE HANDS OF CHINA’S JUSTICE SYSTEM IS JUST AS TROUBLING AS LIU XIAOBO’S - ZHAO LIANHAI s China’s clout in global affairs grows, the world is watching more closely than ever to see what kind of great power it will become. This month, when jailed Chinese dissident Liu Xiaobo receives the Nobel Peace Prize, attention will be drawn away from the more encouraging aspects of what China’s leaders like to call their country’s “rise,” and toward their persistent mistreatment of its most outspoken citizens.

Already, Chinese officials’ ham-handed response to the award has undercut their cherished – and lavishly financed – mission to project China’s “soft power” around the globe.

Mr Liu won the prize because his lifelong commitment to political activism makes him exceptional. But we ought to pay equally close attention to another jailed Chinese activist, one whose plight at the hands of China’s justice system is just as troubling as Mr Liu’s – and far more revealing of the boundaries of permissible dissent.

A Beijing court recently convicted Zhao Lianhai, a 38-yearold former advertising salesman, of “using a popular social issue to incite a mob ... to seriously disrupt social order,” and sentenced him to two and a half years in prison.

Unlike Mr Liu, Mr Zhao had not called for change in China’s political system. Rather, he had spent two years rallying around the almost boringly uncontroversial notion that his family and many others deserve justice from the Sanlu Dairy Group, a company that gave their children kidney stones by illegally doctoring its milk powder with the industrial chemical melamine.

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A man with a cause Mr Zhao did not set out to become an activist. His three-yearold son was lucky to recover quickly after he and 300,000 other children fell ill after drinking the adulterated milk in 2008. But some of the children urinated blood, others have suffered longterm health problems, and at least six died. Mr Zhao, who once worked for the government’s own product-safety watchdog and lived in the capital, saw an opportunity to help less wellpositioned families. He set up Web sites to help them exchange medical information, attract media attention, and file lawsuits demanding compensation.

Initially, the campaign seemed to succeed. A massive recall of Chinese milk ensued, and the Sanlu Dairy Group collapsed.

Two of Sanlu’s suppliers were executed, and its chairwoman was sentenced to life in prison. China’s National People’s Congress enacted a new food-safety law.

But, after Mr Zhao and other parents protested that the government’s compensation plan was inadequate to cover DECEMBER 2010

the cost of their children’s ongoing medical care, they began to receive threats from local police. Mr Zhao’s Web sites were repeatedly shut down, and the group’s lawyers received phone calls from authorities urging them to drop the case. In late 2009, Mr Zhao was officially arrested; he has been in police custody ever since.

Wrong message Mr Zhao’s campaign had been based on the widespread belief in China that while local officials or individual businesspeople may engage in venal or criminal activities, the central government, once informed of the truth, will see to it that justice is done.

After all, the same Chinese leaders who reject Mr Liu’s calls for political reform argue that what Chinese citizens really want are not “Western-style” rights, but basic necessities – clean water, economic opportunities, safe food – that allow their families to prosper, and which China’s own home-grown political system can adequately protect.

But Mr Zhao’s conviction, like the mistreatment of other Chinese whistleblowers, sends the message that when faced with a perceived threat to social stability, China’s legal institutions are not up to the task of providing basic protections to its citizens. A discussion thread on the case on Tianya, a popular Chinese Internet portal, was soon flooded with comments expressing bafflement and outrage at the verdict.

“I don’t have children of my own,” wrote one, “but reading this makes my heart hurt.”

Another wrote: “If things go on this way, our country doesn’t have a future.”

In Hong Kong, Mr Zhao’s sentence has sparked popular protests outside of government offices and formal objections from local officials. Reactions like these ought to be far more worrying to China’s leaders than any rebuke from a group of Norwegians. Mr Zhao’s allies are not out to “humiliate China.”

Rather, like those around the world who believe China deserves credit for its impressive achievements – indeed, like Liu Xiaobo himself – they want their country to develop governing institutions befitting its growing economic stature.

So do China’s neighbours and global partners – and for reasons that have as much to do with self-interest as political values. If China is to honour its commitments on a wide range of international issues – trade, product safety, and environmental protection, to name just a few – and command genuine trust and respect at home and abroad, it will need to embrace people like Mr Zhao, not silence them.

Corporate Social Responsibility

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GOING FAST TO MAKE IT BETTER T

he big winner of International Game Technology’s inaugural Charity Karting Grand Prix was the Macau Business team – and the Red Cross.

Ten teams lined up at the Coloane racetrack on November 14. They battled for the right to donate MOP50,000 in prize money to the charity of their choice, with Macau Business forwarding their prize to the Red Cross Macau.

Experienced Macau Grand Prix motorcyclists, including Michael Rutter, Stuart Easton, Keith Amor, Mark Miller, Gary Johnson, Martin Jessop, James Hillier and Stephen Thompson were on hand with Macau kart drivers to add to the excitement and share some of their experience.

Ready... Set...

The crowd enjoying the races

Spirits were high in the paddock

Motorcyclists Michael Rutter and Keith Amor were on the other end of the chequered flag – waiving it instead of passing it

Competition on the track was fierce

The winning team, Macau Business DECEMBER 2010

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Entertainment

DECEMBER 2010

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Great Grand Prix Another edition, another success. This year’s Macau Grand Prix drew 50,000 spectators to the Guia Circuit, plus there was worldwide media coverage from the more than 1,000 journalists on the track. Edoardo Mortara made history to become the first driver to win two Formula 3 titles in Macau with a back-to-back win in the blue riband race. In the final leg of this year’s World Touring Car Championship, Rob Huff won the first race and 26year old Norbert Michelisz clinched the second. On two wheels, Michael Rutter will have to come back next year to get that elusive, record-breaking seventh victory. He finished second behind Stuart Easton, who took a third successive victory in Macau. There is always more to the Grand Prix besides the competition and this year was no exception with lots of pit girls, excitement and fun.

PHOTOS BY GREG MANSFIELD

DECEMBER 2010

142 RICARDO ANDORINHO BUSINESS DEVELOPER | MB INTELLIGENCE CONSULTANCY LIMITED (“MBI”) andorinho@mb-intelligence.com

Walk that talk! ome people have a hard time understanding what it is to “walk that talk”, or what integrity, congruence and consistency stand for. Even if you are not one of those people, you have almost certainly had the misfortune to deal with a co-worker, family member, or friend who doesn’t understand such concepts.

Is it possible that people who don’t “walk their talk” haven’t realized that their life or the organization they lead, are the result of who they are, what they do and what they stand for? Aren’t you tired of witnessing both in life and organizations alike, things like back stabbing, blaming, and accusing others of doing the wrong thing?

We strongly believe that having character, vision and competence will bring joy, happiness, harmony and inner peace. But unfortunately, we are also aware that people commonly choose mediocrity over excellence because the first is not so hard to pursue!

Make a difference and assist someone who has been stumbling to walk his or her talk! Then, ask them to “pay it forward”: ask a good turn to be repaid by having it done to others instead!

S

Being trustworthy It is undeniable that if you always back up what you say with your actions, you will show your values and character. If you have those qualities and if you show them, the chances are you will be considered trustworthy! And what a great world it would be if everyone were trustworthy!

Are you trustworthy?

In some cases it is more evident than in others, but clearly in all professions, people are distinguished by both their character and competence. When choosing a doctor, a lawyer, a teacher, and so on, you have to look at both their competence and character. Competence or character alone, do not inspire trust!

DECEMBER 2010

Even if you are 100 percent sure about the competency of your doctor or lawyer, you still need to question their character. Otherwise you might end up having your kidney removed just because your doctor thought he could make a few dollars more with such procedure, or having your lawyer assuring you that you won’t get jail time if you lie in court!

According to Stephen R. Covey, renowned author of “The seven habits of highly effective people”, having character includes integrity, maturity and abundance mentality, while being competent involves the knowledge and skill to achieve agreed-upon results (technical competence), to see the big picture, examine assumptions and shift between perspectives (conceptual competence) and the ability to interact effectively (interdependent competence).

Tips for improvement Here are some tips to assist you in walking your talk by demonstrating behaviours of character: 1. Make commitments to yourself and keep them; 2. Model the behaviour you want to see from others; 3. If you make a rule or design a process, follow it; 4. Choose win-win situations; 5. Understand which situations might represent “deposits” or “withdrawals” to each person you relate with and choose to make only deposits; 6. Help people achieve the goals that are important to them; 7. Always do what you say you’re going to.

Be sure that the fastest way to decrease trust is to violate the mentioned tips, while the quickest way to increase it is to demonstrate both competence and character. The good news is that by behaving in ways that build trust with one, you are building trust with many.

143

GOVERNMENT, BY THE BOOK Our government officials seem to have an odd relationship with the law.

When any of their actions are questioned, the official plea is always the same: “Everything was done according to the law”.

No wore explanation, no more details.

This is all we get. It is more than enough or so the government-types think.

It is the frequently heard, official justification as to why outspoken activists from Hong Kong find themselves permanently barred from entering Macau.

It happened again last month, during Premier Wen Jiabao’s visit to the territory.

Frozen Spy wonders, isn’t working according to the law what the government is expected to do in the first place?

It would be strange to hear high officials saying otherwise.

PORTUGAL’S FLAGGING FORTUNES Eleven years since the handover, the last Portuguese flag to fly over the Macau government headquarters remains out of the public eye.

According to General Rocha Vieira, Macau’s last governor, the flag is still folded-up inside a drawer at the home of one of his former aides.

Frozen Spy wonders why the Portuguese government won’t put the flag in a museum, on display as part of the nation’s heritage.

Maybe the cash-strapped country is waiting for its cashed-up former territory to include Lisbon in the cash handout scheme so it can afford the cost of the exhibit.

BORED STIFF You’re right if you assumed the annual policy address isn’t the most interesting thing in the world. But is seems to get more and more dull every year.

If not for the lady who interrupted Chief Executive’s Fernando Chui Sai On because there was no chair for her to sit on – all seats in the Legislative Assembly were occupied – there would be very little to talk about.

Frozen Spy has a great idea to improve the quality of the policy address and one that would support Macau’s current positioning as an Asian entertainment capital.

Let’s hire some of those cheerleaders that performed at Guangzhou’s Asian Games. You know, the ones that were blamed by losing teams for their “distracting” moves.

Frozen Spy is hopeful that the cheerleaders might also act as a source of inspiration for the government and legislators alike to spur on their performance.

It would also have the positive effect of bringing the topic of imported labour into the spotlight and to sex-up an important issue our legislators obviously find quite boring.

And, at the very least, it would give us something to talk about.

CLEARING THE BAD AIR A lot has been said and written over the past couple of weeks about the environmental performance of the Macau solid waste incineration plant. MASTV cited an unnamed source who claimed the plant has regularly exceeded emission limits. The Environmental Protection Bureau has stressed that the plant did not.

Frozen Spy is no white-coated, bespectacled scientific expert but, if everything was good, even performing above the agreed standards monitored by the bureau, why has the government demanded so many changes at the plant since this became news?

It seems this story is not yet ready for incineration.

DECEMBER 2010

144

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