Vitor Quintã
MOP 6.00
Gross National 1 Income growth tops GDP expansion
April 19, 2013
Page 2
Deputy editor-in-chief
Regional gaming centres continue to lag Macau Page 6
Editor-in-chief Tiago Azevedo
Govt to keep running bust Reolian’s buses
www.macaubusinessdaily.com
Year II
Number 445 Tuesday December 31, 2013
Page 16
Massive support for MOP30 min wage: govt
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he overwhelming majority of people – 98.8 percent – who voiced opinions during a government consultation exercise, support the idea of a minimum wage of 30 patacas (US$3.75) or more an hour for all cleaning and security staff. The government has said it will “cautiously consider” a number of factors before deciding how much the minimum wage should be.
Trade unions and employers remain at odds over the matter. A labour representative has called for a firm schedule for imposing a minimum wage, while a businessman has said now is not the right time. The Labour Affairs Bureau spent 47 days consulting the public. By November 15 it had received 1,007 written opinions. It published the report on its findings yesterday. More on page 3
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December 30
HSI - Movers Name
Taipa North development to offer 6,400 new flats
Macau bookshops make last stand in fast paced ever-changing city
Rainbow Group eyes Hengqin logistics and training centre
The revised urban plan for Taipa’s northern district is expected to supply 6,400 new flats, of which only about 1,000 would be public homes. But the government stressed the plan for the 223,000-square metre zone – which is currently mostly undeveloped and is sub-divided into plots – was not meant to benefit only private developers. The updated plan identifies 71 plots in the area, of which 33 are privately owned.
Buying books in downtown Macau could soon be a thing of the past as a 63-year-old bookshop chain, Starlight Bookstore Co Ltd, is running down its operation in Rua de Pedro Nolasco da Silva. It will let its premises there to retailers catering to tourists. Macau’s bookstore owners believe the government should do more to promote reading via traditional media, even as e-books grow in popularity among the young.
Rainbow Group, a Macau-based distributor of luxury brand products, wants to set up a logistics centre and employee training base in Hengqin, president Terry Siu said. Quoted by Chinese-language Hong Kong Economic Journal, Ms Siu said the group would continue to expand its retail network in both mainland China and Macau. Rainbow Group would hire 500 more workers next year, taking its workforce to 2,500, the businesswoman said.
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December 31, 2013
Macau
Taipa North development to offer 6,400 new flats But only 1,000 will be public homes in the island’s underused district Tony Lai
tony.lai@macaubusinessdaily.com
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he revised urban planning for Taipa’s northern district is expected to supply 6,400 new flats, of which only about 1,000 will be public homes. The government pledged the plan was not meant to benefit private interests in the area, which has more than 223,000 square metres. The Land, Public Works and Transport Bureau announced yesterday the updated urban plan next to the old University of Macau campus, where a public housing project is located. Lao Iong, head of the bureau’s
urban planning department, told a press conference the updated plan identifies 71 plots in the area, of which 33 are privately-owned undeveloped parcels that could provide 5,400 flats. The plan earmarks 12 plots for the public land reserve, with potential to supply up to 1,000 flats, while the remaining plots are either developed or zoned for public facilities. Mr Lao claimed the plan revision was “pragmatic” and would benefit the landowners, the government and the public. “We also would like to have more land from the Taipa North plan to
build more public homes… but the hard truth is that half of the land in the area is privately owned,” said Mr Lao. “The planning cannot sacrifice the rights of the land holders. If we really want to add more public homes we would have to expropriate the land and compensate [the owners].” He stressed the plan, expected to accommodate 36,500 people, “has maximised the public interest” in offering more public facilities like a sports and education complex, elderly homes, a market and a park. Those facilities will serve not only the Taipa North residents but also
Taipa’s northern district remains underdeveloped, the government says
people who live in downtown Taipa, Mr Lao said. He acknowleged Taipa lacks public facilities.
Appeal boost Mr Lao said: “There was already an urban plan in 1995 but the land rights in the area are dispersed so the development pace has not been ideal.” The lack of road networks in the area also posed difficulties for its development, he added. The administration made changes to the plan to make it more attractive for the landholders to develop it, said Mr Lao. The new plan will relax the height cap in the area up to 90 metres while allowing landholders to build development with a total area 20 percent bigger. However, almost all private landowners in the district will have to return part of the plots they own to the government. They will be included in the public land reserve. “So it can be said the floor space of the private land is larger but the land area is smaller,” he said. Mr Lao believes the plan can encourage the landowners to develop their plots, together with the public facilities built in the area and the robust property market. He said, however, it is difficult to say when the development will come or how many homes will be available because the landholders may decide not to cooperate with the government and leave the land idle.
City’s 2012 GNI growth tops GDP Gross National Income expanded 3.1 percentage points faster than Gross Domestic Product Michael Grimes
michael.grimes@macaubusinessdaily.com
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acau’s Gross National Income at current prices amounted to 301.72 billion patacas (US$37.8 billion) in 2012, according to data released yesterday by the Statistics and Census Service. It represented year-on-year growth of 13 percent, compared to a 9.9 percent expansion for Gross Domestic Product during the same period. The GNI numbers can be useful indictors for officials in communities with large numbers of non-domiciled investors. They reveal what actual residents are earning – including income derived from outside – relative to GDP. The World Bank defines the latter as the value of the total final output of all goods
and services produced in a single year within a country or jurisdiction’s boundaries, including the earnings of people domiciled outside. The government stresses however in its commentary on the GNI numbers, that for statistical purposes in this case, the term ‘resident’ applies to “a person who has stayed or intends to stay in that economy for at least 12 months, irrespective of nationality or legal status”. The data therefore do not differentiate between the administration’s own categories of ‘non-resident’ and ‘resident’ worker. Government data do show that in the fourth quarter of 2012, 110,552 of Macau’s then 582,000 population –
Gross national happiness? GNI outpaced GDP growth
i.e., 19 percent of inhabitants – were non-residents as defined administratively. Macau’s aggregate GNI figure for 2012 was only
13.4 percent below that for GDP. The 2012 statistics show that per capita GNI was 530,221 patacas, compared to per capita GDP
of 611,930 patacas. Macau’s GNI increased by 13.0 percent in real terms year-on-year during 2012, and was thus higher than ‘real’ GDP growth by 3.0 percentage points. Per-capita GNI increased by 9.1 percent in real terms, higher than the real per capita GDP growth by 2.9 percentage points. The statistics bureau said in its commentary on the numbers: “Total inflow of external factor income increased by 34.1 percent, mainly due to a 43.1 percent rise in ‘Other’ investment income (59.3 percent of total) and a 55.8 percent surge in portfolio investment income (25.9 percent) received by resident investors from abroad.”
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December 31, 2013 April 19, 2013
Macau
A minimum wage would be only for cleaning and security staff
Support for minimum wage of MOP30 is overwhelming The government will ‘cautiously consider’ various factors before deciding the amount Tony Lai
tony.lai@macaubusinessdaily.com
T
he overwhelming majority of people consulted by the government are in favour of a minimum wage of 30 patacas (US$3.75) or more an hour for all cleaning and security staff. In response, the government has said it will “cautiously consider” a number of factors before deciding how much the minimum wage should be. The trade unions and employers remain at odds over the matter. A trade unionist has called for a firm schedule for imposing a minimum wage, while a businessman has said now is not the right time. The Labour Affairs Bureau spent 47 days consulting the public about a minimum wage, which would be only for cleaners and guards. By the time the bureau finished on November 15 it had received 1,007 written opinions. It published the report on its findings yesterday. The report says 98.8 percent of the opinions were in favour of a minimum wage of 30 patacas or more an hour. The bureau had proposed a minimum wage between 23 patacas and 30 patacas. The report shows many of the statements in favour of a high minimum wage were identical, but were signed by different people.
KEY POINTS The workers demand a schedule for introduction The bosses say householders will foot the bill A higher wage means a greater impact, govt says
Macau has no general minimum wage. At present only employees of government cleaning and security contractors are entitled to a minimum wage, which is 26 patacas an hour. The findings of the public consultation failed to persuade the government to decide at once on the amount of a minimum wage for all cleaners and guards. “The SAR government believes a more preferable way is to cautiously analyse the changes in a basket of indicators, the socio-economic situation and the relevant government policies,” the Labour Affairs Bureau says in its report.
It is meaningless to say how many support it, as society is made up of more employees than employers Vong Kok Seng, Macau Chamber of Commerce vice-president
Meaning of time The bureau thinks setting a minimum wage should involve more than just using median monthly earnings or the consumer price index as references, as suggested by some workers it consulted. The bureau says economic growth, unemployment, the minimum wage for employees of government contractors and the income subsidy should be taken into consideration. The government tops up low incomes so that all residents are paid at least 4,700 patacas a month. Macau Federation of Trade Unions official Ella Lei Cheng I, a member of the Legislative Assembly, told Business Daily: “We are mostly concerned about two things: the amount – 30 patacas is a very reasonable level – and the time.” Ms Lei said: “It would be meaningless for workers to earn even 40 patacas an hour if the legislation can only be implemented, like, 10 years from now.” She demanded that the government “state exactly” when a minimum wage could be imposed. “The problem we have right now
is that it often takes too long for the government to come up with a bill, and the process drags on,” she said. Ms Lei said a template for a general minimum wage was also needed. The Labour Affairs Bureau did not say when it would decide on a minimum wage for cleaners and guards. Ms Lei said the amount of any minimum wage should to be reviewed every year instead of every two years, as proposed in the report. “This could better reflect the impact of inflation on workers’ wages,” she said.
Meaning of numbers The vice-president of the Macau Chamber of Commerce, Vong Kok Seng, praised the government for being “pragmatic” in taking its time before deciding. Mr Vong played down the popular support for a minimum wage of 30 patacas or more. “It is meaningless to say how many
support it, as society is made up of more employees than employers,” he told Business Daily. Mr Vong reiterated the chamber of commerce’s view’s that now is “not the right time” to introduce a minimum wage for cleaners and guards because the city still lacks a law regulating building management companies. “The implementation of a minimum wage will definitely spike up building management charges,” he said. “This may lead to more disputes between householders and management companies, requiring relevant laws to help settle the matter.” The Housing Bureau said last month that it would begin soliciting public opinion on draft legislation to regulate building management companies and their employees in the first quarter of next year. The report on a study that the University of Macau did this year predicts that a minimum wage of 30 patacas an hour for cleaning and security staff would increase building management fees by 17.3 percent. The study report predicts that a high minimum wage would shrink the profit margins of building management companies by an average of 7.1 percent. The Labour Affairs Bureau’s report on the findings of its public consultation says the higher the minimum wage, the greater its effects on various sectors of society would be. The report says a high minimum wage is more likely to induce employers to replace low-skilled, older employees. The government is proposing that all cleaners and guards be entitled to a minimum wage, whether they are Macau residents or migrant workers. The amount would include basic pay and other emoluments, the report says.
4
December 31, 2013
Macau
Macau bookshops make a last Bookshops take separate approaches to coping with fewer readers, higher rents and Tony Lai
tony.lai@macaubusinessdaily.com Photo by Manuel Cardoso
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ua de Pedro Nolasco da Silva, a street in the city centre always crowded with residents and tourists on weekdays, has a variety of shops selling jewellery, watches, and clothes – and books. But buying books in the prime shopping area will soon be a thing of the past as a 63-year-old bookshop chain, Starlight Bookstore Co Ltd, is running down its operation in Rua de Pedro Nolasco da Silva and will let its premises there to retailers catering to tourists. The story of Starlight Bookstore illustrates the problems faced by booksellers as the reading population declines. Some bookshops try to offer customers more to sustain their business. Others focus on what they do best. There are no official data on book retailing in Macau. The value of all retail sales here was over 47.3 billion patacas (US$5.91 billion) in the first nine months of this year, 21 percent more than a year earlier, according to the Statistics and Census Service. But the value of imports of books and newspapers in the first 11 months was 105 million patacas, 12.9 percent less than in the equivalent period of last year. Starlight Bookstore director and general manager Daniel Sio estimates that book sales in Macau have fallen by 30 percent in recent years. “There are fewer and fewer people who read but our operating costs, in contrast, keep rising, notably our wage bill,” Mr Sio he said. “It is more difficult for us to maintain our operations.”
Many products have gone up in price because of inflation in these past few years, but have you seen any significant increase in book prices? Chan Im Wa, The First Book Centre managing director
Apart from its main branch in Rua de Pedro Nolasco da Silva, Starlight Bookstore has shops nearby in Calçada do Monte and in the Macau Polytechnic Institute. “In order to provide better service to our customers, we are now reducing operations by shutting down this branch to support our two other shops,” Mr Sio said. “We will try not to cut down on our manpower.”
No fat margins Starlight Bookstore’s Rua de Pedro Nolasco da Silva branch is not the first bookshop to close for good this year.
Just a few minutes away by foot, in Rua do Campo, was The Commercial Press (Hong Kong) Ltd’s only branch in Macau, which closed in June. The company gave difficulty in recruiting staff as the main reason for the closure. People in the bookselling industry believe increases in its rent also drove The Commercial Press out of the city. “It is difficult for any bookshops to survive in the tourist spots nowadays,” said the managing director of The First Book Centre in the Horta e Costa area, Chan Im Wa. Ms Chan told Business Daily that to survive in the tourist spots, bookshops needed to own their own premises or sell products other than the printed word. “The profit margin on book sales is not wide,” she said. She declined to be specific. “Many products have gone up in price because of inflation in these past few years, but have you seen any significant increase in book prices?” she said. Ms Chan said The First Book Centre had managed to stay in the black. “The reading population, particularly the adult reading population, has declined in the past few years, but sales of children’s books – impelled by the government’s reading drive in the schools – have been doing well,” she said. She said growth in sales of children’s books made up for losses her shop suffered in other segments of the market. “Of course, we do not have any fat margins,” she added. High rents and insufficient labour
KEY POINTS Starlight Bookstore branch to close Sales of books declining swiftly Profit margins on sales narrow
made business difficult, Ms Chan said. Book sales are declining worldwide. The largest retailer of books in the United States, Barnes & Noble Inc, made a loss of US$73.8 million (590.4 million patacas) in the first half of its financial year, 87.6 percent bigger than the loss it made a year earlier.
The digital age A survey by the All-China Federation of Industry and Commerce found that nearly half the mainland’s bookshops closed between 2001 and 2011. The survey report predicted more closures. Mr Sio said: “The global trend of contracting book sales is inevitable.” He said people increasingly read from tablets rather than the printed page. “In the past, when you needed to
5
December 31, 2013
Macau
Call for govt book vouchers
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acau’s bookstores believe the government should do more to promote reading and help not only their businesses but also the residents. Daniel Sio, Starlight Bookstore Co Ltd director and general manager, told Business Daily the government could provide more support for the industry, namely by launching book vouchers. Those would be similar to the 600-pataca (US$75.1) healthcare vouchers granted to permanent residents each year since 2009, he said. The annual healthcare voucher programme subsidizes medical expenses incurred at governmentapproved private clinics, including dental clinics and practitioners of Chinese traditional medicine. Beneficiaries can transfer their healthcare vouchers – valid for one year – to their spouses or other immediate relatives. The government has set aside about 363 million patacas to spend in this programme this year. “Macau has such a good economy and there is more the government can do to promote reading,” Mr Sio said. “For example if the vouchers are valued at 200 patacas, it is already enough for three books.” “This could help the cultural industry enterprises such as the bookstores and also boost the reading atmosphere here,” he said. Chan Im Wa, managing director of The First Book Centre agrees but she says educating children on the importance of reading from an early age is more important.
stand insufficient manpower
T.L.
check words, you would look them up in a physical dictionary you had purchased, but now you have large resources online,” he said. General Administration of Press and Publication data show the mainland printing and publishing industry’s annual revenue grew by 14.2 percent last year to 1.66 trillion yuan (2.18 billion patacas). The mainland digital publishing industry’s revenue grew faster: by 40.5 percent to 193.6 billion yuan. One of the largest bookshop chains in Taiwan, Eslite, opened a branch in Hong Kong last year. The opening attracted long queues of customers and much attention in the mass media. Ms Chan said: “The Eslite bookshop may be a more successful
example of a physical bookshop, but it now relies also on non-book revenue.” Eslite Spectrum Corp, the Taiwanlisted subsidiary of Eslite Corp that runs the chain, had revenue of NT$10.6 billion (2.82 billion patacas) last year, 13.7 percent more than in 2011, and profit after tax of NT$282 million, 28.8 percent more. But book sales accounted for under 30 percent of revenue. The company also runs cinemas, hotels, and gift and clothes shops. The era of tablets has shown up the shortcomings of Macau’s book retailers. “I seldom shop for books in Macau as the bookshops here usually do not offer the books I want,” Wong Wai Io, a 31-year-old clerk, told Business Daily. “It is especially difficult to find books in foreign languages and language-teaching books. I usually have to go to Hong Kong, or order them online,” Mr Wong said.
A hard chair
There are fewer and fewer people who read but our operating costs, in contrast, keep rising, notably our wage bill Daniel Sio, Starlight Bookstore director and general manager
Kitty Kuong, a 25-year-old event organiser, said: “Bookstores in Macau are crowded and not comfortable at all.” Ms Kuong told Business Daily: “It is different from the stores in Taiwan, where there is lots of space for sitting and stretching out your legs, and you can take time reading a couple of chapters.” Rex Wong, a 22-year-old student, said a bookshop should offer more than just a hard chair in an aisle in front of crowds of people. “It should also include other amenities: a whole environment that
In Macau bookshops, you go there to buy only because you need to. In other places, like Taiwan, it is more like a leisure activity Kitty Kuong, Bookshop customer
– help them to order a copy from the suppliers,” she said. Starlight Bookstore’s Mr Sio said Macau bookshops had less space than their counterparts in other places. The prospects for bookselling are daunting. So Starlight Bookstore intends to do more than sell just books and gifts. “We are pondering holding courses, like cultural courses, next year – if possible – to attract more people,” Mr Sio said. In contrast, Ms Chan said her bookshop would continue to focus on selling books. “We tried to sell stationery and gifts in the past, which accounted for half of our sales at the time,” she said. “But that meant a heavier workload for our staff so we stopped some years ago.”
Labour luxury makes you feel you are in no rush,” Mr Wong told Business Daily. Ms Kuong said: “In Macau bookshops, you go there to buy only because you need to. In other places, like Taiwan, it is more like a leisure activity. You can spend your free time wandering around.” The First Book Centre’s Ms Chan said: “The range of books on offer here is much narrower than in other places because the reading population here is not large.” She said Macau retailers imported popular mainstream books that were more likely to sell. “But if any customer wants a title that is not available at the moment we try – and we succeed in most cases
The First Book Centre intends to set up an online platform similar to Starlight Bookstore’s to promote the shop and its books, but has yet to put the plan into action because it cannot get the staff. “We need to have people available to maintain and update it, and we don’t have that luxury at this moment,” Ms Chan said. A frequent customer of the Rua de Pedro Nolasco da Silva branch of Starlight Bookstore told Business Daily: “It is certainly sad to see this branch close, as I have been coming here for decades.” “But it is like this everywhere. Making room for more tourists and more money – that is more important,” he said, bitterly.
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December 31, 2013 April 19, 2013
Macau
Regional gaming centres continue to lag Macau Malaysia’s small industry likely to grow at around 6pct in 2014 says research paper Michael Grimes
michael.grimes@macaubusinessdaily.com
US$1.5 bln redevelopment – Resorts World Genting, Malaysia
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alaysia’s RHB Research Institute Sdn Bhd – a specialist in economic, equity, and debt market analysis – says the country’s gaming sector is likely to continue to lag well behind Macau’s casino industry in revenue growth. The research house cites a number of factors, including the planned introduction in Malaysia of a goods and services tax. It is likely to apply to betting. “We are forecasting for sectoral earnings growth [in Malaysia gaming] of 5.6 percent for CY14 [calendar year 2014] and 6.7 percent for CY15,” said RHB analyst Kong Heng Siong. Analyst consensus for revenue growth among Macau’s casino operators is 22.4 percent for CY14 and 17.8 percent for CY15, says the research house. “The sturdier growth in Macau’s gaming market, in our view, is mainly underpinned by the continued influx of visitors from China in tandem with the domestic economy’s expansion,” RHB’s Mr Kong said. According to the document, shares of Macau casino operators are traded at a 30 percent to 45 percent premium relative to Malaysian gaming stocks. That valuation gap is expected to stay
in the near-term, states RHB. Neither of the main publicly quoted firms in Malaysia’s gaming sector have direct investment in Macau. Genting Malaysia Bhd operates the Resorts World Genting casino resort at Genting Highlands, and Berjaya Sports Toto Bhd – founded by Vincent Tan, the current chairman of Cardiff City Football Club in the English Premier League – runs national lottery games. Genting Hong Kong – a sister company to Genting Malaysia – operates Star Cruises’ casino ships out of Hong Kong. It is also a joint venture partner in the Resorts World Manila casino resort near Manila International Airport in the Philippines.
Tax take Malaysia is to levy GST at six percent on qualifying goods and services starting in April 2015. It’s not clear at this stage if it will apply to the casino betting gross or net win. RHB said in a research note in September, that Malaysia – which has only one legally licensed casino property at Resorts World Genting – has since 1998 levied a flat rate of 25 percent tax on gross bets. There was talk prior to the 2014 national
6%
GST on Malaysian gaming from April 2015
budget of a one percent hike in the gross betting tax. It didn’t happen. RHB had forecast such an increase could have eroded Genting Malaysia’s earnings in financial years 2013 through to 2015 by 2.4 percent to 2.5 percent. “While we find some comfort in Genting Malaysia’s proposed five billion ringgit [US$1.52 billion] capex to rejuvenate its flagship Genting Highlands resorts over the next 10 years, we hold the view that it is too early to quantify the potential earnings accretion, as the first phase of the proposed facelift will only be completed by 2H2015,” Mr Kong wrote in his latest note. In neighbouring Singapore the market created by two casino resorts – Marina Bay Sands developed by
Las Vegas Sands Corp, and Resorts World Sentosa, developed by Genting Singapore – was described in a recent report by credit research firm Fitch Ratings as “mature” and likely to grow by between three percent and five percent annually from the approximately US$5.85 billion grossed (including local slot clubs) achieved in 2012. In Singapore a form of GST is levied at seven percent of total net win on bets in the city-state’s casino resorts, as well as a five percent tax on the gross for VIP table games players and 15 percent for main floor table players. In Macau, there is a 35 percent tax on gross gaming revenue, plus a 1.6 percent contribution to Macao Foundation (which provides grants to local associations and charities). There is an additional 2.4 percent levy on the Macau gross as a contribution to ‘infrastructure’, ‘tourism’ and the city’s Social Security Fund. Stanley Ho Hung Sun’s casino firm SJM Holdings Ltd pays the latter levy at a reduced rate of 1.4 percent, in lieu of providing dredging services for Macau’s Outer Harbour. Last year alone this one percentage point difference was worth 806 million patacas (US$100 million) to the company.
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December 31, 2013 April 19, 2013
Macau
Rainbow Group eyes Hengqin Labour market still tight as logistics, training centre
workforce grows
Macau-based fashion retailer wants more retail outlets here and in the mainland
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Stephanie Lai
sw.lai@macaubusinessdaily.com
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ainbow Group, a Macaubased distributor of luxury brand products, wants to set up a logistics centre and employee training base in Hengqin, president Terry Siu said. Quoted by Chinese-language Hong Kong Economic Journal, Ms Siu said the group would continue to expand its retail network in both mainland China and Macau. More outlets means Rainbow Group would hire 500 more workers next year, which would take its workforce to 2,500, the businesswoman said. The company has applied to build a training base for its employees in Hengqin to accommodate the group’s retail business, as well as a logistics centre, Ms Siu said. Business Daily was unable to obtain more information on the logistics centre from Rainbow Group before we went to press. The group has two logistics centres in Shanghai and Shenzhen supporting its supply chain in the mainland market. In February, the Hengqin authorities announced a plan to set the corporate income tax at 15 percent for several industries, including logistics businesses. That rate, which would cover Hong Kong and Macau companies settling in the island, would be lower than the 25-percent rate charged
Ocean Kingdom gets trial start Ocean Kingdom, one of the six theme parks of the Chimelong International Ocean Resort on Hengqin Island, will start trial operation by January 18. Chen Wancheng, Chimelong Group chief executive officer, told Zhuhai media the amusement park facilities were still being tested. Chimelong Hengqin Bay Hotel will open for business a bit earlier. The hotel, which includes 1,888 rooms, will open by January 8. Daily circus shows will be launched at the resort’s International Circus Town starting January 12. The First China International Circus Festival was held in Ocean Kingdom last month. Terry Siu is the president of fashion retailer Rainbow Group
in most mainland provinces. The full range of businesses that can benefit from the 15 percent of income tax rate will only be announced later, the Hengqin branch of Zhuhai Municipal Local Taxation Bureau told Business Daily. Rainbow Group has the retail rights for 14 international brands such as Cartier, Giorgio
Armani and Hugo Boss. It operates over 200 stores in Macau and 28 cities in the mainland China, mostly in second-tier and third-tier cities, the group’s website says. Ms Siu said she was not worried about more luxury brands taking back direct control of their businesses in China, saying there are still
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30 brands under Rainbow Group’s current portfolio. The group wants to increase its retail network to at least 350 shops in Macau and the mainland in the next three years, Ms Siu said. She expressed confidence in the sustained popularity of European fashion brands amongst Chinese consumers.
acau’s jobless rate remained unchanged in the September-November period, even though the working force grew further. The employed population reached 368,400 by the end of November, which represents a slight increase of 0.5 percent from the previous period, the Statistics and Census Service announced yesterday. The main reason behind the increase was a hiring spree by the gaming sector. Casinos signed up about 2,500 people, taking its total workforce to 85,300 people. In contrast hotels fired 600 workers, reducing its staff to 25,500, and retail lost 200 employees and now has 35,500 people. Only 7,000 people were out of a job in the SeptemberNovember period, 100 more than in the previous period. Macau’s unemployment rate held stable at 1.9 percent – third lowest in the world. The rate of underemployed – those performing jobs for which they are overqualified or working part time but keen to go full-time – remained at 0.4 percent. This is the lowest since the Statistics and Census Service began collecting employment data in 1992. The information indicates the territory’s labour market has remained tight in the last three months, with few still unable to find a full-time job that matches their qualification. S.L.
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December 31, 2013 April 19, 2013
Greater China Film director may face largest one-child fine Oscar-nominated Chinese director Zhang Yimou (right) may face a fine of more than 7 million yuan (US$1.2 million) in the country’s biggest penalty for violations of family-planning rules, the official Xinhua news agency said. The 62-year-old director of the Beijing Olympics opening ceremony and films such as ‘Raise the Red Lantern’ fathered two sons and one daughter with his wife Chen Ting, before the couple married in 2011, Xinhua reported. Mr Zhang already had a daughter with his ex-wife, according to the People’s Daily newspaper.
Yuan hits record high on strong central bank fixing Currency appreciation attracting speculators to Chinese market Gabriel Wildau
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hina’s yuan hit a record high yesterday in light trading, as traders say authorities are guiding the yuan stronger in the final days of the year to achieve a pre-determined yearly appreciation target. Spot yuan changed hands at 6.0641 per US dollar at midday, 0.07 percent stronger than Friday’s close, after touching an all-time high of 6.0637 earlier in the morning. The gains came after the central bank set its daily midpoint at 6.0647 per dollar, the strongest fixing ever and 0.04 percent firmer than Friday’s fix. The People’s Bank of China
(PBOC) often guides the yuan stronger in the closing days of the year. Market watchers say this enables the government to record a strong full-year appreciation figure, helping to rebut criticism from trading partners who believe China keeps its currency weak to benefit local exporters. The yuan’s appreciation also reflects current supply and demand pressures. The currency’s consistent appreciation this year, as well as rising yuan interest rates, have attracted speculators to the Chinese currency. Traders say client demand for dollars has been weak in recent days.
KEY POINTS Central bank often guides yuan stronger in late Dec Two-year high in euro also supports yuan gains Yuan could rise further today, then stabilise
“There are a lot of short (dollar) positions,” said a trader at a major state-owned bank in Beijing. “I expect this round of appreciation will end at around 6.06. After New Year’s things will stabilise,” he said. The yuan looks set for a gain of 2.7 percent this year. Beyond year-end factors, the euro hit a two-year high against the dollar yesterday. The PBOC often fixes the yuan stronger when the euro and other non-dollar currencies rise. But the stronger euro came as the Japanese yen hit a five-year low against the dollar. Reuters
Over 3 mln hectares of land too polluted to farm Cleaning up rural regions could prove huge challenge to food supply
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Pollution has contaminated Chinese land the size of Belgium
bout 3.33 million hectares (8 million acres) of China’s farmland is too polluted to grow crops, a government official said yesterday, highlighting the risk facing agriculture after three decades of rapid industrial growth. China has been under pressure to improve its urban environment following a spate of pollution scares. But cleaning up rural regions could be an even bigger challenge as the government tries to reverse damage done by years of urban and industrial encroachment and ensure food supplies for a growing population. Wang Shiyuan, the vice‑minister of land and resources, told a news briefing that China was determined to rectify the problem and had committed “tens of billions of yuan” a year to pilot projects aimed at rehabilitating contaminated land and underground water supplies. The area of China’s contaminated land is about the same size as Belgium. Mr Wang said no more planting would be allowed on it as the government was determined to prevent toxic metals entering the food chain.
“In the past there have been news reports about cadmiumcontaminated rice - these kinds of problems have already been strictly prohibited,” he said. This year, inspectors found dangerous levels of cadmium in rice sold in the southern city of Guangzhou. The rice was grown in Henan, a major heavy metal-producing region. China’s determination to squeeze as much food and resources as possible from its land has put thousands of farms close to chemical plants, mines and other heavy industries, raising the risks of contamination. With food security still the most pressing concern, China is determined to ensure that at least 120 million hectares (295 million acres) of land is reserved for agriculture, a policy known as the “red line”. The rehabilitation of polluted land is part of that policy. A government land survey revealed traces of toxic metals dating back at least a century as well as pesticides banned in the 1980s, and state researchers have said that as much as 70 percent of China’s soil could have problems. Reuters
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December 31, 2013 April 19, 2013
Greater China
Li pledges ‘appropriate liquidity’ in 2014 As cash crunches hit China’s money markets earlier this month
UBS unit faces penalty on stock drop: report
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President Xi Jinping and China’s other new leaders, who took power in March, have said they want to adjust the country’s policy priorities to value growth quality over quantity, sacrificing some growth in exchange for balanced growth and protection against financial risks. China’s economic growth is likely to come in at 7.6 percent this year, according to a cabinet report cited by the official Xinhua news agency last week, just above the government’s target of 7.5 percent and slightly below last year’s 7.7 percent. Sources at top government think tanks told Reuters that for 2014, China will likely use the same 7.5 percent growth target it set for this year.
he Shanghai Stock Exchange will penalise four companies including an UBS AG unit and China International Capital Corp for equity sell orders that caused stocks to plunge on December 20, the newspaper Shanghai Securities News said. Shares in lenders including China Construction Bank Corp and Bank of Communications Co plunged in the final minutes of trading on December 20, while those of six companies tumbled by the 10 percent daily limit. The penalties come after the China Securities Regulatory Commission said on Friday that executing large transactions that significantly deviated from market prices was “disruptive.” UBS Securities Co, CICC, Guotai Junan Securities Co and Orient Securities Co were penalised for failing exercise professional judgement and diligently review orders from Qualified Foreign Institutional Investor (QFII) accounts controlled by UBS, Citigroup Inc, HSBC Holdings Plc and Martin Currie Investment Management Ltd, the newspaper reported, citing the Shanghai Stock Exchange. It did not provide details on penalties. Calls to UBS, Guotai Junan Securities, Orient Securities, CICC and the Shanghai Stock Exchange went unanswered yesterday. The QFIIs also did not immediately respond to requests for comment. QFIIs allow investors from outside China to buy yuan-denominated securities on mainland markets, which are otherwise closed to foreign funds. The “abnormal trading” in some Chinese stocks on December 20 was due to some position adjustments by some QFIIs as they tracked stock indexes, the Shanghai Stock Exchange said in a statement on its microblog on December 22. The QFIIs sold 680 million yuan (US$112 million) of shares in 17 companies in the last three minutes of trading, the CSRC said. The firms timed the trades near the market close because the value of the new index components would be based on closing prices, according to the watchdog.
Reuters
Bloomberg News
Chinese premier Li Keqiang made an inspection tour to Tianjin on Sunday
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hinese premier Li Keqiang has said that the government will keep liquidity at an appropriate level in 2014 to maintain the stability of financial markets and the broader economy. He made the remarks during a recent inspection tour to the northern Chinese city of Tianjin, according to an account published on the website of the State Council, China’s cabinet, late on Sunday. The comments came after cash crunches in China’s money markets in June and December, which many market observers believe were engineered by the central bank, which refused to aid the market with large cash injections to help banks cope with elevated cash demand at the end of each quarter.
Market watchers interpreted the People’s Bank of China’s (PBOC) passive approach as short-term interest rates spiked as an effort to help curb non-stop growth in housing prices and a message to banks to deleverage their balance sheets. Some have perceived an unofficial shift to tighter monetary policy. “We will stick to the prudent monetary policy, keep appropriate liquidity, realise reasonable growth in credit and total social financing and keep prices largely stable,” Mr Li was quoted as saying in the statement. “We have the conditions to keep the economy to operate in a steady style and maintain the stability of the financial markets,” he said without elaborating.
Zhejiang Loong confirms order of 20 A320s C
hina’s Zhejiang Loong Airlines has ordered 20 Airbus planes of the A320 series, firming up a deal made in September, Airbus announced in a statement Sunday. The carrier which is based in Hangzhou, east China, had been given the green light for the transport of passengers when it signed the Memorandum of Understanding with Airbus at the 15th Aviation Expo China 2013 in Beijing. Zhejiang Loong Airlines’s order concerns 11 A320ceo and nine A320neo. Zhejiang Loong Airlines “made its first commercial flight with a leased A320, thereby becoming a new Airbus user”, the aircraft manufacturer said.
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The carrier is “determined to contribute to the economic and social development of Zhejiang province offering efficient transport services,” Airbus quoted company chief Liu Qihong as saying. The airline plans to offer services within a range of four hours around Hangzhou. Airbus markets the A320 family, a single-aisle jetliner (composed of the A318, A319, A320 and A321) as “the world’s most eco-efficient single-aisle product line”. The manufacturer says it had 2,523 firm orders of the aircraft at the end of November. AFP
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December 31, 2013 April 19, 2013
Greater China
Retirement delayed as China faces smaller workforce Delaying retirement a more effective tool in alleviating labour shortages, analysts say
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hina plans to raise the retirement age for the first time since the 1950s, as policymakers confront the prospect of a shrinking workforce that damps economic growth. The age will rise gradually, Hu Xiaoyi, a vice minister of human resources and social security, said this month. China’s compulsory retirement ages, now 50 for most women and 60 for men, are likely in 2020 to be about five years higher than they are now, according to economists surveyed by Bloomberg News. Delaying retirement may be a more effective tool in alleviating labour shortages and driving growth than the easing of the one-child policy announced in November as part of the broadest policy reforms since the 1990s. More than three decades of population control are thinning the ranks of available workers, adding to constraints on expansion as President Xi Jinping’s government seeks to rein in debt-fuelled investment. “I would think that a lot of people would want to voluntarily work longer if the policies are right,” said Chang Jian, China economist at Barclays Plc in Hong Kong, who formerly worked at the World Bank. The government would get “a lot more mileage” from raising the retirement age than a partial relaxation of the one-child policy, she said. Twelve of 18 analysts saw 55 as closest to the 2020 retirement age for women, with five saying 60 and one 65, according to the Bloomberg News survey, conducted from November 22 to November 27.
Men’s retirement The retirement age for men is likely to rise to about 65, according to 14 respondents, while two said it would be closer to 70 and two said it would stay near 60, the survey found. For women in white-collar jobs, the retirement age is 55, and there are other exceptions such as for heavy labour. The working-age labour force in China declined by 3.45 million people last year, according to the government. The United Nations has forecast a drop of about 24 million in the population age 15 to 59 from 2015 to 2025, while people age 65 and older will increase by about 66 million. Scarcity is helping push up labour costs, driving companies such as
KEY POINTS Population control measures thinning ranks of available workers Retirement age to be about five years higher in 2020 May have bigger impact than the change in the one-child policy Higher retirement age won’t change demographic structure – Yu
Delaying retirement may slow the process of labour surplus
Samsung Electronics Co Ltd to relocate production to countries including Vietnam. Raising the male retirement to 65 by 2020 may help keep in the labour force some of what statistics-bureau data show were 41.5 million men age 47 to 51 in 2011. There were 51.5 million women age 37 to 41. Yu Yongding, a former adviser to the central bank, said a higher retirement age won’t change China’s demographic structure and trends. At the same time, “it’s definitely helpful for China’s labour supply, and therefore good for economic growth in the long run,” Mr Yu, a senior researcher at the Chinese Academy of Social Sciences, said in an interview in Beijing.
Pension shortfall Fourteen Chinese provinces faced a combined pension shortfall of 76.7 billion yuan (US$12.6 billion) in 2011, according to a report by CASS, a state researcher, the official Xinhua news agency reported in October. “A delayed retirement age, despite its unpopularity, is helpful for China’s economic growth and development” by allowing people to work longer and making more efficient use of labour, said Li Xiaoping, a Beijing-based researcher with CASS’s Institute of Population and Labour Economics. Letting people have more children, while more popular, may carry fewer economic-growth benefits because boosting the population alone doesn’t necessarily help expansion, Mr Li said. Wang Yuanlong, a 42-year-old taxicab driver in Beijing, said that if the retirement age is raised to 65, “I don’t think it’s worthwhile to make my pension contributions.” “It’s bad to think that I have to work every day when I am 65,” Mr Wang said.
Avoiding deeper declines in the labour force may help support economic growth that analysts forecast will slow. Expansion will decelerate to 7.4 percent in 2014 and 7.2 percent in 2015, according to median estimates of economists in a separate Bloomberg News survey this month. Other short-term challenges in China’s economy include the biggest money-market cash crunch since June, which subsided in late December after the central bank injected funds via open-market operations for the first time in three weeks. The seven-day repurchase rate, a gauge of funding availability in the banking system, fell for a second day in the last week of December, down 87 basis points to 5.58 percent, according to a weighted average by the National Interbank Funding Centre. China is also trying to sustain growth by encouraging some of the 600 million-plus rural residents to relocate to cities and better integrating the 260 million migrant workers who live in urban areas without getting full access to schools and other municipal benefits.
Second child The Communist Party said in November that couples will be allowed to have a second child if either parent is an only child, instead of both parents, and Xinhua reported that some provinces may start the policy in the first quarter. The party said in November that it would consider raising the retirement age. Delaying retirement will slow the process of China’s labour surplus becoming a deficit, said Zhu Haibin, Hong Kong-based chief China economist at JPMorgan Chase & Co. The shift “will have a much bigger impact on the economy than
A delayed retirement age, despite its unpopularity, is helpful for China’s economic growth and development Li Xiaoping, CASS’s Institute of Population and Labour Economics
the change in the one-child policy, because that will only start to affect the labour force in 20 years’ time,” Mr Zhu said. China isn’t the only nation grappling with the issue. The U.K. plans to raise the pension age to 66 from 65 by 2020 and may raise it to 68 by the mid-2030s. Australia’s pension age is scheduled to rise to 67 from 65 by 2023, and the government may need to increase it later to 70, the nation’s Productivity Commission said in a research paper last month. National average life expectancy in China was 72 for men and 77 for women in 2010, according to government data. The highest was 82 for women in Beijing and Shanghai. “The age of 50 or 60 is no longer regarded as old,” Yang Yansui, director of Tsinghua University’s Research Centre of Employment and Social Security, said in Beijing. “The pension system just can’t be sustained if the pension access age is not extended.” Bloomberg News
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December 31, 2013 April 19, 2013
Asia
Singapore’s developers move from best to worst Decline in stock prices making some developers attractive Pooja Thakur and Jasmine Ng
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ingapore’s developers posted the worst performance on the benchmark Straits Times Index this year after recording the biggest gains in 2012 as property curbs drove home sales lower and slowed price gains. Property stocks in Singapore, ranked the most-expensive city to buy a luxury home in Asia after Hong Kong, may further languish next year after the government took measures to cool prices. Home sales may decline 10 percent in 2014 while prices are expected to drop for the first time in two years, according to broker Chesterton Singapore Pte. The property curbs, which included stamp duties and other taxes on home purchases, led Citigroup Inc and UBS AG to rate the city’s residential developers underweight in the past two months. CapitaLand Ltd and City Developments Ltd, the nation’s two biggest listed developers, were among the three worst performers on the index after being in the top 10 last year. “Singapore property developers have been out of fashion for some time,” said Tim Gibson, head of Asian property equities at Henderson Global Investors Ltd, which manages about US$117 billion globally. “We would remain cautious of developers with exposure to the residential sector, given that demand for primary units have cooled post the numerous rounds of government measures.”
Stricter measures The city-state began introducing residential curbs four years ago. The government of Prime Minister Lee Hsien Loong intensified efforts this year as prices jumped to a record, driven by low interest rates, demand from Singaporeans to upgrade from public housing, as well as purchases by overseas buyers. The measures included a cap on debt at 60 percent of a borrower’s income. That policy and other curbs have moderated property transactions and housing loan growth, the Monetary Authority of Singapore said in its annual review of financial stability earlier this month, adding that the government will monitor the market and take further steps if needed. Prices and transaction volumes of Singapore residential properties are expected to decline for the rest of the year due to the cumulative impact of government measures, CapitaLand, Southeast Asia’s biggest developer, said on October 31.
Physical prices look set to correct and we expect continued share price weakness unless the government removes some of the cooling measures Wilson Liew, Maybank Kim Eng Securities
Singapore – second most-expensive city to buy a luxury home in Asia
Developers are beginning to cut prices in existing and new projects and take lower profit margins, City Developments, Singapore’s second-largest developer, said on November 12. Sales of new private homes could drop to 15,000 units this year from 22,197 in 2012, according to Desmond Sim, associate director at CBRE Research.
Price correction Higher borrowing costs, falling public housing resale prices, slower population growth and a record number of apartment completions suggest that residential demand will wane, Wilson Liew, an analyst at Maybank Kim Eng Securities, wrote in a December 17 note. “Physical prices look set to correct and we expect continued share price weakness unless the government removes some of the cooling measures,” Mr Liew said. Fund managers expect developers to lead declines in Singapore amid a real estate slump and the prospect of higher interest rates. The decline in property stocks pushed the Straits Times Index 0.6 percent lower this year, the only drop among developed markets in 2013. City Developments fell 25 percent this year, making it the second-worst performer
on the Straits Times Index and reversing a 45 percent gain in 2012. CapitaLand declined 18 percent, the third-worst on the measure this year after a 67 percent advance in 2012. Four of the 10 poorest performers on the benchmark were property companies. The Singapore property index, which tracks 50 developers in the city, slid 10 percent this year, after surging 48 percent in 2012. Developers may get a reprieve as the government cut the number of sites it plans to sell in the first half of 2014, according to SLP International Property Consultants, citing its analysis of the data from the Urban Redevelopment Authority. The decrease “could bring some relief to developers who have unlaunched residential projects or projects with substantial number of unsold units,” said Nicholas Mak, executive director of research & consultancy at SLP in Singapore. “The reduction in land supply could be to prevent an oversupply in the private housing market.”
Expanding overseas The developers aren’t just reliant on Singapore. CapitaLand’s holdings in the city-state make up 36 percent of its assets, lower than 39 percent for properties in China, it said
KEY POINTS Singapore property index slid 10 pct this year Developers were the best performers for a decade Home sales may decline 10 pct in 2014 – broker Developers beginning to cut prices
on November 12. For Keppel Land Ltd, Singapore contributed to 41 percent of sales in the third quarter. City Developments, which has a controlling stake in Millennium & Copthorne Hotels Plc, relied on the global hospitality chain for almost half of its sales in the three months through September, outpacing contributions from property development, according to its latest earnings statement. The three companies are still selling homes in Singapore. City Developments said in its earnings statement
its Echelon project that’s a 10-minute drive to the financial district was almost sold out. A 1,572-squarefoot apartment at the development was last sold for S$2.5 million (US$1.97 million) in August, according to government data. The decline in stock prices also made some developers attractive relative with the Singapore market. CapitaLand and Keppel Land trade at 0.8 times their book value, compared with a multiple of 1.4 for the benchmark stock index. City Developments trade at 1.2 times. Of the 24 analysts who cover CapitaLand, 21 have buy recommendations on the stock, according to data compiled by Bloomberg. For Keppel Land, 14 out of 24 analysts have buy calls. Fewer than half of the 25 analysts tracking City Developments advised investors to sell. “We’re not jumping right now in loading up on properties, although we think the weaknesses have been priced in,” said Chong Yoon-Chou, a Singaporebased investment director at Aberdeen Asset Management Asia Ltd, which manages about US$324.6 billion globally. “While valuations have come back to more attractive levels, we haven’t seen the kind of discount back in the crisis years.” Bloomberg News
12 12
December 31, 2013 April 19, 2013
Asia
China, S. Korea fear impact of yen slide on exporters Shinzo Abe’s massive monetary and fiscal stimulus will impact two countries
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hina and South Korea’s anxiety over the rapidly falling yen came to the fore yesterday as senior officials said their exporters could be hurt by Japan’s attempts to pull its moribund economy out of a two-decade slump. Beijing and Seoul understand the need for Tokyo to revive its US$5 trillion economy and escape persistent deflation. But they are worried that the massive monetary and fiscal stimulus championed by Japanese prime minister Shinzo Abe has sharply weakened the yen and put their exporters at a disadvantage in global markets. So far, Chinese and South Korean officials have avoided direct action to maintain competitiveness, such as intervening by buying dollars in currency markets, but there is a risk of a response if their export sectors are severely hampered. “(Japan) will look to keep the economy growing by boosting exports through the yen’s depreciation,” Xu Shaoshi, chairman of China’s National Development and Reform Commission, said at a meeting with the South
Xu Shaoshi met with the South Korean finance minister in Seoul yesterday
Korean finance minister in Seoul. “This is a policy that will affect South Korea and China, and therefore needs to be monitored closely,” Mr Xu said. The yen fell to a fiveyear low against the dollar yesterday, and has plunged
26 percent over the past 15 months. With the Chinese yuan and Korean won both gaining against the dollar this year, the impact has been even more pronounced on the exchange rates between three of the world’s top seven exporting nations.
The yen hit a 15-year low of 5.7533 yuan and a 5-year low of 9.9983 won yesterday. Over the past 15 months, it has weakened by nearly 30 percent against both currencies, Thomson Reuters data shows. South Korean deputy Finance minister Eun Sung‑soo
told Reuters that Seoul was concerned by the yen’s fall at a time when the won was strengthening. One prong of Mr Abe’s policies, known as “Abenomics”, has been to stoke demand to generate inflation. As part of that, the Bank of Japan is increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen to 70 trillion yen (US$570 billion to US$665 billion). Apart from the increased money supply pushing down the exchange rate, Japan’s very low interest rates means investors can borrow funds in yen cheaply and then convert them and invest in other countries – helping further depress the yen. The United States Federal Reserve’s assetbuying stimulus also saw the dollar weaken as funds released by the central bank were invested in emerging economies. China is the world’s largest exporter, Japan the fourth and South Korea the seventh during the first nine months of this year, World Trade Organization data show. Reuters
Indian bank risk rises on bad loans, slower profits Profitability of the nation’s lenders fell to the lowest in at least five years Anto Antony
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he risk to India’s banking industry rose in the six months through September as bad loans surged and profitability slumped, the central bank said. The average gross bad-loan ratio may increase to 4.6 percent of total lending by September 2014 in a “baseline scenario,” the Reserve Bank of India (RBI) said in a financial stability report posted on its website yesterday. The ratio advanced to 4.2 percent as of September 30 from 3.4 percent in March, the report showed. Sour loans at Indian lenders are rising as the South Asian nation’s economy slows and clearances for various infrastructure projects are delayed, the RBI said. The central bank predicts India’s economy will expand 5 percent in the 12 months
through March 31, the same pace as the last fiscal year, which was the weakest in a decade. Profitability of the nation’s lenders, as measured by return on equity, fell to 10.2 percent as of September 30, the lowest in at least five years, due to higher provisions for bad loans and the slowing pace of growth from loan income, the RBI report showed. Return on equity measures the profit generated with shareholders’ funds. The S&P BSE Bankex index, a gauge of 12 banking stocks, has slumped 9.3 percent this year. State Bank of India, the nation’s largest lender, has lost 26 percent and ICICI Bank Ltd has fallen 3.5 percent. The broader S&P BSE Sensex index has gained 9 percent. Bloomberg News
State Bank of India’s stock, the nation’s largest lender, has lost 26 percent this year
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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December 31, 2013 April 19, 2013
Asia
Indonesia sees tin win as blueprint for commodities Country eyes chance to be price setter in global commodity markets
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ndonesia’s bold attempt to challenge the London Metal Exchange (LME) for supremacy in the global tin market by imposing strict export rules and driving up prices looks to be paying off. Shipments from the world’s biggest tin exporter slumped to below 1,000 tonnes in September from over 6,000 tonnes after Jakarta ruled at the end of August that all tin ingot shipments should trade via a local platform, the Indonesia Commodity and Derivatives Exchange (ICDX), before being exported. By November, shipments had recovered to August levels, but tin prices have risen more than 8 percent to US$23,000 a tonne since the endAugust policy move. “By imposing the new tin trade rules we have set a price target at US$25,000-US$29,000 a tonne this year,” Sutriono Edi, head of Indonesia’s Commodity Futures Trading Regulatory Agency, told Reuters. “It’s better for us to export less volume but for higher value and better prices, than export a bigger volume but with low value and low prices.” The stricter trading rules, and subsequent drop in exports, spooked suppliers to some of the world’s biggest electronics companies, including Apple Inc and Samsung Electronics. Neither company responded to emailed requests for comment. Indonesia controls 40 percent of internationally traded tin
and, outside China, supplies up to two-thirds of Asia’s electronics industry with a material used in circuit boards that go into smartphones and tablets. Indonesia hopes the new rules will also deter illegal tin mining and set a blueprint for other commodities where the country is the world’s biggest exporter, such as palm oil, thermal coal and nickel ore, industry and government sources said. It is also home to the mine which holds the world’s biggest gold reserves. “We have the chance to be a price setter for tin,” said Trade minister Gita Wirjawan, a former Goldman Sachs banker who has presidential aspirations. “If the ICDX succeeds in keeping prices up, we can make it the basis for other commodities.” While tin contributes less than 1 percent of Southeast Asia’s biggest economy, it is a test case for a government keen to flex its muscles in global commodity markets. The new rule slashed trade between buyers and sellers who cannot directly agree term deals for 2014. Traders stepped in to fill the gap, but Indonesia’s supply, now under government control, has left some traders uneasy. “There are a lot of customers trying other sources,” said one physical tin trader whose company has signed up to the ICDX. “Maybe what Indonesia wants to see is they strangle the market a bit, then LME stocks start running down and the price goes up.” ‘We have the chance to be a price setter for tin,’ said Trade minister Gita Wirjawan
Reuters
Cyclone shuts down Australia iron ore exports Shipments and rigs halted at world’s biggest exporter
I
ron ore shipments from northern Australia, the world’s biggest exporter, and some offshore oil drilling were halted as a cyclone forecast to bring gusts topping 200 kilometers (124 miles) an hour nears the coast. Tropical cyclone Christine, which intensified to a category 3 storm overnight, is expected to make landfall at around midnight local time between Karratha and Port Hedland on the Pilbara coast of Western Australia, Bureau of Meteorology spokesman Neil Bennett told reporters in Perth. “When you have winds in excess of 200 kilometers per hour you have got a very, very powerful system on your hands,” Mr Bennett said at a news conference. “This one needs to be treated with a great deal of care and a great deal of caution.” Port Hedland, the world’s largest ore-export terminal located about 1,300 kilometers north of Perth, and two other ports halted shipments yesterday as BHP Billiton Ltd said it’s preparing for severe weather across its operations in the region. Australia is set to account
for about 52 percent of global seaborne supply this year, according to Morgan Stanley. “The worst case scenario would be if this came onshore pretty hard, hit the pits and also hit the rail networks,” said Evan Lucas, a Melbourne-based strategist at IG Markets.
Rio, Chevron Iron ore, which rose 1.4 percent to US$134.00 a dry metric ton on Friday, may drop 7.5 percent next year as global supplies gain, according to Australia & New Zealand Banking Group Ltd. Rio Tinto Group, the world’s second-largest iron ore exporter, closed its Pilbara port and rail operations and evacuated workers, spokesman Bruce Tobin said yesterday in an e-mail. Chevron Corp and Woodside Petroleum Ltd are among energy companies that are evacuating workers from operations in the region in advance of the storm. Heavy rainfall and winds with speeds of up to 110 kilometers an hour hit coastal communities around Port Hedland earlier yesterday,
the bureau said. The cyclone poses a “threat to lives and homes” in areas including Port Hedland, South Hedland and Karratha, Western Australia’s Department of Fire and Emergency Services said yesterday in a statement. “Port and rail operations in Port Hedland have been suspended, with tie-
down activities completed. All personnel have safely left,” BHP spokeswoman Fiona Hadley said in an e-mailed statement. Preparations for extreme weather are being made across the company’s sites in the area, she said. Port Hedland exports iron ore from mines owned by BHP and Fortescue
Metals Group Ltd. Fortescue secured its port and rail operations in Port Hedland and closed offices and accommodation villages, spokeswoman Yvonne Ball said yesterday in an e-mail. Staff at the company’s other sites were preparing for the cyclone, she said.
Australia is set to account for about 52 percent of global seaborne supply this year
Bloomberg News
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December 31, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 102.0
69.5 69.3
32.7 32.6
101.6
69.1
32.5 101.2
68.9
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average 69.062
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average 62.55
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Min 62.1
68.7
Max 102.0
average 101.25
PRICE
62.7
25.5
62.5
25.4
62.3
25.3
Max 25.55
average 25.418
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YTD %
(H) 52W
Min 25.25
Last 25.50
7.794022791
106.2200012
(L) 52W
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100.27
-0.04984051
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112.39
0.187199144
7.98424289
112.7999954
96
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282.63
0.362203047
11.47353475
287.259984
243.1999922
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953.75
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6.178680768
960.75
840
4.427
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313.75
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5.246385562
320.0099945
278.0799866
Gold Spot $/Oz
1204.4
-0.7311
-27.6402
1696.2
1180.57
Silver Spot $/Oz
19.6786
-1.9868
-34.6443
32.46
18.2208
1366
-0.6509
-9.9984
1742.8
1294.18
NATURAL GAS FUTR Feb14
Platinum Spot $/Oz
85.56999969
708.95
-0.3654
1.3278
786.5
629.75
LME ALUMINUM 3MO ($)
1810
2.957906712
-12.68692716
2184
1736.25
LME COPPER 3MO ($)
7382
1.359329946
-6.92220401
8346
6602
LME ZINC
2089
0.674698795
0.432692308
2230
1811.75
Palladium Spot $/Oz
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar14
14200
0.282485876
-16.76436108
18770
13205
15.355
0.065167807
#N/A N/A
16.77000046
15.12000084
425.75
-0.409356725
-30.14766202
614
418.5
WHEAT FUTURE(CBT) Mar14
607.25
-0.287356322
-26.99128344
845
600.75
SOYBEAN FUTURE Mar14
1307.5
-0.475737393
-0.551435634
1377.75
1174
COFFEE 'C' FUTURE Mar14
116.45
0.085947572
-27.37761147
172.25
104.1499939
16.45
0.121728545
-20.06802721
20.71999931
15.85999966
CORN FUTURE
Mar14
SUGAR #11 (WORLD) Mar14 COTTON NO.2 FUTR Mar14
25.2
83.97
-0.17831669
5.74234983
90.61000061
76.65000153
COUNTRY MAJOR
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
ASIA PACIFIC
CROSSES
Max 32.65
average 32.481
Min 32.30
Last 32.50
32.3
35.0
34.9
34.8
Max 35.00
average 34.885
Min 34.75
Last 34.85
34.7
World Stock Markets - Indices
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.885 1.6494 0.8923 1.374 105.34 7.9867 7.7543 6.0622 62.06 32.84 1.2689 29.965 44.395 12263 93.199 1.22601 0.83303 8.3295 10.976 144.74 1.03
-0.2255 0.0667 -0.0897 -0.0655 -0.1614 0.005 0.009 0.1171 -0.3464 0 0 -0.01 0 -0.0163 0.0365 -0.0343 0.1104 0.5126 0.4592 -0.1036 0
-14.7235 1.9659 2.5888 4.1698 -18.2647 -0.0438 -0.0477 2.7779 -11.3841 -6.8819 -3.7434 -3.1103 -7.636 -20.1419 -4.1546 -1.5114 -2.114 -1.3446 -4.0598 -21.5352 -0.0097
1.0599 1.6578 0.9839 1.3893 105.41 8.0111 7.7664 6.2492 68.845 32.96 1.2862 30.228 44.82 12281 105.433 1.265 0.88151 8.4957 11.0434 145.69 1.032
0.8821 1.4814 0.88 1.2746 85.67 7.9818 7.7492 6.0607 52.89 28.56 1.2195 28.913 40.54 9603 86.41 1.2064 0.80817 7.8281 10.195 113.2 1.0289
Macau Related Stocks NAME ARISTOCRAT LEISU CROWN RESORTS LT
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
VOLUME CRNCY
4.64
0.6507592
47.30158
5.12
3.11
592490
16.93
0.1182732
58.66916
17.38
10.49
311991
AMAX INTERNATION
1.74
6.748466
24.28572
2.12
0.75
7524650
BOC HONG KONG HO
24.8
-0.4016064
2.904563
28
22.85
2361901 1612000
CENTURY LEGEND
NAME
100.8
Currency Exchange Rates
NAME
METALS
Last 101.4
25.6
Commodities ENERGY
Min 100.9
62.9
62.1
Last 62.6
32.4
0.425
0
60.37737
0.68
0.26
CHEUK NANG HLDGS
7.08
0.2832861
18.197
7.28
5
126000
CHINA OVERSEAS
21.6
-0.9174312
-6.493508
25.6
17.7
19126515
CHINESE ESTATES
24.1
2.335456
114.307
24.5
10.334
176854
CHOW TAI FOOK JE
11.4
-0.8695652
-8.360126
13.4
7.44
2597583
EMPEROR ENTERTAI
3.92
-1.754386
107.4074
4.66
1.85
706000
FUTURE BRIGHT
4.61
5.491991
280.3548
4.8
1.182
10040000
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
16478.41
-0.008919968
25.74965
16529.01
12883.89
NASDAQ COMPOSITE INDEX
US
4156.594
-0.2540327
37.65774
4175.363
2953.518
GALAXY ENTERTAIN
68.95
0.9516837
127.1829
70.4
30
7090500
14.71055
6875.62
5873.43
HANG SENG BK
125.5
-0.07961783
5.728731
132.8
110.6
492267
26
0.5802708
-21.80451
35.3
23.2
478000
84.15
0.2979738
3.505531
90.7
77.85
11083902 12404000
FTSE 100 INDEX
GB
6765.41
0.2153796
DAX INDEX
GE
9589.12
-0.002815612
25.96727
9594.35
7418.36
HOPEWELL HLDGS
NIKKEI 225
JN
16291.31
0.6945449
56.71984
16320.22
10374.85
HSBC HLDGS PLC
HANG SENG INDEX
HK
23244.87
0.007012792
2.59501
24111.55078
19426.35938
CSI 300 INDEX
CH
2299.458
-0.1745187
-8.858429
2791.303
2023.171
TAIWAN TAIEX INDEX
TA
8623.43
1.035613
11.99987
8623.429688
7603.27
MGM CHINA HOLDIN
32.5
KOSPI INDEX
SK
2011.34
0.4524842
0.7155513
2063.28
1770.53
MIDLAND HOLDINGS
3.65 0.315
S&P/ASX 200 INDEX
AU
5356.799
0.6149255
15.22599
5457.3
4632.3
JAKARTA COMPOSITE INDEX
ID
4241.944
0.6874944
-1.731494
5251.296
3837.735
FTSE Bursa Malaysia KLCI
MA
1863.43
0.1273468
10.33069
1867.67
NZX ALL INDEX
NZ
1005
0.06182925
13.93873
PHILIPPINES ALL SHARE IX
PH
3614.32
0.32727
-2.288737
HUTCHISON TELE H
2.99
1.013514
-16.01123
4.66
2.5
LUK FOOK HLDGS I
29.1
-1.355932
19.2623
31.5
16.88
686400
MELCO INTL DEVEL
28.35
0.5319149
214.6504
29.15
8.9
1512000
0.619195
144.7606
33.3
13.146
1604311
-1.351351
-1.351353
4.29
2.68
2080800
-3.076923
107.2368
0.4
0.131
47093000
NEPTUNE GROUP NEW WORLD DEV
9.78
0.204918
-18.63561
15.12
9.67
7702577
SANDS CHINA LTD
62.6
0.886382
84.3888
65.9
33.5
5854782
1597
SHUN HO RESOURCE
1.65
0
17.85714
1.92
1.33
10000
1048.998
879.821
SHUN TAK HOLDING
4.58
0.6593407
9.307874
4.8
3.27
2487500
4571.4
3440.12
SJM HOLDINGS LTD
25.5
0.990099
43.68093
28
17.04
3100165
SMARTONE TELECOM
8.88
-2.310231
-36.93182
14.46
7.38
2823269
WYNN MACAU LTD
34.85
0
66.34844
36.9
19
1702600
ASIA ENTERTAINME
N/A
N/A
N/A
N/A
N/A
0
-0.09061489
72.62358
78.5999
43.6
137773 22520
Euromoney Dragon 300 Index Sin
SI
606.43
0.7
-2.36
NA
NA
STOCK EXCH OF THAI INDEX
TH
1298.71
-0.7451508
-6.697182
1649.77
1260.08
HO CHI MINH STOCK INDEX
VN
500.35
-1.196659
20.93636
533.15
408.32
BALLY TECHNOLOGI
77.18
Laos Composite Index
LO
1253.33
-0.7341993
3.174258
1455.82
1214.77
BOC HONG KONG HO
3.22
1.577287
4.885996
3.6
2.99
GALAXY ENTERTAIN
8.84
-0.5624297
122.67
9.15
3.89
52753
17.66
-0.0565931
24.6295
21.2
13.5801
1692432
JONES LANG LASAL
102.31
-0.1853659
21.88468
102.985
80.86
142279
LAS VEGAS SANDS
78.24
-0.6223803
69.4974
79.25
44.45
2752990
MELCO CROWN-ADR
38.93
-0.2562132
131.1758
39.42
16.15
1461254
MGM CHINA HOLDIN
4.08
0
133.104
4.2
1.7651
7100
MGM RESORTS INTE
23.15
-0.3872633
98.88316
23.5
11.32
3449835
SHFL ENTERTAINME
23.19
#N/A N/A
59.93103
23.25
13.88
344231
SJM HOLDINGS LTD
3.23
-2.416918
41.81495
3.6
2.2
20198
191.25
0.1099246
73.13675
191.8999
107.165
587479
INTL GAME TECH
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
Hang Seng Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AIA GROUP LTD
30.2
1.003344
16574881
CHINA UNICOM HON
13.68
1.333333
22775492
ALUMINUM CORP-H
3.61
0
15433022
CITIC PACIFIC
10.12
0.1980198
6468988
BANK OF CHINA-H
3.15
1.286174
329406866
BANK OF COMMUN-H
5.87
0.8591065
37793438
29
0.1727116
14.5
BANK EAST ASIA BELLE INTERNATIO
NAME
CLP HLDGS LTD
NAME
PRICE
DAY %
64.4
0.625
2568679
SANDS CHINA LTD
28.75
-0.1736111
6213954
SINO LAND CO
14.28
0.990099
7686664
SUN HUNG KAI PRO
109.1
1.018519
8616634
93
-0.4815409
2456828
265.6
1.45149
2048509
23.9
0
2206357
10
0.8064516
5926157
52.75
1.05364
3208615
POWER ASSETS HOL
65.6
0
1561243
CNOOC LTD
16.32
0.4926108
46287676
1260442
COSCO PAC LTD
11.76
0
3138217
SWIRE PACIFIC-A
0
7192500
ESPRIT HLDGS
12.44
-0.48
4211743
TENCENT HOLDINGS
24
0.2087683
10140777
HANG LUNG PROPER
26.55
-0.1879699
7812341
TINGYI HLDG CO
CATHAY PAC AIR
13.78
0.2911208
3140232
HANG SENG BK
119.7
0.167364
1690249
WANT WANT CHINA
CHEUNG KONG
114.9
1.23348
3918568
HENDERSON LAND D
57
2.059087
5880582
WHARF HLDG
75.55
0.1325381
701703
20
1.112235
6329376
125.6
3.54493
9625332
76.5 -0.06531679
9291476
BOC HONG KONG HO
CHINA COAL ENE-H
7.7
-0.1297017
40174849
CHINA CONST BA-H
5.87
1.206897
202072100
CHINA LIFE INS-H
22.9
0.4385965
30126882
CHINA MERCHANT
25.6
0.3921569
4209584
CHINA MOBILE
HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC
85.45
1.064459
16569813
HUTCHISON WHAMPO
CHINA OVERSEAS
20.2
-0.2469136
19374736
IND & COMM BK-H
CHINA PETROLEU-H
8.36
0.9661836
101198904
CHINA RES ENTERP
25.2
0.8
77.35
1.243455
6697663
5.17
1.372549
317570965
LI & FUNG LTD
12.84
-0.9259259
17517410
4219717
MTR CORP
29.85
1.530612
4880670
MOVERS
15
32
VOLUME
3 23354
INDEX 23244.87 HIGH
23353.54
LOW
23036.96
CHINA RES LAND
17.16
1.179245
6849146
NEW WORLD DEV
12.98
1.564945
12528960
52W (H) 24111.55078
CHINA RES POWER
16.08
-0.618047
7490964
PETROCHINA CO-H
10.94
-1.263538
64234127
(L) 19426.35938
CHINA SHENHUA-H
33.35
-0.1497006
11160228
PING AN INSURA-H
63.35
1.198083
8338502
23036
24-December
30-December
15 15
December 31, 2013 April 19, 2013
Opinion Business
wires
Thailand’s silent coup
Leading reports from Asia’s best business newspapers
China Daily China’s top government auditor pledged to keep a close eye on the levels of debt and spending to ensure the country’s fiscal stability. Liu Jiayi, head of the National Audit Office, said that his office will track the potential risks of accumulated debt and how they are dissolved, while checking how new debt is used. The office will also audit officials in “key regions, key departments, key agencies and key posts” at least once during their terms, and conduct checks of government spending on conferences, meetings and office buildings, he added.
Sin-ming Shaw
Former fellow at Oxford University, is an investor based in Asia and Argentina
Thanh Nien Daily Vietnam’s Prime Minister Nguyen Tan Dung said that executives of stateowned enterprises (SOEs) who throw a spanner in privatisation works meant to restructure the state sector should be sacked. The process of selling shares of SOEs has slowed down significantly in recent years after more than 800 were equitized in 2004-05. The number dropped to 13 in 2012 and three this year. Equitisation is the term Vietnam uses to describe the process of issuing shares to partially privatise stateowned businesses in which the government will still hold the majority stake.
Times of India The Reserve Bank of India has no plans to come up with a regulatory framework for Bitcoins, the virtual currency, which has risen sharply in value in the past few months, a top official said. “Regulation comes only when people are doing certain business and we come to understand that something wrong is happening. First of all we don’t understand this subject,” RBI deputy governor KC Chakrabarty said. “But at present what we are saying is neither we regulate them nor we support them,” he said.
Myanmar Times Myanmar pro-democracy leader Aung San Suu Kyi’s opposition party vowed to contest crucial elections in 2015 even if the constitution is not amended first to allow her to become president. The military-drafted charter blocks anyone whose spouse or children are overseas citizens from leading the country – a clause widely believed to be targeted at the Nobel laureate whose two sons are British. The constitution also ring-fences a quarter of the seats in parliament for unelected military personnel.
T
hailand is once again being convulsed by extreme partisan politics, with the country’s polarisation playing out on Bangkok’s streets. Several people have been killed, and many more have been injured. The sense that Thailand has been through all of this before would be mildly reassuring were it not for a nagging fear that this decent and prosperous society may be set to destroy its democracy. Much of the violence has been led by Suthep Thaugsuban, a former deputy prime minister. He has inspired thousands of demonstrators, many from his power base in the country’s south, to storm and occupy government buildings with the aim of unseating Prime Minister Yingluck Shinawatra, the sister of exiled former Prime Minister Thaksin Shinawatra. Suthep says that this is the first step in rooting out “Thaksinism” from the country’s political life. On December 1, Suthep demanded – and received – a meeting with Yingluck in the presence of Thailand’s military chiefs, whom he had asked to “guarantee” his safety. During the meeting, Suthep gave Yingluck a two-day deadline to resign. With the police failing to control the mobs in the streets without the help of the military, Yingluck decided to resign and dissolve parliament, declaring that she would lead a caretaker government until a new election is held on February 2. The date was endorsed by a “reform forum,” established to resolve the crisis and comprising Bangkok’s elite (including the military). Suthep and his followers were dissatisfied, and left the forum in protest, rejecting
Yingluck even as an interim prime minister and demanding that the election be held after political reforms – the sort he would agree with – are implemented to eliminate all vestiges of the Thaksin clan from government.
‘People’s council’ In fact, Suthep has called for a “people’s council,” comprised of 400 unbiased representatives. The council would replace the Senate after the upper house nominates a new leader to be appointed by the King, thus obviating the need for elections in the near future. Wassana Nanuam, the militaryaffairs correspondent of the English-language daily Bangkok Post, has described the move as a “silent” coup d’état: no tanks in the streets. The Democrat Party, led by the former court-appointed Prime Minister Abhisit Vejjajiva, has separately announced a boycott of the February 2 election on the grounds that the party could not reform the country even if it participated. The Democratic Party last won a parliamentary majority in 1992. While the military chiefs’ inclinations have been with Bangkok’s elites, they are being careful to keep their options open. Their unsuccessful stint in power following the military coup in 2010 appears to have taught them that they should wait to see if their political allies can break Thaksin’s electoral stranglehold, which has lasted 12 years and five general elections, before deciding what to do next. Bangkok’s elites maintain that the billionaire Thaksin and his allies have bought their electoral victories. But Freedom House,
Thaksin’s supporters miscalculated in assuming that they could so easily abuse their parliamentary majority
which tracks democracy and civil rights around the world, declared Yingluck’s landslide electoral victory in 2011 free and fair, a position supported by most Thailand experts. Despite Thaksin’s corrupt image, a majority of mainly poorer Thais see him as their only alternative to the country’s out-of-touch urban elites.
Far from over Indeed, Suthep’s insistence on delaying the election is an open admission that he and his allies cannot win a fair contest, and he has even gone so far as to suggest that, with the “right” leader, Thailand may not need elections at all in the future. Nor is it clear that any reforms would satisfy the anti-Thaksin camp, except for those designed to deny Thaksin’s followers a parliamentary majority. That said, Thaksin and his sister bear some responsibility for their recent misfortunes. Guilty
of excessive hubris, their ability to empathise with the peasants and the urban poor is matched only by their disregard for the urban middle class and its members’ demand for clean government and rule of law rather than populism. Yingluck must also take some blame for her clumsy handling of the current crisis. What ignited the protests was her attempt to amend an amnesty bill, originally intended as a grudging act of reconciliation between the country’s opposing “red” and “yellow” political camps. But, while the amnesty was to apply to lesser crimes committed from 2006 to 2011, Yingluck tried to extend it two years earlier and include capital crimes – a move rightly seen as a blatant attempt to absolve her brother and pave the way for his return to Thailand. Thaksin’s supporters miscalculated in assuming that they could so easily abuse their parliamentary majority. Their effort to manipulate the amnesty, though not unconstitutional, was nonetheless arrogant and provocative. Anger erupted among Bangkok’s middle classes, prompting Suthep to unleash his mobs. The story is far from over. If recent history is any guide, the February election (assuming it is held) will sweep Thaksin’s allies back to power. What follows will be fraught with risks of further instability, as poor rural Thais face off against wealthy urban elites, and polarisation intensifies between the north, where most people live, and the southern power base of the Democrat Party and Suthep, the street mobs’ leader. © Project Syndicate
16 16
December 31, 2013 April 19, 2013
Closing Chinese local govts owe nearly US$3 trillion Xi Jinping in charge of pushing through reforms China’s local governments are carrying debt of nearly US$3 trillion, a report released yesterday revealed, a load that is smaller than the most dire market forecast but which still shows fiscal stresses are a key source of risk. The National Audit Office, China’s state auditor, said local governments had outstanding debt of 17.9 trillion yuan (US$2.95 trillion) at end-June. The debt total is the first China has reported since 2010, the last time it did a comprehensive audit of its state finances. At that time cumulative localgovernment debt was estimated at 10.7 trillion yuan.
Chinese President Xi Jinping will head a group steer economic and social reforms, the official Xinhua news agency said yesterday, underscoring his determination to push through change. China last month unveiled its boldest set of reforms in nearly three decades. The Communist Party said it would set up the group to steer the changes. The announcement that Mr Xi will take personal charge means the team will be more powerful than the State Commission for Restructuring the Economy. The move could ease market fears of resistance from vested interests, such as powerful state-owned companies.
Govt to keep running Reolian’s buses Court rules to suspend seizure of bankrupt bus operator’s assets Tony Lai
tony.lai@macaubusinessdaily.com
T
he government will sign a lease contract “in the next few days” with the courtappointed administrator of bankrupt bus operator Reolian Public Transport Co Ltd to continue using its assets, namely its buses. The move is to ensure bus services run normally, the cabinet of Secretary for Transport and Public Works Lau Si Io told Business Daily. The administration took over the operations of Reolian in October, when the company filed for bankruptcy. In a dispatch published in yesterday’s Official Gazette, Chief Executive Fernando Chui Sai On authorises Mr Lau to sign a lease agreement with the bankrupt estate of Reolian. “After the court declared the
bankruptcy of Reolian earlier this month… the government has to sign this agreement to continue to use the vehicles, workers and equipment of Reolian,” said a spokesman for Mr Lau’s cabinet. “This ensures the bus service of Reolian will not be halted,” the person added. “The deal will be signed very soon, in the next few days,” said the spokesman. Reolian filed for bankruptcy in October after it ran out of money to pay its employees. A court declared it so on December 4 after creditors failed to reach a deal to salvage the firm. Reolian’s bus service continued after the government asked the court for interim permission to use the company’s assets. Yesterday’s notice means the court
has approved the government’s formal application to avoid the asset seizure. Informed sources said earlier this month that Reolian’s assets were estimated at 80 million patacas (US$10 million) while it has debts
of over 160 million patacas. Reolian runs two-fifths, or 27, of the city’s bus routes and has more than 500 employees, the Transport Bureau has said. T.L.
London home prices to lead gains again Mismatch between supply and demand will persist in 2014, says report Fergal O’Brien
U
London homes prices jumped 9.1 percent this year
nited Kingdom house prices rose in December and will extend gains in 2014, led by London and southeast England, Hometrack Ltd said. Values across England and Wales increased 0.5 percent from November, the London-based property researcher said yesterday. In 2013, prices jumped 4.4 percent, rebounding from a 0.3 percent decline the previous year. London and the southeast registered the highest growth, up 9.1 percent and 5 percent respectively. Prices in northern England fell 0.5 percent. “The strongest market conditions and impetus for price inflation is set to remain focused on southern England,” Hometrack said in a statement. “A broader-based recovery in the housing market is dependent upon growth in the real economy, jobs and household incomes.” The mismatch between supply and demand that helped to drive prices higher this year will persist in 2014,
according to Hometrack. It said the market is also supported by the government’s Help to Buy program, which is aimed at helping homebuyers with small down payments. In 2013, demand rose 25 percent, the fastest in three years, while the supply of homes for sale increased 6 percent, the slowest pace in the 12 years Hometrack has been recording the data. The revival in the property market prompted the Bank of England to step in last month to cool momentum, and Governor Mark Carney has said policy makers are monitoring the situation. Mortgage lender Halifax has forecast that home values will increase between 4 percent and 8 percent next year. There is “little current sign of the excessive behavior associated with a house price bubble,” Halifax said on December 23. “The authorities are also on guard to take action in the event of signs of overheating.” Bloomberg News