Macau business daily, Feb 19, 2014 by Business Daily

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make borrowing easier for SMEs. business daily 1 Some members of the assembly have doubts about the usefulness of the schemes. But the assembly’s second standing committee chairman, Chan Chak Mo, defended the policy. “I don’t think these two schemes will lead to any abuse,” he said. “How much SMEs apply for under the schemes depends on their own resources,” he added. More on page

Year II

Number 479 Wednesday February 19, 2014

Publisher: Paulo A. Azevedo

Closing Editor: Michael Grimes

Building firms T piling up credit guarantees

he small- and medium-sized enterprise sector locally with the healthiest order books – consisting of Macau construction companies – is the greatest beneficiary of zero-interest government loans. The news emerged yesterday after a closed doors meeting at the Legislative Assembly to discuss the administration’s SME Credit Guarantee Scheme and the SME Credit Guarantee Scheme Designated for Special Projects. Both are meant to

Friday April 19, 2013

www.macaubusinessdaily.com

Lower smartphone sales cut CTM’s turnover

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ower revenue from fixed-line services and from smartphone sales cut the annual turnover of Companhia de Telecomunicações de Macau SARL (CTM) by nearly 4.5 percent last year, its parent company says. Last week Macau market rival SmarTone Mobile Communications (Macau) Ltd reported its first loss on operations here in four years, citing lower revenue from roaming charges following an industry-wide cut in carriage prices. CTM’s parent company, Citic Telecom International Holdings Ltd, yesterday confirmed that CTM – Macau’s former monopoly operator and still the dominant carrier – has applied to the government to renew its 3G mobile communications licence. The current one is due to expire halfway through next year, and is confident of acquiring a next generation 4G licence soon. Page

Hang Seng Index 22596

22567

22538

22509

22480

22451

February 18

HSI - Movers

Name

Foggy weather Portuguese Vitasoy recalls brings delays to real estate half million more than 80 ferries promoted in Macau lemon teas Foggy weather disrupted some of the city’s sea and air traffic yesterday as visibility plunged to zero at times, says the government. A spokesperson of the Marine and Water Bureau told Business Daily that 82 ferry trips from the Outer Harbour Ferry Terminal on the peninsula and at the Taipa Temporary Ferry Terminal were delayed yesterday. The average delay for the 60 affected ferries in the peninsula was about 70 minutes. Page

A Portugal property roadshow will travel to Macau on March 18 to market the country to Chinese investors. The continued growth of private investment in the luxury real estate sector in Portugal led the Portuguese Industrial Association to organise a mission to China. For this year, and based on figures from the beginning of 2014, inward property investment is expected to total almost 500 million euros (5.49 billion patacas). Page

Hong Kong drink maker Vitasoy International Holdings Ltd is recalling 500,000 cartons of lemon tea distributed in Macau and Hong Kong because of a “taste deviation”. Vitasoy said that the 250 ml cartons of original-flavour VITA Lemon Tea being recalled bore “best before” dates of December 22, 2014, or December 27, 2014.The company said it voluntarily begun recalling them yesterday. Macau shopkeepers that sold the drink will refund buyers. Page 16

%Day

BANK EAST ASIA

2.96

AIA GROUP LTD

1.90

CHINA RES POWER

1.88

GALAXY ENTERTAIN

1.53

SANDS CHINA LTD

1.48

CHINA SHENHUA-H

-0.93

CHINA COAL ENE-H

-0.98

CHINA OVERSEAS

-1.16

CATHAY PAC AIR

-1.28

CHINA PETROLEU-H

-1.32

Source: Bloomberg

I SSN 2226-8294

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February 19, 2014 Friday April 19, 2013

Macau

CTM – still the dominant telco in Macau (Photo: Manuel Cardoso)

Lower smartphone sales cut CTM turnover by 4.5 pct Telco applying to renew its 3G portable telecoms licence before it expires next year Tony Lai

tony.lai@macaubusinessdaily.com

Dominant player CTM’s parent company, Citic Telecom International Holdings Ltd, yesterday confirmed that CTM – Macau’s former monopoly operator and still the dominant carrier – has applied to the government to renew its 3G mobile communications licence. The current one is due to expire halfway through next year, and is confident of acquiring a next generation 4G licence soon. CTM chief executive Vandy Poon Fuk Hei said – in press conference in Hong Kong yesterday to discuss Citic’s overall 2013 results – that the Macau government intended to issue licences for 4G services this year. Business Daily asked Macau’s Bureau of Telecommunications Regulation about the progress of the application, but the regulator had failed to reply by the time we went to press. Citic Telecom told the Hong Kong Stock Exchange yesterday that CTM’s

turnover had been HK$4.56 billion (US$588.3 million) last year, 4.5 percent less than in 2012. “The decrease was mainly due to the decline in sales of smartphones,” Citic Telecom said. Revenue from sales of telecommunication equipment slipped by 7.7 percent to HK$3 billion. Lower revenue from fixed-line telecommunications, which fell by 18.4 percent to HK$428.5 million, also reduced turnover. “The decrease was in line with the worldwide trends of declining fixed IDD traffic volumes, and the fixed residential lines are gradually being replaced by the mobile services,” Citic Telecom said. The parent company said the completion of new hotels in Macau last year had prevented CTM’s revenue from fixed-line services from falling further. CTM’s adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) were nearly HK$734.8 million. Citic Telecom gave no comparative figure for adjusted EBITDA in 2012, as it became the majority shareholder in CTM only last June, when it increased its stake to 99 percent from 20 percent. The parent company gave no net profit figure for CTM, either. CTM’s net profit in 2012 was 969.3 million patacas (US$121.2 million), the biggest it had made up to that point. CTM declined to give Business Daily any more information about its financial performance last year.

CTM’s rival in the mobile telecommunications market, SmarTone Mobile Communications (Macau) Ltd, reported last week a loss of HK$9.3 million for its financial first half ended December 31.

to HK$1.06 billion because of its takeover of CTM. The price of Citic Telecom stock rose by over 10.1 percent to close at HK$2.61 yesterday after the company announced its results.

Still biggest Citic Telecom said CTM had had 47 percent of the mobile telecommunications market last year, once again keeping the biggest single share. CTM’s mobile telecommunications services had 281,768 post-paid subscribers at the end of the year, 3.5 percent more than a year earlier. The company’s average revenue per user rose by 17 percent to HK$118. Citic Telecom chairman Xin Yuejiang told the stock exchange: “Macau will sustain rapid economic growth as inbound tourists will continue to drive massive demand for cross-border and local communication, while the development of Hengqin Island in Zhuhai will also present CTM with new opportunities.” Macau had 29.3 million visitors last year, 4 percent more than in 2012, official data show. “We will also drive the integration of the ‘triple play’, namely the provision of multiple interactive services,” Mr Xin said. He said CTM was aiming to connect all residential buildings to its optical-fibre network this year. Citic Telecom’s annual net profit rose by over 131 percent last year

Macau’s inbound tourists will continue to drive massive demand for cross-border and local communication Xin Yuejiang , Citic Telecom chairman

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February 19,19, 2014 Friday April 2013

Macau

Building sub-contractors main takers for credit guarantees Those who need the least help in Macau’s construction boom get the most public support Tony Lai

tony.lai@macaubusinessdaily.com

he small-and medium-sized enterprise sector locally with the healthiest order books – consisting of Macau construction companies – is the greatest beneficiary of zero-interest government loans. The news emerged yesterday after a closed doors meeting at the Legislative Assembly to discuss the administration’s SME Credit Guarantee Scheme and the SME Credit Guarantee Scheme Designated for Special Projects. Both are meant to make borrowing easier for SMEs.

I don’t think these two schemes will lead to any abuse Legislator Chan Chak Mo

Between 2003 and the end of last year banks made 436 loans amounting to 699.3 million patacas (US$87.4 million) to borrowers that made use of the schemes, data from Macau Economic Services show. The SME Credit Guarantee Scheme guarantees 70 percent of a five-year interest-free loan, up to a maximum amount guaranteed of 3.5

million patacas. The government tabled a bill in the Legislative Assembly this year which would raise the limit on the total amount that can be guaranteed by the SME Credit Guarantee Scheme to 900 million patacas from 500 million patacas. The government said during the first reading of the bill that it was seeking to increase the limit because the amount of lending guaranteed so far was nearing the present ceiling. But some members of the assembly have doubts about the usefulness of the two schemes. The assembly’s second standing committee is handling the bill. The committee chairman, Chan Chak Mo, said yesterday after a closed doors discussion at the Legislative Assembly that the schemes had begun in 2003 – a time of crisis for the city’s tourism industry, when people stayed away following the severe acute respiratory syndrome outbreak in neighbouring Hong Kong. Mr Chan told reporters after members of his committee had met: “Some are doubtful whether these [subsidies] should continue, as the economy has become so much better, and whether the SMEs still need help.” Mr Chan, who is also managing director of restaurant operator Future Bright Holdings Ltd, defended the schemes. “I don’t think these two schemes will lead to any abuse,” he said. “How much SMEs apply for under the schemes depends on their own resources,” he said. Mr Chan said that even if an SME failed to repay a loan, the government would try to get back the amount guaranteed unless the enterprise was bankrupt.

The government said last month that only two borrowers had failed to repay loans. A study commissioned by the Macau SMEs Association last year found that over 70 percent of SMEs had no sources of finance other than their own savings, while the rest had access to bank loans, government loans or the equity market. Business Daily’s own calculations indicate that banks lent SMEs in the construction industry 179.3 million patacas of the total. Banks lent SMEs

Foggy weather delays over 80 ferries F

oggy weather disrupted some of the city’s sea and air traffic yesterday as visibility plunged to zero at times, says the government. A spokesperson of the Marine and Water Bureau told Business Daily that 82 ferry trips from the Outer Harbour Ferry Terminal on the peninsula and at the Taipa Temporary Ferry Terminal were delayed yesterday. The average delay for the 60 affected ferries in the peninsula was about 70 minutes. There was an average 45-minute hold up for the 22 affected ferries at Taipa, the

in the construction sector 54.1 million patacas last year alone. Between 2003 and the end of last year banks lent SMEs in the retailing industry 125.2 million patacas. Banks lent SMEs in the wholesaling industry 123.2 million patacas. The SME Credit Guarantee Scheme Designated for Special Projects guarantees the full amount of loans up to 1 million patacas. The limit on the total amount that can be guaranteed by the scheme is 100 million patacas.

spokesperson said. The government implemented special safety measures for the waterways near the two terminals; namely single sea lane ferry movements to and from the terminals, instead of the normal two-lane travel in and out of the harbours. The measures were in place for 16-and-half hours until 1.45pm yesterday, said the bureau’s spokesperson. According to the bureau’s regulations, such measures only come into force when visibility at sea drops below 0.5 nautical miles. Public broadcaster TDM also quoted the airport operator saying three inbound flights to Macau yesterday had temporary stopovers elsewhere due to the weather. The Meteorological and Geophysical Bureau told TDM the fog was due start dispersing from yesterday evening thanks to strong winds from the north. T.L.

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Macau Heritage Law in effect next month Macau’s first Cultural Heritage Protection Law comes into effect on March 1, and includes several provisions that will fall under the competences of the Land, Public Works and Transport Bureau. The bureau along with the Cultural Affairs Bureau have held information sessions so that employees can familiarise themselves with the legal diploma. More information sessions, this time open to the general public, are scheduled to take place at 3pm Sunday at the Macao Museum. Legislators passed the bill in August last year. This is the first time a new heritage law comes into effect in the last 29 years.

Hotel prices a barrier to Taiwan visitors

Pricey Macau a hard sell for Taiwan An open skies pact is not the whole answer to attracting more trippers across the Taiwan Strait says industry source Stephanie Lai

sw.lai@macaubusinessdaily.com

mproved air links by themselves won’t encourage more Taiwanese tourists to Macau says an airline manager, speaking shortly after a new air services agreement between the two jurisdictions. Value for money is an important factor and at the moment Macau

is quite a hard sell, suggests the executive, who spoke on condition of anonymity. “The drop in visitors from Taiwan is mainly because hotel room rates here are too high, and the tourism industry has to come up with attractive packages,” said

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the person on the sidelines of the signing ceremony. “Also, because of the depreciation of the yen and more tourism promotion last year, many Taiwan tourists opted to go to Japan instead,” he said. “Even now, Japan is still a very popular option for Taiwan tourists.” “We have yet to see how the open skies deal will create new sources of custom, and at this point it’s hard to say that fares will definitely fall,” the manager said. The number of people from Taiwan visiting Macau has fallen for the past two years, official data show. Last year the number was just over 1 million, 6.7 percent fewer than in 2012. In 2011 the number was over 1.2 million. One of those hoping to benefit from the new deal is TransAsia Airways. But the Taiwan carrier says it has no immediate intention of competing on fares. TransAsia Airways told Business Daily that it expected more competition on Macau-Taiwan routes. The airline said it would cooperate more closely with Macau resort operators in offering flight and hotel packages to attract more passengers. But it said it had no plans for big changes in its fares or flight frequencies. “We’ll be observing the market dynamics to see how we can reinforce

our promotions of flight fares, but we’re not making any major adjustments in our fares now,” a spokeswoman for TransAsia Airways said. “We also have no plan to add more flights.” The open skies agreement allows airlines to carry unlimited amounts of passengers and freight between Macau and Taiwan, and allows more airlines to do it. It was not immediately clear when the agreement will come into effect. TransAsia Airways has 37 flights a week between Macau and Taiwan. The director of the Civil Aviation Authority of Macau, Simon Chan Weng Hong, told reporters on Monday that the authority had received no new requests from Macau or Taiwan airlines to put on more flights between here and the island.

6.7%

Y-o-y fall in visitors from Taiwan in 2013

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Macau Portuguese President to visit Macau Portuguese President Aníbal Cavaco Silva is set to visit Macau some time in May, Rádio Macau reported yesterday. The date is yet to be confirmed with Beijing. However this will be his first visit in 20 years. According to Rádio Macau, the Portuguese President wishes to visit Macau before his term in office ends. Mr Cavaco Silva was first elected President on January 22, 2006, and re-elected on January 23, 2011, for a second five-year term. On April 13, 1987, the Portuguese President and then Chinese Premier Zhao Ziyang signed the Joint declaration of the Government of the People’s Republic of China and The Government of the Republic of Portugal on the question of Macau. The declaration established that Macau was a Chinese territory under Portuguese administration and set December 20, 1999 as the handover date.

China-Lusophone trade up by 2.3pct in 2013 Trade between China and Portuguese-speaking countries totalled US$131.4 bln

ommercial trade between China and Portuguesespeaking countries totalled US$131.4 billion in 2013, an increase of 2.3 percent over the previous year. The latest statistics from China Customs show that last year China imported 0.04 percent more goods from Portuguese-speaking countries totalling US$87.4 billion, while China exports rose by 7.1 percent

to US$44 billion. Meanwhile, between January and November 2013 trade between China and Portuguese-speaking countries reached US$119.2 billion, an increase of 1.25 percent. China imported goods from Portuguese-speaking countries totalled US$76.6 billion, a slight decrease of 1.2 percent, while China exports totalled US$39.6 billion, an increase of 6.8 percent, in the first

11 months of the year. In the month of November alone, trade was of US$10.1 billion, a decrease of 3.7 percent over that of the previous month. Still in November, China imports totalled US$6.05 billion, a drop of just under 13 percent over that of the month of October. China exports, on the other hand, registered an increase of 15.2 percent to reach US$4.1 billion.

In December 2013, trade between China and Portuguesespeaking countries rose 21 percent to US$12.3 million over November figures. China imported goods worth US$7.9 billion, an increase of about 30 percent. China exported goods to Portuguese-speaking countries were up by 7.9 percent to US$4.4 billion. S.F

Sasol Ltd gas pipeline in Mozambique

Non-metallic mineral production up 18.6 pct in 2013 But the manufacturing of apparel was down 37.9 pct last year

acau’s cement and concrete factories were busier last year with the manufacture of non-metallic mineral products. Overall industrial production was down 1.1 percent in the last quarter of 2013 over that of the previous quarter, figures from the Statistics and Census Service show.

This left the industrial production index at 64.9 points. The manufacturing sector took up most of the production index at 95.1, and according to the figures, it also increased by 3.9 percent over the previous quarter. This was mainly due to a 16.3 percent increase in the index

of manufacture of other nonmetallic mineral products to be used in the number of on-going construction projects. The manufacture of tobacco, which rose to a five-year high in the second quarter of 2013, was down by 14.8 percent for the whole yearly production.

The manufacture of food products and beverages was slightly up by 1 percent in the fourth quarter of 2013, over the previous quarter. However, throughout the whole of 2013, the production of food and beverages was up by 9.2 percent over that of the previous year. S.F.

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Macau Brought to you by

HOSPITALITY Guests rising The number of guests in the region’s hotels has risen steadily since 2009. From that year until the end of 2013, the total number of guests staying in all categories of hotels and guesthouses rose by 58 percent. That rise is the equivalent of a 12.3 percent annual average growth rate. It’s a value that, if kept, would allow the number of guests to almost double every six years. Most guests in 2013 came, as usual, from the mainland. Their number has, in the period shown, risen by 92.5 percent. As a result of these trends, the number of guests coming from China alone in 2013, a figure close to 6.4 million guests, was almost equal to the total number of guests in 2009, when this one stood at just over 6.7 million guests.

Safe as houses – Portugal property

Portuguese real estate promoted in Macau Lure of residency visa for PRC citizens a major draw for investors

Hong Kong comes a very distant second. The gap with the mainland increased noticeably in the period. In 2009 hotels registered 1.6 million guests from Hong Kong. Their number rose slowly since and reached just a little over 1.7 million guests in 2013. Those figures mean that while in 2009 there was about one Hong Kong guest for each mainland guest, in 2013 that relationship had increased to just one per 3.6 guests. In the third place as a source of guests is Macau itself. Its contribution is increasing in both absolute and relative terms. In those years, the number of residents checking in the local hotels more than doubled, resulting in an average growth rate just below 20 percent per year. The fastest growing source of guests was, however, South Korea. The number of guests from that country rose almost 2.7 times in the same period.

17,314

Average daily number of mainland guests checking in the local hotels, 2013

Portugal property roadshow will travel to Macau on March 18 to market the country to Chinese investors. The continued growth of private investment in the luxury real estate sector in Portugal – a significant proportion of the country’s foreign direct investment – led the Portuguese Industrial Association (AIP) to organise a mission to China, reports MacauHub.com. The driver behind private Chinese investment in Portugal is obtaining so-called golden visas. They provide residency permits valid across the European Union’s Schengen visa area to those investing more than 500,000 euros in real estate. This scheme has caught the attention of real estate agencies and law firms in both countries as well as of other companies specialising in property searches. The Macau leg of the property roadshow will meet with local businesspeople, and present reciprocal investment opportunities. Before that, there will be a China Portugal Property and Investment Roadshow in Shanghai from March 14 to 17. It’s organised by AIP Foundation, via its fairs and congress arm, AIP – Feiras, Congressos e Eventos. It will feature at the Portugal Pavilion at the 10th Shanghai Overseas Property & Investment Immigration Show.

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The Construction and Real Estate Federation of the Portuguese-speaking countries; the Luso-Chinese Chamber of Commerce; and Portugal’s foreign trade and investment agency AICEP also support it.

Secure investment Described on real estate news website Diário Imobiliário as “one of the most important events in China to attract Chinese direct investment in this sector,” the Shanghai event will have “around 12 Portuguese companies representing the best of the real estate/tourism sector in Portugal” according to the organisers. The mission is scheduled to end on March 19 in Hong Kong after a meeting with local businesspeople at the Clube Lusitano and the European Union representative office in Hong Kong. “The Chinese market and the French market are those that have most looked to Portugal as a secure and profitable investment opportunity, and this is why they were the two markets chosen as strategic destinations for the internationalisation of the Portugal Real Estate Salon,” said Luís Lima, the chairman of its Strategic Council. The Portuguese Real Estates Salon (SIL – Salão Imobiliário de Portugal 2014) will be held from October 8 to 12 in Lisbon.

500 mln euros

Amount of FDI Portugal could earn from property this year

The 2013 edition of the Salon was attended by around 100 European investors, investors from China and the Community of Portuguesespeaking Countries (CPLP), which led to 750 meetings with over 150 Portuguese businesspeople. Portuguese real estate prices recovered in 2013 following downturns in previous years. The golden visa scheme was a driver of that recovery, bringing in more than 300 million euros (3.28 billion patacas) of investment, mainly from China. For this year, and based on figures from the beginning of the year, investment is expected to total almost 500 million euros.

celebration

M.G.

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Macau FTZ to include Baiyun airport Guangzhou Baiyun International Airport’s development zone is likely to be included in the proposed free trade zone incorporating the mainland’s Guangdong province, Macau and Hong Kong, reports the China Securities Journal. Baiyun airport’s comprehensive development zone will be a new addition to the three previously planned areas of Guangzhou’s Nansha, Shenzhen’s Qianhai and Zhuhai’s Hengqin special economic areas. They are intended to boost economic development in the region partly thanks to their proximity to Macau and Hong Kong. China’s State Council is still considering the proposal for the local free trade zone – submitted by the Guangdong government last year.

Commercial property loans drop in Dec Residential mortgage loans, however, increased slightly by 1pct Sara Farr newsdesk@macaubusinessdaily.com

he number of new commercial real estate loans dropped by 27.8 percent to 2.3 billion patacas (US$28.8 million) in December, compared to those recorded a month earlier. According to figures released yesterday by the Monetary Authority of Macau, the majority of these loans – 98.3 percent – went to residents. The value of new commercial real estate also dropped 28.3 percent, while loans granted to nonresidents for that property segment increased by 16.8 percent. On an annual basis, however, new loan approvals for commercial spaces were down slightly by 0.7 percent. Last December, new residential mortgage loans approved by Macau banks rose 1.2 percent month-onmonth to 3 billion patacas. Of these, 99.1 percent were granted to residents. But judged year-on-year, the mortgagable value of new residential real estate to residents increased by 4.2 percent year on-year in December. The number of approved home loans to nonresidents, on the other hand, dropped 75.8 percent. Compared with the same period in 2012, new approvals for residential mortgages went up by 14.5 percent. The value of new residential mortgages collateralised by uncompleted units, such as those in the equitable mortgage category, increased

by 12.3 percent month-onmonth to 141.8 million patacas. Compared with the same period of 2012, such types of mortgages increased by 57.9 percent. In terms of outstanding value of residential mortgage loans, the total reached 118.3 billion, a slight increase of 1.3

percent in December, over that of a month earlier. This is also an increase of 22.3 percent over the same period a year prior. According to the Monetary Authority, the resident component of the market made up 94.8 percent of the total. In addition, compared with end-

November 2013, outstanding residential mortgage loans to residents grew by 1.5 percent, while those to non-residents dropped 1.2 percent. As for commercial real estate, its outstanding value increased 1.1 percent since the end of November 2013, and was up 23.8 percent

Three-star hotel still has no licence HK filing highlights barriers faced by investors in providing more low-cost Macau accommodation

Hong Kong-listed hotel management firm sold its interest in a proposed three-star Macau hotel after waiting fruitlessly for six months for an operating licence from the Macau government. The licence is still pending. Rosedale Hotel Holdings Ltd said so in a filing yesterday. The firm had entered – via its subsidiary Enjoy Media – into a memorandum of understanding on October 24, 2012,

to sell the Macau property – known as Square Inn – to an “independent third party”. On January 25, 2013, the agreement signing date was extended until April 30, 2013, and the property was finally sold for HK$52 million (US$6.7 million) to two people called Tong Hon Va and Cheong Soi Un. “The hotel has not yet been in operation pending the grant of a hotel licence by the relevant government

authority,” Rosedale’s filing said yesterday. Last year the average room rate in three-star, four-star and five-star hotels in Macau was 1,474 patacas, 4.1 percent more than in 2012, the Macau Government Tourist Office disclosed last month. The high price of Macau hotel rooms compared to other international holiday destinations has been highlighted by overseas agents as

compared with December 2012. The total value stood at 85.3 billion patacas. In addition, 93.2 percent of such loans were granted to residents. This is an increase of 1.5 percent over that of a month earlier, while the value of loans granted to nonresidents dropped 4.3 percent.

inhibiting the growth of international long-haul visitor numbers here. Macau has around 28,000 hotel rooms serving a market with more than 29 million visitors last year. A jump in room rates in four-star and five-star hotels over the Lunar New Year holidays, which this year began on January 31, was due in part to block bookings by VIP gaming promoters at the casino resorts, the president of the Macau Travel Industry Council, Andy Wu Keng Kuong told Business Daily. MGTO has pledged to increase the amount of budget accommodation – including guesthouses – available in the city. But the slow pace of government licensing approvals has been highlighted by investors as one barrier to achieving that. M.G.

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Greater China

China tackles US$1 trillion gap in data President Xi Jinping orders changes to how country measures success

he gap in reported economic output between China’s provinces and national statistics narrowed for the first time in six years as Communist Party leaders vowed to reduce the focus on growth in evaluating local officials. The combined nominal economic output of the 31 provinces expanded about 9.2 percent in 2013 to 62.9 trillion yuan (US$10.4 trillion), according to data reported by local governments since December and compiled by Bloomberg News. That exceeded the national figure by 6.06 trillion yuan, or 10.7 percent, after an 11 percent margin in 2012. The data suggest regional officials are heeding directives from President Xi Jinping and his team to shift their attention toward more sustainable expansion, including reducing debt and pollution. Still, the excess of the provincial total over the national figure remains more than the size of Indonesia’s economy, pointing to the room for further improvements. “Regional authorities are showing more realistic data,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. The numbers “may reflect the change in emphasis in assessment of regional authorities away from growth towards other factors, which reduced the incentive

for them to inflate the numbers.” It’s the first time since 2007 that the combined provincial figures have shown a slower nominal growth rate than the central government’s data. Last year’s 9.2 percent expansion compares with 9.5 percent in countrywide figures from the National Bureau of Statistics, while the 10.6 percent increase in provincial output in 2012 exceeded the 9.8 percent

seen in NBS numbers. The last time regional growth was slower than national figures, China’s inflation-adjusted expansion subsequently slowed to 9.6 percent in 2008 from 14.2 percent in 2007. The statistics bureau said last month that China’s economy grew 7.7 percent last year on an inflation-adjusted basis, the same pace as in 2012. The government

doesn’t disclose the GDP deflator it uses to calculate the expansion number. Neither central authorities nor provinces provide estimates of the level of real, or inflationadjusted, GDP. The disparity between the combined provincial figures and the national number has been due partly to double counting of items and the statistics bureau was trying

Wearable device shipments to surge

Bank of East Asia p

Reduced technical barriers will open the floodgates for ‘smart’ portable technology experts say

Numbers for 2013 show margin according to filin

orldwide wearable device shipments are estimated to grow 499 percent to 190 million units in 2018 from 31.7 million units this year, as more multifunction products like smart watches and smart glasses debut in the market, the Taiwan-based Industrial Economics and Knowledge Research Center (IEK) said. The global market for wearable devices like smart watches and wristbands is forecast to grow significantly this year because technology companies face lower technical barriers to entry, IEK senior

analyst Hou Chun-yuan told a forum in Taipei. The higher entry barriers for smartglasses and bioelectronics will limit vendors to a relatively smaller number compared with those making smart watches and wristbands this year, he added. “Wearable devices will become the information and communications technology industry’s next growth driver as demand for mobile devices, as well as traditional PCs, weakens,” Hou said. Hou forecast that new wearable devices launched by tech companies

this year will be accessories to smart phones. Using Bluetooth technology, wearables like smart watches or wristbands can measure the wearer’s heart rate and then report back, Hou said. The application of smart watches or wristbands would still be largely related to monitoring a person’s body condition during exercise, he added. “Using a gadget to check a person’s body condition is convenient, but the application will not be able to create a market that is large in scale,” Hou said. Hou said smart glasses, unlike watches or wristbands, can stimulate huge demand because they can perform tasks from the “first-person point of view.” “Smart glasses will become ‘killer products’ as they can take pictures within a wink of the eye, or display information to the person in a direct way,” Hou said. Hou said wearable devices need more wearer-friendly designs, because they are attached to people’s bodies to detect physiological data or other signals. Unlike mobile devices or traditional PCs, wearable devices are smaller in size and cannot carry large batteries to stay charged for any considerable length of time, Hou said. To attract consumers, tech companies planning to develop wearable devices should adopt lowpower consumption chipsets for their products, Hou said. He also said that firms consider using waterproof components.

ank of East Asia Ltd., Hong Kong’s largest family-run lender, unexpectedly reported higher 2013 profit as wider lending margins helped offset a drop in trading income. The stock surged the most in five months. Net income increased 9 percent to a record HK$6.61 billion (US$852 million), or HK$2.78 a share, from HK$6.06 billion, or HK$2.72 a share, a year earlier, the bank said in a filing to the Hong Kong stock exchange yesterday. That exceeded the HK$5.89 billion average of 21 analyst estimates compiled by Bloomberg. The Hong Kong lender stepped up its expansion in China as the nation embarked on its broadest economic reform measures since the 1990s. Bank of East Asia said efforts to bolster its product range in China helped the lender improve interest margins as the Chinese central bank liberalises interest rates. “It’s a very strong set of results,” Grace Wu, Hong Kong- based analyst at Daiwa Securities Co., said by telephone. “We are quite encouraged to see that very strong growth in net

Increase in BEA net income

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Greater China to correct the issue, Ma Jiantang, head of the agency, said in 2012. The NBS didn’t immediately respond to a faxed request for comment on Monday. The provincial economic numbers were reported on government websites and local media.

Data quality One possible explanation for the narrowing disparity is that the quality of the provincial growth data improved in the eyes of the NBS, which usually adjusts the regional data to compile the national figures, said Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong. This could have been the case if incentives for provinces to inflate or exaggerate their numbers have weakened, said Kuijs, a former economist at the World Bank in Beijing. China’s leaders are trying to change a system where growth was traditionally as the quickest path to promotion. Local- government borrowing will used as an “important indicator” for regional officials’ performance reviews and people should be punished for decisions that “result in huge losses to the country,” waste resources or cause ecological damage, the Xinhua News Agency reported in December, citing the Communist Party’s Organization Department.

New credit National data over the past week showed that new credit, exports and imports exceeded analysts’ estimates in January, offering support to the

9.2%

Economic growth of PRC’s 31 provinces in 2013

world’s second-largest economy. Nonfinancial foreign direct investment in China rose 16.1 percent in January from a year earlier, the biggest gain since July, Ministry of Commerce data showed today. China has set a target of 9.5 percent for 2014 growth in industrial production, the Ministry of Industry and Information Technology said today in Beijing, down from a 10 percent goal for 2013. The government is targeting export growth of about 7.5 percent in 2014, setting sights lower than the 2013 pace according to three people with direct knowledge of the matter, Bloomberg News reported last week. The government targeted 7.5 percent growth in real GDP last year and normally provides the current year’s goal at the annual meeting of

the National People’s Congress, which begins March 5. Analysts surveyed by Bloomberg News in January project growth of 7.4 percent, based on the median estimate. About two-thirds of China’s provinces have already set real-GDP expansion targets for this year that are lower than 2013’s goals, based on reports compiled by Bloomberg. Inner Mongolia set a 2014 target of 9 percent growth, compared with 2013’s 12 percent goal. While almost all provinces reported real growth rates at or above the national 7.7 percent figure, almost half indicated nominal growth below the national 9.5 percent rate. Expansion ranged as low as 4 percent in Shanxi province, which reported a 9 percent increase in real output. Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong, said he visited several cities last year including Changsha, the capital of southern Hunan province, where the economy appeared to be slowing more sharply than the nation as a whole. Yet it’s possible that the national figures include activity in services and Internet industries that may not show up in local data, he said. The contribution to GDP from tertiary industries, which include services, exceeded secondary ones, mostly manufacturing, for the first time in 2013. The NBS has “better methodology to calculate” data on Internet services, for example, said Ding, who previously worked at the International Monetary Fund and People’s Bank of China. “These kinds of economic activity are becoming more and more important.” Bloomberg News

posts record profit

HK jobless numbers fall Hong Kong’s jobless rate fell to 3.1 percent for the November to January period the territory’s government said yesterday. The underemployment rate was at 1.3 percent versus 1.4 percent in the October to December period. “With vibrant consumption in the run-up to the Lunar New Year, total employment hit a new high while the number of unemployed persons declined for the fifth consecutive month,” said Matthew Cheung, the Secretary for Labour and Welfare in a statement. “The seasonally adjusted unemployment rate edged down to 3.1 percent, the lowest level since December 1997 to February 1998. The underemployment rate likewise fell to a 16-year low of 1.3 percent,” added the official.

Taiwan revises Q4 GDP upward Taiwan said yesterday it raised its 2014 GDP growth outlook to 2.82 percent from a preliminary forecast of 2.59 percent. Gross domestic product grew 2.95 percent in the fourth quarter of 2013 from a year earlier, slightly faster than a preliminary estimate of 2.92 percent growth, the statistics agency said. The statistics agency cut its 2014 CPI forecast to 1.07 percent from a preliminary 1.21 percent. For full-year 2013, GDP growth was lowered to 2.11 percent from 2.19 percent estimated previously.

US$2.5 bln invested in Global Logistic

improved lending ng

Global Logistic Properties Ltd., the biggest modern warehouse operator in China, will get US$2.5 billion from investors including the Bank of China Ltd.’s investment unit to expand in Asia’s biggest economy. They will invest US$2.36 billion by subscribing to new shares in GLP’s local subsidiary and US$163 million through buying new shares in GLP, the Singapore-listed company said in an e-mailed statement. Other investors include “a large Chinese insurance company,” which GLP didn’t name, and Hopu Funds, backed by China’s largest state-owned companies and institutional investors, it said.

interest income, which has more than offset the weaker trading profit.” Net interest income increased 25 percent to HK$12.2 billion last year, helped by a widening of the net interest margin, according to yesterday’s earnings release, which didn’t provide the NIM figure. Loans to borrowers in China grew 13 percent in 2013 to HK$144.2 billion.

Stock jump The company’s net interest margin expanded by 15 basis points to 1.98 percent in the second half of 2013 from the previous six months, while its China business had a 35 basis point gain to 2.46 percent, Sharnie Wong and Chen Wang, Hong Kong-based analysts at Barclays Plc, wrote in a report yesterday. Bank of East Asia shares rose 3 percent, the most since September 17, to HK$31.35 at the close in Hong Kong. The stock jumped as much as 5.4 percent after the earnings, which were reported during the midday trading break. The shares lost 0.8 percent in the past 12 months, compared with a 3.4 percent drop by the benchmark Hang Seng Index. Bank of East Asia has more than 120 outlets in China, which accounted for 40 percent of the lender’s 2013 operating income, according to data on its website and yesterday’s statement. The bank devoted more resources to expanding its China business including setting up a team for supply-chain financing and developing more high-

‘Mainland focused’ – David Li, CEO of Bank of East Asia

yielding retail loans such as auto loans and micro-financing last year, it said yesterday. “Mainland China has been and will remain a key focus,” chief executive David Li wrote in the earnings report. “We will further strengthen collaboration among our branch networks in Hong Kong, mainland China and overseas to capture opportunities arising from increasing business flows to and from the mainland.”

The weaker performance of Bank of East Asia’s investment portfolio and lower trading income contributed to a 5.6 percent drop in non-interest income last year, the bank said. The average daily value of securities traded on the Hong Kong stock exchange’s Main Board dropped to HK$56.7 billion in the second half of 2013 from HK$68 billion in the first six months, data compiled by Bloomberg show. Bloomberg News

Qingdao creating carbon market Qingdao has become the latest Chinese city to plan a market to reduce greenhouse gas emissions, as a group of advisers backed by its mayor is hammering out rules for an emissions trading scheme that could start next year. Qingdao, a city of 3 million people in northeastern Shandong province with a GDP equal to that of Bangladesh, is a major energy consumer as the local economy relies on heavy industry and petrochemicals. In a bid to meet a target of cutting carbon emissions per unit of GDP to 19-20 percent below 2010 levels by 2015.

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Greater China Arrests on Guangzhou high rise fire Prosecutors have approved the arrest of five government employees over a fire at a high-rise building in Guangzhou last year. Xinhua News Agency quoted the Guangzhou People’s Procuratorate saying the five were detained on charges of dereliction of duty and taking bribes. One was an official of the Guangzhou Bureau of Justice and the other four were all police officers from the public security bureau of Yuexiu District. A fire blamed on an electrical short circuit broke out at the 25-story Jianye Mansion on December 15. No casualties were reported, but the accident highlighted the limited ability of some cities to control fires in skyscrapers. The owner of the building, Li Rongqiao, has been in custody since. He was also charged a new crime of bribery, the prosecutors said. The case is under further investigation.

Suning gets approval for insurance brokerage Company also among a group of firms with licenses to offer telecom services

Xinjiang support for pre-school education Xinjiang Uygur Autonomous Region in northwest China is boosting financial support in 2014 to boost pre-school education. The local government says it will put an extra 810 million yuan (US$133.6 million) into expansion of public and private kindergartens to accommodate more children, particularly those disabled and orphaned; from poor families; and of migrant workers. The fund will help subsidise food, books, heating, building maintenance and some fees for rural kindergartens. All the 450,000 rural children in Xinjiang are expected to benefit from the programme. Part of the financial support will help urban poor struggling to pay pre-schooling fees, said an education department source. “In addition to enhanced training, we will also increase subsidies for 2,537 teachers working for kindergartens exercising bilingual education in the region,” the person told Xinhua, one of China’s official news agencies. In 2013 China started a new subsidy system for the sometimes troubled Xinjiang region. That year the government allocated 800 million yuan to guarantee two years of bilingual preschooling for local children.

Henan water project advances A section of China’s south-to-north water diversion project across the central Henan province will be finished by the end of May, local authorities said yesterday. Xinhua News Agency cited the Office of the South-to-North Water Diversion Project Commission of Henan saying most work was completed by the end of last year. There are plans to invest another 8.39 billion yuan (US$1.38 billion) this year in constructing the auxiliary projects. That will be for information automation, water and soil conservation, and construction of green belts and fences, officials said. The Henan section will begin trial operations in June. The project is part of a national scheme. Most work on the scheme was completed by the end of last year, and it will supply water this year for 19 major cities and more than 100 smaller towns in north China.

etailer Suning will enter the insurance brokerage service after getting the go-ahead from China’s top insurance regulator, Xinhua News Agency reported yesterday. The report quotes the company. In a circular posted on its website, the China Insurance Regulatory Commission said it has allowed Suning to establish an insurance sales company to market insurance products on the Chinese mainland. The company, with registered capital of 120 million yuan (US$19.8 million), will be jointly funded by Suning and its brick-and-mortar retail chain Suning Appliance, each holding a stake of 75 and 25 percent, respectively. In addition to marketing insurance products, the newly founded insurance sales company will also be allowed to collect insurance premiums as well as validate and settle claims. Before obtaining regulator approval for brokerage services, Suning had since August 2012 been selling a broad range of insurance

products offered by major insurance firms on its online marketplace, Suning.com. Suning is in the midst of changing from a traditional physical chain store selling home appliances and consumer electronics to a more Internet-focused retailer seeking to stay relevant in China’s increasingly competitive online retail scene. The company is quoted by Xinhua saying its new brokerage service will tap Suning’s ongoing efforts at integrating its online retail platform and more than 1,600 bricks and mortar stores to facilitate sales and enhance customer experience. Suning is also among a group of firms that have obtained licences from the Ministry of Industry and Information Technology to offer telecom services. China’s leading Internet firms have made inroads into financial services since last year, selling money market funds with higher returns than bank deposits, extending loans to fund start-ups and consumers, and marketing insurance products.

Chinese e-commerce giant Alibaba also launched two insurance products designed by two insurance firms earlier this month. The two products, bringing total sales of 880 million yuan at an expected annualised return of seven percent, were snapped up minutes after their launch by customers of the company’s online payment service Alipay.

120 mln yuan Capital for Suning’s brokerage arm

China’s taste buds guiding NZ infrastructure Island nation’s waterways and transport to focus on serving exports to PRC

hanging diets in a developing China are forcing the New Zealand government to rethink its infrastructure investment, according to a report out yesterday. The first National Infrastructure Evidence Base, published by the National Infrastructure Unit, said the growth of China would be one of the key influences on the New Zealand economy, one of the four infrastructure drivers, including population, technology and resources. “The projected rise in wealth, living standards and changing dietary tastes in China has implications for

New Zealand in terms of our export commodities (e.g. dairy, meat, forestry) and our export services (e.g. tourism, education). A sustained increase in commodity demand will likely create a need for investment in our productive water infrastructure, freight networks and supporting infrastructure,” the report is cited as saying by Xinhua News Agency. With the world economy still plagued by uncertainty in the aftermath of the Global Financial Crisis, little to no growth in Europe, a moderate recovery in the United States and mixed results in other advanced economies, “the degree to

which the appetite for agricultural commodities is sustained will have a significant impact on New Zealand,” it said. Finance Minister Bill English said the report showed plenty of scope to use and manage more than NZ$120 billion (US$100.2) worth of public infrastructure assets. “We face a range of infrastructure challenges, including from technology and demographic changes. Therefore, our traditional ways of spending more and building more infrastructure will need to change if we are to meet those challenges,” Mr English said in a statement.

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Asia

Indonesia copper export ban looms Smelters jittery about supply security as politics play out Melanie Burton

uying interest from Indian and Japanese smelters for spot shipments of copper concentrate has picked up in recent weeks on growing jitters that an impasse over Indonesian supply may be drawn out, traders said. Indonesia in mid-January slapped a new tax regime on exports of copper concentrate as part of a strategy to boost value from its mineral wealth. Export taxes are set rise to 60 percent by the end of 2016, before a complete ban from 2017. Global miners Freeport McMoRan Copper & Gold and Newmont Mining Corp have said the new regulations conflict with contracts they signed with Indonesia that exempted them from new taxes or duties. Both have halted shipments while they negotiate with the government. But with talks stretching out, and bookings for April shipments set to pick up as top refined copper producer China cranks up for its peak second quarter, some smelters are looking to secure their needs, traders said.

Market jitters “There’s been a lot more stirring in the markets. We’ve had more people picking up the phone and asking, ‘If we were to buy from you, what would be your terms,’” one concentrates trader said. Mine supply tends to undershoot expectations each year because many copper deposits lie deep beneath the earth’s surface or are in emerging market countries where sudden regulatory changes can hit production. Although the market is expecting a flood of mine supply this year, traders are watching developments in Indonesian closely. The country is a major regional supplier of copper concentrate, with Freeport and Newmonth accounting for nearly all of its output. Traders said that bids for new shipments have fallen to double digits, from treatment and refining

charges (TC/RCs) that have held around the US$105-US$110 per tonne and 10.5 to 11 US cents per pound mark for the past month, indicating smelters are prepared to earn less to win concentrate. The charges dropped from US$130 and 13 US cents in December 2013 to US$100-US$105 in mid January after the tax was announced. “The Indians and Japanese have some buying interest but not more than what’s available on spot or adjustable in ... advancements,” another trader at a merchant said, adding that a Philippines smelter that closed after Typhoon Haiyan late last year had also started to accept deliveries. Global miners or trading houses pay TC/RCs to smelters to convert concentrate into refined metal, with the charges deducted from the sale price, based on London Metal

Exchange copper prices . Charges typically fall when concentrate supply tightens. Goldman Sachs estimates that the market is losing around 25,000 tonnes from Freeport’s Grasberg operations and 10,000 tonnes from Newmont’s Batu Hijau each month, although it estimates a large global buffer of concentrate of more than 500,000 tonnes.

Domestic politics “To some extent Newmont and Freeport have managed to mitigate it. They foresaw this happening, their shipping schedules for exports have been geared towards the latter half of Q1 and into Q2…But obviously, time is ticking,” a third trader said. Some analysts don’t expect a resolution of the shipments issue ahead of Indonesia’s parliamentary

elections in April and possibly until a new President is in place by October. “We now see any backtracking of a nationalist policy such as the minerals export ban unlikely prior to the completion of the election process,” said Macquarie analysts attending an Indonesian mining conference, in a research note overnight. But there may still be some movement before then. Freeport said earlier this month that it would look at building a new copper smelter, one of the demands of the Indonesian government. Six companies affected by the minerals ban, which includes minerals other than copper, have also begun the process of applying for export permits, which could be approved as soon as next month, a senior government official said this week.

Land of the rising snow Japan hit by severe winter weather as govt mobilises

apan was hit by record snowfall as several prefectures in the eastern part of the country reported deaths as well as severe transport delays and disruptions. The Japan Fire and Disaster Management Agency has confirmed at least 19 deaths caused by the snowstorm across northeast Japan. At least 365 are reported to be injured from incidents caused directly by the heavy snow. Elderly residents in Oyama in Shizuoka Prefecture were stranded in their homes following a snow dump of more than three feet (1 metre) on Friday.

Other isolated communities were also cut off, with more than 5,000 households inaccessible due to blocked roads in some mountainous areas of Yamanashi, Nagano, Saitama and Gunma prefectures as well as western Tokyo, according to the Cabinet Office. Japanese Prime Minister Shinzo Abe set up emergency disaster task force to deal with the damage caused by the snow fall, according to his office. Yesterday morning he ordered the relevant government departments to take all possible measures to avoid “anybody freez[ing] to the death due to the isolation”

and to make the utmost effort “to restore lifelines and clear the roads” in those areas which are cut off. Tokyo experienced just

under a foot (27cm) of snow over the weekend, days after the capital had experienced its heaviest snowfall in decades. A highway connecting Gunma

Reuters

and Nagano prefectures was closed, stranding hundreds of drivers, and the national broadcaster NHK said over 600 flights, mostly domestic, across the country were also canceled. Police said building collapses accounted for several fatalities, while in Yamanashi prefecture two men froze to death in separate incidents while trying to walk home from stranded cars. A commuter train collision at a station on the outskirts of Tokyo was also attributed to the snow by railway operator Tokyu Corp. Around 20 passengers were left with minor injuries in the incident. The Japan Meteorological Agency has raised advisories for much of the country, and with the storm heading northwards, sections of northern island of Hokkaido have been placed under warning of heavy snowfall and avalanches.

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Asia Vietnam dissident loses appeal One of Vietnam’s most prominent dissidents lost his appeal yesterday against imprisonment for tax evasion, as dozens of supporters protested outside the court against the communist state’s crackdown on dissent. Scores of police encircled the Hanoi People’s Court of Appeals, which upheld a two and a half year jail sentence for Catholic lawyer and blogger Le Quoc Quan, whose conviction in October was denounced by rights campaigners as politically motivated. “The defendant did not show regret and took a disrespectful attitude towards the court,” said court president Nguyen Van Son, confirming the jail term and a fine of around US$57,000.

Philippines rules on cybercrime The Philippine Supreme Court ruled Tuesday that a controversial cybercrime law penalising online libel is constitutional, amid claims it is intended to curb Internet freedom in one of Asia’s most freewheeling democracies. The court said a section of the Cybercrime Protection Law “which penalises online or cyber libel is not unconstitutional”, spokesman Theodore Te said. However the ruling would only cover the original sender of the allegedly libellous material and not the recipients, Te said. The cybercrime law was passed in 2012, but the high court suspended its implementation after various groups sued to have it declared constitutional.

Singapore sovereign selling Temasek divesting US$3.1 bln share of telecoms firm founded by Saeed Azhar and Denny Thomas

ingapore state investor Temasek Holdings Pvt Ltd is seeking to sell its US$3.1 billion stake in Thai telecom company Shin Corp, according to people familiar with the matter, and has approached its SingTel unit as a possible buyer. Temasek, which owns 41.6 percent of Shin Corp through a subsidiary, held talks with Singapore Telecommunications Co, as SingTel is formally known, late last year, said the people, who declined to be identified, as the information is not public. Those discussions have since stalled amid political tensions in Thailand, they said. The move by Temasek, which oversees US$170 billion in assets, is in line with the state investor’s plans to consolidate portfolio companies in industry groupings. This would be its first move toward bringing its telecoms assets under one roof, analysts said, potentially creating a regional giant. The Temasek stake in Shin Corp, founded by former Thailand prime minister Thaksin Shinawatra, is worth US$3.1 billion by current market value. Shin Corp’s shares now trade

more than 50 percent above the price paid in 2006 by a Temasek-led consortium that included ChineseThai businessman Surin Upatkoon, when it bought 96 percent of the Thai firm for a total of US$3.8 billion. “At a fair price such a deal would make sense for SingTel,” Chris Lane, senior analyst at Sanford C. Bernstein in Hong Kong who covers Asia-Pacific telecommunications. SingTel is 52 percent owned by Temasek.

mirrors that it has tried to deploy in other business segments - with varying degrees of success. Last year its financial services portfolio company DBS Group

Telecoms market Shin Corp owns 40.5 percent of Thailand’s biggest mobile telecoms company, Advanced Info Service Pcl. SingTel already has a 23 percent stake in AIS: Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it’s also present, like Australia. “SingTel executives are involved in the day-to-day operations of the company,” said Bernstein analyst Lane. “Buying the stake from Temasek avoids the possibility of another ‘telco’ securing a significant interest in AIS.” Temasek’s telecoms strategy

Record remittances from overseas Filipinos Gandhi’s killers spared death India’s Supreme Court commuted the death sentence yesterday for three killers of former prime minister Rajiv Gandhi, citing delays in the case 23 years after Tamil separatists assassinated him. The court headed by Chief Justice P. Sathasivam spared the three killers from the gallows on the grounds that successive Indian presidents had taken 11 years in deciding on their pleas for mercy. “We implore the government to render advice in a reasonable amount of time for taking a decision on mercy pleas,” Sathasivam told the court in announcing the judgement.

Protests over Malaysia state boss A coalition of Malaysian rights groups has launched a petition urging the country’s king to block a new posting for a controversial state leader who resigned after decades of graft allegations. Taib Mahmud, who has been chief minister of resource-rich Sarawak state on Borneo island since 1981, resigned last week following mounting claims of corruption and environmentally disastrous policies. One of Malaysia’s most powerful political figures, the 77-year-old is widely rumoured to be eyeing the traditionally ceremonial position of state governor. Critics say that would allow him to be able to retain control of Sarawak and possibly avoid potential prosecution.

Amount of money sent home was 8 pct of country’s GDP in 2013

emittances from Filipinos working and living abroad grew faster than expected in 2013, hitting a new record high of US$22.76 billion from US$21.391 billion in 2012, the country’s central lender, the Bangko Sentral ng Pilipinas, reported. Last year’s figure represented a growth rate of 6.4 percent from a year ago, surpassing the BSP’s five-percent growth target. It also accounted for 8.4 percent of the country’s total economic output for 2013. “The solid growth of remittances from OFs [overseas Filipinos] remains supportive of economic activity, with cash remittances accounting for 8.4 percent of the country’s gross domestic product in 2013,” the BSP said in a statement. For December alone, a new monthly record of US$2.155 billion was recorded. The BSP said cash transfers from land-based workers, which made up 77.1 percent of total remittances, grew six percent in 2013 while those from sea-based workers were up 7.9 percent. Cash remittances largely came

Warmly received – cash from overseas workers up 6.4 pct last year

from the United States, Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada, and Japan. “Remittances remained robust on the back of strong demand for skilled Filipino manpower abroad, particularly in the Middle East,” the BSP said. Citing data from the Philippine Overseas Employment Administration, the central bank said 1.8 million Filipino workers were deployed abroad in 2013. Approved job orders hit 793,415 last year, the bulk or 40.9 percent of which were for services; production;

and professional, technical, and related works. “These job orders were intended for the manpower requirements of Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan, Hong Kong, and Qatar,” the BSP said. At the same time, the BSP said the continued expansion of financial service providers abroad to facilitate overseas Filipinos’ remittances contributed to the growth of money sent home to the Philippines. Tie-ups, remittance centres, correspondent banks, and branches or offices of local banks abroad have already reached 4,740 as of end2013, the central bank said. Moreover, the BSP earlier said recent natural calamities that hit the country late last year such as Typhoons Santi and Yolanda, and the 7.4-magnitude earthquake will further increase cash remittances until early this year. The economy grew 7.2 percent last year, surpassing market and government expectations. The government expects the economy to grow by 6.5 to 7.5 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 CLOSING 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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Asia

stake in Shin Corp Thai ex-PM

Holdings Ltd made a bid for Bank Danamon Indonesia Tbk, but it failed to get approval from Indonesian regulator. The future of its 18 percent stake in London-based bank

Standard Chartered PLC is a constant source of speculation for bankers, who have previously suggested merging Standard Chartered with DBS. The slowdown in Shin Corp deal

talks makes it the second potential transaction in Thailand to be put on the back burner due to political stalemate. ING Groep’s planned sale of a 31 percent stake in TMB Bank Pcl has also hit roadblocks, Reuters previously reported. Shin Corp occupies a position of symbolic importance in Thailand. Along with Thai investors, Temasek and Surin Upatkoon bought the 96 percent Shin Corp holding in 2006 through a vehicle known as Cedar Holdings Ltd. While Cedar has since sold most of its ownership, Temasek remains a Shin Corp shareholder through a subsidiary called Aspen. The change in its ownership triggered accusations of insider trading and tax evasion as the family of then Prime Minister Thaksin Shinawatra and others involved received US$1.9 billion tax-free.

KEY POINTS Holding bought in 2006 from then-PM Thaksin’s family Sale talks on hold due to Thai unrest Second Thai M&A deal to be impacted by stalemate Temasek oversees US$170 billion in assets

Rules obeyed Thaksin insisted at the time that the sale satisfied all the rules in a country where share sales conducted through the stock market are not taxed. Protests in Bangkok followed, ultimately leading to a coup that ousted Thaksin. Thailand is one of 25 countries in which SingTel operates, with more than 500 million subscribers in total and more than three-quarters of its core earnings coming from outside Singapore. The company had a cash flow of S$2.5 billion at the end of December. But SingTel has been seeking to overhaul a portfolio of telecoms investments that include stakes in

Australia’s Optus, India’s Bharti Airtel Ltd, Globe Telecom Inc in the Philippines and Indonesia’s PT Telkomsel. Last year, it unsuccessfully tried to sell the Australian satellite business. A spokesman for Temasek Holdings declined to comment on the talks, but added, “We are a long term investor in Asia including in ASEAN.” A Shin Corp official in Bangkok declined to comment, while a SingTel spokeswoman also declined comment. Reuters

Coca-Cola Amatil faces US$367 mln write down

Yen slides after BoJ boosts lending

Boss of Australian soft drinks firm apologises to investors, says corner turned

The yen will probably weaken to 110 per US dollar by year-end say analysts

oca-Cola Amatil Ltd. Managing Director Terry Davis told investors he was sorry after a A$404 million (US$367 million) write-off at its packaged-foods unit SPC Ardmona drove profit to its lowest level since 1992. “I apologise to not be able to bring you a better result,” Davis, who’s leaving the job March 3, told investors on a call yesterday after announcing an 83 percent drop in net income to A$79.9 million for the year ended December 31. “Hopefully we’ve turned the tide” with SPC, he said. Sales volumes at Coca-Cola Amatil’s main Australian soft drinks business fell 3.2 percent to 338 million cases last year, cutting group revenue by 1.1 percent to A$5.08 billion, the first decline since 2006, according to data compiled by Bloomberg. Australia’s biggest beverage company fell 5.3 percent to A$11.22 at the close in Sydney, its lowest price since August 2011. Australian food companies have been hurt by currency swings in recent years. The Australian dollar’s rise to a 29-year high of $1.11 in

T July 2011 lowered the cost of competing imports, and its subsequent decline to 90 cents has increased the price of raw materials. Asahi Group Holdings Ltd.’s Schweppes Australia unit, which sells Pepsi in the country, raised prices for the first time in two years this month, Citigroup Inc. analyst Gino Rossi wrote in a Feb. 7 note to clients, driven by an estimated 3.5 percent increase in costs of imported ingredients. That will lessen pricing pressure on Coca-Cola, which sells at a premium of more than 50 percent to Pepsi, according to Rossi. “Aggressive competitor pricing” was responsible for the poor result from CocaCola Amatil’s Australian beverage unit, the company

said yesterday. The results were a negative for Coca-Cola Amatil’s credit, Moody’s Investors Service senior vice president Ian Lewis wrote in an opinion after the announcement. It wouldn’t affect the company’s investment-grade ratings, which are stable at A3, he wrote. “The high Australian dollar has enabled a flood of cheap imported product to be sold in Australia below the cost of production here while decimating SPCA’s export markets,” Coca- Cola Amatil said in a regulatory statement yesterday. The company will pursue anti-dumping measures, changes to import tariffs, and enforcement of standards on ingredients, according to the statement. Bloomberg News

he yen slid against all major peers after the Bank of Japan boosted lending programmes and said it will continue monetary easing to meet its inflation target. The yen touched the weakest level this month versus the dollar after BoJ officials retained a pledge to expand the monetary base, doubled part of a growth lending program and said individual banks could borrow twice as much low-interest money as previously under a second facility. The greenback remained lower versus the euro before data that may show New York region manufacturing slowed. Australia’s dollar rose after minutes of the Reserve Bank’s February 4 meeting signalled steady rates. “The BoJ’s decision to stimulate the flow of money through extension and expansion of lending programs was well received,” said Yousuke Hosokawa, the head of the foreign-exchange sales team in Japan’s capital at Sumitomo Mitsui Trust Bank Ltd. “That is boosting risk appetite and yen selling.” The Cabinet office said on Monday Japan’s gross

domestic product expanded an annualised 1 percent from the previous quarter, missing analyst estimates and boosting speculation for more central bank easing in coming months amid the implementation of a sales-tax increase starting in April. “Dollar-yen has surged because there has been a loosening of monetary policy,” said Joseph Capurso, a Sydney-based strategist at Commonwealth Bank of Australia, referring to the expansion of the central bank’s growth funding and loan programmes. “The risks are rising that the BOJ eases further by lifting the monetary base target around April if the evidence suggests that the tax increase is having a large negative effect on the Japanese economy.” The yen will probably weaken to 110 per US dollar by year-end, according to the median estimate in a Bloomberg poll of more than 50 economists, which would take it to levels unseen since August 2008. Analysts in a separate survey predict the euro will weaken to US$1.28 over the period. Bloomberg News

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International

Venezuela raids opposition party office Latin American state also expels 3 U.S. diplomats, accusing that country of ‘interfering’ Diego Ore and Brian Ellsworth

enezuelan security forces raided the headquarters of an opposition party accused of fomenting nearly a week of violent protests, witnesses said, as the country expelled three U.S. diplomats on charges of conspiring with demonstrators. Presumed military intelligence officers burst into the opposition Popular Will party office and attempted to forcibly remove several activists after throwing tear gas inside, according to party officials. “The intelligence officers arrived and began to harass us,” said party activist Adriangela Ruiz. “They threw tear gas, took computers and tried to take away several people.” The government has issued an arrest warrant for Popular Will’s founder, Leopoldo Lopez, 42, the U.S.-educated opposition leader accused of murder and terrorism in relation to the violent demonstrations of the past week. He has been the main instigator of the demonstrations that have energized Venezuela’s opposition, but show few immediate signs they

will achieve their goal of ending the government of socialist President Nicolas Maduro. Student protesters have taken his lead and are now promising to continue demonstrating around the country. Videos sent to the media by Popular Will, which could not be independently identified, showed men entering the party’s premises, waving

guns and kicking down a door. Students protesting outside the building then prevented the gunmen from taking anyone away, a party worker said. Two government officials contacted by Reuters said they had no information about the incident and also did not have any way of making authorized spokespeople available. The Caracas protests have been limited to mostly upscale areas, with little evidence so far that Venezuelans will join the demonstrations en masse across the country of 29 million people. Even so, thousands were out in the streets again on Monday. Lopez, whose whereabouts were unknown, promised via an online video to hand himself in on Tuesday and called on supporters to march with him to the Interior Ministry. “Let’s all go dressed in white to one place. Then I will walk alone. I will not put any Venezuelan’s life at risk,” he tweeted on Monday.

Diplomats expelled After several days of blaming the

violence on meddling by Washington, the Venezuelan government declared three U.S. diplomats personae non gratae, giving them 48 hours to leave the country on charges they were recruiting college students for the protests. “They have been visiting universities with the pretext of granting visas,” said Foreign Minister Elias Jaua, who often faced off against the police during his own days as a student demonstrator. “But that is a cover for making contacts with [student] leaders to offer them training and financing to create youth groups that generate violence,” he told reporters. The U.S. State Department called the allegations “baseless and false,” adding that Washington supported free expression and peaceful assembly in Venezuela and in countries around the world. Venezuela has routinely expelled U.S. diplomats in recent years as the relationship between the two countries frayed during the 14-year rule of the late socialist firebrand, Hugo Chavez. Reuters

Starwood Capital CEO ‘planning’ share sale Barry Sternlicht founded the Connecticut-based property investor in 1991 David Welch

arry Sternlicht, chairman and chief executive officer of Starwood Capital Group LLC, has spoken to banks as he prepares to sell shares of the property-investment firm to investors, a person familiar with the matter said. Starwood probably will sell a minority stake in an initial public offering, said the person, asking not to be named because talks are private. Sternlicht told Bloomberg Television in December 2012 he was considering a stake sale to raise cash and finance new businesses. In November, he said he may consider IPOs of some of Starwood’s holdings. Sternlicht, 53, has hired more staff at Greenwich, Connecticut-based Starwood in recent years to pursue investments. The firm has been buying shopping malls and office properties, with the CEO saying he’s “bullish” on commercial real estate because of its attractive yields. Tom Johnson, a Starwood Capital spokesman with Abernathy MacGregor Group, declined to comment on

Starwood Capital’s plan. Starwood Capital has raised about US$23 billion of equity since inception, and bought more than US$45 billion in assets, according to a January statement. The preparations for a stock sale were reported earlier yesterday by the Wall Street Journal. “I think you might see our mall business go public, maybe some of our hotels,” Sternlicht said in the November interview with Bloomberg Television. “We own more than 100 hotels in the U.S. and building a bunch. It’s a good time to be public.” He founded the firm in 1991 after working for Chicago-based JMB Realty Corp. He started the company now known as Starwood Hotels & Resorts Worldwide Inc. in 1995, running it until 2004 when he stepped down as CEO to become executive chairman. He resigned in 2005. Starwood Hotels, based in Stamford, Connecticut, is no longer affiliated with Starwood Capital. Bloomberg News

Netflix talks with Time Warner stall

etflix Inc.’s effort to secure a place for its video-subscription service on Time Warner Cable Inc. set-top boxes is on hold now that the cable operator is being sold, people with knowledge of the matter said. The discussions are unlikely to progress before Time Warner Cable’s US$45.2 billion acquisition by Comcast Corp. is completed, said the people, who asked not to be named because the matter is private. Comcast, which isn’t as far along in its own talks with Netflix, is focused on increasing film downloads and rentals with its new X1 settop box platform, they said. “They will not be in any kind of rush to let Netflix on their cable box and cannibalise their business,” said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. in Dallas who has a neutral rating on Netflix.

A deal with Time Warner Cable would put pressure on other pay-TV providers to offer Netflix as well. The video-streaming pioneer, with 44.4 million online subscribers, has pitched its Web-based trove of original shows, movies and older series as a must-have for pay-TV providers who increasingly poach each other’s viewers for growth. It has signed two European cable services and is trying to reach deals with smaller U.S. outfits that use TiVo Inc. set-top boxes. Discussions have included the possibility of Netflix paying fees to pay-TV providers, Chief Executive Officer Reed Hastings said in an interview in late January. While Los Gatos, California-based Netflix can continue to grow without such deals, access on cable TV systems would make viewing easier by eliminating the need

to toggle between cable and Internet services, Hastings said. “Consumers already use Netflix on the smart TVs, their Apple TVs and their Rokus,” Hastings said last month. “For us, it’s not a financial decision, it’s a customerpleasing decision,” he said. Jonathan Friedland, a spokesman for Netflix, declined to comment on the Comcast-Time Warner merger, as did Maureen Huff, with Time Warner Cable. Steven Restivo, a spokesman for Comcast, said the company continues to talk to application providers about joining the X1 set-top box platform. Comcast, already the largest U.S. cable company, has said it expects the deal to absorb No. 2 Time Warner Cable to be completed by year-end. Bloomberg News

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February 19,19, 2014 Friday April 2013

Opinion Business

wires

China’s risky reforms

Leading reports from Asia’s best business newspapers

STRAITS TIMES

Ian Bremmer David Gordon President Eurasia Group Former director, policy planning, US State Department

Cleaning companies will soon come under a new licensing scheme that requires them to pay cleaners tiered wages according to the type of cleaning jobs they do. This scheme was given the nod by Parliament yesterday when it passed the Environmental Public Health (Amendment) Bill. The wage scales, however, are to be decided by a separate tripartite committee of employers, unionists and government officials. As a result, some MPs expressed concern yesterday on how the panel would draw up the wages for the different cleaning jobs.

TAIPEI TIMES The nation may see two domestic budget carriers launch begin operations in the fourth quarter, following China Airlines Ltd receiving permission from the Civil Aeronautics Administration last week to set up a low-cost airline. Eyeing the rising demand and potential in the low-cost carrier market, TransAsia Airways Corp announced in November last year that the agency had given it the go-ahead to establish a budget-carrier subsidiary under the brand name V air. “We hope to launch official operation in September, if everything goes smoothly,” TNA public relations office vice president Alison Kao told the Taipei Times by telephone.

PHILIPPINE STAR The Department of Budget and Management announced the release of 167 million pesos which will cover pension arrears of 380 retired firemen from the Bureau of Fire Protection. According to the DBM, the funds will benefit pensioners who retired from 1991 to 2001, and those who were not previously covered by the BFP Retirement and Separation Benefit System. “When these firemen retired between 1991 to 2001, the system that could have facilitated the timely release of their retirement and pension benefits was not fully established,” Budget Secretary Florencio ‘Butch’ Abad said.

THE AGE Alcoa has announced that it will shut its 59-year-old Point Henry aluminium smelter and two rolling mills, costing a total of 980 jobs. Alcoa said the smelter, where 500 workers are employed, would cease operation in August. Additionally, a Geelong, New South Wales, rolling mill along with a rolling mill and recycling centre at Yennora in Sydney would close by the end of the year with the loss of a further 480 jobs. Alcoa has announced it is closing its aluminium smelter in Geelong with the loss of 950 jobs.

hen it comes to economic reform, China’s leaders no longer believe that time is on their side. With a new sense of urgency, President Xi Jinping and his inner circle are attempting one of the most ambitious economic and socialpolicy reform plans in history. But in any authoritarian country, change creates risk. Consider the scale of the proposed plans. For China to reach the next stage of its development, a much larger share of Chinese-made products now destined for Europe, America, and Japan must be sold to consumers inside China. This shift will require a big increase in local purchasing power – and, therefore, an enormous transfer of wealth from large domestic companies to Chinese households. In addition, China’s leaders appear to be on the verge of approving 12 new regional freetrade zones, which will drive competition and efficiency on a new scale in many economic sectors. They also recognise the need for further liberalisation of the country’s financial system, a move that will require tolerance for outright defaults on bad loans – and the anxiety and anger that comes with them. Here, as in other areas of the reform plan, change is dangerous; but Xi has come to believe that pressing ahead is vitally important if China is to take the next crucial steps toward building a middle-class, digital-age economy. Moreover, the reforms are crucial for the Chinese Communist Party’s long-term hold on power. The leadership will also try to increase state-owned enterprises’ efficiency by withholding support (and money) from those that underperform, potentially putting large numbers of workers out on the streets. And the government’s steps to

tackle China’s heavily polluted air and water, a problem that officials can no longer ignore or explain away, will weigh on short-term growth as well. In the past, the CCP has responded to slowing growth with a surge in state spending meant to create jobs and keep the system humming. This time, the authorities are allowing growth to slow at a measured pace, partly because the slowdown is a precondition for the kind of growth that does not depend on the state, and partly because the slowdown helps sustain demand for reform.

Centralising tendency To accomplish these goals, Xi is centralising power, launching a charm offensive, and cracking down on official corruption and extravagance. He is also using anti-corruption and re-education efforts to intimidate (real and potential) reform opponents within the CCP. Finally, the leadership has created new party institutions, answerable directly to top officials, to ensure that all changes are implemented as planned. Nonetheless, while the reforms are crucial for China’s future, they are certain to produce a backlash. Some of the losers have the means to defend their interests: purged officials, companies, and industries that face new regulatory scrutiny, as well as firms forced out of business, have well-placed friends within China’s enormous bureaucracy. Moreover, free-trade zones bring greater competition, including from foreign firms, which raises risks of increased unemployment and capital flight. China’s leaders have long feared publicly visible divisions within the elite; given the risk that infighting could expose sensitive secrets. Xi’s proposed reforms are just the

sort of changes that might have this effect. That risk is much greater today than it was ten years ago. With hundreds of millions of Chinese now online, and other twenty-firstcentury communication tools available to an unprecedented number of citizens, ideas and information cross China’s internal and external borders with unprecedented ease and speed. In response, the CCP continues to develop new technologies to stifle or redirect dissent; but the battle for control of China’s public discourse is not one that the country’s leaders can win every day for the foreseeable future, and they know it.

Xi is centralising power, launching a charm offensive, and cracking down on official corruption and extravagance

There are broader questions as well. The authorities appear confident that they can manage the risks generated by a gradually slowing economy. What if they are wrong? What if bank defaults pile up, creating a major credit crisis? What if unrest grows to levels not seen in many years? These scenarios are highly unlikely in 2014. But early signals suggest that if trouble develops, the party will choose

a crackdown over concessions, and there is no guarantee that party unity will hold in such a scenario.

Neighbourly concerns For outsiders, the reform process also poses risks that extend well beyond the global economic fallout of a sharp Chinese slowdown. The country’s neighbours, particularly Japan, have the most to fear. If reforms become broadly unpopular or expose dangerous divisions within the leadership, the government will have good reason to divert public attention from controversies at home by picking fights abroad. Frictions between China and the Philippines, Vietnam, and others in the South China Sea persist, but confrontations with Japan, including over territorial disputes in the East China Sea, are more likely to cause the most damage. No one in power in either country wants a war, but diplomatic dust-ups between China and Japan, the world’s second and third largest economies, respectively, have already taken a toll on their commercial relations. In particular, Japanese companies operating in China have sustained significant reputational and financial damage during recent episodes of trouble between the two governments. Conflict with the United States is unlikely for the moment. At such a delicate time internally, China would gain nothing from antagonising the US. But trouble with US allies, particularly Japan, could draw the US into a fight that it would strongly prefer to avoid. In short, China is on the brink of large, necessary, and dangerous transformations that promise to change the country for the better – or make everything, including regional stability, much worse. The entire world has a large stake in what happens next. © Project Syndicate

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February 19, 2014 Friday April 19, 2013

Closing Ukraine anti-govt protestors hurt

Magnitude 6.5 earthquake near Barbados

At least three anti-government protesters were killed and some 150 others injured, some seriously, yesterday in fresh clashes between police and demonstrators in Kiev, opposition medics said. Doctors at an opposition-run field hospital said that stun grenades caused most of the injuries while some of the 30 people in a serious condition had suffered head injuries, and one person had to have a hand amputated. Russia blamed the policies of Western countries for the latest clashes between pro-EU protesters and police on the streets of Kiev.

A magnitude 6.5 earthquake struck yesterday in the Caribbean near the island of Barbados, the US Geological Survey said. The quake hit at 0927 GMT about 170 kilometres (106 miles) north-northeast of the town of Bathsheba on Barbados, the USGS said. It struck at a depth of 16.9 kilometres (10.5 miles). There were no immediate reports of damage or injuries. The Daily Nation newspaper said people called radio stations to report the quake. According to Barbados Today, residents in parts of the island were “literally shaken out of their sleep.”

Vitasoy recalls half million lemon tea packs in Macau, HK Drink maker is worried some of the product doesn’t taste as it should Stephanie Lai

sw.lai@macaubusinessdaily.com

French Alps killings arrest F

rench police yesterday arrested a 48-yearold man in connection with the 2012 killings of a British-Iraqi family and a cyclist in the Alps, in their first breakthrough in the case. Annecy prosecutor Eric Maillaud said the man, from the Haute-Savoie region, was placed in formal custody and detained following the release in November of an identikit image of a mysterious motorcyclist seen near where the quadruple murder took place. “This arrest, which may not be the only one, was the result of witness statements” that came in after the image was released, Maillaud said. He said there was no apparent “direct link” between the man and the victims and sources close to the case expressed caution, saying the arrest may only be for questioning. A source close to the investigation said police carried out a search of the man’s home near the scene of the crime, in the presence of his girlfriend. The source described him as a “taciturn mountain man” and a gun enthusiast who lives on the fringes of society.

India parliament TV feed cut T

ong Kong drink maker Vitasoy International Holdings Ltd is recalling 500,000 cartons of lemon tea distributed in Macau and Hong Kong because of what the company calls “taste deviation”. Vitasoy said yesterday that the 250 ml cartons of original-flavour VITA Lemon Tea being recalled bore “best before” dates of December 22, 2014, or December 27, 2014. The company said it had voluntarily begun recalling them yesterday. Vitasoy (Macau) Ltd said it was recalling 14,580 cartons distributed in Macau that bore the “best before” date of December 27. The company said Macau shopkeepers that had sold the drink would refund buyers. A written statement issued by Vitasoy Macau says the drink is being recalled because consumers in Hong Kong thought it tasted “slightly different” from usual. Vitasoy Macau says the drink is safe to consume. “The slight taste deviation is caused by natural tea leaves used as ingredients. Tea leaves naturally have taste variation from time to time,”

he live broadcast of proceedings in the Indian parliament was suddenly halted yesterday shortly before lawmakers voted to pass a controversial bill creating the country’s 29th state. Days after the parliament was adjourned when one lawmaker opposed to the creation of Telangana state squirted pepper spray, there was fresh uproar when the live feed was cut shortly before the crunch vote. While there was no official explanation for the blackout, the NDTV news channel said the decision was made by Speaker Meira Kumar who feared a repeat of last Thursday’s chaos, which was widely described as a disgrace to democracy. Telangana is being carved out of the existing southern state of Andhra Pradesh, a move analysts say is designed to increase the ruling Congress party’s support in deprived coastal areas in an upcoming election. Its creation has been fiercely opposed by Andhra Pradesh Chief Minister Kiran Reddy, who is widely expected to quit Congress and form his own faction as a result of the vote.

Vitasoy Macau says. A spokesman from Vitasoy in Hong Kong stressed to Business Daily that the “taste deviation” was not due to any changes made in the lemon tea formula. The Consumer Council in Macau and the Royal Supermarket chain told us they had not received any complaints or queries by Macau consumers about the quality of VITA Lemon Tea. A spokesman for the Food Safety Centre in Macau said: “We’ll keep a close watch on the recall case.” The spokesman said it was a case of taste rather than safety. “But we’ll keep in touch with the company to track the ingredients of their lemon tea products being recalled,” he said. Hong Kong-listed Vitasoy Group runs two major product lines of drinks: the soy drink VITASOY and a range of teas, juices, distilled water and dairy products sold under the brand VITA. Sharen Lo, granddaughter of Vitasoy’s founder Lo Kwai Cheung, is married to Lawrence Ho Yau Lung, cochairman of Macau casino operator Melco Crown Entertainment Ltd.

Ex-US congressman held in Zimbabwe F

ormer US congressman Melvin Reynolds has been arrested in Zimbabwe, an immigration official said yesterday, without giving details. “We are with him and we are conducting investigations. That is all I can say at the moment,” Ario Mabika, a spokesman for Zimbabwe’s immigration department told AFP. Police were not available to comment. The state-controlled Herald newspaper Tuesday reported that Reynolds has been arrested for violating immigration laws and possessing pornographic material. Reynolds stepped down from the US Congress in 1995 after being convicted of statutory rape. He was later convicted of bank fraud, but was pardoned by then president Bill Clinton. The Herald quoted a source saying the former congressman was picked up at a local hotel Monday after running up a bill of US$24,500 and that he has been living in the country illegally after his visa expired. According to The Herald, which witnessed his arrest, Reynolds was denied contact with the US embassy in Harare.