MOP 6.00
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Future Bright profit jumps 15 pct Page 4
Consumer price inflation rises 6.4 pct
www.macaubusinessdaily.com
Year II
Number 482 Monday February 24, 2014
Publisher: Paulo A. Azevedo
Closing Editor: Michael Grimes
Minimum wage set at MOP28 per hour
January hotel daily 1 business room rates up 10 pct
Friday April 19, 2013
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he government will soon introduce legislation that would set a minimum wage of 28 patacas (US$3.51) an hour for all cleaning and security staff. Labour Affairs Bureau director Wong Chi Hong said so after a meeting of the Standing Committee for the Coordination of Social Affairs on Friday. Mr Wong added the government intended that employers should count at least 83 percent of the minimum as the basic wage. But Legislative Assembly member Ella Lei Cheng I criticised the timetable. “It will take 180 days for the law to come into effect after it’s been passed,” Ms Lei said. “By then, whether the wage level is set at 28 patacas or 30 patacas, it will not look like a level that has kept up with changes in the economy.” More on page
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All agree on MOP90 a month for welfare
Bank of China Macau in Shanghai FTZ loan
The government is proposing to raise the minimum monthly contribution to the social security fund to 90 patacas (US$11.27) per employee from 45 patacas. Representatives of the bosses and the workers have agreed to this sum, but they still disagree on what proportion the employer should pay and what proportion the employee should pay. Social Security Fund president Ip Peng Kun hopes the employer would continue to pay two-thirds and the employee one-third.
Bank of China Macau Branch (BoC Macau) is among the first batch of banks providing offshore loans for companies in Shanghai’s free trade zone. It may pave the way for the lender to provide similar services closer to home on Hengqin Island – the mainland’s special economic zone next door to Macau. BoC Macau and its sister companies – Shanghai Branch and Singapore Branch – together provided a loan worth 100 million yuan (130.6 million patacas).
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INTERVIEW
CEM among world’s best electricity firms: CEO
February 21
HSI - Movers Name
%Day
CATHAY PAC AIR
3.98
BELLE INTERNATIO
3.04
TENCENT HOLDINGS
2.83
WANT WANT CHINA
2.83
HONG KG CHINA GS
2.39
CHINA OVERSEAS
-0.94
COSCO PAC LTD
-0.95
CHINA RES POWER
-1.15
CHINA PETROLEU-H
-1.21
LENOVO GROUP LTD
-2.35
Source: Bloomberg
I SSN 2226-8294
Macau’s electricity supplier CEM – Companhia de Electricidade de Macau – accepts it doesn’t have autonomy on where it can source fossil fuel raw materials. But it is among the reliable power firms in the world. So says its chief executive Franklin Willemyns in an interview with Business Daily. Last year, 90 percent of the electricity used in Macau was imported and CEM’s own generators were barely used. Pages 6 & 7
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February 24, 2014 Friday April 19, 2013
Macau Crown’s first half boosted by Macau Australian casino group Crown Resorts Ltd, controlled by billionaire James Packer, posted a 29.4 percent rise in its first-half net profit on Friday, largely driven by record earnings from its Macau businesses. Net profit after tax excluding any impact from hold rate variations in VIP gaming revenue rose to A$315.0 million (2.26 billion patacas) for the six months ended December 31, from A$243.5 million a year ago, the company said in a statement. Crown co-owns Macau casino operator Melco Crown Entertainment Ltd. Crown Resorts’ shares closed down 3.19 percent in Sydney on Friday, at A$16.68.
All agree on MOP90 a month for welfare But the bosses are willing to pay only one-half, and the workers are willing to pay only one-third Stephanie Lai
sw.lai@macaubusinessdaily.com
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he government is proposing to raise the minimum monthly contribution to the social security fund to 90 patacas (US$11.27) per employee from 45 patacas. Representatives of the bosses and the workers have agreed to this sum, but they still disagree on what proportion the employer should pay and what proportion the employee should pay. Social Security Fund president Ip Peng Kun said after a meeting of the Standing Committee for the Coordination of Social Affairs on Friday that the government was proposing to maintain the present proportions, so the employer would continue to pay two-thirds and the employee one-third. That means the employer would pay 60 patacas instead of 30 patacas and the employee would pay 30 patacas instead of 15 patacas. “The employers and the employees find the amount of the contribution acceptable,” Mr Ip told reporters. “But the employers want the contribution ratio to be closer to one to one, while the employees want to maintain at the present ratio of two to one,” he said. “We feel very disappointed that we have had no success in coming up with a proposal acceptable to all.” Mr Ip said the committee would put its views on the government’s proposal in writing by the end of March.
“It’s hard to say when the 90 pataca contribution might be realised,” he said. Retirement pensions and allowances such as those for unemployment, illness, births, marriages and deaths are paid out of the social security fund. Mr Ip said about 80 percent of the money in the social security fund came from the government. The government puts 1 percent of its annual budget in the fund. It also spends a maximum of 3 percent of its revenue from taxes on gaming on social welfare, and 75 percent of that money goes into the fund.
Workers adamant Mr Ip said the money from contributions and the money from the government was insufficient to keep the fund going. “Last year the government decided that it would inject an extra 37 billion patacas into the fund from 2013 to 2016 so it can sustain the fund can for 50 years,” he said. “We hope that employers and employees can both increase their contributions, so that the fund will not have to depend only on government funding,” he said. “We assume that residents aged 65 years or older will get their monthly pension for 15 years, given a lifespan of 80 years, and they have to contribute to the fund for 30 years,” Mr Ip said.
“With annual interest earned by the fund counted in the equation, every 100 patacas of pension would require a monthly contribution of 22.10 patacas,” he said. He said that for the fund to be able to afford to pay a pension of 3,000 patacas a month – which is what it pays now – a combined monthly input of 663 patacas per employee was required from employers, employees and the government. Mr Ip said in December 2012 that the combined monthly contribution by the employer and employee would have to increase gradually to 270 patacas by 2016, and that the government intended that the employer and employee should be contributing in equal proportions by that year. Members of the Standing Committee for the Coordination of Social Affairs that represent the workers are adamant that the present proportions should be maintained.
No quarrel One such representative is Legislative Assembly member Ella Lei Cheng I of the Macau Federation of Trade Unions. “In the absence of better measures for protecting the interests of workers, such as a central provident fund and proper severance pay, we don’t think we will agree to any change in the present contribution ratio,”
Ms Lei said. Neither the bosses nor the workers have any quarrel with the government’s proposal to increase the retirement pension and the various allowances. Mr Ip said the government was proposing to increase the pension by 6 percent to 3,180 patacas a month to maintain the quality of life of retired people in the present economic circumstances. He said it was proposing to increase the allowances for unemployment and for illness requiring inpatient treatment in hospital by 5.8 percent to 127 patacas a day. It was proposing to increase the allowances for births, marriages and deaths by 5.9 percent to 1,800 patacas, he said. “These suggested adjustments would mean the government would have to put a total of 2.866 billion patacas in the social security fund, which is 1.62 million patacas more than our current budget,” Mr Ip said. He said the increases would be backdated to the beginning of last month. “These adjustments are still awaiting the approval of a plenary session of the Standing Committee for the Coordination of Social Affairs,” he said. “We’ll arrange that meeting very soon, and once the process is complete, the adjustments will be gazetted by the government.”
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Macau Govt to collect opinions on building rules The government will solicit opinions from its advisory urban planning committee and from the public before issuing new guidelines to the construction industry. The latter rules will be part of the urban planning law coming into force on March 1, Executive Council spokesman Leong Heng Teng said on Friday. The rules, to be issued by the Land, Public Works and Transport Bureau, determine – among other things – a project’s maximum construction area, the construction height limit and any public facilities to be provided at the project site.
Minimum wage to be MOP28 an hour A labour representative doubts it’s enough for cleaners and guards to live on Stephanie Lai
sw.lai@macaubusinessdaily.com
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he government will soon introduce legislation that would set a minimum wage of 28 patacas (US$3.51) an hour for all cleaning and security staff. Labour Affairs Bureau director Wong Chi Hong said so after a meeting of the Standing Committee for the Coordination of Social Affairs on Friday. “After public consultations and meetings of the standing committee, we’ve come up with this minimum wage level of 28 patacas an hour or 224 patacas a day or 5,824 patacas a month,” Mr Wong said. “It’s a level that the government came up with after taking into consideration what local companies can afford and what employees need to be able to buy with their pay.” He said the minimum wage would not include any overtime pay or annual bonuses. Mr Wong said the government intended that employers should count at least 83 percent of the minimum as the basic wage and the rest as allowances, such as
meal allowances. “This structure of the minimum wage would be reasonable,” he said. He said the government had come up with this structure in the light of the minimum wage structure in other places. Mr Wong added it was the government’s intention for that the amount of the minimum wage be reviewed every two years. The government consulted the public about the planned policy – applicable to cleaning and security staff-only – between September and November. It based the proposal on the findings of a study the University of Macau did in 2012.
Come what may It suggested the amount of the minimum wage should be in the range of 23 patacas to 30 patacas. One of the representatives of the workers that sits on the Standing Committee for the Coordination of Social Affairs, Legislative Assembly
member Ella Lei Cheng I, expressed misgivings about setting the minimum wage at 28 patacas an hour.
“Let’s say the Legislative Assembly passes the bill this year. It will take 180 days for the law to come into ef-
fect after it’s been passed,” Ms Lei said. “By then, whether the wage level is set at 28 patacas or 30 patacas, it will not look like a level that has kept up with changes in the economy.” She urged the government to consider reviewing the minimum wage annually. An employers’ representative on the standing committee, Vong Kok Seng, said bosses did not entirely support the idea of a minimum wage. Mr Vong said a minimum wage would cost small and medium enterprises money they could ill afford to spend. “But if the government decides that it is time for a minimum wage, I believe it is fully prepared take whatever consequences there are,” he said. Mr Wong of the Labour Affairs Bureau did not say when the government intended to table its minimum wage bill. He said the government would pay close attention to economic conditions and tweak the bill if necessary.
Jan hotel room rate rises nearly 10 pct The average cost of a hotel room here last month was more than MOP1,543 Tony Lai
tony.lai@macaubusinessdaily.com
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t cost almost one-tenth more to spend a night in the territory’s hotels last month than the same period a year earlier. That’s probably due in part to the inflationary effect of the Chinese New Year holiday in January this year. Latest unofficial figures from the Macau Hotel Association show the room rate for hotels here rose by 9.7 percent year-on-year to 1,543.9 patacas (US$193) last month. The price for a room in four-star hotels rose by 9.8 percent to 965.7 patacas while the room rate for fivestar hotels was 1,844.1 patacas last month, 9.4 percent more expensive than previous year. Lower grade properties – namely three-star hotels – underwent the
smallest growth in rates – 5.8 percent last month, to more than 1,109 patacas per room. The hotel association compiled the data from its 41 members – hotels ranging from three-star to five-star categories. The association provided no explanation for the hike in room rates but it is likely due in part to the Chinese New Year holidays. They started by end-January this year compared to mid-February last year. Macau Government Tourist Office said the average nightly price of a hotel room in the three- to five-star categories was 2,387 patacas during this year’s lunar holiday period, which ran from January 31 to February 6. The average rate was 17.5 percent
higher than last year’s Chinese New Year. Business Daily reported last month – quoting some travel industry sources – that there were usually jumps in room rates at holiday times, as junket operators had blocked off some casino hotel rooms for their high-rollers, further tightening the supply in the market compared to non-peak times. Official data show the city had 53 hotels in three-star to five-star categories by the end of last year, providing over 26,300 rooms, up by 7.1 percent from previous year. While four-star hotels faced the sharpest year-on-year growth in room rates last month, occupancy rates for that sector dipped – by 4.86 percentage points from the previous
year to 80.5 percent this January. On average across all hotel categories the January occupancy rate was 84.3 percent, down by 1.91 percentage points. But leisure industry consulting company HVS said in its latest quarterly report released last month the hotels here fared better than other establishments in Greater China in terms of revenue and occupancy rate. Macau’s proximity to mainland China’s economic powerhouse Guangdong province, Macau’s casino attractions and limited hotel supply give the hotels here an edge, said the report. Latest official data show 29.3 million tourists came to Macau last year. A total of 63 percent, or 18.6 million, were mainlanders.
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Macau Wing Hang extends takeover deadline Hong Kong’s Wing Hang Bank Ltd and Singapore’s Oversea-Chinese Banking Corp. (OCBC) have again extended the deadline for talks on a possible leveraged buy out by the latter. The parties now have until the end of March to find an agreement. According to the filing by Wing Hang, “under the terms of the second extension agreement, the substantial shareholders… will engage exclusively with OCBC to seek to finalise the terms for a possible offer.” Wing Hang’s branch network includes 12 outlets in Macau under the branding of its local unit Banco Weng Hang SA.
Future Bright’s gross profit jumps 15 pct Restaurant group expanding food souvenir business this year by opening two stores Tony Lai
tony.lai@macaubusinessdaily.com
BoC Macau offers Shanghai’s FTZ loans
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Macau Ieng Kee Bakery – trademarks bought by Future Bright last year (Photo: Manuel Cardoso)
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estaurant operator Future Bright Holdings Ltd reported its operating profit grew by nearly 15 percent last year with better performance in the second half. The company, whose managing director is Macau legislator Chan Chak Mo, also aims to expand its food souvenir business here by opening two new stores, as well as increasing its presence in mainland China. Future Bright told Hong Kong Stock Exchange in a filing that its unaudited turnover last year reached HK$746.5 million (US$96.25 million), increasing by 15.5 percent from the previous year. Its gross operating profit grew at a similar rate; 14.6 percent to HK$271.8 million. “The year of 2013 was a year with a bumpy start in the first quarter but a good catch up in the second half of the year,” said Mr Chan, adding the July-December period accounted for more than 55 percent of last year’s gross profit. The filing said more details would be announced next month in the firm’s annual report. The company continues to benefit from the influx of visitors to Macau. The city received
29.3 million tourists last year – a 4 percent year-on-year rise according to government figures. Japanese-style restaurants remained a key driver for Future Bright’s revenue last year, accounting over half of its turnover at HK$385.7 million. Its revenue from selling confectionery – namely souvenir cookies – rose sharply. Turnover in the food souvenir segment climbed by 157.1 percent from previous year to HK$7.2 million. Partly, the firm grew by acquisition in that category. In August it paid four million patacas (US$500,000) for Macau Ieng Kee Bakery’s trademarks in Macau and Hong Kong. The segment’s performance could improve further this year. The company is set to open two new stores in Macau for its food souvenir products. Future Bright is going to open a flagship store of 2,390 square feet in its own six-storey commercial building near the Ruins of St Paul, the filing said. The company has leased the rest of the building – with effect from the beginning of January – to the United States-based fast fashion retailer Forever 21 Inc, for
HK$2.4 million a month. Apart from that flagship store, the restaurant operator has just also rented a shop of around 1,300 square feet at Rua do Cunha in Taipa – a street famous for food souvenirs – for three years starting next month. Mr Chan also added in the filing that the company “is now in the process of setting up three big restaurants and one food court at Huafa Mall, Zhuhai”. Future Bright said in a previous filing that it was using the space to exploit the increase in the number visitors to Macau and Zhuhai in the next five to 10 years. The company rented a total of 11,375 square metres of commercial space in the Zhuhai mall. It is due to be completed this year with 10-minute drive from the Gongbei border linking Zhuhai and Macau. Future Bright also opened three new restaurants and eateries including a new Pacific Coffee chain store in Macau International Airport last month. Shares of the company closed at HK$4.59 on Friday. That’s a premium of 131.8 percent from their HK$1.98 value a year earlier. Hong Kong’s benchmark Hang Seng Index fell 1.1 percent in the same period.
ank of China Macau Branch (BoC Macau) is among the first batch of banks providing offshore loans for companies in Shanghai’s free trade zone. It may pave the way for the lender to provide similar services closer to home on Hengqin Island – the mainland’s special economic zone next door to Macau. BoC Macau and its sister companies – Shanghai Branch and Singapore Branch – together provided a loan worth 100 million yuan (130.6 million patacas) to developer Shanghai Free Trade Zone United Development Co Ltd on Friday, the official Chinese news agency Xinhua reported. It is the first yuan-denominated loan signed by what are designated by China as overseas branches of Chinese banks – to mainland companies based in the Shanghai FTZ. Xinhua said the mainland’s central bank – the People’s Bank of China – released on Thursday operational guidelines governing cross-border yuan trade via what is the mainland’s first free trade zone. The Shanghai FTZ allows the nearly 10,000 companies currently registered in the 28.78-squarekilometre area to borrow money denominated in yuan from financial institutions abroad. But the loans cannot be used in any equity markets nor can the loan amount exceed 1.5 times each borrowing company’s registered capital. Taiwan’s state-run Central News Agency reported the interest rate of this first cross-border loan was five to six percent. According to Xinhua, that’s a lower than the average rate of interest at which mainland companies can borrow from mainland banks. More cross-border loans denominated in yuan are said to be planned by BoC Macau. The city’s biggest bank – as measured by gross and net assets – said in a statement on its website, available in Chinese only, that it has also reached “cooperation consensus” with China Shipping International Ship Management Co Ltd. BoC Macau will grant loans of 200 million yuan to the shipping firm in the free trade zone. No further details are revealed. The Macau branch of one of the mainland’s big four state-owned banks only added in the statement that this “can provide experience for the policy of cross-border loans denominated in yuan in Hengqin New Area.” Ye Yixin, general manager of BOC Macau, noted last week that there was still no financial policy allowing Macau banks to provide loans in Hengqin despite “discussion for several years”. Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen responded that the government would work on the matter. T.L.
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Macau African Chamber of Commerce opens The African Chamber of Commerce in Macau has been launched, to promote cultural as well as business ties between China and African countries. Founding president Francis Chukwunoso Nwachukwu told local media a key objective for its members is to gain access to the mainland economy. The chamber so far has around 20 members. They come from countries including Angola, Nigeria, São Tomé and Príncipe, Cape Verde, Togo and GuineaConakry. Mr Nwachukwu said the chamber would provide more information on the business environment in Africa, which could help investors in their decision to do business there.
Consumer price inflation up 6.4pct in January Chinese New Year pricing had some impact – last year the holiday was all in February Sara Farr
newsdesk@macaubusinessdaily.com
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rices for home rents, hairdressing and dining out have increased, contributing to a 6.4 percent year-on-year increase in the composite consumer price index – an indicator of inflation – during January. The latest data released by the Statistics and Census Service also suggests that the increase is in part due to Chinese New Year falling at the end January. Last year the holiday was entirely during February. Usually, during Chinese New Year more people dine out, and prices for many
consumer items increase. Compared with January 2013, there was a notable increase in the price index for housing and fuels. It rose by 11 percent mainly due to higher home rental costs. There was also an increase in the prices of recreational and cultural services (up by 8.2 percent) as well as for food and non-alcoholic beverages (up by 6.7 percent). The latter two segments rose due to an increase in the prices of restaurant meals and package tours. The price index of communication services
decreased slightly – by 1.6 percent. The CPI for lower-income households – a group that spend proportionately more of their income on essentials – rose 6.9 percent year-onyear. In Macau, CPI-A – as it is known to economists – measures prices for families with average monthly expenditure of between 6,000 patacas (US$751) and 18,999 patacas. Households under CPI-B, whose average monthly spending ranges between 19,000 patacas and 34,999 patacas, registered a 6.3 percent increase over that
of last year. For the whole month of January, the composite price index increased by 0.8 percent over that of the previous month. The price of “miscellaneous goods and services” rose by 2.7 percent, while that of recreation and culture rose by 1.7 percent month-on-month, mainly due to higher prices for hairdressing services and package tours. Seasonal discounting of winter clothing pushed down the price index of clothing and footwear by 1.7 percent. For the 12 months ended
January 2014, the average composite CPI increased by 5.61 percent from the previous period. The price index of housing and fuels increased by 10.1 percent, while that for food and non-alcoholic beverages rose 6.6 percent. Prices of health services increased by 6.3 percent, while the price index for communication services dropped 2.3 percent and that of education was down by one percent. During the 12 months to January 31, the average CPI-A rose by 6.2 percent and CPI-B by 5.5 percent.
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Macau Brought to you by
HOSPITALITY Modest rise Local spending by Macau visitors is an important contribution to the city’s economy. Outside the casinos’ gambling floors, that is especially true in the case of hotels, restaurants and shops. The Statistics and Census Service produces a quarterly survey on the tourists’ expenses, with a breakdown according to some major countries or regions of origin. Data from the last quarter of 2013 indicate that the average expenditure made by visitors, gambling aside, has risen by 9 percent, compared with the previous year. This is the highest value registered since the current methodology was adopted in 2010. Visitors from mainland China account for the vast majority of arrivals and spent the highest amounts per capita, posting a figure of 2,801 patacas. That value stood well above the figures for visitors from richer Asian countries, such as Japan and Singapore. Both the latter registered figures close to 1,800 patacas in the last quarter.
If we take the simple averages for the quarterly results of both 2010 and 2013, we can estimate a rough growth of 34 percent in the average expenditure of visitors in the period observed here. That would be the rough equivalent of a 7.6 percent rise every year. For China alone, those figures would stand at 26.1 percent and 6 percent, respectively. These values raise some questions about the consistency of the survey results over time. But that matter aside, they are not very impressive either. As the rate for tourists’ inflation stood noticeably above those values in the years shown, these numbers suggest that, in real terms, expenditure actually decreased. Moreover, the notable appreciation of the Chinese yuan seems to have had little impact on the level of expenses of mainland visitors.
9.1 %
average visitor expenditure rise, without gambling, in 2013
CEM among world’s most
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acau’s electricity supplier CEM – Companhia de Electricidade de Macau – accepts it doesn’t have autonomy on where it can source fossil fuel raw materials. But it is among the reliable power firms in the world. So says its chief executive Franklin Willemyns in an interview with Business Daily. He admits however that if the government resolves its dispute with Sinosky Energy (Holdings) Co Ltd – a joint venture between Macau Natural Gas Co Ltd and China Petroleum & Chemical Corp (Sinopec) to supply natural gas for CEM’s power generation – then CEM may need to invest in new generating equipment. Last year, 90 percent of the electricity used in Macau was imported and CEM’s own generators were barely used, thanks largely to the interruption in gas supply caused by the major construction work on Hengqin Island. Luciana Leitão
leitao.luciana@macaubusiness.com Photos by Manuel Cardoso
Are you satisfied with CEM’s performance over the past years? CEM has been doing quite well, since the renewal of the contract in 2010. We have a quite good track record in terms of service quality, and the most important one is, of course, the reliability of the service. We have been reaching really top worldwide standards of 99.999-something percent reliability. It is really among the absolute top in the world, which means we are able to deliver the most important thing for our customers; stable and continuous supply of electricity. This result is not by chance. There is a lot of hard work behind it. That’s mainly from our staff, but also thanks to a really important investment we have been doing in the last [few] years. Depending on the year, we have been [investing] between 600 million patacas (US$75.1 million) and one billion patacas per year. Last year, we invested 850 million patacas. This shows, on one side, the efforts CEM is making in constantly improving and expanding the infrastructure for Macau and, on the other side, the confidence of shareholders in the company. This has allowed us to have a very good technical performance. We have around 10 KPI [key performance indicators] that are followed [monitored] by the government and we succeeded in all of them. We performed better than [required by] all the objectives set by the government. In terms of operational results, 2013 has been a good year. Actually, when you look at our accounts, which are still not finalised, we can say already two things: the first thing is that the growth has been moderate at around two percent growth in revenues and also in terms of sales.
So, despite having a relatively low level of revenues, our operational performance increased quite significantly. This allows us also to have better results in terms of net profit, which probably will be published by end of March, when Macau accounts are approved. But we already know we will probably have a better-than-last-year level of results. So, overall, I would say it’s a very good year. One of the special achievements we are really proud of is we completed our second year without accidents – accidents in general. That means any accident that leads to lost working time. Two years without accidents is also exceptional and we are quite proud about this achievement.
Two years without accidents is exceptional and we are quite proud about this
What are your expectations in terms of future growth of CEM? Despite having had in 2013 a very moderate growth of around two percent, the prospects look very bright in terms of demand. When you see all the projects that are ongoing – mainly in the Cotai area – we have calculated more or less there are around 200 billion patacas being invested in the big
entertainment type of projects and of course this will once again transform Macau. Within five years lots of new entertainment projects will require more power and will probably have greater expectations in terms of level of service. This is certainly a challenge, but we are working for it and we are prepared. Can CEM meet the city’s needs given Macau’s use of imported electricity and the scale of the pending infrastructure growth? We have always considered that the best solution for Macau is to make the best business decision. So we are not exclusively depending on [energy] importation. We have our own generating capacity. We will use it based on the economic case for doing so. When it’s more convenient or more competitive to generate domestically rather than to import, we will run our own units. It is true that during 2013, due to the relatively high level of fuel prices and unavailability of gas, we didn’t often run our own [generating] units. We relied quite strongly on importation. More than 90 percent of our demand was supplied through importation. But this is a situation that may change depending on the relative prices and mainly on the availability of gas. We believe that gas can be a very good option. We can be very competitive if we have gas available to generate electricity. There seems to be a change of government strategy regarding natural gas, due to the government’s disagreement with Sinosky, the company in charge of the transportation and supply of imported gas. How does this affect CEM? For us, what is important is
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reliable electricity firms: CEO Are the LRT-related projects the only ones not yet approved by the government? These are certainly the two major investments. There are other types of investments that basically will require further discussion and explanation with the government to see what will be approved or not. It’s an absolutely normal process. Last year, it was the same. We got approval of some investments at the beginning of the year and during the year we had approval for several others. What other investments were not yet approved? It’s a large list. I would say one of the investments that are still under discussion is the building of a new dispatch centre. The main reason is we’re still discussing the best location, and of course the investment related to that. Other investments are related to the new land reclamation. It seems that we might be able to postpone [that] because in our plan we thought it would be needed earlier. That may not be the case.
to have options. As and when there is gas available, we will welcome that. This is a good option for Macau if the gas supply could be resumed, but of course this depends on the current decision and negotiations of the government. We respect that. Without natural gas, is CEM still capable of developing local electricity production? We have a clear contract, which obliges us to maintain an available 472 megawatts of installed capacity in Macau. That’s our contractual obligation. We will respect this. The only thing we may consider eventually as a good option – should we have more gas available – is to replace some of our own [generating] units, particularly the ones here at Macau power plant. The Macau power plant barely uses that equipment, because it is very old and quite noisy and it’s not convenient to have a power plant in the middle of the city. Whenever gas is available we could replace some of our old units with gas combined cycle [turbine equipment]. This is something that for certain would need further studies and discussions with the government. Do you still believe a new power plant is needed? Based on our obligation of the installed capacity we have to maintain, we believe it’s worthwhile at least to study the replacement of our old units. Such replacement would also be very good news in terms of the environment, because by using gas to produce electricity, first of all we [would] gain a lot on efficiency and secondly, you would reduce quite significantly the carbon footprint for carbon generators in Macau. There are strong advantages to
replacing some of our old units. But of course for that we need to have – on one side – gas available – and on the other side – we need to study the economics of such investments and also discuss [it] with the government. Would you consider such investment in domestic generation one the main challenges you face at this point, considering the rising demand for electricity and limitations on local production? No. This is just an option for us. I don’t think the supply is compromised. Even if our units are quite old they are still [capable of] running. We have them available whenever necessary, so basically what we are talking is about replacing generator capacity. Of course, newer units are more reliable and efficient, but that doesn’t mean that we cannot supply [power] if we don’t have it [new equipment].
We have been reaching really top worldwide standards of 99.999 something percent reliability
Up to now, the government only approved half of CEM’s budget for 2014. Is this really ‘normal’, as you’ve said in other interviews? I would say it’s actually good news to have half of our budget approved at the beginning of the year. In the past, sometimes, we started the year without any approval. This is good news. We can continue without interruption most of our major investments. [But] It is true half of our investments have been approved and the other half has still not been approved. When we submitted the plans, it was in early mid-2013. Some of the projects mainly related to the LRT [light rail transit] that we have put in our investment plan. We know already that they are delayed, so it makes sense and we completely understand that some of these investments may not be needed right now, because it will depend on development of the LRT. Particularly, we had in our budget plan two [electricity] substation – which are significant investments – to be installed in Macau peninsula. And [in] as far as the LRT routes in Macau have not been decided and a clear timetable has not been decided, it’s logical that we have to wait for implementation of such projects. We are prepared whenever the government takes the decision, we are advanced with our engineering and it’s just a question of approval [so] that we can start the construction. Meanwhile, we are very advanced – in complete accordance with the timetable requested by the government – regarding the two substations in the Cotai area that will be needed for the LRT in Cotai and Taipa. These substations are under construction.
Are some of the still-to-be approved projects urgent? All the projects we have submitted and are still not approved we will have to be discussed and evaluated case-by-case on whether we can delay and whether it makes sense to delay. Some of them we know already – without further discussion – can be delayed. Others we still believe are important and they will require more discussions. Regarding CEM’s approved projects, what can we expect this year? This year we have three main projects, which are three substations. Two I have already mentioned; which are [for the] LRT. [There’s also] one substation that is really very important for us, in the north part of the city, is a substation we are building near Ilha Verde. This substation was very difficult, because land is very difficult to find in the north part of the city. In the north of the city – although there isn’t the tremendous development seen in Cotai – we have noticed that power demand is increasing. That has probably a direct relation with the living standard. People have more equipment, restaurants are introducing more environmentally friendly types of kitchens with induction cooking and things like that, and this is increasing the demand [for power]. In the old part of the city, we really needed to have a new substation and finally we got the land and we are building it. It will be ready by mid-2015. And in the old part of the city, we also need to install at least six to eight transformer stations. We are already quite advanced [in efforts] to find the suitable land with the government, which will reinforce also the supply of the old area of Macau. These are some of the main projects we have already approved and we will continue. And the general reinforcement of our network takes also quite a big piece of our capital expenditure.
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Tax refunds to lure overseas Inbound tourists to Beijing fell 10 pct last year
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Wine sales strictly ‘ordinaire’ Wine consumption in China, after almost one decade of robust annual growth at around 25 percent, fell for the first time in 2013. The decline was 2 percent from the previous year, the latest study on the global wine and spirits market revealed. However, the confidence of the global wine industry in the world’s potentially largest market remains intact. China is now the fifth-largest buyer of red, white, rose and sparkling wine. The Chinese government’s fight against corruption and gift giving may have had an effect on wine sales, says Xavier de Eizaguirre, chairman of Vinexpo.
Taiwan ‘aerotropolis’ plan Taiwan’s ambitions to become a regional air hub finally look set to take off with approval for an “aerotropolis” to cash in on improving ties with China and the rise of budget airlines in the region. The ambitious plan to transform the main Taoyuan International Airport into a regional aviation centre is tipped to attract more than US$16 billion in investment for the island’s biggest infrastructure project in more than three decades. Covering nearly 7,000 hectares (17,000 acres), the “aerotropolis” will include a free trade zone, a third terminal at the airport and an industrial park to house goods-distribution and aviation-related industries.
Wanxiang to resume Fisker production China’s leading auto-parts maker Wanxiang Group said it plans to resume production at Fisker after it purchased the firm in a US$149.2million deal last week. Wanxiang will restart production in the coming months at Fisker’s manufacturing plant in Finland and then at a disused plant in Delaware, United States, which Fisker bought from General Motors in 2010, the company said. A US court judge on Tuesday approved the deal in which Wanxiang purchased the bankrupt electric car maker, which is based in California. In the next 18 months, Wanxiang aims to sell at least 1,000 Karma vehicles in the US and 500 in Europe.
China-Sri Lanka trade talks Chinese officials began three days of talks on economic cooperation with Sri Lanka on Saturday, as Beijing strengthens relations with the Indian Ocean island of 21 million people that is a focal point for its regional rivalry with India. “This visit will give an added impetus to opportunities accruing to Sri Lanka in the context of promoting the country as a regional ‘commercial hub’,” Sri Lanka’s external affairs ministry said in a statement. China has increased its investments in Sri Lanka, funding airports, roads, railways and ports.
verseas tourists may be able to claim tax refunds at shopping malls in Beijing as the city strives to boost inbound tourism. Local authorities are working on a plan, according to the Beijing Tourism Development Commission. Zhou Zhengyu, head of the commission, said at a news conference on Friday that the policy is likely to be launched later this year. Authorities will also try to make visa applications easier for foreign tourists. No details of the tax reimbursement plan have been released. Dai Bin, a professor of tourism at Beijing International Studies University, said the policy would help to increase spending by overseas visitors. He expects the tax refund
KEY POINTS Overseas shoppers may be able to claim tax refunds in Beijing Policy likely to be launched later this year Shopping 28 pct of total spending by tourists in Beijing City saw a sharp fall in inbound tourism in 2013
rate to be set at 5 percent or higher. Official figures show that shopping accounts for 27.6 percent of total spending by tourists in Beijing, followed by transport at 26.9 percent, accommodation at 16.9 percent and dining at 7.3 percent.
Wang Hongcun, head of the general office of the Beijing commerce commission, said the agency would further promote traditional brands in Beijing to attract more overseas consumers. “Shopping and dining by tourists
10m migrants to be trained each Lack of skills said to keep many workers out of modern industries
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shoppers
in Beijing generated more than 203 billion yuan (US$33.4 billion) last year, accounting for more than half of total tourism income,” he said. Yang Jinsong, a professor of international tourism at the China Tourism Academy, suggested the
year
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he Chinese government plans to provide training for all young migrant workers by 2020 to facilitate economic restructuring, a senior official says. “Lack of skills has impeded migrant workers’ ability to become qualified for work in modern industries,” said Yang Zhiming, vice-minister of human resources and social security. The government plans to train 10 million workers every year starting from this year, said Yang. The programme is likely mostly to benefit the “new generation of migrant workers”, which refers to those born after the 1980s says Xinhua news agency. About 100 million migrant workers fall into this social group. China had 269 million migrant workers by the end of 2013, according to official figures. Yang said that labour costs in China would increase in coming
269 mln
China’s migrant workers at end-2013
capital learn a lesson from Hainan province, where the tax reimbursement scheme was first piloted. However, it received a lukewarm response because of a shortage of products and a lack of promotion. Aki Takahashi, 29, from Japan, who came to Beijing for a vacation in 2012, said the tax reimbursement might help generate more revenue but not necessarily more tourists. “Shopping is not a must in China for me and my family. Also, you can always buy duty-free products at the airport terminals,” he said. Unlike Hainan, the tax refund in Beijing will only apply to foreign visitors, an insider told China Daily. Figures from the Beijing commission show that the city saw a sharp fall in inbound tourism in 2013, with more than 4.5 million visitors arriving, down by 10.1 percent from the previous year. It said the number of foreign tourists accounted for 1.79 percent of all tourists arriving in the capital last year. Foreign tourists’ per capita spending in Beijing last year rose to US$1,065, an increase of 3.6 percent. Average spending on shopping per stay was US$252.40, with each stay averaging 4.22 days. “Foreign tourists, although accounting for only 1.79 percent of the total, contributed 7.49 percent of tourism revenue last year,” Yang said. While tourist arrivals from Asia dropped by 15.3 percent and those from Europe by 9.7 percent, the proportion coming to Beijing from Africa grew by 9.4 percent. The United States was the biggest source of foreign tourists in Beijing, with 747,000 visitors arriving last year, followed by 369,800 from South
years; therefore, a sufficient number of skilled workers is vital for the economy to be upgraded from “made in China” to “created in China”. Yang was speaking at a news conference hosted by the State Council Information Office in Beijing. Ministry statistics showed that monthly income for migrant workers reached about 2,600 yuan (US$427) in 2013, an increase of nearly 14 percent compared with the previous year. But the income gap between rural and urban residents is still large, as migrant workers earn only 60 percent of what their urban counterparts earn, according to the National Bureau of Statistics. The pay for migrant workers in the economically developed eastern parts of the country was about 10 percent higher than in central or western parts, Yang said. Liu Junsheng, a researcher at the Labour and Wage Institute of the Ministry of Human Resources and Social Security, told China Daily that rising wage costs have forced many labour-intensive industries in the coastal areas to relocate to inland provinces and even to countries in Southeast Asia. He estimates that the government will invest at least 60 billion yuan each year on the massive training programme. Shi Zhenhuan, a communication official at Foxconn Technology Group, a major supplier for electronics giants, including Apple Inc, said it is difficult for the company to recruit enough skilled workers for its 30 manufacturing plants in the country. He said most employees are not well educated and lack required skills, adding that it is challenging for the company to improve their skills as most young workers change jobs frequently.
Mobile payment war escalates Cab-calling services the unlikely battlefield for control of emerging sector
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mart phone payment application provider Didi has announced that if passengers pay taxi fares via WeChat – a service of Tencent – they will get a 12 yuan price subsidy. Hours later, rival KuaiDi – a service of rival Alibaba – made a public promise to cut “always one yuan more than our competitor” off the price, if the payment goes through Alipay. In large cities like Beijing, a three kilometre taxi ride could be free, as the starting fare is 13 yuan. In smaller cities where starting fares are lower, consumers may even make a profit. As the competition gets more tigerish, the sustainability of the price war has come into question and a more healthy development of the mobile payment market sought. Alipay currently leads mobile payments with nearly 300 million registered users, 100 million of whom use mobile phones. Last year, those users made 2.78 billion transactions, with an aggregate turnover of 900 billion yuan, more than five times the US$27 billion posted by Paypal in the same period. Neck and neck is Tencent’s WeChat, China’s largest social networking app with more than 500 million users worldwide. During Spring Festival holiday between January 31 and February 6, WeChat users on the Chinese mainland distributed nearly 200
A surprise attack on Pearl Harbor Ma Yun, Alibaba chairman
million yuan of “lucky money” to one another through the platform. That marketing manoeuvre has given Wechat an edge as users scramble to cash in their gifts that have to link at least one cash card. Describing the lucky money gambit as a “surprise attack on Pearl Harbor”, Alibaba chairman Ma Yun said, “It’s a good thing Spring Festival ends soon.” While the skirmishes escalate, researcher Yi Jingxue with Analysys International sees “no clear profit model for cab-hailing apps yet.” “The real emphasis of the rivalry should go beyond looking for new users to cultivating user loyalty,” said Yi. “For mobile Internet products, network traffic means profits, which is why the number of users is of ultimate importance,” Yi explained.
China uses economic tools against smog
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aving realised the seriousness of the problem, Chinese provincial governments have resorted to economic tools to encourage environmental protection and help reduce pollution. In North China’s Hebei province, the provincial government has offered cheaper electricity to power plants that upgrade their equipment, said Zhang Shaohua, deputy head of the provincial development and reform commission. According to control measures released by the province in September, all 19 thermal power plants in the region should upgrade their equipment for dust collection. To encourage this, the government will offer 20 yuan (US$3.30) per 100 kwh of generated electricity, Zhang said. The province’s administration will also slash commodity use by 15 million tons of steel, 10 million tons of cement and use 15 million fewer tons of coal this year, according to a government work report released
last month. Tianjin Municipality, which borders Hebei, launched carbon emissions trading in December, following Shenzhen, Shanghai and Beijing. Under the trading programme, companies that produce more than their fair share of emissions will have to buy unused quotas on the market from companies that cause more modest pollution. Environmental protection authorities in Beijing are getting banks involved. In a joint circular released in August by the city’s environmental protection bureau, the China Banking Regulatory Commission and its Beijing branch, companies with poor pollution records will be banned from obtaining bank loans, said Wang Ruixian, of the Beijing’s environmental protection bureau. Governments at all levels should explore more ways to fight smog, and encourage people to join the effort, Zhou Shengxian, minister of environmental protection, has said.
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Chinese hustle The rise and pending fall of Hanlong Group chairman Liu Han
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Chinese businessman – who achieved world renown when a school he had previously donated survived the 2008 Sichuan earthquake while many government buildings collapsed – is one of 36 people being investigated for alleged links to criminal gangs reports Xinhua. As chairman of mainland conglomerate Hanglong Group, Liu Han is fantastically wealthy. But in China that and even major acts of philanthropy are not enough to protect you if you become a threat to the state and the political ruling class. Rumours had circulated since last March that well-known plutocrat and mineral tycoon Liu had ‘disappeared’. Now nine murder charges have been brought against 36 alleged gang members linked to Liu, and many other charges filed, says Xinhua, citing Xianning People’s Procuratorate in Hubei Province. The extent of the background briefing into the case about Liu Han’s alleged involvement – seemingly given to Xinhua by official sources – suggests just how seriously the Chinese government views the potential threat to its power. It also bodes poorly for Liu’s chances of an acquittal in any upcoming trial. Famous for his philanthropy, Liu was elected a political advisor in Sichuan Province three times in a row, and has over 20 honorary titles. His best known charitable act was the building of a rural elementary school complex which later withstood the devastating 2008 Sichuan earthquake.
Hanlong Group He is chairman of the boards of the Hanlong Group, the biggest private enterprise in Sichuan Province, and the listed Jinlu Group. He owns tens of subsidiary companies involved in electricity, energy, finance, mining, real estate and securities. Estimates put his worth in tens of billions of yuan. Acting on the orders of the Central Committee of the Communist Party of China (CPC), in March last year the Ministry of Public Security (MPS)
commanded police in Beijing, Hubei and Sichuan to investigate Liu, and as Xinhua put it “bring to justice the alleged leader of a mafia-style criminal group” which allegedly lurked behind Lui’s glamorous facade. The news of the prosecutions has sent tremors through Sichuan’ s political and business circles, many of whom never suspected that such a huge network could be targeted. Liu has now been linked with a very public murder that took place on January 10, 2009 in Guanghan, Sichuan. At an open-air teahouse in downtown Guanghan, witnesses watched as several men got out of a car, fired over 10 shots, and raced off in the same car. Three people were shot dead and two unrelated persons injured by stray bullets
20
Number of honorary titles held by Liu Han
“It was so fast,” said a witness. “It was like watching a movie.” Great uproar followed the shooting in Sichuan and sending shock waves all the way to the central authorities. The two suspects, Yuan Shaolin and Zhang Donghua, were soon captured and they had little hesitation in naming a man called Liu Wei as the man behind the killing. By that time, Liu Wei had already absconded and became a ‘class-A’ wanted man. Liu Wei is the younger brother of Liu Han. At the time, he was boss of Guanghan Yiyuan Industrial Corporation and a popular entrepreneur and philanthropist; as well as a torch bearer in the run up to the Beijing Olympics in August 2008. However, to those who really knew
him, Liu Wei is allegedly a ruthless underworld kingpin who controlled gambling, loan sharking and construction projects. Chen Fuwei, one of men slain in the teahouse, was Liu’s sworn enemy. The police received tip-offs of Liu Wei’s whereabouts from time to time in the ensuing four years, but every time the net tightened around him Liu Wei slipped away again. All this time Liu Wei had not left Guanghan, because there, he allegedly has a patron – Liu Han.
Self made Liu Han was born in 1965. In the early 1990s, Liu Han and Liu Wei ran gambling game centres in Guanghan. At that time, the brothers supposedly mustered a gang of local thugs and vagrants. In 1993, it’s alleged the brothers openly broke a seal on properties that had been seized by the court and used guns against law enforcers. That year, Liu Han fraudulently obtained a loan that he used to do business with someone called Sun, and his fortune began to grow and grow. Sun has been investigated in a separate case. Always on the look out for greater profits, in 1998, one of Liu Han’s companies waded into a real estate development project in Xiaodao Village, Mianyang, Sichuan’s second largest city. After a noisy confrontation with villagers over demolition compensation, Tang Xianbing, a security guard with Liu Han’s company, stabbed and killed Xiong Wei, leader of the protestors. “Nothing happened to me after the killing, and that made me bolder and more unscrupulous,” Tang said in his confession. “I would do anything for the company, even murder. I no longer felt any fear.” Silenced by the murder, the villagers stood aside and made way for the development project. Five days after the killing of Xiong Wei, Liu Han allegedly ordered Zeng Jianjun, one of his henchmen, to shoot dead rival gang boss Zhou Zheng, on a Guanghan street.
“Many people knew that the shooting was our doing, but no one came to trouble us,” said Zeng. Impunity brought even more flagrant crimes and killings. In February 1999, Wang Yongcheng, another gang boss in Mianyang, threatened to blow up Liu Han’s company building. “No fear,” Liu Han was said to have told his subordinates. “Get someone to handle him.” A dozen days later, Wang was gunned down by a shooter allegedly sent by one of Liu Han’s lackeys, Sun Huajun.
Bark and bite In September 2000, Liu Wei this time, allegedly instructed his men to brutally kill Liang Shiqi. Liang was an old neighbour of the Lius, whose aunt had raised Liu Han as her own. Liu Wei allegedly ordered the killing out of a suspicion that Liang has pocketed his “dog minding fees”. That was possibly a reference to protection money owed by local businesses to Liu Wei. In May 2002, Liu Han’s bodyguards Qiu Defeng and Huan Lizhu allegedly provoked a brawl in a recreation centre in Chengdu, capital of Sichuan, gathering a crowd to beat up passers by. One person was killed and many injured. Out of all this killing, only Qiu received four years in prison. Seemingly immune from any punishment, the other killers walked free. Liu Han was soon established as a “kingpin” in Guanghan and Mianyang. Some of his victims were forced to leave their homes for years, in fear of his gang, reports Xinhua. More than 100 members of the public were made to suffer by his group, but few reported any crime. Victims and their families did not even dare to speak the name “Liu” out loud, referring to them as “that family” instead. “My father suffered a cerebral infraction after the murder. He cries every day, calling my brother’s name,” Xiong Li, sister of village protestor Xiong Wei, told Xinhua.
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Indonesia’s eruption plans lagging Country a volcano hot spot as part of Pacific ‘Ring of Fire’
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s Indonesia deals with the aftermath of two volcanic eruptions, experts question whether the country is well equipped to face the threats from dozens of volcanoes that dot the archipelago. At least 34 people have been killed in two volcanic eruptions this month. Seventeen were killed on February 1 when Mount Sinabung in North Sumatra province erupted. On February 13, Mount Kelud in East Java also erupted, killing seven. More than 130,000 people were displaced as a result of the two disasters. “We have 100 million people living in places that are prone to disasters, including volcanoes, earthquakes and floods,” said Dody Ruswandi, deputy for emergency response at the government’s National Disaster Mitigation Agency (BNPB). “It’s a big challenge both for the local and central governments.” Indonesia straddles the Pacific Ring of Fire, an arc of volcanoes and fault lines encircling the Pacific. Ruswandi said each province had its own disaster management agency and but levels of preparedness varied. “In East Java where Mount Kelud is, the level of preparedness is good. Many lives were saved in the latest eruptions even though the area around the volcano is inhabited by hundreds of thousands of people,” he said. In the case of Sinabung, Ruswandi said people were unfamiliar with the habits of the volcano due to it having been mostly dormant for hundreds of years. Before small eruptions began intermittently last September, culminating in February’s deadly eruption, Sinabung last exploded in 2010, but there were no fatalities, except for one person who died of respiratory problems linked to the disaster. “The people around Sinabung had little experience in dealing with its activity because there’s little information in terms of historical precedents. The recent eruptions can serve as a lesson for them so that in the future they can save themselves,” he said. The BNPB has worked with local agencies and NGOs on preparedness programs at community level. These include identifying threats, providing training to local officials and conducting simulations and drills, risk mapping and quantifying populations likely to be affected. “Local governments only spend tiny portions of their budgets on
disaster management. But things are improving and there’s growing awareness to promote community preparedness and awareness,” Ruswandi said. The BNPB has an annual budget of nearly US$300 million plus US$380 million in reserve funds, he said. Wahyu Triyoso, a geophysicist at the Bandung Institute of Technology (ITB), said Indonesia should pay more attention to mitigation to deal with bigger eruptions. “When Kelud erupted several major airports were closed,” he said. “Can you imagine if Anak Krakatau [‘child of Krakatau’] erupted and expelled energy many times that of Kelud?” he asked, referring to a mountain formed from an eruption in 1883. The hot ash and tsunamis created destroyed 150 villages on the coasts of Sumatra and Java and killed 40,000 people. Anak Krakatau rose above sea level in 1930 from the centre of the underwater caldera left by the original volcano. “The country’s biggest airport would be paralysed. What if eruptions were to last for months? The economy would shut down,” Triyoso warned.
Indonesia needs to boost scientific modelling, including simulations, to estimate casualties and human costs in the event of a major eruption such as Krakatau, he suggested. “Now imagine if the Krakatau eruption in 1883 happened in today’s Indonesia. The eruption did not only produce ash but also triggered a giant tsunami. Visualising such unexpected, big disasters like Krakatau under the current conditions is important,” Triyoso said. Indonesia also needs to strengthen its food and energy security in order to handle such a large-scale disaster, he added. It currently has a fuel stock that lasts 21 days and depends on imports from Singapore. Triyoso said monitoring systems were adequate, with sensor equipment installed at volcanoes nationwide, but authorities needed to actually use this monitoring data in their risk and hazard assessment programmes, including eruption scenarios, and in formulating reconstruction plans. Since January at least 197 people have been killed in disasters, including flooding, landslides, and volcanic eruptions nationwide, according to the BNPB.
Vietnam trade V deficit US$1.2 bln in Feb 38.3 pct fall m-o-m in total export value
ietnam’s national trade deficit was US$1.2 billion in the first half of February. The total export value for the period was US$3.66 billion and total import value was US$4.86 billion states Vietnam News. Even so, the General Customs Office reported, the nation gained a trade surplus of US$622 million in the period between January 1 and February 15 this year. The trade value in the first half of this month reached US$8.52 billion, a decline of 17.9 per cent against the second half of January, but an increase of 64.7 per cent compared with the same period last year. It made the total trade value between January 1 and February 15 this year amount to US$30.31 billion, a surge
of 11 per cent compared with the same period last year. Vietnam saw a decline of 38.3 per cent in the total export value to US$3.66 billion in the first half of February against the second half of January. But the value during the first 46 days of this year made a year-on-year rise of 7.4 per cent or US$15.47 billion.
KEY POINTS 197 killed in disasters since January Eruption monitoring systems adequate Local government spend on disaster planning ‘tiny’ Nation should strengthen food, energy security
The General Customs Office said the sharp reduction in the total export value in the first half of February was due to fall in the export value of key products, including textile and garment (US$700 million), telephone and components (US$223 million), footwear (US$169 million), seafood (US$144 million), wood and wooden products (US$140 million), machines and components (US$111 million), computers, electronic products and components (US$111 million) and crude oil (US$110 million). The value of exported goods by FDI enterprises accounted for 63.6 percent of the total national value in the first half of February, which was a fall of 36 percent or US$2.33 billion against the second half of January.
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Asia Two dead in Bangkok shopping district An explosion at an anti-government protest site in central Bangkok killed two people, the first time a location in the Thai capital’s main shopping district has been targeted since demonstrations began on October 31. At least 22 people were injured in the blast at about 5pm. local time close to the CentralWorld shopping mall in Rajdamri Road, the Bangkok Emergency Medical Service said on its website. Nineteen people have died in protest violence since late November, including a five-year-old girl who was killed in an explosion in eastern Trat province on Saturday.
BlackRock cuts Dubai share holdings Dubai’s stock index tumbled the most in a month after BlackRock Inc. cut its holdings in United Arab Emirates shares, citing “speculative excess.” Saudi Arabia’s gauge rose above 9,000 for the first time since 2008. The DFM General Index declined 1.4 percent, the most since January 26, to 4,122.88 at the close in the emirate, while Abu Dhabi’s measure slid 0.9 percent. That pared the benchmarks’ gains over the past 12 months to 112 percent and 61 percent respectively. Dubai Investments PJSC, the company that operates businesses ranging from real estate to dairy, retreated 3.1 percent. Arabtec Holding Co. fell to the lowest since February 3.
To let – one Olympic What to do with Sochi’s mountain base for the just-completed David Ljunggren and Olga Petrova
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tanislav Kuznetsov has a headache like no other: it measures 780,000 square metres and covers a large expanse of Russian mountainside. The Gorky Gorod resort in the snowy Caucasus peaks above Sochi was packed during the Winter Olympics. Now the Games are ending, Kuznetsov’s job is to keep filling the nine hotels. And the holiday apartment. And the luxury stores. And the large supermarket complex, which includes a massive artificial beach and lake on the top floor. “We are seriously thinking about the future,” said Kuznetsov, deputy chairman of the board at Russian state lender Sberbank, which owns 92 percent of Gorky Gorod. His challenge epitomises the broader struggle that Russia faces to get a lasting return on an estimated US$50 billion spent on developing the region for the Sochi Games. Kuznetsov appeared upbeat when he spoke to Reuters text and television in an interview on Friday, two days after hosting a major brainstorming session on what to do next with a
Yellen wins praise at G-20 Hamas to privatise Gaza crossing The Gaza Strip’s militant Hamas rulers have said they plan to let private contractors take over the running of the Palestinian territory’s border crossings with Egypt and Israel. “The government is to give the private sector the opportunity to handle the technical management of crossing points from the Gaza Strip,” Hamas deputy prime minister Ziad al-Zaza told AFP on Saturday and said that a commission of seven businessmen would be dedicated to the project. “Supervision of all terminals will be under government control,” said Zaza, who is also finance minister.
Islamic bonds mulled for DanaInfra Malaysia’s DanaInfra Nasional Bhd, created by the finance ministry to raise funds for the country’s largest infrastructure project, may issue and list on the stock exchange this year as many as two Islamic bonds worth 100 million ringgit (US$30.4 million) each, an official with the bourse said. “We are in engagement with them, and definitely we will see at least one or two issuances this year,” Jamaluddin Nor Mohamad, head of Islamic and alternative markets at Bursa Malaysia, said in an interview. The expected issuance is necessary to promote Bursa Malaysia as a market for retail sukuk, he said.
Emerging markets’ angst at Fed tapering policy is eased
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anet Yellen, in her first global forum as Federal Reserve chair, won praise for helping smooth emerging market concerns as the Group of 20 nations pledged to be mindful of international repercussions of monetary policy. In the lead up to the concluding communiqué released in Sydney, India and South Africa were among nations calling for the Fed to consider spill overs as it withdraws stimulus. Officials from the U.K. and Australia had backed the Fed’s right to set policy to its own needs and said some were using the impact of tapering as an excuse for domestic failings. Announcing the G-20’s priorities, Australian host Treasurer Joe Hockey said Yellen was “hugely impressive” in dealing with the issue of taper fallout. “There was proper recognition that the movement of monetary policy in major developed countries either way, whether it be tightening or easing, is going to have an impact on emerging economies,” he said in a speech. Three weeks into her job, Yellen, 67, kept her influence behind closed doors, eschewing public statements while in Sydney. As Hockey and his French and Spanish counterparts
noted her impact in deliberations, Reserve Bank of India Governor Raghuram Rajan, who warned before the meetings of a breakdown in global policy coordination due to tapering, noted “widespread agreement” on the need to calibrate policy. The timing of stimulus pullback will depend on the outlook for prices and growth, the G-20 communiqué said. The group will aim to lift collective gross domestic product by more than 2 percent above the trajectory implied by current policies over the coming five years. The final G-20 statement included a commitment that central banks would be “mindful of impacts” of monetary policy settings -- a clause that wasn’t in a draft seen by Bloomberg News on Feb. 21. A line saying the G-20 nations “recognise that monetary policy needs to remain accommodative in many advanced economies” was also added since the draft statement was seen. Brazilian central bank President Alexandre Tombini said Yellen “herself said that obviously they are looking at the international situation to define their policies.” He was speaking to reporters in Sydney after the G-20 meeting. Bloomberg News
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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business daily 13 13
February 24,19, 2014 Friday April 2013
Asia
resort Winter Games
complex than can accommodate up to 6,000 people. He talks of a bright future in both winter and summer, offering access to the mountains and the Black Sea coast. But in an earlier more informal conversation he had been franker about Gorky Gorod, which translates as Gorky Town. “My personal opinion is that to give this town the chance of a new life we will need a powerful new vision of its future,” he told reporters on Feb 5. “Obviously there is a fear about what will happen, that without a big new idea the significant success of this real estate will of course be put in doubt.”
Attracting Russians Sitting still is not an option, since the overall investment by Sberbank and others totals 80 billion roubles (US$2.3 billion) and this money needs to be made back. Another complicating factor is that Gorky Gorod is not the only mountain complex with rooms to fill. Energy giant Gazprom runs the nearby Laura complex while oligarch Vladimir Potanin built Rosa Khutor. Kuznetsov sees few problems filling rooms in the months to come, since Sochi will host a Group of Eight summit in June and a Formula One race in October. In general, though, officials say foreign tourists are unlikely to flock to the region any time soon, if only because there are virtually no direct flights to Sochi from abroad and some potential travellers are put off
by visa requirements. This means Kuznetsov needs to attract plenty of Russians to the brand new resort to keep the area busy. “No one will invest in a space that after a big event is more or less a ghost city,” said Carsten Albert, manager of two up-market hotels in Gorky Gorod. Two kinds of domestic tourists on the target list are those with money who usually travel abroad and those who vacation in Russia but might think Gorky Gorod is too expensive. “Many people say the climate here is very similar to a Swiss valley,” said Kuznetsov, claiming that the air blowing up from the Black Sea is infused with oxygen from the waters. “To be honest, we can already compete with the major resorts in Europe.” He is also optimistic about the resort’s ability to attract conventions, spa tourists and people who variously want a skiing holiday in winter and an outdoor experience in summer. Some eight million people visit the hot, pebbly beaches of Sochi every year and most of them would love the chance to cool off in the mountains as they admire the snow, he said.
Prices tumble Visitors polled by Reuters in the streets of the resort had mixed opinions about whether they would come back. “I find the area pretty and I could imagine going skiing here but I think there are many other closer ski areas that you’d go to for less money, effort, no visa and so on,” said Jana Passkoenig from Germany.
“I like it very much ... I wasn’t expecting to see something like this. If we come here in the future we would start skiing right away, will stay here and ski,” said Nikolai Frolov from the city of Ufa in the Ural mountains. One way to fill rooms is to offer good deals. “We understand this is a new resort and to attract people, even Russian guests, we need to attract them with prices as well,” says Maria Volkova, a public relations specialist with Interstate, a firm that operates four of the hotels. Once the Games are over, the price for a regular room will be just 3,700 roubles, including breakfast. Kuznetsov often uses the word “comfort” and the modern accommodation shown to reporters in four separate hotels bore little resemblance to old-style Soviet rooms, which contained a single bed, ancient sheets and a noisy fridge. Sberbank also plans to raise funds by selling around 1,500 apartments and according to Kuznetsov, aims to get its money back in five to seven years. Albert, who worked for 12 years in the chic Swiss resort of St Moritz, dismisses this as unrealistic. “People want to get rich in months, not even in years, not in decades. That’s the biggest problem in Russia, that people can’t wait,” he told Reuters. “They want to get back their investment in hotels maybe in seven or eight years when the whole world knows it comes back in 20 to 25 years.” Reuters
Japan drafts revision of arms exports ban Could draw criticism from China and South Korea, where country’s wartime aggression still rankles Nobuhiro Kubo
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apan has drafted new guidelines that would reverse a decades-old ban on weapons exports, a source with knowledge of the matter said yesterday, a move that could further strain ties with neighbours China and South Korea. Tokyo has been reviewing the self-imposed export ban under Prime Minister Shinzo Abe’s new security strategy, aimed at bolstering the selfreliance of the military. Serving as prime minister for a rare second time and enjoying solid public approval, Abe says Japan needs a stronger military to cope with what he calls an increasingly threatening security environment, with a more militarily assertive China and unpredictable North Korea. The proposed revision could draw criticism from China and South Korea, where resentment over Japan’s wartime aggression still runs deep. Beijing and Seoul also have long-running territorial disputes with Tokyo over different sets of islets. Japan drew up the “three principles” on arms exports in 1967, banning sales to
countries with communist governments or those involved in international conflicts or subject to United Nations sanctions. But the rules over time became tantamount to a blanket ban on exports - with some exceptions - and on the development and production of weapons with countries other than the United States. Under the new guidelines, arms exports would be approved upon “rigorous review” if they were to serve
peaceful missions or if joint development of a weapon was deemed to enhance national security, the source told Reuters. The draft principles omit the ban of exports to governments that are involved in international conflicts, a move that Japanese daily Asahi Shimbun said on Sunday was aimed at paving the way for more sales to countries like Israel, which last year bought Lockheed Martin’s F-35 jets with
Japan-made components. “It’s not necessarily aimed at boosting exports so much as clarifying the types of cases in which exports were previously allowed under exceptional circumstances,” the source said, declining to be identified because the draft is not public. The Liberal Democratic Party-led government hopes to agree the revision with its more dovish coalition partner, the New Komeito Party, and approve the
change as early as next month, the source said. The current export ban has traditionally kept Japanese defence contractors, such as Mitsubishi Heavy Industries Ltd, Kawasaki Heavy Industries Ltd and IHI Corp, from taking part in international weapons development programmes, making it difficult for them to stay abreast of technological development and drive down costs. Reuters
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International
Venezuelans protest en masse Rival rallies for pro- and anti-govt camps show deep split in society Jordi Miro
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undreds of thousands of Venezuelans took to the streets of Caracas in marches for and against President Nicolas Maduro’s government at the weekend, as the nation’s massive divide became ever more visible. The protests – which began on February 4 – are seen as the biggest test yet to socialist leader Maduro since he succeeded late leftist icon Hugo Chavez last year, with the country’s economic problems at the heart of often bloody scenes that have left 10 people dead and scores injured. Saturday’s competing mass rallies in the capital laid bare a chasm between those who support Maduro and those who oppose him, in an oil-rich country that despite having the world’s largest proven reserves is grappling with basic goods shortages, rampant inflation and violent crime. Just 24 hours after Maduro made a rare offer to US President Barack Obama of talks to end more than a decade of enmity, there appeared no prospect of rapprochement after Secretary of State John Kerry hit out at the Venezuelan government’s handling of the protests. Heeding the call of opposition leader Henrique Capriles, who narrowly lost to Maduro in the election to succeed Chavez last year, at least 50,000 anti-government protesters
streamed into several avenues in the Caracas neighborhood of Sucre. With some sporting Guy Fawkes masks or faces painted in the colors of the Venezuelan flag, they demanded the disarming of groups accused of intimidating and even attacking demonstrators. “The state should stop these paramilitary groups,” said the head of the main opposition coalition, Ramon Guillermo Aveledo. “It is unacceptable that there are armed groups that are out of control.” Others accused Maduro and late leader Chavez for allowing the economy to tailspin and for failing to tackle street crime and corruption.
Nation split “I can’t stand the situation. It’s not fair that we’re in one of the richest countries in the world and still can’t get food,” 24-year-old student Joel Moreno told AFP. Meanwhile, tens of thousands of pro-government supporters, mostly women who clutched flowers and dressed in red and white, gathered in the center of the capital. Some of Maduro’s backers, draped in the national flag, denounced the student protests. “Venezuela is a country of peace and they can’t come here and try
to change what it is,” said Josefina Lisset, 54. “They should let this president rule, he was elected democratically.” On Saturday, Maduro who denies holding links to armed groups, unveiled a new peace initiative – a week after a national public safety strategy he announced was overtaken by the protests. “I am calling on the Venezuelan people to join me Wednesday in a national peace conference with all the country’s political sectors ... so we Venezuelans can try to neutralize violent groups,” he said. While supporters from the rival camps spilled on to the streets in
different parts of the capital, security was heavy amid fears further clashes could erupt if they collided. The head of the Organization of American States, the regional bloc for the Americas, meanwhile, floated the idea of international mediation. In an op-ed piece in the Chilean paper La Tercera, Jose Miguel Insulza said that if neither government nor demonstrators in Venezuela “trusts anybody any more, no institution or person to be fair and balanced ... maybe they should resort to external actors from somewhere in the Americas” to mediate “before it is too late.” AFP
Russians say ‘knickers’ to panties ban What’s up with WhatsApp? Some types of synthetic textile underwear to be outlawed for health reasons
Service down, three days after Facebook deal
Anna Malpas
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ussia and two of its exSoviet neighbours are set to impose a ban on certain types of lace panties, sparking public fury and even a lingerie-themed street protest. Coming under a complete ban this summer in Russia, Kazakhstan and Belarus are lace or net knickers that have a high synthetic content, due to a new hygiene rule. The Russian underwear market is worth around four billion euros, according to the Russian union of textiles and light industry. Around 60 percent of this is panties. Russians prefer to buy imported underwear, which makes up 80 percent of sales. The rule is set to come into force in the Russia-led customs
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union of the three countries and has prompted plenty of amusement and newspaper photographs of women’s bottoms, but also fears over a return to Soviet-style regulation of everyday life. Last year Russian retailers complained to the ministry of trade and industry that up to 90 percent of synthetic underwear could disappear from stores due to the ban, which sets minimum absorbency for garment material at six percent. “Lacy panties are heterosexual propaganda to adults,” wrote Moskovsky Komsomolets daily, referring to a recent Russian law banning so-called gay propaganda to minors. “Bureaucrats are poking
into women’s knickers,” complained Express Gazeta tabloid. “What? I’m emigrating,” Russian pop star Viktoria Daineko wrote on Twitter. Other bloggers mockingly posted pictures of shapeless knee-length undergarments. “Coming soon to all girls in the country,” one said. Underwear retailers raised concerns that much of their sexier lingerie will fall under the ban, while other observers saw a return to Soviet-style arbitrary rules and lack of choice. In Kazakhstan’s former capital of Almaty, three women protested by putting lacy knickers on their heads and attempted to lay them at an independence monument last weekend. “They have robbed the people so much that we can only give away the last thing we have,” said one of the protesters, Zhanna Baitelova, a journalist at Assandi Times newspaper. “Now they’re even deciding what kind of underwear we should put on,” she said. AFP
hatsApp’s 450 million worldwide users were unable to access the smartphone freemessaging service for several hours on Saturday, three days after Facebook declared it was lavishing up to US$19 billion on it. “Sorry we currently experiencing server issues. We hope to be back up and recovered shortly,” WhatsApp said in a message on Twitter that was retweeted more than 25,000 times in just a few hours and provoked ridicule because it comes so soon after Facebook’s hefty acquisition. Some WhatsApp users found they were unable to connect to the app, while others complained their messages were not going through. WhatsApp did not say how long the outage lasted, but about 2.5 hours later it tweeted again to say: “WhatsApp service has been restored. We are sorry for the downtime...” The specialist website techcrunch.com suggested the problem might be down to “a surge of signups and usage that has overloaded its servers” after the publicity the app garnered following Facebook’s announcement on Wednesday.
Facebook is betting huge on mobile with the eye-popping cash-and-stock deal for WhatsApp, which was only started five years ago but has quickly grown as a free alternative to text messages. It is Facebook’s biggest acquisition and comes less than two years after the California-based Internet star raised US$16 billion in the richest tech sector public stock offering. Neither WhatsApp nor Facebook were immediately available for comment. However, the outage was the source of much amusement – as well as anger – on Twitter. “I expect you are all away from your desks on the ales drinking some of that Facebook cash!” one user, “leonclarance,” replied to WhatsApp’s tweet about the blackout. Another simply tweeted: “Turn down Facebook’s offer guys!” AFP
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February 24,19, 2014 Friday April 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
CHINA DAILY Chinese television maker TCL Corp is releasing its first video game console similar to Microsoft Corp’s Xbox later this year, a company executive said amid high expectations for the longclosed sector. “Entertainment will be the biggest focus for us in 2014,” said Hao Yi, president of TCL Multimedia Technology Holdings Ltd, a major subsidiary of TCL. Increasing demand for video games from Chinese youngsters will drive the sales of the company’s new gadgets, according to Hao. Although the Guangdong-based maker did not disclose the possible release date of the terminals nor sales forecast, its stocks surged in Hong Kong.
The dollar and the damage done Barry Eichengreen
Professor of Economics and Political Science, University of California, Berkeley
JAKARTA GLOBE The unfinished reinforced concrete pillars that dot the Kuningan business district in South Jakarta were meant to hold up the city’s long-awaited monorail line. Now, they’re holding up the resumption of the 1.7 trillion rupiah (US$145 million) project. Jakarta Monorail, the consortium appointed last year to continue the project that was abandoned in 2007, alleges that part of the reason it can’t move forward is that it needs to buy those pillars from state-owned builder Adhi Karya – and that the latter has inflated its price by some 43 percent. The supplier denies the allegation.
THE AGE NBN Co executive chairman Ziggy Switkowski has labelled as too ambitious plans to disconnect copper cable services to up to 100,000 Australian homes per month as part of the national broadband network rollout. The plans, formulated by the company’s previous executives as part of its negotiations with Telstra, mean existing copper phone and broadband services will be disconnected 18 months after the NBN becomes available in a given area. Releasing its halfyear accounts, NBN Co said its capital expenditure increased by A$396 million to A$1.2 billion in the six months to December 31.
VIETNAM NEWS The project to upgrade 45km of the National Road 1A from Ha Noi to Bac Giang Province will start in the first quarter of this year with an investment of 4.5 trillion dong (US$213.35 million), according to the Transport Ministry. The road, which will be constructed under the BOT (build-operate-transfer) model, is expected to be complete in 2016, the ministry said. The expressway will be 45.8km long and have a speed limit of 100km per hour, starts at the crossroad of National Road 31 in Bac Giang Province and ends at the Phu Dong old toll station in Ha Noi.
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he US Federal Reserve is being widely blamed for the recent eruption of volatility in emerging markets. But is the Fed just a convenient whipping boy? It is easier to blame the Fed for today’s global economic problems than it is to blame China’s secular slowdown, which reflects Chinese officials’ laudable efforts to rebalance their economy. Likewise, though Japan’s “Abenomics,” by depressing the yen, complicates policymaking for the country’s neighbours, it also constitutes a commendable effort to bring deflation to a long-overdue end. So, again, it is easier to blame the Fed. And, for the affected emerging economies, the Fed’s tapering of its massive monthly purchases of long-term assets – so-called quantitative easing (QE) – is certainly easier to blame than their own failure to move faster on economic reform. Still, the Fed should not be absolved of all guilt. The prospect of higher interest rates in the US weakens the incentive for investors to pour capital into emerging economies indiscriminately. Though a confluence of factors may have combined to upset the emerging-market applecart, Fed tapering is certainly one of them. It is striking, therefore, that the Fed has made no effort to take into account the impact of its policies on emerging economies or the blowback from emerging markets on the US. Emerging markets comprise more than a third of global GDP. They have contributed considerably more than a third of global growth in recent years. What happens
in emerging markets does not stay in emerging markets. Increasingly, what happens there has the capacity to affect the US. Yet Fed officials, while commenting copiously about their motives for tapering QE, have said nothing about the impact of doing so on emerging markets. They have given no indication of being aware that US monetary policy can affect events outside of their narrow corner of the world.
After the gold rush This silence is all the more remarkable in view of two other recent developments in Washington, DC. First, the US Congress, as part of the government’s recent budget deal, refused to authorise an increase in America’s quota subscription to the International Monetary Fund. The financial commitment was essentially symbolic, but it was part of a larger agreement reached at the Seoul Summit of G-20 leaders to regularise the IMF’s resources and enhance the representation of emerging economies. This failure to follow through reopens old wounds and raises troubling questions about the legitimacy of an institution that, reflecting the long shadow of history, is dominated by a handful of advanced countries. Emerging-market officials have been increasingly reluctant to turn to the IMF for advice and assistance, undermining its ability to play an effective global role. The other development was the decision to make permanent the dollar swap arrangements put in place during the financial crisis by
the Fed, the European Central Bank, and the central banks of Canada, the United Kingdom, Switzerland, and Japan. Under these arrangements, the Fed stands ready to provide dollars to this handful of favoured foreign central banks – an acknowledgment of the dollar’s unique role in international financial markets. Because international banks, wherever they are located, tend to borrow in dollars, the swap arrangements allow foreign central banks to lend dollars to their local banks in times of emergency.
Emerging-market officials have been increasingly reluctant to turn to the IMF for advice and assistance
Put these three events – the tapering of QE, the torpedoing of IMF reform, and the entrenchment of dollar swaps – together and what you get is a US that has renationalized the international lender-of-last-
resort function. Simply put, the Fed is the only emergency source of dollar liquidity still standing. But the US has offered to provide dollars only to a privileged few. And in its policy statements and actions, it has refused to acknowledge its broader responsibility for the stability of the world economy.
Southern man So what should the Fed do differently? First, it should immediately negotiate permanent dollar swap lines with countries such as South Korea, Chile, Mexico, India, and Brazil. Second, the Fed should adjust its rhetoric and, if necessary, its policies to reflect the fact that its actions disproportionately affect other countries, with repercussions on the US economy. Might this mean that the Fed should slow the pace of its tapering of QE? Yes, it might. The Fed may hesitate to extend additional swap lines, because to do so could expose it to losses on foreign currencies. Moreover, it may worry about antagonising countries that are not offered such facilities; and it may fear criticism from Congress for overstepping the bounds of its mandate if its talk and policies acknowledge its global responsibilities. If US policymakers are worried about these issues, their only option is to agree to quota increases for the IMF, thereby allowing responsibility for international financial stability to migrate back to where it belongs: the hands of a legitimate international organisation. © Project Syndicate
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February 24, 2014 Friday April 19, 2013
Closing Mugabe launches 90 birthday balloons
HK rally for press freedoms
Thousands of people turned out yesterday to wish happy birthday to Zimbabwe’s President Robert Mugabe, who threw 90 balloons into the air to mark his 90th year and continuing hold on power. Fresh off the plane from Singapore, where he had travelled for eye surgery last week, Mugabe was in typically defiant mood as he launched his birthday celebrations at Marondera stadium, east of the capital Harare. “I feel as youthful and energetic as a boy of nine,” Mugabe said, before cutting his cake.
More than 1,600 people including journalists marched in Hong Kong on Saturday calling for freedom of the press. The demonstrators, led by the Hong Kong Journalist Association, walked from Central’s Chater Garden to the Chief Executive’s office in Admiralty. Police said 1,600 people took part, while the association estimated the turnout was 6,000. Hong Kong’s ranking on the global Press Freedom Index compiled by Reporters Without Borders fell to 58 last year from 18 in 2002. The Hong Kong government said in a statement it respected freedom of press.
Ukraine faces battle to rise from crisis Could default on US$13 billion Russian bailout if loan withdrawn Marianne Barriaux
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n economy facing default, a splintered opposition and regions with separatist tendencies: Ukraine’s new government will face an uphill struggle to stabilise the country, analysts say, as the fall of President Viktor Yanukovych looms. Under intense pressure from the international community and protesters reeling from violence in Kiev, Yanukovych signed a peace deal Friday after clashes between anti-government activists and security forces left nearly 100 dead this week. But that failed to appease protesters, who now demand the immediate departure of an embattled leader who has already been abandoned by many parliament allies and the police, and who left the capital altogether on Friday night. “There are a lot of people on the ground who believe the revolution needs to be seen through to the end,” said Andrew Weiss, who oversees research on Russia and Eurasia at the Carnegie
Endowment for International Peace think tank. But once the battered country’s worst crisis since independence finally settles down, Ukraine will be in dire need of stabilisation and
analysts are pessimistic about its immediate prospects. “Anybody still casting about for the great white hope – that’s not going to happen,” said Matthew Rojansky, director of the
US-based Kennan Institute, which specialises in Russia and post-Soviet states. The economy for one. Repairing the scarred centre of Kiev will be a costly affair but even without that,
debt-laden Ukraine risks a devastating default unless it receives financial assistance – fast. The three-month crisis has prompted panic on the markets, with short- and long-term bond yields rising sharply and the hryvnia currency losing a tenth of its value in a span of a few weeks. There is also uncertainty over whether Moscow will keep paying out a US$15billion bailout it promised to Kiev shortly after Yanukovych rejected an EU trade deal in November in favour of closer ties with Russia, a move that angered pro-EU parts of the population and kickstarted the unrest. Russia has so far paid out a US$3-billion instalment but suspended another tranche pending a return to calm. Standard & Poor’s ratings agency predicted Friday that if Russia scrapped the bailout, Ukraine would default on the US$13 billion of debt it is due to pay back this year. AFP
Morsi accused China’s foreign minister G-20 nations renew vow of leaking Egypt secrets in rare Iraq visit on shadow banking
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rosecutors yesterday accused deposed Egyptian president Mohamed Morsi of leaking state secrets to Iran’s Revolutionary Guards as part of a plot to destabilise Egypt. The claim came during the second hearing of his trial for espionage. The trial, one of three that are under way against Morsi, is part of a relentless government crackdown targeting him and his Muslim Brotherhood movement since his ouster by the army in July. Prosecutors accuse Morsi and 35 others, including leaders of the Muslim Brotherhood, of conspiring with foreign powers, Palestinian militant movement Hamas and Shiite Iran to destabilise Egypt. Yesterday, the second hearing since the trial opened on February 16, they detailed the charges against Morsi and his co-defendants. They were specifically accused of “delivering to a foreign country... national defence secrets and providing the Iranian Revolutionary Guards with security reports in order to destabilise the security and stability of the country”.
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hinese Foreign Minister Wang Yi arrived in Baghdad yesterday for talks on issues ranging from trade to arming Iraq’s hardpressed security forces, the first such visit in more than a decade. During a joint news conference, Foreign Minister Hoshyar Zebari hailed China as “the biggest trade partner for Iraq, and the biggest investor in the oil and electricity sectors”. Chinese companies PetroChina and CNPC have substantial investments in Iraqi oil production, which accounts for the lion’s share of government revenue. Baghdad is seeking to dramatically ramp up its oil sales to fund reconstruction of its battered infrastructure. Zebari also said Wang’s visit included discussions on arming Iraqi security forces, which are struggling to curb a year-long surge in violence that has killed thousands of people. The situation in Syria, Iraq’s civil war-torn neighbour to the west, and Iran to its east, which is negotiating with world powers including China on its controversial nuclear programme, was also discussed.
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lobal finance officials renewed their promise to address risks from unregulated lending and said their drive to end bailouts for large banks should be nearly finished this year. Group of 20 finance ministers and central bank governors meeting in Sydney over the weekend said they are focused on “substantially completing” efforts to prevent lenders from becoming too big to fail and addressing the risks of shadow banking before a summit of the nations’ leaders in November. In their communique, the officials included wording on shadow banking that was similar to language used in a G-20 declaration in September. The statement referred to “ending too-big-to-fail,” more assertive than the previous promise to make progress toward that goal. Talks to coordinate financial regulations were overshadowed during the weekend by negotiations over an economic growth objective. The group agreed to target collective gross domestic product that’s more than two percent higher after five years than the trajectory implied by current policies.