Macau Business Daily, March 7, 2014 by Business Daily

MOP 6.00 Closing Editor: Michael Grimes Publisher: Paulo A. Azevedo

Macau students flock to Taiwan Page 4

Creativity fund needs to rev ideas engine Page 5

The high life – One Penha Hill Page 7

Year II

Number 491 Friday March 7, 2014

‘Be self-confident’ Beijing’s message to Macau

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Friday April 19, 2013

HSI - Movers March 6

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ashion designer Karl Lagerfeld will lend his name and creative talents to the third hotel tower at SJM Holdings Ltd’s planned Cotai casino resort Lisboa Palace. Mr Lagerfeld heads his own label as well as being creative director of French fashion house Chanel. He signed in Paris a memorandum of understanding on behalf of Karl Lagerfeld Greater China Holdings Ltd. The deal is with Sociedade de Jogos de Macau SA. Page

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COSCO Pacific Ltd

6.47

China Merchants

3.34

CITIC Pacific Ltd

2.21

Tencent Holdings

2.01

Belle International

1.87

Industrial & Comm

-0.66

China Coal Energy

-0.76

Want Want China

-1.06

Tingyi Cayman Isl

-1.37

Bank of East Asia Lt

-2.54

Source: Bloomberg

I SSN 2226-8294

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Photo: Macao Daily News

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SJM hires the man in black

Brought to you by

Future Bright share offer

Show of force at Gongbei

Future Bright Holdings Ltd hopes to raise up to HK$276 million (US$35.6 million) through a share placement, in order to fund the building of a food plaza on Hengqin Island. The restaurant operator told the Hong Kong Stock Exchange it would offer a maximum of 65.4 million shares, about 9.42 percent of the company’s share capital. The shares would be offered at HK$4.30 each.

Members of the Chinese People’s Armed Police Force – known as CAPF – were on patrol in combat gear on the Zhuhai side of the Gongbei border gate with Macau on Wednesday. Chinese-language newspaper Macao Daily News quoted unnamed Zhuhai police officials saying the patrol was a special measure implemented to coincide with the fortnight-long meeting of the National People’s Congress in Beijing.

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Macau Urban planning official chosen Lao Iong, director of the urban planning department for the Land, Public Works and Transport Bureau has been appointed to serve a three-year term as secretary-general of Macau’s new urban planning committee, according to the city’s Official Gazette. The body, to be chaired by the Secretary for Transport and Public Works, Lau Si Io, will have a maximum of 35 members. The majority will be government-appointed and will be professionals chosen from the urban planning sector or related disciplines. The committee will advise on the city’s urban development and construction plans. The timetable for its meetings has yet to be announced.

Future Bright offers shares to fund Hengqin project Restaurant operator aims to raise HK$276 mln for food plaza development Tony Lai tony.lai@macaubusinessdaily.com

a land plot will be granted and the relevant plot ratio for development, as well as the final land cost,” he said. “So we can’t say how much money we will put into the Hengqin project yet.”

One-third chance The Macau government has received 89 applications including Future Bright’s proposal for the 4.5-square-kilometre development zone on Hengqin. Secretary for Economy and Finance Francis Tam Pak Yuen said the government would finish reviewing the applications this month and put forward the final 30 projects to the Hengqin authorities. Other projects earmarked for Hengqin include a 500-million-yuan (652.3 million pataca) shopping outlet from the Rainbow Group, a Macaubased distributor of luxury branded goods.If Future Bright does not win the government’s approval, it will invest the funds in new stores in Macau. After the placement, Mr Chan’s ownership of Future Bright will be diluted from 39.47 percent to 35.75 percent. Investment bank CLSA Ltd is offering the shares. The restaurant operator’s gross operating profit jumped to HK$271.8 million last year, up by 14.6 percent from the previous year, boosted by tourist arrivals. Chan Chak Mo, managing director, Future Bright Holdings

uture Bright Holdings Ltd hopes to raise up to HK$276 million (US$35.6 million) through a share placement, in order to fund the building of a food plaza on Hengqin Island. The restaurant operator told the Hong Kong Stock Exchange it would offer a maximum of 65.4 million shares, about 9.42 percent of the company’s share capital. The shares would be offered at

HK$4.30 each, a discount of 6.32 percent to the average closing price of HK$4.59 a share in the previous 30 trading days. The funds would be invested in the food plaza, which is one of 89 Hengqin proposals awaiting the government’s approval. Managing director Chan Chak Mo – who is also a Macau legislator – said he was confident the project would be one of the 30 selected.

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The food plaza could have a gross floor area of about 140,000 square metres, housing “up to 100 restaurants and food souvenir shops with diverse cuisines… and an exhibition hall”, the company said. Mr Chan said the net HK$276 million the company hoped to raise from the market did not translate into its full, planned investment on Hengqin. “We still don’t know how large

welcome

140,000 sq. m. Size of proposed Hengqin food plaza

opportunity

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Macau Residents’ bank deposits up 4.1 pct in Jan Bank deposits by Macau residents increased 4.1 percent in January from the previous month to 450.3 billion patacas (56.3 billion U.S. dollars), according to figures released by the Monetary Authority of Macao.Residents’ pataca deposits, Hong Kong dollar deposits and other foreign deposits increased respectively by 5.4 percent, 0.3 percent and 12.1 percent month-to-month. Non-residents’ deposits grew 8.6 percent from the previous month to 189.2 billion patacas. Public sector deposits with local banks rose by 13.3 percent month-on-month to 83.4 billion patacas said the authority. Total bank deposits rose 6.3 percent from the previous month to 722.9 billion patacas.

Beijing senior official tells Macau: ‘Be more self-confident’ Analysts say the message is that the government should be more decisive Tony Lai

tony.lai@macaubusinessdaily.com

Policy paralysis The coordinator of the University of Macau’s public administration programme, Eilo Yu Wing Yat, said: “The central government is certainly trying to treat Macau and Hong Kong separately, so different arrangements and policies apply to each of the special administrative regions.” Mr Yu thinks Mr Zhang was calling for the Macau government to be more decisive.

“The government has put itself in a predicament such that it will retreat whenever the public has any adverse reaction.” Mr Yu said an example was

paralysis in labour policy. Secretary for the Economy and Finance Francis Tam Pak Yuen has admitted that the supply of labour cannot keep up with economic development. But the government has yet to come up with a solution to the problem because the trade unions strongly oppose any easing of restrictions on the employment of migrant workers. Mr Li said: “Macau should make progress in grooming its residents.” He explained: “Only when residents are better trained will they be unafraid of losing their jobs to outsiders.” Mr Zhang was quoted as saying yesterday that Macau should work on “cultivating talent”. He also said Macau could cooperate more closely in the development of Hengqin Island. And he said Macau should come up with “fresh ideas” about how to strengthen its position as the conduit for business between the mainland and Portuguesespeaking countries. Premier Li Keqiang said this week Beijing would back efforts by Macau and Hong Kong to become more competitive.

station in Kunming, Yunnan province on the mainland on Saturday evening. Macau’s Secretary for Security Cheong Kuoc Va said on Monday the territory was stepping up its communications with

mainland officials following the Kunming outrage. The Macau Judiciary Police issued a statement yesterday quashing rumours on social media that there was immediate threat of an attack here.

Zhang Dejiang at the National People’s Congress this week

“I’d say the government here is quite weak now – no better than Hong Kong’s – as the government dares not make any big policy changes,” he said.

Show of force on Zhuhai side of border M

embers of the Chinese People’s Armed Police Force – known as CAPF – were on patrol in combat gear on the Zhuhai side of the Gongbei border gate with Macau on Wednesday. Chinese-language newspaper Macao Daily News quoted unnamed Zhuhai police officials saying the patrol was a special measure implemented to coincide with the fortnight-long meeting of the National People’s Congress in Beijing. It also comes only days after at least five reported Xinjiang separatist militants killed as many as 33 people and wounded 140 more in knife attacks at a railway

Photo: Macao Daily News

acau should have more self-confidence and avoid comparing itself with other places, a Beijing official who oversees Macau and Hong Kong said yesterday. The chairman of the standing committee of the National People’s Congress, Zhang Dejiang, said so in a meeting with Macau and Hong Kong deputies. Political scientists think Mr Zhang was probably telling the Macau government to be more decisive, and referring to comparisons with Hong Kong, where universal suffrage is being publicly debated. One of the Macau deputies in yesterday’s meeting, Lao Ngai Leong, quoted Mr Zhang as saying: “Macau should strengthen its self-confidence for its own development.” Mr Lao told reporters after the meeting that Mr Zhang had said: “Macau does not need to compare itself with other places, but to follow its own path to development.” Macao Polytechnic Institute associate professor of public administration Li Lue said: “Macau has always compared itself with Hong Kong in terms of its economy and policies.” Mr Li commented: “I think this message may refer to universal suffrage being debated in Hong Kong, which has caused several political problems which Macau could do without.” The central government gave Hong Kong permission in 2007 to elect its chief executive by universal suffrage in 2017. But sceptics in Hong Kong doubt the central government’s sincerity, suspecting that Beijing will weed out any candidates that are in favour of democracy. Some have said they will occupy Hong Kong’s central business district this year to demonstrate their scepticism. Beijing has said nothing about allowing universal suffrage in Macau.

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Macau

Photocall – senior SJM executives with Karl Lagerfeld and his management team in Paris

SJM signs the man in black German designer Karl Lagerfeld to model third tower at Lisboa Palace

ashion designer Karl Lagerfeld will lend his name and creative talents to the third hotel tower at SJM Holdings Ltd’s planned Cotai casino resort Lisboa Palace. Mr Lagerfeld – who heads his own label as well as being creative director of French fashion house Chanel – signed on Wednesday in Paris a memorandum of understanding on behalf of Karl Lagerfeld Greater China Holdings Ltd. The deal is with the gaming concession unit of SJM – Sociedade de Jogos de Macau SA. The hotel will have up to 270 guestrooms and suites in its own 20-storey tower as part of the HK$30 billion (US$3.87 billion) Lisboa Palace resort according to a statement by SJM. It’s described as the first luxury hotel “fully designed” by Mr Lagerfeld, and is expected to open in 2017. “Together with Palazzo Versace Macau and our own Lisboa brand, our

destination resort will become a hub of luxurious accommodation,” said Ambrose So Shu Fai, chief executive of SJM Holdings, in a prepared statement. In September, SJM announced that

I’m very much down to earth-just not this earth Karl Lagerfeld

Milan-based fashion house Gianni Versace SpA was lending its name and branding to one of the other hotel towers at the new property. It too will have its own 20-storey tower. It too will open in 2017 and have 270 rooms and suites according to SJM company statements. So far SJM hasn’t clarified whether either of the fashion houses will manage their respective hotels directly or under a licensing deal with the casino developer. Karl Lagerfeld Group BV says it has opened five stores in Greater China recently and that the hotel project fits with its ambitions for the region. “This project is an important milestone in the development of our brand and business globally and specifically in Greater China,” said Pier Paolo Righi, chief executive and president of Karl Lagerfeld Group.

Mr Lagerfeld certainly understands luxury. He is quoted saying that on his fourth birthday he asked his mother to get him a valet. As well as Mr Lagerfeld’s contribution, Lisboa Palace will have a luxury hotel branded in the resort’s own name. The entire project is due to have 2,000 rooms, according to the casino company. SJM said at the ground breaking ceremony for Lisboa Palace in midFebruary that it hoped to open the whole resort in 2017 and also hoped to have 700 gaming tables. But last Friday, Francis Tam Pak Yuen, Macau’s Secretary for Economy and Finance, said it was “certain” that the six major new Cotai resorts either planned or under construction wouldn’t get all the tables for which they had asked – until at least 2022, when the current government cap on gaming table growth is due to expire.

Macau, Hong Kong students flock to Taiwan universities The island is changing its immigration rules to encourage students from Macau and Hong Kong to stay Stephanie Lai

sw.lai@macaubusinessdaily.com

he number of students from Macau or Hong Kong studying at Taiwan universities has risen rapidly in the past decade or so, data issued by the island’s Ministry of Education indicate. The data show 8,601 students from Macau or Hong Kong are attending Taiwan universities in this academic year, 5,400 more than nine years ago.

The number of Macau permanent residents studying at Taiwan universities is 4,480, nearly twice the number nine years ago. Most of the Hong Kong and Macau students are studying principally the humanities, business administration, engineering or medicine. The Taiwan government is making it easier for students from the special administrative regions of China to

obtain residency on the island. Last month the island’s Ministry of the Interior announced that the immigration rules will be changed to allow residents of Macau or Hong Kong that have graduated from Taiwan institutions of tertiary education to obtain residency if they have lived and worked in Taiwan for five years, and if they earned an average monthly income of at least twice the minimum

wage in the year before they applied. The island’s Ministry of Labour says the minimum wage is now NT$19,047 (5,027 patacas) a month and will rise to NT$19,273 a month on July 1. At present residents of Macau or Hong Kong that have graduated from Taiwan institutions of tertiary education must return to their home cities for two years before applying for residency on the island.

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Macau

Creativity fund needs to rev its ideas engine Fresh thinking could widen definition of ‘creative industries’ to cover areas linked to big sporting events – academic Luciana Leitão newsdesk@macaubusinessdaily.com

he government’s fund to help foster the creative and cultural industries must be better targeted to be effective, an academic says. The omission of cultural tourism, heritage, architecture and the culinary arts was baffling, said University of Saint Joseph’s creative industries dean Álvaro Barbosa. “They also haven’t included an important area, the big sporting events: Formula 3, Grand Prix, boxing in the casinos,” Mr Barbosa added. He said the fund might even cater for creative endeavours that did not fit the government’s categories. “People may assume they are not included,” he said. The academic says the 200-million-pataca (US$25 million) initiative is a positive, but there is an urgent need to clarify what endeavours would be supported. Mr Barbosa says the fund

Macau Grand Prix – inspiration for creative industries?

may miss some of the most promising opportunities available because it deals with existing businesses only. “According to the government regulations, it is clearly pointing towards

projects already established. If that is the case, then it may not embrace new ideas,” he said. Capturing up-andcoming ideas should begin with “contests” aimed at developing new business

opportunities, he said. But the focus on existing businesses would omit some burgeoning ideas. Mr Barbosa said there were questionable inclusions a n d ex c l u s i o n s i n t h e

fund’s rules. The government’s funding categories include design, visual arts, cinema, music, comics and animation, publishing, fashion and the performing arts.

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Macau Brought to you by

Keep smiling Macau Airport’s passenger volumes to or from Southeast Asia fell by 0.5 percent in February – due mainly to Thailand’s political unrest

HOSPITALITY

Tony Lai

tony.lai@macaubusinessdaily.com

Smaller players Last year Asian countries accounted for 99.3 percent of all visitors that came to Macau on packaged tours. Almost 77 percent of visitors were from China. The next two contributors, Hong Kong and Taiwan accounted together for about 11 percent. Add to that about 6.3 percent corresponding to the combined share of Japan, South Korea and India, and the remainder is of comparatively little significance. Six Southeast Asian countries – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam – had together fewer visitors in packaged tours than either India or South Korea, and barely more than half the figure for Taiwan alone. Even the leader of this pack, Thailand, posted just over 50 visitors per day, on average, in 2013.

THAI Smile was one airline that cancelled some Bangkok flights in January

Leaving aside the obvious seasonality of the plots, it is clear that different trends are at play here. The most remarkable figures are possibly those from Vietnam. Up to the middle of 2010, the country figures were going up and stood close to most of the other countries. Then there was a sharp drop and in many months since we find that fewer than 1,000 visitors have been arriving from that country. Since the middle of last year, the numbers for the Philippines seem also to be stabilising at a lower plateau than usual. After some growth in 2011 and 2012, the values for Singapore seem to be getting back to the levels seen earlier on. Data for Malaysia show significant variability over the year, but are mostly stable across years. The brightest spot is Thailand, the only country displaying a neat upward trend. Figures rose from fewer than 10,000 monthly visitors in 2010 to more than 15,000 in 2013.

65.7%

Growth, Thailand visitors on packaged tours, 2010-13

he political turmoil in Thailand reduced the number of passengers flying between Macau and Southeast Asia last month, Macau International Airport Co Ltd (CAM) says. But both the airport operator and low-cost carrier AirAsia think the number could rebound this month if the situation in Bangkok looks less risky. A spokesperson for CAM told Business Daily yesterday that the number of passengers travelling to or from Southeast Asia had been 0.5 percent lower last month than a year earlier.

‘Dragged down’ “It was dragged down by the political ups and downs in Thailand as the airlines cancelled numerous flights in February and some passengers rebooked their flights, postponing their trips to Thailand,” the spokesperson said. AirAsia Bhd’s general manager of airport and network planning for Greater China, Celia Lao Sio Wun, said her airline had reduced the number of flights it made each day between Macau and Bangkok to three from four last month. “The passenger load factor on our Macau-Bangkok flights dropped by half last month, despite the reduction,” Ms Lao said. She gave no passenger load factor figure. The Thai government announced on January 21 a 60-day state of emergency in Bangkok and the surrounding provinces because of demonstrations by opponents of the

Prime Minister, Yingluck Shinawatra, who are calling for her to step down. The government of Hong Kong has issued the strongest possible warning to its citizens to avoid travelling to Bangkok. The Macau government has no equivalent scale of warnings to travellers, but usually echoes the Hong Kong government advice. Bangkok has been calmer this week after opposition demonstrators withdrew from several places where they had gathered. However, the Thai government has said it will extend the state of emergency if the demonstrations continue. AirAsia’s Ms Lao said: “We are aware of the improved situation in Bangkok and we may restore the number of flights to normal, depending on bookings by our customers.”

We are aware of the improved situation in Bangkok and we may restore the number of flights to normal Celia Lao, AirAsia Bhd

She added: “Customers usually react much faster than the government, which has to be conservative.” The CAM spokesperson thinks the number of passengers to or from Southeast Asia could rebound this month. “The situation there has improved, and passengers that rebooked their flights will have to fly soon,” she said. Despite a fall in the number of travellers to or from Southeast Asia, Macau airport handled over 420,000 passengers last month, 7 percent more than a year earlier.

Vietnam beckons A written statement issued by CAM says the airport handled 18 percent more passengers going to or from the mainland. The airport handled 3,900 takeoffs and landings, 8 percent more than a year earlier. CAM said Jetstar Pacific Airlines would begin services between Macau and Vietnam on March 28, putting on 21 flights a week to and from Hanoi or Da Dang. The airport operator said it expected these services to increase the number of passengers flying to Vietnam from the Pearl River Delta. Statistics and Census Service data show the number of Vietnamese visitors to Macau grew to over 17,100 last year, 23.3 percent more than in 2012. CAM said in January that it wished to increase this year the number of international destinations served by flights to and from Macau to 18 from 12. With Reuters

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Macau Luxury living – impression of the pool deck at One Penha Hill

Land scarcity no obstacle to high life Niche property firms scouring city for more real estate to satisfy high-end demand Stephanie Lai sw.lai@macaubusinessdaily.com

dearth of land for development is no deterrent to developers of luxury properties in Macau who say they are seeking to satisfy heavy demand. The Tomson Group Ltd will commence marketing flats at One Penha Hill off the plan from tomorrow, and Sniper Capital (Macau) Ltd says it is seeking more land to match The Fountainside project. Hong Kong-based Tomson is bullish about demand from within and outside Macau. Tomson’s vice-chairman Albert Tong told the Chinese-language Macao Daily News the company would “continue to look up land plots in the conventional sites of luxury residences”. Mr Tong said he was not concerned by potentially higher interest rates because the purchasing power of affluent investors would outweigh any uptick in rates.

HK$13,000

Average cost per sq. foot at One Penha Hill

One Penha Hill is a low-density housing development of 63 units in four tower blocks, with flats between 1,700 square feet and 3,500 square feet in size. Jones Lang LaSalle (Macau) Ltd has priced the flats at an average cost of HK$13,000 a square foot. Construction on the project is expected to be complete by the beginning of next year. The project also includes a clubhouse, roof garden and parking over a gross floor area of about 22,842 square metres. Sniper is keen to develop more high-end housing projects similar to The Fountainside, also on Penha Hill. “From the experience with The Fountainside, we see that Macau still has room for high-end residential projects,” Sniper director João Afonso told Business Daily. “The buyers are not all investors. A good number of them are users such

as executives.” Mr Afonso said sites were hard to come by and that some potential developments were being held up by a law requiring each flat owner in a single block to approve the development. “We really hope that the government could introduce more flexibility in the redevelopment rules, such as requiring 80 percent of the owners of a single building to agree to the redevelopment plan instead of the current 100 percent,” he said. “But it looks like the old neighbourhood reform bill still got stuck in our legislators’ hands.” The Secretary of Public Works Lau Si Io told the Legislative Assembly last month that the government would wait until after the land and urban planning law was in place. The law came into effect on Saturday.

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Bachelor’s degree holder, preferably in Journalism or English, with an excellent command of the English language; At least 2 years of experience gained at a newspaper and/or magazine for the reporter position, and 5 years of experience for the editor position. (Those with prior involvement in trade and business publications will have an advantage); Ability to work under pressure and strong sense of responsibility; Excellent organisational skills and exceptional attention to detail; Proofreading skills. Interested parties should send a CV with full career details, availability and expected salary to: editor@macaubusiness.com All personal data collected are used for recruitment purposes only.

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Greater China

China must ‘curb’ online finance risks: ban Booming sector could wreck financial markets says ex-ICBC boss

hina needs to regulate booming online financial services firms to curb the risks they pose to the wider financial sector, says former president of Industrial and Commercial Bank of China, Yang Kaisheng. Tens of millions of people have flocked to Internet companies’ wealth management products since last year, attracted by interest rates on deposits higher than those the banks offered to customers, which remain subject to a cap of 3.3 percent for one-year savings. Individual savers have not been the traditional target market for China’s commercial banks. “If they [online financial firms] are allowed to do whatever they want for too long, the chances that something could go wrong will become bigger and the impact on the stability of financial markets will be bigger,” Yang said on the sidelines of China’s

If they are allowed to do whatever they want for too long, the chances that something could go wrong will become bigger Yang Kaisheng, ex-ICBC president

annual parliament meeting. Yang went on to say that the China Banking Regulatory Commission, C h ina S ecu r i ti es R eg u l a to r y Commission and the People’s Bank of China are currently working on rules to regulate the nascent industry, adding that he was not aware of their timetable.

Alibaba Chinese e-commerce giant Alibaba Group Holding Ltd kickstarted China’s online finance industry with the high-yield Yu’e Bao money market fund, which has attracted 400 billion yuan (US$65.27 billion) in assets under management in less than eight months, more than the customer deposits held by the five smallest listed Chinese banks. Rival Internet heavyweights Baidu Inc and Tencent Holdings Ltd quickly followed suit, drawing the ire of China’s banks, who are lobbying regulators to introduce curbs on the growth of online funds offered by non-banks. Yu’e Bao was dubbed a “vampire” by state broadcaster CCTV, which accused it of sucking the life out of China’s banks. Money market funds offered by Alibaba, Baidu and Tencent contributed to a fall of one trillion yuan in traditional bank deposits in January. Non-finance specialist Internet companies offer these products online by partnering with fund companies. Alibaba has applied to invest in a 51 percent stake in Tianhong Asset Management Co Ltd, which is currently going through a regulatory approval process. Yang rebuffed accusations however that Alibaba’s Yu’e Bao is damaging Chinese banks’ liquidity. “Money from Yu’e Bao flows back to the banks, it has been mostly invested in negotiated deposits offered

by the banks,” Yang said. “So the conclusion Yu’e Bao has hurt the liquidity of banks is not scientific.” Chinese Premier Li Keqiang threw the government’s support behind online finance in his opening address to China’s parliament on Wednesday but said the industry needs to be closely watched. “We will promote the healthy development of Internet banking, improve the mechanism for coordinating financial oversight, keep a close watch on the crossborder flow of capital, and ensure that no systemic or regional financial risks occur,” said Li.

PRC stopping boats weekly in South China Sea Disputed waters constant source of tension say Hainan officials

400 bln yuan Yu’e Bao money market fund Baidu Chief Executive Robin Li agreed that online finance needs greater regulation as Internet companies aren’t finance experts,

hinese patrols enforcing disputed new fishing rules in the South China Sea are apprehending foreign boats on a weekly basis, Communist Party officials said yesterday. In comments that provide the first window on how China is enforcing new rules criticised by Washington, the party secretary for Hainan Island said Chinese patrols attempted to peacefully negotiate with vessels that initially ignored warnings to leave Chinese waters. “First of all we would try to dissuade them, tell them to get out, this is our area, and then we negotiate and dissuade as much as possible,” Luo Baoming, party secretary for Hainan province, said yesterday. The Philippines and Vietnam have accused Chinese patrol vessels of firing water cannon and using aggressive means to intimidate and threaten its fishermen near disputed areas. Luo said that authorities based in Sansha city on Woody Island, which administers the mostly uninhabited Paracel islands, were regularly dealing with fishing vessels entering their waters. Also claimed by Vietnam and Taiwan, Vietnamese fishermen routinely attempt to fish the Paracels, despite hundreds being captured in past campaigns in what Vietnam describes as its legal and sovereign fishing grounds. Luo did not provide specific numbers but said: “There’s

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Greater China

nker

Joint property ownership

Juneyao shopping with Boeing, Airbus

A way of cooling mainland prices, and giving buyers hope?

China’s Juneyao Group, the parent of Juneyao Airlines, is in talks with planemaker Boeing and Airbus about acquiring more than 20 more planes, its chairman said yesterday. The aircraft will be used by a low-cost airline Juneyao plans to launch in the second half of the year, Chairman Wang Junjin told Reuters on the sidelines of China’s annual parliament session in Beijing. “We are in talks with both of the planemakers now, we are still evaluating the options,” Wang said, adding he would not consider the A320new, a more fuel-efficient variant of the A320 narrow body plane.

hina will extend a pilot project on joint home ownership between local governments and private buyers into some big cities this year, the vice housing minister said yesterday, as authorities look to subdue a property market in danger of overheating. The minister, Qi Ji, told a forum on the sidelines of China’s annual parliament session that under the plan, local governments would sell land to developers at lower prices and retain part ownership in homes built on the land. The homes would have to be sold at below market rates. House prices in China have surged in the past year, prompting worries of a price bubble and raising concern among officials over social problems as millions of Chinese find themselves priced out of the market. Local governments, under pressure from central authorities to cool price rises, have embarked on a series of measures including making more land available, clamping down on second-home buying and restricting mortgages. adding that without oversight there would be risk, state news agency Xinhua reported on Monday. In response to the success of the Internet funds, Industrial and Commercial Bank of China, Bank of China, Bank of Communications and Ping An Bank have all launched new products in recent weeks that match the attractive features of Yu’e Bao. ICBC has also fought back by limiting its depositors monthly transfers to Alipay to 50,000 yuan per month. Last month 12 Chinese banks imposed transfer limits on Tencent’s Licaitong wealth management product.

Expansion eased The measures have had some effect, with official figures in January showing that home price growth eased for the first time in 14 months, though they still rose at close to 10 percent. “We are preparing to push forward the joint home ownership pilot scheme

in some key cities,” Qi said, without giving details of the target cities. “The joint ownership homes could help ease the current shortages in homes in some cities, especially easing housing demand from the least advantaged group, young people,” Qi said. The scheme will mainly target new graduates and local residents working in cities for several years without owning homes, Qi added. Home buyers can only sell such homes back to the government after a certain period or they can buyback the government’s ownership share. Beijing city began such a scheme late last year and has promised to supply 50,000 such homes this year. Qi indicated that China’s property market has been generally stable so far this year, while efforts to rein in the market will continue. He said the government will cut the land supply in cities with high housing inventories and increase home supply in cities where prices are rising fastest. “We will use necessary economic measures to support local housing demand and reduce inventories in cities with high inventories,” Qi said, without elaborating. Analysts expect house price rises to moderate further this year as the government measures continue and as credit growth slows, though persistent demand from buyers and the need to sell land by local governments to boost their coffers are likely to keep prices buoyant.

Reuters

something like this happening if not every day then at least once a week, and the majority are dealt with by negotiating and persuasion.” New rules issued by Hainan this year, which say foreign fishing boats need permission to enter waters under its jurisdiction, which essentially covers much of the South China Sea, alarmed the region, already concerned by China’s more assertive moves to assert its sovereignty. The fishing rules follow China’s creation of a controversial air defence identification zone in late November above the East China Sea in an area that includes islands at the heart of a bitter territorial row with Japan. Ambiguities surrounding the rules – and their future enforcement – have puzzled a nervous region since they were introduced on January 1, apparently stretching into international waters. Hainan, which juts into the South China Sea from the country’s southern tip, says it governs 2 million square kilometres of water, according to local government data issued in 2011. The South China Sea is an estimated 3.5 million square km in size. Beijing claims almost the entire oil- and gas-rich South China Sea, rejecting rival claims to parts of it from the Philippines, Taiwan, Malaysia, Brunei and Vietnam. Reuters

China’s Ping An sells ‘Basel Bonds’ Ping An Bank Co Ltd yesterday became the first publicly listed mainland Chinese lender to sell special loss-absorbing bonds, but doubts linger about market demand for such debt, which give investors reduced protection against failure. China’s bank regulator began phasing in new higher capital adequacy requirements last year, in line with the global rules known as Basel III. Aggressive implementation of Basel III is a key element of Chinese policymakers’ plan to fortify banks against the risks from a slowing economy, and the so-called “Basel bonds” are designed to help China’s banks withstand an expected rise in bad loans.

Vanke sounds alarm over PRC property China Vanke Co Ltd , the mainland’s largest listed developer, said yesterday that property prices are overheating in some Chinese cities, the latest company to sound the alarm over real estate in the world’s second-largest economy. The warning adds to a series of recent news – from home price data to reports that developers have cut prices – that has rattled investors and hurt share prices of some of China’s top property companies late last month. “There’s overheating in the market now. It needs to return to a logical level,” secretary of the board, Tan Huajie, said.

Port Hedland ore exports to China up 36 pct

China Railway to seek private capital

tate-owned China Railway Corporation plans to seek private investment for a railway development fund that could be launched this year, the Shanghai Securities News reported yesterday. The move comes as the Chinese government has vowed to deepen reforms of its state-owned enterprises and to open up protected industries such as finance, petroleum, power, telecom and railway, to private investors for the first time. Details of the investment fund are still being formulated and a framework may be established by the first half of this year, Peng Kaizhou, deputy general manager of the company was quoted as saying. Peng said the company was considering setting up a national rail

development fund, with a fixed rate of return, or establishing an investment fund for specific projects. China has pledged to speed up railway investment to help shore up the slowing economy. China Railway Corporation, set up in March to take over the defunct railway ministry’s businesses, will spend over US$100 billion on more than 6,600 km (4,100 miles) of new railway lines this year, the state news agency said in January. The China Railways report comes a day after China National Petroleum Corporation (CNPC), the country’s largest energy group, said it planned to open six business areas to private investors. Two weeks ago, peer Sinopec Corp opened up its retail oil business to non-state partners. Reuters

Iron ore exports to China from Australia’s Port Hedland, which ships about a fifth of the global market for the steel-making raw material, rose 36 percent in February compared with the same month last year. Shipments to China were 21.34 million tonnes in February, compared with 15.66 million for the same period in 2013. That was down from January’s 23.31 million, although much of the decline may have been due to the timing of the Lunar New Year holiday in China.

Foreigners kept out of privatisations As China embarks on a new wave of opening up state-dominated industries to private capital, foreign firms will largely be kept out and authorities are likely to look to institutions like domestic pension funds and insurers. State giants China National Petroleum Corporation (CNPC), Sinopec Corp and China Railway Corporation have said they were seeking investments from private capital and also social capital, or funds sourced from pension funds and insurance companies. “I think those are going to be the key groups that the SOEs [stateowned enterprises] will first partner up with,” said Sun Lijian, deputy director of the School of Economics at Fudan University.

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Greater China

War on smog, war on causes of smog China signals focus on reforms and leaner, cleaner growth Kevin Yao and Xiaoyi Shao

hina sent its strongest signal yet that its days of chasing breakneck economic growth were over, promising to wage a “war” on pollution and reduce the pace of investment to a decade-low as it pursues more sustainable expansion. In a State of the Union style address to an annual parliament meeting that began on Wednesday, Premier Li Keqiang said China aimed to expand its economy by 7.5 percent this year, the highest among the world’s major powers, although he stressed that growth would not get in the way of reforms. In carefully crafted language that suggested Beijing had thought hard about leaving the forecast unchanged from last year, Li said the world’s second-largest economy will pursue reforms stretching from finance to the environment, even as it seeks to create jobs and wealth. After 30 years of red-hot doubledigit growth that has lifted millions out of poverty but also polluted the country’s air and water and saddled the nation with ominous debt levels, China wants to change tack and rebalance its economy. “Reform is the top priority for the government,” Li told around 3,000 handpicked delegates in his first parliamentary address in a cavernous meeting hall in central Beijing.

Breakthrough moment “We must have the mettle to fight on and break mental shackles to deepen reforms on all fronts.” Idle factories will be shut, private investment encouraged, government red-tape cut and work on a new environmental protection tax speeded up to create a greener economy powered by consumption rather than investment, Li said. To aid the transformation, China’s economic planner, the National Development and Reform Commission, told parliament the government would target 17.5 percent growth in fixed-asset investment this year, the slowest in 12 years.

KEY POINTS China targets 2014 economic growth of about 7.5 pct Eyes inflation target of around 3.5 percent Says to increase broad M2 money supply by 13 percent Fiscal deficit to stay at 2.1 pct of GDP

Investment is the largest driver of China’s economy and accounted for over half of last year’s 7.7 percent growth by rising 19.6 percent, above an 18 percent target. Asian currencies rose on the news that China’s US$9.4 trillion economy will stay on an even keel after its wobbly start for the year. Investors had been worried by speculation that China may announce a cut in its growth target this week. “Given that GDP growth is expected to be 7.5 percent for ‘longer’, we see this target as supportive for the Asian region, trade, and for commodity currencies,” said Annette Beacher, an analyst at TD Securities in Singapore. Others were less optimistic. By declining to lower its 7.5 percent growth forecast, China is betraying its refusal to break with the past, some analysts said. That means Beijing may not be as radical in reforms as hoped. “It’s a sign that maybe they are not going to tackle credit growth as quickly as we thought they might,” said Julian EvansPritchard, an economist at Capital

Economics in Singapore. China’s annual parliament meeting is a carefully choreographed affair, generally devoid of real debate to portray unstinting support for the government’s one-party rule. And as China’s maturing economy grinds towards a more modest pace of expansion - 7.5 percent growth would be the weakest in 24 years - Beijing is increasingly wary of any outburst of social discontent. Before the parliament meeting began, a Reuters reporter saw police drag away two protesters from Tiananmen Square, the site in central Beijing of a bloody crackdown on prodemocracy demonstrations in 1989. Aware that one of China’s pressing needs is to close sharp income disparities, Beijing announced ambitious reforms at a Communist Party plenum meeting in November that switched to slower but betterquality expansion, from investmentand export-fuelled growth. Wednesday’s announcements suggested it is well on track, but moving cautiously. Analysts have warned in the past that China will be unwilling to rock the boat when it comes to reforms for fear of fuelling job losses and undermining social stability. As such, they say difficult changes such as government downsizing or closures of debt-laden factories are likely to take a back seat. Li repeated the government’s standard rhetoric on financial reforms, saying authorities will widen the yuan’s trading band, relax its grip on the currency and insure deposits, but he did not give a time line. On the environment, which has become an issue of increasing concern in China, he did not mince his words.

Red light “Smog is affecting large parts of China,” Li said in his address that lasted a little over 100 minutes. “Environmental pollution has become a major problem, which is nature’s red-light warning against the model

of inefficient and blind development.” He said the battle against pollution would be waged via price reforms to boost non-fossil fuel power and cutting capacity in the steel and cement sectors, China’s largest air polluters. Yet plans to cut steel and cement capacity comprise just a meagre 2 percent to 2.5 percent of total capacity, and shutdowns may even be outstripped by new capacity under construction, although this will be more modern and less polluting. And with many steel and cement factories already driven out of business by falling demand, some analysts question China’s willingness to go the extra mile on pollution. “Now, it is easy to impose environmental controls because 90 percent of steel mills are losing money,” said Xu Zhongbo, a Beijingbased consultant in the metals sector. Reuters

Environmental pollution has become a major problem…nature’s redlight warning against… inefficient and blind development Chinese Premier Li Keqiang

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Asia

‘Teflon Thailand’ getting stuck Consumer confidence slides to 12-year low says survey Orathai Sriring and Boontiwa Wichakul

hailand’s consumer confidence tumbled to a 12-year low in February, a new survey showed, highlighting the toll that prolonged political unrest is taking on Southeast Asia’s secondbiggest economy. The economy has been nicknamed “Teflon Thailand” for its past resilience to turbulence, but consumer sentiment was weaker last month than it had been even after the devastating floods of late 2011, violent political unrest in 2010 and a deadly tsunami in late 2004. After months of protests aimed at ousting Prime Minister Yingluck Shinawatra, Thais have become reluctant to spend and tourists are staying away, weighing on sales at automakers, property firms and hotels. The downward trend in spending is seen continuing in the coming months.

Spending power “People are worried about weaker purchasing power, smaller income and fewer new jobs. Consumption is likely to remain subdued until late in the second quarter,” said Thanavath Phonvichai, an economics professor at the University of the Thai Chamber of Commerce (UTCC), which conducted the survey. “There is no positive sign in the first quarter. It remains to be seen when a new government will be formed. If we have a new government and its policies in the second quarter, confidence will return,” he told a news conference. The UTCC’s consumer confidence index fell to 69.9 in February - the lowest since November 2001 - from 71.5 in January. It was the 11th straight month of declines. The survey showed that consumers’ readiness to spend on new cars fell to its lowest in 26 months, underlining

a recent sales slide in Thailand, Southeast Asia’s biggest auto market. Auto sales dropped 45.5 percent in January from a year earlier after falling 7.7 percent in all of 2013. Readiness to spend on new homes slid to its lowest in over 8-1/2 years, the survey also showed. This has hurt property firms like LPN Development, Thailand’s biggest condominium developer. The firm said yesterday that it had cut its new project plans by half to only six or seven projects this year because of “the political and economic problems as well as our customers’ situation.” Meanwhile, the number of tourist arrivals to the “Land of Smiles” rose just 0.06 percent in January from a year earlier, after growing about 20 percent in all of 2013. Against this backdrop, Hotelier Erawan Group, operator of a five-star hotel in a busy Bangkok shopping area, this week cut its 2014 revenue growth target to just 2 percent from 10-15 percent. It said the unrest has dragged its occupancy rates in Bangkok down to 50 percent in the first quarter from 83 percent in the same period a year earlier. “Travel warnings by countries will affect the hotel business in the first half. But we expect it to rebound quickly in the second half if the political situation eases,” said Kanyarat Krisnathevin, executive vice president and chief financial officer at Erawan.

Fifth month The protests are now in their fifth month, but at the weekend the remaining activists closed down several big protest sites and moved to a central Bangkok park. A state of emergency in the capital could be extended until the protests end completely. Thailand held a general election

Vedanta climbs, on hiring ex-Rio Tinto CEO Tom Albanese moving to India- focused metal and oil producer

on Feb. 2 but it was disrupted by demonstrators, leaving a caretaker government with limited powers to borrow and spend. It may be a long time before a new functioning government can be installed. Thailand’s economy, Southeast Asia’s second largest after that of Indonesia, grew just 0.6 percent in the final quarter of 2013 from the previous three months and a year earlier as the turmoil hit consumption,

edanta Resources Plc rose to the highest level in two weeks in London after hiring former Rio Tinto Group Chief Executive Officer Tom Albanese as the Indiafocused metal and oil producer seeks a global presence. Vedanta advanced as much as 4.4 percent to 895 pence, the highest since Feb. 19. Albanese, 56, head of the second biggest mine operator from 2007 to 2013, was among chiefs who quit after writing down assets bought during a commodityprice surge. Sales at Rio grew from US$29.7 billion in 2007 to US$51 billion in 2012. Rio Tinto paid US$38 billion to buy aluminium producer Alcan Inc. in 2007, an acquisition that soured when metal prices plunged during the global financial crisis. Albanese resigned after Rio decided to write down US$14 billion from its assets. “Albanese is a very experienced mining executive with a long track record in the industry,” Paul Gait, a mining analyst at Sanford C. Bernstein Ltd., said by phone. “This kind of experience is an incredible value especially for a company trying to

investment and tourism. Last month, the state planning agency, which compiles gross domestic product data, cut its 2014 GDP growth forecast to 3-4 percent from 4-5 percent. The central bank recently said growth could be less than 3 percent. In 2013, the economy expanded 2.9 percent, far below the 6.5 percent recorded in 2012. Reuters

establish itself a global significance.” Albanese will take up the new position on April 1, succeeding M.S. Mehta, Vedanta said yesterday in a statement. Vedanta advanced 3 percent to 883 pence by 10.16am in London, valuing it at 2.36 billion pounds (US$3.95 billion). Bloomberg News

US$14 bln

Rio Tinto write down on Alcan on Albanese’s watch

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Asia

Dry spell could boost palm oil Malaysia’s unseasonal drought might push the commodity up to US$920 per tonne

Carmaker Proton asks for govt cash Malaysia’s International Trade and Industry Minister has confirmed that the country’s carmaker Proton Holdings Bhd has approached the government for funding, adding that the request is being studied. “They have submitted [a request] and it is still a work in progress,” said Datuk Seri Mustapa Mohamed. He didn’t give details of the request. Malaysia’s The Star newspaper has previously reported that Proton was seeking up to 3 billion ringgit (US$920 million) in funding from the government and Petroliam Nasional Bhd (Petronas). It’s been reported Proton is committed to RM3.8 billion in investments until 2017.

Thailand’s True seeks foreign partner Thai telecommunications group True Corp PCL wants to take on a foreign partner in the second half of this year to help it expand in Southeast Asia, its chief executive said yesterday. True Corp, controlled by Thailand’s richest man Dhanin Chearavanont, plans to offer any potential partner new shares equivalent to about quarter of its existing equity, Chief Executive Suphachai Chearavanont told reporters. “We prefer to raise funds via an equity issue to open way for a foreign partner to take a stake in True,” Suphachai said. He declined to give further details.

rude palm oil prices this year could touch 3,000 ringgit (US$920) per tonne or higher, as leaders tracked the effects of the dry spell in Malaysia and biodiesel demands, reports The Star newspaper. Godrej International Ltd director Dorab Mistry said weather held the key for palm oil prices this year and that lack of rainfall next week would in likelihood push prices upward. “If the weather improves and rains come by next week, it will not alter the price outlook to June 2014,” he said when presenting his paper on the second day of the Palm and Lauric Oils Conference and Exhibition 2014. With normal rainfall when the oil palm high cycle begun in July, prices could trade between RM2,600 to RM2,900 per tonne, he said. However, if an El Niño developed, CPO futures would cling to RM3,000 beyond June, he added. “Production is likely to be affected from late 2014 onwards and we may be looking at RM3,500 per tonne.” Subsequently, in that scenario, Mistry noted that Indonesia would find it difficult to implement its biodiesel mandate while biodiesel producers who had committed large volumes at current formula-based pricing might find themselves in a tight spot. LMC International Ltd chairman James Fry, who also presented a paper at the conference, estimated CPO

A young American CEO who apparently committed suicide in Singapore was involved in the world of the bitcoin, but was also struggling with other issues prior to her death, friends and colleagues said. Autumn Radtke, 28, chief executive of virtual currency exchange First Meta Pte Ltd, was found dead on Feb. 26. Police said they were investigating her “unnatural” death, and “preliminary investigations showed no foul play is suspected.” Neighbours said they thought Radtke jumped to her death from a residential apartment complex near her home.

potential upside left from the current high levels but “prices in Rotterdam could still touch or slightly exceed US$1,000 in the next four to eight weeks if palm oil-planting regions got the required rainfall. “Assuming rain in the coming weeks (in Malaysia, Indonesia and Thailand), I see a limited upside,” he said in his presentation. Rabobank International’s forecast

Qantas management rejig Ex-Tigerair boss will be brought in for key role – media report

Bitcoin-loving suicide CEO had ‘other issues’

futures to trade just above RM3,000 mid-year while the EU CPO price should reach US$1,030 if Brent Crude stayed at US$110 per barrel. ISTA Mielke GmbH Oil World executive director Thomas Mielke forecast CPO prices to average US$970 (RM3,177) a tonne in 2014, 14% higher than last year’s average. With a price rally going on currently, he believes there is little

ustralia’s national airline has begun a management reshuffle that will result in a former Tigerair boss – Andrew David – moving into a key role running the day-today operations of Qantas’ domestic and international businesses, reports The Age newspaper in Melbourne. “So far, those in the most senior rungs at Qantas have held onto their jobs despite a muted investor response to its A$2 billion cost-cutting programme – including the axing of 5000 jobs – and the airline failing to convince the Abbott government

to agree to a debt guarantee or an unsecured A$3 billion loan,” adds the newspaper. But it cites internal documents obtained by The Age’s publisher Fairfax Media, saying they show Qantas’ flying operations – the core of its business – will now report to a single chief operating officer who will oversee both domestic and international operations. It will result in Qantas Domestic chief operating officer Matt Lee leaving the airline in just over a week adds the newspaper.

A$2 bln

Cost cutting programme at Qantas

His counterpart at Qantas International, Peter Wilson, will lose his title but have oversight of the airline’s commercial airline licence and help Mr David to move into his new role by the middle of the year. The collapsing of the two roles into one comes after Qantas last Friday shelved plans to split its international and domestic flying operations into separate units with their own air operator’s certificates – i.e., their licences to fly. Qantas insists it will maintain the separate structures but has ‘’put on hold’’ its application to apply for a separate air operator’s certificate for the domestic operations as a ‘’conservative measure to limit the amount of operational change as we move along the transformation process’’. Mr David became chief executive of Tiger Airways Australia Pty Ltd in October 2011, according to a press statement at the time by Singapore-based parent Tiger Airways Holdings Ltd.

editorial council Paulo A. 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, Pierre-François Metayer, Cynthia Wong EDITOR AT LARGE Alex Lee BRANDS & FRIENDS Raquel Dias Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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Asia

prices

supported by world economic events, in particular the (US Federal Reserve) quantitative easing (QE) tapering. “If the US Fed is driven by a better economy domestically and to some extent globally, interest rates will rise and that means there is room for equities to go up. Hence commodities will be underpinned as there is reasonable global growth,” Lambregts said. He noted that while the 12-month outlook on commodities was always based on weather conditions, his longer-term outlook was very positive.

3,500 ringgit Per tonne price forecast by late 2014

for the 12-month CPO average price was RM2,800 per tonne. Its projection for the second quarter of 2013 was higher at RM3,000 per tonne due to a shortage of soybean oil production in South America. It said the price was expected to dip in the second half of the year. Global head of financial markets research Jan Lambregts told StarBiz commodity prices were generally

Fry said the drought would cut South-East Asia’s CPO output in the third quarter, with a further adverse impact at the end of 2014. Mistry’s output estimate for Malaysian CPO is 19.5 million to 19.7 million tonnes for 2014, if the drought ends next week. Meanwhile Reuters reported that palm oil futures are set to climb for a second year, driven by crop damaging dry weather and Indonesia’s higher biodiesel mandate, although bumper global oilseed supplies and weak demand from key consumers could cap gains.

India’s Sensex advances to record Investors pile in as current-account gap shrinks

ndia’s benchmark stock index rose to a record on optimism a shrinking current-account gap will bolster the rupee and spur overseas investors to increase their holdings of local equities. ICICI Bank Ltd. climbed for a third day. Aluminium producer Hindalco Industries Ltd. advanced to its highest level since Jan. 2. Reliance Infrastructure Ltd., a power producer owned by billionaire Anil Ambani, jumped the most since Feb. 2012. The rupee strengthened to a threemonth high. The S&P BSE Sensex soared 0.9 percent to 21,465.99 at 2.41am. in Mumbai. The gap in the broadest gauge of trade narrowed in the October-December period to US$4.2 billion, the smallest in four years, the central bank said in a statement. Foreigners have bought a net US$471 million of shares this year, the most in Asia after Indonesia, data compiled by Bloomberg show. They purchased US$20 billion in 2013. “The current-account deficit has been going very nicely and in the right direction,” Jeff Chowdhry, head of emerging- market stocks at Londonbased F&C Asset Management Plc, which oversees about US$150 billion, said in an interview to Bloomberg TV India yesterday. “Sentiments toward emerging markets have improved and India is not too badly positioned.” ICICI Bank increased 3 percent to

US$471 bln

Value of shares bought by foreign investors, 2014

1,132.80 rupees, set for its highest close since Dec. 12. GAIL added 2.1 percent, its highest price since Jan. 21. Reliance Infrastructure soared 11 percent, the top gainer on the MSCI Emerging Markets Index. India, the world’s second-biggest user of gold, raised taxes on imports of the metal three times last year to help pare a trade imbalance that has weighed on the rupee. The currency rose as high as 61.175 per dollar, the strongest since Dec. 11, and traded at 61.2113, up 0.9 percent from yesterday. Bloomberg News

Philippine inflation eases to 4.1 pct February number shows 0.7 percentage point decline on year earlier

he Philippines’ inflation rate eased in February due to slower increases in alcoholic drinks, tobacco and transport prices, the Philippine Statistics Authority (PSA) reported. In a report, PSA said inflation slid to 4.1 percent last month from 4.2 percent in January. Inflation stood at 3.4 percent in February last year, reported The Philippine Star newspaper. The latest inflation figure was within the central bank – Bangko Sentral ng Pilipinas – target of between 3.8 percent and 4.6 percent. Without food or oil prices, core inflation went down to three percent in February from 3.2 percent in January. “The steady reading will help keep the average inflation over the policy horizon within the government’s target range,” BSP Governor Amando M. Tetangco Jr said. For the first two months of the year, the average inflation stood at 4.2 percent, above the midpoint of the BSP’s three-to five-percent target range. “We will continue to monitor global developments, especially as these impact on investor sentiment and domestic financial markets,

Central bank governor Amando M. Tetangco Jr

4.6%

Upper target limit for inflation, 2014

and any spillover effects that might result in volatilities in international commodity prices,” Tetangco said. “We will also be watchful of trends in domestic liquidity and lending,” he added. The central bank, mandated by law to keep prices stable and ensure this is supportive of sustainable

economic growth, sees inflation averaging at 4.3 percent this year. “We will make adjustments to policy levers as appropriate to ensure that liquidity continues to be channelled to productive sectors of the economy, and that inflation expectations remain wellanchored,” Tetangco said.

By region, inflation in the National Capital Region climbed to 2.8 percent in February from 2.7 percent in January. Areas outside the capital, meanwhile, saw the rate ease to 4.5 percent from 4.6 percent. By commodity group, the alcoholic beverages and tobacco index dropped to 7.1 percent from 17.6 percent, while the transport index fell to one percent from 1.2 percent. This tempered the rise in the clothing and footwear index to 3.7 percent from 3.4 percent and the increase in the housing, water, electricity, gas and other fuels index to 3.6 percent from 3.4 percent, the statistics agency said. The furnishing index also rose to 2.8 percent from 2.6 percent, while the health index climbed to 3.3 percent from 3.2 percent. Meanwhile, The food and non-alcoholic drinks index was unchanged at 5.5 percent, while the education index remained steady at 4.7 percent. The communication and the restaurant indices were also unchanged at 0.0 percent and 2.2 percent, respectively. The recreation and culture index also remained steady at 2.5 percent

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International

US expands military aid to Poland, Baltic states Superpower sending signal to allies, Russians, over Ukraine crisis Daniel De Luce

he United States will bolster military cooperation with Poland and Baltic states to show “support” for its allies after Russia’s intervention in Ukraine, Pentagon

chief Chuck Hagel said on Wednesday U.S. time. The moves to expand aviation training in Poland and step up the US role in NATO’s air patrols over Baltic countries were clearly

Chuck Hagel, US Secretary of Defense

designed to reassure alliance partners in Central and Eastern Europe following alarm at Russia’s actions on the Crimean Peninsula. “The Defense Department is pursuing measures to support our allies,” including increased training in Poland and more US aircraft for NATO’s air policing mission over Baltic states, Hagel told lawmakers. NATO’s top commander and head of the US European Command, General Philip Breedlove, also planned to confer with Central and Eastern European defence chiefs. “This is a time for wise, steady and firm leadership,” Hagel told the Senate Armed Services Committee, describing it as “time for all of us to stand with Ukrainian people in support of their territorial integrity.” At the same hearing, the US military’s top-ranking officer, General Martin Dempsey, said he had spoken to his Russian counterpart, General Valery Gerasimov and urged “restraint” in the days ahead “to preserve room for a diplomatic solution.” US Vice President Joe Biden, meanwhile, called Latvian President Andris Berzins in a sign of reassurance.

The United States has a small team of about 10 airmen stationed in Poland to support military training efforts, while NATO has been conducting air patrols over the skies of Estonia, Latvia and Lithuania for 10 years. The responsibility for the air patrols rotates every four months and the United States recently took over from Belgium in January. Four US F-16 fighter jets are currently assigned to the air patrols and the Pentagon is considering adding more aircraft to the operation, a US defence official told AFP on condition of anonymity. In Poland, US aviation training involves F-16 fighters and C-130 transport planes and the official said more aircraft might be added to the effort. The United States already has suspended all military cooperation with Russia in protest over events in Ukraine, calling off planned exercises, training and exchanges. Hagel dismissed Russia’s assertion that it had not sent troops into Crimea and that forces surrounding air bases and other sites were local “self-defence” militias. “It’s pretty clear that they’re Russian troops,” he said.

Dempsey, chairman of the US Joint Chiefs of Staff, said he had raised the issue with his counterparts, who told him the forces were “welltrained” militia. “I did suggest that a soldier looks like a soldier… and that that distinction had been lost on the international community,” he said. Dempsey added, “these are soldiers who have been taken out of their traditional uniforms, repurposed for placement in the Crimea as a militia force.” The general said he had also spoken this week to military chiefs in the Baltics and in Central and Eastern Europe. “Understandably, they are concerned. They seek our assurance for their security,” the four-star general said. “During our conversations, we committed to developing options to provide those assurances and to deter further Russian aggression.” Leaders of Poland, the Czech Republic, Hungary and Slovakia on Tuesday said they were “shocked” by Russia’s actions in Ukraine, saying it resembled Soviet crackdowns in their countries during the Cold War. NATO held rare emergency meetings this week after Poland requested “Article 4” consultations in light of the crisis in Ukraine, where pro-Russian forces have taken de facto control over the Crimean peninsula. Under Article 4 of the alliance treaty, any NATO member can request consultations when they believe their territorial integrity, political independence or security are threatened. AFP

Great Barrier Reef in grave peril: scientists Australia in December approved a massive coal port expansion in the region

ime is running out for Australia’s iconic Great Barrier Reef, with climate change set to wreck irreversible damage by 2030 unless immediate action is taken, marine scientists said yesterday. In a report prepared for this month’s Earth Hour global climate change campaign, University of Queensland reef researcher Ove Hoegh-Guldberg said the world heritage site was at a turning point. “If we don’t increase our commitment to solve the burgeoning stress from local and global sources,

This is not a hunch or alarmist rhetoric by green activists Ove Hoegh-Guldberg, University of Queensland

the reef will disappear,” he wrote in the foreword to the report. “This is not a hunch or alarmist rhetoric by green activists. It is the conclusion of the world’s most qualified coral reef experts.” Hoegh-Guldberg said scientific consensus was that hikes in carbon dioxide and the average global temperature were “almost certain to destroy the coral communities of the Great Barrier Reef for hundreds if not thousands of years”. “It is highly unlikely that coral reefs will survive more than a two degree increase in average global temperature relative to pre-industrial levels,” he said. “But if the current trajectory of carbon pollution levels continues unchecked, the world is on track for at least three degrees of warming. If we don’t act now, the climate change damage caused to our Great Barrier Reef by 2030 will be irreversible.” The Great Barrier Reef, a place with some of the highest biodiversity on Earth, teems with marine life. It will be the focus of Australia’s Earth Hour – a global campaign to combat climate change. It encourages individuals and organisations to

File photo of cyclone damage to Great Barrier Reef

switch off their lights for one hour. The latest event will be on April 29. The report comes as the reef, considered one of the places most vulnerable to the impacts of climate change, is at risk of having its status downgraded by the UN cultural organisation UNESCO to “world heritage in danger”.

Despite threats of a downgrade unless there is action on rampant coastal development and on water quality, Australia in December approved a massive coal port expansion in the region and associated dumping of dredged waste within the marine park’s boundaries. AFP

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Opinion Business

wires

Every breath you take

Leading reports from Asia’s best business newspapers

THE AGE

David Roberts Nick Riesland Former science adviser to US Ambassador to Japan

Physician with 20+ years of international experience

A special A$2 million bonus reaped by Australian Football League boss Andrew Demetriou means he earns far more than the chief executives of similarly sized companies listed on the ASX, a Fairfax Media analysis shows. Mr Demetriou’s A$3.8 million package for 2013 was more than the combined pay of Breville’s Jonathan Lord, who made A$1.4 million, and Domino’s Pizza head Don Meij, whose package was worth just over A$1 million. However, executive remuneration expert Dean Paatsch said it was difficult to make a fair comparison between the AFL and a listed company.

THE STAR Quarry miner Minetech Resources Bhd (MRB) is planning to venture into the distribution of heavy machinery via a newly established unit. In a statement, MRB said it had set up a new wholly owned subsidiary, Minetech Heavy Machineries Sdn Bhd, to build and expand the group’s heavy equipment business. MRB will distribute the line of heavy equipment products to the mining industry, enabling the group to purchase the equipment for its own use at a dealer’s price and potentially helping it to improve profit margins.

JAKARTA GLOBE Lion Mentari Airlines, Indonesia’s largest privately run air carrier, has announced a major management change by appointing Rudi Lumingkewas to fill its top post, replacing owner Rusdi Kirana. “Rudi Lumingkewas will report to Rusdi Kirana on the development of Lion Air,” the company said in a statement. Rudi joined Lion Air as district manager in Medan in 2001. He was promoted to general manager of sales and marketing in 2012 and was appointed as chief executive of Lion Air on Wednesday.

PHILIPPINE STAR The Department of Budget and Management turned over 9.52 billion pesos (US$213 million) to the Department of Education (DepEd) in January to cover the hiring of 31,335 elementary and secondary teachers for the coming school year. The DepEd expects all teaching positions filled out by April 1, 2014, in time for the beginning of classes. The move is also in line with the Aquino administration’s goal to ramp up education reform in the country. Around 13,738 new teachers will be hired at the elementary level while 17,597 personnel are designated at the secondary level.

earsome stories about migrating Indonesian haze, post-Diwali smog in northern India, and the return of the “airpocalypse” in China tell of Asia’s recent airpollution woes. Not confined to Asia, outdoor particulate pollution claims over 3.1 million lives worldwide every year, five times the number of deaths from malaria and slightly less than double the current AIDS death rate. Airborne pollutants, especially fine particles (smaller than 2.5 microns, or roughly the width of a strand of a spider web), enter deep into the lungs and from there enter the blood stream, causing cardiopulmonary disease, cancer, and possibly premature births. Just how significant are these health risks? Unfortunately, discussion of the subject is often opaque. Poor air quality is often described as reaching a certain “AQI” (Air Quality Index) level, or as being a certain degree above a particular World Health Organization standard. But the general public might better understand the situation if it were framed in terms that compare easily with more familiar hazards.

Très petite mort For instance, the immediate risks of breathing polluted air could be described in terms of the “micromort,” the unit representing a one-in-a-million chance of dying. An average person on an average day faces a risk of roughly one micromort from non-natural

causes. This provides a useful starting point for comparison: the risk of scuba diving, for example, is around five micromorts per dive; sky diving is ten micromorts per jump; and giving birth in the United Kingdom is around 120 micromorts. By comparison, breathing in Beijing on its most polluted days equals approximately 15 micromorts. But the more troubling risks from air pollution arise from chronic exposure. This can be expressed in terms of “microlives” – a unit developed by Cambridge statistician David Spiegelhalter to describe a person’s cumulative risks over a lifetime. One microlife represents 30 minutes of an average young adult’s expected lifespan. The average person uses up about 48 microlives per day; but lifestyle affects how fast one expends one’s microlives. Settling in smoggy Beijing will use up roughly an additional 2-3 microlives per day, implying a reduction in life expectancy of almost three years. Living in Hong Kong or Santiago, Chile, will cost one additional microlife per day, whereas daily life in New Delhi, one of the world’s most polluted cities, costs an estimated 4-5 microlives. By comparison, smoking four cigarettes a day will cost the smoker around two microlives, roughly equivalent to living in Beijing. But the aging clock can also be slowed down – 20 minutes of daily exercise will extend life expectancy by two microlives per day (unless done in the smog), and

drinking two or three cups of coffee daily saves an additional microlife per day. Furthermore, recent research suggests that some, if not all, of the microlives lost from living in Beijing could be recovered by moving to, say, Vancouver, with its pristine air.

Settling in smoggy Beijing will use up roughly…2-3 microlives per day

Besides skipping town, one can mitigate at least some of the risks by limiting one’s exposure on particularly hazardous days. If citizens had access to current air-quality data, they could choose to take protective measures, such as minimizing physical exertion, staying indoors (ideally in filtered air), and wearing a mask (an N95-rated mask, at a minimum, not a surgical mask).

Information sketchy Unfortunately, air-quality information, especially for the most pernicious fine particles, is not easily available in many

highly polluted cities. But such monitoring is not beyond the reach of developing countries, because the necessary equipment is not prohibitively expensive. Ideally, air-quality data should be collected, translated into easily understandable language, and widely disseminated in real-time via social media so that city dwellers can take appropriate action (particularly important for vulnerable individuals). In this regard, China has made big strides, providing a good example for other developing countries to follow. Of course, governments should not stop at monitoring; they should take active measures to reduce air pollution. Against the pressure of Asia’s rapid urbanization and industrial development, this will take sustained effort, involving complex policy decisions and painful economic trade-offs. Making air-quality information available to all – essentially democratizing the data – allows people to engage better in the debate on what sacrifices are acceptable in the fight against air pollution; it also provides basic input for desperately needed research into the health effects of these new highly polluted environments. These farreaching health effects, in addition to the immediate benefit of empowering citizens to protect themselves, should spur even the most financially strapped governments to start a transparent air-quality monitoring campaign today. © Project Syndicate

16 16 business daily

March 7, 2014 Friday April 19, 2013

Closing Bolshoi acid attackers’ jail terms cut

All the president’s women in court

A Moscow appeals court yesterday cut the sentences for a former Bolshoi soloist and two accomplices over an acid attack that nearly blinded the famed company’s artistic director. Soloist Pavel Dmitrichenko (pictured) had his six-year sentence in a strictregime penal colony for the attack on artistic director Sergei Filin cut by six months, the RAPSI legal news agency reported. The perpetrator, Yury Zarutsky, and a getaway driver Andrei Lipatov, also had their sentences reduced from 10 to nine years and four to two years respectively.

France’s love affairs of state hit the courts yesterday as the president’s ex-girlfriend won a privacy case on the same day that the mistress who replaced her began her own suit against the paparazzi. Valérie Trierweiler, the former partner of French President François Hollande, won 12,000 euros (US$16,500) damages in an action she launched over pictures of her on a tropical beach recovering from their breakup. A court at Nanterre in the Paris suburbs ordered weekly glossy Closer to pay the cash.

Court to hear privacy A suit by Hollande’s lover Actress Julie Gayet suing Closer magazine for revealing affair with French president

French court was last night set to hear actress Julie Gayet’s civil suit against Closer magazine, which revealed her affair with President François Hollande. The story made global headlines and prompted his split from his long-term partner. Gayet is suing the glossy fo r b r e a c h o f p r i v a c y and is seeking 50,000 eu r o s ( U S $ 6 8 , 0 0 0 ) i n compensation and 4,000 euros in legal costs. Closer made waves in early January by publishing photographs purportedly showing Hollande arriving for trysts on a scooter at an apartment near the Elysee presidential palace. It claimed the affair began two years ago. A week later on January 17, the magazine published photos of Gayet at the wheel of her car. The 41-year-old actress has also filed a criminal complaint against the photographer, Sébastien Valiela, for breach of privacy, an offence that can be punished with a year in jail and a fine of up to 45,000 euros. Under French law, the inside of a car is considered to be a private space and subject to the country’s strict privacy laws. Hollande split with

Turkey ruling Westgate attackers paves way for disagreed over ex-army chief release killing children T I urkey’s constitutional court ruled yesterday that the legal rights of a former army chief jailed over an alleged coup plot had been violated, a decision that paves the way for his release. The country’s top court argued that a local tribunal had not “effectively examined” a release request by Ilker Basbug before rejecting it in January, a statement said. It also ruled that the local court had unduly banned Basbug – convicted in a mass trial last year – from appealing the decision, violating his legal rights. The constitutional court referred the case back to a local court, which could release him, private NTV television said. The ruling comes after Prime Minister Recep Tayyip Erdoğan said in January he was not opposed to the idea of retrials. Basbug was sentenced to life in prison in 2013 along with hundreds of military officers who were given long jail terms for their role in the socalled “Ergenekon” conspiracy.

slamist gunmen who shot dead scores of people in a Nairobi shopping mall last year were in apparent disagreement over whether they should kill women and small children, a court in Kenya heard yesterday. Witness Geoffrey Kotia, who was supervising children’s activities in the upmarket shopping centre, said he was shot by the attackers, accused of killing Somalis and mockingly told to telephone Kenyan President Uhuru Kenyatta for help. “One of the attackers then said ‘You people, we have been giving you chances to become Muslims but you don’t, and instead you go ahead and kill our people’,” Kotia told the trial of four men who are accused of helping the attackers. Kotia then told the court that one of the attackers said “we Mujahedeen don’t kill small children and women”. But seconds later another gunman said “but you have been killing our children and women in Somalia” and the shooting resumed.

long time partner Valérie Trierweiler following the scandal but has refused to comment further on his private life or the nature of his relationship with Gayet. “It’s a classic case of violation of privacy and we will present the case as such,” Gayet’s lawyer Jean Enocchi told AFP. But Laurence Pieau, the editor of Closer’s French version, defended the decision saying the affair was the talk of the town already and discussed at dinner parties. “We did our job as journalists in correctly informing the public about something they had a right to know,” she said. Gayet, who has been lying low since the scandal, will not appear at the court in the western Paris suburb of Nanterre. She made her first public high-profile appearance last Friday, attending the ceremony for the Césars, the French Oscars, but missed out on a top film award. She had been nominated in the Best Supporting Actress category for her role as a miniskirted ministerial adviser and seductress in Bertrand Tavernier’s “Quai d’Orsay”, a comedy about life at the French foreign ministry.

Judge rejects Apple bid to ban Samsung devices A

AFP

federal judge yesterday rejected Apple’s request to ban an array of Samsung smartphones and tablets found to have infringed on patents of the US tech giant. US District Judge Lucy Koh, who oversaw the blockbuster patent trial, finalised the damage award to be paid by the South Korean electronics giant at US$929 million. But the judge denied Apple’s request to ban 23 Samsung devices, saying there was no evidence that consumer demand was driven by the infringing elements. “To persuade the court to grant Apple such an extraordinary injunction – to bar such complex devices for incorporating three touchscreen software features – Apple bears the burden to prove that these three touchscreen software features drive consumer demand for Samsung’s products,” the judge wrote. “Apple has not met this burden.” A jury last year awarded more than US$1 billion to Apple for patent infringement, but the judge threw out some of that and ordered a partial retrial.