Macau Business Daily, Feb 10, 2015

MOP 6.00 Closing editor: Joanne Kuai

Another scathing report. This time by the Commission of Audit. Pointing an accusatory finger at the University of Macau. The educational institution lacks competence in managing its funds, the report says. In addition, UM besmirches the public interest by allocating living units to staff who already own houses. The university is autonomous and independent. But it should also be a role model as a public institution implementing good management skills, says the Commission PAGE 3

Year III

Number 726 Tuesday February 10, 2015

Publisher: Paulo A. Azevedo

Audit report slams UM management

Macau casinos jump on China reform bandwagon

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First equity-linked options issued in Shanghai PAGES 8 & 9

Japan current account surplus reached new record

Watchdog to grow teeth

PAGE 11

More bite needed, says the Consumer Council boss. And this is on the way. The expected Consumer Protection Law will enable the body to more stringently supervise the market. With administrative sanctions, says the interim Vice President of the council, Lewis Chan Hon Sang.

But the date of the law coming into effect has yet to be disclosed

HSI - Movers February 9

Name

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Dateless completion No completion date, no estimated budget, says Raimundo Rosario, the Secretary for Transport and Public Works.Mr. Rosario presented the progress of LRT construction to the follow-up committee for land and public concession affairs of Legislative Assembly (AL). He told reporters after the closedoor meeting with the legislators that the government has no condition to make such prediction

www.macaubusinessdaily.com

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Regional cooperation

Alibaba goes mobile

The governor of Guangdong has noted the target for the provincial government this year. To deepen trade liberalisation terms and financial co-operation with the two SARs. Zhu Xiaodan also said he expected the neighbouring region’s economic growth rate to hit 7.5 pct for 2015

Jack Ma’s company has acquired a stake in Meizu Technology. A Zhuhai-based mobile phone maker. In this way, Alibaba will have its own cell phone running its own operating system. Setting up its next business step for the Hangzhou firm

TPG among various private equity firms considering acquiring a stake in Cirque du Soleil

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PAGE 9

Page 6

%Day

Lenovo Group Ltd

3.13

China Overseas Land

2.40

BOC Hong Kong Holdin

1.10

China Shenhua Energy

0.97

China Unicom Hong Ko

0.94

Hengan International

-2.04

China Mengniu Dairy

-2.48

Wharf Holdings Ltd/T

-2.69

Galaxy Entertainment

-2.91

Want Want China Hol

-3.38

Source: Bloomberg

I SSN 2226-8294

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2 | Business Daily

February 10, 2015

Macau MTel receives nearly 1,000 Internet applications The city’s new fixed-line telecommunication service provider MTel Telecommunication Company Ltd. has received applications from nearly 1,000 users in residential buildings for its broadband Internet service, the chairman and CEO of the company, Choi Tak Meng, told reporters last week. In addition, Mr. Choi said that the MTel network covered 36 per cent of the Macau Peninsula, 33 per cent of Taipa and 43 per cent of Coloane. He explained that the lower coverage in Taipa is due to the construction of the Light Rail Transit (LRT) there.

New legislation for Consumer Council

The Consumer Council is a tiger without teeth, according to Its interim vice-president. The new Consumer Protection Law, however, is expected to give the Council new powers that will allow it to supervise the market more efficiently João Santos Filipe

jsfilipe@macaubusinessdaily.com

T

he supervisory powers of the Consumer Council are going to be reinforced by the new Consumer Protection Law and in future it may be able to impose administrative sanctions. This intention was announced yesterday at the Public Administration Building during the presentation of the results of the public consultation about the new legislation to protect consumer rights.

The hot topic of the public consultation, which ran from June to August last year, was the reinforcement of the Consumer Council’s competences, with 26 per cent of the opinions focusing on this point. People in Macau want the Council to have more power to collect information about products and princes in the market and the power to impose administrative sanctions.

“At this moment the Consumer Council is a tiger without teeth.

We hope that after this legislation is approved the Consumer Council will have teeth, which means real

powers”, said the interim vicepresident of the Consumer Council, Lewis Chan Hon Sang. As legislation is still being drafted, however, there is no prediction of the date that it will come into effect.

“The Consumer Council is like a football referee. It has to make sure that everybody is playing by the rules.

However, practices such as abuse of a dominant position are like the use of performance-enhancing drugs. In order to detect it we need to run blood tests but to do that we need access to blood samples. In this case, blood samples are the information about the products and their cost”, Mr. Chan said concerning the increase of powers to access more information.

According to the Director of the Legal Affairs Bureau, Liu De Xue, the new legislation will bring about more transparency concerning the rights of consumers and will be more effective in fighting manipulation of the market such as abuse of dominant position, price fixing and other monopolistic practices.

The new legislation will also focus on new forms of consumption, such as online shopping and pre-payment shopping, In which the consumer pays for the service before actually receiving it.

“The legislation on consumer protection is more than 20 years old. Many articles are obsolete and out-of-date. It needs to be improved.

Since the handover, Macau has gone through many changes, which have also been seen on the economic side.

There are new way of consuming”, Mr. Liu said.

In this area, the legislation will introduce a return period for pre-payment and online shopping products. During this time, the consumer will be able to return the product if he or she is not happy with it.

The new law will also try to simplify regulations for the Consumer Arbitration Centre in order to increase its efficiency and give it powers for non-judiciary magistrates to act as mediators.

Chui Sai On enforces licensing system for importer of petroleum products

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he Chief Executive of the Macau Government, Fernando Chui Sai On, yesterday signed a dispatch implementing the use of the licensing system for the import of petroleum products.

The licensing system means that the importer has to obtain an import permit from the government before buying such products, which is different from the current declaration system.

This decision was taken on Saturday after Chui Sai On met the Secretary for Economy and Finance, Lionel Leung Vai Tac. The petroleum product importers have been on the government radar since raising prices on 5 February. The hike came during a period when the value of oil has been dropping.

New wholesale market expected to open in 2017

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he schedule for opening the new wholesale market has slipped one year behind and is now expected to be operational in 2017, according to the President of the Civic and Municipal Affairs Bureau (IACM), Alex Vong Iao Lek. Initially, the project was expected to open to the public in 2016.

“The construction works started last year, and in 2017 the wholesale market may become operational. It will be a two-storey building when it starts operating and an extra storey may be added in the future”, Mr. Vong said.

Previously, the government said the project would be ready in 2016 and that it would cost MOP860 million. The contractor for the project is the Mainland company Guangdong Nam Yue Group Co. Ltd. Yesterday, during the presentation of the results of the public consultation on the new law on consumer rights, the President of IACM said that the bureau was working to bring competition to the sector by increasing the public supply of vegetables not only in number but also in type. Concerning the licences to sell fresh products, he said the government had already handed out new permits last year.

J.S.F.

Business Daily | 3

February 10, 2015

Macau Macau launches legal reform committee

The government has decided to create a committee dedicated to studying the local legal and criminal system, according to the Official Gazette. The committee for the legal and criminal system is expected to have a duration of three years, with an extension option, and starts its work today. The objective is to cover the development of legal and judicial reforms regarding the penal code, monitor its implementation, conduct research projects and publish criminal policy studies. The committee will work under the supervision of the Macau Prosecutor, who should receive an annual report regarding committee activities.

UM affecting public housing, mismanaging funds An audit report has found that the University of Macau has been providing accommodation to academic staff who already own a home here; in some cases, two homes even Sara Farr

sarafarr@macaubusinessdaily.com

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he University of Macau (UM) has mismanaged public funds and been providing accommodation to staff who are also residential property owners here, a report by the Commission of Audit has found.

According to the report, as at May 31, 2014 as many as 217 university staff were living on-campus rent-free.

These were all Macau ID cardholders.

Of these, 32 were found to be residential property owners, with five owning two residential properties.

Since the construction of oncampus accommodation is funded with government money, the report concluded that in allocating living units to academic and administrative staff, the university is actually hurting the public housing of Macau.

‘Considering that, on the one hand, the constructions at UM are part of the MSAR buildings, funded by public money, and on the other hand UM is a collective person with public rights and its workers fall under the group of employees who work for public entities, the university should exercise its policies in line with that of the government,’ the report reads.

The university is conducting a string of initiatives, the University of Macau said in response to the audit report, adding that under these initiatives is setting up of college residencies, the internationalisation of the honorary college and a new educational method. ‘All these new initiatives depend on the good

use [made] of the new campus [in Hengqin],’ the reply reads.

Housing academic and administrative staff on-campus shouldn’t be seen as a perk but as an incentive for teachers and staff to stay on-campus and allowing them more ‘interaction time’ with the students.

In addition, ‘the allocation of residencies is determined by the university’s needs and longterm development plan as well as the availability of on-campus accommodation,’ the University of Macau said in its response.

Being a role model The report says that while the university is autonomous and independent, it should also be a role model as a public institution in carrying out good management skills not only for society but the public, too.

The University of Macau is a public institution for teaching that generates its own revenues through tuition fees, research work and donations. However, the majority of its expenditure is covered by an annual government budget, which in 2013 amounted to MOP1.2 billion patacas. This represents more than 85 per cent of the university’s overall expenditure of MOP1.4 billion, the report found.

In addition to the annual budget, the government also paid for the construction of the university’s new

campus in Hengqin, which cost around MOP10.3 billion. ‘The attribution of subsidies to the University of Macau shows the importance the government places on the higher education institution in the development of Macau,’ the report reads, adding that in giving the university autonomy to manage the funds, the institution should do so in a ‘rigorous, efficient and transparent manner.’

The report found that in this regard, the university had failed to manage public funds appropriately because good management isn’t just about achieving a good return with minimal resources but about achieving good results and having a positive impact on society.

“UM agrees with the assessment made by the Commission of Audit,” in that the current organisational model and election method for members of its Foundation could cause “future management problems,” the university’s rector Wei Zhao admitted in a statement in response to the report. He also added that the suggestions of the Commission of Audit were welcomed and would be taken into consideration in the future.

Alexis Tam, Secretary for Social Affairs and Culture, said yesterday he was going to ask the University of Macau to explain the Commission of Audit’s findings about the foundation.

He also added that the university will change charters and go from a private to a public institution.

University of Macau to attract 30 per cent more students by 2021

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he new campus of the University of Macau (UM), occupying an area 20 times larger than its original, expects to have up to 13,000 students by 2021, almost 3,000 more than today.

“This is not a university, it’s a ‘UniverCity’. Here we have all the services inherent to a city,’ vice-rector Rui Martins told news agency Lusa.

With the Light Rapid Transit (LRT) still under construction and a new hospital planned for 2017, the new campus of the University of Macau was the biggest public works initiative completed during Chui Sai On’s first term as Chief Executive. Mr. Chui was re-elected in December for another five years.

After leaving the old facilities in Taipa, UM decided upon a new concept: move to a site outside Macau borders in Hengqin but with a special status that enables it to remain under the jurisdiction of the Special Administrative Region applying the law of Macau and not the law of mainland China.

Although the campus is much larger, the number of students is only 3.8 per cent higher, now 9,300 students. The goal is to reach 10,000 students in 2016/2017 and 13,000 in 2021/2022, said the vice-rector.

UM bet on a non-typical model for the Asian continent, where students and teachers live on campus, in socalled residential colleges. Today, the university has eight residencies, where around 3,500 students live and expects to open four more.

For degree programmes, the majority of students – 80 per cent - are from Macau with the rest coming from Mainland China.

With the current number of local students in secondary education falling, the university is looking further afield and wants to focus on attracting students from Hong Kong, Taiwan, Malaysia and India, among other regions.

The campus also hosts 360 of its 557 teachers, with the capacity for 800. Although it states that the “faculty teachers are becoming more qualified,” Rui Martins admitted that the salary cap imposed due to the indexation of the public administration salary table, prevents the university from making some signings.

The highest paid professor category could receive a maximum of MOP86,900, which can only be exceeded in exceptional circumstances that must be approved by the university council.

This situation may change with the approval of the new financial rules of the university, expected this year, allowing “more capacity to compete in the higher education market in relation to the recruitment of other teachers,” he said.

MdD/Lusa

4 | Business Daily

February 10, 2015

Macau

Guangdong to achieve more liberalised trade terms with the SARs The province is also predicted to reach an economic growth of 7.5 pct for this year, having experienced lower than expected growth last year Stephanie Lai

sw.lai@macaubusinessdaily.com

Guangdong Governor Zhu Xiaodan

H

aving experienced lower than expected economic growth last year, Guangdong Governor Zhu Xiaodan said yesterday that he expected the province to achieve an economic growth rate of 7.5 per cent for this year while deepening trade liberalisation terms with Hong Kong and Macau.

Mr. Zhu was speaking at yesterday morning’s opening ceremony of the provincial People’s Congress.

In 2014, Guangdong’s economy grew by 7.8 per cent to RMB6.78 trillion (US$1.09 trillion) compared to the previous year, missing the estimated 8.5 per cent rise as envisaged by the governor’s report last year.

The slowdown in investment and consumption has contributed to the lower than expected economic growth, Mr. Zhu said in his report yesterday.

The provincial government would work to restrict the urban unemployment rate to within 3.5 per cent for this year while achieving a trade growth of 3 per cent.

The Guangdong governor noted that the target for the provincial government this year was to deepen

trade liberalisation terms and financial co-operation with the two Special Administrative Regions.

On December 18 last year, the provincial delegates signed a new edition of the Closer Economic Partnership Arrangement Agreement (CEPA) with Hong Kong and Macau, which was set to benefit the companies of these two cities that have previously been subjected to more restrictions than their mainland counterparts to provide services in the province.

As for the new agreement signed with Macau, which is to enter into effect on March 1 this year, all of these restrictions will be removed for 58 service sectors - including advertising services, photography, meetings and conventions, restaurants, tour guides and goods transportation – so that they will have the same market entry conditions as mainland companies.

For the first time, this latest edition of CEPA signed with Hong Kong and Macau has also adopted the ‘negative list’ format.

The concept of ‘negative list’, as adopted by the Shanghai Free Trade Zone that officially opened in

September 2013, refers to a catalogue of restrictions on outside investment.

The ‘negative list’ approach means that if a sector is not on the list, foreign companies can invest in it without any restriction or joint venture requirements; overseas entities just need to register their projects without applying for approval.

The sectors for Macau companies that would like to target mainland Chinese clients in Guangdong that are on the negative list as enclosed in the CEPA signing include legal services, accounting and audit services, market survey, education business, shipping and aviation businesses. For these sectors on the negative list, establishing a business in the province is only permitted when they fulfill a partnership with a mainland company or capital requirement as listed by the Chinese government.

Speaking to the Congress yesterday, Mr. Zhu said he hoped to promote the development of service sectors of the province with Hong Kong and Macau, as well as speeding up the building of the cross-border Hong Kong-Zhuhai-Macau Bridge.

Investors facing HK$3 bln losses in sudden closure of bitcoin trading company

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bitcoin trading platform in Hong Kong – Mycoin – has reportedly suddenly shut down its operation, affecting approximately 3,000 investors in the Special Administration Region who risk losing HK$3 billion (US$375 million).

Hong Kong legislator Leung YiuChung told Hong Kong media at the weekend that some 30 clients of the company had turned to him, claiming they were not able to sell their bitcoins at market price, according to Hong Kong English-language newspaper South China Morning Post.

The newspaper said that the possible HK$3 billion loss of the clients following the sudden closure is based on a recent statement by Mycoin, which indicated that it had 3,000 clients, of whom each had invested around HK$1 million in Hong Kong.

These clients intend to file reports with the Hong Kong police tomorrow, claiming that the operation of the company is involved in a pyramid selling scheme.

Nevertheless, the newspaper reported that these clients are worried about whether the police will handle the case, as they were not given any written documents to prove their transaction, only a trading account on the company’s platform.

In June 2014, the very first Bitcoin vending machine in Macau was installed by the distributor Bitcoinnect in a pawnshop on the ground floor of Sands Macao casino but was later moved by the distributor.

The machine was not sanctioned by the Monetary Authority of Macau to name itself ‘ATM’ or ‘Bitcoin ATM’ - only ‘Bitcoin vending kiosk’, which allows users to top up their balance, sell Bitcoins or other altcoins, as well as obtain fiat money.

Graff Diamonds open outlet in Hong Kong

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he British jeweller company Graff Diamonds has opened a new outlet in Hong Kong, in St George’s Building. This is the fourth of the group in the neighbouring Special Administrative Region.

Besides four outlets in Hong Kong, Graff Diamonds has a shop in Wynn Macau, designed by the architect Peter Marino. The American was also the designer of the fourth Hong Kong shop of the brand.

Graff Diamonds was founded in 1960 by Laurence Graff and has over 35 stores around the world, including New York, Monte Carlo, Beijing and Taipei.

Business Daily | 5

February 10, 2015

Macau

Dateless completion for LRT Secretary Rosario said there is neither a date for the completion of the whole LRT project nor an estimation of the total budget Kam Leong

kamleong@macaubusinessdaily.com

S

ecretary for Transport and Public Works Raimundo Rosario said the government is not able to estimate the whole budget of the Light Rail Transit (LRT) and its traffic commencement date, telling legislators that the Taipa route of the LRT will definitely not open to traffic in 2016 as the construction of the depot has been seriously delayed.

Mr. Rosario presented the progress of LRT construction to the followup committee for land and public concession affairs at the Legislative Assembly (AL). He told reporters after the closed-door meeting with the legislators that the government has no condition to presume the budget and commencement date, as the route for the northern part of the LRT on the Peninsula has not yet been confirmed.

According to the Secretary, the route of this part will be decided within the first half of this year following the government analysis of 10,000 opinions gained from a recent 3-month consultation session.

No LRT for Taipa in 2016 yet The Secretary also told legislators that the Taipa side of

LRT will not be able to open to traffic in 2016, according to the chairman of the sub-committee of AL Ho Iong San. Last year, the government said that the Taipa part would be completed between the end of 2015 and the beginning of 2016, believing operations would start by next year.

However, Mr. Rosario told reporters yesterday that one of the chief constructions of the Taipa

section – the depot – is subject to serious delay.

“The speed of the depot construction is very low, and it has been slow for a while. As such, we are discussing with the contractor on how to resolve the problem, hoping to reach a consensus with this company,” Mr. Rosario said, claiming there will be a resolution shortly.

“The depot is a very serious issue.

If the [construction of the depot]

continues to be delayed, when the construction of the railways are finished, the operation [of the LRT won’t be available] as there is no depot [to store the carriages],” the Secretary added.

Meanwhile, Mr. Ho said that the government may consider resolving the delay of the depot through judicial procedure.

On the other hand, regarding a contractor of LRT project – Top Builder Group Ltd. – recently claiming the government should be blamed for the delay of the LRT, Secretary Rosario said neither the government nor contractor should take full responsibility for the delays.

In fact, a recent report by the Commission of Audit had criticised the management of Transportation Infrastructure Office on the LRT project, which is running late and over budget.

The first phase of the LRT project, linking the southern part and northern part of the Peninsula, Barra and Taipa, was firstly slated to be completed by the end of 2011.

The new date for the completion of the phase is now expected to be in September 2017.

6 | Business Daily

February 10, 2015

Macau Brands

Trends

Rocking Vera Wang Raquel Dias newsdesk@macaubusinessdaily.com

Cirque du Soleil said to attract TPG, Carlyle to stake auction ‘Zaia’ was Cirque du Soleil’s first resident show in Asia, and resident show at The Venetian Macao. Three and a half years into its 10-year contract, Sands China Ltd. brought the curtain down

V

era Wang has become the name of reference for brides all over the world.

The American designer has managed to turn her elegant gowns into a Hollywood synonym for bride and weddings. Countless movies make reference or show a Vera Wang original. Girls everywhere sigh and dream about the day they, too, will get to wear the silky beautifully crafted dresses.

Should you be planning a wedding for 2015 you should be advised that Wang suggestions are sensual, edgy and cheeky. Sure, you will still find strapless full gowns that have been her signature for years but the 2015 Fall collection shows a lot more skin and it’s a lot bolder that we’ve come to expect from her. The look book reads ‘The seduction of cleavage, bare arms and legs’ and that’s exactly what it is.

Halter silk gowns cling to the frame and have no other embellishments save for a pretty tulle bow in the back and a silk organza petalaccented train. Sexy strapless mermaid gowns feature revealing cut-outs at each side, and slinky silhouettes reveal a deep-plunge open back. Even the way the models are styled ignore the traditional happy silhouette of ladies on the happiest day of her life. Rather, the edgy young girls could well be going to a rock concert were it not for the fact that they’re draped in all white dresses.

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PG Capital Management and Carlyle Group LP are among the private equity firms considering acquiring a stake in Cirque du Soleil, the Montrealbased entertainment company, people with knowledge of the matter said.

Cirque du Soleil, which has hired Goldman Sachs Group Inc. as an adviser, is seeking a valuation of about US$2 billion in the stake sale, according to two people, who asked not to be named because the discussions are private. Formal bids for Cirque du Soleil are due in two to three weeks as management presentations conclude, one of the people said.

Guy Laliberté, Cirque du Soleil’s founder and majority owner, told the Wall Street Journal in December he

was seeking to sell a 20 per cent to 30 per cent stake in the company to an investor who would help Cirque du Soleil expand globally.

A US$2 billion valuation is about 12 times Cirque du Soleil’s 2014 adjusted earnings before interest, depreciation, taxes and amortization of $170 million, the company’s own number, two of the people said.

Representatives for TPG and Carlyle declined to comment.

“The process to find a strategic partner is ongoing, and it’s very long,” said Renée-Claude Ménard, a spokeswoman for Cirque du Soleil in Montreal. “There’s nothing new to report since Mr. Laliberté gave interviews on the subject last year.

We are not disclosing the names of the interested parties.”

Istithmar World and Nakheel PJSC, both units of governmentowned Dubai World, said in August 2008 that they had acquired 20 per cent of the circus operator. The two together now own 10 per cent of Cirque du Soleil after cutting their stake in half last year, Ménard said.

Neither investor is involved in Cirque du Soleil’s efforts to find a strategic partner, she said.

Cirque du Soleil was founded in 1984 and is famous for its acrobatics shows and circus-like performances, including several in Las Vegas such as ‘O’ at Bellagio Hotel & Casino and ‘Michael Jackson: One’ at Mandalay Bay Resort and Casino. The company employs 4,000 people worldwide, according to its website.

Bloomberg

Genting net profits down 50 per cent in 2014

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enting Hong Kong is expecting a 50 per cent drop in its net profits from 2014 mainly due to a reduction in gains generated by its decreased stake in Norwegian Cruise Line Holdings and a one-off financial gain in 2013 that created an unfavourable comparison with last year. Despite the decline, the company said that the operational profit (earnings less interest, taxes, depreciation and appreciation) will ‘remain stable’ compared to 2013.

The company, which is one of the main competitors of casino operators here in markets like Singapore and the Philippines, estimates last year’s net profits to totalled US$235 millions.

According to a filing sent to the Hong Stock Exchange yesterday, that’s less

than half of what Genting made in 2013: US$483 million.

The company says, however, that the net profit didn’t take into account the share of results from Norwegian Cruise Line Holdings and Travellers International Hotel Group, two companies that are associated to the group but listed on other stock exchanges. Genting’s final and consolidated results are still being finalised and should be published in March, the company announced.

Genting explained to investors that the decrease in profits was due to several factors. The major one was the drop in profits from its stakes in Norwegian Cruise Line Holdings that declined to US$153 million last year from US$452 million in 2013.

Another negative driver was the absence last year of the one-off gain registered in 2013 from the listing of both Norwegian Cruise and Travellers International that gave the company an extra US$219 million that year.

But it was not all losses. Genting also profited with the gain of US$124 million from the disposal of stakes in Norwegian Cruise as a result of issuing new shares for the acquisition of Prestige Cruises in 2014, a fair value gain of approximately US$18 million related to the disposal of certain financial assets, an approximately US$14 million gain from the recovery of a loan and reduction of net finance costs of approximately US$16 million.

L.G.

Business Daily | 7

February 10, 2015

Macau

In Macau, casino titans jump on China reform bandwagon This comes at a time when growth in gambling revenue has plummeted, with high-rollers quitting Macau’s tables in the face of Xi’s anti-graft campaign

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eading China’s anti-corruption campaign, President Xi Jinping warned Macau last December that the world’s biggest gambling hub needs to be about more than baccarat. Now, the reform drive has new champions - the casino operators.

The firms that lead the former Portuguese colony’s US$44 billion-ayear gaming business are pledging to spend billions of dollars on opening more amenities like convention centres and theatres, and touting their credentials as good employers.

The stakes are high as Xi’s reforms squeeze revenue growth to a low since the industry was liberalised in 2001.

Officials set to review Macau’s 35 casinos will examine how operators have diversified away from gambling in deciding who gets the most gaming tables in a new strip modelled on Las Vegas, and who hangs on to concessions set to expire from 2020.

U.S. stalwarts like Las Vegas Sands Corp and Wynn Resorts Ltd say they know the new game well. “When you hear the central government and the Macau government urged operators to diversify the attractions of their facilities... they are preaching to the choir. We invented that idea,” Steve Wynn, founder of Wynn Resorts, told investors in a conference call on February 4.

The industry review is also likely to shed light on what the casino operators can expect as the first of their licences start to expire in 2020.

Lionel Leong Vai Tac, secretary for Economy and Finance in Macau, said in January there may be changes in taxes on casinos, according to local media, without giving further details.

It also comes as growth in gambling revenue has plummeted, with highrollers quitting Macau’s tables in the face of Xi’s zeal for squashing ostentatious spending. The rate of casino revenue growth in January was 17 percentage points lower than a year earlier, the eighth consecutive monthly decline, and February is set to be the worst on record with analysts predicting growth will be down some 35 percentage points.

Community responsibility The six licensed casino operators in the special administrative region

are prepared to adapt, and say their track record shows it can be done.

In Macau, where one in five people work in the industry, gambling accounts for 95 percent of total revenue, more than double the level in Las Vegas.

“We believe it’s in the very best interests of the concession holders to demonstrate to the government the significant investment they are making to help diversify the economy towards other forms of entertainment such as theatre and cultural activities,” said Aaron Fischer, an analyst at CLSA in Hong Kong.

“These investments should translate into approval for around 400 gaming tables...reasonable considering the capital expenditure investment of between $2.5-4 billion being made by each of the operators,” said Fischer.

Casino operators are also trying to emphasise good corporate culture and training for local residents, a key policy target of Macau Chief Executive Fernando Chui’s new administration.

“We promoted just under 2,500 employees, 90 percent of whom were Macau locals. As one of the largest employers in Macau, if not the largest, we take our responsibly to the community very seriously,” Sands founder Sheldon Adelson told investors in a Jan. 29 conference call.

Despite the extended slide in revenue growth, casino operators remain determined to make it big in Macau, with new developments coming up fast.

Over the next three years, the operators, including Melco Crown, SJM Holdings Ltd, Galaxy Entertainment Group and MGM China Holdings, will open new resorts on the Cotai strip, a reclaimed stretch of land between the bustling main peninsula of Macau and Coloane island, which is modelled on the Las Vegas strip.

These developments point to the future of the gaming industry in Macau, featuring much more than baccarat card tables and roulette wheels.

Galaxy’s newest development is set to open on the Cotai strip in May, together with its new Broadway

property which will house a 3,000seat theatre.

Meanwhile, Melco Crown is expected to open its movie-themed Studio City in the third quarter

with facilities that include a ferris wheel that stands more than 400 feet tall, a nightclub and a 5,000seat concert hall.

Reuters

8 | Business Daily

February 10, 2015

Greater China China sets CO2 reporting standards China issued new guidelines yesterday to help standardise the way big industrial firms measure and report their greenhouse gas emissions, in a step towards the launch of a national carbon market scheduled for the middle of next year. China has pledged to bring its CO2 emissions to a peak by around 2030, and firms could be obliged to participate in a nationwide carbon trading scheme by as early as 2016.

The National Development and Reform Commission (NDRC) yesterday released new technical guidelines detailing how oil and coal producers should measure and report their emissions.

Brokerages see surging profits in January Brokerage firms posted big profits in the first month of 2015, boosted by easing measures from policymakers.

Combined net profits of 20 listed firms totalled 8.11 billion yuan (US$1.32 billion) in January with aggregate revenues hitting 16.83 billion yuan, data from the Shanghai and Shenzhen bourses showed yesterday. Citic Securities and China Merchants Securities were the top two earners in January with their net profits amounting to 2.11 billion yuan and 1.74 billion yuan, respectively.

The sector’s strong performance was attributed to bullish Chinese shares in the last quarter of 2014.

HK might charge airport improvement fee A senior executive at Hong Kong’s Airport Authority said yesterday that visitors to Hong Kong might have to bear the construction cost of the planned third runway at Hong Kong International Airport. The project will expand the airport’s capacity to handle over 600,000 flights a year by 2030 and double the current amount of cargo and passenger traffic. The construction cost of the new runway is expected to reach over HK$130 billion (US$16.8 billion).

Options debut gives traders tool to

Chinese authorities are taking steps to avoid a repeat of past experi losses and allegations of market manipulation

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hina started trading of equitylinked options for the first time, giving investors a new tool to manage risk in the world’s most-volatile major stock market.

Contracts on the China 50 ETF, an exchange-traded fund tracking some of the country’s biggest companies, began changing hands on the Shanghai Stock Exchange as part of a trial that Haitong Futures Co. predicts will eventually expand to options on equity indexes and single stocks.

It’s the first new equity derivative allowed by Chinese regulators since the 2010 introduction of index futures, a market that has grown about 10- fold in the past four years.

China’s options debut, which comes 13 years after the derivatives started in India, is part of the nation’s effort to lure more sophisticated investors to a market where individuals account for about 80 percent of equity trading and price swings are the biggest among the world’s 15 biggest bourses.

The contracts will make it easier for institutions in the US$5 trillion stock market to manage volatility after the Shanghai Composite Index turned into this year’s worst-performing equity gauge from the best performer in 2014.

Structural changes China’s introduction of options follows a string of changes to the nation’s stock market structure over the past five years. Aside from index

Launching its first option is a big step for China.

We can see Chinese leaders’ ambition to internationalize mainland shares and gradually build its derivatives market Winner Lee, Asia equity-derivatives strategist, BNP Paribas in Hong Kong

futures, policy makers have introduced short selling, margin trading and a program for international investors to buy local securities using yuan raised overseas. The Shanghai bourse gave foreigners unprecedented access to yuan-denominated shares in November with the start of the Hong Kong exchange link.

If Chinese authorities do decide to expand the options market, it has the potential to become the largest in Asia, said Eric Ren, a Shanghai-based general manager at Haitong Futures, one of the 10 brokerages granted a license to take part in the trial of ETF options. It may take as many as six months for trading in the contracts to

Bank of China in Sydney becomes RMB clearing bank

Regulators and banks have sought for years to remove Beijing promotes electric vehicle rental barriers to the direct currency conversion between Australian dollars and yuan BAIC Motor and Foxconn, the world’s largest electronics contractor, launched a joint electric vehicle rental service.

Users can book the vehicles at rental points or through website and cell phone applications. There are currently 1,000 BAIC E150EV electric cars available to hire at a rate of 30 yuan an hour (US$4.90), 159 yuan per day and 99 yuan per night, according to the joint venture Beijing Hengyu New Energy Automobile Rental Co. Hengyu currently has 12 rental points and 17 charging points in Beijing, with a view to add more electric models to the market.

More Chinese buying homes in NZ Chinese investors and migrants are increasingly buying up homes in New Zealand’s South Island region of Canterbury, where the economy is booming as it rebuilds from the earthquakes of 2010 and 2011, a major real estate firm said yesterday. Bayleys Canterbury said it had identified a growing trend in sales data, and the company itself had been involved in the sale of 24 homes and “a large number” of land sections to Chinese buyers over the past six months.

The company had taken a portfolio of properties to the Luxury Property Showcase exhibition in Shanghai.

A

ustralia’s top finance and government officials joined the Bank of China president in Sydney yesterday to officially announce the Bank of China’s Sydney branch ‘s appointment as the clearing bank for the local renminbi (RMB) market in Australia.

Bank of China President Chen Siqing said the development of an RMB market would help cut the cost of currency trade between China and Australia.

“The official launch of the bank in Sydney represents an important step in the internationalization of the RMB,” Chen said.

Reserve Bank of Australia Governor Glenn Stevens said the ceremony yesterday marked an important step in the further development of a local renminbi market.

The key direct benefit of the official Australian RMB clearing bank is that it can more efficiently facilitate transactions between Australian firms and their Chinese mainland counterparts using the Chinese currency, he said.

The Bank of China’s attempt to step up its presence in the market comes after regulators and banks have for several years sought to

The opportunities for Australian and Chinese investors to invest in each other’s financial markets could grow significantly in the coming years Glenn Stevens, Reserve Bank of Australia, Governor

remove barriers to the direct currency conversion between Australian dollars and yuan.

New South Wales (NSW) Premier Mike Baird said only 1 percent of trade with China was settled in RMB but there was scope for this to rise significantly.

Stevens said process of RMB internationalization and the associated

opening of China’s capital account are likely to have significant implications for the global financial system.

“The Chinese authorities have indicated that they intend to continue RMB internationalization and capital account liberalization in the coming years,” he said.

“As a result, the opportunities for Australian and Chinese investors to invest in each other’s financial markets could grow significantly in the coming years.”

“By increasing their familiarity with the RMB as an international transaction currency, local financial institutions, investors and firms are likely to be better placed to take advantage of these future opportunities as they arise.”

Xinhua

Business Daily | 9

February 10, 2015

Greater China

o hedge volatile stocks Guangdong to see 7.5 pct growth in 2015

iments in derivatives that led to investor

increase, with average daily turnover climbing to as much as US$150 million, versus about US$400 million for the underlying ETF, BNP’s Lee said.

Valuation gaps The Shanghai exchange will expand options trading to 180 ETFs

and individual stocks, Oriental Outlook reported, citing Liu Ti, director of the bourse’s derivatives business department.

The HSI Volatility Index of Hong Kong-listed shares fell 4 percent last week to 15.01, the lowest level since November 28.

Options trading will be limited to institutions and individuals with at least 500,000 yuan (US$80,069) in their accounts, who must pass three tests on their options knowledge before becoming eligible to trade.

Individual investors can hold no more than 50 option contracts, according to the exchange.

China’s ETF options will start with four expiry dates, in March, April, June and September, according to the Shanghai exchange.

While the contracts won’t be available to foreigners through the Hong Kong bourse link at the outset, Hong Kong Exchanges & Clearing Ltd. has said the connect could be expanded to include derivatives.

The most actively traded contracts in Shanghai trading on Monday were March calls with a strike price of 2.2 yuan, which had 2,501 contracts change hands at the close. By contrast, the mosttraded contracts on Friday for the U.S.-listed iShares China LargeCap ETF had volumes of more than 14,000, according to data compiled by Bloomberg.

Bloomberg News

Chinese Premier Li Keqiang said during a visit to Guangdong in January that the province should keep its growth above the national average

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he governor of China’s economic powerhouse of Guangdong warned yesterday the province faces slower-than expected economic growth in 2015 of 7.5 percent, due to weak domestic consumption and anaemic global demand.

Guangdong, one of China’s key economic engines accounting for some 10 percent of the country’s economic output and around a quarter of its exports, would likely see growth dip from 7.8 percent in 2014 to 7.5 percent this year, Zhu Xiaodan, said yesterday.

“Consumption growth is rather weak.

The import and export outlook is still severe, and the operational difficulties for industries have increased,” Zhu told delegates at Guangdong’s annual provincial parliamentary session.

“The downward pressure on the economy is still rather great,” he added, though some 450 billion yuan (US$72.04 billion) would be pumped into major infrastructure projects including transport and municipal works as well to strengthen crossborder co-operation with neighbouring Hong Kong and Macau.

Chinese Premier Li Keqiang said during a visit to Guangdong in January that the province should keep its growth above the national average given its

role as “an important support” for China’s overall economy, according to the state-run China Daily.

Recent struggle Guangdong’s economy has struggled in recent years, despite becoming the first mainland province to exceed US$1 trillion in GDP in 2013 under the watch of Guangdong party chief Hu Chunhua, a publicity-shy official tipped as a future national leader.

Guangdong’s massive industrial and export hinterland including the “world’s factory” of the Pearl River Delta has been hit by weak global demand in key markets like the Eurozone and Japan, as well as rising costs that have triggered strikes and big factory closures ahead of the Lunar New Year holiday.

In Guangzhou, the provincial capital, a watch run by Citizen Holdings of Japan closed this month, making about 1,000 workers jobless, according to Chinese media reports and workers.

Other problems faced by Guangdong include a troubled property sector hit by falling prices, endemic prostitution in some urban areas, rural-urban inequalities and polluted cities.

Reuters

Alibaba enters smartphone business The deal is designed to help Alibaba push its mobile operating system within China Paul Carsten and John Ruwitch

Meizu headquarters Zhuhai

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hina’s Alibaba Group Holding is taking a US$590 million stake in an obscure domestic smartphone maker as the e-commerce giant tests ways to expand its mobile operating system in a shrinking, cutthroat handset market.

Extending a previously muted push into hardware, Alibaba said yesterday it will buy an unspecified minority stake in smartphone maker Meizu Technology. Dwarfed by rivals like Xiaomi, privately owned Meizu’s

slice of China’s smartphone market is estimated by analysts at below 2 percent.

The deal, unlike U.S. rival Amazon.com Inc’s foray into smartphones with its own-brand Fire Phone, is designed to help Alibaba push its mobile operating system within China through Meizu’s handsets. In return, Zhuhai, Guangdong-based Meizu will get access to Alibaba’s e-commerce sales channels and other resources, the companies said in a joint statement.

For China’s e-commerce king, with a market value of US$213 billion market value, the US$590 million price tag may be a costly entry fee. Meizu’s reach in China, and likely that of the Alibaba operating system, is severely blunted by domestic leaders Xiaomi, Huawei Technologies and Lenovo Group, as well as multinational giants Apple and Samsung Electronics Co Ltd. “You could say they’re spending US$590 million to experiment a bit and see what happens - it’s an expensive

You could say they’re spending US$590 million to experiment a bit and see what happens - it’s an expensive experiment, right?

Michael Clendenin, Managing Director, RedTech Advisors

experiment, right?” said Michael Clendenin, Managing Director at Shanghai-based RedTech Advisors. “My concern is that some internet players are confusing being able to just spend a couple hundred million dollars to buy a piece of hardware that looks pretty

cool but is essentially a copy of what Apple has done and what Xiaomi has done,” he said.

Together, the leading five brands accounted for nearly 60 percent of China’s smartphone market in the fourth quarter of 2014, said Nicole Peng, a Shanghai-based analyst with data research firm Canalys.

Meizu has pumped up shipments from a few hundred thousand in previous years to under 2 million in the last three months of 2014, but it still had less than 2 percent of China’s smartphone market share in that quarter, said Peng.

As well as intense competition, Alibaba and Meizu must contend with flagging sales of smartphones, even though China is the world’s largest market for the devices.

Some 557 million people access the internet via mobile devices, according to government data. But shipments in China were 389 million phones in 2014, down from 423 million the previous year, according to China’s Ministry of Industry and Information Technology.

Reuters

10 | Business Daily

February 10, 2015

Greater China

Kaisa sequels coming to banks Banks are indirectly exposed to the real estate industry via the wealth management and trust products they sell

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ating companies are warning of risks to Chinese lenders from a corruption campaign that’s frozen real-estate projects and ensnared executives as the economy slows.

Moody’s Investors Service predicted an increase in non-performing loans by property firms, after Kaisa Group Holdings Ltd. almost missed a bond coupon payment while embroiled in an anti-graft investigation. Standard & Poor’s warned of more than 10 developers with weak cash flows that have debt maturing in coming months. Fitch Ratings Ltd. said the sudden resignation of the president of China Minsheng Banking Corp. and investigation into a board member of Bank of Beijing Co. underscored management and political risks facing China’s banks.

President Xi Jinping’s graft crackdown, described by state media as the harshest since the 1949

I don’t expect a strong rebound for the Chinese housing market in 2015 Christopher Yip, analyst, S&P

founding of the People’s Republic of China, is disrupting growth just as the world’s second-largest economy registers the slowest expansion in 25 years. While just 1.16 percent of Chinese banks’ loans were classed as nonperforming on September 30, versus 0.97 percent a year earlier, Moody’s says the trend is understated.

“The event risk caused by anti-corruption as evidenced by Kaisa, together with a still sluggish property market, could lead to rising nonperforming loans in the real estate sector,” Christine Kuo, a senior analyst at Moody’s in Hong Kong, said in a February 3 phone interview.

Default avoided Kaisa will make an interest payment on its US$500 million of 10.25 percent U.S. dollar bonds, according to a document seen by Bloomberg News on February 6, avoiding being the first Chinese developer to default on its U.S. currency debt. The notes slid 40 percent in December and reached 29.9 cents last month as some of Kaisa’s projects in Shenzhen were blocked and executives including founder Kwok Ying Shing quit. Sunac China Holdings Ltd. bought a 49.3 percent stake in the developer for US$587 million on January 30.

As Kaisa’s troubles unfolded, local creditors wasted no time freezing its assets, while offshore bondholders watched on. A court in northeast China froze 640 million yuan (US$102 million) of Kaisa’s deposits, people familiar said January 19.

Shares in Minsheng Banking, a lender with a 297 billion yuan

market cap, tumbled last week after President Mao Xiaofeng resigned and a magazine said he’s being investigated by Chinese authorities.

Random probes “Investors are grappling with the randomness of the probes, which are adding to other negative news including the slowing economic growth,” said Gordon Ip, a Hong Kong-based fund manager at Value Partners Group Ltd., which oversaw US$12.9 billion of assets as of December 31.

Some 21 percent of Chinese banks’ loans are to the nation’s real estate sector, according to Moody’s. While home mortgages account for as much as 14 percent, facilities agreed with property developers comprise about one third of the total, the ratings company said January 28.

Kaisa’s woes have heightened refinancing risks for developers with weak cash flows and high leverage, Christopher Yip, a Hong Kong-based analyst at S&P, said in a February 2 Web conference. He flagged more than 10 companies to watch that have short-term offshore debt maturing, include Glorious Property Holdings Ltd. and Fantasia Holdings Group Co.

282 percent By the middle of last year, China’s debt had reached 282 percent of gross domestic product, far exceeding the developing economy average and higher than some advanced economies, including Australia, the U.S. and Germany, the report found. The Chinese economy has

added US$20.8 trillion of new debt since 2007, which represents more than one third of global debt growth and McKinsey estimated that half of loans in China are linked to the property sector.

Prices of new homes in China’s 100 major cities dropped 3.09 percent in January from a year earlier, according to China Index Academy data. Prices rose 0.21 percent from December.

“We expect a 5 percent drop on the average selling price over the year, compared with a 7.9 percent drop in 2014. The high growth we saw in 2013 is over,” S&P’s Yip said.

Housing’s influence on China’s economy is pervasive, driving sales of everything from cement and steel to electrical appliances, furniture and cars.

Indirect exposure Banks are also indirectly exposed to the real estate industry via the wealth management and trust products they sell, often on behalf of third parties, according to Citigroup Inc. Hong Kong-based credit analyst Peijiao Yu. “Many of those products are linked to property projects, which indicates some reputational risk if banks don’t bail out creditors when they are in distress,” she said.

Regional banks will be most affected by a real estate downturn due to a supply glut in many small cities, Qiang Liao, a Beijing-based banking analyst at S&P, said. “We continue to view a prolonged and deep property market correction as a major tail risk for the Chinese banking sector.”

Bloomberg News

Business Daily | 11

February 10, 2015

Asia

S. Korean government pressured by rising tax burden President Park’s approval rating remained at the lowest level for two straight weeks

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ax burden among households in South Korea grew at a faster pace than income gain, putting political pressures on the Park Geunhye administration amid the lowest approval rating, statistical agency data showed yesterday.

Average monthly income of households with two family members and more was 4,314,334 won (US$3,935) during the JanuarySeptember period in 2014, up 3.6 percent from a year earlier, according to Statistics Korea.

During the same period, households’ monthly tax expenditure averaged 154,276 won, up 5.9 percent from a year ago.

The tax expenditure includes regular taxes - income tax and property tax - as well as non-recurring taxes such as acquisition taxes for property and cars.

When including indirect taxes such as consumption tax and added- value tax, households’ tax burden would have increased faster than the nominal figure.

Tax expenditure for households has grown faster than income increase for five straight years since 2010 when tax expenditure jumped 11.5 percent while household income grew 5.8 percent.

Rising tax burden for households put additional pressures on President Park’s government amid public outrage over the revised tax code, which increased tax burden for lowand middle-income brackets while reducing those for high-income class.

During the tax settlement period earlier this year, the tax code revision from income deduction to tax deduction raised tax burden for middle-income earners, causing a public fury. Tobacco prices were raised by a whopping 80 percent from this year, increasing living expenses especially among low-income earners.

President Park’s approval rating remained at the lowest level for two

President Park Geun-hye waving to followers in times when she was more popular

5.9 pct year-to-year increase in South Korean households’ monthly tax expenditure straight weeks. According to a poll by Gallup Korea, Park’s support rate was 29 percent last week, the lowest since her inauguration in February 2013.

Public anger escalated further on reduced burden for corporate tax, the

rate of which was lowered under the Lee Myung-bak government from 2008 to 2012.

The government’s tax revenue from companies reduced 1.3 percent in 2013 and 0.9 percent in 2012 respectively, but income tax revenue expanded 4.4 percent in 2013 after rising 8.3 percent in 2012, 12.8 percent in 2011 and 9 percent in 2010 each.

The government was accused of raising income tax on wage earners to fill up shortage of corporate tax revenue.

Even the ruling Saenuri Party criticized President Park for her signature pledge of “welfare without tax hikes” as the government actually raised taxes, such as tobacco prices,

which imposed heavier burden on low-income class.

The main opposition New Politics Alliance for Democracy called for the corporate tax hike, but Kim Moo-sung, ruling Saenuri party leader, objected to higher tax burden for companies citing lacklustre economic conditions.

President Park said during a meeting with senior secretaries yesterday that the tax shortage should be filled up by stimulating the economy, denouncing the ruling party leader’s call for tax hikes.

Park, however, noted that the government would review possible tax hikes if lawmakers discuss the issue and gain people’s sympathy toward it.

Xinhua

Japan logs record-low current account surplus In December alone Japan posted a current account surplus of 187.2 billion yen

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apan’s current account surplus shrank nearly a fifth to a record low US$22 billion in 2014, the fourth straight annual fall, as its trade deficit swelled amid a weak yen, official data showed yesterday.

The surplus on its current account fell from 3.23 trillion yen in 2013 to 2.63 trillion yen last year, the smallest since 1985, when comparable data became available, according to the finance ministry.

The current account is the broadest measure of the country’s trade with the rest of the world, including not only trade in goods but also services, tourism and returns on the country’s foreign investment.

Japan’s trade deficit last year grew by 18.1 percent to 1.04 trillion yen from the

Looking ahead, we expect the yen to weaken towards 140 against the dollar by the end of the year, which should provide an additional boost to the income balance Capital Economics

previous year, as the cost of imports of oil and gas -which is priced in dollars -overwhelmed export growth.

Japan has been saddled with a trade imbalance stoked by its heavy dependence on importing fossil fuels to generate electricity, with nuclear reactors shut down in response to the 2011 tsunami-sparked atomic disaster.

But overall income is improving with higher gains from equity and other direct investment, as well as from investment in financial items.

The rise has been inflated by a weaker yen, the consequence of Prime Minister Shinzo Abe’s prospending policy and the Bank of Japan’s massive monetary easing.

In December alone Japan

posted a current account surplus of 187.2 billion yen, the sixth straight monthly surplus, reversing a deficit of 679.9 billion yen a year earlier.

Capital Economics said Japan’s current account surplus should continue to improve in coming months as the trade balance may return to surplus as the oil price falls.

“Looking ahead, we expect the yen to weaken towards 140 against the dollar by the end of the year, which should provide an additional boost to the income balance,” it said.

“What’s more, the plunge in the price of crude oil since last summer has yet to feed through to import prices in full,” it added. “Once this happens, the trade balance may briefly return to surplus.”

AFP

12 | Business Daily

February 10, 2015

Asia

StanChart targets wealthier customers in retail bank revamp The moves come as Chief Executive Peter Sands is under increasing pressure to revive the bank’s fortunes after a troubled two years Lawrence White

S

tandard Chartered will shift its retail bank’s focus from mass market to affluent customers and urge more clients to go online as part of a broader restructuring, a senior executive told Reuters.

StanChart’s retail business is one of the first divisions the Asia-focused lender has targeted with cuts, announcing last month it would axe 4,000 retail jobs or 5 percent of its global workforce and close 80100 branches.

The moves come as Chief Executive Peter Sands is under increasing pressure to revive the bank’s fortunes after a troubled two years, which abruptly halted a decade of record profits.

Key to fixing the retail division would be stripping out costs, Karen Fawcett, global head of the bank’s retail clients unit, told Reuters in an interview. She wants to reduce the division’s costincome ratio from 67 percent to 65 percent by the end of the year, and ultimately to 55 percent.

“We have a fantastic business with 10 million clients in 34 countries...but the problem is high costs,” Fawcett said.

One key initiative will be

the rollout of an iPad-based platform for recruiting new clients in 10 markets this year and another 10 markets in 2016, she said.

In addition to previously announced closures in South Korea, the bank will also close many branches in Pakistan.

Most other markets will also

see a few closures, Fawcett said, adding that some branches will be relocated.

StanChart’s biggest headache is South Korea, where tight regulations and competition from local lenders have made it a difficult market for foreign banks.

Fawcett, however, ruled

out a sale of the South Korean business, saying StanChart would work instead to improve staff performance.

StanChart’s woes have prompted some of the lender’s top investors to call for Sands to step down.

Sky News reported on Friday that Sands had told

senior staff on an internal conference call last week that succession planning has already begun.

Fawcett said she had not been present on the call.

“Peter is a very competent chief executive and he is running the bank,” she said.

Reuters

Malaysian rates fall as funding rules seen easing squeeze Elffie Chew

M

alaysia’s short-term interest rates fell the most since 2009 yesterday after the central bank developed rules governing the way local banks should account for certain deposits and other items on their balance sheets.

Deposits that are subject to an early-withdrawal penalty of at least 50 percent of accrued interest can be treated as “qualifying term funding,” or money that can be lent out, with effect from June 1, according to a central bank circular dated January 30 and obtained by Bloomberg News.

Unrestricted investment accounts,

which hold assets such as securities and exchange-traded commodities, will be subject to a 10 percent runoff rate from the same date, the circular showed. The run-off rate is the accounting treatment banks use to reflect the risk that the holders withdraw their funds.

The move helped to clarify how much cash banks need to set aside when making loans. The Kuala Lumpur interbank offered rate has been rising amid concern that stricter capital buffers to be introduced by 2019 will limit the flow of credit in the Southeast Asian nation.

Three-month Klibor, a gauge of funding availability, fell two basis points, or 0.02 percentage point, to 3.82 percent yesterday. That’s the biggest drop since February 2009. It reached 3.87 percent on December 15, the highest since 2006.

“The changes are intended to facilitate a smooth transition to full implementation of the liquidity coverage ratio by 2019,” the central bank said in the circular. The rule on deposits will be tightened from that date, with only those subject to early-withdrawal penalties of 100 percent allowed as qualifying term

funding in 2019, the circular said.

The Basel Committee on Banking Supervision issued rules in 2010 intended to boost banks’ capital buffers against losses, following the global financial crisis that erupted in 2008. The so-called Basel III standards will be introduced in 2019.

According to the Malaysian central bank’s circular, non-ringgit denominated corporate bonds that have been assigned an A rating will be recognized as high-quality liquid assets subject to losses of 50 percent, effective from June 1.

Bloomberg News

editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk João Santos Filipe, Luis Gonçalves, Michael Armstrong, Sara Farr, Stephanie Lai, Óscar Guijarro, Kam Leong, Joanne Kuai GROUP SENIOR ANALYST José I. Duarte Brands & Trends Raquel Dias Creative Director José Manuel Cardoso Designer Francisco Cordeiro 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 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

February 10, 2015

Asia Cambodia’s banking industry sees rise Cambodia’s banking sector has reported a 33.7 percent rise in lending in 2014, according to the figures released by the National Bank of Cambodia (NBC) yesterday. The figures showed that the kingdom’s 36 commercial banks had lent a total of US$10.8 billion to customers as of December last year, up 33.7 percent year-on-year. On the deposit side, it said, by December last year, the banks had received a total deposit of US$11.6 billion, up 36 percent year-on-year. Cambodia’s banking sector has been serving around 2.2 million borrowers and 3.3 million depositors, the figures showed.

Vietnamese remittances channelled into production Vietnam received about US$12 billion worth of inward remittances in 2014, most of which has been invested in production and business activities, according to the State Bank of Vietnam (SBV). Previously, remittances mainly focused on real estate sector, securities and savings as main investment channels, but in the first six months of 2014, 70 percent of remittances were invested in manufacturing and trading, the bank reported. Over the previous three years, the amount of overseas remittances to Vietnam continued to increase from US$9 billion in 2011 to US$10 billion in 2012, and US$11 billion in 2013.

Australian job ads rise Australian job advertisements in newspapers and on the Internet rose for the eight straight month in January to reach their highest in at least two years, pointing to some pick up in demand for labour.

A survey by Australia and New Zealand Banking Group showed total job advertisements rose 1.3 percent to 142,398 per week on average in January. Annual growth in ads accelerated to 13.6 percent, the fastest in two-and-a-half years.

Ads on the internet rose 1.5 percent in January, while those in newspapers resumed their long-running decline with a drop of 6.7 percent.

Tepco, Chubu to merge plants Tokyo Electric Power Co and Chubu Electric Power Co said yesterday they may combine their fossil-fuel plants under a joint venture they are setting up from April to handle their fuel procurement and related businesses. The announcement means the companies, the biggest and third biggest of Japan’s 10 regional electricity utilities, are deepening the planned joint venture to cut fuel procurement and other costs in the wake of the Fukushima nuclear disaster.

Indonesian retail sales growth slows Indonesia’s annual retail sales in December grew at a much slower pace of 4.3 percent due to weak sales of household utensils, cultural and recreational goods as well as spare parts and accessories, a Bank Indonesia survey showed yesterday.

December’s retail sales were slower than November’s 11.4 percent growth, which was revised from an initial 14.1 percent.

The survey of 650 retailers in 10 major cities showed that retail sales on a yearly basis were expected to ease in the next three months due to slowing demand in Southeast Asia’s largest economy.

Thai jobs slump in January as economy sputters Farm jobs slipped by 480,000 in January from the same period last year Orathai Sriring

T

hailand’s employment shrank by 430,000 in January from a year earlier, mainly in agriculture and retail businesses, suggesting the economy is still struggling to gain traction after the army took power in May to end months of political unrest.

Employment slipped to 37.36 million last month from 37.79 million in January 2014, when political tensions flared up, the National Statistical Office’s labour force survey showed.

It was a sharp slide from 38.66 million jobs in December, although economists said that was due mainly to seasonal factors. About a third of the workforce is engaged in the farm sector, where there is a high degree of off-season unemployment.

Farm jobs slipped by 480,000 in January from the same period last year, the survey published late last week on the statistics office website showed. Employment in retail and auto repairs fell 420,000, while hotel and restaurant jobs declined 50,000.

“Many of our workforce are in the agricultural sector, which is now facing a severe drought. Fewer jobs in the retail business suggest consumption is not that good,” said Pimonwan Mahujchariyawong, economist with Kasikorn Research Centre.

“The economy is likely to recover slowly. Sentiment is not good yet. Sectors

like tourism just started to recover.”

Thailand will see its worst drought in more than a decade this year, the irrigation department said last week, damaging crops in one of the world’s largest rice exporters.

However, overall non-farm jobs rose by 50,000 in January from a year earlier, with the manufacturing sector adding 350,000 jobs and construction 100,000, the survey showed.

In January, the unemployment rate was 1.06 percent, the highest since June’s 1.15 percent, and up from 0.56 percent in December and 0.94 percent in January last year.

The rate has usually been less than 1 percent in recent years but could

BOJ’s board member sure deflation will not return Morimoto was one of the four dissenters to the BOJ’s decision to expand its stimulus programme in October last year Leika Kihara

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apan will not slip back into deflation as improvements in the economy offset the temporary pressure on prices from slumping oil costs, a central bank policymaker said, signalling that no immediate expansion of monetary stimulus was necessary.

Bank of Japan board member Yoshihisa Morimoto acknowledged that consumer inflation is likely to slow in coming months due largely to steep falls in crude oil prices, which are driven both by excess supply and weak global demand.

But the former utility executive warned against focusing too narrowly on monthly consumer price index (CPI) data, stressing that the BOJ was looking more at the broader trend of prices that took into account wages and the economy’s output gap.

“Crude oil prices have fallen further (since the BOJ’s monetary easing in October) but when you

look at other factors, the broad trend hasn’t changed,” Morimoto told a briefing after meeting business leaders in Chiba, eastern Japan, on Monday.

Core consumer inflation is likely to head toward the BOJ’s 2 percent target from around October as companies raise wages and prices reflecting improvements in the economy, he added.

Japan’s economy is emerging from recession as exports and output show initial signs of picking up, offering relief to the BOJ which is keen to stand pat on policy for now after having just eased in October last year.

But core consumer inflation slowed to 0.5 percent in the year to December and is set to move further away from the BOJ’s target due to the collapse in oil prices, keeping alive expectations the bank may ease policy again soon.

Morimoto was one of the four dissenters to the BOJ’s decision to expand its stimulus programme in

be higher in April-June due to new graduates, analysts said.

Although the coup returned some stability, efforts to get the economy growing have been stymied as exports are week and consumption remains subdued, restrained by high household debt and shaky consumer confidence. The weak economy has put pressure on the junta to speed up infrastructure projects to spur growth.

The central bank expects Southeast Asia’s second-largest economy to grow 4 percent this year after a projected 0.8 percent expansion in 2014, the weakest since flood-devastated 2011. Official GDP data is due on February 16.

Reuters

KEY POINTS CPI to slow as oil slump hits, rise thereafter-Morimoto BOJ must aim for mild inflation backed by recovery Sees no need for more easing, warns of demerits of QE

October last year, a move aimed at preventing oil price falls, and a subsequent slowdown in inflation, from hurting inflation expectations.

Morimoto said he would vote against additional easing if it had been proposed now, arguing that topping up asset purchases further will not give much of a boost to public sentiment.

The benefits of expanding stimulus are diminishing with interest rates already historically low, while the BOJ’s radical monetary programme risks creating financial imbalances, he said.

He also cautioned against focusing too much on pushing up inflation, saying that consumer sentiment remains weak after being hit by the rising cost of living as sharp yen declines raise import costs.

“What’s important is to achieve a cycle under which prices rise gradually accompanied by improvements in the economy,” he said. Morimoto’s fiveyear term in the board ends in June.

Reuters

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February 10, 2015

International HSBC ‘helped clients dodge tax’ Banking giant HSBC faced damaging claims yesterday that its Swiss division helped wealthy customers dodge millions of dollars in taxes after a ‘SwissLeaks’ cache of secret files emerged online.

The documents, published over the weekend, claim the bank helped clients in more than 200 countries evade taxes on accounts containing US$119 billion (104 billion euros). The huge cache of files has sparked criminal probes in several countries and attempts to claw back cash after being stolen by an IT worker in 2007 and passed to French authorities.

G20 meeting warns of challenges for global economy Financial leaders attending the G20 meeting will work to shortlist growth priorities for each member

Signs of pick-up in euro zone Economic growth prospects have improved in key areas of the euro zone, the OECD’s latest leading indicator publication said yesterday. The leading indicator, designed to detect turning points in major economies, signalled stable growth in most big economies and signs of a pickup within the euro zone in Germany, Italy and Spain, the Organisation for Economic Cooperation and Development said.

“The CLIs (indicators) indicate stable growth momentum also in the OECD area as whole and in some of the major economies, including the United States, Canada, Japan, China and Brazil,” said the Paris-based OECD.

Germany clocks up record exports Europe’s biggest economy clocked up a record volume of exports and attained its largest ever trade surplus in 2014, data compiled by the federal statistics office Destatis showed yesterday.

Germany exported a record 1.134 trillion euros (US$1.28 trillion) worth of goods last year and imported goods worth 916.5 billion euros. That pushed the trade surplus to an annual total of 217 billion euros, Destatis calculated in a statement. In December alone, Germany exported goods worth a total of 98.7 billion euros in seasonally adjusted terms, an increase of 3.4 percent from November, Destatis said.

PwC sees Russian vehicle sales down Russian car sales are expected to decline by 25-35 percent this year, accounting firm PricewaterhouseCoopers said yesterday, hit by a sharp economic slowdown and devaluation of the rouble. PwC said in a presentation that sales could reach 1.52 million to 1.75 million units, compared to 2.34 million autos sold in 2014, when sales were down 10 percent in annual terms. Russia, a country with 143 million people, has been a booming market for car producers since the fall of the Soviet Union. But with the economy heading for recession due to Western sanctions people have less disposable income.

Cameroon debt issuance triples Cameroon has nearly tripled its debt issuance plans for 2015 to 900 billion CFA francs (US$1.56 billion), amid a shortfall in oil revenues due to the slump in global oil prices. President Paul Biya signed a decree, authorising the government to “issue debt including Treasury bills and bonds of up to 900 billion CFA francs to finance development projects”, according to the president’s website. The government had initially planned to issue 320 billion francs in debt this year, compared with 280 billion CFA francs issued last year.

Chinese Deputy Finance Minister Zhu Guangyao called on joint efforts to face the challenges

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inancial officials and policymakers attending a Group of 20 (G20) ministerial meeting have warned that weak growth and diverging monetary policies among major economies may make 2015 a difficult year for the global economy.

While addressing financial officials and bankers from more than 40 countries just ahead of the first Ministerial Meeting of the Turkish G20 Presidency, Chinese Deputy Finance Minister Zhu Guangyao highlighted risks for the world economy and called on joint efforts to face the challenges.

“The sluggish global growth is a real challenge faced by all members of G20,” Zhu said, referring to the downgrade of global economic growth from 3.8 percent to 3.5 percent in January by the International Monetary Fund.

Diverging monetary policies and

the fall of oil prices are risks causing global economic turbulence, Zhu said.

The U.S. Federal Reserve has completed its asset purchase program and is expected to raise interest rates in the middle of this year, while on the other side of the Atlantic, the European Central Bank (ECB) has recently cut interest rates to boost the economy.

Diverging monetary policies could also be observed among leading emerging economies, as China recently lowered deposit reserve rates ahead of the Lunar New Year in a bid to meet “seasonal need of extra cash,” weeks after India decided to cut interest rates amid lower-than-expected inflation figures and plunging oil prices.

Meanwhile the rapid drop in the prices of oil and other commodities triggered a surge of inflation for exporters such as Russia and Brazil forced these economies to raise interest rates.

The economic slowdown in Europe

Internet regulator must change before US polls Some countries like China and Russia have called for a solely intergovernmental body to oversee ICANN in the future

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lans to transfer control of Internet overseer ICANN from US hands to a globally representative body could be jeopardised unless a deal is reached before the 2016 US elections, the group’s chief warned yesterday.

Fadi Chehade, chief executive of the Internet Corporation for Assigned Names and Numbers, said opponents of the new oversight system may be deliberately trying to delay the transition set for September 30.

“ICANN has been waiting for this political window to open for 16 years,” Chehade told AFP as the group began a four-day meeting in Singapore.

“We don’t know what factors could affect the political window,” he said, adding however that “we do

know that in 2016 there is a heavy political process in the United States”.

“Therefore the oxygen that is available to certain items may be very easily consumed by the electoral process.”

The next US presidential election and related polls for Congress and state governors will be held on November 8, 2016.

ICANN is in charge of assigning Internet domain names and the numbering codes that lie behind online addresses. It has been overseen by the US government since its inception in 1998, under a contract that expires by end-September this year.

Some countries like China and Russia have called for a solely intergovernmental body to oversee ICANN in the future. Critics say such a model

is another risk to the global economy as Greece casts additional uncertainties to the euro zone, Zhu said.

IMF Managing Director Christine Lagarde expressed similar concern.

“There is a lot at stake ... Without action, we could see the global economic super tanker continuing to be stuck in the shallow waters of sub-par growth and meagre job creation,” she said in a blog on the IMF website In a bid to make a previous action plan to boost growth more efficient, financial leaders attending the G20 meeting will work to shortlist growth priorities for each member.

Last year, leaders of the G20 leading economies vowed to take measures to achieve additional two percentage points in their collective GDP growth over the next five yeas.

The hundreds of commitments entailed in the Brisbane Action Plan will be narrowed down to only 5-10 priorities per country so that actual progress could be easily checked, officials said.

Xinhua

The sluggish global growth is a real challenge faced by all members of G20 Zhu Guangyao Chinese Deputy Finance Minister

would provide a powerful tool to repressive regimes.

Within the United States, some lawmakers have also criticised the move to cede control of the group, citing the possibility that it could be detrimental to the national interest.

Washington has insisted that it would only hand over the reins to a globally representative group of governments, civil society and businesses.

Chehade said the Internet community was aware of efforts by some parties to derail such a “multistakeholder” approach by deliberately delaying the transition, but did not mention names.

“Those who are trying for their own purposes to delay this transition, make no mistake, we know that the most powerful political tool to kill something is to simply delay it,” he said.

In an interview with AFP last week, Chehade conceded that the US may have to extend its control beyond September amid continued bickering among stakeholders, including governments, over the replacement regulatory regime.

Steve Crocker, the chairman of ICANN’s board of directors, said on yesterday in Singapore “there is no precise, absolute stroke of midnight deadline”.

AFP

Business Daily | 15

February 10, 2015

Opinion Business

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Leading reports from Asia’s best business newspapers

China trade data shows impact of commodity price slump

THE STAR The (Malaysian) banking sector will not likely see a downgrade even with a further cut in government expenditure if crude oil prices were to hover around US$45 a barrel and the ringgit continues to weaken, according to some economists and analysts. Malaysia University of Science and Technology School of Business dean and economist Dr Yeah Kim Leng said a further cut in government expenditure may be necessary if world oil prices remained at US$45 per barrel which was below the Government’s revised Budget 2015 assumption of US$55 per barrel.

Clyde Russell Reuters columnist

THE PHNOM PENH POST High returns on investment and healthy interest rates are helping Cambodia’s microfinance sector continue its rapid expansion, according to Cambodia-based investment firm Mekong Strategic Partners. With an average of 22 percent return on equity and 48 percent increase in loans across Cambodia’s 27 microfinance institutions in 2013, Mekong Strategic Partners’ latest report states that the Kingdom’s microfinance industry is one of the world’s best performing. The report lists good management, a light and “pro-market” approach from the regulator, and a dynamic mix of NGO and private-sector shareholders as the driving forces behind the market’s expansion.

THE NEW ZEALAND HERALD New laws cracking down on shell companies appear to be having an early effect, with police seeing a drop off in requests for information about New Zealand-registered firms allegedly committing crimes overseas. Any change would be an ebb in what was a rising tide of requests from overseas law enforcement agencies regarding locally registered companies. The police’s financial intelligence unit, in the year to June 2014, received requests for information about 39 New Zealand-registered companies which had allegedly committed crimes in other countries.

VIETNAM NEWS The Ministry of Planning and Investment (MPI) wanted local businesses to invest more in agriculture and rural areas in Ha Noi, Nguyen Van Hieu, deputy minister of Planning and Investment, told participants in a conference last Friday. The conference sought to collect feedback on Decree 210/2013/ND-CP, which sets out incentives and assistance from the State for businesses investing in agriculture and rural areas. This support consists of providing human resources and assistance in market development, application of science and technology, medicinal herb plantation and agro forest and aquaculture processing.

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hina’s January trade data has been viewed as unambiguously weak, and while the softer exports are an obvious concern, the dramatic slump in imports isn’t nearly as bad as it looks.

Exports dropped 3.3 percent from a year earlier, against a median expectation of a 6.3 percent gain, while imports plummeted 19.9 percent, the biggest slide since May 2009, a time when the economy was dealing with the global recession.

The problem with looking at the trade numbers in percentage terms is that they are dollarbased, value numbers.

They don’t take account of volumes, and this is particularly key when looking at commodity imports.

While the value of commodity imports has crashed from January 2014 to January this year, volumes still look fairly healthy.

Not so healthy as to conclude that China’s economy is robust, but also far from weak enough to start pressing the panic button.

Overall, commodity imports would tend to support the view that the Chinese economy is bumbling along, without strong momentum in either direction.

Crude oil imports were 6.59 million barrels per day (bpd) in January, only 0.6 percent below the levels of January last year.

It’s true that they dropped nearly 8 percent from December, but that month saw a record 7.15 million bpd as China took advantage of the more than 50

It pays to be cautious about reading too much into the decline, with December’s figure being a record high

percent plunge in oil prices to fill strategic and commercial storages.

Over the whole of 2014, crude imports average 6.17 million bpd, meaning January’s total was above the average for the previous 12 months, not exactly a weak performance.

The difference is in the price paid. In January 2014, China customs data showed the average price it paid for a barrel of oil was US$108.67. The data for January this year isn’t yet available, but the price in December was US$77.52 a barrel, a figure that’s likely to decline given the drop in Brent crude.

In iron ore, imports were 78.57 million tonnes in January, down 9.5 percent from the same month last year, and by the same amount from December.

Again, it pays to be cautious about reading too much into the decline, with December’s figure being a record high. January’s imports were always likely to fall given steel mills had already restocked, taking advantage or iron ore’s decline in the second half of last year.

Iron ore imports averaged 77.7 million tonnes a month in 2014, meaning, like crude, January’s figure was above the average in what was the strongest year on record.

The price paid for iron ore in January 2014 was US$127.68 a tonne, by December it was down to US$75.61, and again is heading lower still.

Importing and exporting deflation?

Imports of unwrought copper were 410,000 tonnes in January, down 2.4 percent from December and 24.1 percent from the same month last year.

Given that January 2014 was a freakishly strong month, it’s better to look at the recent trend, with unwrought copper imports averaging 378,400 tonnes a month in 2014, meaning that January this year was ahead of the recent average.

The price paid for refined copper in January 2014 was US$7,419.90

a tonne, by December it was down to US$6,716.90.

Taken together, January’s imports of the three main commodities were higher than the average for last year, while the prices paid were substantially lower.

The only commodity where there is unabashed weakness is coal, where imports slumped to 16.78 million tonnes in January, down 38.4 percent from December and a massive 53.3 percent below the level of January 2014.

Coal imports are suffering from a level of caution over the new rules about quality, from plentiful domestic supply and on-going efforts to limit the fuel’s use in order to lower pollution.

Overall, the picture that emerges is that commodity import volumes are holding up, and that much of the reason for the sharp fall in the value of imports is because of slumping prices.

Likewise, given Chinese manufacturers are paying considerably less for their commodity imports, it’s plausible that part of the reason for the drop in value of exports is because prices of goods are being lowered.

It would be a more of surprise if the fall in commodity prices isn’t having a deflationary impact on the prices of manufactured goods.

The Chinese economy may not be roaring ahead, but be wary of saying it’s stumbling based on the dollar value of imports and exports.

Reuters

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February 10, 2015

Closing IT bureau helps diversify Hong Kong’s economy

China expects 1 mln more births in 2015

The proposed Innovation and Technology Bureau (ITB) will help Hong Kong diversify its economy and remain competitive, Hong Kong’s chief executive Leung Chun-ying (pictured) said yesterday. Leung said, although facing short term and long term challenges, Hong Kong’s economy by and large has been doing well, and a robust economy is the prerequisite for improving the people’s livelihood.

Leungaddedthisyear’sPolicyAddresshasemphasized the need to diversify Hong Kong’s economy, and that demands creativity and innovation, “ITB would be the key driver for Hong Kong’s innovation in the years to come,” he said.

At least one million more births are expected in 2015 than last year, as a result of changes to the birth control policy. A total of 16.9 million new citizens came into the world in 2014, 470,000 more than in 2013, according to the China Population Association (CPA) yesterday.

According to the CPA, since 1990s, the annual number of new-borns has decreased from more than 20 million to around 16 million.

The lowest number was 15.8 million in 2006. The number of Chinese women at childbearing age has declined while the number of births has increased.

Qualcomm nears resolving China antitrust dispute The fine would be the largest paid by any company in China Matthew Miller and Michael Martina

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ualcomm is likely to pay China a record fine of around US$1 billion, ending a 14-month government investigation into anti-competitive practices, after the U.S. chipmaker and the regulator made significant progress during talks last week.

The deal may also see Qualcomm lower its royalty rates by around a third on patents used in China.

Discussions in Beijing over one of the most contentious cases under China’s 2008 anti-monopoly law have intensified in recent weeks, culminating in meetings

Taiwan exports beat expectations

between Qualcomm senior executives and National Development and Reform Commission (NDRC) officials on Friday.

The company would also agree to make changes to its licensing practices, though those are not expected to alter its business model.

“The NDRC will soon release a new antitrust settlement,” Xu Kunlin, the head of the agency’s antitrust division, said at a law conference yesterday, according to an article posted on the website of the official Securities Times.

For the fiscal year ended September 28, Qualcomm earned about half its global revenue of US$26.5 billion in China, with a large chunk of profit coming from highermargin royalties earned from the company’s licensing arm.

The NDRC probe disrupted that business, fostering disputes with existing licensees and causing other firms to delay signing new licenses, though Qualcomm reached a settlement with one “major Chinese licensee” even as the investigation continued, Qualcomm President Derek Aberle told analysts last month.

San Diego-based Qualcomm has also been seeking to deepen its presence in the Chinese market by transferring technology and investing in next-generation chip users. In July, it said it would partner Semiconductor Manufacturing International Corp, a major Chinese chipset maker, to manufacture Qualcomm’s Snapdragon processors. It also plans to invest up to US$150 million in Chinese start-ups to help develop mobile technologies for Internet, e-commerce, semiconductors, education and health.

The NDRC didn’t immediately respond to

China raises retail oil prices

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xports grew faster than expected in January, while imports slid on lower oil prices, providing a decent start to a year filled with uncertainties as to whether the island’s key tech sector can maintain its record momentum from 2014.

Exports grew an annual 3.4 percent last month, better than the 2.58 percent growth expected by economists in a Reuters poll. Exports contracted 2.8 percent in December.

Officials attributed the slide in import value, its second consecutive contraction, to the fall in global oil prices, as Taiwan imports nearly all of its oil.

Exports to Taiwan’s largest trading partner China leapt 11.8 percent, partly due to the timing of the Lunar New Year this year, with officials warning that the one-off fillip may constrain export growth this month. The new year fell in January last year but will be in February this year.

Shipments to the United States saw a 8.1 percent rise from a year earlier, while those to Japan were up 2.7 percent and exports to Europe tumbled 12.6 percent.

Reuters

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op economic planner yesterday announced the retail price of gasoline would be raised by 290 yuan (US$47.3) per tonne and diesel by 280 yuan per tonne, snapping the trend of 13 consecutive cuts since July.

The adjustment that will come into effect today means retail prices will edge up by 0.21 yuan per litre for gas and 0.24 yuan per litre for diesel, according to the National Development and Reform Commission.

In 2013, China adopted a pricing regime that adjusts domestic fuel prices when international crude prices change by more than 50 yuan per tonne for 10 working days.

According to data from the General Administration of Customs, China imported 308.4 million tonnes of crude oil in 2014 worth 228.3 billion dollars.

Some oil companies’ decisions to cut capital spending and the recent robust job creation pace in the United States both contributed to higher oil prices, said Wang Yanting, an analyst with JYD Online Corp., a Beijing commodity e-commerce platform.

Xinhua

a request for comment.

Christine Trimble, a Qualcomm spokeswoman, declined to comment.

Foreign firms not targeted A settlement would be a milestone in Xu’s controversial tenure at the NDRC’s antitrust division.

He was promoted late last year to concurrently head the agency’s powerful pricing bureau.

Attorneys, executives and experts who have been drawn into NDRC’s antitrust investigations have complained of a culture of intimidation under Xu. Underscoring how the issue became a focus of commercial friction between the world’s two largest economies, U.S. President Barack Obama pressed his Chinese counterpart Xi Jinping during November talks on the use of antitrust policy to limit royalty fees.

The NDRC has defended its antitrust work as fair and transparent. Xu told a news conference in September that foreign businesses were not being targeted.

In recent months, four international business lobbies have raised concerns about how China’s antitrust regulators carried out investigations. At least 30 overseas firms, including U.S. software giant Microsoft Corp and South Korea’s Samsung Electronics Co Ltd, have come under scrutiny.

Reuters

GE joins companies lured by India subsidies

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eneral Electric Co. and Continental AG are among companies looking to take advantage of a subsidy India is offering for electronics manufacturing amid Prime Minister Narendra Modi’s push to boost economic growth.

The government has received at least 60 applications, with about half of them approved, for a subsidy of as much as 25 percent on capital investment, Ajay Kumar, joint secretary in the Department of Electronics & Information Technology, said in an interview in New Delhi. More than 40 submissions were made after Modi took office in May, he said.

While the incentive was introduced by the previous government, the number of proposals is accelerating as Modi takes steps including allowing more foreign direct investment in industries such as railways to boost economic growth. He has made a push for local manufacturing to create 100 million new factory jobs by 2022 and the government is implementing an US$18 billion program known as Digital India to expand high-speed Internet access and offer government services online.

Bloomberg News